Survey of American Industry and Careers (6 Volume Set)

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SURVEY OF

American Industry and Careers

SURVEY OF

American Industry and Careers Volume 1 Accounting Services—Civil Services: Public Safety

The Editors of Salem Press

Salem Press Pasadena, California

Hackensack, New Jersey

Editorial Director: Christina J. Moose Project Editor: Rowena Wildin Manuscript Editors: Stacy Cole, Andy Perry Acquisitions Manager: Mark Rehn Administrative Assistant: Paul Tifford, Jr.

Research Supervisor: Jeffry Jensen Photo Editor: Cynthia Breslin Beres Design and Layout: James Hutson Additional Layout: William Zimmerman

Cover photo: ©JLP/Jose L. Pelaez/CORBIS

Copyright ©2012, by Salem Press, A Division of EBSCO Publishing, Inc. All rights in this book are reserved. No part of this work may be used or reproduced in any manner whatsoever or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without written permission from the copyright owner except in the case of brief quotations embodied in critical articles and reviews or in the copying of images deemed to be freely licensed or in the public domain. For information, address the publisher, Salem Press, at [email protected]. ∞ The paper used in these volumes conforms to the American National Standard for Permanence of Paper for Printed Library Materials, X39.48-1992 (R1997). Library of Congress Cataloging-in-Publication Data Survey of American industry and careers / The Editors of Salem Press. v. cm. Includes bibliographical references and indexes. ISBN 978-1-58765-768-9 (set : alk. paper) — ISBN 978-1-58765-769-6 (vol. 1 : alk. paper) — ISBN 978-158765-770-2 (vol. 2 : alk. paper) — ISBN 978-1-58765-771-9 (vol. 3 : alk. paper) — ISBN 978-1-58765-772-6 (vol. 4 : alk. paper) — ISBN 978-1-58765-773-3 (vol. 5 : alk. paper) — ISBN 978-1-58765-774-0 (vol. 6 : alk. paper) 1. Business—Vocational guidance—United States. 2. Industries—United States. 3. Occupations— United States. 4. Vocational guidance—United States. I. Salem Press. HF5382.5.U5S87 2012 331.7020973—dc23 2011019601 First Printing

printed in the united states of america

Contents Publisher’s Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi Complete List of Contents . . . . . . . . . . . . . . . . . . . . . . xiii List of Tables and Sidebars . . . . . . . . . . . . . . . . . . . . . xvii Accounting Services . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Advertising and Marketing Industry . . . . . . . . . . . . . . . . . 19 Airline Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Alternative Power Industry . . . . . . . . . . . . . . . . . . . . . . 54 Animal Care Services . . . . . . . . . . . . . . . . . . . . . . . . . 74 Apparel and Fashion Industry . . . . . . . . . . . . . . . . . . . . 86 Automobiles and Personal Vehicles Industry . . . . . . . . . . . 105 Banking Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Batteries and Fuel Cells Industry . . . . . . . . . . . . . . . . . . 141 Beverage and Tobacco Industry . . . . . . . . . . . . . . . . . . 159 Biofuels Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 Broadcast Industry . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Building Architecture Industry . . . . . . . . . . . . . . . . . . . 215 Building Construction Industry . . . . . . . . . . . . . . . . . . . 233 Business Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 Casino Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Chemicals Industry . . . . . . . . . . . . . . . . . . . . . . . . . 288 Civil Services: Planning . . . . . . . . . . . . . . . . . . . . . . . 305 Civil Services: Public Safety . . . . . . . . . . . . . . . . . . . . . 325

v

Publisher’s Note ■

Salem’s six-volume Survey of American Industry and Careers provides in-depth overviews of 112 core North American industries and related jobs and careers, current as of 2010. Drawing on data from authoritative sources such as the U.S. Bureau of Labor Statistics as well as private institutions, and written by authors familiar with these fields, these detailed essays address all aspects of the industries covered, from their history to the outlook for their future in the coming decade.

■ ■

Sophisticated search functionality Complete content, including appendixes Integrated searches with any other Salem Press product you already have on the Salem History platform.

E-books are also available. Essay Format Each of the essays is designed to introduce students and prospective employees to the industries by providing vital information and assessments in the following standard format:

Scope of Coverage Survey of American Industry and Careers features 112 industry profiles: essays ranging in length from 8,000 to 10,000 words (roughly 12-15 pages) and arranged alphabetically, from Accounting Services to Water Supply Industry. The industries covered include those most important to the North American economy and range from manufacturing to e-businesses. The scale of these industries also ranges from those dominated by international corporations to those dominated by small businesses or individual enterprises. These are the industries that ground the American economy.

INDUSTRY

SNAPSHOT

General Industry: The primary industry related to the one covered. Career Clusters: The category or categories of careers to which this industry is related. Subcategory Industries: Smaller industries within this major industry. Related Industries: Industries covered in this publication to “see also.” Annual Domestic Revenues: Annual revenues generated in the United States, in U.S. dollars, followed by the source and year in parentheses. Annual International Revenues: Where available, annual revenues generated outside the United States, followed by the source and year in parentheses. Annual Global Revenues: Where available, annual revenues generated globally (including the United States), followed by the source and year in parentheses. NAICS Numbers: The number or numbers that identify this industry in the North American Industry Classification System from the U.S. Census (http://www.census.gov).

Online Access Salem provides access to its award-winning content both in traditional, printed form and online. Any school or library that purchases this six-volume set is entitled to free, complimentary access to Salem’s online version of Survey of American Industry and Careers through our Salem History database. Access is available through a code printed on the inside cover of this first volume, and that access is unlimited and immediate. Our online customer service representatives, at (800) 221-1592, are happy to help with any questions. The advantages are clear: ■ Complimentary with print purchase ■ Fully supported ■ Unlimited users at your library ■ Full access from home or dorm rooms ■ Immediate access via online registration ■ A simple, intuitive interface ■ User profile areas for students and patrons

INDUSTRY

DEFINITION

Summary: Capsule description of the nature of the industry and its fundamental goals, purposes, goods, and services. vii

Survey of American Industry and Careers History of the Industry: Description of when the industry began and how it has changed, leading up to the industry in the twenty-first century. The Industry Today: The types of things that the industry does in the twenty-first century, its general processes, where it stands today, the most common subindustries, and common partnership industries.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The discussion in this section focuses on the various major divisions, departments, or functions within the industry. Typical subsections might include the following: ■

INDUSTRY MARKET SEGMENTS

■ ■ ■

An overview of market segments in this industry, whether Small, Midsize, and Large or more tailored to other market segments. The following subsections will appear in each market-segment section:

■

■ ■ ■

Business Sector [Small, Midsize, Large, or Other]

Business Management Customer Services Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources

At the end of each of these subsections, typical occupations are listed.

Potential Annual Earnings Scale: Range of earnings by individuals employed in this market segment. Clientele Interaction: Types of interactions one who works in this market segment has with clients, others. Amenities, Atmosphere, and Physical Grounds: Typical types of environments experienced by workers in this market segment. Typical Number of Employees: Numbers of employees for this market segment. Traditional Geographic Locations: Where one typically finds plants or shops for this market segment, whether rural or urban, situated near water or everywhere. Pros of Working in a Small/Midsize/Large Business: Special advantages enjoyed by workers in this market segment. Cons of Working in a Small/Midsize/Large Business: Consideration of potential downsides to working in this market segment. Costs: Typical costs for this market segment, including: ■ Payroll and Benefits ■ Supplies ■ External Services ■ Utilities ■ Taxes

INDUSTRY

OUTLOOK

Overview: Identifies trends: Is this industry on the rise, in decline, or stable? Employment Advantages: Details on the benefits of employment or a career in the industry. Annual Earnings: Discusses the increase or decrease in annual earnings, as well as the trends in earnings in the jobs and careers related to this industry.

RELATED RESOURCES FOR FURTHER RESEARCH Lists authoritative industry, professional, and government associations, societies, agencies, as well as trade journals. Includes mailing addresses, telephone and fax numbers, and URLs.

ABOUT

THE

AUTHOR

Names the author and identifies his or her degrees, experience, and other credentials for writing the essay. viii

Publisher’s Note FURTHER

READING

Includes authoritative sources for more indepth information and study of the industry.

■

Special Features Several ready-reference aids distinguish this set: ■

384 sidebars and tables: The essays are supplemented with useful statistical tables and descriptive sidebars. These are of five types: ■

■

■

■

■

Contributions: These 45 tables detail the value added by the industry to the economy, including both dollars and percentages for U.S. gross domestic product, numbers of persons employed, and total employee compensation. Inputs: These 45 tables describe the resources most commonly consumed by the industry and their value. Occupation Specialties: These 79 sidebars identify common occupations within the industry, accompanied by a brief description of each. Occupation Profiles: These 145 sidebars provide a basic description of one of the industry’s most common occupations, including related career clusters, personal interests, working conditions, minimum education levels, degrees of physical ability and exertion, typical means by which job applicants gain relevant experience, the need for licenses or certifications, employment outlook, and the typical Holland interest score related to the occupation. These scores are rendered in capital letters that correspond to the following personality types as developed by psychologist John L. Holland’s theory of vocational choice: A = artistic: creative, original, independent, chaotic C = conventional: detail-oriented, organizing, clerical E = enterprising: suited to competitive environments, possessing leadership qualities, persuasive I = investigative: analytical, intellectual, scientific, explorative

■

■

R = realistic: practical, physical, hands-on, tool-oriented S = social: cooperative, supporting, helping, healing/nurturing Projected Employment: These 70 tables list the numbers of persons employed for the industry or subindustry, by typical occupations, both for 2008 or 2009 and as projected for 2018 by the U.S. Bureau of Labor Statistics.

Complete List of Contents: This alphabetical list of contents appears in all six volumes. List of Tables and Sidebars: This alphabetical and permuted list of tables and sidebars offers quick access to statistical data accompanying the essays and appears in all six volumes. Photographs: 615 photographs illustrate the essays.

The back matter to Volume 6 includes the following appendixes: ■

■ ■

■

Employment by Industry, 2008 and Projected 2018 Fortune 500 Companies by Industry, 2009 Bibliography: both general-reference sources and industry-specific sources Electronic Resources: both general-reference resources and industry-specific resources

Finally, Volume 6 ends with three useful indexes: ■ ■ ■

Industries by Career Cluster Jobs and Careers Subject Index

Contributors Salem Press would like to extend its appreciation to all involved in the development and production of this work. The essays have been written and signed by experts or active participants in these industries, and each essay includes a paragraph, “About the Author,” detailing their experience. Without these expert contributions, a project of this nature would not be possible. A full list of the contributors’ names and affiliations appears in the front matter of this volume.

ix

Contributors Michael P. Auerbach Boston, Massachusetts

Dale L. Flesher University of Mississippi

Ing-Wei Khor Oceanside, California

Mihaela Avramut Verlan Medical Communications

Don Franceschetti University of Memphis

Samuel V. Kisseadoo Hampton Land Conservancy

Mike Bemis Washington County (Washington) Library

Karen S. Garvin American Military University

Marylane Wade Koch Loewenberg School of Nursing, University of Memphis

Adam Berger New York, New York Charles L. Bonza Estes Park, Colorado Susan Roth Breitzer Fayetteville, North Carolina Victoria Breting-García Houston, Texas Christine M. Carroll American Medical Writers Association Ernesto Alonso Contreras Zimmer Gunsul Frasca Architects Robert Cullers Kansas State University Tracey M. DiLascio The Law Office of Tracey M. DiLascio Chaunacey Dunklee Fullerton (California) Public Library Leslie Farison Appalachian State University Elizabeth Fernandez Hollywood, Florida Jane Brodsky Fitzpatrick The Graduate Center, City University of New York

Jennifer L. Gibson Marietta, Georgia Jamie Greene Silver Spring, Maryland Glenda Griffin Sam Houston State University Wendy C. Hamblet North Carolina Agricultural and Technical State University Christine Henderson Henderson Realty Katharine M. Holden St. Paul, Minnesota Robert M. Hordon Rutgers University Kylie Grimshaw Hughes Charlotte, North Carolina Ski Hunter University of Texas at Arlington April D. Ingram Kelowna, British Columbia, Canada Micah L. Issitt Philadelphia, Pennsylvania Ramonica R. Jones Austin, Texas Fiona Kelleghan South Miami, Florida

xi

Narayanan M. Komerath Georgia Institute of Technology Jeanne L. Kuhler Benedictine University Dawn A. Laney Emory University Jo Ann M. Langston Christian Authors, Illustrators and Readers Society Jeffrey Larson Tioga Medical Center/Northern Medical Informatics Norma Lewis Byron Center, Michigan Roy Liebman California State University, Los Angeles Keith Gregory Logan Kutztown University of Pennsylvania Donald W. Lovejoy Palm Beach Atlantic University Robert E. McFarland Southern Historical Consultants Andrew McKelvey American Institute of Architects Tyler Manolovitz Sam Houston State University

Survey of American Industry and Careers Sergei A. Markov Austin Peay State University

Gina M. Robertiello Felician College

David Steffens Oklahoma City University

Michelle Marie Martinez Sam Houston State University

Carol A. Rolf Rivier College

Bethany Thivierge Technicality Resources

Randall L. Milstein Oregon State University

Joseph R. Rudolph, Jr. Towson University

Vanessa E. Vaughn Chicago, Illinois

Suzanne Mulvehill Lake Worth, Florida

Elizabeth D. Schafer Loachapoka, Alaska

David A. Olle Eastshire Communications

Reinhold Schlieper Embry-Riddle Aeronautical University

Patrice La Vigne American Medical Writers Association

Ruth Omunda North Carolina Agricultural and Technical State University

Andrew Walter Simsbury, Connecticut

Terry J. Shackleford University of Texas M.D.

Bradley R. A. Wilson University of Cincinnati

Ravinder Pandher University of Calgary

Lisa Shen Sam Houston State University

Robert J. Paradowski Rochester Institute of Technology

Carolyn Sprague Bow, New Hampshire

Robin L. Wulffson Faculty, American College of Obstetrics and Gynecology

John Radzilowski University of Alaska Southeast

Nancy Sprague American College of Healthcare Executives

xii

Helen M. York University of Maine

Complete List of Contents VOLUME Contents . . . . . . . . . . . . . . . . . . . . . . v Publisher’s Note . . . . . . . . . . . . . . . . . vii Contributors . . . . . . . . . . . . . . . . . . . xi List of Tables and Sidebars . . . . . . . . . . xvii Accounting Services . . . . . . . . . . . . . . . 1 Advertising and Marketing Industry . . . . . . 19 Airline Industry . . . . . . . . . . . . . . . . . 36 Alternative Power Industry . . . . . . . . . . . 54 Animal Care Services . . . . . . . . . . . . . . 74 Apparel and Fashion Industry . . . . . . . . . 86 Automobiles and Personal Vehicles Industry . . . . . . . . . . . . . . . . . . . 105

1

Banking Industry . . . . . . . . . Batteries and Fuel Cells Industry Beverage and Tobacco Industry. Biofuels Industry . . . . . . . . . Broadcast Industry . . . . . . . . Building Architecture Industry . Building Construction Industry . Business Services . . . . . . . . .

. . . . . . . .

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. . . . . . . .

125 141 159 177 197 215 233 252

Casino Industry. . . . . . . Chemicals Industry. . . . . Civil Services: Planning . . Civil Services: Public Safety

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

271 288 305 325

VOLUME

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. . . .

. . . .

2

Contents . . . . . . . . . . . . . . . . . . . . xxxv Complete List of Contents . . . . . . . . . xxxvii List of Tables and Sidebars . . . . . . . . . . . xli

Day-Care Services. . . . . . . . . . . . . . . . 503 Defense Industry . . . . . . . . . . . . . . . . 523 Dental and Orthodontics Industry . . . . . . 541

Coal Mining Industry . . . . . . . . . Complementary and Alternative Health Care Industry . . . . . . . . Computer Hardware and Peripherals Industry . . . . . . . . . . . . . . . Computer Software Industry . . . . . Computer Systems Industry . . . . . . Construction Equipment Industry . . Corporate Education Services . . . . . Counseling Services . . . . . . . . . . Criminal Justice and Prison Industry .

Electrical and Gas Appliances Industry . . . . 559 Electrical Power Industry . . . . . . . . . . . 578 Environmental Engineering and Consultation Services . . . . . . . . . . . . 593

. . . . 345 . . . . 362 . . . . . . .

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379 397 414 432 452 469 485

Farming Industry . . . . . . . . . . . . Federal Public Administration . . . . Financial Services Industry . . . . . . Fishing and Fisheries Industry. . . . . Food Manufacturing and Wholesaling Industry . . . . . . . . . . . . . . . Food Retail Industry . . . . . . . . . .

VOLUME Contents . . . . . . . . . . . . . . . . . . . . . lix Complete List of Contents . . . . . . . . . . . lxi List of Tables and Sidebars . . . . . . . . . . . lxv

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613 631 648 663

. . . . 681 . . . . 704

3

Food Services . . . . . . . . . . . . . . . . . . 721 Freight Transport Industry . . . . . . . . . . 742 Funerary Industry . . . . . . . . . . . . . . . 760

xiii

Survey of American Industry and Careers Furniture and Home Furnishings Industry . . . . . . . . . . . . . . . . . . . 775 Hand Tools and Instruments Industry . . Health and Fitness Industry . . . . . . . . Heavy Machines Industry . . . . . . . . . Higher Education Industry . . . . . . . . Highway, Road, and Bridge Construction Industry . . . . . . . . . . . . . . . . . Home Maintenance Services . . . . . . . Hospital Care and Services . . . . . . . . Hotels and Motels Industry . . . . . . . . Household and Personal Products Industry . . . . . . . . . . . . . . . . .

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793 808 825 844

. . . .

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863 881 899 918

Industrial Design Industry . . . . . . . . . . . 952 Insurance Industry . . . . . . . . . . . . . . . 971 Internet and Cyber Communications Industry . . . . . . . . . . . . . . . . . . . 989 Landscaping Services . . . . . . Legal Services and Law Firms . Libraries and Archives Industry Light Machinery Industry . . . Livestock and Animal Products Industry. . . . . . . . . . . . Local Public Administration . .

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1005 1026 1043 1060

. . . . . . . 1078 . . . . . . . 1096

. . 937 VOLUME

4

Contents . . . . . . . . . . . . . . . . . . . lxxxiii Complete List of Contents . . . . . . . . . . lxxxv List of Tables and Sidebars . . . . . . . . . lxxxix

Nuclear Power Industry . . . . . . . . . . . 1297

Logging Industry . . . . . . . . . . . . . . . 1113

Paper Manufacturing and Products Industry. . . . . . . . . . . . . . . . Passenger Transportation and Transit Industry. . . . . . . . . . . . . . . . Personal Services . . . . . . . . . . . . Petroleum and Natural Gas Industry . Pharmaceuticals and Medications Industry. . . . . . . . . . . . . . . . Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry . Plastics and Rubber Manufacturing Industry. . . . . . . . . . . . . . . . Political Advocacy Industry. . . . . . . Postal and Package Delivery Services .

Mass Transportation Vehicles Industry . Medicine and Health Care Industry . . . Metals Manufacturing Industry . . . . . Mining Industry . . . . . . . . . . . . . . Motion Picture and Television Industry . Museums and Cultural Institutions Industry. . . . . . . . . . . . . . . . . Music Industry . . . . . . . . . . . . . .

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. . . . .

Outdoor Recreation Industry . . . . . . . . 1312

1131 1151 1169 1187 1204

. . 1225 . . 1241

National and International Security Industry. . . . . . . . . . . . . . . . . . . 1260 Natural Resources Management . . . . . . . 1276

VOLUME

Printing Industry . . . . . . . . . . . Private Education Industry . . . . . . Public Elementary and Secondary Education Industry . . . . . . . . Public Health Services . . . . . . . . Publishing and Information Industry

. . . . 1495 . . . . 1515

. . . 1351 . . . 1369 . . . 1384 . . . 1403 . . . 1423 . . . 1440 . . . 1458 . . . 1476

5

Real Estate Industry. . . . . . . . . Rental and Leasing Services . . . . Residential Medical Care Industry . Restaurant Industry . . . . . . . . . Retail Trade and Service Industry .

Contents . . . . . . . . . . . . . . . . . . . . cvii Complete List of Contents . . . . . . . . . . . cix List of Tables and Sidebars . . . . . . . . . . cxiii

. . . 1332

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1588 1606 1626 1644 1664

Scientific and Technical Services . . . . . . 1682 Scientific, Medical, and Health Equipment and Supplies Industry . . . . 1703

. . . . 1537 . . . . 1554 . . . . 1572 xiv

Complete List of Contents Shipbuilding, Submarines, and Naval Transport Industry. . . . . . . . . . Space Exploration and Space Science Industry. . . . . . . . . . . . . . . . Spectator Sports Industry. . . . . . . . Sports Equipment Industry. . . . . . .

Telecommunications Equipment Industry. . . . . . . . . . . . . . . . . . . 1799 Telecommunications Infrastructure Industry. . . . . . . . . . . . . . . . . . . 1819

. . . 1722 . . . 1741 . . . 1762 . . . 1783

VOLUME

6

Contents . . . . . . . . . . . . . . . . . . . cxxxi Complete List of Contents . . . . . . . . . cxxxiii List of Tables and Sidebars . . . . . . . . cxxxvii

Waste Management Industry . . . . . . . . . 1981 Watches and Jewelry Industry . . . . . . . . 1999 Water Supply Industry . . . . . . . . . . . . 2017

Textile and Fabrics Industry . . . . . . Theater and Performing Arts Industry Themed Entertainment Industry . . . Toys and Games Industry. . . . . . . . Travel and Tourism Industry. . . . . .

Employment by Industry, 2008 and Projected 2018 . . . . . . . . . . . Fortune 500 Companies by Industry, 2009. . . . . . . . . . . . . . . . . Bibliography. . . . . . . . . . . . . . Electronic Resources . . . . . . . . .

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. . . . .

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1839 1859 1877 1893 1910

Veterinary Industry . . . . . . . . . . . . . . 1927 Video, Computer, and Virtual Reality Games Industry . . . . . . . . . . . . . . 1947

. . . . 2037 . . . . 2044 . . . . 2060 . . . . 2129

Industries by Career Cluster . . . . . . . . . 2161 Jobs and Careers . . . . . . . . . . . . . . . 2164 Subject Index . . . . . . . . . . . . . . . . . 2181

Warehousing and Storage Industry . . . . . 1964

xv

List of Tables and Sidebars Accommodation Industry’s Contribution to the U.S. Economy, 920 Accountant: Occupation Profile, 12 Accountants and Auditors: Occupation Specialties, 4 Activities Therapist: Occupation Specialties, 1636 Actor: Occupation Specialties, 1871 Actuary: Occupation Profile, 984 Advertising Account Executive: Occupation Profile, 25 Advertising Agent: Occupation Specialties, 27 Aerospace Engineer: Occupation Profile, 1756 Aerospace Engineer: Occupation Specialties, 1755 Agricultural Scientist: Occupation Specialties, 627 Agriculture: Projected Employment for Selected Occupations, 628 Air Transportation: Projected Employment for Selected Occupations, 51 Aircraft Mechanic: Occupation Profile, 48 Airline Industry’s Contribution to the U.S. Economy, 39 Ambulatory Health Care Services’ Contribution to the U.S. Economy, 1153 Amusement Parks: Projected Employment for Selected Occupations, 1889 Animal Caretaker: Occupation Profile, 81 Animal Caretaker: Occupation Specialties, 82 Apparel Industry: Projected Employment for Selected Occupations, 102

Apparel Worker: Occupation Specialties, 92 Architect: Occupation Profile, 225 Architect: Occupation Specialties, 228 Archivist and Curator: Occupation Profile, 1235 Archivist and Curator: Occupation Specialties, 1237 Athletic Trainer: Occupation Profile, 1773 Auditor: Occupation Profile, 14 Automobile Salesperson: Occupation Profile, 112 Automotive Technician: Occupation Specialties, 119 Bank Teller: Occupation Profile, 135 Barber: Occupation Profile, 1374 Bellhop/Bell Captain: Occupation Specialties, 931 Beverage and Tobacco Product Manufacturing: Projected Employment for Selected Occupations, 174 Bindery Worker: Occupation Specialties, 1510 Biomedical Engineer: Occupation Profile, 1714 Biomedical Equipment Technician: Occupation Profile, 1716 Boilermaker: Occupation Profile, 191 Brickmason/Stonemason: Occupation Profile, 247 Broadcast Technician: Occupation Specialties, 210 Broadcasting and Telecommunications Industries, inputs consumed by the, 201 Broadcasting and Telecommunications xvii

Industries’ Contributions to the U.S. Economy, The, 201 Broadcasting: Projected Employment for Selected Occupations, 212 Budget Analyst: Occupation Profile, 262 Bulldozer Operator: Occupation Specialties, 873 Bus Driver: Occupation Profile, 1364 Business Services Industry’s Contribution to the U.S. Economy, 254 Camera Operator: Occupation Profile, 1220 Career/Technology Education Teacher: Occupation Profile, 464 Chemical Engineer: Occupation Specialties, 299 Chemical Equipment Operator: Occupation Specialties, 300 Chemical Manufacturing: Projected Employment for Selected Occupations, 302 Chemical Products Industry’s Contribution to the U.S. Economy, 289 Chemist: Occupation Profile, 190 Chemist: Occupation Specialties, 189 Child-care Worker: Occupation Profile, 518 Chiropractor: Occupation Profile, 370 Cinematographer: Occupation Profile, 1217 Civil Engineer: Occupation Specialties, 311 Clergy: Occupation Profile, 1435 Clothes Designer: Occupation Profile, 98

Survey of American Industry and Careers College Faculty Member: Occupation Profile, 859 Compositor and Typesetter: Occupation Profile, 1509 Computer and Electronic Product Manufacturing: Projected Employment for Selected Occupations, 394 Computer and Electronic Products Industry’s Contribution to the U.S. Economy, 381 Computer-Controlled Machine Tool Operator: Occupation Profile, 443 Computer-Controlled Machine Tool Operator: Occupation Specialties, 440 Computer-Controlled Tool Programmer: Occupation Profile, 442 Computer Engineer: Occupation Profile, 391 Computer Programmer: Occupation Profile, 408 Computer Security Specialist: Occupation Profile, 1000 Computer Systems Analyst: Occupation Profile, 426 Computer Systems Industry’s Contribution to the U.S. Economy, 416 Construction and Building Inspector: Occupation Specialties, 243 Construction Industry: Projected Employment for Selected Occupations, 250 Construction Industry’s Contribution to the U.S. Economy, The, 234 Construction Manager: Occupation Profile, 874 Contribution of Apparel and Leather Manufacturers to the U.S. Economy, 87 Contribution of Food, Beverage, and Tobacco Product Manufacturing to the U.S. Economy, 685

Contribution of Food Services and Drinking Places to the U.S. Economy, The, 1646 Contribution of Funds, Trusts, and Other Financial Vehicles to the U.S. Economy, The, 651 Contribution of Hospital, Nursing, and Residential Care Facilities to the U.S. Economy, 902 Contribution of Personal Services to the U.S. Economy, 1371 Contribution of Securities, Commodity Contracts, and Investments to the U.S. Economy, The, 650 Contribution of Textile and Textile Produce Mills to the U.S. Economy, The, 1841 Contribution to the U.S. Economy of Scientific, Technical, and Miscellaneous Professional Services, 1683 Cook/Chef: Occupation Profile, 1656 Cook/Chef: Occupation Specialties, 1657 Copywriter: Occupation Profile, 30 Corrections Officer: Occupation Profile, 494 Corrections Officer: Occupation Specialties, 493 Cosmetologist: Occupation Specialties, 1375 Cost Estimator: Occupation Specialties, 1507 Counter and Rental Clerk: Occupation Profile, 1619 Couriers and Messengers Industry: Projected Employment for Selected Occupations, 1492 Dancer/Choreographer: Occupation Profile, 1872 Dancer/Choreographer: Occupation Specialties, 1873 Dental Hygienist: Occupation Profile, 554 xviii

Dental Laboratory Technician: Occupation Specialties, 555 Dentist: Occupation Specialties, 553 Dietician and Nutritionist: Occupation Specialties, 819 Dispatcher: Occupation Profile, 1489 Drafter: Occupation Specialties, 313 Education Administrator: Occupation Specialties, 1527 Educational Counselor: Occupation Specialties, 1549 Educational Services: Projected Employment for Selected Occupations, 1551 Electrical and Electronics Engineer: Occupation Profile, 572 Electrical Equipment, Appliance, and Component Manufacturing: Projected Employment for Selected Occupations, 575 Electrical Equipment, Appliances, and Components Industry’s Contribution to the U.S. Economy, 561 Electrical Line Installer and Repairer: Occupation Specialties, 588 Electromechanical Equipment Assembler: Occupation Profile, 573 Electronic Commerce Specialist: Occupation Profile, 997 Elementary School Teacher: Occupation Profile, 1547 Energy Conservation and Use Technician: Occupation Profile, 607 Energy Conservation and Use Technician: Occupation Specialties, 608 Engineering Technician: Occupation Specialties, 1689 Environmental Engineer: Occupation Profile, 606

List of Tables and Sidebars Fabricated Metal Product Manufacturing: Projected Employment for Selected Occupations, 1183 Farmer/Farm Manager: Occupation Specialties, 625 Farming Industry’s Contribution to the U.S. Economy, 614 Federal Government’s Contribution to the U.S. Economy, The, 633 Federal Law Enforcement Agent: Occupation Specialties, 336-337 Finance and Insurance Industry: Projected Employment for Selected Occupations, 139 Firefighter: Occupation Profile, 1565 Fishing Industry: Projected Employment for Selected Occupations, 677 Fitness Trainer and Aerobics Instructor: Occupation Profile, 818 Flight Attendant: Occupation Profile, 46 Food and Beverage Service Worker: Occupation Profile, 736 Food and Beverage Stores: Projected Employment for Selected Occupations, 718 Food Manufacturing: Projected Employment for Selected Occupations, 700 Food Service Manager: Occupation Profile, 733 Food Services and Drinking Places: Projected Employment for Selected Occupations, 739 Forester and Conservation Scientist: Occupation Specialties, 1288 Forestry Worker: Occupation Profile, 1122 Forklift Operator: Occupation Profile, 1977

Funeral Director: Occupation Profile, 771 Furniture and Related Product Manufacturing: Projected Employment for Selected Occupations, 790 Furniture Manufacturing Industry’s Contribution to the U.S. Economy, 776 Gambling Industry: Projected Employment for Selected Occupations, 286 Gardener and Groundskeeper: Occupation Profile, 1020 Gardener and Groundskeeper: Occupation Specialties, 1021 Geologist and Geophysicist: Occupation Profile, 356 Hazardous Waste Manager: Occupation Profile, 1994 Health Care and Social Assistance Industry: Projected Employment for Selected Occupations, 1166 Health Information Technician: Occupation Profile, 910 Heavy and Civil Engineering Construction: Projected Employment for Selected Occupations, 877 Heavy Equipment Service Technician: Occupation Profile, 839 Highway Maintenance Worker: Occupation Profile, 875 Home Appliance Repairer: Occupation Profile, 888 Hospitals Industry: Projected Employment for Selected Occupations, 915 Hotel/Motel Manager: Occupation Specialties, 927 Hotels Industry: Projected Employment for Selected Occupations, 934 Housekeeper: Occupation Specialties, 1376 xix

Industrial Designer: Occupation Profile, 965 Industrial Engineer: Occupation Profile, 966 Industrial Hygienist: Occupation Profile, 1091 Industrial Machinery Mechanic: Occupation Profile, 1071 Inputs Consumed by Ambulatory Health Care Services, 1154 Inputs Consumed by Food Services and Drinking Places, 1646 Inputs Consumed by Funds, Trusts, and Other Financial Vehicles, 651 Inputs Consumed by Hospital, Nursing, and Residential Care Facilities, 902 Inputs Consumed by Manufacturers of Food, Beverages, and Tobacco Products, 685 Inputs Consumed by Personal Services, 1371 Inputs Consumed by Scientific, Technical, and Miscellaneous Professional Services, 1684 Inputs Consumed by Securities, Commodity Contracts, and Investments, 650 Inputs Consumed by State and Local Governments, 1097 Inputs Consumed by Textile Mills and Textile Product Mills, 1842 Inputs Consumed by the Accommodation Industry, 921 Inputs Consumed by the Airline Industry, 39 Inputs Consumed by the Apparel and Leather Manufacturing Industry, 88 Inputs Consumed by the Broadcasting and Telecommunications Industries, 201 Inputs Consumed by the Business Services Industry, 254

Survey of American Industry and Careers Inputs Consumed by the Chemical Products Industry, 289 Inputs Consumed by the Computer and Electronic Products Industry, 381 Inputs Consumed by the Computer Systems Industry, 416 Inputs Consumed by the Construction Industry, 234 Inputs Consumed by the Electrical Equipment, Appliances, and Components Industry, 562 Inputs Consumed by the Farming Industry, 614 Inputs Consumed by the Federal Government, 634 Inputs Consumed by the Furniture Manufacturing Industry, 776 Inputs Consumed by the Insurance Industry, 973 Inputs Consumed by the Legal Services Industry, 1029 Inputs Consumed by the Machinery Manufacturing Industry, 830 Inputs Consumed by the Mining Industry, 1191 Inputs Consumed by the Motion Picture and Sound Recording Industries, 1209 Inputs Consumed by the Motor Vehicle Industry, 107 Inputs Consumed by the Oil and Natural Gas Extraction Industry, 1387 Inputs Consumed by the Paper Products Industry, 1335 Inputs Consumed by the Pipeline Transportation Industry, 1388 Inputs Consumed by the Plastics and Rubber Products Industry, 1443 Inputs Consumed by the Primary Metals Manufacturing Industry, 1172

Inputs Consumed by the Printing Industry, 1499 Inputs Consumed by the Publishing Industry, 1575 Inputs Consumed by the Real Estate Industry, 1590 Inputs Consumed by the Rental and Leasing Industry, 1607 Inputs Consumed by the Retail Trade Industry, 1666 Inputs Consumed by the Transit and Ground Passenger Transportation Industry, 1353 Inputs Consumed by the Truck Transportation Industry, 744 Inputs Consumed by the Utilities Industries, 581 Inputs Consumed by the Warehousing and Storage Industry, 1967 Inputs Consumed by the Waste Management Industry, 1984 Inputs Consumed by the Water Transportation Industry, 1725 Inspector and Compliance Officer: Occupation Profile, 167 Inspector and Tester: Occupation Specialties, 533 Insulation Worker: Occupation Profile, 894 Insurance Carriers and Related Activities: Projected Employment for Selected Occupations, 986 Insurance Claims Adjuster and Examiner: Occupation Profile, 983 Insurance Industry’s Contribution to the U.S. Economy, 973 Interior Designer: Occupation Profile, 229 Jeweler and Watch Repairer: Occupation Profile, 2009 Journalist: Occupation Specialties, 1583 xx

Landscape Architect: Occupation Profile, 1019 Laundry/Dry Cleaning Machine Operator: Occupation Specialties, 1373 Lawyer: Occupation Specialties, 1037 Legal Services Industry’s Contribution to the U.S. Economy, 1029 Librarian: Occupation Specialties, 1053 Library Technician: Occupation Profile, 1055 Locomotive Engineer: Occupation Profile, 1365 Logging Industry: Projected Employment for Selected Occupations, 1128 Lumber Production Worker: Occupation Specialties, 1124 Machinery Manufacturing Industry’s Contribution to the U.S. Economy, The, 829 Machinery Manufacturing: Projected Employment for Selected Occupations, 841 Machinist: Occupation Profile, 803 Mail Carrier: Occupation Profile, 1490 Mail Clerk and Messenger: Occupation Specialties, 1491 Management Analyst and Consultant: Occupation Specialties, 264 Management of Companies and Enterprises: Projected Employment for Selected Occupations, 267 Manufacturers Representative: Occupation Profile, 694 Marine Biologist: Occupation Profile, 1289 Marine Engineer and Architect: Occupation Profile, 1735 Marine Engineer and Architect: Occupation Specialties, 1734

List of Tables and Sidebars Marriage Counselor: Occupation Profile, 473 Meat Cutter: Occupation Profile, 1088 Mechanical Engineer: Occupation Profile, 1074 Media Specialist: Occupation Specialties, 1056 Medical and Health Services Manager: Occupation Specialties, 911 Medical Records Administrator: Occupation Profile, 1637 Medical Scientist: Occupation Profile, 1566 Medical Social Worker: Occupation Profile, 478 Medical Technologist: Occupation Specialties, 1567 Merchandise Displayer: Occupation Profile, 1671 Metal/Plastic Working Machine Operator: Occupation Profile, 1144 Metallurgical/Materials Engineer: Occupation Specialties, 1180 Millwright: Occupation Profile, 697 Mining and Geological Engineer: Occupation Specialties, 1198 Mining and Quarrying: Projected Employment for Selected Occupations, 1201 Mining Industry’s Contribution to the U.S. Economy, 1190 Motion Picture and Sound Recording Industries’ Contribution to the U.S. Economy, 1209 Motion Picture, Video, and Sound Recording Industries: Projected Employment for Selected Occupations, 1222 Motor Vehicle Manufacturing: Projected Employment for Selected Occupations, 122 Motor Vehicles Industry’s Contribution to the U.S. Economy, The, 107

Museums, Historical Sites, and Similar Institutions: Projected Employment for Selected Occupations, 1238 Music Therapist: Occupation Profile, 480 Musical Instrument Repairer: Occupation Specialties, 1254 Musician and Composer: Occupation Profile, 1252 Musician and Composer: Occupation Specialties, 1251 Nuclear Engineer: Occupation Profile, 1306 Nuclear Engineer: Occupation Specialties, 1307 Nuclear Quality Control Inspector: Occupation Profile, 1308 Nurse Practitioner: Occupation Profile, 1638 Nursing and Residential Care Facilities: Projected Employment for Selected Occupations, 1641 Occupation Profile: Accountant, 12 Occupation Profile: Actuary, 984 Occupation Profile: Advertising Account Executive, 25 Occupation Profile: Aerospace Engineer, 1756 Occupation Profile: Aircraft Mechanic, 48 Occupation Profile: Animal Caretaker, 81 Occupation Profile: Architect, 225 Occupation Profile: Archivist and Curator, 1235 Occupation Profile: Athletic Trainer, 1773 Occupation Profile: Auditor, 14 Occupation Profile: Automobile Salesperson, 112 Occupation Profile: Bank Teller, 135 Occupation Profile: Barber, 1374 xxi

Occupation Profile: Biomedical Engineer, 1714 Occupation Profile: Biomedical Equipment Technician, 1716 Occupation Profile: Boilermaker, 191 Occupation Profile: Brickmason/Stonemason, 247 Occupation Profile: Budget Analyst, 262 Occupation Profile: Bus Driver, 1364 Occupation Profile: Camera Operator, 1220 Occupation Profile: Career/ Technology Education Teacher, 464 Occupation Profile: Chemist, 190 Occupation Profile: Child-care Worker, 518 Occupation Profile: Chiropractor, 370 Occupation Profile: Cinematographer, 1217 Occupation Profile: Clergy, 1435 Occupation Profile: Clothes Designer, 98 Occupation Profile: College Faculty Member, 859 Occupation Profile: Compositor and Typesetter, 1509 Occupation Profile: ComputerControlled Machine Tool Operator, 443 Occupation Profile: ComputerControlled Tool Programmer, 442 Occupation Profile: Computer Engineer, 391 Occupation Profile: Computer Programmer, 408 Occupation Profile: Computer Security Specialist, 1000 Occupation Profile: Computer Systems Analyst, 426 Occupation Profile: Construction Manager, 874 Occupation Profile: Cook/Chef, 1656

Survey of American Industry and Careers Occupation Profile: Copywriter, 30 Occupation Profile: Corrections Officer, 494 Occupation Profile: Counter and Rental Clerk, 1619 Occupation Profile: Dancer/ Choreographer, 1872 Occupation Profile: Dental Hygienist, 554 Occupation Profile: Dispatcher, 1489 Occupation Profile: Electrical and Electronics Engineer, 572 Occupation Profile: Electromechanical Equipment Assembler, 573 Occupation Profile: Electronic Commerce Specialist, 997 Occupation Profile: Elementary School Teacher, 1547 Occupation Profile: Energy Conservation and Use Technician, 607 Occupation Profile: Environmental Engineer, 606 Occupation Profile: Firefighter, 1565 Occupation Profile: Fitness Trainer and Aerobics Instructor, 818 Occupation Profile: Flight Attendant, 46 Occupation Profile: Food and Beverage Service Worker, 736 Occupation Profile: Food Service Manager, 733 Occupation Profile: Forestry Worker, 1122 Occupation Profile: Forklift Operator, 1977 Occupation Profile: Funeral Director, 771 Occupation Profile: Gardener and Groundskeeper, 1020 Occupation Profile: Geologist and Geophysicist, 356

Occupation Profile: Hazardous Waste Manager, 1994 Occupation Profile: Health Information Technician, 910 Occupation Profile: Heavy Equipment Service Technician, 839 Occupation Profile: Highway Maintenance Worker, 875 Occupation Profile: Home Appliance Repairer, 888 Occupation Profile: Industrial Designer, 965 Occupation Profile: Industrial Engineer, 966 Occupation Profile: Industrial Hygienist, 1091 Occupation Profile: Industrial Machinery Mechanic, 1071 Occupation Profile: Inspector and Compliance Officer, 167 Occupation Profile: Insulation Worker, 894 Occupation Profile: Insurance Claims Adjuster and Examiner, 983 Occupation Profile: Interior Designer, 229 Occupation Profile: Jeweler and Watch Repairer, 2009 Occupation Profile: Landscape Architect, 1019 Occupation Profile: Library Technician, 1055 Occupation Profile: Locomotive Engineer, 1365 Occupation Profile: Machinist, 803 Occupation Profile: Mail Carrier, 1490 Occupation Profile: Manufacturers Representative, 694 Occupation Profile: Marine Biologist, 1289 Occupation Profile: Marine Engineer and Architect, 1735 Occupation Profile: Marriage Counselor, 473 xxii

Occupation Profile: Meat Cutter, 1088 Occupation Profile: Mechanical Engineer, 1074 Occupation Profile: Medical Records Administrator, 1637 Occupation Profile: Medical Scientist, 1566 Occupation Profile: Medical Social Worker, 478 Occupation Profile: Merchandise Displayer, 1671 Occupation Profile: Metal/ Plastic Working Machine Operator, 1144 Occupation Profile: Millwright, 697 Occupation Profile: Music Therapist, 480 Occupation Profile: Musician and Composer, 1252 Occupation Profile: Nuclear Engineer, 1306 Occupation Profile: Nuclear Quality Control Inspector, 1308 Occupation Profile: Nurse Practitioner, 1638 Occupation Profile: Occupational Therapist, 515 Occupation Profile: Office Machine Repairer, 1073 Occupation Profile: Online Merchant, 941 Occupation Profile: Packer/ Packager, 1905 Occupation Profile: Painting/ Coating Machine Operator, 1904 Occupation Profile: Paralegal, 1038 Occupation Profile: Park Ranger, 339 Occupation Profile: Parole and Probation Officer, 495 Occupation Profile: Pharmaceutical Sales Representative, 1416 Occupation Profile: Pharmacist, 1410

List of Tables and Sidebars Occupation Profile: Plumber and Pipefitter, 892 Occupation Profile: Precision Assembler, 535 Occupation Profile: Prepress Technician, 1584 Occupation Profile: Principal, 1546 Occupation Profile: Production Coordinator, 1812 Occupation Profile: Professional Athlete, 1774 Occupation Profile: Public Administrator, 1108 Occupation Profile: Public Relations Specialist, 1470 Occupation Profile: Quality Control Inspector, 1795 Occupation Profile: Range Manager, 1290 Occupation Profile: Real Estate Sales Agent, 1601 Occupation Profile: Recreation Program Director, 1324 Occupation Profile: Recreation Worker, 1325 Occupation Profile: Refuse Collector, 1995 Occupation Profile: Research Assistant, 857 Occupation Profile: Retail Salesperson, 715 Occupation Profile: Retail Store Sales Manager, 1675 Occupation Profile: Riveter, 1145 Occupation Profile: Robotics Technician, 804 Occupation Profile: Science Technician, 154 Occupation Profile: Secondary School Teacher, 1531 Occupation Profile: Ship Loader, 755 Occupation Profile: Software Designer, 409 Occupation Profile: Soil Scientist, 1291 Occupation Profile: Solar Energy System Installer, 69

Occupation Profile: Stationary Engineer, 1811 Occupation Profile: Teacher Assistant, 1532 Occupation Profile: Technical Sales Representative, 1715 Occupation Profile: Telecommunications Installer and Repairer, 1834 Occupation Profile: Telephone Installer and Repairer, 1813 Occupation Profile: Textile Machine Operator, 1852 Occupation Profile: Tool and Die Maker, 2012 Occupation Profile: Upholsterer, 788 Occupation Profile: Urban and Regional Planner, 319 Occupation Profile: Veterinary Assistant/Technician, 1939 Occupation Profile: Water and Wastewater Engineer, 2029 Occupation Profile: Water Treatment Plant Operator, 2030 Occupation Profile: Wholesale Sales Representative, 170 Occupation Profile: Wind Energy Engineer, 71 Occupation Profile: Woodworker, 789 Occupation Specialties: Accountants and Auditors, 4 Occupation Specialties: Activities Therapist, 1636 Occupation Specialties: Actor, 1871 Occupation Specialties: Advertising Agent, 27 Occupation Specialties: Aerospace Engineer, 1755 Occupation Specialties: Agricultural Scientist, 627 Occupation Specialties: Animal Caretaker, 82 Occupation Specialties: Apparel Worker, 92 Occupation Specialties: Architect, 228 xxiii

Occupation Specialties: Archivist and Curator, 1237 Occupation Specialties: Automotive Technician, 119 Occupation Specialties: Bellhop/Bell Captain, 931 Occupation Specialties: Bindery Worker, 1510 Occupation Specialties: Broadcast Technician, 210 Occupation Specialties: Bulldozer Operator, 873 Occupation Specialties: Chemical Engineer, 299 Occupation Specialties: Chemical Equipment Operator, 300 Occupation Specialties: Chemist, 189 Occupation Specialties: Civil Engineer, 311 Occupation Specialties: Computer-Controlled Machine Tool Operator, 440 Occupation Specialties: Construction and Building Inspector, 243 Occupation Specialties: Cook/ Chef, 1657 Occupation Specialties: Corrections Officer, 493 Occupation Specialties: Cosmetologist, 1375 Occupation Specialties: Cost Estimator, 1507 Occupation Specialties: Dancer/ Choreographer, 1873 Occupation Specialties: Dental Laboratory Technician, 555 Occupation Specialties: Dentist, 553 Occupation Specialties: Dietician and Nutritionist, 819 Occupation Specialties: Drafter, 313 Occupation Specialties: Education Administrator, 1527 Occupation Specialties: Educational Counselor, 1549

Survey of American Industry and Careers Occupation Specialties: Electrical Line Installer and Repairer, 588 Occupation Specialties: Energy Conservation and Use Technician, 608 Occupation Specialties: Engineering Technician, 1689 Occupation Specialties: Farmer/ Farm Manager, 625 Occupation Specialties: Federal Law Enforcement Agent, 336337 Occupation Specialties: Forester and Conservation Scientist, 1288 Occupation Specialties: Gardener and Groundskeeper, 1021 Occupation Specialties: Hotel/ Motel Manager, 927 Occupation Specialties: Housekeeper, 1376 Occupation Specialties: Inspector and Tester, 533 Occupation Specialties: Journalist, 1583 Occupation Specialties: Laundry/Dry Cleaning Machine Operator, 1373 Occupation Specialties: Lawyer, 1037 Occupation Specialties: Librarian, 1053 Occupation Specialties: Lumber Production Worker, 1124 Occupation Specialties: Mail Clerk and Messenger, 1491 Occupation Specialties: Management Analyst and Consultant, 264 Occupation Specialties: Marine Engineer and Architect, 1734 Occupation Specialties: Media Specialist, 1056 Occupation Specialties: Medical and Health Services Manager, 911 Occupation Specialties: Medical Technologist, 1567

Occupation Specialties: Metallurgical/Materials Engineer, 1180 Occupation Specialties: Mining and Geological Engineer, 1198 Occupation Specialties: Musical Instrument Repairer, 1254 Occupation Specialties: Musician and Composer, 1251 Occupation Specialties: Nuclear Engineer, 1307 Occupation Specialties: Packer/ Packager, 1906 Occupation Specialties: Pharmacist, 1409 Occupation Specialties: Police Officer, 341 Occupation Specialties: Power Plant Operator, 587 Occupation Specialties: Precision Assembler, 534 Occupation Specialties: Property and Real Estate Manager, 1600 Occupation Specialties: Psychologist, 471 Occupation Specialties: Public Relations Specialist, 1469 Occupation Specialties: Rail Transportation Worker, 752 Occupation Specialties: Recreation Worker, 1326 Occupation Specialties: Renewable Energy Technician, 70 Occupation Specialties: Reservation and Ticket Agent, 1920 Occupation Specialties: Science Technician, 1694 Occupation Specialties: Small Engine Mechanic, 1072 Occupation Specialties: Special Education Teacher, 1548 Occupation Specialties: Sports Instructor/Coach, 1772 Occupation Specialties: Telecommunications Equipment Installer/ Repairer, 1833 xxiv

Occupation Specialties: Textile Machine Operator, 1853 Occupation Specialties: Travel Agent, 1921 Occupation Specialties: Veterinarian, 1938 Occupation Specialties: Welder, 1144 Occupational Therapist: Occupation Profile, 515 Occupations in Pharmaceutical and Medicine Manufacturing: Projected Employment for Selected Occupations, 1420 Office Machine Repairer: Occupation Profile, 1073 Oil and Gas Extraction Industry’s Contribution to the U.S. Economy, 1387 Oil and Gas Extraction: Projected Employment for Selected Occupations, 1400 Online Merchant: Occupation Profile, 941 Packer/Packager: Occupation Profile, 1905 Packer/Packager: Occupation Specialties, 1906 Painting/Coating Machine Operator: Occupation Profile, 1904 Paper Manufacturing: Projected Employment for Selected Occupations, 1347 Paper Products Industry’s Contribution to the U.S. Economy, 1335 Paralegal: Occupation Profile, 1038 Park Ranger: Occupation Profile, 339 Parole and Probation Officer: Occupation Profile, 495 Performing Arts: Projected Employment for Selected Occupations, 1874 Personal and Laundry Services: Projected Employment for Selected Occupations, 1382

List of Tables and Sidebars Petroleum and Coal Products Manufacturing: Projected Employment for Selected Occupations, 1401 Pharmaceutical Sales Representative: Occupation Profile, 1416 Pharmacist: Occupation Profile, 1410 Pharmacist: Occupation Specialties, 1409 Pipeline Transporation Industry’s Contribution to the U.S. Economy, The, 1388 Plastics and Rubber Products Industry’s Contribution to the U.S. Economy, 1443 Plastics and Rubber Products Manufacturing: Projected Employment for Selected Occupations, 1455 Plumber and Pipefitter: Occupation Profile, 892 Police Officer: Occupation Specialties, 341 Postal Service Industry: Projected Employment for Selected Occupations, 1493 Power Plant Operator: Occupation Specialties, 587 Precision Assembler: Occupation Profile, 535 Precision Assembler: Occupation Specialties, 534 Prepress Technician: Occupation Profile, 1584 Primary Metal Manufacturing: Projected Employment for Selected Occupations, 1184 Primary Metals Manufacturing Industry’s Contribution to the U.S. Economy, 1172 Principal: Occupation Profile, 1546 Printing and Related Support Activities: Projected Employment for Selected Occupations, 1512 Printing Industry’s Contribution to the U.S. Economy, 1499

Production Coordinator: Occupation Profile, 1812 Professional Athlete: Occupation Profile, 1774 Professional, Scientific, and Technical Services: Projected Employment for Selected Occupations, 1700 Projected Employment for Selected Occupations: Agriculture, 628 Projected Employment for Selected Occupations: Air Transportation, 51 Projected Employment for Selected Occupations: Amusement Parks, 1889 Projected Employment for Selected Occupations: Apparel Industry, 102 Projected Employment for Selected Occupations: Beverage and Tobacco Product Manufacturing, 174 Projected Employment for Selected Occupations: Broadcasting, 212 Projected Employment for Selected Occupations: Chemical Manufacturing, 302 Projected Employment for Selected Occupations: Computer and Electronic Product Manufacturing, 394 Projected Employment for Selected Occupations: Construction Industry, 250 Projected Employment for Selected Occupations: Couriers and Messengers Industry, 1492 Projected Employment for Selected Occupations: Educational Services, 1551 Projected Employment for Selected Occupations: Electrical Equipment, Appliance, and Component Manufacturing, 575 xxv

Projected Employment for Selected Occupations: Fabricated Metal Product Manufacturing, 1183 Projected Employment for Selected Occupations: Finance and Insurance Industry, 139 Projected Employment for Selected Occupations: Fishing Industry, 677 Projected Employment for Selected Occupations: Food and Beverage Stores, 718 Projected Employment for Selected Occupations: Food Manufacturing, 700 Projected Employment for Selected Occupations: Food Services and Drinking Places, 739 Projected Employment for Selected Occupations: Furniture and Related Product Manufacturing, 790 Projected Employment for Selected Occupations: Gambling Industry, 286 Projected Employment for Selected Occupations: Health Care and Social Assistance Industry, 1166 Projected Employment for Selected Occupations: Heavy and Civil Engineering Construction, 877 Projected Employment for Selected Occupations: Hospitals Industry, 915 Projected Employment for Selected Occupations: Hotels Industry, 934 Projected Employment for Selected Occupations: Insurance Carriers and Related Activities, 986 Projected Employment for Selected Occupations: Logging Industry, 1128

Survey of American Industry and Careers Projected Employment for Selected Occupations: Machinery Manufacturing, 841 Projected Employment for Selected Occupations: Management of Companies and Enterprises, 267 Projected Employment for Selected Occupations: Mining and Quarrying, 1201 Projected Employment for Selected Occupations: Motion Picture, Video, and Sound Recording Industries, 1222 Projected Employment for Selected Occupations: Motor Vehicle Manufacturing, 122 Projected Employment for Selected Occupations: Museums, Historical Sites, and Similar Institutions, 1238 Projected Employment for Selected Occupations: Nursing and Residential Care Facilities, 1641 Projected Employment for Selected Occupations: Oil and Gas Extraction, 1400 Projected Employment for Selected Occupations: Paper Manufacturing, 1347 Projected Employment for Selected Occupations: Performing Arts, 1874 Projected Employment for Selected Occupations: Personal and Laundry Services, 1382 Projected Employment for Selected Occupations: Petroleum and Coal Products Manufacturing, 1401 Projected Employment for Selected Occupations: Pharmaceutical and Medicine Manufacturing, 1420 Projected Employment for Selected Occupations: Plastics and Rubber Products Manufacturing, 1455

Projected Employment for Selected Occupations: Postal Service Industry, 1493 Projected Employment for Selected Occupations: Primary Metal Manufacturing, 1184 Projected Employment for Selected Occupations: Printing and Related Support Activities, 1512 Projected Employment for Selected Occupations: Professional, Scientific, and Technical Services, 1700 Projected Employment for Selected Occupations: Publishing Industries, 1585 Projected Employment for Selected Occupations: Rail Transportation, 1147 Projected Employment for Selected Occupations: Real Estate Industry, 1603 Projected Employment for Selected Occupations: Real Estate Rental and Leasing, 1604 Projected Employment for Selected Occupations: Religious, Grantmaking, Civic, Professional, and Similar Organizations, 1437 Projected Employment for Selected Occupations: Rental and Leasing Services, 1623 Projected Employment for Selected Occupations: Restaurants, 1660 Projected Employment for Selected Occupations: Retail Trade Industry, 1679 Projected Employment for Selected Occupations: Scenic and Sightseeing Transportation, 1922 Projected Employment for Selected Occupations: Securities, Commodity Contracts, and Related Activities, 661 xxvi

Projected Employment for Selected Occupations: Social Assistance, 520 Projected Employment for Selected Occupations: Specialty Trade Contractors, 897 Projected Employment for Selected Occupations: Sporting Goods, Hobby, Book, and Music Stores, 1796 Projected Employment for Selected Occupations: Support Activities for Mining, 1399 Projected Employment for Selected Occupations: Support Activities for Transportation, 1367 Projected Employment for Selected Occupations: Telecommunications Industry, 1832 Projected Employment for Selected Occupations: Textile Mills, 1851 Projected Employment for Selected Occupations: Textile Product Mills, 1854 Projected Employment for Selected Occupations: Transit and Ground Passenger Transportation, 1366 Projected Employment for Selected Occupations: Transportation Equipment Manufacturing, 1147 Projected Employment for Selected Occupations: Truck Transportation, 757 Projected Employment for Selected Occupations: Utilities Industry, 590 Projected Employment for Selected Occupations: Warehousing and Storage, 1978 Projected Employment for Selected Occupations: Waste

List of Tables and Sidebars Management and Remediation Services, 1997 Projected Employment for Selected Occupations: Water Transportation, 2031 Projected Employment for Selected Occupations: Wood Product Manufacturing, 230 Property and Real Estate Manager: Occupation Specialties, 1600 Psychologist: Occupation Specialties, 471 Public Administrator: Occupation Profile, 1108 Public Relations Specialist: Occupation Profile, 1470 Public Relations Specialist: Occupation Specialties, 1469 Publishing Industries: Projected Employment for Selected Occupations, 1585 Publishing Industry’s Contribution to the U.S. Economy, 1574 Quality Control Inspector: Occupation Profile, 1795 Rail Transportation: Projected Employment for Selected Occupations, 1147 Rail Transportation Worker: Occupation Specialties, 752 Range Manager: Occupation Profile, 1290 Real Estate Industry: Projected Employment for Selected Occupations, 1603 Real Estate Industry’s Contribution to the U.S. Economy, 1590 Real Estate Rental and Leasing: Projected Employment for Selected Occupations, 1604 Real Estate Sales Agent: Occupation Profile, 1601 Recreation Program Director: Occupation Profile, 1324

Recreation Worker: Occupation Profile, 1325 Recreation Worker: Occupation Specialties, 1326 Refuse Collector: Occupation Profile, 1995 Religious, Grantmaking, Civic, Professional, and Similar Organizations: Projected Employment for Selected Occupations, 1437 Renewable Energy Technician: Occupation Specialties, 70 Rental and Leasing Industry’s Contribution to the U.S. Economy, 1607 Rental and Leasing Services: Projected Employment for Selected Occupations, 1623 Research Assistant: Occupation Profile, 857 Reservation and Ticket Agent: Occupation Specialties, 1920 Restaurants: Projected Employment for Selected Occupations, 1660 Retail Salesperson: Occupation Profile, 715 Retail Store Sales Manager: Occupation Profile, 1675 Retail Trade Industry: Projected Employment for Selected Occupations, 1679 Retail Trade Industry’s Contribution to the U.S. Economy, 1666 Riveter: Occupation Profile, 1145 Robotics Technician: Occupation Profile, 804 Scenic and Sightseeing Transportation: Projected Employment for Selected Occupations, 1922 Science Technician: Occupation Profile, 154 Science Technician: Occupation Specialties, 1694 Secondary School Teacher: Occupation Profile, 1531 xxvii

Securities, Commodity Contracts, and Related Activities: Projected Employment for Selected Occupations, 661 Ship Loader: Occupation Profile, 755 Small Engine Mechanic: Occupation Specialties, 1072 Social Assistance: Projected Employment for Selected Occupations, 520 Software Designer: Occupation Profile, 409 Soil Scientist: Occupation Profile, 1291 Solar Energy System Installer: Occupation Profile, 69 Special Education Teacher: Occupation Specialties, 1548 Specialty Trade Contractors: Projected Employment for Selected Occupations, 897 Sporting Goods, Hobby, Book, and Music Stores: Projected Employment for Selected Occupations, 1796 Sports Instructor/Coach: Occupation Specialties, 1772 State and Local Governments’ Contribution to the U.S. Economy, 1097 Stationary Engineer: Occupation Profile, 1811 Support Activities for Mining: Projected Employment for Selected Occupations, 1399 Support Activities for Transportation: Projected Employment for Selected Occupations, 1367 Teacher Assistant: Occupation Profile, 1532 Technical Sales Representative: Occupation Profile, 1715

Survey of American Industry and Careers Telecommunications Equipment Installer/Repairer: Occupation Specialties, 1833 Telecommunications Industry: Projected Employment for Selected Occupations, 1832 Telecommunications Installer and Repairer: Occupation Profile, 1834 Telephone Installer and Repairer: Occupation Profile, 1813 Textile Machine Operator: Occupation Profile, 1852 Textile Machine Operator: Occupation Specialties, 1853 Textile Mills: Projected Employment for Selected Occupations, 1851 Textile Product Mills: Projected Employment for Selected Occupations, 1854 Tool and Die Maker: Occupation Profile, 2012 Transit and Ground Passenger Transportation Industry’s Contribution to the U.S. Economy, 1353 Transit and Ground Passenger Transportation: Projected Employment for Selected Occupations, 1366

Transportation Equipment Manufacturing: Projected Employment for Selected Occupations, 1147 Travel Agent: Occupation Specialties, 1921 Truck Transportation Industry’s Contribution to the U.S. Economy, 744 Truck Transportation: Projected Employment for Selected Occupations, 757 Upholsterer: Occupation Profile, 788 Urban and Regional Planner: Occupation Profile, 319 Utilities Industries’ Contribution to the U.S. Economy, 580 Utilities Industry: Projected Employment for Selected Occupations, 590 Veterinarian: Occupation Specialties, 1938 Veterinary Assistant/Technician: Occupation Profile, 1939 Warehousing and Storage Industry’s Contribution to the U.S. Economy, 1966

xxviii

Warehousing and Storage: Projected Employment for Selected Occupations, 1978 Waste Management and Remediation Services: Projected Employment for Selected Occupations, 1997 Waste Management Industry’s Contribution to the U.S. Economy, 1983 Water and Wastewater Engineer: Occupation Profile, 2029 Water Transportation Industry’s Contribution to the U.S. Economy, 1724 Water Transportation: Projected Employment for Selected Occupations, 2031 Water Treatment Plant Operator: Occupation Profile, 2030 Welder: Occupation Specialties, 1144 Wholesale Sales Representative: Occupation Profile, 170 Wind Energy Engineer: Occupation Profile, 71 Wood Product Manufacturing: Projected Employment for Selected Occupations, 230 Woodworker: Occupation Profile, 789

SURVEY OF

American Industry and Careers

law enforcement agencies uncover white-collar crime. Accountants also prepare personal General Industry: Business, Management, and and corporate income tax reAdministration turns and related paperwork. Career Clusters: Business, Management, and Administration; Accounting is a tool of the Finance; Government and Public Administration American capitalistic system. Subcategory Industries: Auditing Services; Billing Services; There are at least three broad arBookkeeping Services; Certified Public Accountants’ eas of the accounting profession, Firms; Financial Planning Services; Forensic Accounting; including public accounting, Other Accountants’ Firms; Payroll Services; Talent managerial accounting, and govPayment Services; Tax Preparation Services ernmental accounting. Within Related Industries: Business Services; Financial Services each of these broad categories, Industry; Legal Services and Law Firms an individual accountant may Annual Domestic Revenues: $115 billion USD (Hoovers, be involved in activities such as 2009) financial accounting, cost acNAICS Number: 5412 counting, taxation, auditing, or management consulting. For example, a tax accountant might work for a public accounting firm, an industrial firm, or the Internal Revenue INDUSTRY DEFINITION Service or a state tax agency. Accountants maintain financial records and investigate fraud and related Summary crimes. As one early auditor summarized the proThe accounting industry records, tracks, anafession in 1896, an accountant “is the foe of deceit lyzes, and reports on financial transactions for indiand the champion of honesty.” viduals, organizations, businesses, and government entities. Accountants prepare the financial History of the Industry statements that are used by investors to determine The accounting profession is quite old. The first which investments to pursue. They help businesses book on accounting was written in Italy in 1494 by plan and evaluate their operations, and they help INDUSTRY

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© Jose Antonio Santiso Fernández/iStockphoto.com

Accounting Services

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Accounting Services

Luca Pacioli. Even that was not the birth of accounting; the profession itself had been around since ancient times. Accounting has existed for as long as people have needed to keep records. In fact, accounting predates writing: It was the need for accounting records that led to the invention of writing. Today, much of what is known about the early Greek, Roman, and Egyptian civilizations is derived from their accounting records, which were carved into wet clay tablets or written on papyrus. Even some of the famed Dead Sea Scrolls were accounting records of animals brought to temples for sacrifice. Pacioli recorded in writing accounting procedures that could previously be learned only through apprenticeship. Many aspects of accounting have not changed over the five hundred years since Pacioli published his tome. In fact, almost nothing changed for the first four hundred years, but in the late 1800’s and early 1900’s changes began to occur as a result of the industrialization of the world’s major economies.

From the earliest days of settlement, accounting has been an important trade in America. Christopher Columbus sailed with an accountant among the crew on his famous voyage to the New World in 1492. Queen Isabella insisted that the accountant accompany Columbus to keep an eye on her investment. The Pilgrims, by contrast, did not have any accountants with them when they sailed to America in 1620. Their lack of accounting skills added greatly to the hardships they suffered over their first few years in the New World. They were unable to reconcile their accounts with those of their London backers, and as a result they seem to have repaid those backers several times over during their first twenty years in Massachusetts. To suggest that the hardships faced by the Pilgrims were caused by a lack of accounting knowledge is certainly to make a strong statement, but such was indeed the case, as it has been for hundreds of thousands of other organizations since that time. Although accountants have always been impor-

Accountants are perhaps best known for their role in income tax preparation. (©Roman Milert/Dreamstime.com)

Accounting Services tant to the people they have served, the growth of railroads and the subsequent Industrial Revolution made accounting and accountants necessary for many more types of organizations. Before the Industrial Revolution, businesses were usually small enough for their owners to maintain their own accounting records. The growth of large factories made it necessary for many manufacturing concerns to hire professional accountants to keep their records. These records became more important because larger businesses not only have more complex operations but also require larger investments in order to sustain themselves. The railroad industry in the United States played a major role in the professionalization of accounting. The railroads, in general, were the country’s first truly large corporations. They required a great deal of capital from many thousands of stockholders. Those stockholders wanted to see financial statements to determine whether the railroads were profitable. As a result, railroad companies hired a large cadre of accountants. The railroads also pioneered the field of internal auditing. Many accountants were hired by the railroads to serve as internal auditors; they visited every depot along the tracks to audit the financial records of each station agent. In the late 1800’s, many of those railroad accountants started their own public accounting firms. Public accountants offered their services to any companies that needed them, working for each client for as little as a week or two each year. They became the freelancers of the accounting profession. Initially, public accounting firms provided auditing services, prepared finances, developed accounting systems for new businesses, and investigated fraud. Their duties changed significantly in 1913 with the passage of the Sixteenth Amendment to the U.S. Constitution, which established the constitutionality of a direct tax on income. Suddenly there was a new business opportunity for public accountants. Initially, few Americans paid income taxes, but with the onset of World War I the tax rates increased and more people were added to the tax rolls. The Industry Today The accounting industry is quite broad and encompasses many closely related components. First, there is the field of managerial accounting (some-

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Accountants can help individuals minimize income, capital gains, and inheritance taxes through careful planning. (©Lucian Milasan/Dreamstime.com)

times called private accounting), in which accountants work full time for one business or not-forprofit agency. Managerial accountants are part of their organizations’ management teams. They may keep records of transactions and prepare financial statements, such as balance sheets and income statements, or they may perform cost accounting, attempting to determine the exact cost of every item that a company manufactures. Cost accountants provide this information to managers, who then determine what prices to charge for their companies’ products. Accountants also assess whether companies have sufficient cash flow to purchase new equipment, and if the funds are insufficient, they may work to arrange loans from financial institutions. Other managerial accountants may be internal auditors, who work constantly to assess whether employees are working efficiently, effectively, and economically. Internal auditors look for fraud perpetrated by employees, as well as inefficiencies in the production process. At the end of each fiscal year, managerial tax accountants prepare tax returns. Companies pay more than just federal income taxes; they also pay taxes in every city, state, and country within which they operate. Simply preparing a company’s many tax returns can be a full-time, year-round business for the company’s tax department. Still other accountants may prepare their companies’ annual budgets and then monitor actual results to deter-

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Accounting Services OCCUPATION

SPECIALTIES

Accountants and Auditors Specialty

Responsibilities

Budget accountants

Apply principles of accounting to analyze past and present financial operations in order to prepare a budget.

County/city auditors

Direct activities of personnel engaged in recording deeds and similar legal instruments, keep records of county or municipal accounts, compile and transmit fiscal records, prepare financial statements, and audit books of city or county offices.

Internal auditors

Examine and analyze the accounting records of a business and prepare reports concerning its financial status and operating procedures.

Management accountants

Plan, set up, and direct the operation of an accounting system to determine the cost of producing or selling an item or service.

Property accountants

Identify and keep records of equipment, buildings, and other property leased or owned by a company.

Public accountants

Prepare federal, state, and local tax returns of individuals, businesses, or other organizations.

Systems accountants

Devise and install special accounting systems and related procedures in establishments that cannot use a standardized system.

Tax auditors

Audit financial records to determine tax liability; review information gathered from the taxpayer, such as material assets, income, surpluses, liabilities, and expenditures to verify net worth or reported financial status.

mine whether management is staying within the restrictions imposed by their budgets. Once a company has completed its financial statements, it may call in a public accounting firm to conduct an independent audit of those statements. Audits by independent certified public accountants (CPAs) are required by the various stock exchanges (such as the New York Stock Exchange and NASDAQ) and by federal securities laws. Also, local banks often require that their loan customers have annual independent audits by accounting firms. Public accountants are probably the most visible members of the accounting industry. Public accountants are independent of their clients. They typically work only a week or two each year for each of their clients, unless the client is extremely large,

like General Motors or General Electric, in which case public accountants may work almost full time auditing one company’s records. The auditor acts as an independent third party who verifies to outsiders (investors and creditors) that a company’s financial statements are reasonable. Besides conducting audits, public accounting firms are very involved in tax planning and preparation services. The larger public accounting firms often concentrate on tax planning, advising their clients on how to structure transactions in such a manner as to minimize taxes. Smaller accounting firms perform the same service for their smaller clients, and they also prepare those clients’ tax returns. Smaller companies often cannot afford to keep tax preparers on payroll full time, so they hire

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nancial statements to be sure that investors are not accounting firms to, in effect, be their tax departbeing cheated. ments. Another major service offered by most large In addition to these primary areas of accountaccounting firms and many smaller firms is maning, accountants may practice in numerous other agement consulting. CPAs see different businesses areas. Bookkeepers, for example, record business every week; as a result, they become experts in how transactions. They are paid less than accountants to run a company. Thus, some firms advise corpobut require many of the same skills. Most towns rate managers of ways to improve their companies’ have small public accounting firms that service profits. only small businesses, and these firms may perform Government agencies are also large employers bookkeeping services (sometimes called write-up of accountants. For example, the Internal Revenue work) for businesses too small to afford to keep Service (IRS) employs thousands of accountants to bookkeepers on staff. Small public accounting conduct tax audits. Internal Revenue agents evalufirms may also offer payroll-preparation services, ate the accuracy of personal and corporate tax rewriting the weekly or monthly checks for a large turns. State tax authorities hire large numbers of number of local employers. They are also heavily accountants to perform the same activities at the involved in tax preparation services during the first state level. In addition, the Government Accountthree months of the calendar year, when individuability Office (GAO) and the twenty-six inspectors als have to pay their taxes. CPAs are also typically ingeneral of various federal agencies and cabinet devolved in estate planning and personal financial partments (such as the Department of Defense or planning. Even when a client goes to a law firm for the Department of Transportation) employ a great estate planning, the lawyer will often call in an acmany accountants. The GAO is the federal governcountant to handle the tax aspects of the estate ment’s auditing agency. Both GAO auditors and plan. Also, larger law firms typically have accounthose in inspector general offices conduct audits to tants on staff to handle questions relating to estate be sure that government agencies are being operand gift taxes. ated in the most efficient possible manner and that In addition to practical accounting, some acvendors are not cheating the government. These countants conduct education and research, teachauditing jobs are usually interesting because the ing at colleges, community colleges, and high auditors routinely deal with different activities alschools. Professors of accounting engage in remost every other week. search and communicate their research results Still another large employer of accountants is the Federal Bureau of Investigation (FBI). In fact, most jobs at the FBI have historically required a degree in accounting. The FBI needs accountants because so much of its work is related to white-collar crime. Even terrorism cases often hinge on financial analysis; FBI accountants trace terrorists’ funds to determine both their sources and the uses to which they are put. The Securities and Exchange Commission (SEC) is another large employer of accountants. The SEC is the overseer of the United States’ public financial markets (the An important function of accountants is auditing, or performing an internal or exterstock exchanges) and is connal examination of a company’s financial records. (©Uyen Le/iStockphoto.com) stantly analyzing companies’ fi-

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Accounting Services

to the members of the accounting and financial community. Accounting degrees are also useful as general business degrees, since students learn principles applicable to any financial venture. Accounting graduates have traditionally been the highest-paid graduates among students in the business disciplines. In fact, accounting graduates at many colleges and universities receive the highest starting salaries of any majors, and raises come often to those who work conscientiously.

INDUSTRY MARKET SEGMENTS Accounting businesses range in size from sole proprietorships to very large partnerships. The largest has approximately forty-five thousand employees, thirty-two thousand of whom are accountants.

Accountants can help individuals create savings plans to pay for their children’s education, a new business venture, or retirement. (©Andrey Ananyn/Dreamstime.com)

Small Businesses The smallest accounting firms have only one CPA, who is called the sole proprietor. Such firms typically deal with very small clients. As a firm gets more clients, its owner may hire additional help, growing the firm into a partnership. In general, any accounting firm with fewer than one hundred CPAs is considered as a small firm. Most, however, are much smaller than that. Firms with four to ten partners are the norm. Such firms are typically called local firms. If a firm expands to a second office in another city, then it may be called a regional firm. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the mean annual salary of all accountants and auditors in 2009 was $73,920. Earnings will vary from region to region and by size of community. Generally, CPAs in smaller towns earn less than those in large cities. Nevertheless, the remuneration is lucrative. CPAs in small towns may be the wealthiest people in those towns. Starting salaries in smaller towns are usually in the $40,000 range or higher, with large cities starting CPAs at over $50,000. Those who have been practicing for over twelve years have average salaries in the neighborhood of $270,000 annually. Clientele Interaction. There is a great deal of client interaction in small accounting firms. In most cases, CPAs go to their clients’ homes or places of business. There is typically repeat patronage from one year to the next, so CPAs need not constantly seek new clients. The treatment that clients receive during their first engagement with an accounting firm strongly influences whether they will return in subsequent years. In general, CPAs in small firms become close friends with their clients. Clients must share their most intimate financial secrets with their CPAs, and that often leads them to share many other secrets as well. Even divorces and estate planning are part of the CPA-client relationship. Amenities, Atmosphere, and Physical Grounds. Accountants work in professionally appointed offices. The atmosphere is usually favorable but can be hectic at times. For example, tax returns must be filed by a deadline, and if that deadline is approaching, accountants must often work around the clock. At one small accounting firm, the CPAs averaged working 110 hours per

Accounting Services week during the first three months of the year, which is the period when most clients want audits conducted and when tax returns must be filed. The summer months are sometimes slower but not always, depending on the nature of client businesses. For example, an accountant whose client is a ski resort probably would not have much work during the summer, but a CPA who was auditing a city government might be extra busy during the summer because many cities end their fiscal years on June 30 and want their audits done shortly thereafter. Those working at lower levels, such as bookkeepers and accounts receivable clerks, sometimes encounter muscle stress, backaches, and repetitive motion injuries from using computers on a continuing basis. Typical Number of Employees. Small accounting firms employ up to one hundred CPAs. Usually, they employ roughly one support staff member, such as a secretary or office manager, for every three CPAs. Newly certified CPAs, or CPAs in training, may also work as lower-level employees in a firm. Traditional Geographic Locations. Accounting firms may be located anywhere. Sole proprietors may work from home offices or may rent or purchase separate office space. Firms with more than one CPA generally work from commercial offices, often in the business districts of their towns or cities. Pros of Working for a Small Accounting Firm. A small accounting firm is usually a little more relaxed than a larger firm, but not always. Established firms are always busy, so sometimes the CPAs must work long hours when business is greater than expected. Salaries are quite high, often just as high as in larger firms. CPAs in small firms often have much closer relationships with their clients than do CPAs who work in larger firms. As a result, CPAs in small communities often know everything that is going on in their communities. There are no secrets from a local CPA. People discuss the ramifications of various divorce arrangements with their CPAs, as well as the merits of sending children to high-priced colleges versus cheaper schools and what investments to consider. CPAs are more than just financial advisers; they are life advisers. Cons of Working for a Small Accounting Firm. The main disadvantage of a small accounting

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firm is that there is often no one to help with the work. CPAs at small firms may also find it difficult to keep up with changes in the field through continuing education. Tax laws often change, so CPAs must obtain at least forty hours of continuing professional education each year. Because there is no one to cover for them, CPAs in small firms may find it hard to make the time to fulfill this requirement. Moreover, the small size of their firms requires them to go off-site to take continuing education courses, whereas larger firms may bring instructors to them. Costs Payroll and Benefits: Small accounting firms generally hire staff at weekly or monthly salaries. Benefits such as vacation and sick time are offered at the discretion of the proprietor or partners but are usually quite liberal because the staff are often asked to work long hours during the busy season. Therefore, benefits usually include substantial time off when the firm is less busy. Supplies: Small accounting firms require standard business supplies, including computers, calculators, telephones, fax machines, copiers, paper products, and so on. They also need paper shredders and secure file storage facilities. External Services: Small accounting firms are largely self-contained. They have little need for outside services other than perhaps for janitorial service in the office. Utilities: Typical utilities for a small accounting firm include water and sewage, electricity, gas/ oil service, telephone, cable television, and Internet access. Taxes: Small accounting firms must pay payroll taxes on their employees and state and local property taxes. Because most firms are organized as proprietorships or partnerships, income is taxed to the individual owners, not the company itself. As a result, small accounting firms file only an information return for income tax purposes but do not actually pay the income taxes; the proprietor or partners must individually pay taxes on the income earned by the business. Continuing Education: Accounting firms of all sizes must invest substantial amounts in continuing education. CPAs are legally required to re-

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Accounting Services ceive at least forty hours of continuing professional education (CPE) annually, and many CPAs obtain more than the minimum. As a result, accounting firms of all sizes often spend up to 10 percent of their profits on continuing education programs, books, magazines, and membership in professional organizations such as the American Institute of Certified Public Accountants (AICPA) and the various state CPA societies.

Midsize Businesses Midsize accounting firms employ between one hundred and one thousand CPAs. These midsize firms are not common; there are probably fewer than two hundred of them in the United States. CPAs typically work either in very small firms or in very large firms; the midsize firms do not have a separate niche. The work done by the few midsize firms that do exist is typically the same as that performed by either the small firms or the large firms, or both. Midsize accounting firms are typically regional. Most have more than one office, but these offices are usually in a fairly small geographic region, perhaps no larger than one state. The only single-office midsize firms are in very large cities— notably New York City. Work performed at a midsize accounting firm is usually slightly different from that at a small firm. Midsize firms conduct more audit engagements and perform less write-up work. The tax work in a midsize firm may not differ much from the tax work in a small firm—both prepare tax returns for businesses and individuals. To get a job in a midsize accounting firm, a person typically must have graduated from college and also hold a master’s degree or the equivalent. In most states, one of the requirements to sit for the CPA examination is that an accountant must have completed at least 150 semester hours of college course work. Potential Annual Earnings Scale. According to the BLS, the mean annual salary of all accountants and auditors in 2009 was $73,920. CPAs in midsize firms typically earn about the same as those in small firms. Earnings vary from region to region and by size of community. Generally, CPAs in smaller towns earn less than those in large cities, but the salaries are almost always lucrative. A beginning CPA in a midsize firm usually starts in the $45,000 range or higher, with large cities starting

CPAs at over $50,000. Those who have been practicing for over twelve years average a salary in the neighborhood of $270,000 annually. The most experienced partners in a midsize firm may approach salaries similar to those in large firms, or $500,000 annually. Clientele Interaction. Clientele interaction in a midsize firm will be quite similar to that in a small firm, since they are both dealing with the same types of clients—at least to some extent. Thus, there is a great deal of client interaction in midsize accounting firms. In most cases, CPAs at midsize firms still travel to their clients’ places of business and rely on repeat business to sustain their firms. In general, CPAs in midsize firms become close friends with their clients. Clients must share their most intimate financial secrets with their CPAs, and that leads them to share many other secrets as well. Even divorces and estate planning are a part of the CPA-client relationship. Amenities, Atmosphere, and Physical Grounds. Accountants in midsize firms work in well-appointed offices. Firms try to exhibit a look of success to encourage potential clients. The atmosphere is usually favorable but can be hectic at times. For example, tax returns and audits must be completed by a deadline, and if that deadline is approaching, accountants must often work around the clock. As in small firms, the summer months are sometimes slower but not always, depending upon the nature of client businesses. For example, an accounting firm that audits government agencies might be extra busy during the summer because many cities and counties end their fiscal years on June 30 and want their audits done shortly thereafter. Typical Number of Employees. A typical midsize accounting firm might include 30 partners, 120 associates, and an additional 50 or 60 nonaccountant staff members. The largest of the midsize firms have about 90 partners, about 400 associates, and an additional 150 nonaccountant staff members. Traditional Geographic Locations. Accounting firms can and do locate almost everywhere. Midsize firms typically limit themselves to a fairly small geographic area, but that geographic area can be centered anywhere in the country. Pros of Working for a Midsize Accounting Firm. A midsize accounting firm is usually a little

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more relaxed than a larger firm but sometimes not as flexible as a small firm. Established accounting firms are always busy, so the CPAs have to work many extra hours when business is greater than expected. Salaries are quite high, often just as high as in larger firms. CPAs in midsize firms often have a closer relationship with their clients than do CPAs who work in large firms, but not always as close as those in small firms. Nevertheless, CPAs in small communities, whether in small firms or midsize firms, often know everything that is going on in those communities. There are no secrets from local CPAs. CPAs are more than just financial advisers. They are life advisers. Cons of Working for a Midsize Accounting Firm. Some accountants would probably argue that there are few downsides to working in a midsize firm. Midsize firms are large enough to avoid the problems of small firms, but not so large as to be subject to the problems of the large national firms. Costs Payroll and Benefits: Midsize accounting firms generally hire staff at weekly or monthly salaries. Benefits such as vacation and sick time are offered at the discretion of the partners but are usually quite liberal because CPAs and staff are often asked to work long hours during the busy season. Therefore, benefits usually include substantial time off when the firm is less busy. Supplies: Midsize accounting firms require standard business supplies, including computers, calculators, telephones, fax machines, copiers, paper products, and so on. They also need paper shredders and secure file storage facilities. External Services: Midsize accounting firms, like smaller firms, are largely self-contained. They have little need for outside services other than perhaps for janitorial service in the office. Utilities: Typical utilities for a midsize accounting firm include water and sewage, electricity, gas/ oil service, telephone, cable television, and Internet access. Taxes: Midsize accounting firms must pay payroll taxes on their employees and state and local property taxes. Because most firms are organized as partnerships, the income is taxed to the individual owners—not the company itself. As a result, midsize accounting firms file only infor-

Accountants prepare statements and reports that reveal the financial state of companies. (©Haywiremedia/Dreamstime.com)

mation returns for income tax purposes but do not actually pay income taxes; the partners must individually pay taxes on the income earned by the business. Continuing Education: Accounting firms of all sizes must invest a substantial amount in continuing education. CPAs are legally required to receive at least forty hours of continuing education annually, and many CPAs obtain more than the minimum. As a result, accounting firms of all sizes often spend up to 10 percent of their profits on continuing education programs, books, magazines, and membership in professional organizations such as the American Institute of Certified Public Accountants and the various state CPA societies. Large Businesses Large accounting firms have more than one thousand CPAs on staff. There are fewer than twenty such firms in the United States. The four largest are known as the Big Four; this group con-

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Accounting Services

sists of Deloitte, Ernst & Young, PricewaterhouseCoopers, and KPMG. Each of these four firms employs over sixteen thousand CPAs. To give an indication of how much larger these four firms are than the next largest firms, the fifth largest firm, McGladrey & Pullen, employs only fifty-four hundred CPAs and the sixth largest firm, Grant Thornton, employs only four thousand CPAs. The seventh largest firm, BDO Seidman, employs just over twenty-one hundred CPAs. Much of the work conducted by large accounting firms is auditing, although these firms also do a lot of tax planning and management consulting. Their tax work is limited to planning, not preparation of tax returns. Whereas small and midsize accounting firms spend a lot of time on tax return preparation, the large firms do less of this type of work. Their tax duties consist primarily of helping clients pay less in taxes. To get a job in a midsize or large accounting firm, a candidate typically needs a master’s degree or the equivalent. Most states require students to complete 150 semester hours of college course work, or the equivalent of a master’s degree, before they can sit for the CPA examination. Potential Annual Earnings Scale. According to the BLS, the mean annual salary of all accountants and auditors in 2009 was $73,920. CPAs in large firms typically earn about the same or a little more than those in midsize firms. Earnings vary from region to region and by size of community, but since most large firms’ offices are located in larger cities, there is less of a variance from one office to the next than is found in some midsize firms. A beginning CPA in a large firm usually starts in the $55,000-$60,000 range or higher; large cities start CPAs at over $60,000. CPAs who have been practicing for over twelve years have average salaries in the neighborhood of $500,000 annually. The most experienced partners in large firms may have salaries substantially above the $500,000 average. Clientele Interaction. Large accounting firms usually serve larger clients than do small and midsize firms. The interaction is always at a client’s place of business. CPAs in large firms may be as involved as CPAs in smaller firms in their clients’ business but will probably have a less personal interaction with those clients’ employees. Amenities, Atmosphere, and Physical Grounds. Accountants in large firms work in wellappointed offices. Firms try to exhibit a look of suc-

cess. CPAs at large firms often travel a great deal on business. Large clients often have branches and subsidiaries in many locations, and auditors must travel to all of these locations as a part of the audit process. As a result, many large-firm auditors are on the road for weeks at a time. The atmosphere of large firms is usually favorable but can be hectic at times. For example, audits must be completed by a deadline, and if that deadline is approaching, auditors must often work around the clock. As in small firms, the summer months are sometimes slower but not always, depending upon the nature of the client businesses. Because of the long hours and the constant travel, there is often a lot of employee turnover in large accounting firms. Traveling to exotic locations both in the United States and internationally may be exciting for young, single CPAs, but once they marry and start families, constant travel can become much less appealing. As a result, many CPAs leave the large firms after three to five years to join midsize and local firms or to become managerial accountants in other industries. Often, a CPA in this position ends up taking a managerial post at a firm that the CPA has already served in the past as an independent auditor. Typical Number of Employees. Large accounting firms employ more than one thousand CPAs, as well as support staff. The largest firm, Deloitte, has almost three thousand partners, thirty-three thousand nonpartner CPAs, and twelve thousand support staff. Traditional Geographic Locations. The large accounting firms are located in the largest American cities. The Big Four firms are located in about one hundred of the largest cities. They also have international offices in every major city in the world. In many cases, a CPA in an American office can transfer to an international office for a few years. Pros of Working for a Large Accounting Firm. The main advantages of working in a large accounting firm are the high pay, the outstanding training provided, the opportunity to work with the brightest and best people in the country, and the value added to one’s resume. Most industries prefer to hire managerial accountants who have experience in the large international acounting firms. Large firms also provide the opportunity to experience a great deal of travel, both domestically and internationally, at their expense.

Accounting Services Cons of Working for a Large Accounting Firm. Travel is both an advantage and a disadvantage of working for a large firm. People simply get burned out traveling all of the time, and travel fatigue is probably the main reason that CPAs leave large firms. The long hours can also be a problem for some, but they can be a disadvantage at firms of any size. Costs Payroll and Benefits: Large accounting firms generally hire staff at monthly salaries. Although some firms pay overtime, it is not a common practice, as most accountants are exempt employees. Typically, CPAs in large firms are expected to devote their lives to their firms, working unlimited hours for the lucrative salaries they are paid. Benefits such as vacation and sick time are usually quite liberal because CPAs and staff are often asked to work very long hours during the busy season. Therefore, benefits usually include substantial time off when the firm is less busy. However, as employees progress upward in their firms, they may find it difficult to use all of their accrued vacation time. Supplies: Large accounting firms require a great deal of supplies, including paper products, computers, miscellaneous office supplies and equipment, calculators, and so forth. External Services: Large accounting firms, like smaller firms, are largely self-contained. They have little need for outside services other than perhaps for janitorial service in the office. In recent years, some large accounting firms have begun outsourcing tax preparation services. Firms must also pay the travel expenses of auditors who fly all over the world on company business. Utilities: Typical utilities for a large accounting firm include water and sewage, electricity, gas/ oil service, telephone, cable television, and Internet access. For international organizations with hundreds of offices, these costs can be substantial. Taxes: Large accounting firms must pay payroll taxes on their employees and state and local property taxes. Because most firms are organized as partnerships, the income is taxed to the individual owners—not the company itself. As a result, large accounting firms file only an information return for income tax purposes but do

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not actually pay income taxes. The partners must individually pay taxes on the income earned by the business. Continuing Education: Accounting firms of all sizes must invest in continuing education. CPAs are legally required to receive at least forty hours of continuing education annually, and many CPAs obtain more than the minimum. As a result, accounting firms of all sizes often spend up to 10 percent of their profits on continuing education programs, books, magazines, and membership in professional organizations such as the American Institute of Certified Public Accountants and the various state CPA societies. The large accounting firms typically provide all of the CPE that their staff needs, whereas small and midsize firms typically send their employees outside to external educators for CPE.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The accounting industry is not really a single industry, although an education in accounting can qualify a person for almost any job in the expanded industry. Accountants are needed everywhere. The following umbrella categories apply to the organizational structure of the accounting industry: ■ ■ ■ ■ ■

Public Accounting Managerial Accounting Governmental Accounting Forensic Accounting Bookkeeping

Public Accounting Public accounting consists of auditing, tax work, and management consulting services. College graduates hired by accounting firms typically work in either auditing or tax departments. More experienced individuals handle the management consulting phase of the business. Most graduates start out in the auditing department, because that is the biggest department in almost every accounting firm. Audits are performed to assure investors and creditors that a company’s financial statements are accurate. An audit of a small company might last a week or two, while an audit at a large international

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Accounting Services OCCUPATION

PROFILE

Accountant Considerations

Qualifications

Description

Tracks, records, and reports on financial activities of companies; prepares taxes of individuals and companies; analyzes financial consequences of investments.

Career clusters

Business, Management, and Administration; Finance; Government and Public Administration

Interests

Data

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; military service; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

CRS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

corporation, such as Ford Motor Company, might go on almost throughout the year, but with much greater effort shortly after the close of the fiscal year. Public accounting firms sell the services of their accountants. An accountant may work for a different client almost every week of the year. Just as states license doctors and lawyers, they also license public accountants. Such licensure is to ensure a high standard of service to the public. The most highly paid public accountants are certified public accountants (CPAs). CPAs have passed a difficult four-part examination and achieved experience in the field of public accounting. A person must have the equivalent of a master’s degree in accounting (150 or more semester hours of college course work) to be eligible to sit for the CPA examination. All four parts must be passed before a person can become a CPA. The examination is prepared and graded by the American Institute of Certified Public Accountants (AICPA). The AICPA is

the largest professional organization of accountants and has more than 350,000 members. The CPA examination is given on demand during eight months of the year at local testing centers throughout the country. Before a person can sit for the exam, he or she must be authorized to sit by a state board of public accountancy. People beginning work at accounting firms start as staff accountants. After about two years, they are promoted to senior accountants. After about six years, they are promoted to managers, and after about twelve years they can expect to become partners in their firms. Responsibilities and salaries increase with job titles. As mentioned previously, public accountants also perform tax services and management consulting services. Some smaller public accounting firms also offer payroll preparation services and bookkeeping services. Public accounting occupations may include the following:

Accounting Services ■ ■ ■ ■ ■ ■ ■ ■

Staff Accountant Senior Accountant Managing Accountant Partner Administrative Assistant Tax Preparer Auditor Consultant

Managerial Accounting Managerial accountants (sometimes called private accountants) work for nonaccounting businesses, providing accounting services directly to their individual employers. They generally work within accounting, management, or administrative divisions of companies. A managerial accountant can be involved in a number of job areas, including financial accounting, cost accounting, budgeting, internal auditing, payroll, and financial statement analysis. Although states do not license private accountants, there is an exam that private accountants can take to demonstrate their abilities in the field. The Certified Management Accountant (CMA) examination is a two-part exam designed to measure the skills needed in managerial accounting. The CMA exam is administered by a division of the Institute of Management Accountants (IMA), an organization composed of private accountants working in industry. The IMA is the second-largest professional organization of accountants in the United States, but at only about sixty thousand members, it is much smaller than the AICPA. Another examination for accountants working in industry is the Certified Internal Auditor (CIA) examination, which is administered by the Institute of Internal Auditors (IIA). The CIA exam is a four-part examination that tests the skills needed by internal auditors in industry. Although the CIA exam tests many of the same subjects as the CPA examination, the CIA puts more emphasis on fraud auditing and operational audits of efficiency, effectiveness, and economy. Unlike the CPA examination, which is solely given in the United States, the CIA exam is administered in every major country in the world and is offered in at least fourteen different languages. Thus, the CIA certification is an international certification. One of the most common career fields in managerial accounting is that of cost accountant. A cost

13

accountant examines costs and conducts time and motion studies to determine the per-unit cost of every item that a company manufactures. Those costs can then serve as guidelines in determining what prices to charge to customers for those products. There is a little-known organization, the Cost Accounting Standards Board, that establishes the principles that cost accountants must follow in determining costs related to products sold to the federal government under cost-plus contracts. Managerial accountants often start out as a staff accountants, auditors, or clerks in specialized areas, such as accounts receivable clerk, or payroll clerk. After two or three years, there will be a promotion to senior accountant and after about six years to manager. The next step for a managerial accountant is to become a branch controller, and eventually a corporate controller. The corporate controller may eventually become a corporate officer by being promoted to vice president of finance, a position sometimes called chief financial officer, or CFO. An internal auditor will rise through the ranks and eventually become the director of internal auditing and then the vice president of internal auditing—an officer position that works closely with the audit committee of the board of directors. Managerial accounting occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Cost Accountant Senior Accountant Chief Financial Officer (CFO) Vice President of Internal Auditing Controller Human Resources Administrator Internal Auditor Financial Compliance Officer Payroll Manager Payroll Clerk Accounts Receivable Clerk Accounts Payable Clerk Billing Manager Office Manager

Governmental Accounting Governmental accountants work for the federal government and various city and state governments. In many respects, governmental accountants have jobs similar to managerial accountants in that they can work in accounting, budgeting, au-

14

Accounting Services

diting, or taxation. The GAO is the largest employer of government auditors, while the IRS is the largest government employer of tax accountants. The various offices of inspectors general in government agencies also hire many auditors. Governmental accountants are certified through the Certified Government Financial Managerial (CGFM) examination. The CGFM is a three-part examination administered by the Association of Government Accountants. Accountants working for the IRS typically start out as office auditors or field agents in jobs that involve conducting tax audits of individuals and companies. Other areas include collection agents, who try to collect unpaid taxes from individuals who have tried to defraud the government, and special agents, who conduct fraud audits. GAO auditors and those in offices of inspectors general typically progress from staff accountant to audit manager following a structure similar to that of public accounting firms.

OCCUPATION

Governmental accounting occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Inspector General Deputy Inspector General State Controller Auditor Senior Auditor Auditing Manager Field Agent Forensic Accountant Special Agent City Controller Analyst Collections Agent

Forensic Accounting Fraud auditing, or forensic accounting, is an activity that can be performed by public accountants, managerial accountants, or governmental accountants. What is significant is not who the employer is

PROFILE

Auditor Considerations

Qualifications

Description

Reviews accounting records and procedures for accuracy; may work internally or may audit other companies.

Career clusters

Business, Management, and Administration; Finance; Government and Public Administration

Interests

Data

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

REC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Accounting Services but the target of the job. To be a good fraud auditor requires a lot of experience in auditing. As a result, young people usually do not start out on a fraud audit team. Once they have had some experience as auditors, they can transfer to fraud audit departments within their firms or agencies. The Certified Fraud Examiner (CFE) program is administered to potential forensic accountants by the Association of Certified Fraud Examiners. Typically, CFEs hold some other certification, such as CPA or CIA, before they ever sit for the CFE examination, which is a four-part examination. Forensic accounting occupations may include the following: ■ ■ ■ ■ ■ ■

Inspector General Deputy Inspector General Forensic Accountant Special Agent External Auditor Internal Auditor

Bookkeeping The positions of bookkeeper and accounting clerk are the lowest-level positions in the accounting field. These occupations do not always require college degrees. They also pay lower salaries than do accounting positions that require college degrees. According to the BLS, in 2008 the median annual pay of bookkeeping, accounting, and auditing clerks was $32,510, which is substantially below the starting salary for an accountant with a master’s degree. The top 10 percent of this group earned over $49,260, but the bottom 10 percent earned under $20,950. Thus, there is substantial variability in salaries in the lower-level positions. Bookkeeping occupations may include the following: ■ ■

Bookkeeper Accounting Clerk

INDUSTRY

OUTLOOK

Overview The outlook for the accounting industry shows it to be on the rise, particularly at the higher levels of the field, such as public accounting and internal auditing. Accountants and auditors are predicted

15

to have much faster employment growth from 2008-2018 than other careers. Job opportunities should be plentiful, particularly for accountants and auditors who have professional certifications, such as the CPA or CIA. Employment of accountants and auditors is expected to grow by 22 percent between 2008 and 2018, which is a much higher rate than the average for all occupations. This growth rate translates into around 279,400 new accounting jobs being created during this period. More new businesses, new financial laws and corporate governance regulations, and greater accountability for protection of a company’s investors will lead to this enhanced job growth. The U.S. economy is expected to grow after it recovers from the recession of 2007-2009. If this projection proves accurate, the number of businesses in the country will increase, necessitating the services of more accountants and auditors. As these companies grow, the volume of information processed by accountants and the emphasis on internal controls will increase as well. Alternatively, if there are further downturns in the economy, the situation is not all bad for accountants. When companies go into bankruptcy, accountants are needed to oversee the bankruptcy process; thus, accounting is a stable occupation regardless of economic upturns and downturns. When the economy is good, businesses need accountants to record their growth; when the economy is bad, businesses need accountants to explain how bad things are. During the recession year of 2009, revenues in public accounting declined by about 2 percent, but this decline was limited to the six largest firms, where revenues were down 4 percent. The rest of the industry actually saw an increase in revenues. The expanding globalization of business by American companies will lead to increased demand for accountants with a knowledge of international accounting principles and international mergers and acquisitions. Also, there is a growing movement toward International Financial Reporting Standards (IFRS), which will likely enhance the demand for accountants and auditors. An increased need for accountants and auditors also will result from an increased emphasis on corporate transparency and more concern with internal controls over financial reporting. New laws, such as the

16

Accounting Services

Sarbanes-Oxley Act of 2002 and laws covering financial institutions passed in 2009, have resulted in greater scrutiny of company finances and accounting procedures, and these laws will result in more opportunities for accountants, as they require auditors who are CPAs to audit financial records more thoroughly. At the same time, more private accountants and internal auditors will be needed in industry to uncover and eliminate fraud and ensure that internal controls are documented in detail. More forensic accountants also are likely to be required to detect illegal financial activity. Accountants and auditors who are CPAs, CMAs, or CIAs will likely have the greatest job prospects. In most cases, available jobs will require master’s degrees in accounting. People with a proficiency in auditing computer information systems may have advantages in getting some accounting and auditing jobs. Also, accounting firms and industries typically seek applicants with strong interpersonal and communication skills. People often think that accounting is a numbers business, but it is really more of a people business. Thus, interpersonal skills are just as important as skill with numbers. Accountants typically work on teams with other members of management, so they must be able to communicate accounting information clearly and concisely to other people. Besides newly created positions, the need to replace individuals who retire will also produce many job opportunities. Even at the lower-level positions, such as bookkeeper and clerk positions, job growth is projected by the U.S. Department of Labor to be at least as fast as the average for the entire economy. The large size of the accounting profession will entail numerous job opportunities simply because of retirements or transfers to other occupations. Employment of bookkeepers and accounting clerks is predicted by the Department of Labor to grow by 10 percent from 2008 to 2018, which is at least as fast as the average for all career fields. This projection makes accounting and bookkeeping one of the largest growth career fields in the American economy, with over 212,000 new jobs anticipated. Although lower-level positions such as bookkeepers and clerks earn less than accountants with college degrees, their educational requirements are also lower. Moreover, lower-level positions often lead to promotions to higher levels, particu-

larly if the incumbents obtain college degrees and pass one or more of the professional accounting examinations. A growing economy will result in more business transactions that require record keeping. Also, public and congressional demands for greater transparency in financial reporting by public companies will increase the demand for accountants. For example, the Sarbanes-Oxley Act resulted in a large increase in the work of both internal auditors and public accountants. Similarly, every time Congress changes the tax laws, these changes create work for accountants. There is an old joke that every attempt to simplify the tax laws makes more work for accountants because it complicates the Internal Revenue Code. Also, increased government regulation and the introduction of new reporting principles, including the possible adoption of International Financial Reporting Standards, should result in additional demand for accountants at all levels. However, some companies will likely outsource their bookkeeping, accounting, and tax activities to third-party contractors in other countries. The large size of the accounting field ensures plenty of job openings, including opportunities for temporary and part-time work. For example, for qualified people, jobs are virtually unlimited during the first three months of each year, when tax returns must be filed. Employment Advantages According to the BLS, the accounting industry will continue to grow well into the 2010’s. Salaries are expected to remain above the national average, and industry-wide demand is anticipated to continue. The diversity of the accounting industry, in terms of the broad range of career paths it offers, is a great benefit to those seeking advancement. Most employees begin at entry-level staff positions in accounting firms or industrial companies and then move upward either within their initial firms or at other organizations. There is a great deal of movement in the accounting profession. Accountants often begin with public firms and later move to other firms or to one of their initial firms’ clients. Relevant skills are interchangeable among public, managerial, and governmental accounting. Most public accounting firms offer management training, certification preparation, and other programs designed to give employees the opportunity to thrive and advance. Industrial and governmental

Accounting Services employers also support their accountants with time off to fulfill their annual forty-hour continuing education requirements. Those in the accounting profession may realize personal development by working in an everchanging industry. For example, tax laws change several times each year; accounting principles as promulgated by the Financial Accounting Standards Board (FASB) are only slightly more stable. Accountants may be tested and energized by the constant changes in their profession. They also have many job opportunities that are not limited to accounting. An accounting degree is a general business degree, and knowledge of accounting principles can help anyone run a business more efficiently and effectively. Therefore, accounting can form a foundation for people who wish to start their own businesses or go into family businesses. Annual Earnings According to Hoovers, the 100,000 accounting businesses in the United States experience annual revenues of roughly $115 billion. It is unclear, however, how best to categorize or delimit the industry. Many accountants work for nonaccounting firms, and many others use their accounting skills to assume leadership positions of such firms, making precise estimates difficult. Nonetheless, based on the extrapolations of the U.S. Department of Labor’s figures, the amount paid to accountants annually, within both accounting and nonaccounting firms, is in excess of $150 billion.

RELATED RESOURCES FOR FURTHER RESEARCH Academy of Accounting Historians, Weatherhead School of Management 10900 Euclid Ave. Cleveland, OH 44106-7235 Tel: (216) 368-2074 Fax: (216) 368-6244 https://www.netforumondemand.com/eweb/ StartPage.aspx?Site=AAH American Accounting Association 5717 Bessie Dr. Sarasota, FL 34233-2399 Tel: (941) 921-7747

Fax: (941) 923-4093 http://www.aaahq.org American Institute of Certified Public Accountants 1211 Avenue of the Americas New York, NY 10036 Tel: (888) 777-7077 Fax: (212) 596-6213 http://www.aicpa.org Association of Certified Fraud Examiners 716 West Ave. Austin, TX 78701-2727 Tel: (800) 245-3321 Fax: (512) 478-9297 http://www.acfe.com Association of Government Accountants 2208 Mount Vernon Ave. Alexandria, VA 22301 Tel: (703) 684-6931 Fax: (703) 548-9367 http://www.agacgfm.org Gleim Publications P.O. Box 12848, University Station Gainesville, FL 32604 Tel: (800) 874-5346 Fax: (352) 375-6940 http://www.gleim.com Institute of Internal Auditors 247 Maitland Ave. Altamonte Springs, FL 32701-4201 Tel: (407) 937-1100 Fax: (407) 937-1101 http://www.theiia.org Institute of Management Accountants 10 Paragon Dr. Montvale, NJ 07645-1759 Tel: (800) 638-4427 Fax: (201) 474-1600 http://www.imanet.org National Library of the Accounting Profession, University of Mississippi University, MS 38677-1848 Tel: (662) 915-5537

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Accounting Services Fax: (662) 915-7477 http://www.olemiss.edu/depts/ general_library/aicpa

ABOUT

THE

AUTHOR

Dale L. Flesher is the Arthur Andersen Professor of Accountancy and associate dean of the Patterson School of Accountancy at the University of Mississippi. He graduated from Ball State University (1967) and holds a master’s degree in accounting (1968) from that school. He received his Ph.D. in accounting from the University of Cincinnati (1975). He is a CPA, a certified internal auditor, and a certified fraud examiner, and he also holds a Certificate in Management Accounting. He has taught accounting at the university level for over forty-two years. He has authored over three hundred journal articles on accounting and is the author of forty-five books in eighty-five editions.

FURTHER

READING

Albrecht, W. Steve, and Chad O. Albrecht. Fraud Examination. Cincinnati: Thomson SouthWestern, 2003. Flesher, Dale L. The IIA: Fifty Years of Progress Through Sharing. Altamonte Springs, Calif.: Institute of Internal Auditors, 1991. _______. One Hundred Years of NASBA: Serving the Public Interest. Nashville, Tenn.: National Association of State Boards of Accountancy, 2007. Flesher, Dale L., and Tonya K. Flesher. Accounting for the Middle Manager. Albany, N.Y.: Van Nostrand Reinhold, 1979.

Gleim, Irvin N. CPA Review. 4 vols. Gainesville, Fla.: Gleim, 2010. Gleim, Irvin N., and Dale L. Flesher. CMA Review Part 1: Financial Planning, Performance, and Control. 15th ed. Gainesville, Fla.: Gleim, 2010. King, Thomas A. More than a Numbers Game: A Brief History of Accounting. New York: John Wiley & Sons, 2006. Melancon, Barry. “Trends for CPAs in 2010.” New Accountant 736 (March/April, 2010): 5ff. Miranti, Paul J., Jr. Accountancy Comes of Age: The Development of an American Profession, 18861940. Chapel Hill: University of North Carolina Press, 1990. Olson, Wallace E. The Accounting Profession: Years of Trial, 1969-1980. New York: American Institute of Certified Public Accountants, 1982. Previts, Gary John, and Barbara Dubis Merino. A History of Accountancy in the United States: The Cultural Significance of Accounting. Columbus: The Ohio State University Press, 1998. Roehl-Anderson, Janice M., and Steven M. Bragg. The Controller’s Function: The Work of the Managerial Accountant. 2d ed. New York: John Wiley & Sons, 2000. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Advertising and Marketing Industry AP/Wide World Photos

INDUSTRY

SNAPSHOT

General Industry: Communications Career Clusters: Arts, A/V Technology, and Communication; Marketing, Sales, and Service Subcategory Industries: Advertising Agencies; Advertising Material Distribution Services; Direct Mail Advertising; Display Advertising; Marketing Analysis Services; Marketing Consulting Services; Marketing Research Services; Media Buying Agencies; Media Representatives Related Industries: Broadcast Industry; Food Retail Industry; Internet and Cyber Communications Industry; Motion Picture and Television Industry; Publishing and Information Industry; Retail Trade and Service Industry Annual Domestic Revenues: $167.5 billion USD (GroupM, 2009) Annual Global Revenues: $440.8 billion USD (GroupM, 2009) NAICS Numbers: 5418, 54191

INDUSTRY

effective communications strategies. It then crafts messaging campaigns based on its research to create or increase demand for products and services and thereby to maximize profits for the companies that sell them. Advertising messages are usually distributed through print or broadcast media, public displays, direct mail, or the Internet and related technologies.

History of the Industry Many scholars consider marketing and advertising to have existed in some form since the beginning of human commerce. There is considerable evidence of marketing throughout human history. Hawkers announcing the availability of products were a constant feature of public life in ancient Greece. In addition, archaeologists have uncovered printed materials promoting wares from ancient Pompeii, Carthage, and Rome. Advertising posters featuring alluring drawings of products for sale were common throughout medieval Europe. The modern era of advertising may be traced back to the beginning of newspapers in seven-

DEFINITION

Summary The advertising and marketing industry analyzes and influences consumer behavior and expectations through intentional communication campaigns. The industry systematically researches 19

20

Advertising and Marketing Industry

resulting rapid increase in commercial activity produced an ideal environment for the new advertising and marketing industry. Another social trend also hastened the growth of the advertising industry. In 1867, the United States created the Department of Education. Children of every economic and social class began to attend school, resulting in a dramatic increase in literacy by the end of the nineteenth century. As a result, The seven P‘s of marketing. (©Alain Lacroix/Dreamstime.com) newspaper and magazine circulation increased nearly tenfold. This meant that publications’ circulation teenth century Europe. These regularly printed secosts vastly increased, but periodicals also gained rial publications were an ideal place for merchants the ability to reach massive audiences. The sale of to publicize the availability of goods and services, print advertising became the primary source of revand they quickly became a standard marketing meenue for newspapers and magazines. Advertising dium. By the beginning of the eighteenth century, agencies began to purchase space in publications newspaper advertising was common throughout and resell it to their clients. Europe and the United States. In the middle of that Two factors led to even further growth of the adcentury, magazines began to be published on a regvertising industry in the first half of the twentieth ular basis, providing another forum for print adcentury. One was the U.S. automotive industry, vertising. which began in the last decades of the nineteenth Initially, newspaper and magazine advertising century and experienced unprecedented comwas created by the vendors of the goods and sermercial success in the early twentieth century. The vices being sold. In the middle of the nineteenth industry relied heavily on advertising to sell cars, century, advertising agencies came into existence pushing the advertising industry to new levels of to take over marketing functions for business clieconomic success. ents. The first American advertising agency is generally considered to have been founded in 1843 by Volney Palmer in Philadelphia, Pennsylvania. In the decades that followed its founding, many more firms emerged. The first major American advertising trade conference was held in New York in 1873. By then, the advertising and marketing industry had become well established in larger cities. Many scholars contend that the industry’s rapid growth resulted from the historical context in which it developed. In the latter half of the nineteenth century, the United States was transforming from a rural to an urban society. Farming households were largely self-sufficient, producing many of their own goods, such as food and milk. As people migrated to cities, they lost the ability to make their own essential goods, which created major opNewspapers are one of the earliest media for advertiseportunities for manufacturers and retailers. The ments. (©Franc Podgoršek/iStockphoto.com)

Advertising and Marketing Industry

21

Many retail stores use advertising flyers to reach customers. (©Rose-marie Henriksson/Dreamstime.com)

At the same time, radio was evolving into a form of popular mass media. By the 1930’s, radios were common in American and European households. Radio networks produced news and entertainment programming and generated revenue through commercial sponsorship. Although the new broadcast medium broke the near monopoly on advertising that print media had previously held, it opened up new possibilities for the advertising firms that brokered deals between media outlets and other businesses. In the middle of the twentieth century, television joined radio as a widely accessible broadcast medium. The impact of television on American culture was profound. As radio audiences migrated to television, advertising clients followed them. Once again, advertising firms were well positioned to take advantage of the change in information technology. By the 1960’s, advertising firms were collecting huge profits by selling businesses advertising space in newspapers and magazines, on radio, and on television. This was the beginning of a

golden era for the advertising industry that lasted until the start of the twenty-first century. The Industry Today Although it enjoyed overwhelming success a generation ago, the advertising and marketing industry faces significant challenges in the twentyfirst century. Indeed, some analysts consider the industry to be entering a period of crisis. One of the biggest factors in the industry’s decline has been a steady decline in U.S. newspaper circulation that began in 1987. According to the U.S. Audit Bureau of Circulations, roughly 30 million Americans purchased daily newspapers in 2009, compared to 40 million daily purchasers in 1940. The emergence of cable television has also affected advertising. A generation ago, television audiences belonged almost entirely to three major networks: the American Broadcasting Company (ABC), the Columbia Broadcasting System (CBS), and the National Broadcasting Company (NBC). By the beginning of the twenty-first century, nearly

22

Advertising and Marketing Industry

consumers age. By 2008, more Americans received their news coverage from the Internet than from print newspapers. The migration of audiences to the Internet has led to a dilemma for the advertising and marketing industry. Although the Internet provides new opportunities for broadcasters to distribute text, audio, and video content to users around the globe at a mere fraction of the cost of traditional media platforms, Internet advertising does not operate in the same fashion as traditional media advertising. As a result, marketing and advertising professionals have had difficulty developing sustainably lucrative business models for advertising campaigns in an online environment. Instead, Google, which places advertisements on a Web page based on the key words appearing on that specific page, has risen to dominate Internet advertising, and traditional models of buying and selling space for ads in an entire publication based on the reputation or readership of the publication as a whole have been displaced. The large advertising firms thrived in the twentieth century by buying advertising space and reselling it to clients rather than by charging fees for creative work. These large firms are ill-suited for a digital age in which advertising space is virtually unlimited and audience size is purely a reflection of the appeal of the content. The global recession of 20072009 caused dramatic drops in traditional media advertising revenue streams. Some traditionally strong media products were hit particularly hard. Gannett Newspapers, as an example, experienced revenue drops of over 60 percent in the first half of 2009. The New York Times, perhaps the best-established print product in the world, lost 50 percent of its revenue in 2008. Several publications went bankrupt as a result of the recession, including both of Chicago’s major newspapers. Although some analysts are confident that the overWeb sites have become a popular way to advertise, market products, and enall advertising market will begin hance a company’s reputation. (©iStockphoto.com) 70 percent of American households had access to cable television. Hundreds of new channels came onto the television scene, significantly weakening the traditional broadcast networks. Network television audiences have dropped by more than half, but networks are reluctant to lower the prices they charge for commercial airtime to reflect their decreased audience size. Perhaps the most significant factor influencing contemporary media consumption has been the emergence of the Internet. This new technology grew in popularity at a staggering rate. According to the Pew Research Center, Internet use increased from 14 percent of the American population in 1995 to more than 41 percent in 1998. By 2008, this number was over 70 percent. Television viewership and print readership have decreased as Internet usage has increased. A Pew Research Center report released in 2002 showed that people under thirty were more likely to receive their news online than were the members of any other demographic group. The appeal of online news sources to young consumers makes it likely that the audience for online news will grow as these

Advertising and Marketing Industry to stabilize in 2010, there is no question that the previously robust industry is vulnerable, and it will need to adjust to a new media environment.

INDUSTRY MARKET SEGMENTS Advertising and marketing companies can range in size from small to very large. Often, a company will only handle a single aspect of the overall advertising process. A small company may exclusively handle market research, creative services, or account management. In the middle of the twentieth century, when the industry was at its economic peak, the trend was toward larger, integrated firms. In the early twenty-first century, many companies are becoming leaner and more nicheoriented.

23

Small Businesses A small business in the advertising and marketing industry is likely to have annual revenues of between $1 million and $5 million. It will normally employ between ten and fifty people. In addition, small businesses in this industry are often specialized boutique agencies rather than full-service firms. This means that they focus on a single niche advertising activity and coordinate with other agencies to develop full marketing campaigns for client companies. Potential Annual Earnings Scale. According to the Bureau of Labor Statistics (BLS), the median salary for an advertising manager is around $80,000, while the median salary for a marketing manager is close to $110,000. At small boutique companies, executives are likely to be partners or owners, rather than salaried staff. As a result, they will have less reliable income, being paid when the

Many marketers feel the best way to reach people like this trio is through social media such as Facebook. (©Drew Hadley/ iStockphoto.com)

24

Advertising and Marketing Industry

firm takes in money and going without a salary if there is not sufficient income to produce one. By the same token, any unexpected increases in income may increase owners’ take-home pay if that revenue is not reinvested in the firm. Clientele Interaction. Maintaining a loyal client base is particularly important for a small advertising business. Small advertising businesses are likely to draw customers as a result of their geographical proximity and specialized client needs. Since many small advertising firms primarily serve clients within a limited local area, it is important that they maintain a local reputation for excellent customer service. The best way to do this is to serve client needs in a timely and efficient manner through careful account management practices and attention to customer feedback. Meetings between account managers and clients generally take place at client offices. However, clients occasionally come to advertising firm headquarters, which typically have designated meeting spaces for such occasions. The ability to handle specialized assignments is also important to small, niche-oriented boutique firms. It is therefore important for niche-oriented firms to keep up to date with the latest techniques and technologies associated with their area of specialization. Impressing clients by being able to handle types of assignments that larger firms cannot is essential to the success of a small advertising firm. Amenities, Atmosphere, and Physical Grounds. Small advertising and marketing companies typically have a single office space. Space requirements are not particularly high for a small advertising firm. Offices are normally around three thousand square feet. Small advertising businesses normally have a reception desk and waiting area. There is usually a large conference room for presenting marketing campaign concepts to clients, conducting focus groups, or hosting staff meetings. Account management staff may have individual offices near or attached to this room for hosting smaller numbers of clients. Much of the work of an advertising company is conducted in larger, shared office spaces. These are often separated into cubicles, with computers for each worker to use for tracking media purchases, developing creative material, analyzing marketing data, and executing other essential business functions.

Typical Number of Employees. A small business in the advertising and marketing industry will normally have between ten and fifty employees. Some of these will work as office support and business management staff. Most will be involved with account management and creative services. Traditional Geographic Locations. Small advertising businesses are normally located within the largest city in their area of operation. This facilitates interaction with business clients since central locations are easier to access. Pros of Working for a Small Advertising or Marketing Firm. Smaller firms tend to encourage closer and more personal interaction with clients, allowing account managers to develop lasting relationships with decision makers at the businesses they serve. Smaller advertising firms are also more likely to be niche-oriented boutique agencies. Employees at such boutiques have the opportunity to develop specialized skills and aptitudes. Cons of Working for a Small Advertising or Marketing Firm. The primary drawback of working for a small firm is that such agencies tend to lack the capital base to survive major economic downturns. This means that jobs at smaller firms may be less secure than those at their larger counterparts. Smaller firms may also have difficulty attracting large national brands, somewhat limiting employee exposure to higher-level business contacts. Costs Payroll and Benefits: Small businesses will normally pay employees an hourly wage or annual salary. Office support staff and lower-level creative workers will typically be paid an hourly wage. Higher-level creative personnel, business managers, and other more experienced employees usually receive an annual salary plus benefits such as health insurance, paid vacation, and 401(k) plans. Account managers may be paid an annual salary plus a commission based on a percentage of the revenue they are responsible for bringing to the firm. Supplies: Small advertising companies require typical office supplies, telephones, and fax machines. They will normally have a number of computers and several high-quality printers. Presentation equipment, such as projectors and screens, may also be required for meetings with clients and focus groups.

Advertising and Marketing Industry OCCUPATION

25

PROFILE

Advertising Account Executive Considerations

Qualifications

Description

Manages client accounts as well as interactions between clients and the various departments of the advertising agency, particularly the creative team.

Career clusters

Business, Management, and Administration; Marketing, Sales, and Service

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; volunteer work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

AES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

External Services: Advertising companies normally use external collection agencies to handle delinquent client bills and sometimes have external billing and payroll departments. Since small agencies may handle only one component of the overall advertising process, they may work with other advertising companies to fulfill client needs. Small advertising firms generally have one or more post office boxes for incoming mail. Utilities: Small advertising firms have typical utility expenses for heat, water, electricity, Internet, and multiple telephone lines. Taxes: Small businesses in the advertising industry are responsible for paying municipal, state, and federal taxes on revenue. Additionally, they must pay relevant payroll taxes. Midsize Businesses Midsize businesses in the advertising and marketing industry typically have annual revenues be-

tween $2 million and $20 million and employ between fifty and five hundred people. In addition, midsize advertising agencies may have multiple locations, often in the same geographic area of operation. They tend to be more integrated than their smaller counterparts, handling all aspects of the advertising process for clients. Potential Annual Earnings Scale. Median annual salaries in the advertising and marketing industry range from $80,000 for advertising managers to $110,000 for marketing managers. Sales managers have a median annual salary of $97,000, and public relations managers have a median annual salary of $89,000. Clientele Interaction. Midsize businesses in the advertising industry are in a somewhat unusual position regarding client interaction. They depend on both smaller local businesses and larger accounts. Local businesses usually prefer frequent, face-to-face interaction with account managers.

26

Advertising and Marketing Industry

Larger accounts require occasional visits as well. However, much of the interaction with larger accounts is done remotely, by telephone and e-mail. Amenities, Atmosphere, and Physical Grounds. Midsize advertising and marketing firms sometimes have multiple locations, often in a single region. Often, there will be a larger headquarters, in excess of ten thousand square feet, and several satellite offices of less than five thousand square feet. All of a midsize advertising business’s offices will be organized in a fashion similar to smaller firms. There is usually a reception desk with a waiting area, often decorated with samples of the firm’s work and awards. The office will usually feature a conference room for client presentations and larger meetings. Account managers and business management executives sometimes have private offices. There are generally multiple shared offices to house creative staff, market researchers, and media service personnel. These are sometimes located in separate wings composed of smaller offices in order to facilitate efficient workflow. Typical Number of Employees. Midsize advertising and marketing companies will normally have between fifty and five hundred employees. These will be divided by function, with separate groups handling reception, account management, creative services, market research, and so on. Employees may be divided among several branch locations in order to take advantage of several local markets. Traditional Geographic Locations. A midsize advertising company will often have multiple locations, usually located in the larger cities of its region. Having offices in different cities is an effective technique for capturing business from small local businesses. Advertising firms tend to be located in downtown areas, which allows account management staff easy access to key decision makers at potential client companies. Pros of Working for a Midsize Advertising or Marketing Firm. Midsize advertising companies tend to have stronger cash reserves than their smaller counterparts, allowing them to weather economic downturns. They usually handle all aspects of the advertising process for client businesses, allowing workers a chance to experience various aspects of the industry. Since they serve both small and large clients, employees have the chance to develop personal relationships with

small-business owners, as well as to make contacts at larger corporations. Cons of Working for a Midsize Advertising or Marketing Firm. Workers at midsize companies may not be able to exert as much influence over company strategy as workers at small firms. They also do not have as many opportunities to make high-level client contacts as employees at the larger companies in the industry. Costs Payroll and Benefits: Midsize advertising firms use a variety of compensation strategies. Less experienced, subordinate workers are usually paid an hourly wage. Higher-level employees are paid an annual salary, usually with benefits such as 401(k) plans, health insurance, sick time, and paid vacation. Some account managers are also given bonuses based on a percentage of the revenue that they bring into the agency. Supplies: Each branch of a midsize advertising company needs the ordinary range of office supplies and equipment, including multiline telephones and fax machines, as well as regularly upgraded computers, printers, and sophisticated projectors for presentations. External Services: Midsize companies in this business area often require the use of external services, including legal counselors, accounting services, and computer networking services. They often use external collection services to go after delinquent bills. Utilities: Midsize companies require the usual utility services, such as heat, water, and electricity. They also need many multiline telephones and high-speed Internet connections for the computers in their offices. Taxes: Midsize businesses must pay municipal and state taxes in each area of operation, as well as federal taxes on revenue. They are also responsible for payroll taxes. Large Businesses The advertising and marketing industry has traditionally been dominated by very large businesses. These range in size considerably and will typically have between five hundred and ten thousand employees. They command annual revenues of between $20 million and $4 billion. Large advertising agencies usually have a number of different offices,

Advertising and Marketing Industry often in multiple countries. Each branch is typically staffed with integrated teams of advertising professionals, able to handle every aspect of the marketing process for clients. Potential Annual Earnings Scale. Median annual salaries in the advertising and marketing industry range from $80,000 for advertising managers to $110,000 for marketing managers. Sales managers have a median annual salary of $97,000, and public relations managers have a median annual salary of $89,000. Clientele Interaction. Large advertising companies deal with high-level decision makers at national and international corporations. Account management teams are usually assigned to a handful of clients and are responsible for making sure that their advertising needs are met in full. Account managers are expected to meet in person with their clients periodically, and they often have to travel around the country or internationally on a regular basis. Most communication, however, is conducted by telephone, e-mail, or videoconferencing. Amenities, Atmosphere, and Physical Grounds. Large companies in the advertising industry typically have several headquarters around the country or the world. These are housed in large

OCCUPATION

27

buildings, typically in excess of twenty thousand square feet in size. Such companies also have a network of smaller satellite offices, which may be around the same size as the offices of smaller firms. Headquarters tend to be situated in large buildings located in the center of the most important city of operation. The first floor is usually reserved for reception and security. Different departments within the company will have offices taking up one or more floors of the building. There are also large designated conference rooms or auditoriums that are suitable for presentations or meetings involving large numbers of people. Satellite offices of large advertising companies tend to be organized similarly to those of midsize companies. There is a reception area, conference room, and individual offices for higher-level executives. Larger shared offices house creative, research, and media service teams. Typical Number of Employees. Large companies in the advertising and marketing industry range in size considerably. They may employ between five hundred and ten thousand people, usually located at headquarters and branches throughout the country or the world. These companies may be major employers in their areas of operation.

SPECIALTIES

Advertising Agents Specialty

Responsibilities

Outdoor advertising leasing agents

Obtain leases to sites for outdoor advertising and persuade property owners to lease sites in order to build billboard signs for use in outdoor advertising.

Radio and television time sales representatives

Contact prospective customers to sell radio and television time for advertising on broadcasting stations or networks.

Sales-promotion representatives

Persuade customers to use sales promotions and display items of wholesale commodity distributors.

Signs and displays sales representatives

Solicit and draw up contracts for signs and displays.

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Advertising and Marketing Industry

Traditional Geographic Locations. Headquarters of large advertising companies tend to be located in the most important commercial city of the region or country in which they are located. They are usually in the more expensive business districts of these cities, helping bolster the company’s reputation for business success. Satellite offices, which are usually responsible for addressing the advertising needs of businesses in the local region, are often found in the center of the larger cities in their areas of operation, facilitating their interactions with important decision makers at potential client companies. Pros of Working for a Large Advertising or Marketing Firm. Working for a large company in the advertising industry affords employees many opportunities to influence well-known brands and network with executives at multinational corporations. Large advertising firms typically have massive cash reserves and may be publicly traded, meaning that they are better positioned to weather economic downturns than are their smaller counterparts. The size of the company may also offer greater opportunities for career advancement. Cons of Working for a Large Advertising or Marketing Firm. At large (and sometimes publicly traded) companies, most individual employees have very little control over company governance or their own jobs. Some departmental staff, especially account managers, may be tied to specific clients. If those clients decide to leave the firm, associated account managers may lose their jobs. This can create a type of job insecurity that some professionals find unacceptable. Costs Payroll and Benefits: Many employees of large advertising companies are compensated with annual salaries and benefits such as retirement funds, health insurance, and paid vacation. Some lower-level workers may be paid an hourly wage. Certain departmental staff, such as account managers, may also receive bonus pay based on the amount of revenue they bring to the firm. Supplies: Large advertising companies are significant purchasers of office supplies and equipment. They need regularly updated multiline telephones, computers, printers, and projectors.

External Services: Large advertising and marketing firms require a number of different external services, including accountants, lawyers, payroll administrators, security personnel, and collection agents. Utilities: Because they tend to occupy large office buildings, the bigger advertising companies incur sizeable utility expenses. They must pay for heat, water, electricity, telephones, and highspeed Internet for multiple locations. Taxes: Large advertising companies must pay revenue-based income tax to the municipalities, states, provinces, and nations in which they operate. They must also pay relevant payroll taxes. Since they are large and often multinational corporations, the bigger advertising firms have complicated tax liabilities.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Advertising and marketing companies of all sizes require similar business activities. Smaller agencies tend to be more specialized and provide a narrower range of services. Larger firms are normally more integrated and handle a wider range of advertising services. At these larger firms, activities are conducted by complementary divisions that are often located on different floors or in separate buildings. The following umbrella categories apply to the organizational structure of businesses in the advertising and marketing industry: ■ ■ ■ ■ ■ ■ ■

Business Management Office Management Market Research Account Management Media Services Creative Services Interactive Services

Business Management Advertising and marketing companies rely on certain members of the staff to provide corporate leadership. Business management staff are whitecollar, salaried executives who are responsible for making important company decisions. Business

Advertising and Marketing Industry management personnel are usually college graduates and often have advanced degrees. They tend to have worked their way up through the ranks of the advertising industry, often having served as account managers or in creative services. Business management employees are primarily responsible for planning and facilitating bigpicture company strategy. Day-to-day activities for business management staff revolve around reviewing profit-and-loss data, generating relevant reports, and communicating actionable directives to other departments. Business management departments also include specialized support staff, such as accountants and legal counselors, to help executives make strategic decisions. Most high-ranking business management employees will be located at the company’s main corporate office. Large advertising companies with multiple locations will often have business management employees stationed at regional or local offices as well. These personnel are responsible for facilitating communication between the company’s head office and its local branches. Business management occupations may include the following: ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Regional Manager General Manager Accountant Legal Counsel

Office Management Every branch of an advertising and marketing company requires a number of office management staff members. These workers support other departments by maintaining day-to-day business operations. Office management work involves providing reception support, keeping records, procuring office supplies, and performing other clerical services. Higher-ranking members of the office management team usually have degrees in business administration or related fields. These more skilled workers are usually paid on a salary basis. Lower-ranking office management staff may or may not have college degrees and are usually paid an hourly wage. Office management personnel usually serve as the first point of contact between a company and members of the public. They answer telephones,

29

attend to visitors, maintain schedules, and direct inquiries from potential clients to relevant departments. Workers in this category are also in charge of handling accounts receivable and accounts payable. They ensure that clients are accurately billed for services rendered and that vendors are paid in a timely manner. Some members of office management staff are also responsible for human resource administration. This includes maintaining personnel files, facilitating payrolls, and addressing employee issues. Office management occupations may include the following: ■ ■ ■ ■ ■ ■

Office Manager Human Resources Manager Billing Manager Payroll Administrator Receptionist Secretary

Market Research Market research departments are sometimes found within larger advertising agencies. More often, however, market research services are provided by independent, specialized firms. Market research is primarily concerned with understanding customer demographics, consumer demand, and brand awareness. Market research is usually divided into two categories: qualitative and quantitative. Qualitative market research involves collecting subjective data, such as how customers feel about a potential product or the ways that people use goods and services in their daily lives. Qualitative market researchers utilize a number of different primary and secondary research techniques. Primary research often involves surveying potential customers and probing for impressions of a product through focus groups. Secondary research involves assembling existing data to help client companies position their products for maximum commercial success. Quantitative market research attempts to make sense of consumer behavior through more empirical and mathematical models. Researchers in this category utilize statistical analyses to determine the relationship between numerical variables such as price, customer income levels, and units of a product that are sold. Market research is increasingly

30

Advertising and Marketing Industry

used by advertising agencies to develop effective and tailored advertising campaigns targeted at different groups of customers. Market research occupations may include the following: ■ ■ ■ ■ ■ ■

Quantitative Project Manager Qualitative Project Manager Statistician Survey Administrator Focus Group Facilitator Research Assistant

Account Management The account management department is the part of an advertising firm primarily responsible for interacting with client businesses. Account management personnel are essentially salespeople and often have academic backgrounds in marketing. Their job is to recruit clients for the firm and serve the advertising needs of those clients.

Account management staff work with clients to identify their particular marketing needs. Because client businesses are all different, this planning stage is a very important part of the account management process. Variables such as target demographics, geographic scope, advertising budgets, and preferred advertising media must all be considered in order to maximize the clients’ return on investment. Once they have a clear understanding of a client’s needs, account management staff will work with the agency’s creative department to develop the specific ads that will make up the overall campaign. They then present these potential ads to the clients and make changes as deemed necessary. When a client has agreed on an advertising campaign and specific ad content, the designated account management staff then works with media purchasers to secure the required media space. Account management personnel are then responsible for monitoring every component of the campaign to ensure that all ads run as planned.

OCCUPATION

PROFILE

Copywriter Considerations

Qualifications

Description

Creates text for print, radio, and video advertisements and commercials.

Career clusters

Arts, A/V Technology, and Communications; Business, Management, and Administration

Interests

Data

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ASI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Advertising and Marketing Industry Account management occupations may include the following: ■ ■ ■ ■ ■

Account Director Account Manager Account Executive Account Supervisor Assistant Account Executive

Media Services The media services department is in charge of securing all the space needed to place client ads. It purchases page space from newspapers and magazines, as well as time on radio and television, interacting directly with media outlets. An important part of the media service department’s job is to learn the cost of advertising with the various publications and stations in its area of operation. Media services representatives then negotiate with media outlets to purchase ad space at a discount. Advertising agencies used to earn most of their revenue by reselling this ad space to their clients. The margin of discount agencies could negotiate with media outlets contributed to their margin of profit. Since the 1980’s, many advertising firms have changed their business models and now charge directly for creative services. Reselling ad space remains an important revenue stream for most agencies, however. Media service representatives must keep track of all advertising traffic. They receive orders from the agency’s account management department for specified amounts of ad space, and they purchase that space from media outlets. They then receive completed ads from the agency’s creative services department and make sure the ads run correctly in the purchased ad space. Media services occupations may include the following: ■ ■ ■ ■ ■ ■

Media Director Media Supervisor Media Buyer Media Planner Assistant Media Buyer Assistant Media Planner

Creative Services The creative services department is responsible for creating advertisements. Creative services per-

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sonnel work closely with account management and media services departments to develop ads, often to exacting client specifications. Perhaps the most important part of the creative process is copywriting. Copywriters create the text of print ads and write scripts for broadcast commercials. Copywriters must thoroughly understand the message and tone that a client wants to convey to the public, then use limited word space to convey this information in a compelling manner. The design elements of advertisements are developed by other creative services personnel. Design staff members, who usually have formal artistic training, produce the nonverbal elements of print ads and broadcast commercials. In the case of print ads, this entails selecting or creating art to go along with copy. For broadcast commercials, the design staff manages backgrounds, costumes, framing, accompanying music, and other stylistic details. Producing ads for any kind of media is a very time-consuming and complicated process. Because clients must ultimately be pleased with every detail of the ad, it is typical for creative service departments to develop drafts, known as mock-ups or comps. Account management staff then show these drafts to clients, who provide feedback about desired changes. Creative services occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Art Director Producer Editor Senior Copywriter Associate Producer Graphic Designer Junior Copywriter

Interactive Services The rapid growth in popularity of the Internet is poised to alter dramatically the world of advertising. Electronic publishing presents major advantages over print publication, eliminating the significant costs associated with printing and distribution. Audience migration from paper to online information sources is increasing, especially among younger people. In 2009, more Americans received their news information online than from newspapers, signaling a shift in media consumption habits.

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Advertising and Marketing Industry

Broadcast media is also being changed by the Internet. Online audio broadcasts, known as podcasts, have become standard elements of radio stations’ Web sites. Television is also incorporating online distribution channels. Many television programs may be streamed to computers through the stations’ own Web sites or through third parties such as Hulu. These Internet streams incorporate advertising, albeit using different models from those employed in broadcast and cable television. Despite the enormous potential for advertising online, most media companies have not yet found sustainable business models that use the Internet to generate enough revenue to replace traditional forms of advertising. The interactive services departments that are developing among many advertising companies seek to help advertising companies migrate to an online setting and to pioneer ways to achieve profitability in the digital age. Interactive services occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Interactive Sales Manager Interactive Creative Director Interactive Producer Interactive Designer HTML Programmer Flash Programmer Search Engine Optimizer Interactive Sales Associate

INDUSTRY

OUTLOOK

Overview The long-term outlook for this industry shows it to be stable or in modest decline. It is experiencing a steep downturn in the short term, however, as a result of the global recession. The advertising and marketing industries are likely to be radically transformed in the long term by changes in technology. For example, while much market research has traditionally relied on talking to consumers to find out about their purchasing habits, many companies now amass vast databases that track every purchase a customer makes in their stores. Future market research is likely to increase its utilization of such databases and to develop as many methods as possible of tracking consumer behavior as it happens, such as using Global Positioning Satellite

(GPS) systems to locate consumers and track their movements and buying patterns. The U.S. Department of Labor projects that the advertising and marketing industry will experience a 12 percent rate of job growth through 2016, keeping up with job growth generally. However, other analysts are cautious about such positive predictions, noting that rapidly shifting media-consumption habits are likely to change the industry in unpredictable ways. The 2007-2009 global economic downturn made it clear that the industry has been in flux for several years. Although many analysts consider the sharp revenue declines the industry has experienced during this flux period to be temporary, nearly all agree that the industry will be very different in the future. Print media advertising, in particular, is suffering from long-term readership declines as a result of the advent of digital information sources. Network television and analog radio are also having increasing difficulty competing against their digital counterparts. The hallmark of the twenty-first century information space may well be fragmentation. Television and radio remain important forms, alongside the Internet and other digital media, but no one form is dominant. As a result, no one venue commands a sufficient audience to generate the levels of revenue advertisers once received from a single source in a less fragmented media environment. Advertising professionals are therefore still struggling to develop ways to generate sufficient revenue in the contemporary digital environment. This is due in part to the rapid changes taking place with Internet technology. Most industry analysts assume that Internet technology will stabilize in the next decade and that online advertising will mature as a subindustry. The simplest form of online advertising is the pay-per-click model, in which brands are promoted on a Web page and pay a fixed amount to the hosting site for each visitor who interacts with the advertisement. An entire promotional writing style, designed to get Web pages higher search engine rankings, has emerged to facilitate pay-perclick advertising. This is called search engine optimization (SEO) and can be considered a sophisticated digital form of copywriting that is still being developed. Streaming online video advertising certainly

Advertising and Marketing Industry holds some promise, though its monetary potential has yet to be realized. Beginning in 2005, Web sites around the world began streaming video content for users to watch on demand. Some of these, such as YouTube, were based in the United States and were governed by that nation’s copyright laws. Others, however, were based in China, Hong Kong, and Taiwan, and they illegally streamed full versions of films and television shows. This proved very popular, and American companies are now experimenting with advertising techniques to sustain this new form of video distribution. The cutting edge of Internet-based advertising is known as Web 3.0 or the “semantic Web.” It occurs when advertisers target specific Internet users by tracking their commercial behavior, preferences, and even location in order to deliver precise marketing information instantly. Employment Advantages The performance of the advertising and marketing industry typically tracks with that of the overall economy. The global recession that began in 2007 has significantly affected advertising revenue. This downturn will continue to depress the industry in the short term, creating a difficult atmosphere for prospective employees. However, advertising has been a part of human culture since ancient times, and it is certainly going to remain an important element of the global economic system. Individuals with an interest in understanding and influencing patterns of commercial behavior would be well served to pursue a career in advertising. In the long term, the industry is experiencing radical changes that are largely due to the migration of audiences from analog to digital media. Although these changes will most likely disrupt traditional business models, they will also result in new opportunities for advertising professionals. One clear advantage of working within the advertising and marketing industry at this point in its history is the opportunity to help shape its future. As the media landscape is increasingly transformed by the development of digital communication technologies, firms will be seeking innovative thinkers to pioneer new forms of advertising. In that sense, this is an ideal time for forward-thinking individuals to enter the advertising industry, as they will be called on to develop new and better approaches to influencing customer behavior.

33

Annual Earnings Overall, advertising revenues remained strong during the last two decades of robust economic growth. The current global recession has led to a period of contracted spending on advertising services. The industry is currently valued at $440.8 billion globally and $167.5 billion in the United States. Serial print publications, historically the most important venue for advertising, have been in decline for several decades. The 2007-2009 recession led to dramatic revenue drops. Newspapers have been the most severely affected, with many publications posting 2009 revenue losses of between 40 and 50 percent. Magazines also suffered in 2009, posting losses of around 25 percent. Broadcast media did not escape the ravages of the global recession. Many major radio networks posted 2009 revenue drops of between 20 and 25 percent. Television revenue dropped between 10 and 20 percent, with cable stations faring somewhat better than broadcast networks. The industry recovered modestly in 2010, and for 2011, MAGNA, a division of IPG’s Mediabrands, predicted that advertising revenues in the United States would grow by 3.1 percent, exclusive of Olympic and political advertising. Revenue from television, digital, radio, and outdoor advertising was forecast to grow 6.3 percent in 2011. Although revenues from print media (newspapers, magazines, directories, and direct mail) were predicted to decline by 2.9 percent in 2011, other forms of advertising were experiencing increases. Growth in revenues from online video was forecast at 26.8 percent and mobile device advertising at 60.1 percent. Print advertising is considered by many in the industry to be in permanent decline. Much of the decline of traditional advertising forums is due to the shift of audiences to digital platforms. Digital media were the one sector of the advertising industry to experience modest growth during the recession, posting gains of between 2 and 3 percent for 2009.

RELATED RESOURCES FOR FURTHER RESEARCH American Advertising Federation 1101 Vermont Ave. NW, Suite 500 Washington, DC 20005 Tel: (800) 999-2231

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Advertising and Marketing Industry manager of a small newspaper for two years. He conducts research into the role the Internet plays in shaping future business trends in South Asia.

Fax: (202) 898-0159 http://www.aaf.org American Association of Advertising Agencies 405 Lexington Ave., 18th Floor New York, NY 10174 Tel: (212) 682-2500 http://www.aaaa.org Asian American Advertising Federation P.O. Box 69851 West Hollywood, CA 90069 Tel: (310) 289-5500 Fax: (310) 289-5501 http://www.3af.org Association of Hispanic Advertising Agencies 8400 Westpark Dr., 2d Floor McLean, VA 22102 Tel: (703) 610-9014 Fax: (703) 610-0227 http://www.ahaa.org International Advertising Association 275 Madison Ave., Suite 2102 New York, NY 10016 Tel: (212) 557-1133 Fax: (212) 983-0455 http://www.iaaglobal.org World Advertising Research Center 1 Ivory Square Plantation Wharf London SW11 3UE United Kingdom Tel: 44-20-7326-8600 Fax: 44-20-7326-8601 http://www.warc.com

ABOUT

THE

AUTHOR

Adam Berger holds a Ph.D. in social anthropology from the University of St. Andrews and maintains a strong interest in the interplay between technology and human communication. Berger has been working in the market research and print journalism fields for over a decade and was the general

FURTHER

READING

Berners-Lee, Tim, James Hendler, and Ora Lassila. “The Semantic Web.” Scientific American, May, 2001. Cappo, Joe. The Future of Advertising: New Media, New Clients, New Consumers in the Post-television Age. New York: Crain Communications, 2003. Holme, Bryan. Advertising: Reflections of a Century. New York: Viking Press, 1982. Lears, Jackson. Fables of Abundance: A Cultural History of Advertising in America. New York: Basic Books, 1994. Luft, Oliver. “Advertising Boss: Print Will Struggle to Recover After Recession.” The Guardian, May 5, 2009. http:// www.guardian.co.uk/media/2009/may/05/ maurice-levy-publicis-groupe. Mackay, Adrian, ed. The Practice of Advertising. 5th ed. Oxford, England: Elsevier ButterworthHeinemann, 2005. Norris, James D. Advertising and the Transformation of American Society, 1865-1920. Westport, Conn.: Greenwood Press, 1990. Pattis, S. William. Careers in Advertising. 3d ed. Chicago: VGM Career Books, 2004. Scott, David Meerman. The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases, Online Video, and Viral Marketing to Reach Buyers Directly. 2d ed. Hoboken, N.J.: John Wiley & Sons, 2010. Strickland, Martha. “What the Semantic Web—or Web 3.0—Can Do for Marketers.” Advertising Age, November 24, 2008. http://adage.com/ digitalnext/post?article_id=132815. Twitchell, James B. Adcult USA: The Triumph of Advertising in American Culture. New York: Columbia University Press, 1996. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

Advertising and Marketing Industry U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Wilkerson, David B. “U.S. Advertising Seen Plunging 13 Percent in 2009.” Marketwatch,

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March 12, 2009. http://www.marketwatch. com/story/us-advertising-revenue-plunge-132009. Wilmshurst, John, and Adrian Mackay. The Fundamentals of Advertising. 2d ed. Oxford, England: Elsevier Butterworth-Heinemann, 1999.

©Laurin Rinder/Dreamstime.com

Airline Industry

INDUSTRY

SNAPSHOT

General Industry: Transportation, Distribution, and Logistics Career Cluster: Transportation, Distribution, and Logistics Subcategory Industries: Scheduled Freight Air Transportation; Scheduled Passenger Air Transportation Related Industries: Defense Industry; Freight Transport Industry; Mass Transportation Vehicles Industry; Passenger Transportation and Transit Industry; Travel and Tourism Industry Annual Domestic Revenues: $120 billion USD (First Research, 2009; includes only major airlines and major cargo and courier companies) Annual Global Revenues: $536 billion USD (International Air Transport Association, 2008; includes passenger and cargo companies) NAICS Numbers: 4811, 336411-336412

INDUSTRY

range of services and business approaches. Because of its global nature, in the early twenty-first century the entire industry was forced to make significant adjustments to its general operations by increased concerns about terrorism, security, economic conditions, and public health. It remains a complex field, comprising myriad types of airlines—from the short-distance, regional airline to the globe-trotting international carrier. Within each of these airlines, there is an equally diverse collection of professional positions that must work together as part of a well-run network.

History of the Industry Flying devices date as far back as 400 b.c.e., when the Chinese began developing kites not only for entertainment but also to study weather phenomena and to enhance religious traditions. In the first century c.e., Hero, of the city-state of Alexandria, began to experiment with steam and air pressure, creating the aeolipile, a steam-powered sphere that would help inspire the notion of jet propulsion. The first serious consideration of human flight and air travel, however, came from Leonardo da Vinci

DEFINITION

Summary The global airline industry facilitates the travel of millions of people to and from their destinations each day. Although it is single-minded in terms of its general purpose—air transportation of people and freight—it is a diverse industry with a wide 36

Airline Industry in the fifteenth century. He sketched more than one hundred diagrams of various machines of flight. Most notably, his ornithopter, while never actually constructed, would serve as the inspiration for the modern helicopter. In 1783, the first passengers in history took off in the first device meant for air travel: A sheep, a rooster, and a duck were placed aboard a basket beneath a hot-air balloon designed by Joseph-Michel Montgolfier and Jacques-Étienne Montgolfier. The balloon was the first of its kind. After some additional modification and experimentation, the Montgolfier brothers sent the first human passengers into the air later that year. The introduction in the early to mid-nineteenth century of gliding technology helped pave the way for the development of airplanes. In the late nineteenth century, the German engineer Otto Lilien-

37

thal studied aerodynamics based on the glider concept. In fact, he constructed one that was able to carry people over a long distance. Lilienthal died when one of his gliders veered out of control and crashed. Not long after his death, Orville Wright and Wilbur Wright used Lilienthal’s theories and inventions, incorporating glider technology into their own design of the first functioning airplane in 1903. It was not long after the Wright brothers’ successful flight at Kitty Hawk, North Carolina, that passenger and cargo airplanes began to be designed, and an industry rapidly developed. Entrepreneurs sought to use the Wright brothers’ technology to transport paying customers. The first airline company to be founded was the Aviation Corporation, which created an air transport division known as American Airways. American Airways would evolve into one of the largest airlines

In 2009, more than 970,000 aircraft took off or landed at Hartsfield-Jackson Atlanta International Airport in Georgia. (©Chris Galbraith/Dreamstime.com)

38

Airline Industry

in the world, American Airlines. In 1928, another icon of the industry, United Airlines, would be born of Boeing’s United Aircraft and Transportation Company. The birth of the aviation industry was aided by the passage of the Kelly Airmail Act (1925), which allowed private carriers under contract with the U.S. government to transport mail. The revenue generated by private carriers enabled them to take other cargo aboard their increasingly international routes, as well as to transport people. As the industry grew, a series of laws and regulations was implemented in the United States to assert governance over the industry. Airplanes became larger and capable of carrying more people greater distances, a development that became useful in World War II. In the 1950’s, commercial aircraft grew larger, more efficient, and more comfortable, as people traveled by air in growing numbers. The Federal Aviation Administration (FAA) was estab-

lished in 1958 to develop a common air traffic control system in the United States. Over the next few decades, increased competition among airlines lowered the price of air travel, and more people traveled by air as a result. In the 1970’s, the airline industry was given an even greater infusion of energy. Federal legislators and agency officials lifted a number of key regulations that were originally imposed on the industry in order to prevent monopolies and antitrust violations. This deregulation spurred the creation of a large number of new airline companies, creating new levels of competition and further lowering prices. The lower prices, in turn, drew in more business from travelers. During the late 1970’s, revenues in the U.S. airline industry increased significantly year over year. Previous growth was only modest in comparison. The consistent growth of the global airline industry continued through the 1990’s, until the

Airplanes are used to transport cargo as well as passengers. (©Omers/Dreamstime.com)

Airline Industry

39

revenue gains and losses caused by a number of economic and security factors that are both within and beyond its control. For example, between 2001 and 2006, security threats and a worldwide recession Value Added Amount caused the American airline industry to Gross domestic product $57.3 billion lose $40 billion in revenues. During that Gross domestic product 0.4% same period, a number of major internaPersons employed 493,000 tional airlines that had been in operation Total employee compensation $38.3 billion for decades either declared bankruptcy or ceased operations altogether. The inSource: U.S. Bureau of Economic Analysis. Data are for dustry remains unstable as a result of en2008. ergy prices and economic uncertainty, among other factors. The strong sensitivity of the airline intragic events of September 11, 2001. The terrorist dustry to economic conditions has given rise to a attacks using hijacked commerical airplanes as major subindustry: Low-cost carriers experienced weapons led to a sweeping overhaul in the way aira boom during the 2001 recession. These compaline security was managed and operated. The need nies offer passengers lower fares, but they provide to increase security required airlines to spend few amenities and serve only shorter routes. Such more on security, and this expense was passed policies keep the carriers’ budgets manageable along to customers. The resulting higher costs and allow them to develop further low-rate prowere exacerbated by rising fuel prices that resulted grams. both from a shortage of refinery capacity and from Additionally, in order to weather volatile ecoU.S. military engagements in the oil-rich Middle nomic conditions, many major carriers have East. These trends created one of the most signifimerged or entered into strategic partnerships with cant shifts in the century-old airline industry’s hisother domestic, regional, and international carritory, as the industry struggled to recover from one ers. These cooperative ventures generate greater of its most trying periods. profits while reducing costs through sharing expenses. The 2008 merger of Northwest Airlines The Industry Today and Delta Airlines, for example, made Delta the Airlines have evolved into a diverse, global inworld’s largest carrier, with sixty-four hundred dustry. Commercial flights are offered into every flights on eight hundred jets generating an estimajor international city and most populated remated $32 billion in revenues. The merger also gions. Since 1978, when the U.S. Congress lifted a number of industry-specific regulations, the number of airline companies has grown explosively, Inputs Consumed by the and those companies hired twice as many employees during each of the years between 1978 and Airline Industry 2008 than the industry hired in any year prior to 1978. Globally, hundreds of thousands of people Input Value are employed by about two thousand airlines operEnergy $42.1 billion ating over twenty-three thousand planes to over Materials $2.3 billion thirty-seven hundred airports. In 2006, 2 billion Purchased services $58.1 billion people booked seats on nearly 28 million schedTotal $102.5 billion uled flights around the world. The U.S. airline industry operated 11 million of those flights carrying Source: U.S. Bureau of Economic Analysis. Data 745 million people—more than one-third of the are for 2008. global total. The airline industry remains subject to dramatic

The Airline Industry’s Contribution to the U.S. Economy

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Airline Industry

gave the airlines a greater ability to reemerge from bankruptcy. There are a number of different types of airlines. In addition to the major airlines, for example, there are many regional airlines. These businesses operate flights to smaller venues, using smaller planes that can land at regional airports. In many cases, regional carriers work in partnership with major airlines to provide international travel links. More than 70 percent of the United States’ 650 regional airports are serviced by such airlines. Niche airlines also exist. They offer amenities, services, or destinations that are specific to a certain client. Some even modify planes in order to accommodate travelers, providing seating, technology, or décor to meet the tastes and preferences of a specific social group or lifestyle. Some commercial airlines are chartered for private use, such as travel for sports teams, sometimes making cabin alterations to suit clients’ needs. Although subject to the ebb and flow of market and consumer demand, the airline industry is expected to experience modest yet consistent growth over the next several years. Despite the turmoil of the post-September 11 security environment and the two recessions of the early twenty-first century, airline travel remains popular.

INDUSTRY MARKET SEGMENTS The airline industry may be broken down into regional, domestic, and international airlines. The separation between the three is somewhat tenuous, however, in that many regional airlines run express, short-hop, or commuter flights for the larger airlines, and many domestic airlines are based in hubs at international airports and partner with international carriers. Indeed, most of the major international airlines engage in code-sharing partnerships with other airlines. (For example, a plane traveling from New York to Paris may be branded as both a United Airlines flight and an Air France flight or may even share flight numbers among three or four different partner airlines.) Nevertheless, the division into regional, domestic, and international airlines is useful for understanding the relative size of airlines, the value of their assets, and their core branding strategies.

Regional Airlines Regional airlines are primarily associated with specific portions of the country, and they often build their initial brands by offering low-cost flights on specific popular business-commuter or shorthop vacation routes within their regions. Once a regional brand is established, however, the airline may expand its offerings to other, more distant destinations while still concentrating on its core routes. Potential Annual Earnings Scale. The earnings scale for employees of regional airlines varies based on the position, employee experience, and the company’s budget parameters. Regional airline personnel typically earn less than those who work for larger carriers. On the high end of the pay scale are pilots, copilots, and flight engineers. According to the Bureau of Labor Statistics (BLS), the 2008 median national salary of such positions was $111,680. On the lower end of the pay scale are flight attendants, whose 2008 median annual earnings were $35,930. Aircraft and avionics equipment mechanics earn a median hourly wage of $22.95 (May, 2006), and avionics technicians earn a median hourly wage of $22.57 (May, 2006). The median annual earnings of a reservation and transportation ticket agent or a travel clerk was $28,540 (May, 2006). According to the BLS, office and support service workers, as well as airline mechanics and technicians, make up about 44 percent of the workforce in the airline industry. Clientele Interaction. By virtue of their small size, regional airlines and their employees will typically have a great deal of interaction with passengers. Most regional airlines make customer service and a “personal touch” the most important aspect of their business model, using it as a marketing tool to differentiate themselves from larger carriers. Amenities, Atmosphere, and Physical Grounds. Regional airlines fly into large airports, but they also serve smaller regional airports. Smaller airports have very few gates (some may have a single gate) and are much more relaxed than their larger counterparts. They may also lack many of the features of larger airports, such as currency exchanges, restaurants, and reliably staffed taxi stands. Regional airlines operate smaller aircraft that feature not only fewer seats but also less space between seats and less maneuvering room in general.

Airline Industry

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tions, many smaller regional airlines suffer longFlight crews must become adept at serving passenterm financial issues and may go bankrupt in a relagers’ needs and performing their duties within tively short amount of time. cramped quarters. Typical Number of Employees. The number Costs of employees at a regional airline company varies Payroll and Benefits: Pay and benefits for rebased on the size of the company, the number of gional airlines depend largely on the position flights it operates, and the size of its aircraft. For exheld, the amount of experience involved, and ample, Comair (a regional airline serving Delta) the budget capabilities of the company in quesoperates over 120 planes in routes throughout the tion. As is the case in other industry segments, midwestern United States and employs several pilots are among the higher-paid employees, thousand aviation professionals. Many smaller airwhile flight attendants are at the lower end of lines have much smaller fleets and employ fewer the pay spectrum. than one hundred people. Supplies: Regional airlines use a wide range of Traditional Geographic Locations. Regional supplies. From a mechanical standpoint, they airlines operate out of major international and naneed a great many replacement parts and matetional airports, as well as regional venues. Many fly rials for plane upkeep and repairs, as well as asout of airports in cities near major metropolitan arsociated mechanical systems (such as luggage eas, saving great amounts of money on landing and conveyors and carts). Furthermore, they rehangar fees. For example, U.S.-based Direct Air quire computer systems and similar technology does not fly to Boston, Chicago, or Montreal. It flies for reservations and ticket issuance. Those airinstead to the smaller nearby cities of Worcester, lines that offer drinks and food need such beverMassachusetts; Rockford, Illinois; and Plattsburgh, ages and meals on board each flight. Fuel is a New York. With fewer and shorter runways, such paramount supply, and the volatility of its cost regional airports may not accommodate larger can represent a significant challenge for small planes, being suited only to smaller, commuter airairlines. craft. External Services: Regional airlines require the Pros of Working for a Regional Airline. Reprotection of law enforcement agencies, such as gional airlines are dynamic businesses whose locathe Transportation Security Authority (TSA), to tion at smaller municipal and regional airports allows employees to avoid the high stress and heavy traffic volume associated with larger carriers. Additionally, new pilots who are looking to gain valuable flight experience tend to find greater opportunities at regional airlines, which are less competitive than the major carriers. Many regional airlines offer discounted or free air fares to employees and their families as recruitment and retention incentives. Cons of Working for a Regional Airline. Regional airlines are often lower-cost airlines. By virtue of their limited budgets, some have aging aircraft fleets, giving rise to safety concerns and maintenance issues. Additionally, hours tend to be long for pilots and crews, especially when staff levels are low but customer demand is high. WithAirport security is a growing field. (©James Steidl/Dreamstime.com) out national and international destina-

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Airline Industry

ensure security is maintained. They also employ computer consultants, marketing and public relations agencies, food and beverage suppliers, reservations systems consultants, and externally based aviation parts suppliers. Utilities: Regional airlines require a great deal of electricity to manage airport and maintenance operations. Additionally, they use large quantities of fuel, not only to power planes but also to operate ground vehicles and mechanical systems. Taxes: In addition to paying corporate income taxes and withholding employee personal income taxes, regional airline employers must pay taxes for real estate (such as hangars) and collect taxes from travelers to cover the price of landing at some larger airports. Domestic Airlines Domestic airlines are national carriers, serving most of the continental United States if not all of North America. They may also fly some international flights; if not, they operate in partnership with international carriers. Most domestic airlines, while serving all major U.S. airports, have “hub” airports through which a large proportion of their flights are directed. As a result, even though domestic airlines serve the entire nation, they may disproportionately affect the economies of specific cities or states. Potential Annual Earnings Scale. Salaries for personnel employed by domestic or national airlines vary based on the position, the individual’s experience, and the budget of the airline (and, in the case of union jobs, the collective bargaining agreement under which an individual is employed). Pilots are among the highest-paid employees, earning salaries based not only on experience but also on aircraft type—the larger the aircraft flown, the higher the salary. The BLS, in 2008, estimated that the national median annual salary for pilots, copilots, and flight engineers was $111,680. On the lower end of the pay scale are flight attendants, whose median earnings in 2008 were $35,930 per year. Aircraft and avionics equipment mechanics earn a median hourly wage of $22.95 (May, 2006), and avionics technicians earn a median hourly wage of $22.57 (May, 2006). The median annual earnings of a reservation and transportation ticket agent or travel clerk

was $28,540 (May, 2006). The BLS states that office and support service workers, as well as airline mechanics and technicians, make up about 44 percent of the workforce in the airline industry. Clientele Interaction. The level of client interaction experienced by domestic-airline employees varies based on position requirements. Flight attendants and other flight crew personnel, as well as gate personnel, will have a high level of interaction with passengers, while luggage handlers and ground crews will interact with them considerably less. Amenities, Atmosphere, and Physical Grounds. In addition to the domestic airline corporate headquarters (which is a professional office environment), most employees of domestic airlines work in major national airports and in the domestic terminals of international airports. They work alongside other airlines’ employees, creating a high-traffic and demanding work environment. Such work conditions require an adherence to corporate policy, as well as government regulations. Because of the nature of the work, a high degree of professionalism and courtesy in the most stressful of situations is expected. Domestic airlines operate a variety of aircraft, from small shuttles to large transcontinental planes, and flight crews must address the distinctive needs of passengers on each sort of craft. Typical Number of Employees. The number of employees working at a domestic airline varies based on the size of the airline, the number of flights it operates, and the types of aircraft involved. The low-cost carrier AirTran has over nine thousand flight crew personnel on seven hundred daily trips, serving the company’s fifty-six destinations around the United States using midsize aircraft. Traditional Geographic Locations. Domestic airlines typically operate out of major national and international airports, although they may also offer shuttle services to regional airports. Since the 1970’s, when deregulation took place, many major domestic airlines have developed a “hub and spoke” system of operations, in which a central airport serves as the airlines’ primary regional transfer point to other airports within that region. Such geographical strategies enable the airline more efficiently to service a region. Pros of Working for a Domestic Airline. Domestic airlines offer competitive salaries, as well as

Airline Industry an opportunity to work in the heart of the excitement of the aviation industry. An increasing number of domestic airlines are also lowcost carriers, rendering them relatively stable and resistant to economic downturns. They provide their employees with a measure of job security and the potential for upward mobility. Cons of Working for a Domestic Airline. Domestic airlines are sometimes hampered by their national confines, since a lack of international business may limit their profitability in difficult economic times. Additionally, from a management perspective, larger airlines (such as domestic airlines) are often locked in challenging collective bargaining units with labor unions representing pilots, flight attendants, mechanics, and other segments of the workforce. These union negotiations can pose a significant challenge in difficult financial times.

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According to the Web site Aviationinterviews.com, at FedEx, a captain of an MD-11 with fourteen years of experience earns more than $218,000 per year. (©Dreamstime.com)

Costs Payroll and Benefits: Pay for employees of domestic airlines is competitive, although specific salaries vary based on available positions, levels of employee experience, and company budgets. Among the highest-paid employees are the senior pilots, whose pay scale is based on experience (judged in terms of flight time). Supplies: Domestic airlines require fuel for planes and vehicles. Also vital is mechanical equipment, used for maintaining and repairing planes and other systems. The airlines also use administrative supplies and computer systems to expedite reservations and operations and to market the company’s services effectively. External Services: Among the external services utilized by a domestic airline company are food and beverage vendors, uniform and linen supply companies, and custodial services. Security is also externally based, operated by the TSA. Airlines may also use external accounting, marketing, public relations, lobbying, and legal counsel vendors. Utilities: Domestic airlines use a great deal of electricity, water, and other utilities in their daily operations, as well as extensive telecommunications services to connect with customers and create connectivity within the company. Fur-

thermore, oil and other fuel types are used in great quantities by such airlines. Taxes: Nationally based airlines must collect payroll taxes, as well as pay corporate income and commercial real estate taxes. Additionally, many countries and cities require that airlines pay landing taxes to help fund airport operations and promote the economic development of the region in which the airports are located. International Airlines International airlines market themselves largely or primarily as carriers between nations, or as fullservice carriers that can transport a passenger from virtually anywhere to virtually anywhere. Many are based in a specific country, name themselves for that country, and seek to be the primary source of air transportation into or out of it. U.S.-based international airlines include the largest domestic airlines, which seek to serve all travel needs, from a short hop within a state to a major transatlantic flight. Potential Annual Earnings Scale. The pay and benefits scale for international airline personnel varies based on the position, the level of experience,

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Airline Industry

and the financial capabilities of the airline in question. According to the BLS, in 2008, pilots, copilots, and flight engineers, nationally, earned a median annual salary of $111,680—international carriers would pay on the high end of this scale. Generally, international airline personnel earn higher wages than their counterparts in domestic and regional airlines as a result of the longer hours they work and the distances they travel, as well as the complexity of international aircraft. On the lower end of the pay scale are flight attendants, whose median earnings in 2008 were $35,930 per year. Again, international carriers pay on the higher end of this scale. Aircraft and avionics equipment mechanics earn a median hourly wage of $22.95 (May, 2006), and avionics technicians earn a median hourly wage of $22.57 (May, 2006). The median average earnings of a reservation and transportation ticket agent or travel clerk is $28,540 (May, 2006). Clientele Interaction. The degree of interaction between international airline personnel and their customers and passengers depends on the position involved. For example, reservations managers, cockpit personnel, and flight attendants will have a higher degree of interaction with travelers than will baggage handlers and mechanics Amenities, Atmosphere, and Physical Grounds. International airlines operate at international airports. Such airports feature a full set of amenities for travelers, including lounges, dutyfree stores, currency exchanges, full restaurants and bars, and even recreation centers and artistic and cultural exhibits. In addition, international airports include U.S. Customs stations, processing travelers entering or returning to the country. Such airports are extremely hectic places, full of passengers and employees likely to be under various levels of stress, and they are suject to strict security protocols and procedures. Typical Number of Employees. International airlines typically have large workforces in order to conduct worldwide operations. American Airlines, one of the world’s largest carriers, has about eightytwo thousand employees around the world. Delta has about seventy thousand employees. Traditional Geographic Locations. International airlines, in addition to their corporate headquarters, tend to operate out of major international airports, although they may run smaller routes to domestic and regional markets. Like do-

mestic carriers, many operate on a hub and spoke basis. Dutch carrier KLM, for example, conducts the majority of its international routes through Amsterdam. The major U.S. international carriers tend to dominate their hubs. For example, two full terminals at Chicago’s O’Hare International Airport are devoted to United Airlines. Pros of Working for an International Airline. One of the most enticing aspects of working for an international airline is the opportunity to travel throughout the world. Other benefits include above-average pay, as well as the opportunity to work on some of the most complex and advanced equipment in the world—some of the newest technologies in the airline industry are used in international travel. Cons of Working for an International Airline. For some individuals, the promise of visiting international locations is not worth the long, erratic hours of traveling, which cause physical fatigue and jet lag, as well as a lack of personal time. Additionally, international airlines are often the primary targets of terrorists. In the post-September 11 environment, such security concerns may weigh heavily on the minds of employees. Costs Payroll and Benefits: The payroll and benefits of international airlines personnel vary depending on the position and the level of experience. Pilots, who are responsible for the safety and operation of their planes during overseas travel, typically are paid the higher end of the salary spectrum—about $130,000 annually. Supplies: International airlines require a large amount of supplies, ranging from administrative and office supplies, to mechanical and electrical equipment, to food and beverages. Additionally, they require a great deal of fuel, especially for large Boeing 747’s, 777’s, and other large, long-distance planes. External Services: International airlines will use a number of externally based services and vendors during the course of their operations, including food and beverage distributors, fuel companies, uniform and linen services, and aviation manufacturers. Additionally, many airlines have external public relations and legal counsel services, as well as keeping political lobbying consultants on retainer. Also, security at

Airline Industry airports is usually managed by local, state, and national law enforcement agencies, including the TSA. Utilities: International airlines use a large volume of water, electricity, and oil (used for airport vehicles and similar machinery) during the course of their daily operations. Additionally, they require a high quantity of jet fuel for planes. Also, such airlines need an extensive telephone and computer networking service to manage interdepartmental communications, as well as customer service, ticket sales, and other external communications. Taxes: International airlines must collect and report employee income taxes relevant to worker nationalities, as well as paying corporate income taxes in the country or region in which they are based. If they own real estate for corporate headquarters, they must pay taxes on that property as well. Additionally, these airlines must pay taxes for landing in certain airports, a tax that is usually added to the price of tickets.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of the airline industry is tightly interconnected in order to retain a solid customer base. To that end, most airlines seek to earn customers’ business, provide safe flights without incident, and retain customers’ favor so they will become repeat customers. A broad network of positions spanning the industry seeks to accomplish these goals, and each plays a distinctive role. The following umbrella categories apply to the organizational structure of the airline industry: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Flight Crews Flight Attendants Ticketing Agents Mechanical and Repair Services Luggage Handling Public Relations Human Resources Legal Counsel Marketing

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Executive Management Executive management consists of the seniorlevel managers in each field of an airline’s overall operations. These highly experienced personnel are familiar with the specific systems and departments within their airline company and how those components work with one another. Executive management is responsible for developing budgets, establishing goals and corporate policies, and developing and implementing strategic plans for the airline. Because executive management sets forth the airline’s short- and long-term goals and strategies, such personnel must each be able to direct the operations of their respective departments and fields, setting specific tasks and goals for subordinates, drafting and implementing department budgets, and addressing any issues that threaten to undermine the pursuit of those goals. In light of the industry’s sensitivity to economic and security conditions, airline executives are expected to be able to react to fluctuations that could have a negative impact on the company. They may even be called upon to issue public statements and testify in public reviews concerning such issues. Risk management and emergency response are among the most important tasks senior managers must undertake in order to ensure the long-term health of the company despite adverse conditions. Executives typically earn the highest salaries of an airline company’s employees. They are often well-educated, with advanced degrees in business management, accounting, human resources, and similar fields. However, the most important aspect of their credentials is experience, both in the specific fields in which they work and as managers. Many executives begin their careers as low-level employees in the industry, working their way up the ladder to build on their skills and experience. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

President Chief Executive Officer (CEO) Chief Operating Officer (COO) Board Chair Chief Financial Officer (CFO) Chief Information Officer (CIO) Vice President of Human Resources

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Airline Industry ■ ■

Vice President of Marketing Executive Assistant

Flight Crews Flight crews are the individuals charged with the operation of the planes themselves. Constituting about 36 percent of airline and air transportation employees, these individuals are highly experienced and well trained. Flight crews are led by the captain—the pilot— who is generally the most experienced member of the flight crew and who oversees the operation of the aircraft. The pilot and copilot (the second in command) share duties in managing the wide range of systems onboard the plane, charting and navigating the craft before and during flight, and communicating with the ground and other planes while in flight. Many planes have a flight engineer who monitors instruments, systems, and gauges, as well as keeps a watch for other aircraft in the vicinity. Pilots, copilots, and flight engineers are well

OCCUPATION

trained in aviation and have significant experience in flying large passenger jets and “turbo-props” (propeller-driven planes). Many of them received their training in the military, although some began their careers working on much smaller commercial and private aircraft before working their way into the airline industry. Flight crew members tend to receive extremely competitive salaries, in large part because of the long and erratic hours they must work, operating planes over long distances at varying times of day. Flight crew occupations may include the following: ■ ■ ■

Pilot Copilot Flight Engineer

Flight Attendants Flight attendants assist in the overall safety and well-being of the passengers aboard an airline flight. The number of flight attendants on a given

PROFILE

Flight Attendant Considerations

Qualifications

Description

Ensures that security and safety regulations are followed during flight and that passengers are comfortable.

Career cluster

Transportation, Distribution, and Logistics

Interests

People; things

Working conditions

Work inside; work both inside and outside

Minimum education level

High school diploma or GED; junior/technical/community college

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience Military service; part-time work Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ESA

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Airline Industry aircraft depends largely on the number of passengers aboard. Since September 11, flight attendants have been charged with an added layer of responsibility, as they are the flight crew’s eyes and ears within the passenger cabin, responsible for alerting the flight crew and security personnel of any passengers who could pose a threat. Flight attendants have many tasks before, during, and after an airline arrives at its destination. Before takeoff, they help passengers find their seats and stow carry-on luggage. They familiarize passengers with safety policies, protocols, and equipment (such as emergency doors, floatation devices, and oxygen masks). Additionally, they answer any questions from passengers about the flight and ensure that passengers abide by any airline and government aviation regulations for using electronic devices, are properly seated with a secure seatbelt, and are able to handle the safety requirements of certain areas of the plane, such as the wing seats. Once a flight is in the air, flight attendants may serve food and drinks to passengers. On international flights, they may also help passengers fill out any immigration paperwork or customs declarations. As the plane nears its destination, flight attendants conduct safety checks of the passenger cabins. In emergencies, flight attendants are expected to act appropriately to ensure the safety of the passengers. They must know basic lifesaving skills and may be called upon to aid in the treatment of sick passengers. They are responsible for ensuring that elderly, disabled, and youthful passengers are well tended during the flight. Flight attendants must have at least a high school diploma, although many have undergraduate degrees. Such training gives them better interpersonal skills, provides a basic understanding of psychology and sociology, and enhances their diplomatic skills. For international flights, flight attendants with foreign-language skills are in high demand among employers. Training and experience are also extremely important, and flight attendants must receive several weeks of intensive training, either in training centers or on the job. They are required to have outstanding crisis-management and communication skills as well. Flight attendant occupations may include the following:

■ ■ ■

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Senior Flight Attendant Junior Flight Attendant Gate Check Personnel

Ticketing Agents The task of booking passengers on an airline’s scheduled flights falls to the ticket sales and reservations personnel. Ticketing agents may book individual reservations via telephone or Internet purchases, or they may book group tickets via contracts and interpersonal negotiations. They may also be located at the airport, checking in passengers and making modifications to their reservations. In this case, they are tasked with ensuring that any passengers who fail to appear in a booked seat are quickly replaced by others who are standing by for inclusion on a flight, thereby ensuring that a plane is as fully occupied as possible. Ticket sales and reservations agents usually receive hourly wages at a competitive rate. They are expected to have at least a high school degree, and they must have excellent organizational and interpersonal skills. They must also demonstrate strong diplomatic skills for they are often expected to deal with angry or impatient customers during the course of their daily responsibilities. Ticketing agent occupations may include the following: ■ ■ ■ ■ ■

Ticketing Agent Reservations Manager Baggage Claims/Check Personnel Sales Manager Administrative Assistant

Mechanical and Repair Services Mechanical and repair personnel provide maintenance services for aircraft, ground vehicles, and other mechanical systems owned and operated by an airline. In addition to fueling planes and assisting the captain in checking all external and internal systems prior to takeoff, they are expected to make repairs both quickly and in compliance with local, regional, state, and national government regulations. This segment of the airline industry is essential to a company’s operations and the safety of its passengers. Mechanical and repair personnel are highly experienced individuals, fully trained on the equipment that they are charged with maintaining. They

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Airline Industry OCCUPATION

PROFILE

Aircraft Mechanic Considerations

Qualifications

Description

Maintains and repairs aircraft to ensure their safe operation.

Career clusters

Manufacturing; Transportation, Distribution, and Logistics

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

On-the-job training; junior/technical/community college; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

REI; RIE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

are expected immediately to identify and repair malfunctioning equipment in order to ensure that any repair-related delay to flights is as brief as possible. Mechanical and repair personnel have strong vocational educations and, in some cases, advanced degrees in mechanical engineering and similar fields. They must be able to work in loud conditions and to work long hours. Mechanical and repair services occupations may include the following: ■ ■ ■ ■ ■

Avionics Technician Maintenance Director/Supervisor Inspector Lead Mechanic Engineer

Luggage Handling Luggage handling personnel work to ensure that any checked baggage is transported from the main terminal to the appropriate aircraft, stowed on board, removed from the plane upon arrival,

and returned to its owners at the baggage claim area. These individuals are responsible for organizing checked luggage and running it through an often-extensive network of conveyors that carries it to the planes. This process must be accomplished quickly in order to ensure that the luggage gets on the right plane prior to takeoff. Luggage handlers must also work quickly to remove luggage and shipping containers from incoming planes and return them to passengers via another conveyor system. In the event that luggage is lost or delayed in transit, luggage handlers may also be involved in returning that luggage to its owners. Luggage handlers do not need advanced education, but they must be physically fit in order to handle heavier items of luggage. They must also be able to work quickly to load and unload planes, requiring strength, stamina, and organizational abilities. Luggage handling occupations may include the following:

Airline Industry ■ ■ ■ ■

Skycap Ramp Agent Baggage Agent Cargo Agent

Public Relations The management of all external communications, press statements, interviews, promotions, and other forms of information dissemination falls to an airline company’s public relations staff. Public relations personnel are charged with promoting the interests and activities of the airline to the general public, as well as to targeted audiences. They also issue statements of the airline’s official positions and responses to emergency situations, political issues, and other time-sensitive matters. Public relations personnel must be effective communicators, as well as capable of reacting quickly to sensitive issues in an even-handed, careful, and diplomatic manner. In many cases, an airline’s political endeavors, such as lobbying and government relations, are conducted through this department. Public relations personnel are typically college educated, and many have advanced degrees in such fields as public relations, communications, public affairs, law, and public policy. They must be professionally experienced in the airline industry, demonstrating a strong understanding of all rele-

49

vant issues and their effects on their airline’s stated goals and activities. Public relations occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Public Relations Director External Affairs Coordinator Government Relations Manager Lobbyist Event Planner Marketing Manager Administrative Assistant

Human Resources Human resources personnel recruit, hire, and terminate employees. They help organize employee benefits packages, insurance programs, and training programs. They may also be involved in conducting background checks or coordinating with law enforcement investigators to ensure that potential employees are not connected with any criminal activity. Human resources professionals are highly conversant in issues pertaining to federal and state employment practices, as well as protocols for hiring and terminating employees. They are well versed in union labor concerns that affect individuals and groups within their organization. They are typically

The airlines industry employs many ground workers at major airports. (©Dreamstime.com)

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Airline Industry

college educated, and many have advanced training or degrees in business management, human resources, and similar fields. Human resources occupations may include the following: ■ ■ ■

Human Resources Director Human Resources Coordinator Administrative Assistant

Legal Counsel Many airlines have their own legal teams on staff. These lawyers are charged with a number of important tasks relative to the airline’s operations. Attorneys who work for airlines typically have extensive backgrounds in regulatory compliance and ensure that their airline is operating within government-imposed guidelines and obeys laws regarding airline travel. They must be fully familiar with the regulatory agencies overseeing the airline industry, such as the FAA or the European Aviation Safety Agency (EASA). Attorneys may also be needed to conduct negotiations with collective bargaining units. Many segments of the industry, including pilots, flight attendants, and ground crews, are members of unions and subject to periodic labor contract negotiations. Many members of an airline’s legal team are labor lawyers, skilled in collective bargaining and labor relations. They may also need to attend to unionrelated grievances or staff legal issues as they arise. Legal team members typically have law degrees and, in many cases, additional degrees in similar fields, such as business management. They must be prepared to work long hours at times, especially during collective bargaining negotiations. They must also have excellent researching skills and be able to locate and analyze current laws and keep track of industry-related legislation and proposed regulations. These skills will allow them to keep the airline’s senior management aware of any potential changes in laws or regulations that may affect the company. Legal counsel occupations may include the following: ■ ■ ■ ■

Chief Legal Counsel Staff Attorney Compliance Officer Associate Counsel

■ ■

Researcher Administrative Assistant

Marketing Marketing personnel within the airline industry are responsible for ensuring that an airline’s endeavors are visible, both within and outside of the industry. Marketing departments are typically charged with forging partnerships with other companies and associations in order to enhance the company’s image. They purchase advertising space in periodicals and other media read by potential customers and create advertising campaigns designed to increase business. Marketing professionals are typically expected to be familiar with the airline, the industry in which it operates, and its target clients. They typically work consistent hours and are expected to work well in a team environment and demonstrate a high degree of creativity. Marketing professionals are typically college educated, and many have advanced degrees in business management, advertising, marketing, and similar fields. Marketing occupations may include the following: ■ ■ ■ ■

Marketing Director Marketing Coordinator Advertising Manager Administrative Assistant

INDUSTRY

OUTLOOK

Overview The airline industry is subject to a wide range of influences that have a significant and sometimes negative impact on its success. Among these influences are international terrorism, economic recession, and fuel prices. Each of these factors played a role in causing deep damage to the industry, beginning in 2001 and continuing into the first decade of the twenty-first century. Fear of terrorism, for example, fostered increased security measures at airports, increasing ticket prices, causing delays in airline boarding and departures, and discouraging potential travelers. The economy and the high price of fuel have also played a significant role in the decline in the airline industry’s profits. Increased expenses associated

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with energy costs have been transferred to consumestimates that, by 2016, wage and salary jobs in the U.S. airline industry will increase by only 7 percent, ers in the form of higher ticket prices, causing some compared with 11 percent for all other industries tourists to seek alternate travel modes (or simply combined. Airlines’ growth will not be consistent, not travel) and curtailing business travel as well. however: As the economy surges and recedes, so These conditions have not completely stunted too does consumer and corporate spending on air the airline industry. Rather, they have forced the travel. It is therefore likely that airlines’ growth will industry to evolve in a number of ways to accommobe subject to frequent fluctuations over time. Addidate travelers. For example, low-cost and regional tionally, it is believed that much of this growth will carriers have continued to grow and develop, combe in the low-cost and regional carrier markets. peting successfully with larger airlines. AirTran, Still, two important aspects of the twenty-first which evolved out of the defunct ValueJet in 1996, century will continue to foster the growth of the inposted a $28 million profit in the first quarter of dustry. First, the population will continue to grow, 2009. Meanwhile, international carrier American and a larger population entails a greater potential Airlines posted a $181 million loss, and U.S. Airways demand for passenger travel. Second, although lost $103 million during the same period. Another the worldwide economy falters occasionally, it is low-cost carrier, JetBlue, posted a $12 million profit. still continuing along a path toward global integraThe only apparent risk to this trend is the fact tion. This trend entails greater opportunities for that regional carriers, lacking extensive reserves or business and commerce, increasing the likelihood numerous destinations, may not have far to fall if that businesspeople will need to travel more to conthey experience losses. Major carriers such as duct their business. American and the European airlines may perform Many experts see the United States as key to the poorly, but they may offset losses by restructuring, redevelopment of the global airline industry. As cutting routes, and otherwise reducing expenses. the largest market for airline passengers, the Smaller carriers that lose passengers and profits United States represents a demand for airline may have less to cut, increasing the risk of failure. travel that must increase in order for the rest of the The twenty-first century has also witnessed a global industry to be revitalized. round of consolidations among major airlines. These consolidations represent an effort to increase the companies’ reach to global PROJECTED EMPLOYMENT destinations while sharing and FOR SELECTED OCCUPATIONS even reducing costs. The merging of Delta and Northwest to Air Transportation establish the world’s largest airline, for example, increased Employment the combined giant’s available 2009 Projected 2018 Occupation destinations and provided the potential for reduced prices. 65,340 72,100 Airline pilots, copilots, and flight As major airlines continue to engineers struggle with the costs and chal13,680 21,100 Cargo and freight agents lenges of the global recession, it is likely that more airlines will 95,480 106,300 Flight attendants attempt to foster partnerships 91,920 111,700 Reservation and transportation and mergers to prevent their ticket agents and travel clerks collapse. Overall, the airline industry Source: U.S. Bureau of Labor Statistics, Industries at a Glance, is expected to experience conOccupational Employment Statistics and Employment Projections tinued but modest growth in Program. the near future. The U.S. Bureau of Labor Statistics (BLS)

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Employment Advantages There is a wide range of advantages to working in the airline industry. The first of these is the joy of travel. Many who join the ranks of airline employees respond to the promise of frequent travel to other cities and countries. Flight crews and flight attendants have many opportunities to travel, both as a direct part of their jobs and as a fringe benefit during their time off. Employment in the airline industry gives them the ability to travel to and from a wide range of destinations, on a flexible schedule and at pay rates that are above average. Additionally, the airline industry offers a wide range of job possibilities. The industry is one of the world’s largest and, in light of its breadth, presents a diverse collection of employment opportunities. Employees are needed to fill administrative posts, labor-intensive jobs, mechanic posts, and customer-service jobs, as well as serving as flight attendants and crews. Virtually every type of skill set may find an opportunity within this industry. The airline industry, despite its sensitivity to market fluctuations, continues to grow each year, a fact that suggests stability as an overall industry. While companies may grow and decline, those who work within the industry may find a degree of consistency in choosing airlines as a career path. The fact that low-cost carriers are taking hold as a preferred airline among budget-conscious travelers increases the possibilities for jobs within those companies. This is a welcome development for those who might not be able to gain a position within one of the major international airlines. Working for such lower-cost airlines may require accepting a lower salary, but for those looking to enter or remain in the industry, such companies present openings in an otherwise-challenging economy. Although the terrorist attacks of September 11, 2001, and the recession of the same period sent the airline industry into a major period of poor productivity, potential employees may take solace in the fact that customers still demand air travel. Thus, the industry is likely to continue to grow overall in spite of its sensitivity to flux. Annual Earnings The airline industry remains fiscally strong and healthy, despite the ongoing economic tumult in the global system. In 2008, the global industry posted revenues of about $536 billion, represent-

ing mild growth. That figure shrank significantly in 2009, however, as a result of the economic downturn, weak consumer demand, and the heightened cost of oil. By the second quarter of 2009, global revenues fell to about $455 billion, with doubledigit losses in every region. After expenses, the industry experienced a net loss. The United States remains the largest contributor to the industry’s overall performance. In 2008, the U.S. airline industry posted revenues of about $186 billion, a drop from the previous year. The next year, 2009, was no different, as revenues fell to $120 billion. Still, the U.S. industry was the only national airline industry to realize a modest profit, earning $100 million after expenses. The drop in revenue again stemmed from the faltering economy and the rising cost of oil. The industry is forecast to continue experiencing hardship around the world. Three factors seem to contribute most heavily to airlines’ bottom line: the cost of oil, which has increased at varying rates over the last several years; demand, which is significantly affected by economic downturns; and the cost of labor. In regard to the latter, collective bargaining units will continue to negotiate for the best possible pay and benefits, potentially decreasing profit margins. They have also, however, demonstrated a willingness to accept cuts in pay when the survival of their employer is at stake.

RELATED RESOURCES FOR FURTHER RESEARCH Air Transport Association of America 1301 Pennsylvania Ave. NW, Suite 1100 Washington, DC 20004 Tel: (202) 626-4000 http://www.airlines.org Association of European Airlines Ave. Louise 350 B-1050 Brussels Belgium Tel: 32-2-639-89-89 Fax: 32-2-639-89-99 http://www.aea.be European Regions Airline Association The Baker Suite, Fairoaks Airport

Airline Industry Chobham, Woking, Surrey GU24 8HX United Kingdom Tel: 44-12-7685-7038 Fax: 44-12-7685-9485 http://www.eraa.org International Air Transport Association 800 Place Victoria P.O. Box 113 Montreal, QC H4Z 1M1 Canada Tel: (514) 874-0202 Fax: (514) 874-9632 http://www.iata.org Regional Airline Association 2025 M St. NW, Suite 800 Washington, DC 20036-3309 Tel: (202) 367-1170 Fax: (202) 367-2170 http://www.raa.org

ABOUT

THE

AUTHOR

Michael P. Auerbach has over sixteen years of professional experience in public policy and administration, economic and business development, and the hospitality industry. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He has worked extensively with the tourism industry, promoting economic and business development. He is a veteran of state and federal government, having worked for seven years in the Massachusetts legislature and for four years as a federal government contractor.

FURTHER

READING

AVJobs.com. “Aviation Career Salary, Wages and Pay.” http://www.avjobs.com/salaries-wagespay/index.asp. Belobaba, Peter, Amedeo Odoni, and Cynthia Barnhart, eds. The Global Airline Industry.

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Chichester, West Sussex, England: John Wiley & Sons, 2009. Dillon, Tamara. “Sky-High Careers: Jobs Related to Airlines.” Occupational Outlook Quarterly, Summer, 2007. http://stats.bls.gov/opub/ ooq/2007/summer/art01.pdf. Doganis, Rigas. The Airline Business. 2d ed. New York: Routledge, 2006. Finnegan, Joy. “Special Report: Aviation Maintenance 2007 Salary Survey.” Aviation Maintenance, September 1, 2007. http:// www.aviationtoday.com/am/categories/ commercial/15370.html. Massachusetts Institute of Technology, Global Airline Industry Program. “Airline Industry Overview.” 2010. http://web.mit.edu/ airlines/analysis/analysis_airline_industry .html. Morrison, Steven A., and Clifford Winston. The Evolution of the Airline Industry. Washington, D.C.: Brookings Institution, 1995. Orenic, Liesl Miller. On the Ground: Labor Struggle in the American Airline Industry. Urbana: University of Illinois Press, 2009. Shaw, Stephen. Airline Marketing and Management. 6th ed. Burlington, Vt.: Ashgate, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Vasigh, Bijan, Ken Fleming, and Tom Tacker. Introduction to Air Transport Economics: From Theory to Applications. Burlington, Vt.: Ashgate, 2008. Wensveen, John G. Air Transportation: A Management Perspective. Burlington, Vt.: Ashgate, 2007.

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Alternative Power Industry

sources include sunlight, wind, tides, falling water, geological heat, and biomass, all of which General Industry: Energy are considered renewable. The Career Cluster: Science, Technology, Engineering, and Math industry and the career opporSubcategory Industries: Alternative Energy Structure tunities within it are diverse and Construction; Electric Power Transmission, Control, and evolving rapidly. Large utilityDistribution; Geothermal Drilling; Geothermal Steam scale wind, solar, geothermal, Production; Hydroelectric Power Generation; Solar tidal, and other hydroelectric Electric Power Generation; Tidal Electric Power plants share features with coal, Generation; Wind Electric Power Generation oil, and nuclear utility plants. Related Industries: Batteries and Fuel Cells Industry; Manufacturers of wind turbines Biofuels Industry; Coal Mining Industry; Electrical Power and solar arrays share features Industry; Nuclear Power Industry; Petroleum and Natural with builders of airplanes and Gas Industry oceangoing vessels. Small startAnnual Domestic Revenues: $42.5 billion USD (American up companies advancing techSolar Energy Society, 2007) nologies and services, from thinAnnual Global Revenues: $144.5 billion USD (Clean Edge film solar cells to smart power Trends, 2009) meters, relate to the computer NAICS Numbers: 22112, 221111, 221119, 221330, 237110, industry. Biodiesel and ethanol 237130 come from agricultural farms with processing plants. Spacebased and other beamed power transmission may become important. Public policy issues and global debates are INDUSTRY DEFINITION consistently engaged by this industry. Summary History of the Industry The alternative power industry generates elecMany of today’s alternative energy sources were trical power from sources other than fossil fuels the sources of energy before the use of fossil fuels or nuclear technology. These alternative energy INDUSTRY

SNAPSHOT

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Alternative Power Industry became pervasive. The ancient Incas of South America are believed to have used solar concentrators as heat sources. Wind energy powered smallscale industry and agriculture in Holland, Denmark, and Spain in the nineteenth century, as well as in the American West. Hydroelectric power plants operated at natural waterfalls such as Niagara Falls on the U.S.-Canadian border and at artificial dams in many parts of the world, offering flood control, irrigation, a supply of drinking water, and electricity generation. The oil rush of 1859, the discovery of large natural gas deposits in the southwestern United States in the early 1900’s, the coal-burning iron and steel industry, the advent of the internal combustion engine in the middle of the nineteenth century, and the assembly-line mode of automobile production in the early twentieth century established fossil fuels as the standard for both household and transportation energy usage. Tanker ships, trucks, railroads, and pipelines made fossil fuels available throughout the world. Mass-produced internal combustion engines surpassed other forms of power generation for electricity and transportation in cost-efficiency, scalability, reliability, and

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portability all over the world. Coal and then petroleum replaced animal power and wood as power sources for transportation. The electric power grid in turn provided cheap, convenient, and reliable power for the expansion of cities. Mass-produced electric-powered devices became symbols of convenience and a civilized standard of living. The world wars and the interstate highway system reinforced the United States’ dependence on fossil fuels. In the 1950’s and 1960’s, nuclear energy seemed to promise clean, abundant, and inexpensive electric power, and more than one hundred nuclear plants exist in the United States today. Rising public concerns about nuclear waste and reactor safety stopped the growth of the American nuclear industry, however. Concerns about the social costs of large hydroelectric plants also hindered development of that technology, while cheap and abundant fossil fuels remained at the forefront of the energy sector. In 1973, the Middle East oil embargo sent oil prices to unprecedented heights and triggered massive investments in developing renewable energy technologies. However, the recession of the mid-1970’s destroyed most such initiatives, as fossil fuel prices dropped. The price of oil

The number of private residences using solar power is increasing. (©Dreamstime.com)

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rose again from 1978 to 1980 in response to the Iranian Revolution and the Soviet invasion of Afghanistan. Developments in spacecraft power and the computer revolution of the 1990’s helped create large-scale production facilities for solar cell arrays, while composite-structure technology enabled construction of large wind-turbine blades. The Kyoto Protocol of 1997 established targets and funding mechanisms for signatory nations to reduce the carbon dioxide emissions caused by burning fossil fuels. The treaty led to a boom in construction of alternative power plants. By the early twenty-first century, rising global demand for energy and concerns about air pollution and climate change generated worldwide action to develop nonfossil energy resources. The Industry Today The nuclear fusion and fission power radiated from the Sun toward Earth is captured for human use in many ways, although the total capture amounts to much less than 1 percent of the power falling on Earth’s atmosphere. The Sun powers winds, ocean currents, rain, and all biomass growth on the planet’s surface. Since the various levels of availability and means of extraction for each of these secondary sources are diverse, each alternative energy source forms the basis for a different field of technology. In 2007, the alternative power industry generated $42.58 billion of revenue, employing 218,000 people in industry and 504,000 people overall. The much larger, associated enterprises in energy efficiency and conservation generated just over $1 trillion and employed more than 3.5 million people in industry and 8.6 million people overall. While the United States is a large player in the field of alternative energy, nations all over the world are investing heavily and advancing policies to encourage the development of alternative power resources. The primary U.S. market segments, in descending order of the number of people they employ, are ethanol, other biofuels, wind, photovoltaic cells, geothermal energy, fuel cells, solar thermal technology, and hydroelectric power. The alternative power industry today is advancing rapidly in several directions. In 2008, 43 percent of new grid-connected energy capacity in the United States came from renewable sources. Most renewable energy technologies are very

expensive per unit of installed generation capacity. Conventional, grid-based electricity generated at thermal or nuclear power plants (and at large hydroelectric plants) is significantly cheaper. For instance, a cost lower than $1 per installed watt is considered to be necessary to be competitive with grid-connected electricity from nuclear and thermal power plants, but the costs for most renewable sources are still well above that level. Renewable energy installations around the world nearly tripled in the first decade of the twenty-first century, but in 2008 they still accounted for less than 11 percent of total installed primary energy

Energy-saving lightbulbs are gradually replacing incandescent bulbs. (©Dreamstime.com)

Alternative Power Industry capacity and less than 9 percent of total power generation in the United States: Out of the 161 gigawatts of installed alternative power generation capacity, 119 came from hydropower plants, mostly large dams. Oil price increases after 2004 led to a boom in alternative energy, with stock prices rising sharply by 2007. Rising economic stresses in Europe and North America set back these investments in 2008 and 2009. In 2010, there was optimism that the pace of alternative energy resource development would keep accelerating, reaching perhaps 15 percent or more of primary power generation. However, low stock prices made investment analysts pessimistic about the ability of many contemporary companies to survive without continuing government subsidies. Thus, the nascent alternative energy industry is simultaneously experiencing uncertainty, challenges, and immense opportunities. In 2008, according to the U.S. Energy Information Administration, 9.1 percent of U.S. electricity was generated from alternative sources. Of this 9.1 percent, 66.9 percent came from hydroelectric plants, 14.5 percent from wind energy, 9.8 percent from burning wood, 3.9 percent from geothermal energy, 4.7 percent from burning nonwood biomass, and 0.2 percent from solar energy. Globally, 48 percent of renewable electricity-generation capacity came from wind energy, 39 percent from burning biomass, 8.9 percent from geothermal energy, 4 percent from solar photovoltaic cells, 0.04 percent from solar thermal energy, and 0.03 percent from ocean tidal energy. The credit crisis and market contraction of 2007-2009 stopped or delayed many alternative power projects and cut off the flow venture capital and other investments into the industry. Government stimulus initiatives, such as the American Recovery and Reinvestment Act of 2009 and similar measures in Europe, injected funds into the industry, making up for some of this shortfall. Because the status of investment in the industry has become fast-changing, revenue figures for the alternative power industry are not stable. Given the intense focus on building new plants and the huge untapped potential of alternative power resources, most industry reports treat the levels of government funding and private investment as indicators of prospects, progress, and future employment, rather than of revenue or profitability.

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INDUSTRY MARKET SEGMENTS The alternative power industry comprises many different subindustries, including the solar, wind, biomass, biogas, hydroelectric, tidal, and geothermal power industries. In addition to these electrical power generation industries, it encompasses alternative fuel sources for vehicles. Within each of these subindustries, companies exist of various sizes, from small start-ups to full-scale electrical power generation and distribution firms. The following sections provide overviews of each energy technology then provide summaries of the various size-based market segments in the umbrella industry. Solar Power Solar power can be extracted and converted directly from sunlight by means of flat-plate receivers that collect at the incident intensity but can operate in diffuse light. It can also be collected by concentrators that achieve intensities equivalent to several hundred suns but that work poorly in diffuse light. Solar concentrators used with focalpoint towers achieve temperatures of thousands of Kelvins and high thermal efficiency, limited by containment materials. Many solar thermal plants consist of arrays of solar “trough” reflectors, with oil-carrying pipes absorbing the heat focused by the reflectors. The oil exchanges heat with pressurized steam that drives turbines to generate electricity. Solar thermal power plants are reaching utility scale in several parts of the world, including the deserts of India and California. In 2008 alone, installed solar photovoltaic (PV) energy capacity in the United States increased by 44 percent. However, the PV industry remains a tiny market segment overall. Despite the high cost of installed power generation capacity, production of PV cell arrays lags behind a soaring level of demand, creating opportunities for new entrants such as the thin-film solar cell and the cadmium-tellurium cell industry. Earlier solar cells were made from wafers of highly purified silicon substrates whose manufacture consumed a large amount of energy and generated toxic by-products. Technological advances have reduced the thickness of the substrates to micrometer dimensions and achieved high conversion effi-

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ciencies with other rare materials, such as gallium arsenide, indium, and selenium. Commercial solar cell arrays are believed to return the energy required to manufacture them after about three years of operation. As mass production brings costs down, demand is expected to rise even faster, ensuring a strong market well into the future. Technology choices in this field may evolve as rapidly as computer technology evolves, however, rendering predictions about specific devices or mechanisms unreliable. Supplies of the various rare materials required to fabricate solar cells seem adequate to meet projected worldwide demand, but if demand exceeds supply production costs will increase. Thus, although sunlight may be unlimited, the capacity to build solar cells of a given composition may be limited. Global solar PV cell production exceeded 6.9 gigawatts of rated power generation capacity in 2008, bringing cumulative installed capacity to 13.9 gigawatts. Germany led all producers with 5.3 gigawatts of cumulative capacity, followed by Spain with 3.1 gigawatts and Japan with 2.1 gigawatts. The growth rate may be gauged from the fact that 2.7 gigawatts of Spain’s total capacity was added in 2008. The United States produced 0.41 gigawatts of new cell capacity in 2008 and has a total installed capacity of 1.1 gigawatts. The average price of PV modules dropped to $3.85 per watt in 2008. Total annual production of PV cells is projected to exceed 20 gigawatts per year by 2012. Wind Power Another way of converting energy from the Sun is to use the kinetic energy in air as it is driven by differences in atmospheric pressure. The wind power industry places large turbines strategically to make use of steady winds. The industry employed 550,000 people worldwide in 2009. At the end of 2008, total global installed wind power capacity was 122.3 gigawatts, seven times what it had been in 2000. Total U.S. installed capacity in 2008 was 25 gigawatts, ten times what it had been in 2000 and 151 percent of its 2007 level. Until 2008, Germany had been the global leader in wind power, but its installed capacity that year was 24 gigawatts, falling short of U.S. capacity for the first time. However, that 24 gigawatts represented 8 percent of Germany’s total electrical generation, whereas the 25 gigawatts of capacity in the United

States represented only 1.9 percent of total U.S. generation. Also at the end of 2008, over 300 gigawatts of wind capacity was in the planning and development stages, though the time lines of these plans were not always clear. In that year, cumulative U.S. investment in wind power since the 1980’s exceeded $45 billion. Sales of small wind turbine units to consumers rather than utilities produced $77 million in revenue in 2008 and added a total of 17.4 megawatts of new capacity. Revenue may be estimated from the following average figures. At the end of 2008, the average price of wind-generated electric energy was 6.4 cents per kilowatt-hour. Capacity figures do not provide a realistic concept of actual generation because utility-scale wind turbines typically generate their rated capacity of power during only 30 to 40 percent of a given year, depending on the location. Average power generation ranged from 27.1 percent of capacity in the eastern United States to 44.1 percent of capacity in Hawaii, for a national average of 36 percent. Thus, total revenue from sales of wind-generated power in the United States may be estimated at $18.4 billion in 2008. The average sale price of new wind turbines was $1.5 million per megawatt of rated capacity. Over 8,500 megawatts of new capacity was installed in the United States in 2008, generating an estimated $12.75 billion in revenues from sales and installation of new turbines. Another major component of market activity is integrating wind energy into the grid, which requires numerous investments in storage and auxiliary generation using other fuels. Over eighty-five thousand people worked in the wind industry in the United States in 2008. Roughly thirty thousand of these jobs were in turbine manufacturing, operations, management, and construction, while the other fifty-five thousand jobs were in manufacturing of small parts and raw components; real estate development; permitting; resource assessment; financial, consulting, accounting, contracting, and engineering services; repair shops; equipment manufacturing; suppliers; transportation; and logistics. Utility-scale wind farms are present along the edges of plateaus, in canyons, along mountain ridges, on mountain slopes, and in narrow valleys. Better efficiency has driven designers to create wind turbines with ever-greater rotor diameters,

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As of December, 2010, more than four hundred manufacturing plants in the United States were building components for wind turbines like these. (©Daniel Raustadt/Dreamstime.com)

heights, and rated power. Turbines of over 5 megawatts operate off the German shore. Better power factors (that is, the percentage of a year that a turbine produces its full rated capacity of power) have driven turbine locations to offshore farms even in storm-frequented areas such as the North Sea off Germany and Britain, the Gulf of Mexico, and the Atlantic coast of Massachusetts. The Netherlands, Denmark, and the U.S. states of North and South Dakota, New Mexico, Colorado, Minnesota, and California have sigificant wind power industry presence. Abroad, wind power is growing in India. Turbine construction has much in common with the building of yachts and tall buildings. At the same time, large wind turbines face community opposition because of their size and noise. Blade failures plague machines where strong nighttime winds flow down mountain slopes, generating turbulence. Wind farms also require large electric generators, electricity storage capacity, and transmission infrastructure.

Biomass Power Being composed primarily of hydrocarbons and water, biomass can be used to generate power in many ways. Corn, sugarcane, and other foodgrains and grasses can be converted to alcohol to supplement fossil petroleum fuels. Brazil has taken the lead in sustainable use of ethanol (ethyl alcohol) from sugarcane. In the United States, gasoline is blended with ethanol, forming a mixture of 10 to 15 percent ethanol and 85 to 90 percent gasoline. U.S. ethanol is produced primarily from corn, one of the country’s five major subsidized production crops. Between 2000 and 2008, U.S. production of corn ethanol increased fivefold. Ethanol in 2010 accounted for 6.5 percent of the total U.S. gasoline pool, and American ethanol producers were the leading employers in the country’s alternative power industry. Production of corn ethanol rose past 10 billion gallons per year by 2007 and is expected to level off at 15 billion gallons per year. However, corn is a

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less desirable source of ethanol than is cellulosic feedstock (such as cornhusks and grasses). Therefore, as the limits on blending are overcome and the infrastructure is built to maturity, cellulosic ethanol production is expected to rise sharply. Including a small market share for other biofuels, it is projected to push biofuels to a total of 35 billion gallons per year by 2022. Conversion of farmland for fuel production is blamed in several nations for rising food prices that cause hardship to the poorest people and is therefore facing growing opposition. The fact that cellulosic feedstocks need not compete with food crops—and can in fact be produced as by-products of growing food, as is the case with cornhusks— increases their desirability. Indian railways derive a substantial portion of the fuel for their diesel locomotives from Jatropha plants, which are cultivated along their rights of way. The plants serve the secondary purpose of keeping cattle off the tracks, since Jatropha is poisonous. Vegetable oil from peanuts and groundnuts, and even from coconuts, has been used in test flights of aircraft. Photosynthetic algae such as Chlorella vulgaris use water, sunlight, and carbon dioxide to grow and yield biodiesel. Algae farms are often located close to fossilbased thermal power plants and make use of their carbon dioxide emissions. Between 2000 and 2008, biodiesel production in the United States increased by more than 35,000 percent. In 2007, the biomass fuel market amounted to $8.7 billion in agriculture and biomass sources, $13 billion in conversion and production, and $18.3 billion in blending, retailing, and marketing. Biogas Power Natural gas deposits from ancient vegetation are often found along with fossil petroleum deposits. The infrastructure used to refine, distribute, and use this resource can easily be adapted to use biogas captured from decaying surface vegetation today from distributed sources such as landfills. Methane, a major ingredient of biogas, is estimated to have twenty times the global warming potential of carbon dioxide. Thus, capturing and burning biogas is supported by initiatives to control climate change. A major source of biogas may be the methane leaking out of the Arctic tundra as the permafrost melts. Before it can be used, though, engineers must design viable means of capturing and

transporting this resource over the vast, remote areas where it occurs. Similar techniques may be adapted for capturing biogas from suburban backyards and farms. Methane is also believed to be present in very large quantities, captured as methane hydrates mixed with water ice, at the bottom of the ocean. This phenomenon was dramatically illustrated during initial attempts to capture the crude oil leaking from the site of the Deepwater Horizon disaster in the Gulf of Mexico in 2010. Techniques for extracting both the methane and the freshwater locked in ocean ice are being explored. Hydroelectric Power Hydroelectric power forms a substantial percentage of the baseload power resources of several nations with rivers and mountains. At carefully selected locations, the kinetic energy of water falling a significant distance can be captured to run turbines that generate electric power. However, large dams cause severe technical, social, and public policy issues by inundating pristine forests and endangered species habitats, displacing communities

Hydroelectric power is the largest renewable source of electrical energy generation in the United States. (©Mark Jensen/iStockphoto.com)

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Hoover Dam provides energy to public and private utilities in Arizona, Nevada, and California. (©Holly Mann/Dreamstime.com)

from fertile lands, and representing earthquake hazards. In the United States, hydroelectric (or hydel) power is the largest renewable source of electrical energy generation, producing nearly 289,300 gigawatt-hours in 2006. Micro-hydel plants, which generate between 1 and 30 megawatts, are being installed in several nations to capture the power of fast-flowing streams and provide power to remote communities. Pico-hydel power generators, which generate mere hundreds or thousands of watts from small streams, provide viable solutions for individual homes or small villages, but the extraction technology must be refined to lower the cost per unit of power of such devices. Tidal Power The power of ocean tides can be extracted in two principal ways: by building semipermeable bar-

rages across estuaries with a high tidal range or by harnessing offshore tidal streams and currents. The water collected in a barrage can be emptied through turbines. One drawback is that the 12.5hour cycle of tidal operation is out of synchronization with the daily cycle of demand for electricity, so local storage is required. Proponents estimate that over 10 gigawatts of electricity can be brought online by 2020 and that a potential 250 terawatthours can be economically harvested from the U.S. coastline. Schemes for steadily extracting power from waves are based on their predictable, repetitive nature. Installation costs exceed $15 per watt, too high to compete with other power sources. One use for tidal power is to run reverse osmosis plants to desalinate seawater. A variant of tidal power schemes is a proposal to capture power from offshore turbines in the ocean currents off the east

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Alternative Power Industry

and west coasts of the United States and integrate those turbines with large offshore wind farms. Geothermal Power Geothermal energy is generated by heat released by radioactive decay inside the earth’s core, perhaps augmented by gravitational pressure. Hot springs and geothermal steam generation are used on a large scale in Iceland, which is also adapting hydrogen for energy storage and transportation fuel. Geothermal power is used in several U.S. communities and military bases. A related technology involves using ground-source heat pumps that transfer heat between water and the earth to help heat or cool buildings. A newer application of geothermal energy, used in California, is to generate electricity by pumping treated wastewater into heated underground layers in geothermally active areas, supplementing and renewing the supply of steam to operate turbine generators. While this technique solves the problem of wastewater runoff into streams and rivers, it also raises concerns from nearby communities about increased earthquake activity. Vehicle Technologies The transportation industry is beginning a longterm transition from burning fossil fuels to employing alternative energy sources. New types of engine technologies such as alcohol fueled, hybrid gasoline-electric, compressed natural gas, liquefied natural gas, fuel cell-electric, and battery-powered motors are coming on the market rapidly, and most automakers are facing legal requirements to improve fleet average fuel efficiencies. Hybrid-engine automobiles have achieved customer acceptance, driving development activity by the automobile industry. One nascent area for stationary, portable, and transportation applications is the development of fuel cells, which generate electric current from the energy released by chemical reactions. Fuelcell types, classified by their unique technology or the chemicals used as electrolytes, include polymer electrolyte membrane (PEM), solid oxide, alkaline, molten carbonate, phosphoric acid, and directmethanol. By 2007, worldwide shipments of commercially manufactured fuel cells had exceeded twelve thousand units, rising from five thousand in 2005, with PEM technology leading sales in 2007. Venture capital and private funding for fuel cell development exceeded $188 million in 2007.

Small Businesses There are numerous types of small businesses in the alternative power industry. Some manufacture tools, components, or systems for alternative power providers or devices. Their products include inverters, control switches, safety devices, education and training systems, analysis software for turbine blade development, and thermoelectric modules. Other small businesses run farms devoted to supplying biofuel manufacturers, while another group provides services related to alternative power. These services include plant-site surveying, maintenance and transportation services, and metering power use. Franchises that supply power and equipment maintenance to customers in small areas are projected to become more common as power generation, distribution, and metering are decentralized. Retailers sell alternative power devices to end users and installers. Yet another category of small alternative power businesses conducts research and development funded by government contracts. Such companies occasionally grow into or spin off full productionscale enterprises. They work to develop new types of wind, solar, water, and biomass energy conversion devices or storage technologies. The federal government also has a stake in developing socalled smart grid initiatives, and it is funding the development of numerous components to measure, communicate, and control power usage and generation. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average salary of electrical engineers in the electric power generation industry was $84,710 in 2009. Engineering technicians earned an average of $60,510, while engineering managers earned an average of $117,130. Clientele Interaction. Many small businesses in alternative energy are venture-capital-funded startup companies, so all their employees can expect some clientele interaction. Because there is less division of labor at small businesses than there is at major corporations, everyone can expect to be called upon to participate in solving problems, clinching new business deals, and maintaining customer goodwill. Amenities, Atmosphere, and Physical Grounds. Small companies in the alternative power industry often have a hardware component, where

Alternative Power Industry devices are built and tested. Often, these facilities are converted warehouses or machine shops and include laboratory equipment and heavy machinery. Other companies develop computer software or provide accounting services and are based in office buildings. Maintenance and field jobs require travel and work either outdoors or in machineryfilled interior environments. Typical Number of Employees. Small companies can have up to five hundred employees, but many have fewer than twenty. Work is usually accomplished by small teams or by large teams composed of workers from multiple small businesses and overseen by much larger entities. Traditional Geographic Locations. Alternative energy companies are distributed all over the United States and in most nations abroad because their energy sources, applications, and customer bases are highly diverse. Small companies have opportunities in states where public consciousness about the energy crisis is high or distributed resources are plentiful, as in California, Florida, Hawaii, Massachusetts, Connecticut, New Hampshire, and Maine. In addition, opportunities may also be increasing in states where electricity generation from renewable sources was less than 1 percent of the total as recently as 2006. These states and territories include Ohio, Indiana, Illinois, Missouri, Delaware, American Samoa, Guam, the District of Columbia, the Northern Marianas, Puerto Rico, and the Virgin Islands. Pros of Working for a Small Alternative Power Company. This industry is in a state of very rapid evolution and probable growth. Employees can expect to learn about many new issues and have the potential to gain experience in a variety of skills and areas that in twenty years will become fully developed, highly specialized career paths. Thus, they have a unique window of opportunity to rise to the top of the industry. Cons of Working for a Small Alternative Power Company. The same rapid evolution of the industry, and of public policies relating to alternative energy, that creates significant opportunities generates significant risks. Many of today’s small companies will not survive for more than a few years. Many technologies being developed will not reach a critical market size and will fall by the wayside after they are overtaken by other technologies. Some of the factors that determine which

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companies succeed and which ones fail may be sudden developments that are quite outside the control of employees or company managers. Working at even a successful small company in this type of environment can be quite stressful. Costs Payroll and Benefits: Small alternative energy companies may pay salaries or hourly wages. Some, especially those that depend on government grants, may pay some workers on a perproject or contract basis. Professionals at startups and other small firms are likely to receive benefits, including health insurance and possibly retirement plans. Some may receive stock or stock options instead, which may become lucrative if their companies succeed. Supplies: Supplies typically include electrical, structural, and plumbing components, as well as standard office supplies, and constitute a large expense. External Services: Small companies often outsource payroll functions to minimize in-house employee headcount. They may also contract with lobbyists or government consultants, as well as cleaning, maintenance, tax preparation, auditing, and public relations services. Utilities: Utility costs are moderate, though some inhouse machining and temperature control functions involve substantial electricity and gas costs. Taxes: Several federal, state, and local incentives are available for companies in the alternative power industry, including tax credits for research and development, for installing renewable generation capacity, and for generating employment. Credits notwithstanding, companies must pay corporate and property taxes as applicable. Midsize Businesses Midsize businesses include builders, distributors, and installers of smaller alternative energy and energy efficiency devices. They may cater to homeowners, apartment complexes, businesses, or office buildings. As the number of alternative power sources, the number of generators, and the variety of technologies to support and exploit them all increase, the power distribution industry is expected to change. It will cease to be characterized by large utility monopolies and instead provide customers with a choice of services, equipment,

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Alternative Power Industry

and supplies from several competitors. Distributors and installers’ business models require them to reach many customers within limited geographic regions. Laboratories engaged in alternative energy research also often fall in the midsize business category. In addition to research, these laboratories provide specialized testing and analysis services. Midsize alternative power businesses have large staffs of field technicians, because they usually rely on distributed energy sources. Another type of midsize business is the small geothermal or hydroelectric utility or the local combined heat and power (CHP) plant. CHP plants use the waste heat from power generation to provide heating for community homes and businesses. They are sometimes located at or near landfills or biomass energy projects to take advantage of cheap biogas supplies. Several companies developing and manufacturing storage devices and fuel cells—such as lithium-ion batteries and proton-exchange fuel cells—have become midsize companies as these technologies have matured. Potential Annual Earnings Scale. According to the BLS, the average salary of electrical engineers in the electric power generation industry was $84,710 in 2009. Engineering technicians earned an average of $60,510, while engineering managers earned an average of $117,130. Clientele Interaction. Many positions in these businesses require clientele interaction, though the roles are more formalized than they are in small businesses. Amenities, Atmosphere, and Physical Grounds. Midsize businesses are typically located in office parks and industrial parks, though small power plants may be in rural or remote locations, with their customer interaction offices located in urban areas. Many positions involving customer interaction, installation, and service involve substantial outdoor and travel time. Typical Number of Employees. Midsize alternative power businesses employ between five hundred and two thousand people. Traditional Geographic Locations. Midsize alternative power companies are located all over the United States. Power generation plants are located near the resources they exploit. Wind turbine farms must be placed where there is wind, in coastal, offshore, plateau-edge, or mountainous re-

gions. Similarly, solar, geothermal, hydroelectric, and biomass plants are located in areas with significant sunlight, geothermal activity, kinetic water energy, or agricultural lands. They may also locate near potential customers, as a business that specializes in increasing energy efficiency in cold climates is likely to be found in such a climate. Massachusetts, Florida, Kentucky, Alabama, Georgia, Maine, California, and Michigan host several midsize alternative power companies. Pros of Working for a Midsize Alternative Power Company. Midsize businesses generally have established technology and customer bases, removing some of the uncertainties facing small businesses. Job functions are more specialized and distributed, so employees can focus on their specialties. Because of international opportunities and the fast-changing nature of the technologies involved, employees in midsize companies may have opportunities for considerable travel and interaction with peers in other states and nations. Cons of Working for a Midsize Alternative Power Company. Midsize businesses lack some of the resources that large companies can bring to bear, so they have trouble competing with such companies. Meanwhile, the growth rates of midsize firms’ profits and share prices may be slower than those of small firms. Job security may be greater than at small start-ups, but it is usually lower than at large companies. Costs Payroll and Benefits: Midsize companies pay hourly wages or annual salaries, depending on the position. They seek to compete with large firms for employees, so benefit packages are often generous. Standard benefits include 401(k) retirement plans, medical insurance, flex-serve plans, and possible stock options. Supplies: Supplies and materials costs vary widely with the type of business. For instance, solar cell manufacturers need rare materials such as indium, gallium, selenium, and cadmium. Storage battery manufacturers need lithium. Some of these materials must be imported, and their costs may fluctuate dramatically. External Services: Midsize alternative power companies may contract legal, accounting, public relations, and lobbying services, as well as facility cleaning, maintenance, and security.

Alternative Power Industry Utilities: Midsize companies require water, sewage, telephone, and Internet access. If they generate electricity, they may provide their own power; otherwise, they require electricity as well. Taxes: Several federal, state, and local incentives are available for companies in the alternative power industry, including tax credits for research and development, for installing renewable generation capacity, and for generating employment. Credits notwithstanding, companies must pay corporate and property taxes as applicable. Large Businesses Large alternative power businesses include manufacturers of wind, hydroelectric, and marine turbines; solar troughs; and solar cell arrays, as well as operators of wind, solar, and biomass power generation facilities. The manufacturers of heavy equipment such as wind turbine blades, turbine generators, and pumps are usually divisions of very large multinational corporations that have their own research and development laboratories and production facilities and that cater to customers worldwide. Siemens and General Electric are examples of major multinational corporations with products and operations in many areas of the alternative power industry. Operators of large generation facilities are usually utility companies with customers confined to a given geographic area. Such corporations have been established in the wind and solar thermal industries especially. For example, the states of Idaho, Washington, Oregon, and South Dakota in 2006 generated roughly 89, 78, 75, and 49 percent, respectively, of their total electricity usage from renewable resources, primarily hydroelectric resources. Potential Annual Earnings Scale. According to the BLS, the average salary of electrical engineers in the electric power generation industry was $84,710 in 2009. Engineering technicians earned an average of $60,510, while engineering managers earned an average of $117,130. Clientele Interaction. In large alternative power companies, clientele interaction is carefully organized so that people in only some positions and functions interact with the clientele. Amenities, Atmosphere, and Physical Grounds. Large companies in the alternative energy business have excellent amenities and physi-

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cal grounds for their offices and research laboratories. Manufacturing facilities are modern and well maintained. Typical Number of Employees. Large alternative power companies employ more than two thousand people, sometimes far more. Traditional Geographic Locations. Large companies have many locations, with headquarters located in major metropolitan areas, while research and development laboratories may be located in small towns. Pros of Working for a Large Alternative Power Corporation. Large power utilities are generally stable employers with stable and steadily growing stock prices. They often provide in-house training and pay for employees to receive continuing education. Employees may also be encouraged to participate and take leading service roles in professional organizations. If so, the company will pay the costs of travel to and participation in professional conferences. Cons of Working for a Large Alternative Power Corporation. Large businesses hire people for specialized jobs. As new business opportunities arise, they often prefer to hire new people specializing in those jobs, although current employees are usually given the opportunity to apply for these positions. Unless one moves into management, one may find one’s longtime service and experience given little value when new managers come in. Costs Payroll and Benefits: Beyond investment in new plants, payroll is the largest expense of the large corporation. Benefit packages are excellent, and include 401(k), health insurance, flexserve, profit-sharing, stock options, and employee stock purchase plans. Supplies: Supply costs depend on the type of business. Equipment manufacturers incur large materials and supplies costs, whereas utilities have much less of an ongoing need for materials and supplies. External Services: While some services are contracted out, large alternative power companies usually prefer to develop in-house capabilities in order to save costs and protect intellectual property. Utilities: Large companies require water, sewage, telephone, and Internet access. If they generate

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Alternative Power Industry

electricity, they may provide their own power; otherwise, they require electricity as well. Taxes: Several federal, state, and local incentives are available for companies in the alternative power industry, including tax credits for research and development, for installing renewable generation capacity, and for generating employment. Credits notwithstanding, companies must pay corporate and property taxes as applicable.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The alternative power industry is by nature highly diverse: It is based on a plethora of resources, technologies, and systems. Industry companies develop new technologies, operate routine utilities, build and install large machines and energy farms, articulate and develop public policy, and conduct research at the frontiers of science and engineering. Corporate structures usually reflect existing practices within their particular subindustries. Many of the career opportunities in this industry are not specific to this industry. The most promising U.S. alternative power occupations between 2010 and 2030, listed in order by the number of jobs expected to be created in each category, are: accountant, electrician, management analyst, welder, computer analyst, electrical engineer, mechanical engineer, power line worker, construction manager, cost estimator, sheet metal worker, chemist, information technology manager, environmental scientist, and iron and steel worker. These estimates will probably change as college and trade school curricula change in response to the demand for energy-specific professionals, producing more of them. The following umbrella categories apply to the organizational structure of businesses in the alternative power industry: ■ ■

■ ■ ■

Executive Management Business Management and Professional Support Customer Service Marketing and Sales Facilities and Security

■ ■ ■ ■ ■

Research and Development Engineering and Technology Production and Operations Distribution Human Resources

Executive Management Executive managers oversee all aspects of their companies, setting policy, making long-term plans, and managing those who implement their plans and policies. The largest alternative power companies are the manufacturers of large systems and the utility companies that run power plants. The former have substantial research and development components, as well as manufacturing facilities, technicians, and marketing departments. The latter employ large workforces of plant operators, repair crews, account executives, and customer service specialists. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) Chief Technology Officer (CTO) General Counsel Vice President of Planning Vice President of Research and Development

Business Management and Professional Support Large corporations have several divisions, headed by vice presidents. Reporting to them are general managers and directors. Directors are often people who have come up through many job functions at the company and are hence experienced in technical and personnel management. Program managers typically have bachelor’s or master’s degrees in science or engineering, and some have business management degrees. Directors may come from diverse backgrounds. Business management in the alternative power industry also involves dealing with fast-changing regulations and legal issues, creating the need for several legal and public policy experts. Alternative power industry facilities must often face community concerns, for example, about wind turbine noise, visual pollution by tall towers, and other con-

Alternative Power Industry cerns about a new industry. Tax incentives and other public policy decisions are critical to the success of most alternative power companies. Creative financial arrangements, such as the use of green credits or carbon futures, are often used to finance alternative power projects in remote areas. Thus, business management in the alternative power industry requires a good understanding of several technologies as well as legal and financial issues. Program and business management occupations may include the following:

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■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■

Contracts Administrator Contracts Negotiator Business Operations Specialist Multifunction Financial Analyst Engineering Planner Master Planner Senior Financial Analyst Proposal Analyst Senior Business Operations Manager Senior Regulatory Analyst Climate Change and Energy Director Business Development Manager/ Coordinator Finance Director Senior Business Development Associate Order Administrator Contracts Manager Contractual Services Sales Manager Energy Services Functional Project Manager Renewable Energy Director Forecasting Leader, Energy Services Project Manager Tax Manager Treasurer Account Director Export Coordinator Financial Manager Professional Support Personnel

Many other positions are needed to advance the alternative power industry. These include staff systems integrators, information technology professionals, legal professionals, administrative and accounting associates, media contacts, and graphic artists. Support professionals in the alternative power industry include the following:

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Graphic Artist Multimedia Design Engineer Training Representative Audiovisual Support Specialist Configuration Control Specialist Publication Coordinator Network Engineer Database Administrator Enterprise Architect Network Support Technician Corporate Attorney Legal Assistant

Customer Service Alternative power utilities must deal with a large and growing base of retail customers, requiring several customer service positions. Customer service representatives must respond to billing questions, equipment failures, and weather-related service outage complaints, as well as troubleshooting equipment issues for customers. Many customer service requests deal with technical issues and equipment performance, demanding both technical knowledge and people skills. Companies that manufacture equipment must deal with distributors and end users of the equipment. Customer service occupations may include the following: ■ ■ ■ ■ ■ ■

Energy Auditor Lead Customer Service Engineer Account Executive Customer Service Representative Dispatcher Scheduler

Marketing and Sales Marketing and sales personnel attempt to grow the market for alternative power products and services. Equipment sales and project negotiations are conducted worldwide, and sales and marketing positions involve considerable travel. Sales professionals must be interested in learning about the numerous issues and developments that affect customer decisions regarding purchases, installations, and life cycles of new systems. They must also be willing to learn and be sensitive to the cultural traditions of their customers. Many positions in sales and marketing are intensely technical, and others are intensely involved

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in economics and financial analysis. They often involve very substantial commissions when large deals are successfully completed. With large amounts of money and their companies’ futures often hinging on the deals that they negotiate, sales and marketing people must be energetic enough to work as needed and to stay with deals long enough to see them through to success. These positions are accordingly characterized by intense stress and competitive spirit. Marketing and sales occupations may include the following: ■ ■ ■ ■ ■ ■

Business Development Director Executive Marketing Leader Marketing Manager Sales Manager Account Director Sales Representative

Facilities and Security Facilities and security personnel maintain and protect the physical and intellectual property of their employers, as well as their fellow workers. Apart from the usual concerns about worker safety, theft, and property damage, the increasing use of computers and the Internet in the alternative power industry raises severe concerns about cyber security. Thus, some security personnel require awareness and training in sophisticated technologies. Facilities and security occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Network Security Specialist Security Manager Security Officer Maintenance and Repair Manager Maintenance and Repair Worker Electrician Plumber Custodian/Janitor

Research and Development The alternative power industry depends much more on research and development than does the traditional energy industry. This is true partly because technological advancement and cost reductions are urgently needed by companies seeking to become competitive in the marketplace. Research

positions in the alternative power industry share several aspects of spacecraft, chemistry, materials, and aerospace-propulsion research, with many commonalities in technology. Many researchers hold doctoral degrees in science and engineering disciplines. Researchers in the alternative power industry may come with backgrounds in mechanical, electrical, chemical, civil, biochemical, ocean, or environmental engineering, as well as chemistry, physics, computer science, biochemistry, materials science, atmospheric science, geophysics, hydrology, geology, or economics. Research and development jobs in energy require patience and long-term persistence to solve difficult problems. Researchers must be able to document and publish their results and to develop proposals and papers through the peer review process. Research and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Project Manager Principal Research Engineer Senior Research Engineer Research Engineer Principal Research Scientist Senior Research Scientist Scientific Systems Analyst Senior Staff Chemist Software Engineer Geophysicist Software Architect Data Management Assistant

Engineering and Technology The alternative power industry employs an increasing number of engineers, as a very large amount of infrastructure and equipment must be built and many existing installations replaced as alternative energy use increases. Engineering jobs vary, from designing new systems to developing production plants and equipment to solving field installation problems. As the industry matures, many engineering jobs in power generation and distribution facilities will become more routine. In general, engineers solve technical problems. Often, these have no immediate solution in sight, and finding ont demands ingenuity, attention to detail, knowledge of existing systems, and practical, technical expertise. Many engineering jobs involve mainly computations and scientific analysis, while

Alternative Power Industry others are very hands-on, involving building and testing systems and helping implement them in the field. Each engineering job is specific to a problem that needs a solution, and engineers in the alternative power industry may find themselves learning new skills constantly and changing specialties many times during their careers. A large number of positions in engineering are at the skilled-technician level, and people who start in these positions are often promoted to engineer and manager positions as they become experienced and develop expertise. Renewable energy and energy efficiency occupations are projected to create numerous opportunities for workers, who can start with only a high school diploma or graduate equivalency diploma. Entry-level positions include solar system installer, wind field technician, and recycling-center operator. Opportunities requiring apprenticeships and associate’s degrees include solar system designer, electrical system installer, solar installation engineering technican, wind turbine technician, and energy field auditor.

OCCUPATION

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Some positions, such as that of energy trading specialist, combine sales and marketing issues with mathematical skills and knowledge of economics. Engineering and technology occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Senior Consultant Consultant Engineering Manager Lead Engineer Senior Engineer Chief Project Manager Project Manager Project Leader Team Leader Technical Solutions Director Mechanical Engineer Systems Engineer Electrical Engineer Research Engineer Applications Engineer Repair Engineer

PROFILE

Solar Energy System Installer Considerations

Qualifications

Description

Installs and repairs systems that generate solar energy for heating and cooling buildings or for heating water and pools.

Career clusters

Architecture and Construction; Manufacturing

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

Junior/technical/community college; bachelor’s degree

Physical exertion

Heavy work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Volunteer work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

RCI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Alternative Power Industry OCCUPATION

SPECIALTIES

Renewable Energy Technicians Specialty

Responsibilities

Bioenergy technicians

Maintain bioenergy power plants, which convert energy from biomass, such as wood, crops, plants, waste materials, and alcohol fuels.

Fuel cell technicians

Research and perform the assembly and testing of fuel cells and also install and maintain existing fuel cells.

Geothermal energy technicians

Maintain geothermal power plants, which convert energy from the earth’s core.

Hydropower energy technicians

Maintain hydropower plants, which convert water to energy.

Solar photovoltaic installers and technicians

Build, install, and maintain systems on roofs and other structures to harness solar energy.

Solar thermal installers and technicians

Install and repair systems that collect, store, and circulate solar-heated water.

Weatherization installers and technicians

Weatherize homes to make them more energy efficient.

■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■

Design Engineer Manufacturing Process Engineer Technician Electromechanical Engineering Technician Systems Researcher Machinist Switchgear Specialist Winder Welder Inspector and Tester Electrical Specialist

with metals. Solar cell manufacture is conducted in clean rooms similar to those for manufacturing computer chips. The manufacture of wind turbine blades bears much similarity to the building of yachts, since it involves building large pieces out of composite materials. Manufacturing is still done in small teams in most companies, except in the case of mass-produced items such as solar cell arrays and small equipment. Production and operations occupations may include the following: ■

Production and Operations Manufacturing facilities in alternative power are operated by production engineers, machinists, electrical technicians, materials engineers, and assembly-line technicians. The types of manufacturing vary widely among industry segments, although all types of alternative energy involve equipment for generating electrical current and storing energy. The manufacture of generators involves work

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Product Manager Line Manager Production Technician Quality Assurance Engineer/Analyst Manufacturing Engineer Engineering Planner Logistics Engineer/Analyst Industrial Engineer Purchasing Manager Procurement Representative

Alternative Power Industry Distribution The distribution function in the alternative power industry includes the distribution of energy in a utility mode, as well as the distribution of retail products. The power distribution function is similar to the operation of any utility. Distribution occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Power Plant Operator Power Distributor Chemical Plant Operator Energy Trader Grid Technology Specialist Warehouse Manager Truck Driver Freight Loader/Unloader Shipping and Receiving Clerk

Human Resources Recruiting in the alternative energy field is a challenging occupation since the field is changing

OCCUPATION

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rapidly, and matching needed credentials and skills with people is quite difficult. As the field is still relatively new and small, and there are few college degree programs that prepare workers specifically for this field, recruiters are often found seeking people with very broad credentials or people with extremely specific credentials that can only come from competitors. As the field matures, this situation will change, with a reduced number of position descriptions and easier fits between people and positions. The workforce is very diverse, and alternative power companies must expect to compete globally. Thus, good language and people skills are essential. For these reasons, companies require excellent recruiting and retention operations staffed by sharp professionals. Human resources occupations may include the following: ■ ■ ■

Human Resources Executive Senior Life-Cycle Recruiter Administrative Representative

PROFILE

Wind Energy Engineer Considerations

Qualifications

Description

Designs, installs, and maintains wind farm systems, components, and software.

Career clusters

Agriculture, Food, and Natural Resources; Architecture and Construction; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Alternative Power Industry ■ ■ ■

■ ■ ■ ■ ■ ■ ■

Diversity Coordinator Employee Trainer Senior Training and Development Specialist Senior Labor Relations Representative Organization Development Analyst Senior Employment Representative Human Resources Generalist Benefits Manager Payroll Clerk Administrative Assistant

INDUSTRY

OUTLOOK

Overview For an industry that is as popular in principle as the alternative power industry is, the realities of market survival are unusually challenging. The cost per unit of power generated by this industry is usually not low enough to compete on the open market with conventional fossil-based and nuclear power suppliers who are already well established in the existing grid, transportation, and distribution infrastructure, which was mostly amortized decades ago. To compete well with conventional power companies, alternative power companies often require government subsidies. The fortunes of companies in this area fluctuate sharply in response to the cost of fossil energy and to perceptions of global and national energy policies. Wind turbine farms have become fairly common worldwide, and machine size has reached the range of 0.5 to 8 megawatts. Solar PV cell production appears to be limited only by production capacity, even as the installed cost of PV arrays is slowly decreasing. Thin-film solar cell technology may offer substantial advantages in integrating solar power with buildings and vehicles. Construction of wind turbine farms and solar power plants has reached a critical level where there is enough expertise, raw material, and production capacity to continue building plants at ever-lower cost per unit of power. This side of the industry is poised for long-term growth, though profits may not be high for many years to come. Employment Advantages Workers in the alternative power industry experience all the excitement of contributing to an

industry at the leading edge of technological endeavor. Long-term projections indicate that employment in this industry will increase by a large factor, though the growth will be unsteady and uncertain. Thus, those who enter the industry now may become among its most experienced members in a relatively short time. The industry also has the glamor of being seen as essential to the world’s progress and may provide employees with the longterm satisfaction of being part of the solution to the world’s long-term problems. Annual Earnings The alternative power industry, as a nascent field funded largely by venture capital and government subsidies, is not yet consistently profitable. According to Clean Edge Trends, in 2009 the global industry earned revenues of $144.5 billion, of which wind power accounted for $63.5 billion, biofuels accounted for $44.9 billion, and solar power accounted for $36.1 billion. The top earning companies in the industry are those generating either fuels such as ethanol or electric power. The major wind turbine manufacturers come next, and they have reached profitability. Manufacturers of solar cells are also reaching profitability, with stable demand and standardization across global markets. All segments of the industry, with the possible exception of ethanol producers and the top companies in the wind turbine and solar cell enterprises, suffered setbacks during the financial crisis of 2007-2009, but quickly began to recover. Indices of clean energy stocks rose nearly 40 percent in 2009, compared to a rise of 22 percent for the Standard & Poor’s 500 stock index.

RELATED RESOURCES FOR FURTHER RESEARCH American Solar Energy Society 2400 Central Ave., Suite A Boulder, CO 80301 Tel: (303) 443-3130 Fax: (303) 443-3212 http://www.ases.org American Wind Energy Association 1501 M St. NW, Suite 1000 Washington, DC 20005

Alternative Power Industry Tel: (202) 383-2500 Fax: (202) 383-2505 http://awea.org

FURTHER

Energy Information Administration 1000 Independence Ave. SW Washington, DC 20585 Tel: (202) 586-8800 http://www.eia.doe.gov National Biodiesel Board 605 Clark Ave. P.O. Box 104898 Jefferson City, MO 65110-4898 Tel: (800) 841-5849 Fax: (573) 635-7913 http://www.biodiesel.org National Renewable Energy Laboratory 1617 Cole Blvd. Golden, CO 80401-3305 Tel: (303) 275-3000 http://www.nrel.gov

ABOUT

THE

AUTHOR

Narayanan M. Komerath is a professor of aerospace engineering at the Georgia Institute of Technology. He has taught engineering subjects, including aerodynamics and propulsion, for more than twenty-five years. He directs the John J. Harper wind tunnel and the Micro Renewable Energy Laboratory, offering courses and research programs in experimental aerodynamics, fluid mechanics, advanced space concepts, and renewable power devices. He is an associate fellow of the American Institute of Aeronautics and Astronautics and a fellow of the National Aeronautics and Space Administration’s Institute of Advanced Concepts. As a member of the founding panels for the Eighth Continent Chamber of Commerce, he developed the connection between space resources and terrestrial energy markets. He has served as a senior fellow of the Sam Nunn Center for International Security, Technology, and Policy since 2004.

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READING

Brooks, H., et al. Energy in Transition, 1985-2010: Final Report of the Committee on Nuclear and Alternative Energy Systems. Washington, D.C.: National Academies Press, 1980. Brown, Amy Kathryn. Powering the Future: The Problems and Possibilities of Green Energy. New York: International Debate Education Association, 2010. Carazo, Dan. Green Electrical Sells: Profit from the Booming Markets for Green Building and Energy Efficiency. Syosset, N.Y.: Carazo Communications, 2010. Doyle, Kevin Lee, et al. The Complete Guide to Environmental Careers in the Twenty-first Century. Washington, D.C.: Island Press, 1999. Fasulo, Michael, and Paul Walker. Careers in the Environment. 3d ed. New York: McGraw-Hill, 2007. Heintzman, Andrew. The New Entrepreneurs: Building a Green Economy for the Future. Toronto: House of Anansi Press, 2010. McNamee, Gregory. Careers in Renewable Energy: Get a Green Job. Masonville, Colo.: PixyJack Press, 2008. Schlager, N., and J. Weisblatt, eds. Alternative Energy. 3 vols. Detroit: UXL, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Energy. Geothermal Technologies Market Report. Washington, D.C.: Author, 2009. _______. Solar Technologies Market Report. Washington, D.C.: Author, 2010. _______. Wind Technologies Market Report. Washington, D.C.: Author, 2009.

©Michael Pettigrew/Dreamstime.com

Animal Care Services

History of the Industry The use of animals to perform certain tasks—such as pullGeneral Industry: Personal Services ing a plow, guarding an encampCareer Cluster: Human Services ment, or providing food—dates Subcategory Industries: Animal Boarding; Animal back to antiquity. Generally, Grooming; Animal Training; Pet Breeding; Pet Shelters; farm animals received only such Pet Sitting care as was necessary for them Related Industries: Personal Services; Veterinary Industry to continue their work and to Annual Domestic Revenues: $3.2 billion USD (American breed. Eventually, certain aniPet Products Association, 2009) mal species gained new roles as NAICS Numbers: 81291, 112990 companion pets. As these pets became part of human households, it became necessary to groom and train them to coexist INDUSTRY DEFINITION pleasantly with people. Controlled and specialized breeding was practiced to produce animals suitSummary able in appearance, size, type, and temperament The animal care services industry focuses on the for companionship roles. care of companion pets such as dogs, cats, horses, Animal care services slowly evolved into an indusand birds. It includes animal breeders, groomers, try. In the early days, services such as dog grooming and trainers. Trainers may concentrate on obediwere usually performed at home. European paintence skills, or they may train animals to perform ings from the fourteenth century depict elaborately specialized actions such as agility demonstrations, groomed dogs seated at their owners’ feet, while modeling, search-and-rescue services, or law enother paintings portray women holding small dogs forcement duties. In addition, both animal in their laps and cutting their hair or fur with scissors. The first dog-grooming parlors opened in Engroomers and animal trainers often offer boarding gland in the nineteenth century, and the first book or day-care services. Animal care attendants work specifically on grooming, Kennel Secrets: How to Breed, throughout the animal care services industry, as Exhibit, and Manage Dogs, was published in 1893. well as in veterinary medicine. INDUSTRY

SNAPSHOT

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Animal Care Services Formal dog training also blossomed in the late nineteenth century, when Practical Training (1885), by S. P. Hammond, was published. Hammond recommended that dogs be praised for obedient behavior and rewarded with food. Around the same time, Montague Steven, a pioneer in the hunting of grizzly bears, trained bear-hunting dogs in New Mexico using food rewards, and American psychologist Edward Thorndike’s system of stimulus and response showed that animals can learn quickly if correct behavior is rewarded positively. By 1899, the first canine school for police dogs opened in Belgium, training Belgian shepherds. In the early twentieth century, dogs were trained for service in World War I and World War II. During the same period, there was increased use of trained police dogs. In the postwar era, former military and police trainers offered their services to

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civilians who wanted well-behaved dogs. As the United States economy boomed in the 1950’s, the number of companion pets increased dramatically. This boom increased the demand for animal care services. Pet grooming branched out from one-person businesses located in private homes to grooming salons and mobile grooming units. In the late twentieth century, small pet supply stores gave way to big-box corporations with sufficient floor space to offer grooming salons, training schools, and on-site boarding services at one location. In the 1990’s, dog day care became a popular tool for owners juggling full-time jobs to provide for their animals’ exercise and socialization needs. The Industry Today Today companion animals are more popular than ever. According to a study released by the

The swimming pool at the Wag Hotel in San Francisco, a pet hotel for dogs and cats, is probably more popular with dogs than with cats. (AP/Wide World Photos)

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Animal Care Services

such as the Shih Tzu and the Maltese, have become increasingly popular, creating a greater demand for the services of animal groomers. Small, locally owned grooming salons continue to be popular small businesses. In addition, large pet-supply corporations include grooming salons on site. Mobile grooming services have sprung up as well in major cities, where they are enjoying growing market share. An individual may outfit a van with all the necessary grooming equipment and supplies and service his or her clientele without the exPet grooming ranges from simple baths to creating elaborate blow-dried styles pense of renting or owning salon with bows. (©Michael Pettigrew/Dreamstime.com) space. In addition, an established grooming salon may offer mobile grooming services to clients whose pets are elAmerican Pet Products Association in the early derly, ill, or nervous, or exhibit behavior issues that twenty-first century, approximately 63 percent of make transportation difficult. U.S. households own at least one pet, while almost Dog trainers generally work in multitrainer half—47 percent—own more than one pet. Amerifacilities or as freelance consultants. Major petcans spent an estimated $3.2 billion on animal care related companies also offer trainers’ employment services in 2008 and $3.4 billion in 2009. Thus, the at their on-site training, day-care, and boarding faanimal care services industry is growing and will cilities. Veterinary clinics commonly offer on-site continue to need dedicated and talented people to grooming or boarding facilities as well. As a result, breed, care for, groom, train, exercise, and board businesses with two or three focuses have develcompanion animals. oped: Grooming salons may also offer around-thePet breeders encounter a steady demand for clock boarding facilities or day care during stancompanion animals. However, owners of large dard working hours. Breeders may offer grooming breeding facilities—often referred to as “puppy or boarding facilities or may rent space for outdoor mills”—have tarnished the image of companionagility classes or animal herding opportunities. A animal breeders. Puppy mill owners are characterdog training facility that offers classes at night and ized by their use of substandard breeding practices on weekends may rent space to a dog day-care serand provide exceptionally poor care for their anivice during weekdays, or it may operate such a busimals. In contrast, well-regarded animal breeders ness itself. These multifocus businesses provide are selective in their breeding methods and pracattractive one-stop service for pet owners and intices; they perform genetic testing to rule out anicreased profits for businesses. mals with defects, provide excellent care for the animals in their charge, and, overall, are devoted to Animal care attendants are essential to the animal care services industry. Animal care attendants producing healthy animals that are prime examfeed, exercise, and socialize animals. They also ples of their breeds. Small and midsize breeding maintain the cleanliness of the animals’ immediate operations are often sideline businesses or run as environment. Since they work closely with the anihobbies rather than for profit. Large breeding opmals on a regular basis, they are able to spot and reerations often produce a wide variety of breeds and port health and behavioral issues. Although they may offer stud and artificial insemination procedures for increased profitability. perform vital tasks, animal care attendants generally receive lower pay than groomers or trainers. Dog breeds that require frequent grooming,

Animal Care Services Partnership industries for the animal care services industry include veterinary medicine, pet food manufacture and sales, animal health care manufacture and sales, pet supply production and sales, and print and online publishing of pet-related magazines and books.

INDUSTRY MARKET SEGMENTS In the animal care services industry, company sizes range from one-person companies to large corporations. The following sections provide details on the different scales of company operating in this industry. Small Businesses Small animal care businesses have annual revenues of between $10,000 and $200,000. There is a wide range of revenue possibilities for small businesses in the animal care services industry. They can have as few as one employee or as many as twenty employees. Many small businesses in the industry rely on contract staff—for example, an obedience trainer who is not a permanent employee of the business but who is paid to teach one training class—instead of or in addition to permanent staff. A business may be a one-owner shop in a residential home, a stand-alone salon or center, or a component of a veterinary clinic or another larger business. Potential Annual Earnings Scale. The average annual pay for animal care workers is relatively low. The national average salary for full-time dog trainers is $35,619; the average salary for dog groomers is $28,751; the average salary for dog breeders is $27,691; and the average salary for animal care attendants in the United States is $19,050. Clientele Interaction. The animal care services industry is essentially concerned with providing personalized service, and business owners and employees have ample opportunity to work closely with both pet owners and their pets. Amenities, Atmosphere, and Physical Grounds. Physical setting varies widely in this industry. Small animal-care businesses can be located in the owner’s place of residence or in a separate rented or owned location. For example, a groomer may operate a small grooming shop in an outbuild-

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ing or garage that, while sufficient for the work, lacks amenities for employees. Another groomer may work in a grooming area that is part of a veterinary clinic. Still another groomer may work in an elaborate salon with separate facilities for employee breaks and lunches. In all animal care businesses, employees must be able to stand for long periods of time, such as while working at a grooming table or while teaching an obedience class. In addition, animal care workers are often required to lift or position animals and equipment, such as agility poles and buckets. Most important, owners and employees of animal care businesses must not have serious allergies to animal dander, and they must be able to tolerate exposure to the industrialstrength cleaning supplies often used in these industries. Typical Number of Employees. Number of employees varies widely in small business in the animal care services industry. The owner of the business may perform all the labor or may work alongside a staff consisting of permanent employees and contract employees. Traditional Geographic Locations. Animal care businesses are located in all geographic areas.

A dog trainer teaches a cattle dog to jump through a hoop. (©iStockphoto.com)

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Pros of Working for a Small Animal-Care Business. The owner of a small animal-care business may have total control over all aspects of the business, and employees (if any) may have more individual power to make business decisions. Also, a small business with few employees may have more of a “family” atmosphere than a large business with many employees. Cons of Working for a Small Animal-Care Business. Owners or employees who, of necessity, perform multiple roles in the business may experience fatigue and emotional or physical burnout. In times of illness or injury, lack of employees may result in the temporary closure of the business, loss of income, and possibly loss of customer base. Costs Payroll and Benefits: Employees may be paid on a salary, hourly, or project basis. Employers may or may not offer benefits such as health insurance and paid holidays. Supplies: Expenditures for supplies vary widely. For example, a grooming business will need to purchase, maintain, upgrade, and replace extensive grooming equipment. In addition, individual groomers working in salons may wish to purchase high-quality scissors, clippers, or other equipment for their own exclusive use. A mobile grooming business will require a suitable van or other vehicle to be purchased or leased, in-

sured, and customized or outfitted with grooming equipment. An obedience training center or dog day care may require little more than building space or land. External Services: External services can include landscaping and cleaning. Any animal care business that operates in a building, whether rented or owned, will require constant cleaning to keep it free of animal hair and fur, feces, urine, and so on. Groundskeeping will be necessary to keep the area free of feces. Utilities: Standard utilities may be required, such as telephone, Internet, electricity, heating, and cooling. Taxes: Animal care businesses must pay taxes on their profits, payroll taxes of employees, selfemployment tax when applicable, and property taxes for any properties owned or rented. Insurance: Owners of small businesses may be required to carry insurance riders that cover the business in case of dog bites and other such occurrences.

Midsize Businesses Midsize animal-care businesses have annual revenues of between $50,000 and $300,000. They can have as few as ten employees and as many as seventy-five employees. Many midsize businesses in this industry rely on contract staff—for example, an obedience trainer who is not a permanent employee of the business but who is paid to teach one training class—instead of or in addition to permanent staff. Most businesses involved in large-scale breeding of companion pets fall into the midsize business range. Potential Annual Earnings Scale. The average annual pay for animal care workers is relatively low. The national average salary for full-time dog trainers is $35,619; the average salary for dog groomers is $28,751; the average salary for dog breeders is $27,691; and the average salary for animal care attendants in the United An animal care worker trims the nails of a cat. (©Serdar Tibet/Dreamstime.com) States is $19,050.

Animal Care Services

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Clientele Interaction. The animal care services industry depends on providing personalized services, and midsize-business owners and employees have ample opportunity to work closely with both pet owners and their pets. However, as they grow, midsize businesses must monitor their customer service carefully in order to maintain a satisfactory level of personal service. Amenities, Atmosphere, and Physical Grounds. Midsize animalcare businesses are typically located on commercial property, rather than at an owner’s home. Midsize businesses include stand-alone grooming salons; obedience schools; animal day-care centers; breeding operations; boarding kennels; specialty pet shops that offer grooming, training, boarding, or day care; and veterinary West Highland terriers are a popular breed well known to pet groomers. clinics that offer grooming, training, (©Naten/Dreamstime.com) boarding, or day care. Typical Number of Employees. Midsize animal-care businesses have between ten and seventy-five employees. The may or may not offer benefits such as health inowner of a midsize business may work alongside surance and paid holidays. employees or may act in a supervisory role. Owners Supplies: The start-up and upgrade cost of suprely on salaried or hourly permanent employees as plies for midsize businesses is large, depending well as contract employees. on the size of the facility and the services ofTraditional Geographic Locations. Animal fered. Grooming businesses require extensive care businesses are located in all geographic areas. grooming supplies, and trainers may also rePros of Working for a Midsize Animal-Care quire specialized equipment. Business. A midsize business generally has the caExternal Services: Any animal care business that pability to provide staff-extended business hours. operates in a building, whether rented or In addition, there is more employee backup in case owned, will require constant cleaning to keep it of illness or injury. Midsize businesses may also free of animal hair and fur, feces, urine, and so avoid some of the layers of bureaucracy often assoon. Groundskeeping will be necessary to keep ciated with larger businesses. the area free of feces. Cons of Working for a Midsize Animal-Care Utilities: Animal care businesses may require stanBusiness. Midsize businesses may be large enough dard utilities, such as telephone, Internet, electo offer upgraded and extra services that smaller tricity, heating, and cooling. businesses cannot offer. However, in doing so, they Taxes: Animal care businesses must pay taxes on may lose or compromise the personal touch that is their profits, payroll taxes of employees, selfso important in the animal care services industry. employment tax when applicable, and property taxes for any properties owned or rented. Costs Insurance: Midsize businesses may be required to Payroll and Benefits: Employees may be paid on carry insurance riders that cover the business in a salary, hourly, or contract basis. Employers case of dog bites and other such occurrences.

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Animal Care Services

Large Businesses Generally speaking, large businesses in the animal care services industry are the major players in the petsupply industry; they include big-box retailers such as PetSmart and PETCO, both of which offer grooming, training, boarding, and day-care options in a growing number of their stores. These animal care services, in fact, represent a growing portion of the multibillion-dollar revenue of these chains. Potential Annual Earnings Scale. Salaries of animal care services employees who work for major chains vary by geographic region. A portion of jobs offered by the major chains may be part time. The average annual pay for animal care workers is relatively low. The national average salary for full-time dog trainers is $35,619; the average salary for dog groomers is $28,751; the average salary for dog breeders is $27,691; and the average salary for animal care attendants in the United States is $19,050. Clientele Interaction. Employees of major chains face the challenge of providing the personalized service that pet owners desire while working within the layers of bureaucracy often associated with large corporations. Larger training classes, extended grooming hours, and larger numbers of animal clients overall may make it difficult to work closely with individual pet owners and their pets. Amenities, Atmosphere, and Physical Grounds. Large chains that offer animal care services are located in large buildings that offer amenities to employees. Typical Number of Employees. The major pet-supply chains employ large numbers of workers. The number of groomers, trainers, and animal care workers employed at a particular branch varies by store. Traditional Geographic Locations. Animal care services businesses are located in all geographic areas. Pros of Working for a Large Animal-Care Chain. Managers, assistant managers, and employees of a major chain’s grooming salon, day-care or boarding facility, or training center are employees of a major corporation. They typically enjoy job stability and opportunities for promotion. Benefits such as health insurance are also offered. Cons of Working for a Large Animal-Care Business. Generally, employees working at a major chain within the animal care services industry must conform to regulations and guidelines estab-

lished by the corporation, which may mean that there are fewer opportunities to exercise personal power and judgment. Costs Payroll and Benefits: Employees may be salaried or hourly. Benefits are paid to full-time employees and may be offered to part-time employees. Supplies: Large chains require all the grooming and cleaning supplies required by smaller businesses, as well as the office supplies required by all large retailers to maintain the behind-thescenes bureaucracy. External Services: Large chains may require fewer external services than smaller businesses, as security, cleaning, and so on may be provided by the corporation itself. However, even large corporations may hire external companies to perform such services. Large companies also routinely hire third parties for audits and other accounting services. Utilities: Animal care businesses may require standard utilities, such as telephone, Internet, electricity, heating, and cooling. The costs of such utilities, which must be provided to all of a chain’s stores, as well as its corporate headquarters, may be significant. Taxes: Animal care businesses must pay taxes on their profits, payroll taxes of employees, self-employment tax when applicable, and property taxes for any properties owned or rented. Insurance: Chains may be required to carry insurance riders that cover the business in case of dog bites and other such occurrences.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Any size company in the animal care services industry will need to account for certain activities and responsibilities, such as business management and customer services. In smaller companies, one person will generally be responsible for several roles. Smaller companies may not offer a particular service, so the related specialist will not be needed. In larger companies, specialists will fulfill a unique requirement in a specific group. Regardless of size and scope, the functions must be fulfilled.

Animal Care Services The following umbrella categories apply to the organizational structure of businesses in the animal care services industry: ■ ■ ■ ■ ■

Business Management Customer Service Sales and Marketing Facilities and Security Human Resources

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billing, payroll, accounting, Web publishing, and database applications. They generally require at least a four-year university degree. Some roles may require an advanced degree, licensure, or certification. Business management positions often offer a higher salary than other roles within a company or business. Business management occupations may include the following:

Business Management Business management is responsible for the dayto-day operations of the company. Responsibilities include setting the company’s mission and strategy; providing employees with direction; and coordinating relationships with partners, vendors, suppliers, and distributors. Positions in this category generally do not involve manual labor and may require training and experience in computer-based word processing,

OCCUPATION

■ ■ ■ ■ ■ ■ ■ ■ ■

Owner President Chief Executive Officer (CEO) Regional Manager Business Manager Office Manager Accounting or Finance Manager Payroll Administrator Accounts Payable/Accounts Receivable Administrator

PROFILE

Animal Caretaker Considerations

Qualifications

Description

Feeds, exercises, and socializes animals; monitors their health; and maintains the cleanliness of their surroundings.

Career clusters

Agriculture, Food, and Natural Resources; Hospitality and Tourism; Human Services

Interests

People; things

Working conditions

Work inside; work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Heavy work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest score

RCS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Animal Care Services OCCUPATION

SPECIALTIES

Animal Caretakers Specialty

Responsibilities

Animal keepers

Feed, water, and clean the quarters of the birds and animals in zoos, circuses, and menageries; prepare the food to be given to the animals; and add vitamins and medication to the food.

Animal-nursery workers

Care for newborn and young animals in a zoo nursery and exhibit area; prepare the liquid formula and other foods for the animals to provide standard diets for both mothers and newborns according to the requirements of the species.

Animal trainers

Train animals for riding, security, performance, obedience, or assisting people with disabilities.

Aquarists

Attend fish and other aquatic life in aquarium exhibits, take water samples for laboratory analysis, and maintain records of the numbers and kinds of fish.

Kennel attendants

Assist trainers in teaching dogs to be obedient, guide the blind, hunt, track, or work as police dogs.

Pet shop attendants

Show pets to customers, order and sell supplies, and keep sales records.

Stable attendants

Exercise animals regularly, polish saddles and bridles, and assist with horseshoeing; may also harness, saddle, and unsaddle horses, as well as rub them down after exercise periods.

Customer Service Positions in this category generally require excellent interpersonal communication skills. Customer service personnel generally interact directly with pet owners and, depending on their specific job duties, with pets. Basic computer skills are often required for all types of customer service positions. Some positions may involve manual or physical labor. Customer service occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Customer Service Manager Salon Manager Training Manager Assistant Manager Groomer Trainer Breeder

■ ■ ■ ■ ■ ■ ■ ■ ■

Customer Service Representative Assistant Groomer Assistant Trainer Breeding Assistant Technician Bather Animal Care Attendant Host/Hostess Receptionist/Appointment Setter

Sales and Marketing Positions in this category work to generate customers for the company. In general, basic data entry, word-processing, database, and spreadsheet skills are required. Writing and design positions require advanced communications and specialized computer skills. Sales, telemarketing, and ordersetting positions generally require excellent interpersonal communications skills.

Animal Care Services Occupations in this business area may include the following: ■ ■ ■ ■ ■

Salesperson Marketing Manager Graphic Designer Order Setter Telemarketer

Facilities and Security Positions in this category maintain the appearance and usability of buildings and equipment; ensure safe conditions for employees, customers, and vendors; and protect animals, property, and equipment from theft and vandalism. Facilities and security occupations may include the following: ■ ■ ■

Animal Care Attendant Custodian/Janitor Security Guard

Human Resources Positions in this category manage all or some of the hiring and termination process, compliance with government regulations regarding personnel, and the day-to-day administration of employee benefits and grievance procedures. Occupations in this business area may include the following: ■ ■

Human Resources Manager Benefits Manager INDUSTRY

OUTLOOK

Overview The number of households with companion animals is expected to increase significantly each year. As of 2008, there were approximately 88 million cats and 74 million dogs in the United States. These animals need to be bred, groomed, trained, and cared for. Despite the global economic crisis of 2007-2009, pet owners in the United States spent over $3 billion on animal care services in 2009, and that number is expected to increase in future years. According to the U.S. Department of Labor, employment of animal care workers is expected to grow by 21 percent in the next decade. This rate is higher than growth rates for other industries.

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Work in the animal care services industry is often difficult, dirty, and sometimes dangerous. The Bureau of Labor Statistics notes an exceptionally high rate of injury (including dog bites) among animal care workers. In addition, employees who work directly with the animals are exposed to large quantities of chemicals, including cleansers, disinfectants, and topical veterinary treatments. Employment Advantages It is estimated that almost 75 percent of dog owners and more than 50 percent of cat owners consider their companion pets to be members of the family. A healthy, well-groomed, well-trained, and well-cared-for pet is a joy to an animal-loving household and, conversely, less likely to irritate people who do not generally enjoy animals. These animals require care to reach their potential as excellent companion pets. There is great satisfaction to be found in breeding healthy animals to exacting breed standards, feeding and exercising pets— both purebreds and mixed breeds—that wait in shelters for permanent adoptive homes, training a dog to walk on a leash, or grooming a heavily matted and uncomfortable long-haired cat. It is often difficult work, but it is important work. The animal care services industry needs employees who are devoted to the well-being of those important enhancements to the human household, companion pets. Annual Earnings The pet industry, of which the animal care services industry is a major portion, is the seventh-largest retail segment in the United States. According to a report by Market Research Group of New York, the market was expected to grow 6 percent in 2009 to about $53 billion, up from $51 billion in 2008. Growth was projected to speed up in the years 2010 and 2011, increasing an estimated 7.5 percent in 2010 to about $57 billion. The U.S. pet market was estimated to grow at a 7.1 percent compound annual rate from 2008 to 2013, up from 6.4 percent in the previous five-year period (2003-2008). Globally, the pet industry continues to grow overall. For example, there are approximately 27 million pets in the United Kingdom. The British pet industry reached revenues of £4 billion in 2008. The British pet food industry alone recorded gains of 7 percent in 2008 to total nearly £2 billion. De-

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Animal Care Services

spite the economic crisis of 2007-2009, most sectors of the British pet industry are proving relatively resilient.

National Dog Groomers Association of America P.O. Box 101 Clark, PA 16113 http://www.nationaldoggroomers.com

RELATED RESOURCES FOR FURTHER RESEARCH American Kennel Club AKC Customer Care 8051 Arco Corporate Dr., Suite 100 Raleigh, NC 27617-3390 Tel: (919) 233-9767 http://www.akc.org American Pet Products Association 255 Glenville Rd. Greenwich, CT 06831 Tel: (203) 532-0000 Fax: (203) 532-0551 http://www.americanpetproducts.org American Society for the Prevention of Cruelty to Animals 424 E 92d St. New York, NY 10128-6804 Tel: (212) 876-7700 http://www.aspca.org Association of Pet Dog Trainers 150 Executive Center Dr. P.O. Box 35 Greenville, SC 29615 Tel: (800) 738-3647 http://www.apdt.com Cat Fanciers’ Association 1805 Atlantic Ave. P.O. Box 1005 Manasquan, NJ 08736-0805 Tel: (732) 528-9797 http://www.cfainc.org Certification Council for Professional Dog Trainers Professional Testing Corporation 1350 Broadway, 17th Floor New York, NY 10018 Tel: (212) 356-0682 http://www.ccpdt.org

ABOUT

THE

AUTHOR

Katharine M. Holden is a marketing communications consultant. She is a 1988 graduate of the University of St. Catherine.

FURTHER

READING

Bennett, Laura. “Pet Industry Trends for 2009.” Small Business Trends, January 15, 2009. http:// smallbiztrends.com/2009/01/pet-industrytrends-2009.html. CareerBuilder.com. Salary Calculator and Wage Finder. http://www.cbsalary.com/salarycalculator. Hollow, Michele C., and William P. Rives. The Everything Guide to Working with Animals: From Dog Groomer to Wildlife Rescuer—Tons of Great Jobs for Animal Lovers. Avon, Mass.: Adams Media, 2009. Lee, Mary Price, and Richard S. Lee. Opportunities in Animal and Pet Care Careers. 2d ed. New York: McGraw-Hill, 2009. Miller, Louise. Careers for Animal Lovers and Other Zoological Types. 3d ed. New York: McGraw-Hill, 2007. Sandlin, Eileen Figure. Pet Businesses. Irvine, Calif.: Entrepreneur Media, 2006. Shenk, Ellen. Careers with Animals: Exploring Occupations Involving Dogs, Horses, Cats, Birds, Wildlife, and Exotics. Mechanicsburg, Pa.: Stackpole Books, 2005. Simpkins, Jason. “Despite the Recession, the U.S. Pet Care Industry Is Staying Out of the Dog House.” Money Morning, May 29, 2009. http://moneymorning.com/2009/05/29/ pet-care-industry. U.S. Bureau of Labor Statistics. “Animal Care and Service Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos168.htm.

Animal Care Services _______. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

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U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

©Gina Smith/Dreamstime.com

Apparel and Fashion Industry

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Accessory Apparel; Apparel Knitting Mills; Athletic Apparel; Children’s and Infants’ Clothing; Cut and Sew Apparel Manufacturing; Fashion Design Services; Footwear; Formal and Bridal Wear: Haute Couture; Leather and Fur Apparel; Men’s and Boys’ Clothing; Women’s Clothing; Work and Professional Apparel Related Industries: Household and Personal Products Industry; Retail Trade and Service Industry; Textile and Fabrics Industry Annual Domestic Revenues: $460.1 billion (Plunkett Research, 2009) Annual International Revenues: $3.56 billion (Plunkett Research, 2009) Annual Global Revenues: $362 billion (exports only; Plunkett Research, 2008) NAICS Numbers: 315, 3162, 541490

INDUSTRY

design, production, and distribution of clothes, wearable accessories, and footwear. Broad-based in function, apparel and fashion businesses are high-risk concerns that offer the potential for creativity and innovation. Separate from but related to apparel production, the fashion industry attempts to identify and shape clothing trends and has traditionally concerned itself primarily with women’s wear. In recent decades, the fashion and apparel industry has been visibly affected by technological advances and globalization.

History of the Industry Although the fashion and apparel sectors are identified together, historically they have not necessarily been so closely aligned. The fashion industry centered on haute couture that catered to an aristocratic and rarefied clientele, while the apparel industry was dedicated to mass production and more attuned to practicality and salability than to fashion trends. The modern fashion industry began in eighteenth century France and produced fine clothes for the royal court. By

DEFINITION

Summary The apparel and fashion industry is a subset of the manufacturing industry that is dedicated to the 86

Apparel and Fashion Industry

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the late nineteenth century, Paris was The Contribution of Apparel and firmly established as the fashion capital of the world, and the styles that emerged Leather Manufacturers to the U.S. from it dictated women’s fashions in the Economy United States, which gained information on styles to copy through fashion Value Added Amount magazines and fashion dolls. Although Gross domestic product $14.2 billion there were various movements to counGross domestic product 0.1% ter the appeal of Parisian fashion and Persons employed 233,000 promote a similar American style, the Total employee compensation $10.5 billion Parisian couture industry remained the unchallenged arbiter of style into the Source: U.S. Bureau of Economic Analysis. Data are for first half of the twentieth century. 2008. The United States thus had an apparel manufacturing industry well in advance of its fashion industry, but even this industry was relatively late in emerging. Until the invention of the sewing machine, work clothes manufactured in “slop shops” for sailnearly all garments were home-produced, and ors, laborers, and slaves. Mass production of more mass production was limited to the very cheap tailored clothing began with uniforms during the Civil War and with it the introduction of standardized sizes, but it was not until the late nineteenth century that clothing manufacturing achieved its familiar form. Even then, mass manufacture of clothing was initially limited to menswear, because men’s garments were easier to standardize, while women’s clothing continued to be made either at home or to individual order. The mass manufacture of women’s clothing began with outer garments, such as cloaks, that were relatively easy to standardize and soon expanded to include blouses, skirts, and corsets. By the turn of the twentieth century, the American apparel manufacturing industry was well established, and as it grew, the labor it required became increasingly segmented and unskilled. Many immigrants, primarily Jews from Germany and Eastern Europe, worked in the clothing industry. A number of them rose to become manufacturers. Many other immigrant clothing workers, however, struggled to achieve decent pay and working conditions, and clothing unions were born in response to the industry’s labor problems. Manufacturers attempted to evade unionization by moving production out of the northern cities and eventually overseas. The simplification of styles between the late nineteenth century and the mid-twentieth century was gradual and influenced by designers such as Gabrielle “Coco” Chanel and movements that included the introduction of sportswear and the A 1959 Chanel suit. (AP/Wide World Photos)

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Apparel and Fashion Industry alized, as manufacturing increasingly moved to locations in the developing world.

First Lady Jacqueline Kennedy wears a silk apricot dress and strand of pearls during a visit to India in 1962. (Time & Life Pictures/Getty Images)

“California look.” World War II further loosened the French grip on fashion trendsetting, and restrictions on use of cloth inspired an increased level of simplicity in design during the war years. Even so, by the war’s end, the more elaborate French-inspired styles of the “New Look” regained popularity, and Paris still maintained influence into the 1960’s with the aid of celebrity style-setters, including Jacqueline Kennedy. The central role of haute couture in the fashion industry finally came to an end in the late 1960’s, when the youth counterculture movement and accompanying “street fashion” became incorporated into the apparel industry. From the 1960’s into the twenty-first century, the fashion and apparel industry became increasingly internationalized, with major fashion centers emerging in New York, Italy, and Japan. Apparel production likewise became internation-

The Industry Today Today, the apparel and fashion sectors constitute a global industry in which relatively little production takes place in the United States, even for U.S.-based firms. One notable exception involves apparel and footwear produced for the U.S. military and, more recently, the Transportation Security Administration (TSA), thanks to federal legislation that began with the Berry Amendment of 1941. While this legislation has ensured that the government will support American industry, it has had little effect on the manufacture of apparel and footwear for commercial retail. Fashion design and promotion have likewise been internationalized, even beyond the well-established European fashion centers of Paris, London, and Milan, Italy. In any case, the fashion industry in recent decades has gone from dictating popular clothing tastes to responding to them, necessitating a high degree of flexibility and risk-taking, except in certain clothing styles deemed “classic” enough to require only minor variations. Likewise, the increasingly quick travel of styles from fashion runways to stores has blurred the line between haute couture and “off-the-rack” styles, both enabling and requiring manufacturers to produce similar looks at different price points. As a result, designer labels that have traditionally been associated with high fashion frequently are used to sell less expensive lines and even nonclothing

Inputs Consumed by the Apparel and Leather Manufacturing Industry Input

Value

Energy Materials Purchased services Total

$1.0 billion $10.1 billion $8.9 billion $20.0 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

Apparel and Fashion Industry items, although overuse of a label can sometimes diminish its value. Although counterfeiting is punishable by law, moreover, legal copying and adapting of clothing styles make a designer’s or company’s label all the more important to promote. Although the American fashion industry is in decline as a manufacturing business, it remains a large and highly segmented industry, in which only certain sectors fulfill expectations of glamour, often in exchange for long hours and heavy personal commitment to one’s employer. Fashion, especially women’s fashion, is so changeable that apparel manufacture remains a risky business with narrow profit margins, making low overhead and volume sales the main goals of most companies. For this reason, in the latter part of the twentieth century and beyond, haute couture has made up a shrinking segment of the industry. As a result, the purpose of most fashion shows and design showrooms is less to drive direct (or even direct-to-retail) sales of the latest fashions and more to provide ideas and inspirations for designers and manufacturers, since most of the styles displayed in couture showrooms and worn by models on fashion runways will be

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modified for the tastes and lifestyles of consumers. In any case, designers and manufacturing representatives who attend these events are required to pay for the privilege of idea gathering, either through fees or through purchases. One of the more notable changes in the industry in recent decades has been the phenomenon of designers building new labels and design companies under their own names without having previously designed for established design houses or labels. Tommy Hilfiger, who began his career with a shoestring operation and successfully promoted his brand, is a prime example. Most designers design for someone else’s label, and the identification of a label with an individual, such as that of Hilfiger, Calvin Klein, or Anne Klein, can make succession a difficult issue when a label founder retires or dies. Even so, it is certainly possible for a designer who inherits the lead designer mantle of an established label to carry that label’s cachet forward and also to gain recognition in his or her own name. For example, Donna Karan began her career designing for Anne Klein before breaking out on her own.

Donna Karan’s 2011 spring collection at Fashion Week in New York, 2010. (AP/Wide World Photos)

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The majority of designers work without personal recognition and are expected to make their designs conform not only to what is salable but also to what fits with their companies’ target markets and images. The artistic side of fashion design and production continues to be changed by technology, most notably computer-assisted design (CAD) and virtual models, although the long-term effects of this technology remain to be seen. Finally, the work of designers and the glamour of design have been somewhat separated by the phenomenon of celebrity designs, in which celebrities such as Jennifer Lopez and Sean Combs license their names and images to sell apparel that conforms to the lifestyles associated with them—regardless of their level of involvement in the apparel’s design and production. In any case, the glamorous image of the fashion and apparel trade still obscures the reality that most work in the industry involves long hours, tight deadlines, and—on the production end—poor pay and narrow profit margins, even when production takes place in the United States. As Jewish immigrants did historically, Latin American and Asian immigrants play a significant role in clothesmaking, taking advantage of family and communal networks to obtain work. For reasons that range from educational requirements to changes in the industry, however, it is much harder for recent immigrants than it was for their predecessors to advance from contractors to full-fledged manufacturers or acquire other positions in the industry. In any case, few contractors are able to advance without first obtaining a “private label” that guarantees a relatively steady source of work. Although it still takes relatively little capital to set up a contracting shop, most contractors operate with such narrow profit margins that legitimate shops easily suffer competition from those that flout the law— whether by employing undocumented immigrants or by allowing working conditions disturbingly reminiscent of sweatshops. Indeed, sweatshops have reappeared both in the United States and abroad, and they continue to proliferate, despite being illegal and ill-regarded. The effects of international trade regulation upon the industry have been mixed, as manufacturers continue to seek new sources of labor when workers in countries initially chosen for their cheap labor supply begin to demand better pay and condi-

tions. As inhumane as this concern may seem, the cost of labor will remain an issue in apparel manufacture as long as mechanization and automation remain limited and the industry continues to require some human skill. In 1996, an imbroglio over the sweatshops producing the Kathie Lee Gifford line of clothing led both Gifford and her critics to lobby for the prevention of child labor in clothing manufacturing. This episode raised the possibility that social (and environmental) responsibility could influence consumer decisions and hence be salable. That said, American Apparel stands out as one of the relatively few prominent apparel manufacturers to succeed as an entirely domestic and “no-sweat” operation.

INDUSTRY MARKET SEGMENTS Fashion and apparel businesses range dramatically in size. Individual designers and artisans may create clothing and accessories for sale at single outlets or street fairs, and communal Web sites such as Etsy exist through which individuals may sell handmade goods, including apparel and accessories. At the other end of the spectrum, large corporations with thousands of employees massproduce clothing for sale either in their own proprietary stores or through third-party outlets, including department stores and discount stores. Small Businesses Small businesses in the fashion and apparel industry can include a wide variety of operations, ranging from freelance photographers to boutiques to contracting shops. They include selfemployed artisans who may sell apparel either full time or as a hobby to generate extra income. Most small apparel businesses cater to specialized markets or deal in haute couture. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the mean annual salary of all employees of the apparel manufacturing industry in 2009 was $31,270. Fashion designers earned an average of $77,780 per year, sewing machine operators earned an average of $20,700 per year, hand sewers earned an average of $25,150 per year, and patternmakers earned an average of $46,750 per year. Employees of small ap-

Apparel and Fashion Industry parel manufacturing businesses are likely to make less than these averages, but fashion designers of haute couture may earn average or above-average salaries, even in small businesses. Clientele Interaction. In a small apparel business, clientele interaction may be highly personalized and individualized, and the clientele may be varied according to the types of products or services offered. Some divisions, such as modeling, photography, and design, may involve working with high-profile clients in the fashion world, while those in merchandising and retail work primarily with one another and with suppliers. Small-business proprietors are the most likely to interact directly with their customers. In other areas, such as contract manufacturing shops, clientele interaction is much more limited. Amenities, Atmosphere, and Physical Grounds. The amenities, atmosphere, and physical grounds of small fashion and apparel businesses vary widely according to the type of business, location, and potential clientele. Businesses that deal directly with the public attempt to attract and retain customers with appealing settings and presentations of their merchandise. By contrast, manufacturing contractor shops may provide only the minimal workplace amenities required by law— and not always those. Typical Number of Employees. Small fashion and apparel businesses employ between one and one hundred people. Traditional Geographic Locations. Most of the small design studios and contract shops in the American fashion and apparel industry traditionally have been located in the New York City neighborhood known as the Garment District, where numerous design and manufacturing businesses are still clustered. As the twentieth century progressed, similar districts emerged in Los Angeles and other major cities, while manufacturing shops have increasingly moved offshore. Small retail establishments may be located almost anywhere, including, increasingly, in cyberspace. Pros of Working for a Small Apparel Business. Working for a small fashion or apparel business can provide significant opportunities for creative work, close client-proprietor interaction, and learning several different phases of the business. Proprietors and freelancers also have a certain amount of control over their hours. Finally, some

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Bobbins in a modern textile factory. (©iStockphoto.com)

of the creative divisions of the industry provide opportunities to achieve pride of craft, and workers in couture and high fashion may even achieve a certain amount of prestige. Cons of Working for a Small Apparel Business. Employees of small fashion and apparel businesses must work long and sometimes nonstandard hours. Proprietors assume significant financial risk in a declining and competitive industry. Close client-proprietor interaction can be a disadvantage as well as an advantage, especially in situations where gaining new clients is contingent on one’s individual professional reputation. Finally, in the manufacturing sector, small contractors must deal not only with narrow profit margins and variable demand but also with heavy competition and pressure to cut costs. Costs Payroll and Benefits: Depending on the type of business, pay may be salaried, hourly, or at a

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Apparel and Fashion Industry OCCUPATION

SPECIALTIES

Apparel Workers Specialty

Responsibilities

Assemblers

Select parts required to make a complete article of clothing according to size, style, and color, following style guides. They then assemble, by hand, a specified number of selected garment, glove, or mitten parts into bundles for distribution to production workers.

Fabric and apparel patternmakers

Examine sketches or samples to determine necessary pattern pieces and draw, mark, and cut master patterns for articles to be made from fabrics.

Machine pressers

Operate pressing machines to smooth surfaces, flatten seams, or shape articles.

Machine trimmers

Operate sewing machines with cutting blade attachments to trim excess fabric from articles. They start machines, operate controls, and guide articles under the blades.

Markers

Mark sewing guides on garments or material, using chalk, crayon, or pencil, to add further instructions and production guidelines.

Sewing machine operators

Tend semiautomatic sewing machines that stitch or decorate garments, and also thread the machine, position the fabric, and start the machine.

Tailors, dressmakers, and sewers

Design and make tailored items. They confer with customers to develop designs, draw patterns, and assemble, fit, alter, finish, and press garments.

commission or per piece rate. For self-employed workers—including individual proprietors and freelancers—earnings are heavily dependent on revenues. Some successful businesses provide benefits, but many do not, and employers sometimes attempt to pay employees “off the books.” Self-employed persons must provide or arrange for their own benefits or go without. Supplies: Small apparel manufacturers may require sewing machines and equipment, needles, thread, fabrics, and all other necessary raw materials and equipment. Design studios may require all of the above, plus sewing dummies, drawing supplies, CAD machinery, and reference materials. Photographers and makeup artists require the appropriate professional equip-

ment and supplies, while retail boutiques need hangers, tags, racks, security devices, and cashier equipment. Nearly all these businesses require office, bookkeeping, and communications equipment and supplies. External Services: Nearly all divisions of the fashion and apparel industry engage some external services. In design and manufacturing, fabric, equipment, and notions suppliers would be the most common. In the retail sector, the supplying of merchandise may be an external service, given the declining number of manufacturers who retail their own products. Many basic services, such as cleaning and security, may be contracted out, along with equipment repair and maintenance. Small businesses also generally

Apparel and Fashion Industry contract all necessary marketing, advertising, and legal services. Utilities: Small fashion and apparel businesses must pay for electricity, water, sewage, telephone, and Internet access. Taxes: Small businesses are governed by federal and state tax regulations, and retail is affected by state and local sales tax laws. Recently, Internet businesses have been brought under tax codes, and all applicable property and business-related taxes apply. Midsize Businesses Midsize fashion and apparel businesses are visibly less diverse in nature than are small businesses, and they may be found primarily in the manufacturing and retail sectors. They include department and specialty stores, though a number of design firms may be classified in this range, especially those that also manufacture apparel based on their designs. Potential Annual Earnings. According to the BLS, the mean annual salary of all employees of the apparel manufacturing industry in 2009 was $31,270. Fashion designers earned an average of $77,780 per year, sewing machine operators earned an average of $20,700 per year, hand sewers earned an average of $25,150 per year, and patternmakers earned an average of $46,750 per year. Sales managers earned $127,150, while purchasing managers earned $106,380. Midsize-business employees typically earn salaries roughly in line with industry averages. Clientele Interaction. Clientele interaction in midsize fashion and apparel businesses varies, but it generally falls into two categories: professional clientele and customers. That is, designers and manufacturers interact primarily with representatives of related businesses, while retail clothing employees are more likely to interact directly with consumers. Managers in both businesses are less likely to interact with clients than are salespeople. Amenities, Atmosphere, and Physical Grounds. Manufacturing businesses typically offer the least in terms of physical attractiveness and creature comforts, while retail businesses strive to create attractive, inviting environments in settings where customer service is emphasized, unless they emphasize discounted merchandise. In design firms, the physical setting may be actively shaped by

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the head of each firm to project the proper public image in order to sell the firm’s products. Typical Number of Employees. Although there may be variations according to the type of business within the fashion and apparel industry, midsize businesses generally employ between one hundred and one thousand people, some of whom may be contract employees. Traditional Geographic Locations. While some midsize businesses are located in the New York Garment District and other urban garment centers, many have been moving to suburban or even rural locations, many in the American South, and most retail businesses have established presences on the Internet. Production facilities may be located at a distance from management and distribution offices, and they may even be located overseas. Pros of Working for a Midsize Apparel Business. Midsize businesses offer the advantages of greater stability and more opportunities for specialization, as compared with small businesses. They are more likely than small businesses to offer steady salaries, benefits, and opportunities for career mobility. For designers and various skilled operatives, working for a midsize firm offers the opportunity for skilled or creative work in a more comfortable atmosphere and for a steadier income than does freelance or contract employment. Cons of Working for a Midsize Apparel Business. The greatest disadvantage to working for midsize businesses is that such businesses may encounter many of the problems that both large and small businesses do, while retaining fewer of the advantages of either. Midsize manufacturers in particular may be forced to compete with larger manufacturers that have greater resources. Midsize manufacturers also tend to fall behind in terms of production scheduling techniques, and economic downturns may result in greater workloads for those employees who survive workforce reductions. Working for these firms may limit the possibilities for career mobility within one’s company. Creative and managerial personnel may need to expend extra effort to stay on top of the trends that are the lifeblood of apparel and fashion companies. Conversely, personnel issues may be most significant in companies that are too large for direct employer-employee interaction yet too small to maintain separate human resources departments.

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Costs Payroll and Benefits: Pay at midsize firms is generally on a salaried basis at the management level. Otherwise, depending on the position and type of business, pay may be on a salaried, hourly, or commission basis. In manufacturing, there is a trend toward dividing the workforce into teams and basing pay rates on group output. In salaried positions, benefits are expected and legally mandated. Some companies may offer employee discounts on products. Supplies: Midsize apparel manufacturers may require sewing machines and equipment, needles, thread, fabrics, and all other necessary raw materials and equipment. Design studios may require all of the above, plus sewing dummies, drawing supplies, CAD machinery, and reference materials. Photographers and makeup artists require the appropriate professional equipment and supplies, while retail boutiques need hangers, tags, racks, security devices, and cashier equipment. Nearly all these businesses require office, bookkeeping, communications, cleaning, and maintenance equipment and supplies. External Services: Manufacturing businesses may contract fabric, notions, and equipment suppliers, while retail outfits may sell merchandise purchased from external suppliers. Although midsize businesses are more likely than small businesses to have in-house cleaning, maintenance, and security staff, these services may also be contracted to external suppliers. Many midsize firms engage fashion consultants and similar consulting services as they strive to stay on top of fashion trends or improve productivity. They may also contract advertising, marketing, legal, or accounting services. Utilities: Electricity is a major utility expense for manufacturing and is an integral part of all midsize businesses, and water and sewage can also be significant in manufacturing. In nearly all sectors of the industry, telephone and Internet service have become integral. Taxes: Midsize fashion and apparel businesses are subject to all applicable property and businessrelated taxes, and those in the retail sector are additionally subject to local and state sales taxes, whether sales are made in-store, through traditional mail order, or over the Internet. Also,

where international production and distribution are involved, all applicable tariffs and duties must be paid. Large Businesses In the fashion and apparel industry, large businesses are a numerical minority but tend to dominate the mass-market manufacturing and retail sectors. They include major manufacturers of apparel and footwear as well as large clothing stores that usually cater to the mid-range or discount markets. They are fairly complex organizations that emphasize volume, multiple markets, and mass production and distribution. Potential Annual Earnings Scale. According to the BLS, the mean annual salary of all employees of the apparel manufacturing industry in 2009 was $31,270. Fashion designers earned an average of $77,780 per year, sewing machine operators earned an average of $20,700 per year, hand sewers earned an average of $25,150 per year, and patternmakers earned an average of $46,750 per year. Sales managers earned $127,150, while purchasing managers earned $106,380. Large business employees typically earn salaries equal to or greater than industry averages, although this may vary depending on the business model of each firm. Clientele Interaction. The nature of clientele interaction in large businesses may very much depend on position and on the sector of the business. Manufacturing may involve primary to exclusive interaction with business clients, and the production phase may involve little to no client interaction. By contrast, retail is primarily conducted through direct consumer interaction through sales and customer service, and clients may come from all walks of life. Amenities, Atmosphere, and Physical Grounds. Although large apparel and fashion businesses are mainly grouped in manufacturing and retail, workplace conditions and amenities may vary according to the type and phase of the business. Manufacturing plants may be located far from design and business offices and may even be located overseas. Work in factories can be physically demanding, though modern plants have greatly improved conditions in terms of lighting, ventilation, safety, and other features. Business and design offices of large firms may reflect the vision and image their corporate heads wish to project in

Apparel and Fashion Industry terms of the workplace atmosphere, and the atmosphere and appearance of retail establishments often depend on whether customer service or discounting is the business’s major emphasis. Typical Number of Employees. Large businesses generally employ one thousand or more persons, though in some job categories, employees may work on a contract basis rather than being directly employed by the firm. Traditional Geographic Locations. Although large apparel manufacturing and retail businesses traditionally have been located in major urban centers, they have spread out dramatically in the last half century. Downtown department and specialty stores have not disappeared, but distribution and retail have become increasingly suburbanized, with branch stores in some cases becoming more economically important than downtown flagship stores. Large-scale production has been increasingly relocated overseas, although there is still some domestic manufacturing. Pros of Working for a Large Apparel Business. Large apparel businesses may provide opportunities to specialize in certain phases of the business, better and steadier pay and benefits than are available at smaller firms, and more formalized attention to personnel and workplace issues though human resources departments. Intangibly, working for a major apparel or shoe manufacturer whose products are widely distributed and worn may be a source of professional pride. Cons of Working for a Large Apparel Business. Large apparel businesses may be relatively impersonal and bureaucratic in employer-employee relations and afford little opportunity for advancement beyond one’s division. Also, in a large corporation with scattered facilities, there may be less of a sense of workplace belonging and cohesiveness than would be possible in a smaller business. Finally, at the lower levels, pay and benefits may be poor, and some services may be contracted out in order to save money. Costs Payroll and Benefits: In large fashion and apparel businesses, more positions are likely to be salaried, though retail posi-

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tions may be paid on commission. In manufacturing, wages may be hourly or on a piece or commission basis, and union contracts make a difference in improving rates. In large businesses, however, benefits are more likely to be included, and for full-time employees, health insurance is mandated by law. Some companies may offer employee discounts on products or merchandise. Supplies: Large apparel manufacturers may require sewing machines and equipment, needles, thread, fabrics, and all other necessary raw materials and equipment, as well as vehicles and supplies related to shipping. Design studios may require all of the above, plus sewing dummies, drawing supplies, CAD machinery, and refer-

Women sew at the Dalma Dress Manufacturing factory in New York’s Garment District. (AP/Wide World Photos)

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Apparel and Fashion Industry

ence materials. Photographers and makeup artists require the appropriate professional equipment and supplies, while retail boutiques need hangers, tags, racks, security devices, and cashier equipment. Nearly all these businesses require office, bookkeeping, communications, cleaning, and maintenance equipment and supplies. External Services: Large manufacturers purchase fabric, notions, and other raw materials from suppliers, and most retail businesses purchase their merchandise from elsewhere. Large businesses may have their own marketing and legal divisions, but they may still contract outside services. It is particularly common for even major corporations to engage external public relations and marketing firms to design or consult on major advertising campaigns. Utilities: Electricity and gas are vital to large businesses, as are telephone and Internet services. Manufacturers may also require more than basic water and sewage services. Taxes: Large-scale businesses must pay the applicable federal and state taxes, and retail businesses, including Internet divisions, must comply with the applicable state and local sales taxes. Finally, as large corporations are the most likely to manufacture and distribute internationally, they may routinely deal with the applicable tariffs and duties.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The apparel and fashion industry offers a variety of careers with numerous entry points, some of which may require specialized education and experience. Some occupations in the industry may cover more than one job role, especially those in smaller businesses, and offer the opportunity for mobility within the industry. While some careers, such as design, generally require specialized education and training, others, such as management, human resources, and security, may require more general training or education that is less specific to the fashion industry. In addition, most manufacturing jobs may be learned through on-the-job training, although specialized vocational training

or previous experience helps. In smaller companies, employees may perform several functions, while in larger corporations, work is more specialized, and in manufacturing it is difficult to advance from production to management. Also, many career paths in the fashion and apparel industry involve work and training in many of these segments in the industry. The following umbrella categories apply to the organizational structure of businesses in the apparel and fashion industry: ■ ■ ■ ■ ■ ■ ■ ■ ■

Business Management Publicity Modeling Facilities and Security Design Production Distribution/Merchandising Retail and Customer Service Human Resources

Business Management In the fashion and apparel industry, good business management remains vital to both smooth day-to-day operation and long-term financial and structural planning. Those who work in management are vested with varying degrees of authority and considerable responsibility for the success of overall operations, regardless of the size of their business. In the fashion industry, however, management may have an additional shaping role in creating the corporate culture, which in companies devoted to the manufacture of fashionable apparel may entail creating the kind of workplace that reflects the image and vision the company wishes to project and engaging employees who will support that vision in terms of loyalty to their company and willingness to wear its styles or even its actual products. Managerial style may be bureaucratic and hierarchical or cooperative and consensus based, depending on the size and specialization of the business. Although nearly all phases of the industry may involve management personnel, management is mostly concentrated in the upper tiers of the industry and may require business education in addition to or in place of education in fashion or apparel production. Although in larger businesses, management may be at some remove from the creative

Apparel and Fashion Industry process, it is never totally separated from it, as management in the fashion and apparel industries requires a willingness to assume the general risks associated with running a business that is also affected by the special volatility of the world of fashion. Smaller businesses may have little if any separation between the creative process and business management. Finally, although management constitutes its own division within this industry, many who start their careers in other sectors, such as design, production, or distribution, may eventually seek to move up into managerial roles. Management occupations may include the following:

ing a career in these areas requires specialized training. Moreover, once they gain entry to their professions, photographers and designers seeking to advance their careers must build and circulate portfolios of their work. Other career areas in this sector include photographers’ agents, who secure jobs and negotiate terms on behalf of their clients, and fashion editors and stylists, who create and select images to appear in popular magazines and other public media. Publicity occupations may include the following: ■ ■

■ ■ ■ ■ ■ ■ ■

Assistant Department Manager Owner/Sole Proprietor Chief Executive Officer (CEO) Chief Financial Officer (CFO) Store Manager Department Manager Personnel Manager

■ ■ ■ ■ ■ ■ ■ ■

Publicity Publicity, especially photographic publicity, is essential to fashion and apparel advertising and marketing. Many photographers and publicists work for designers, manufacturers, and retailers, while other professionals work as fashion journalists and photographers employed by the popular media. Fashion photography and publicity not only sells clothes and shoes directly but also promotes the lifestyles and fantasies that are used to sell clothing associated with them. Many fashion photographers and writers specialize in covering fashion shows and events. While most do not obtain high-paying, glamorous jobs, they can find opportunities in related areas. Fashion photographers, writers, and publicists may work in a variety of settings, and many work on a freelance basis. Some photographers may have the opportunity to specialize, working with certain designers or models. Fashion publicity also includes the work of set designers, display designers, clothing stylists, hair stylists, and makeup artists, all of whom create appealing, glamorous images that are subsequently captured in fashion photographs and publicity material. Thus, creating the image to be captured is as integral to a fashion photographer’s job as is capturing it. Pursu-

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■

Photographer Publicist Agent Fashion Writer Fashion Editor Visual Merchandise Designer Display Designer Set Designer Stylist Hair Stylist Makeup Artist

Modeling Human modeling of clothes goes back to the early twentieth century, when models were employed for live department store and catwalk displays. Over the course of the century, modeling became increasingly associated with photographic settings. Models appear in catalogs, magazines, and advertising, which now appear electronically as well as in print. Relatively few models achieve the salaries of the most famous, and modeling may be well or poorly paid, depending on the setting. In some situations, there is the possibility of exploitation, requiring caution and awareness on the part of aspiring models. Fashion modeling requires an unusual amount of attention to bodily and personal appearance, although in recent times there has been more room for diversity in age, ethnicity, and—to a lesser extent—size. The most significant change has been a move from an accepted standard of blond hair and blue eyes to a greater diversity and individuality of appearance. Some models, such as Lauren Hutton and Cindy Crawford, even incorporate blemishes as part of their trademark “looks.” Models are usually hired and placed through agencies, although a

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few achieve enough prominence to hire personal agents, and some models have successfully transitioned to other sectors of the fashion industry, especially design. Some apparel manufacturers engage actresses and other celebrities who are not professional models to model their designs. Some prospective models who might not meet height or other physical requirements for the runway or fashion magazines may model for consumer manufacturers or department stores. Others may specialize as hair, hand, or other body part models. The industry employs child and even infant models, but parents arrange and approve work for these young models. Models are assisted by a variety of stylists, who may include hair and makeup artists, clothing stylists who coordinate outfits, and set stylists who create backdrops for photographers. Modeling agents maintain most of the responsibility for arranging jobs and negotiating contracts. Modeling occupations may include the following:

■ ■ ■ ■

Model Modeling Agent Stylist Publicist

Facilities and Security Facilities management and security, though unglamorous, is essential to the smooth running of the fashion and apparel industry. Beyond protecting merchandise and material from theft, security personnel protect trade secrets, patents, and designs from both theft and counterfeiting. Counterfeit merchandise is becoming more common, and it is also becoming more sophisticated and difficult for consumers to distinguish from genuine designer merchandise. As a result, protecting both the physical and the legal security of designs has become increasingly important to the success of many apparel businesses. Although it is legal to create knockoffs and variations on original designs for public display, doing so still poses proprietary and

OCCUPATION

PROFILE

Clothes Designer Considerations

Qualifications

Description

Designs clothing and other apparel and supervises its construction.

Career clusters

Arts, A/V Technology, and Communications; Marketing, Sales, and Service; Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

Junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

ASR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Apparel and Fashion Industry trademark challenges. Thus, design firms seeking to guard their intellectual property rights must engage patent and trademark lawyers, either inhouse or on retainer from law firms. At the more basic level, store and plant security personnel seek to prevent shoplifting and other forms of theft. These employees are important to maintaining solvency in a competitive business environment, and the general care and maintenance of plant, office, and retail facilities are among the most basic of business concerns. Many businesses, however, outsource security and maintenance services to save money. Contract personnel may experience poorer working conditions and have less job security than would in-house staff fulfilling the same roles. Trained security guards and maintenance staff who are dissatisfied with such conditions may find it relatively easy to seek employment outside the fashion and apparel industry. Facilities and security occupations may include the following: ■ ■ ■ ■ ■

Security Guard Store Detective Intellectual Property Attorney Custodian/Janitor Technician

Design Of all sectors of the fashion and apparel industry, design is most centrally associated with high fashion, although it is equally integral to the more quotidian sectors of the apparel industry, so designers may work in a variety of markets. In most cases, creativity is limited by the necessities of salability, and different settings require different skills and education. Most fashion designers design for someone else’s fashion house or company for at least part of their career, and relatively few design under their own names. In recent years, new technologies, especially CAD systems, have had a great effect on the work of clothing designers. Fashion design often involves negotiating a continuous tension, not only between individual creativity and general considerations of marketability, but also between individual creativity and conformity to the specific requirements of one’s employer. It also requires a willingness to work the sometimes long hours demanded by a design house and to adhere to tight deadlines, as each sea-

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son’s collections must go from the design to the production phase in relatively short order. A design house’s workplace culture may be heavily influenced by the personality and charisma of its head. This is especially true of well-known manufacturers such as Ralph Lauren and Tommy Hilfiger, who seek to project particular lifestyles and images that are integral to the sale of their designs. Other workplaces may allow more room for individual creativity, and many include libraries and other resources to provide inspiration. Design occupations may include the following: ■ ■ ■ ■ ■ ■

Fashion Designer Fashion Coordinator Sample Maker Patternmaker Tailor Couturier

Production Production has become the most outsourced sector of the apparel industry, largely for economic reasons. From the late nineteenth century onward, clothing and shoe manufacturing have become increasingly deskilled, segmented, and mechanized, but manufacturers have never been able to automate these industries completely, necessitating some human labor. Even so, apparel manufacturing today has become so segmented that the production of a complete item of clothing for sale by individual tailors has become increasingly rare and limited to high-end couture and custom tailoring. In the growing trend toward off-site production, jobbers arrange contracts, and contractors and their assistants (both foreign and domestic) manufacture the products. Although it requires relatively little investment to become a contractor, unless a person has an education or background in business, it is difficult for a contractor to advance in the industry. Most clothing manufacturers produce under tight profit margins, and legitimate contractors may find themselves in competition with shops that do not operate within legal parameters. Such illegal operations move frequently, making it difficult to enforce labor and other regulations. When clothing production workers became unionized, efforts followed to modernize and centralize production, resulting in individual piece rates being

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replaced by team-based work models. These changes improved working conditions, but they also sometimes created new layers of bureaucracy that resulted in less rather than more shop-floor control of those conditions. In any case, declining unionization and the continuous migration of manufacturing shops in search of cheaper labor has resulted in a return to poor pay, sweatshop-like conditions, and even “homework” (garment production contracted out to be performed at home). Overall, production remains the most labor-intensive sector in the industry, and employees in this sector maintain the lowest status and pay. Production occupations may include the following:

fashion shows and production sites. Retail merchandising may involve working for the distributor, rather than the manufacturer. Fashion consultants research trends and make buying recommendations; they are often independent contractors. In all cases, a career in distribution requires not only knowledge of fashion and business but also an understanding of marketing trends and techniques. Fashion buyers and distributors may work in a variety of settings and may work with one firm at a time or several. Distribution and merchandising occupations may include the following: ■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Contractor Jobber Custom Tailor/Dressmaker Custom Shoemaker Finisher Cutter Sample Maker Patternmaker Shoe and Leather Worker Tailor

Distribution/Merchandising Fashion distributors and merchandisers choose and supervise the delivery of garments from manufacturers to stores. In firms that sell their own products to the public, merchandising involves direct sales to customers through specialty stores, divisions of department stores, boutiques, outlets, or online sites. Merchandisers and distributors assume a certain degree of risk and must be aware of and responsive to popular trends. They work within the designated seasons for different kinds of apparel and footwear. The adoption of computers and bar-coding systems has considerably sped up the process and aided and driven a push toward just-in-time delivery of seasonal merchandise. The information age has also sped up the acquisition of data on fashion trends to the point where it is possible to use technology to manage the product life cycle, from introduction, to transfer to clearance sections and discount racks, to removal from stores. Distribution personnel include fashion buyers, who must work closely with fashion designers and merchandisers alike and who travel frequently to

■ ■ ■

Buyer Distributor Retail Merchandiser Fashion Consultant Publicity Designer

Retail and Customer Service The distribution of goods from merchant to customer is separate from but related to distribution from producer to merchant. In the apparel and footwear industry, direct sales from manufacturer to customer are increasingly rare and in some cases are limited to outlets that specialize in seconds and to smaller, high-end boutiques. There are still, however, many apparel businesses that include retail divisions, requiring salespersons and customerservice personnel to work directly with consumers. In the case of store sales, income may be partly or entirely based on commission, requiring active salesmanship and interaction with customers. Beyond the sales floor, marketing includes advertising and publicity—in this case, for particular stores’ sales and other merchandise, rather than a more general promotion of a company and its products. Both sales and retail marketing, however, involve learning to appeal to customer desires as well as needs and building associations between products and the lifestyles and fantasies that will sell them. Customer service can make a difference in whether customers continue to buy from a particular retailer. Customer service begins with sales, and it may also involve providing information, handling returns and exchanges, and addressing complaints. In some establishments, it may include providing charge accounts and gift-wrapping services.

Apparel and Fashion Industry Although over the decades customer service has been made a less integral part of the clothes-buying experience in exchange for discounted prices, the need for it will never entirely disappear. Customer service remains an essential part of the high-end apparel and couture divisions of the industry, and even middle-range department stores may offer specialized customer service, such as brassiere fitting. Finally, as shopping is increasingly done online, displacing both in-store and traditional mailorder shopping, customer service may change in form and require fluency with computer technology. Retail and customer service occupations may include the following:

human resources personnel can be vital to the smooth running of the fashion industry, which has long been known for its high turnover rate and often poor working conditions. For that reason, those seeking a career in fashion human resources should be well educated in human resources management, as well as in the relevant laws and policies governing the industry. Human resources occupations may include the following: ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■

Retailer Advertising Executive Account Manager Sales Clerk Customer Service Representative Personal Shopper

Human Resources Human resources personnel recruit, hire, train, and fire employees. They administer payroll and benefits, respond to employee grievances, and set or oversee personnel policy. They may also work with representatives of organized labor to ensure that collective bargaining contracts are enforced. Although unionization has greatly declined in the American apparel industry, UNITE HERE, the latest successor to historic clothing workers’ unions, still represents thousands of apparel production workers, requiring human resources as well as management personnel to negotiate contracts with union representatives and to work with representatives to respond to employee grievances. By contrast, in divisions such as modeling and photography, where work is frequently contracted on a freelance basis, human resources officers may most frequently deal with independent contractors or their agents. In large companies, human resources personnel serve as part of the middle management layer between labor and executive management. Smaller businesses may have minimal to nonexistent dedicated human resources staff. This situation can be especially problematic in midsize businesses ranging from 50 to 350 employees, because competent

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■ ■ ■

Vice President of Human Resources Personnel Manager Benefits Manager Human Resources Generalist Payroll Clerk Modeling Agent Photographic Agent Ombudsperson

INDUSTRY

OUTLOOK

Overview The outlook for the American apparel industry shows it to be in decline, although it is unlikely to disappear completely. As with most labor-intensive industries, most of the manufacturing work is performed overseas, and changes in trade regulations are not likely to do much to reverse this trend. Some of the notable exceptions remain military and TSA uniforms, whose domestic manufacture is required by federal law. In addition, the manufacture of high-end and custom-made clothing is likely to remain domestic, as will the other sectors of the fashion industry, mostly design, management, and distribution. As a result, the American apparel and shoe industries may become increasingly service-focused and divorced from their manufacturing origins. On the other hand, the demand for quick turnaround and just-in-time delivery could restore domestic manufacture at least somewhat, although the future prospects of this trend remain to be seen. The industry is also witnessing paradoxical trends: On one hand, mergers, especially between retailers and manufacturers, are increasing; on the other hand, outsourcing and contracting of certain functions are also increasing, as firms seek to focus on the core areas of design and marketing.

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the green factor has become harder to ignore in the apparel industry as elsewhere, and in some cases it may be used as a Apparel Industry selling point, along with other forms of social awareness. LaEmployment bor and social justice concerns 2009 Projected 2018 Occupation have become increasingly relevant, especially in the promo7,070 3,300 First-line supervisors/managers of tion of “no-sweat” merchandise. production and operating workers They have done little, however, 5,710 2,900 Inspectors, testers, sorters, samplers, to reverse the trend toward overand weighers seas production, making American Apparel rare in its success 75,140 35,300 Sewing machine operators (and self-promotion) as an en9,570 1,900 Tailors, dressmakers, and custom tirely domestic manufacturer. sewers Clothing manufacturing is projected to become an increas5,130 2,600 Textile cutting machine setters, ingly prominent part of the operators, and tenders economies of developing na4,030 2,900 Textile knitting and weaving tions, as trade agreements such machine setters, operators, and as the North American Free tenders Trade Agreement (NAFTA) and the Dominican Republic-Central Source: U.S. Bureau of Labor Statistics, Industries at a Glance, America-United States Free Occupational Employment Statistics and Employment Projections Trade Agreement (CAFTA-DR) Program. have encouraged the movement of manufacturing to these locations. American companies provide comparatively attractive employment options for workers in developing Numerous economic, political, and social faccountries. tors can affect the fashion and apparel industry in Although the manufacture of apparel and footboth direct and indirect ways. For example, nawear is on the decline in the United States, the fashtional and international economic conditions can ion industry remains volatile but strong, and the affect not only the performance of the industry but only thing that can be predicted about fashion is its also styles themselves. The recession of 2007-2009 essential changeability as it reflects the times and inspired a return to basic styles and fashion consersociety in which it exists. Some trends that remain vatism, favoring firms that specialize in apparel clear are an increase in the multiculturality of considered classic or otherwise less subject to fashstyles, the permanent demand for sportswear and ion trends and placing trendier firms at risk. Beyond casual dress, a continued influence of “street fasheconomics, globalism has been the most powerful ion” that makes fashion design increasingly a botforce shaping the fashion and apparel industry in tom-up process, and a continued blurring of the recent decades, and it is likely to have permanent lines between couture and ready-to-wear. Aleffects on production, despite rearguard efforts to though it is unlikely that there will ever be a return revitalize domestic production. Even alterations in to the days when haute couture designers in Paris federal trade and manufacturing regulations have could dictate popular styles, Paris, New York, Londone little to affect the increased transfer of retail don, and Milan will remain important centers of manufacturing overseas. the creative side of the industry and continue to set Although environmental regulation of indusstandards for quality and artistry. try remains controversial and difficult to enforce, PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Apparel and Fashion Industry Employment Advantages Despite the decline of the American apparel industry and the volatile nature of the fashion world, careers in these industries may appeal to creative and business-oriented individuals alike and offer exciting opportunities to use artistic and design skills to produce and market salable products. While increased segmentation and creation of niche markets within the industry poses new challenges to those seeking to enter the apparel trade, it also offers exciting possibilities to create and market products for increasingly diverse populations. In particular, the rising appeal of social awareness offers possibilities for those who seek to create green and otherwise socially responsible products and businesses within the industry. With globalization here to stay, fashion and apparel is best suited to students who are willing to expose themselves to diverse cultures and to an internationalized business world. Additionally, in this high-risk industry, there is significant competition for positions that fall into the more glamorous categories, such as design, photography, and modeling. Finally, a student aspiring to a career in fashion should understand that, while there is usually more hard work than glamour involved, those who are willing to put in the effort can enjoy rewarding careers. Annual Earnings The fashion and apparel industry’s earnings can be challenging to report at times, because in many classifications, reports on earnings in this industry have been merged with those of the textile industry. Paradoxically, the apparel industry has become so subdivided that reports of annual earnings may be affected by the industry subcategory, as well as the larger subdivision between knit apparel and cut-and-sewn apparel, with footwear constituting yet another category. As a result, while the reported combined annual industry revenue is reported to be over $20 billion as of early 2010, the industry is so fragmented that the fifty largest operations generate only 40 percent of the annual revenue. Also, although most firms are highly specialized, mergers between manufacturing and retail have also complicated the earnings landscape. The larger economic picture has also had an effect, with the post-September 11, 2001, economic downturn and the 2007-2009 recession negatively affecting the industry. According to the U.S. Census Bureau and

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the World Trade Organization, the U.S. apparel industry in 2009 made up a small fraction of the world apparel trade, and decline in most sectors of the industry is predicted between 2008 and 2018.

RELATED RESOURCES FOR FURTHER RESEARCH American Apparel and Footwear Association 1600 N Kent St., 12th Floor Arlington, VA 22209 Tel: (703) 524-1864 http://www.apparelandfootwear.org American Apparel Producers’ Network P.O. Box 720693 Atlanta, GA 30358 Tel: (404) 843-3171 Fax: (404) 671-9456 http://www.aapnetwork.net Fashion Group International 8 W 40th St., 7th Floor New York, NY 10108 Tel: (212) 302-5511 Fax: (212) 302-5533 http://www.fgi.org International Association of Clothing Designers and Executives 835 NW 36th Terrace Oklahoma City, OK 73118 Tel: (405) 602-8037 Fax: (405) 602-8038 http://www.iacde.com Professional Fashion Photography Organization 256 Robertson Blvd., Suite 101 Beverly Hills, CA 90211 Tel: (898) 316-7376 http://pfpo.net

ABOUT

THE

AUTHOR

Susan Roth Breitzer holds a Ph.D. in U.S. history; her dissertation focused on the immigrant Jewish clothing industry and unions in Progressive-

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era Chicago. She has taught American and world history at Fayetteville State University. She published “Uneasy Alliances: Hull House, the Garment Workers’ Strikes, and the Jews of Chicago” in the Indiana Magazine of History and is the author of numerous encyclopedia articles for reference works that include Issues: Understanding Controversy and Society, Historical Encyclopedia of American Labor (2004), and Work in America: An Encyclopedia of History, Policy, and Society (2003).

FURTHER

READING

Baudot, François. Fashion: The Twentieth Century. Rev. ed. New York: Universe, 2006. Blasczyk, Regina Lee. Producing Fashion: Commerce, Culture, and Consumers. Philadelphia: University of Pennsylvania Press, 2008. Brown, Carol. Fashion and Textiles: The Essential Careers Guide. London: Laurence King, 2010. DePaola, Helena, and Carol Stewart Mueller. 2d ed. Marketing Today’s Fashion. Englewood Cliffs, N.J.: Prentice-Hall, 1986. Easey, Mike, ed. Fashion Marketing. 2d ed. Oxford, England: Blackwell Science, 2002. Gross, Michael. Model: The Ugly Business of Beautiful Women. New York: Perennial, 2003. Karr, Rick. “Fashion Industry Copes with Designer Knockoffs: With Copyright Protection Elusive, Copies Are Common.” September 18, 2003. http://www.npr.org/ templates/story/stotu.php?storyId=1434815. Manlow, Veronica. Designing Clothes: The Culture and Organization of the Fashion Industry. New Brunswick, N.J.: Transaction, 2007. Martin, Richard, ed. Contemporary Fashion. New York: St. James Press, 1995. Rath, Jan. Unraveling the Rag Trade: Immigrant Entrepreneurship in Seven World Cities. New York: Berg, 2000. Roscho, Bernard. The Rag Trade: How New York and Paris Run the Breakneck Business of Dressing American Women. New York: Funk & Wagnalls, 1963.

Sherrill, Marcia, and Carey Adina Karmel. Style Makers: Inside Fashion. New York: Monacelli Press, 2002. Sluiter, Liesbeth. Clean Clothes: A Global Movement to End Sweatshops. New York: Palgrave Macmillan, 2009. Snyder, Rachel Louise. Fugitive Denim: A Moving Story of People and Pants in the Borderless World of Global Trade. New York: W. W. Norton, 2008. Timmerman, Kelsey. Where Am I Wearing? A Global Tour to the Countries, Factories, and People That Make Our Clothes. Hoboken, N.J.: Wiley, 2009. UNITE HERE. “UNITE HERE: Textiles, Manufacturing, and Retail.” http:// www.unitehere.org/about/apparel.php. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Textile, Apparel, and Furnishings Occupations.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos233.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Defense. “Berry Amendment FAQ.” http://www.acq.usd.mil/dpap/cpic/ berry_amendment_faq.html. U.S. Department of Labor. Bureau of International Labor Affairs. The Apparel Industry and Codes of Conduct: A Solution to the International Child Labor Problem. Washington, D.C.: Author, 1996. White, Nicola, and Ian Griffiths, eds. The Fashion Business: Theory, Practice, Image. New York: Berg, 2000.

Automobiles and Personal Vehicles Industry AP/Wide World Photos

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The automobiles and personal vehicles industry designs, manufactures, and sells automobiles, trucks, all-terrain vehicles, bicycles, motorcycles, mopeds, scooters, boats and other small watercraft, and snowmobiles. The industry also includes manufacturers of dedicated parts for these vehicles, such as engine parts, car batteries, and tires. The industry is experiencing the emergence of new markets and increased competition.

General Industry: Manufacturing Career Clusters: Manufacturing; Transportation, Distribution, and Logistics Subcategory Industries: Boat Building; Motor Vehicle and Motor Vehicle Parts and Supplies Merchant Wholesalers; Motor Vehicle Body and Trailer Manufacturing; Motor Vehicle Manufacturing; Motor Vehicle Parts Manufacturing; Motorcycle, Bicycle, and Parts Manufacturing Related Industries: Batteries and Fuel Cells Industry; Electrical Power Industry; Mass Transportation Vehicles Industry; Petroleum and Natural Gas Industry; Rental and Leasing Services Annual Domestic Revenues: $824 billion USD (Datamonitor, 2009) Annual International Revenues: $1.586 trillion USD (Datamonitor, 2009) Annual Global Revenues: $2.410 trillion USD (Datamonitor, 2009) NAICS Numbers: 3369, 4231, 336612, 3361-3363

History of the Industry The automobile was the culmination of many people’s inspirations, creations, and inventions. In France in 1769, Nicholas-Joseph Cugnot assembled the first self-propelled vehicle, which was powered by steam. Other notable landmarks include a gasoline-powered vehicle, often considered the first true automobile, constructed in 1885 by Karl Benz of Germany, and the first U.S. car manufacturing company, established by former bicycle maker Charles Duryea and his brother Frank in 1894. In the early twentieth century, now-familiar names emerged in the automotive field, including Studebaker, Packard, Olds, Chrysler, and Buick, and industry leader Henry Ford established the Ford Motor Company, using a moving assembly 105

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Workers assemble a 2011 Dodge Avenger at the Chrysler Sterling Heights plant in Michigan. (AP/Wide World Photos)

line to manufacture his Model T. As the century progressed, the popularity of the automobile soared, although sales and production declined during the Depression years and World War II. Postwar sales rose again, and the U.S. market focused on performance and design while facing competition from foreign automakers. The industry was subsequently affected by concerns over vehicle safety, environmental impact, and fuel efficiency. By the early twenty-first century, a weakening economy and strong competition from foreign manufacturers were among the top stressors for American auto companies. Much like the automobile, the bicycle came into being as a result of the various efforts, ideas, and innovations of many people, all attempting to create a human-powered vehicle. Of note is the invention of a two-wheeled device in 1817 by Karl von Drais, a German. Drais’s apparatus lacked pedals, and riders pushed off the ground with their feet. Pedaled versions began to appear in France in 1867, and chain technology was applied in ensuing years.

Scotsman John Dunlop introduced the pneumatic tire in 1888. Eventually, the modern bicycle evolved, complete with brakes and gears. During the bicycle’s evolution, many inventors experimented with mounting an engine on a wheeled frame, thus creating various forerunners of the modern motorcycle. By the early twentieth century, motorcycles were increasing in popularity, and manufacturers began to surface. Eventually, motorcycles, as well as the Jeep automobile, were developed for military use. As the industry progressed, the smaller motor scooter appeared, as, later, did the dirt bike. Throughout history, as inventors developed many types of vehicles constructed for human convenience, the idea was born for a vehicle designed to carry people across snow. Carl J. Eliason received the first patent for a snowmobile in 1927. Various patents have been issued to many others since, but the design of the first modern snowmobile is credited to Joseph-Armand Bombardier in 1958. Improvements in performance and design

Automobiles and Personal Vehicles Industry have produced many variations that serve both recreational and practical functions. Another important type of vehicle is watercraft. Modern water vessels have their beginnings in prehistoric times, when people followed the paths of rivers in their explorations and first began to build rafts. Sailboats were first launched on the Nile River in 3100 b.c.e., and canoes appeared along ancient rivers between 7000 and 6000 b.c.e. The thirteenth century c.e. yielded the first gondolas in Venice, and the first lifeboat appeared in England in 1790. The first patent for a sailboard was issued in 1968, and in 1984 windsurfing became an Olympic sport. The Industry Today Today, the automobiles and personal vehicles industry produces numerous types and styles of conveyances, including boats, mopeds, scooters, golf carts, all-terrain vehicles, personal transport vehicles, motorcycles, trucks, cars, and hybrid vehicles. Worldwide leaders in the automotive industry include Toyota, Volkswagen, Honda, Ford, General Motors, and Chrysler. At present, the industry faces many challenges, including financial, energy, environmental, and safety issues. Economic concerns may boost consumer interest in used automobiles and mass transit systems. Environmental and energy concerns have advanced alternative fuel technologies such as ethanol, natural gas, and fuel cells. Also of note is the hybrid electric vehicle (HEV), which uses a combination of a gasoline or diesel engine and an electric motor to propel itself. New modern hybrid models are

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Inputs Consumed by the Motor Vehicle Industry Input

Value

Energy Materials Purchased services Total

$3.2 billion $274.9 billion $32.7 billion $310.8 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

emerging on the market, as are entirely electric vehicles (EVs). Advantages of HEVs and EVs include decreased emissions, better fuel economy, and possible tax benefits. Disadvantages include the cost of charging the battery and high costs of battery disposal and replacement. On another front, the electric bicycle is attracting attention worldwide as an alternative to more cumbersome or more expensive modes of travel. Electric bicycles are gaining popularity in China, India, Europe, and the United States. Some disagreement exists regarding whether the electric bike is a type of scooter or a bicycle and whether it should be allowed to run on streets or sidewalks. However, bicycles themselves are technically not allowed on sidewalks in most jurisdictions. Other types of bicycles include mountain bikes, road bikes, recumbent bikes, beach bikes, folding bikes, hybrids, and those suited for bicycle motocross. China supplies the major portion of bicycles to the United States. As for The Motor Vehicles Industry’s American bikes, manufacturers exist in smaller shops producing higher-quality, Contribution to the U.S. Economy expensive bikes, while mass producers exist mostly overseas. In the retail arena, Value Added Amount mass merchants experience the largest Gross domestic product $89.0 billion volume of sales in a lower price range, Gross domestic product 0.6% while independent bicycle dealerships sell Persons employed 883,000 mostly to enthusiasts and tend toward Total employee compensation $65.6 billion more expensive models. Modern motorcycles, mopeds, and Source: U.S. Bureau of Economic Analysis. Data are for scooters still serve as practical methods of 2008. transportation in some parts of the world, but U.S. riders use them largely for recre-

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ation. Leading brands include Honda, Yamaha, Suzuki, and Harley-Davidson. Generally, motorcycles can be thought of as belonging to one of four categories. Off-road bikes and sports motorcycles are designed for acceleration and performance, cruisers are designed for comfort and long-distance touring, choppers are customized and styled for individuality, and scooters and mopeds are designed for simplicity and affordability. Research and development efforts include innovations to increase safety, deter theft, and decrease pollution. The industry is seasonal and also affected by weather patterns. The snowmobile industry is also sensitive to weather conditions and suffers during periods of low snowfall. Snowmobiles carry one or two passengers across snow-covered areas. Major manufacturers in the United States and Canada include Arctic Cat, BRP, Polaris, and Yamaha. Most snowmobiles are sold for recreational use, but they are also utilized to aid ski accident victims and in search-and-

rescue operations. The industry is striving to produce cleaner, quieter, faster models and improve sales. Sales have also dipped for all-terrain vehicles (ATVs). ATVs typically carry one passenger and utilize three or four wheels with wide tires and deep treads. A possible growth area has been created with the manufacturing of a side-by-side, or twopassenger, ATV. This unconventional model is gaining in popularity, and competition is high to produce it. ATVs carry passengers over smooth and rough terrains, including sand, dense bush, mud, and gravel. Largely sold for recreational use, ATVs are also used in tourism, for search and rescue, and on farms. This industry, as well as the bicycle, snowmobile, golf cart, and personal watercraft industries, is affected by weather conditions and fluxes in consumer interest and expendable income. Research and development is under way to attract buyers and encourage trail-riding with ATV models that are safer and cleaner for the environment.

The first Chevrolet Volt hybrid electric vehicle sold to the public leaves a Denville, New Jersey, showroom on December 15, 2010. (AP/Wide World Photos)

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Advances in golf cart design are also under way. Leading improvements include greater energy efficiency and better braking systems. Golf carts typically carry one or two passengers and their gear around a golf course and generally run on electric motors, although some are powered by gas engines. Demand has declined steadily in previous years because of a steady reduction in the nation’s number of golfers as well as reduced discretionary income for consumers. IBISWorld forecasts a renewed interest in the sport beginning A snowmobile gets a little air during a race. (©Dreamstime.com) in 2010, which should increase sales of golf carts. The boat industry includes inboard and outboard motorboats, inboard-outdrive boats, jet INDUSTRY MARKET boats, hovercrafts, rowboats, dinghies, kayaks, and SEGMENTS canoes. For motor-driven boats, builders seek to appeal to customer desires for increased fuel effiThe automobiles and personal vehicles industry ciency, more comfortable designs, and environis engaged in the design, production, marketing, mentally friendly boat engines. Manufacturers are sale, and servicing of motor vehicles. In the manualso updating the Global Positioning System (GPS) facturing segment, the automobile industry is products they install on their boats, as well as using dominated by a limited number of major autoa new type of hull paint that is better for the marine makers because significant economies of scale are environment. Additionally, a new process for creatrequired to balance the high cost of product develing stronger boat hulls is on the horizon. opment, marketing, and distribution. On the other end of the spectrum, automobile retail and afterAlso relatively new on the scene is the gyrosales servicing and repair segments are traditionscopic personal transport vehicle. Dean Kamen inally fragmented. With the exception of a few used vented the Segway and revealed it in 2001. The automobile superstore chains, automobile dealers Segway, an electric self-balancing vehicle, is inand repair shops are generally smaller, indepentended for use by an individual who stands on it dently owned businesses. The following sections and is propelled along on two wheels. The invenprovide a comprehensive breakdown of these intion was promoted as having the potential to transdustry segments. form the transportation industry. Sales did not meet expectations, however, as a consumer market Manufacturing failed to emerge. However, the Segway has been The automobile manufacturing sector is one of used as an aid for patrol in police forces and secuthe largest employers in the United States and a rity firms, yielding important commercial sales. major segment of the U.S. manufacturing industry, Overall, the automotive and personal vehicles incontributing almost 4 percent of the national gross dustry has been challenged by the 2007-2009 downdomestic product (GDP). The manufacturing secturn in the global economy, but this downturn has tor consists of automobile parts manufacturing stirred competition and stimulated research and and automobile assembly. Operating in this indusdevelopment of new and better products for the try segment requires a high level of capital investconsumer and the environment.

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ment to support new product development and establish the highly automated processes required for large-scale production. Potential Annual Earnings Scale. Wages in the automobile manufacturing industry are generally higher than in other sectors of the manufacturing industry. The average industry annual salary for experienced autoworkers is estimated to reach $72,700 in 2010, with hourly wages for various positions ranging from $14.26 to $39.15. However, earning levels for this industry are expected to remain stagnant for the foreseeable future. It is also common for workers to be laid off or forced to work reduced hours as a result of slow production, although agreements with labor unions require some automakers to pay idle employees and provide them with health care benefits. Clientele Interaction. Automobile manufacturers generally act as wholesalers and sell or transfer ownership of newly assembled vehicles to franchised dealerships, which in turn sell to the general public. Therefore, a great majority of positions in the automobile manufacturing industry do not require any interaction with their eventual clientele. However, growing consumer preference to use the Internet as the purchasing medium for both used and new vehicles has led manufacturers to provide more Web-based customer services. Amenities, Atmosphere, and Physical Grounds. The majority of automobile manufacturing positions are on assembly lines in manufacturing plants. While professional and managerial workers normally have clean and comfortable offices, plant supervisors and mangers are still expected to visit the assembly lines and face some of the same working conditions as assembly-line workers. For most jobs, working overtime during peak seasons is expected. Workers in this industry have traditionally experienced higher injury rates than their counterparts in other manufacturing industries. Despite companies’ efforts to improve their work environments, some workers are still subject to uncomfortable work conditions, including frequent contact with oil, grease, heat, fumes, and noise. Working with powerful machinery operating at high speed can be hazardous, and, while many operations have been automated, some jobs still require workers to lift and fit heavy objects. Companies have, however, redesigned workstations and job responsibili-

ties to improve task ergonomics and reduce the repetitiveness of the assembly-line style of work. For instance, assembly-line stations may be adjusted to a worker’s height, and workers now typically function in teams and share a number of rotating tasks. Typical Number of Employees. Employment in the automobile manufacturing sector is concentrated in a relatively small number of large establishments. Automobile parts manufacturing plants are usually smaller than automobile assembly plants. Parts plants employ approximately five hundred people each, on average, while well-established automobile assembly plants often employ between two thousand and three thousand people each. According to the U.S. Bureau of Labor Statistics (BLS), there were approximately 877,000 people employed in the automobile and personal vehicle manufacturing industry in 2008. About 62 percent of the jobs were related to motor vehicle parts manufacturing, 22 percent were related to motor vehicle assembling, and 16 percent were related to manufacturing vehicles other than automobiles, such as campers or motorcycles. Traditional Geographic Locations. In the United States, automotive production capacity is primarily concentrated in the Midwest. Manufacturing headquarters for major U.S. domestic automakers Ford, General Motors (GM), and Chrysler—aptly known as the Detroit Three—are located in the Great Lakes area of Michigan, near Detroit. A second automotive hub has emerged in the Southeast, as Asian automakers such as Toyota and Honda have established manufacturing plants in Alabama, Kentucky, and West Virginia. Beyond these facilities, the majority of automakers—including the Detroit Three—operate globally through plants in North and South America, Europe, and Asia. Each plant normally produces only a few models to maximize economies of scale. Pros of Working for a Vehicle Manufacturing Company. Vehicle manufacturing workers, especially those who work in automotive assembly plants for the Detroit Three automakers, have long been protected by strong union representation and enjoy relatively high wages and comprehensive benefits. At the national level, the United Automobile, Aerospace, and Agricultural Implement Workers (UAW) is the autoworker organization commanding the strongest bargaining power. The

Automobiles and Personal Vehicles Industry UAW has maintained health and medical care benefits for its members when those benefits were in danger, and it has negotiated with the Detroit Three to ensure reasonable compensation for workers who are laid off. Cons of Working for a Vehicle Manufacturing Company. Vehicle manufacturing plants operate in two or three eight-hour shifts per twenty-four hours, and some workers may face undesirable shift hours. During peak production seasons, workers are also expected to work overtime to meet production goals. At the same time, employment in the industry can be volatile, as it is highly dependent on market demand for automobiles and personal vehicles. The recession of 2007-2009, for example, threatened the job security of auto workers. Automakers have also responded to union demands and industry competition by investing in high-technology automation equipment, thus eliminating previously necessary positions. The industry has shed over 15 percent of its workforce since its peak employment in 1995, and employment numbers fell by 7.4 percent annually between 2004 and 2009. The Center for Automotive Research (CAR) anticipates that 115,000 workers will leave the industry between 2008 and 2016. For manufacturers of recreational and luxury personal vehicles, including motorcycles, jet skis, and recreational vehicles (RVs), employment numbers have fallen even more sharply, and the lost jobs are not expected to return in the foreseeable future. It is also estimated that the total number of U.S. automobile manufacturing plants will fall by 5.2 percent annually between 2010 and 2015. Costs Payroll and Benefits: U.S. manufacturers pay salaries or hourly wages negotiated by unions. Benefits have traditionally included generous retirement pensions, as well as health insurance. The level of benefits for current and future employees, however, is decreasing, as companies are increasingly burdened by retirement plans they founded when they were more successful and faced less competition than they do today. Workers’ salaries on average account for 5.8 percent of automakers’ total costs. Supplies: In addition to traditional office supplies, automobile manufacturers require large amounts of heavy and light machinery, as well as

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the tools and devices necessary to maintain that machinery. They also require vast amounts of raw materials, such as steel and rubber. These raw materials have risen in price, drastically reducing the sector’s profits between 2004 and 2009. In 2009, supplies represented 78.4 percent of manufacturers’ overall expenses in this industry. External Services: Automobile companies may contract external vendors to provide security, cleaning, maintenance, and other related services. While they may have internal advertising and marketing executives, it is common to contract external advertising or public relations agencies to either plan or contribute to major advertising campaigns. They may also employ lobbying firms to influence legislation relevant to the automobile industry. Utilities: Vehicle manufacturers must pay for significant amounts of electricity, water, and sewage use, as well as telephone and Internet access. Taxes: Vehicle manufacturers must pay corporate and property taxes and withhold income and payroll taxes from their employees. Other Expenses: Depreciation represents a significant expense in the auto industry, as equipment, inventory, and material lose value over time. This loss represents 4 percent of costs, on average. Retailing Automobile manufacturers sell newly built cars to dealerships, which are independent businesses granted franchise status by automakers. Most dealerships are midsize, locally based businesses, and many operate multiple franchises in order to protect themselves from the sales swings of individual brands and models. Franchises are usually granted by each of an automaker’s marketing divisions; for instance, although GM owns both Buick and Chevrolet, a dealer wishing to sell both brands must acquire a separate franchise from each of them. Most automobile dealers generate profits through three segments: new vehicle sales, preowned vehicle sales, and service and parts sales. Some dealerships deal exclusively in previously owned vehicles, which do not require franchise licensing from manufacturers. This practice enables used vehicle dealers to operate without franchising

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Automobiles and Personal Vehicles Industry OCCUPATION

PROFILE

Automobile Salesperson Considerations

Qualifications

Description

Sells automobiles and other vehicles, along with accessories; prepares loan and other paperwork.

Career clusters

Business, Management, and Administration; Marketing, Sales, and Service

Interests

Data; people

Working conditions

Work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

restrictions and to sell all makes and models of automobile. A few national chains of used automobile superstores, such as CarMax, have begun to emerge. Nonetheless, over 85 percent of the used vehicle industry remains independent and decentralized. Potential Annual Earnings Scale. The average annual salary for all employees in automobile and personal vehicle dealerships is just over $44,000, although salaries may vary since many positions have some commission-based component. Salespeople earn approximately $46,000 on average, and individuals in managerial positions could earn from $73,000 to well over $120,000. Earnings for technician and servicing positions are determined by experience and training, ranging from $20,000 to $60,000. Clientele Interaction. Customer relations are extremely important in the retail vehicle industry, as satisfied customers may develop both trust in and loyalty to both an automobile brand and a spe-

cific dealership, resulting in repeat purchases and referrals. Salespersons usually greet potential customers, determine the purpose of their visit, demonstrate vehicle features, and begin negotiations for terms of purchase. Sales and finance managers may also be involved with finalizing sales terms and service package agreements. Amenities, Atmosphere, and Physical Grounds. Employees of automobile dealers work in one of two settings. Sales and office administration positions work in the dealership showroom floor and office area. The workplace offers general amenities available with most offices, although privacy is often minimal. Showroom floors are often designed to convey a spacious and open feel, and employees, especially salespersons, usually share desks and offices. The work environment can be stressful, because salespersons and managers are continuously competing against other dealerships and one another to meet company sales quotas and personal sales goals.

Automobiles and Personal Vehicles Industry Technicians and service personnel work in the servicing and repair area of the dealership. Although repair shops are generally well ventilated and well lit, they are also noisy, and workers are in frequent contact with greasy vehicle parts. They may also need to lift heavy vehicle parts and handle powerful tools and machinery. Precautionary measures are established to ensure workplace safety, but minor cuts, burns, and bruises can be common, and workers sometimes have to work in awkward positions. Typical Number of Employees. Overall, U.S. automobile dealers employ an average of 54 people each. However, the average number of employees varies widely among states, from 30 for South Dakota to 114 for Arizona. On average, about half of a dealership’s employees work in sales, one-third work in technical and parts services, and the rest work in administrative offices. Automotive dealers employed a total of over 1.18 million people in 2007. Traditional Geographic Locations. The size and number of dealerships in a geographic region are closely related to population size in that region. Automobile dealerships are often located near major roads on the outskirts of metropolitan areas to capitalize on consumer traffic and cheaper real estate. Dealerships that own multiple franchises frequently locate these franchises in close proximity to one another to attract potential clients by offering multiple brand options. Pros of Working for an Automobile Dealership. Traditionally, automobile dealers have benefited from an asymmetrical information advantage they hold over customers that is due to relatively murky processes for valuing both new and used vehicles. By setting sticker prices significantly higher than vehicles’ actual costs or residual values, dealers are able to generate greater profits. Although savvy consumers are gradually erasing dealers’ information advantage, an experienced salesperson may still be able to negotiate a favorable sales price, especially for preowned vehicles. As most dealership positions have some commission-based component, they provide good earning potential for capable performers. Employees may also enjoy the use of dealership vehicles for official business and even for limited personal use, although this benefit is usually limited to managers and some salespersons.

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Cons of Working for an Automobile Dealership. Dealerships assume the financial risk of reselling the vehicles they buy from automakers and individuals. Indeed, on average, more than 70 percent of a dealership’s costs are related to its purchase of inventory to sell. Those dealing in used vehicles must expend additional funds to repair and refurbish the inventory they acquire. Therefore, a dealership’s sales performance is vulnerable to uncontrollable external factors, such as changes in consumer preferences and in the popularity of its vehicle brands and models. For instance, in early 2010, Toyota dealers faced sharply decreased consumer confidence when the automaker issued a large recall for faulty auto parts. Similarly, during the early twenty-first century, dealers for the Detroit Three have been hurt when consumer demand has shifted from trucks and SUVs—traditionally their more popular product lines—to smaller, more fuel-efficient vehicles—traditional specialties of foreign automakers such as Toyota. In addition, with valuation information and tools for both new and used vehicles becoming increasingly accessible through the Internet, consumers are able to compare vehicle features and prices, forcing dealers to compete for business by reducing their profit margins. Costs Payroll and Benefits: Automobile dealerships may pay salaries or hourly wages, depending on the position. Repair technicians may be hourly, while salespersons often earn base salaries plus commissions on sales. Large dealerships generally offer benefits packages. Supplies: Dealerships require office supplies, including computers, telephones, and fax machines, as well as maintenance supplies, such as tools, diagnostic computers, and spare parts. External Services: Automobile dealers may contract external services such as cleaning, site maintenance, information technology support, and security. They may also contract advertising, accounting, legal, or collections services. Utilities: Dealerships must pay for electricity, water, heating, air-conditioning, sewage, telephone, and Internet access. Taxes: Dealerships must pay corporate income and property taxes, as well as collecting income and payroll taxes from their employees.

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Other Expenses: During periods of economic downturn and tightened credit control, automobile dealers’ finances are directly affected by their customers’ finances and credit level. This is especially prevalent for used-vehicle dealers, since the nature of their business exposes these dealers to more customers with poor credit. Between 2004 and 2009, bad debt expense due to customers’ financial troubles increased from 16 percent to 21 percent of used-vehicle dealers’ overall costs.

pendent on a mechanic’s expertise, training, and experience. For instance, general maintenance and repair workers without certification or specialization earn average annual salaries of $30,500; motorcycle mechanics, who repair motorcycles, scooters, mopeds, and small all-terrain vehicles, earn just under $34,000 annually, while bus and truck mechanics earn over $45,000. Managers and supervisors may earn upwards of $65,000 per year. Clientele Interaction. The amount of interaction between mechanic and client depends on the size and organization of a given shop. In smaller businesses, clients may interact directly with the techniServicing and Repair cians or mechanics responsible for servicing their While most new automobile retailers offer warvehicles to discuss the types of service needed or ranties and maintenance services for vehicles in problems with the vehicles. In larger establishments, their franchised brands, automobile owners also service managers or advisers generally meet with have the option of visiting independent automotive clients, determine service orders, and assign techrepair shops. Most repair shops strive to provide nicians and mechanics to vehicles as appropriate. one-stop, inclusive services, which include a wide Amenities, Atmosphere, and Physical range of mechanical and electrical repairs—such as Grounds. Automotive mechanics and service techbrake service and timing belt change—and maintenance services, most commonly oil change and tire nicians usually work in indoor or semi-enclosed repair shops. The work environment may be drafty rotation. There are also some shops that specialize and noisy. While automotive maintenance and rein one or two functions, such as exhaust and underpair work is becoming more computerized, technicarriage repair. Specialized shops account for about cians still work with greasy and dirty auto parts and 15 percent of all automotive repair establishments. often need to lift heavy parts and tools. Some miPotential Annual Earnings Scale. Automotive nor injuries, such as small cuts or bruises, are commechanics and service technicians on average earn mon, but employees who follow industry safety around $42,000 annually. Earnings are highly destandards can usually avoid serious accidents. An average repair shop has five bays, or vehicle service stations, and carries out repair and maintenance services on about ten vehicles per day. The average number of bays is expected to increase in the future, although as of 2010 only about 3 percent of shops repaired more than thirty vehicles per day. Most automotive repair shop employees work standard forty-hour weeks, but 24 percent worked longer hours in 2008. Some workers may also have to work evenings and weekends in order to provide timely service and satisfy The owner of Mt. Pleasant Custom Motorcycles puts the finishing touches on a customized motorcycle. (Bloomberg via Getty Images) client demands.

Automobiles and Personal Vehicles Industry Typical Number of Employees. Around 60 percent of auto repair shop owners are self-employed. Their shops tend to be small and have just two or three employees. Larger automotive shops may hire or train technicians to specialize in certain types of repairs, while smaller shops look for mechanics who can handle most general repairs. Traditional Geographic Locations. The automobile service industry is built on consumer demand. Therefore, distribution of auto repair and aftermarket shops is highly correlated to regional population and the number of registered motor vehicles in each state and metropolitan area. Overall, the southeastern region of the United States accounts for the highest proportion of industry establishments, at 23 percent. Regions with poor public transportation may also have higher concentrations of automobile service establishments, corresponding to higher rates of car ownership. California, for example, is home to 12 percent of car repair shops. Pros of Working for an Automobile Repair Shop. Although a weak economy reduces consumer spending on new, leisure, and luxury vehicles, it has less of an effect on spending for repairs. Auto repair jobs are less affected by economic downturns than are other positions in the automotive industry. Most households are highly dependent on vehicles. As consumers choose to keep their vehicles longer or purchase preowned models instead of new ones—increasing the average age and amount of wear and tear of American vehicles—the need to service and repair existing vehicles is expected to increase. In addition, the financial requirements to start and maintain a selfowned auto mechanic business are relatively low. In regions with many existing shops, prospective shop owners also have opportunities to purchase established shops and their equipment. Cons of Working for an Automobile Repair Shop. Although the overall job market is stable, employment related to leisure vehicles such as motorcycles and mopeds is seasonal in nature and can fluctuate according to overall economic conditions. As most automobiles are continually becoming more technically advanced, demand for more highly skilled labor is also rising. Mechanics must adapt to the ever-changing technologies and repair techniques associated with their industry. For independent automotive repair shop owners, com-

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petition is expected to be strong as a result of the low barrier to market entry. Shops are also facing indirect competition from businesses outside their industry, such as gasoline stations that offer basic automotive services. Costs Payroll and Benefits: Mechanics may be paid salaries or hourly wages. Self-employed mechanics and repair shop owners must pay themselves out of their businesses’ profits after all other financial obligations—including paying employees— are met. If they realize no profits, they will receive no pay. Benefits are paid at the discretion of the owner. Supplies: Automobile repair shops require the heavy and light machinery and tools used to repair automobiles, as well as replacement parts and diagnostic computers. They also require the office supplies used to maintain customer and billing records. External Services: Automobile repair shops may contract cleaning, advertising, or accounting and tax preparation services, among others. They may also need to contract specialized vendors to dispose of hazardous materials, such as motor oil, tires, and used batteries. Utilities: Repair shops much pay basic utilities such as telephone, Internet, electricity, water, and sewage. Taxes: Repair shops must pay federal, state, and local corporate and property taxes. Sole proprietors may pay self-employment taxes and may pay personal income taxes on their businesses’ profits rather than paying corporate taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The automobile industry distributes positions across two quite different sectors: industrial manufacturing and retail sales and service. Thus, some job roles exist only within a particular sector of the industry, while others exist in both sectors. Manufacturing plants are almost always large establishments with clear divisions of labor; therefore, the manufacturing sector usually employs at least one person for each job role. Some dealerships and re-

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pair shops, by contrast, are quite small. Within that sector, a given employee may fill many different roles, especially in the case of an owner of an independent establishment. The following umbrella categories apply to businesses within the automobiles and personal vehicles industry: ■ ■ ■ ■ ■ ■ ■ ■

Management Engineering and Design Production Facility Maintenance and Construction Sales and Marketing Service and Repair Administrative Support Transportation and Distribution

Management There are many levels of management within the automotive industry, including corporate managers, plant managers, and retail and service managers. Corporate managers oversee the entire operation of automobile companies, including plant operations, franchising, and overall corporate vision and long-term planning. Plant managers establish, implement, and enforce standards and procedures for the design, production, marketing, sales, and finance of vehicles. They supervise production employees and coordinate production activities, including staff scheduling, equipment maintenance and upgrade, product quality inspection, and inventory control. Management workers are also responsible for ensuring that plant production processes adhere to government and industry regulations, such as safety and environmental regulations. Supervisory and industry experience is highly valued for this type of position, and some supervisory jobs are given to experienced production workers without postsecondary degrees. However, most management positions require bachelor’s degrees in appropriate fields. Many upper management personnel have engineering backgrounds, professional training, and in-depth knowledge of design and production processes. Individuals in top management positions also serve as the public representatives of their companies. Retail and service managers work on the level of dealerships. They oversee the performance of staff in their areas of responsibility, assign duties and

hours to employees, monitor their progress, evaluate performance, and implement performance incentives. Most dealerships and repair shops are independently or family-owned businesses. Therefore, the proprietor, or owner, of this type of establishment is often involved in its daily business management as well. Most retail and service managers hire, fire, and train new employees. This responsibility is especially important for the sales manager, since the sales staff’s performance dictates success of the dealership. Top management workers review market and sales analyses to determine consumer demands, estimate the sales potentials of different vehicle models, and develop sales campaigns. Retail management positions require in-depth understanding of the industry and knowledge of accounting, business administration, marketing, and sales. Although most management positions do not require postsecondary degrees, as the job market becomes more competitive, employers are viewing candidates with bachelor’s and associate’s degrees in business-related fields favorably. Management occupations may include the following: ■ ■ ■ ■

■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Vice President of Research and Development Vice President of Human Resources Vice President of Public and Government Relations General Counsel Plant Operations Manager Industrial Production Manager First-Line Supervisor Dealership Owner Sales Manager General and Operations Manager Office Manager Service Manager Chief Mechanic

Engineering and Design Professional workers, including industrial designers, engineers, and engineering technicians, create new motor vehicle models. They design, develop, test, and plan production for each model,

Automobiles and Personal Vehicles Industry taking into account safety, marketability, performance, environmental and other regulations, and a host of other factors. Depending on their skills and expertise, they may design models of proposed vehicles, construct and test actual engine and vehicle parts, or engineer plant layout and control systems to ensure optimal efficiency of the production process. Since they are integral to every stage of the automotive production process, engineers and industrial designers generally earn higher salaries than most other workers in automotive plants—with the exception of upper management. Both engineers and industrial designers require bachelor’s degrees in the relevant area of specialization. Engineering technicians and some graphic designers may require only associate’s degrees, since their jobs primarily involve performing tasks developed or specified by their superiors. Many engineers also become licensed or certified to increase their competitiveness on the job market. Licensing is mandatory for some engineering positions and highly recommended for all, as it is of increasing importance to most employers. Licensing requirements vary by state, but they generally include graduating from an accredited postsecondary program, obtaining four years of professional work experience, and passing two eight-hour exams on the fundamentals of engineering and on the principles and practice of engineering. Certification is a status granted by technical or professional organizations to indicate individual engineers’ expertise in specialized fields. It is usually voluntary but may be common practice in some fields. Engineering and design occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Development Engineer Electrical Engineer Electronics Engineer Industrial Engineer Mechanical Engineer Production Engineer Graphic Designer Engineering Technician

Production Production jobs account for 65 percent of the positions available in the manufacturing sector of

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the industry. Production workers are responsible for putting together various parts to form subassemblies, then putting these subassemblies together to build complete vehicles. Although many basic manual labor tasks are performed by computer-controlled machinery, production workers still perform the more complex tasks that are not easily automated, such as making precision metal parts that are too small and detailed for automated machinery. Automotive production workers have traditionally enjoyed stronger union protection and earned higher wages than have their counterparts in other manufacturing industries. However, automobile production jobs are expected to decline by 16 percent over the ten-year period between 2008 and 2018. This expected decline is due to increasing production automation and the shifting of some part and vehicle production to countries with lower labor costs. Faced with increased competition and economic downturns, the automotive sector is also looking for ways to increase the flexibility of its workforce. Therefore, instead of specializing in single production jobs, workers are increasingly expected to perform a greater variety of tasks. Such multiskilled workers may become team assemblers, who can perform multiple assembly functions and who are interchangeable among different production teams. Most production positions require at least a high school diploma plus some postsecondary training or apprenticeship, but applicants with two-year degrees in technical areas have the best job opportunities. As production processes become more technologically sophisticated, employers are looking for workers with better math skills, computer aptitudes, and critical thinking abilities. Industry experience, and sometimes competitive examination scores, are also used as a basis for hiring new employees and determining wages. Employers may also provide classroom instruction, apprenticeship programs, and on-the-job training for workers. Training ranges from basic health and safety standards, shop mathematics, and blueprint reading to tool designing and computer programming. Opportunities for training and advancement vary significantly by position and plant type, with larger automotive assembly plants offering the most extensive training programs. Workers with experience, training, and outstanding perfor-

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mance have the opportunity to advance into supervisory and management positions. Production occupations may include the following: ■

■

■ ■ ■ ■ ■ ■ ■ ■ ■

Computer-Controlled Machine Tool Operator Machine Tool Cutter, Setter, and Operator Assembler and Fabricator Metal and Plastic Worker Team Assembler Welding, Soldering, and Brazing Worker Tool and Die Maker Painting Worker Grinder/Polisher Sewing Machine Operator Inspector, Tester, Sorter, Sampler, and Weigher

Facility Maintenance and Construction On average, between 8 and 10 percent of production plant employees are maintenance and construction workers. This staff is vital to the production process because it is responsible for the setup, maintenance, and repair of equipment and facilities. Without capable maintenance workers, a plant would be prone to work stoppage, disrupted work flows, and loss of productivity and revenue. Maintenance tasks traditionally have been organized among a number of specializations, such as electrician, machinist, millwright, and plumber. These positions are responsible for, respectively, laying electrical wiring and servicing electrical equipment, welding and fabricating special parts, installing and moving machinery, and maintaining hydraulic systems. Each specialization requires at least some postsecondary training and apprenticeship. However, an alternative maintenance model has emerged in recent years that calls for maintenance workers to be assigned to a specific section of a plant instead of a specific area of specialization. Under the new plant maintenance model, maintenance workers are expected to resolve any equipment or machinery problems in their assigned areas. This model requires each worker to possess a wider range of maintenance skills—a requirement that can be challenging for older workers who have specialized in one area throughout their career. The model also establishes higher

skill requirements for entry into the field. Employers may provide additional training and apprenticeship programs, but—as with production-worker training—these opportunities vary considerably by plant type and size. Facility maintenance and construction occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Machinist Electrician Plumber and Pipefitter Millwright Industrial Machinery Mechanic Maintenance and Repair Worker Security Guard

Sales and Marketing The performance of a dealership’s sales force determines the success of the dealership. Salespeople may specialize in selling new and used vehicles, automotive parts, or vehicle service and maintenance plans and financing options. A successful salesperson needs to build rapport with potential clients and earn their trust and respect, so individuals in this position must possess in-depth knowledge of their dealerships’ vehicle models and inventories, as well as excellent communication skills. Salespeople are also expected to be well groomed and dressed in business attire because they are the public representatives of both their dealerships and their franchises’ vehicle brands. New salespeople receive extensive training through on-the-job mentoring from sales managers and senior workers. Some larger dealers also provide classroom training on vehicle features and on techniques for approaching potential clients, negotiating prices, and closing sales. This training may take several days to complete. Since salespeople’s salaries are based primarily on commissions, a new salesperson will often receive a modest fixed salary during the first few months of training and mentorship. With experience and consistently high performance, a salesperson can advance to become a sales manager, office manager, or operations manager. Although the minimum education level for salespeople is a high school diploma and some postsecondary training, employers often prefer individuals in management positions to have related postsecondary degrees. Therefore, a lack of post-

Automobiles and Personal Vehicles Industry secondary education could put individuals at a disadvantage when seeking advancement. Marketing personnel work closely with sales teams to develop consistent and favorable public images for their companies. In most dealer and repair services, basic marketing responsibilities often fall to the sales and general management. It is also common practice for management to contract external agencies to design and carry out media marketing campaigns. At the corporate level, sales and marketing personnel either design national advertising campaigns or liaise with external agencies designing such campaigns. Moreover, some corporate staff are responsible for selling not individual cars, but new franchises to interested dealers. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Vice President of Public Relations Vice President of Franchising Advertising Manager Marketing Manager Parts Salesperson Retail Salesperson Sales and Finance Specialist Cashier Public Relations Specialist

OCCUPATION

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Service and Repair Automotive service and repair workers diagnose, adjust, and repair automobiles. Some automotive workers also specialize in repairing vehicle bodies, including straightening bent body parts, removing dents, and replacing parts that are beyond repair. As automotive technology becomes increasingly sophisticated, employers are looking for graduates from vocational and community colleges’ automotive training programs when they seek to fill automotive repair technician openings. Certification through the National Institute for Automotive Service Excellence (ASE) also provides industry-recognized credentials for automotive service and repair workers. Although ASE certification is not required for most positions, it will improve a worker’s chance for employment and advancement. Service and repair occupations may include the following: ■ ■ ■ ■ ■ ■

Automotive Body and Related Repairer Automotive Collision Repairer Body Shop Owner Service Manager Chief Mechanic Mechanic

SPECIALTIES

Automotive Technicians Specialty

Responsibilities

Air-conditioning technicians

Install, repair, and service air-conditioners in automobiles.

Auto retrofitters

Make changes to existing vehicles to upgrade them to meet new environmental standards.

Brake repair technicians

Repair automotive brake systems, replace brake pads and linings, repair hydraulic cylinders, and turn discs and drums.

Front end technicians

Repair steering mechanisms and suspension systems, as well as align and balance wheels.

Radiator technicians

Locate and repair radiator leaks and clean and install radiator systems.

Tune-up technicians

Ensure efficient automotive engine performance using various testing machines to check overall performance capabilities.

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Automobiles and Personal Vehicles Industry Mechanic’s Assistant Automotive Service Technician Installation, Maintenance, and Repair Help Worker Maintenance and Repair Service Adviser

Administrative Support Office and administrative support personnel organize and maintain the flow of information and paperwork within a business. They prepare reports on daily operations, track inventory, and keep records of all accounting transactions. Some staff members may also assist in sales-related tasks such as answering and transferring telephone calls and greeting potential customers at the reception desk. Administrative support personnel’s educational background and training are dependent on the specific position. Some accounting-related positions may require a bachelor’s or associate’s degree, while receptionists and general office workers may only need some postsecondary training. Administrative support occupations may include the following:

mostly work alone and for long, irregular hours to transport freight all around the country. Transportation workers for sales and repair businesses are less well compensated, but they enjoy more stable work hours. Workers are typically light delivery-truck operators who pick up and deliver automotive parts, while some are tow-truck drivers who transport damaged vehicles to repair shops. Transportation workers for dealers also include cleaners responsible for preparing vehicles for showroom display and drivers who chauffeur clients between the shop and their residences or workplaces while their vehicles are serviced. Transportation and distribution occupations may include the following: ■ ■ ■ ■ ■

Industrial Truck and Tractor Operator Heavy Truck and Tractor-Trailer Driver Light Truck Driver Chauffeur Vehicle Cleaner

INDUSTRY ■ ■ ■ ■ ■ ■ ■ ■ ■

■ ■

Shipping and Receiving Clerk Switchboard Operator Customer Service Representative Receptionist Information Clerk Secretary Administrative Assistant Executive Assistant Bookkeeping, Accounting, and Auditing Clerk Accounts Payable Clerk Accounts Receivable Clerk

Transportation and Distribution Transportation and distribution personnel deliver vehicles and vehicle parts to dealerships and other establishments. Transportation workers for automotive manufacturing plants are mostly heavy freight-truck drivers, while workers for sales and repair establishments range from light delivery-truck drivers to customer chauffeurs. Motor vehicle manufacturing plants are one of the top-paying employers of truck drivers, with an annual average wage of $55,520 in 2008. Such drivers require commercial driver’s licenses and may need to use automated routing equipment. Drivers

OUTLOOK

Overview The outlook for the automobiles and personal vehicles industry shows it to be in decline, although many of those involved hold cautious optimism. In general, the industry is in a state of flux worldwide. The flux is caused not only by the global financial crisis of 2007-2009 but also by uncertainty as to the future of environmental and energy policy and by a transition from gasoline-powered vehicles to hybrid and plug-in electric vehicles that is just beginning and may or may not ever be completed. According to Datamonitor, the U.S. automobile industry is declining in both market values and volume of new cars, and gains are not forecast for the immediate future. Additionally, bankruptcies and downsizing by two major U.S. automobile manufacturers and their subsequent government bailouts have contributed to decreased consumer confidence, as has a very high-profile recall of Toyota automobiles that damaged a reputation for safety and reliability carefully cultivated over many years. Sales of imports and shifting prices of raw materials have generated further pressure on the U.S. industry. With increasing globalization and rivalry high, Ameri-

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A white-collar worker heads to work on his bicycle. (©iStockphoto.com)

can companies strive to become more competitive and are focusing on marketing and design to entice buyers. Suppliers for the automotive industry also face challenges. Difficulties with demand, high prices, and costs add to the frustrations experienced by the automobile parts industry. In 2009, the U.S. government launched the Auto Supplier Support Program to aid in financial stabilization. Additionally, U.S. parts suppliers are exploring the benefits of conducting business in foreign and emerging markets. Emerging markets, however, add pressure to providers of raw materials, who must compete for diminishing resources. To increase supplies, automotive manufacturers have increased the use of recycled auto materials. In contrast, the related mechanical repairs industry for cars and trucks has seen an increase in demand as many consumers invest in the upkeep of currently owned automobiles. Additionally, with technological ad-

vances in automobiles, many consumers find home repairs increasingly difficult. For bicycles, the repair industry is experiencing a decline for independent shop owners, as repair business is increasingly handled by bicycle dealerships and sporting goods stores. As for manufacturing, China supplies the major portion of bicycles to the United States. Although bicycle use is increasing, retail prices have fallen, or risen only marginally, leading to an overall decline in profits in 2008 and 2009. Motorcycle sales, which are tied to the financial health of consumers, have also been in decline, despite prior years of growth. Rivalry in the market is high, and IBISWorld predicts revenue will continue to decline throughout 2010 but forecasts growth beginning in 2011. A precarious economy is also a threat to the snowmobile industry, although the International Snowmobile Manufacturers Association reported an increase in U.S. snowmobile registrations in 2009.

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After several years of low snowPROJECTED EMPLOYMENT falls, the association adopted a FOR SELECTED OCCUPATIONS positive outlook for the 20092010 season. IBISWorld preMotor Vehicle Manufacturing dicts demand to increase beginning with 2010. The econEmployment omy is also a factor in the 2008 Projected 2018 Occupation reduced demand for ATVs. Research and development is un85,000 71,400 Assemblers and fabricators der way to attract buyers and en1,500 1,300 Computer and mathematical courage trail-riding with ATV science occupations models that are safer and cleaner for the environment. 100 100 Electrical and electronics engineers Beginning in 2010, the outlook 4,600 3,800 First-line supervisors/managers of for ATV sales appears encourproduction and operating workers aging. As for golf carts, demand has been declining for over 11,800 10,500 Installation, maintenance, and ten years because of a steady repair occupations reduction in golfers, as well as 3,400 3,100 Mechanical engineers economic instabilities that reduce discretionary income. Source: U.S. Bureau of Labor Statistics, Industries at a Glance, IBISWorld forecast a renewed Occupational Employment Statistics and Employment Projections interest in the sport beginning Program. in 2010, which was expected to drive new golf cart sales. As the economy struggles to recover, consumers are spenddecline. Individuals interested in occupations in ing less on luxury items such as boats and jet skis. this industry should expect high competition for Major players in the boat-building industry include jobs. Important characteristics for potential workBrunswick Boat Group and Genmar Holdings. ers include openness to new ideas and flexibility. Both companies have dealt with financial strains by Job seekers should be able to work well in teams closing a number of facilities and reducing their and be willing and able to adapt to changing condiworkforces. IBISWorld anticipates that the U.S. intions. dustry will face emerging foreign players and inIn other fields, employment outlooks are mixed. creasing competition; however, the industry is exGraduates from trade schools, as well as those willpected to recover slightly beginning in 2010. Baby ing to work as apprentices, are favored by employboomers with large savings may be likely potential ers in the motorcycle and parts manufacturing boat buyers. Also on the luxury list is the personal industries and the boat building industry. Competransport vehicle, most notably the Segway. The tition for jobs will be high, as employment overall is Segway is relatively expensive, and sales suffered as expected to decline. Gains, albeit slow, are precustomers tightened their financial belts during dicted for employment and wages in the ATV, golf the economic decline. However, commercial sales cart, and snowmobile manufacturing industries. to entities such as police forces and security firms The decline in employment for the boat building have helped ease the financial disappointments industry should stabilize, with possible growth for caused by unmet expectations in the consumer some companies. Smaller boat companies will resector. cruit skilled labor. The best candidates for employment in the repair sectors for cars, trucks, boats, Employment Advantages motorcycles, and bicycles are technicians with speThe U.S. Department of Labor expects employcific training and knowledge, maintenance profesment in motor vehicle and parts manufacturing to

Automobiles and Personal Vehicles Industry sionals, and apprentices. Increases in technology require specifically skilled employees for repair work. Annual Earnings According to Datamonitor, the U.S. new car market yielded estimated revenues for 2009 of $151.6 billion and a compound annual rate of change of −8.7 percent for 2005-2009. For the same span of time, the estimated compound annual rate of change for the European market was −0.5 percent, and Europe saw revenues of $390 billion in 2009. The Asia-Pacific market exhibited growth, with an estimated compound annual growth rate of 3.8 percent and 2009 revenues of $285.5 billion. In other arenas, IBISWorld reported that the U.S. bicycle dealership and repair industry generated an estimated $3.348 billion in 2009 and forecast a slight increase to $3.391 billion in 2010. The U.S. motorcycle, bike, and parts manufacturing industry yielded estimated revenues of $4.238 billion and was predicted to decline to $3.965 billion in 2010. The U.S. ATV, golf cart, and snowmobile manufacturing industry generated an estimated $7.507 billion in 2009, with potential for a slight increase to $7.625 billion in 2010. Significant dips in revenue in 2008-2009 for U.S. boat builders left the industry with estimated revenue of $6.282 billion for 2009. A rise was forecast in 2010 to $7.212 billion.

RELATED RESOURCES FOR FURTHER RESEARCH Alliance of Automobile Manufacturers 1401 Eye St. NW, Suite 900 Washington, DC 20005 Tel: (202) 326-5500 Fax: (202) 326-5598 http://www.autoalliance.org Automotive Service Association P.O. Box 929 Bedford, TX 76021 Tel: (817) 283-6205 Fax: (817) 685-0225 http://www.asashop.org

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Center for Automotive Research 1000 Victors Way, Suite 200 Ann Arbor, MI 48108 Tel: (734) 662-1287 Fax: (734) 662-5736 http://www.cargroup.org National Automobile Dealers Association 8400 Westpark Dr. McLean, VA 22120 Tel: (703) 821-7000 Fax: (703) 821-7075 http://www.nada.org National Bicycle Dealers Association 3176 Pullman St., Suite 117 Costa Mesa, CA 92626 Tel: (949) 722-6909 http://nbda.com National Marine Manufacturers Association 200 E Randolph Dr., Suite 5100 Chicago, IL 60601 Tel: (202) 737-9750 Fax: (202) 628-4716 http://www.nmma.org National Motorcycle Dealers Association P.O. Box 4800 Scottsdale, AZ 85261-4800 Tel: (800) 717-7970 Fax: (480) 860-0425 http://www.nationalmda.com

ABOUT

THE

AUTHORS

Glenda Griffin works for Sam Houston State University in Huntsville, Texas, as a serials cataloger. She has been employed in both public and academic libraries for over twenty-two years and demonstrates a commitment to continuing education and training. Glenda regularly attends libraryrelated conferences, where she finds opportunities to increase her knowledge, as well as to write and publish reports on various conference sessions. Other publishing accomplishments include an essay on being a new serialist, various book reviews, and poetry.

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Lisa Shen is the business reference librarian and an assistant professor at Sam Houston State University in Huntsville, Texas, where she provides reference assistance and in-class instruction on business and industry research for students and faculty. Her previous work experience includes donor research and account management. Lisa’s research interests include information behavior and evidencebased library practices. Her most recent publication is on student perception of library services. She is a past recipient of librarianship-related awards from McGill University, Canada, and the Special Library Association (SLA).

FURTHER

READING

Carson, Iain, and Vijay V. Vaitheeswaran. Zoom: The Global Race to Fuel the Car of the Future. New York: Twelve, 2008. Fuhs, Allen. Hybrid Vehicles and the Future of Personal Transportation. Boca Raton, Fla.: CRC Press, 2009. Goodman, J. David. “An Electric Boost for Bicyclists.” The New York Times, February 1, 2010. Hachman, Mark. “Segway Quietly Sold; Dealers Remain Optimistic.” PC, January 18, 2010. http://www.pcmag.com/article2/ 0,2817,2358173,00.asp. Herlihy, David. Bicycle: The History. New Haven, Conn.: Yale University Press, 2004. Ingrassia, Paul. Crash Course: The American Automobile Industry’s Road from Glory to Disaster. New York: Random House, 2010. Kraft, Thomas. “From High-Wheelers to HighTech: Bicycle Manufacturing Past and Present.” Techdirections, November, 2006. Levy, Efraim. Industry Survey: Autos and Auto Parts. New York: Standard & Poor’s, 2009. Nieuwenhuis, Paul, and P. E. Wells. Car Futures: Rethinking the Automotive Industry Beyond the

American Model. Cardiff, Wales: Trend Tracker, 2009. Rossi, Renzo. A History of Water Travel. Detroit: Blackbirch Press, 2005. Russ, Jonathan S. Global Motivations: Honda, Toyota, and the Drive Toward American Manufacturing. Lanham, Md.: University Press of America, 2009. Smedman, Lisa. From Boneshakers to Choppers: The Rip-Roaring History of Motorcycles. Buffalo, N.Y.: Annick Press, 2007. U.S. Bureau of Economic Analysis. “Gross Domestic Product by Industry Accounts.” March 30, 2010. http://www.bea.gov/ industry/gpotables/gpo_action.cfm?anon =501149&table_id=24759&format_type=0. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. _______. Office of Transportation and Machinery. “The Road Ahead: An Assessment of the U.S. Motor Vehicle Industry.” April, 2009. http://trade.gov/wcm/groups/public/ @trade/@mas/@man/@aai/documents/ web_content/auto_report_roadahead09.pdf. U.S. Library of Congress. “Who Invented the Automobile?” February 12, 2009. http:// www.loc.gov/rr/scitech/mysteries/auto.html. Woodsen, Mary. “Going for Green.” Popular Science 276, no. 1 (2010): 50.

Banking Industry ©Zentilia/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Finance Career Cluster: Finance Subcategory Industries: Commercial Banking; Consumer Lending; Credit Cards; Credit Unions; Mortgage and Nonmortgage Loan Brokers; Savings Institutions Related Industries: Accounting Services; Business Services; Financial Services Industry Annual Domestic Revenues: $801.49 billion USD (Federal Deposit Insurance Corporation, 2010) Annual International Revenues: $2 trillion USD (Dietz, 2009) Annual Global Revenues: $2.8 trillion USD (Dietz, 2008) NAICS Numbers: 521-522

INDUSTRY

range from millions of dollars to enable a corporation to build a new factory to a few hundred dollars with which a customer can buy a used car. Banks also provide a variety of personal and commercial investment vehicles that help people plan for retirement and build wealth.

History of the Industry Banking in its modern form originated in the city-states of Italy during the 1400’s. This innovation developed slowly, however, and when the American colonies were founded, banking was still not an established practice in England. A handful of banks operated in America during the colonial period, but these establishments were closed by the British government in the 1740’s. In order to acquire capital, farmers and businesspeople relied on complicated chains of merchant credit. As the colonial economy diversified, the need for a banking system became paramount. The first real bank in the United States was the Bank of North America, chartered in Philadelphia in 1781. Several large banks were then established in the nation’s growing cities.

DEFINITION

Summary Banks come in a variety of forms and sizes, but the basic purpose of any bank is to accept deposits and then lend that money to businesses and individuals. In the process, banks provide essential services that enable daily life and the economy to function smoothly. Checks, debit cards, and credit cards provide convenient ways for people to pay their bills and make purchases. Bank loans can 125

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The Federal Reserve building in Washington, D.C. (©iStockphoto.com)

Between 1840 and 1863, states adopted free banking laws, and the number of state banks quickly multiplied. These state banks issued their own notes, which circulated as currency. This system made business difficult, because the notes of failed banks became worthless, and notes of solvent banks were often discounted for a variety of reasons. During the Civil War, the National Bank Act of 1863 brought some order to the system by allowing national banks to issue guaranteed bank notes (called greenbacks) and taxing the notes of state banks to discourage their use. State-chartered banks of deposit continued to operate and multiplied as checks became more popular, leading to a dual system of national and state banks. During the closing decades of the century, recurring waves of bank panics, overextension of credit, and an inadequate money supply wreaked havoc with the nation’s economy. In 1913, Congress passed the Federal Reserve Act, which created a central bank with twelve branch banks (the Federal Reserve), a new cur-

rency (Federal Reserve notes), and a system for controlling the money supply by setting interest rates, buying and selling treasury bonds in the open market, and setting reserve ratios for member banks. In addition to its ability to carry out monetary policy, the Fed, as it came to be known, was responsible for enforcing federal banking regulations. The Fed brought stability and order to the nation’s banking industry but failed to prevent the Great Depression. When thousands of banks failed across the country, depositors lost their savings and the public lost confidence in the banking system. In response, Congress established the Federal Deposit Insurance Corporation (FDIC), which guaranteed deposits in member banks, even if the bank closed its doors. Initially, deposits were insured up to $2,500, but today that amount has increased to $250,000. The Glass-Steagall Act (19321933) prohibited banks from engaging in the insurance and securities businesses, which were seen as too risky. Other legislation broadened the federal government’s power to regulate credit and

Banking Industry other bank operations. All of these actions restored the public’s confidence in their local institutions and provided a solid foundation for the banking industry over the next half century. After the Great Depression, the banking industry grew along with the nation’s economy, providing the necessary credit and financial services to make the United States an industrial giant. The number of banks increased steadily, along with total assets, deposits, and number of employees. Also, new kinds of financial institutions emerged in response to consumer demand for credit and convenience. Credit unions, savings-and-loan banks, and finance companies helped make credit available so that millions could buy new cars, purchase consumer goods, and realize the American Dream of home ownership. In the 1980’s, Congress responded to the public’s call for deregulation of business by allowing savings-and-loan banks to expand their services to include checking accounts, but these banks also were allowed to engage in risky commercial loans and real estate investments. The result was the failure of more than five hundred savings-and-loan associations and the bankruptcy of the Federal Savings and Loan Insurance Corporation (FSLIC), whose obligations were transferred to the FDIC in 1989. Congress again deregulated the industry in 1999 and allowed banks to sell insurance and securities. The Industry Today There are four main types of banks. The largest category is commercial banks, which employed more than 1.8 million people in 2010. Commercial banks often are referred to as full-service banks because they provide a wide range of services for consumers and businesses. In addition to loans and deposit accounts, these banks offer currency exchange, retirement and investment options, trust administration, and even insurance. Commercial banks often provide a number of services for businesses, such as payroll and accounting. They range in size from small-town banks to the largest banking corporations in the country. Savings-and-loan banks initially were designed to do little more than accept deposits and offer consumer loans, which benefited consumers because these banks operated with less overhead than commercial banks and could therefore pay higher

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interest on deposits and charge less for loans. In 2010, savings banks employed 167,000 workers. After the savings-and-loan crisis of the 1980’s, Congress created the Office of Thrift Supervision to regulate these banks, and under its watchful eye, this segment of the banking industry has rebounded strongly. Today, savings-and-loan banks concentrate on home mortgages, with smaller segments of their business devoted to small-business and car loans. Credit unions are nonprofit, member-owned institutions, usually associated with a particular industry or even a single company. Credit unions began with the simple idea that people who had something in common, such as employment at the same company, could pool their money and loan money to each other at a lower rate than commercial banks. Since the 1970’s, credit unions have expanded their services to the point that they offer the same consumer services as commercial banks, including automated teller machines (ATMs), bill payment, credit cards, safe deposit boxes, and direct deposit. One of the most popular benefits of credit union membership is the ability to use payroll deductions for savings accounts. The Federal Reserve has twelve branch banks. The Federal Reserve functions as the nation’s central bank, which means that it is responsible for controlling the size of the money supply and carrying out monetary policy. Usually referred to as the Fed, the Federal Reserve sets key interest rates, sets reserve ratios for member banks, and conducts open market operations, all of which have the effect of expanding or contracting the money supply. In addition, the Fed plays a vital role in the payments system by clearing checks quickly and accurately. Finally, the Fed supervises member banks and enforces federal regulations to ensure that the banking system remains sound. The expansion of banking services into the securities field has brought banks under the regulatory eye of the Securities and Exchange Commission. Since 1999, commercial banks have been able to engage in investment banking, which is the process of helping companies acquire funding through stock sales or direct investment. Investment bankers also play key roles in mergers and acquisitions, which often result in huge bonuses. Investment banking is a growing source of revenue for the largest banks.

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The banking industry faced its greatest crisis money, pay bills, check their balances, or apply for since the Great Depression when the American a loan from home, work, or anywhere they have an economy entered a major recession in 2007. ForeInternet connection. Online banking got its start closures on homes began to skyrocket as workers in 1995, and estimates were that 55 million families who had lost their jobs or suffered reductions in inwould bank on the Internet in 2010. The main adcome could no longer make their mortgage payvantage for customers is convenience. For people ments. The problem was compounded by the pracwho would rather not visit the bank, e-banks such tice on the part of many lenders and mortgage as Virtual Bank and Giant Bank offer a completely brokers, during the early 2000’s, of lending to online experience, and because they do not have underqualified borrowers based on the equity in the overhead expenses of traditional brick-andthe homes, which had zoomed upward starting in mortar banks, Internet banks can often offer the late 1990’s. When that bubble burst, home higher interest rates on checking and savings acowners’ equity plunged: Home prices dropped, counts, as well as lower fees. The disadvantages of causing many borrowers to owe more than their Internet banks are that they do not own ATM mahomes were worth. Banks also faced having to forechines, so users must pay a fee each time they make close on new construction that could not be sold. a withdrawal using another bank’s machine, and Business failures added to the problem. Banks that making deposits must be done through the mail or had made too many risky loans or banks in areas through a balance transfer. hard hit by the recession closed their doors and were either bought out by stronger banks or taken over by the FDIC. INDUSTRY MARKET Mergers and consolidations were a trend in the SEGMENTS banking industry even before 2007, but bank failures of the recession accelerated the trend. Between Banks can range in size from small-town, locally 1990 and 2000, the number of banks dropped from owned operations to regional banks that have 15,162 to 9,904, and—although the number of branch offices in several states to giant corporabranch offices increased from 69,216 to 80,100 in tions that do business across the country and 2005—the total number of banks continued to dearound the world. The following section provides a cline with the recession. Consolidation also meant detailed breakdown of each segment. that commercial banks increased in size and complexity. The “megabanks” offer credit cards, insurance policies, and brokerage services. Technology has changed the way that banks operate and the way that they interact with customers. ATMs and direct deposit (the practice by many employers of depositing employees’ paychecks directly into their accounts) eliminated the need for customers to actually visit the bank during business hours to withdraw money from their accounts or to make a deposit. Online banking has added Many bank customers use automated teller machines like this one. (©Dreamsanother level of convenience. time.com) Customers can now transfer

Banking Industry Small Businesses Small banks, usually referred to as community banks, typically have less than $1 billion in assets. Although small in size, community banks often offer consumers most of the services of much larger institutions and can even have branch offices, even though they serve a small town or a portion of a larger town or city. Potential Annual Earnings Scale. Salaries for bank officers can vary according to location and profitability, but bank managers at community banks typically earn between $46,000 and $96,000 per year. Clientele Interaction. Community banks thrive on close relationships with their customers, especially if they face competition from other community banks. Tellers and customer service representatives see the same customers regularly and get to know them much better than is possible in a larger bank. Customers expect and generally receive a greater degree of personal service than they would get from a larger bank. Loan officers and bank managers also have the opportunity to build relationships with clients and to interact with customers. Small banks often strive to build close links to the communities they serve through service projects, sponsorships, and other charitable activities. The manager of a community bank has the opportunity to get involved in every aspect of the business, and most employees must be able to take on multiple roles. One of the features of community banks is relationship lending, which means that loan decisions for small farms and businesses are based on a personal relationship of mutual trust between the bank and borrower as much as they are on credit scores or other objective criteria. Community bankers have an informational advantage over larger banks because they know the needs of their communities and the reputations of their clients. Amenities, Atmosphere, and Physical Grounds. Traditional banks offer comfortable, and sometimes elegant, spaces where customer interactions take place. Marble floors and columns, expensive wood paneling, and plush seating have long been the norm. These spaces are designed to make customers feel that the bank is successful and financially stable and that their money is safe. Bank officers usually enjoy well-appointed offices for the same reason. However, many bank employees, es-

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pecially those involved in the numerous bookkeeping tasks that take place in the back offices, spend long periods of time working in confined spaces behind counters or in cubicles. In keeping with the nature of the work, the atmosphere in banks is generally quiet and subdued. Bank employees are expected to wear business attire, although in the past decade casual dress—such as a polo shirt with the bank’s logo—has become more common. The physical grounds of a community bank typically include a parking lot for customers, along with flower beds and other landscaping in keeping with the bank’s image. In a larger town or city, a small bank might be located as a storefront alongside other businesses. Typical Number of Employees. The number of employees can vary widely depending on the number of branches and the size of the bank. A small bank operating from a single location can have as few as ten employees, while a community bank with several branches can employ as many as one hundred people. Most employees are full time, but many banks are increasing their hours of operation by hiring part-time workers. Traditional Geographic Locations. Community banks are typically located in small towns or may serve a portion of a larger town or city. Older banks typically were located in the center of town, where customers came to shop or take care of other business. When grocery and department stores moved to the outskirts of town, banks followed. Newer banks tend to be built along major roads or in shopping centers in an effort to maximize customer convenience. Small branch offices can even be located in grocery or department stores such as Walmart. Pros of Working for a Small Bank. Employees of small banks enjoy the personal service they are able to give to customers whom they see often. Also, because the number of employees is small, many workers have to handle multiple tasks during the day, which makes their jobs more interesting and challenging. Bank officers can experience the satisfaction of helping small businesses get started and grow. The relationships among officers and employees in a small bank often is close, with everyone working together and sharing job responsibilities. An additional positive benefit of working at a community bank is that these institutions generally promote from within. Employees who start out as tellers or operations personnel

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can advance to management through education, training, and experience. Cons of Working for a Small Bank. A drawback to working in a small community bank is that salaries are not as high as at larger banks. Similarly, opportunities for advancement may be limited, because there are not as many officers and levels of management as larger banks employ. Some employees would prefer to specialize in one specific area of banking, which they may not be able to do at a community bank. For example, an employee who wants to work in investment banking or currency exchange may find little need for this expertise in a small town. Costs Payroll and Benefits: Payroll is a major expense in the banking industry, which is still laborintensive despite advances in computer technology. Because of this, competition from other banks puts downward pressure on wages. On the plus side, even small banks offer comprehensive benefits packages including health, dental, life, and disability insurance; vacation and sick leave; and retirement plans. Banks are closed on major holidays, but vacation time must be used to take more time off than the holiday itself. Supplies: Banks require a variety of items during the course of business, including a wide range of office and paper supplies, communications equipment, and computers. External Services: Small banks contract for a range of services, including landscaping and grounds maintenance, cleaning services, and external auditing. A small bank also may prefer to contract for computer maintenance and network services instead of hiring its own specialists. Small banks often contract building maintenance services on an as-needed basis. Utilities: Banks generally require standard utility services, including electricity, water, sewer, and natural gas (if available), along with communication services such as telephone and Internet connectivity. Taxes: Banks are required to pay local, state, and federal income taxes, along with property taxes. Midsize Businesses Midsize banks often are referred to as regional banks because they have numerous branches,

some of which are located in several states. Midsize banks have assets in excess of $1 billion, but less than the assets of the smallest of the largest twentyfive banks (about $40 billion). Regional banks typically offer more services than community banks and are able to make larger commercial loans or meet the needs of wealthier clients. Potential Annual Earnings Scale. Salaries for bank officers can vary according to location and profitability, but bank managers at midsize banks typically earn between $53,000 and $107,000 per year. The broad range of bank sizes within this sector means that salaries for top officers of the larger banks can be much higher. Clientele Interaction. Interaction with customers may not be much different in a branch of a regional bank from that at a small bank. However, policies and procedures usually are determined at the bank’s headquarters, so employees may feel less leeway in dealing with customers than they would at a smaller bank. Regional banks are able to offer their customers a wider range of services than community banks, and personal financial advisers often are called on to assist with retirement and asset planning, investment products, and insurance products. Lending is a major part of the business at regional banks, but it can be a different process than at the community bank. Loan officers for regional banks are more likely to rely on objective criteria such as credit scores and income rather than personal reputation or standing in the community. Loan officers in the commercial department are focused on making large loans to businesses rather than smaller loans to small companies and farms. Bankers are aware that customers may find larger banks impersonal and have developed “relationship” banking as a way to bring banks closer to their customers. Umpqua Bank in Northern California has cross-trained bank employees in multiple tasks, so that tellers can take mortgage applications or provide other services. One branch hosts community events such as film nights and yoga lessons in its lobby. Such promotions are designed to enhance customer service and create a community bank atmosphere. Regional banks may make special provisions for wealthy clients, such as financial advice or other services. Amenities, Atmosphere, and Physical Grounds. Regional bank headquarters are often housed in modern buildings, which have well-

Banking Industry appointed public areas designed to instill in customers a sense that the bank is successful and stable. Bank officers meet with clients in offices and conference rooms that are designed to convey the same impression. However, the operations personnel who are responsible for transactions behind the scenes tend to work in confined spaces for long periods of time. A small army of bookkeepers, clerks, and data entry specialists is responsible for thousands of transactions that occur daily. The atmosphere at regional banks reflects this difference between public and private areas. Public areas tend to be quiet and subdued, while the back office operations can be hectic and fastpaced, because of the sheer volume of work that needs to be done daily. Amenities can be greater than those offered at community banks, such as an in-house gym or other facilities for employee use. Typical Number of Employees. Staff size can vary greatly according to the size of the bank. Regional banks typically have hundreds of employees, but the larger banks can employ thousands. Traditional Geographic Locations. The headquarters of regional banks tend to be located in cities, where they can take advantage of a larger labor pool to draw from, airport facilities for travel, and a greater range of external services. Some regional banks are located in the downtown business district, but many have located their headquarters in suburban areas close to interstate highways. Regional banks also have numerous branch banks of various sizes than can be located in small towns or grocery stores. For employees of branches, the workplace may not be much different from working for a community bank. Pros of Working for a Midsize Bank. Employees of regional banks enjoy a greater variety of job opportunities, as well as multiple levels of advancement. Midsize banks may be able to offer employees higher pay and better benefits, although this is not always the case. People who prefer to specialize in one aspect of banking, such as currency exchange, would find greater opportunity to do so than in a community bank. Cons of Working for a Midsize Bank. Many employees may feel that they do not have close relationships with their customers like they would if they worked in a community bank. Also, policy decisions often are made by corporate officers at bank headquarters far removed from the branch

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banks. Although there are opportunities for advancement, a promotion may require a move to a different town or even a different state. Costs Payroll and Benefits: Employee salaries are a major expense for regional banks. Because of their size and the diversity of their operations, regional banks may offer part-time positions. Midsize banks offer comprehensive benefits packages including health, dental, life, and disability insurance; vacation and sick leave; and retirement plans. Supplies: Banks require a variety of items during the course of business, including a wide range of office supplies, computer equipment, and postage. External Services: Banks contract for a range of services, including landscaping and grounds maintenance, cleaning services, and external auditing. Regional banks often contract building maintenance services on an as-needed basis for their branch operations. Utilities: Banks generally require the standard utility services, including electricity, water, sewer, and natural gas (if available), along with communication services such as telephone and Internet connectivity. Taxes: Banks are required to pay local, state, and federal income taxes, along with property taxes. They also are responsible for reporting certain interest and investment income and other account activity to the Internal Revenue Service. Large Businesses Large banks are defined as the largest twentyfive banks in the country, and most operate on a national and even international scale. They provide the widest range of services to consumers and businesses, including credit cards, investment banking, and trust administration. Potential Annual Earnings Scale. Large banks have multiple levels of management, with multiple levels of salaries and bonuses. Salaries for top executives in this category can reach several million dollars. Clientele Interaction. Client interaction for large banks depends on the type of customer. Even the largest banks still have traditional tellers who deal with ordinary transactions. Despite having

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Banking Industry

thousands of customers, employees at some branches may see the same customer often enough to develop a close relationship. Large banks tend to forgo the small farm and business market in favor of large loans to big companies and corporations, which are more profitable. Also, large banks can draw on greater capital resources to help fund large ventures. Investment banking has become an increasingly important sector of large bank operations. Credit cards and debit cards are issued by most banks. (©Alexander Podshivalov/ Large banks are making efDreamstime.com) forts to develop “relationship” banking, which means making customers feel as if they were New York City. The exceptions are Bank of Amerdealing with a community bank rather than one of ica (Charlotte, North Carolina), Wells Fargo (San the largest banks in the country. Since all banks ofFrancisco, California), and Barclays (Wilmington, fer basically the same products, customer service is Delaware). The rest of the top twenty-five banks are an important area in which banks compete with headquartered in cities across the country. In addione another. For example, Chemical Bank in New tion to their headquarters, large banks have large York City has developed mobile ATMs, which can regional offices and thousands of branches across be hauled around to office buildings for the convethe country. nience of customers. Pros of Working for a Large Bank. Large Amenities, Atmosphere, and Physical banks offer the greatest range of services and the Grounds. The headquarters of large banks house greatest variety of jobs. With multiple levels of manthousands of workers and offer amenities such as agement, several subsidiaries, and thousands of gyms, restaurants, parking, and even retail shops. branches, opportunities abound for specialization The atmosphere in a large bank is similar to other and advancement. Large banks offer the highest banks. The purpose of public space is to impress salaries for most job descriptions in banking, alupon customers the solidity and success of the though entry-level and less-skilled positions may bank, and therefore these spaces are dignified and pay the industry average. In some sectors, espewell-appointed. However, the private spaces where cially investment banking, top merger specialists operations take place are composed of cubicles can earn huge bonuses that put their salaries into and confined spaces. Since the headquarters of the seven-figure range. Executives at large banks large banks often are located in the central busialso earn million-dollar salaries. ness districts of large cities, they have little or no Some employees enjoy sharing in the recognigreen space, but because of these locations, worktion and prestige that comes from working for one ers often enjoy access to a wide variety of restauof the largest banks in the country. Large banks rants and shopping on their breaks. also offer extensive training programs to help their Typical Number of Employees. Large banks employees prepare for new jobs or promotions and have at least 100,000 employees. The largest bank, to keep up with the latest developments in the inBank of America, employs more than 284,000 dustry. people. Cons of Working for a Large Bank. Working Traditional Geographic Locations. The headquarters of seven of the ten largest banks are in for a large bank can be an impersonal experience.

Banking Industry There is a large gap between management and other employees. Many employees, from call-center workers to loan processors, are expected to meet production or sales goals, which can make the workplace a stressful environment. Plus, with tens of thousands (or hundreds of thousands) of employees working for the same company, it might to difficult for an individual to feel that he or she is making a contribution. For those looking to climb the corporate ladder, it might be harder to do so at a large bank than it appears. Although there are more opportunities for advancement in a large bank than in smaller banks, there also is more competition. Large banks also are less likely to hire from within than smaller banks. Advancement might require a relocation to a distant city. Large banks also are not immune to failure or consolidation. During the 2007-2009 financial crisis, several of the largest banks failed and were taken over by other banks. These transitions can be stressful experiences for employees, because they have to learn new systems and policies. Costs Payroll and Benefits: Payroll is a major expense in the banking industry, which is still labor-intensive despite advances in computer technology. Large banks offer comprehensive benefits packages including health, dental, life, and disability insurance; vacation and sick leave; and retirement plans. Large banks also offer benefits that are not found in smaller banks. For instance, Citizens Bank offers its employees an $8,000 forgivable loan to buy a home in a distressed community. Bank of America offers its employees an extensive discount program for hundreds and products and services from a variety of companies. Supplies: Banks require a variety of items during the course of business, including a wide range of office supplies, communications equipment, computers, printers, and copiers. External Services: Because large banks operate on a huge scale, they are able to hire more specialized workers than smaller banks, who bring in outside contractors. Still, large banks require a variety of external services such as package delivery, auditing, and executive search services. Utilities: Banks generally require the standard utility services, including electricity, water, sewer,

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and natural gas (if available), along with communication services such as telephone and Internet connectivity. Taxes: Banks are required to pay local, state, and federal income taxes, along with property taxes. Banks also are required to report certain client earnings and account statuses to the Internal Revenue Service.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The basic organizational structure and job roles within a bank are basically the same regardless of its size. Larger banks offer the full range of services available and employ numerous workers in specialized job roles, while employees in smaller banks often have to take on multiple duties during the course of their work. The following umbrella categories apply to the organizational structure of small, midsize, and large banks: ■ ■ ■ ■ ■ ■ ■ ■

Bank Management Customer Service Tellers Lending Facilities and Security Information Technology Operations Human Resources

Bank Management Managing a bank is usually a responsibility shared by several people. The bank manager or president has overall command of all aspects of running the bank and is responsible for the bank’s profitability. Depending on the size of the bank, the next level of management can be broken into numerous areas of responsibility, including operations, lending, and security. Each of these officers oversees the operations of a department and is responsible for carrying out the bank’s policies. Bank officers usually have a college degree, along with specialized training in various aspects of banking. Because of their education and responsibilities, they earn higher salaries than other bank employees.

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Large banks have specialized managers who are in charge of departments that handle trust administration, investment banking, insurance, international finance, or securities management. These positions require specialized training and experience. Branch managers are responsible for running a branch office and generally are in charge of motivating and managing the branch’s employees, customer service, and business development. Branch managers deal with all aspects of running their operations, from security to resolving the problems of unhappy customers. A large branch may have its own set of officers who are responsible for areas of lending, operations, or security for the branch. Occupations in bank management include the following: ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Operations Officer Lending Officer Investment Banking Officer Business Relations Director Branch Manager Trust Officer

customer service employees often are specialized. One employee might specialize in Christmas Club accounts, while another might deal exclusively with checking or savings accounts. Customer service workers often work at desks in the bank lobby. In large banks, customer service workers are needed to answer the hundreds of phone calls that the bank receives each day. Most banks have automated services for basic information such as account balances, but some customers want to talk to a real person. Customers who are experiencing problems with their accounts or wish to lodge a complaint often will call because it is more convenient than going into the bank. Phone representatives have to be just as knowledgeable as their counterparts in the lobby, and just as ready to resolve customer problems. Occupations within the customer service department include the following: ■ ■ ■ ■ ■

Customer Service Representative Call Center Specialist Customer Service Supervisor New Accounts Representative Accounts Specialist

Tellers Customer Service Tellers are the public face of the company, beBecause banks sell basically the same product, cause they deal directly with customers by hanone of the ways that they can compete with other dling transactions either at the teller window or banks is customer service. Banks often promote their customer service emphasis in their marketing campaigns and slogans. Customer service employees often are the first people whom potential new customers encounter at the bank, so it is important that they be friendly and well versed in the bank’s products. They must be able to answer customer questions and to give advice on a variety of account options. In small banks, customer service representatives may perform a variety of tasks throughout the day, from opening and closing accounts to resolving customer complaints. In larger banks, A bank teller counts money. (©Nancy Louie/iStockphoto.com)

Banking Industry OCCUPATION

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PROFILE

Bank Teller Considerations

Qualifications

Description

Handles basic customer transactions such as making deposits, cashing checks, and preparing cashier’s checks, as well as balancing cash drawers at end of shift.

Career cluster

Finance

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

CSE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

the drive-up window. Aside from deposits and withdrawals, tellers also exchange currency, provide cashiers’ checks and travelers’ checks, receive loan payments, and resolve many problems that customers have. In a large bank, tellers and customer service representatives may have specialized jobs. For instance, they may deal exclusively with currency exchange, commercial accounts, or children’s accounts. In small banks, these workers may have to handle any customer transaction. Tellers generally must have completed high school and have good math and communications skills. Tellers also must be able to maintain confidentiality and be comfortable handling large amounts of currency. Traditionally, tellers have been trained on the job, but bank services are becoming more complex, and many institutions are realizing the value of continued education for

their teller staff in order for them to provide better customer service and to market the bank’s products to their customers. Despite the increased use of online banking, the need for tellers continues to increase. Regional and large banks are opening new branches in grocery stores and department stores, and expanding their business hours as well. Additionally, tellers often transfer to other positions within the bank after a few years of experience. A primary reason is that tellers earn an average of $11.53 an hour (2009), while other jobs within the bank pay more. Occupations for tellers include the following: ■ ■ ■ ■ ■

Head Teller Bank Teller Cashier Roving Teller Teller Coordinator

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Lending One of the primary functions of banks is to lend money. Banks make loans for a host of items and in a wide range of amounts and terms. Corporations might borrow millions of dollars, a growing family might take out a mortgage loan to buy a new home, or a teenager might need several hundred dollars for a used car or thousands of dollars for college. Loan officers handle all of these transactions. In small banks, loan officers might have to arrange loans of all types, but in larger banks loan officers are more specialized. Loan officers can assist customers with filling out loan applications and getting the loan process started. A loan officer may have the authority to approve a loan or might make a recommendation to a loan committee. Loan officers must be good salespeople, because their income partially depends on commissions from the loans they generate. For that reason, commercial loan officers tend to earn more than home mortgage loan officers. In 2009, the average salary for all loan officers was $54,000. Loan officers often have to work outside the office, to seek out new customers or to meet with clients who cannot come to the bank during regular business hours. They sometimes need to check out properties themselves in order to make a loan decision. Loan officers also make determinations about car loans and other types of consumer lending. These loans are less complicated than mortgage or commercial loans, but still follow the same processes of application and approval. Occupations within the lending department include the following: ■ ■ ■ ■ ■

Loan Officer Mortgage Loan Officer Commercial Loan Officer Agricultural Loan Officer Consumer Loan Specialist

Facilities and Security Facilities maintenance vary according to the size of the building. Small banks or branches use external contractors to handle their maintenance needs, but banks that are housed in large buildings will have their own facilities managers to make sure that the electrical, plumbing, and other systems such as air-conditioning are working properly.

Maintenance personnel are responsible for everything from changing lightbulbs to oiling squeaky doors. Large banks may employ specialized maintenance personnel such as electricians, carpenters, and plumbers. Security is an especially important issue for banks, because maintaining customers depends on a reputation as a safe place for people to deposit their money. Because the main business of banks is money, they are careful to protect themselves against losses. Security work can range from armed guards who are a visible symbol of the bank’s security effort to personnel who spend their day monitoring the bank’s video surveillance. Occupations within the security and facilities departments include the following: ■ ■ ■ ■ ■ ■

Facility Manager Electrician Plumber General Maintenance and Repair Worker Armed Guard Security Specialist

Information Technology Because banks rely heavily on computer technology, a variety of specialists are needed to keep the business running smoothly. Technicians are needed to install and maintain computer equipment, including monitors, cables, printers, and processors. Computer equipment and software constantly are upgraded to keep up with the latest technology. Network technicians ensure the smooth operation of the computer network within a bank as well as the bank’s branches, which for the largest banks can number in the thousands. Software specialists work with the software’s publisher to make sure that the bank’s accounting programs run smoothly, install updates, and help train employees. Web site developers create and maintain sites that banks use for marketing and online banking. Network and Internet security increasingly are vital functions for banks because transactions of all kinds now are done electronically. Banks work hard to minimize the threat from computer viruses, which can shut down their operations, and also from electronic theft, which is a threat to the bank’s reputation as much as it is to customers’ accounts.

Banking Industry

Online banking is preferred by many customers because of its convenience. (©Dreamstime.com)

Occupations within the information technology department include the following:

Credit analysts assist loan officers in determining whether or not to approve loans. Loan processors make sure that the necessary paperwork has been completed and all documents submitted. Banks also need specialists to deal with loans that are in default. Collections workers attempt to collect payment from borrowers or work out payment plans. Since the housing crisis began in 2007, banks have faced an escalating number of foreclosures. Foreclosure specialists see this process through the court system, while property specialists are needed to look after and sell the foreclosed properties. As banks expand into new service areas, new positions are being created in the fields of investment banking, securities, and insurance. Clerks and specialized workers are needed in all of these areas to process documents, enter data into computers, and perform a host of other administrative functions. Banks also employ a large number of secretaries to assist bank officers. Secretaries are responsible for a variety of tasks throughout the day, including making appointments, taking dictation, and word processing. Occupations within the operations department include the following: ■

■ ■ ■ ■ ■

Web Developer Online Banking Specialist Computer Technician Network Administrator Computer Security Specialist

■ ■ ■ ■ ■ ■

Operations Operations is the real engine of the banking industry, but it remains hidden from public view. The actions that take place in the public area of the bank—checks being deposited, loan applications being filled out, accounts being opened—are only the tip of the iceberg. Thousands of transactions occur each day, and all must be accounted for rapidly and accurately. Checks and deposit slips must be run through machines. Interest must be calculated and payments recorded. A variety of data must be entered into computers. Individual accounts and the bank’s own accounts must be reconciled. All of these operations take place in accordance with federal and state regulations. Loan processing requires its own specialists.

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■ ■ ■

Bank Courier Transit Clerk Bookkeeper/Auditor Credit Analyst Accounting Clerk Interest Clerk Mortgage Clerk Electronic Reader-Sorter Operator Check Encoder Proof Machine Operator

Human Resources The human resources department is responsible for hiring and training new employees, administering benefits such as insurance and retirement, and processing payroll. In most banks, the human resources department is responsible for maintaining the employee handbook and setting policies for sick leave, vacation time, and holidays. The human resources department also maintains records on all employees (including evaluations) and makes sure that the bank complies with federal and state employment regulations.

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Human resources managers usually have college degrees and experience in the field. They must be knowledgeable about salaries and benefits trends in the industry and be in close communication with other managers to be aware of the bank’s needs. Human resources managers must also be well versed in employment law so as to keep the bank in compliance. A number of administrative clerks assist the manager with record-keeping. The human resources department usually is responsible for training new employees so that they are aware of company policies and procedures. Often, the department is responsible for continuing education for current employees as well. Banks, especially the larger ones, have extensive education programs so that their employees can keep abreast of the latest developments in banking technology and practices, as well as federal and state banking regulations. Occupations within the human resources department include the following: ■ ■ ■ ■ ■ ■ ■

Human Resources Manager Personnel Manager Salary Specialist Payroll Clerk Benefits Specialist Training Specialist Administrative Assistant

INDUSTRY

OUTLOOK

Overview The outlook for this industry appears to be guardedly bright. The global economic crisis that began in 2007 took a huge toll. Washington Mutual’s 2008 demise was the largest bank failure on record to that time, and during the next two years almost three hundred banks closed their doors. Of course, they were bought out by stronger banks and depositors did not lose their money. However, more than 100,000 jobs were lost as banks laid off workers to save money. The entire economy slumped as credit dried up and banks were left with more foreclosed homes than they could handle. The federal government stepped in and “bailed out” several of the largest banks in the country, including Bank of America. Despite these major struggles, as of 2010, the banking industry ap-

peared to be recovering as earnings began to climb and the banking system restabilized. The financial crisis has, however, left some major changes in the industry in its wake. The banking crisis accelerated a trend toward consolidation. Estimates are that the number of banks could decline from the 2010 figure of eight thousand to five thousand over the next ten years. On the plus side, consolidation means that weaker banks have been and will be driven from the market, while stronger banks will prosper and grow. These successful banks are less likely to overinvest in risky loans and will provide stability to the industry. The downside of consolidation is the loss of capital to investors in failed banks. Some analysts are concerned about the growth of “megabanks” that will dominate the market. The market share of the three largest banks—J. P. Morgan Chase, Bank of America, and Wells Fargo—increased from 21 percent in 2006 to 33 percent in 2010. The fear is that consumers will lose as these megabanks lower interest rates on savings and raise fees. However, other analysts feel that competition will continue to force these large banks to keep their rates competitive. Another hallmark of banking today is expansion of services. This trend is likely to continue as banks become financial supermarkets that offer every financial service that consumers and businesses might need. Banks are expanding services in part to seek out new sources of revenue, and in part to draw customers from other institutions. Despite these trends that seem to favor large banks, small institutions such as community banks and credit unions appear to be holding their own because of the high level of personal service they offer and their attention to small businesses and farms. However, growth in these sectors of the industry appears to be limited as they compete with larger banks. Technology continues to change the way customers interact with their banks. Mobile banking, the latest customer interface, allows customers to do their banking from their mobile phones or wireless devices such as iPads. Some banks have begun trial programs that allow customers to make deposits by e-mailing images of checks. Loan applications are available online, and companies such as Quicken offer a whole suite of loan products entirely on the Internet. However, just as online bank-

Banking Industry ing has failed to completely replace face-to-face transactions with tellers, these new technologies also are unlikely to fully replace the old system. Customers like convenience but also prefer their banking experience to be a personal one. Banks are a vital part of the economy and everyday life. The banking industry has proven itself to be flexible and adaptable. Banking services will continue to be in high demand for consumers and businesses because, as the old saying goes, “Everyone needs a bank.” Employment Advantages The prospects for banking employment in the future appear to be bright, despite the recent turmoil in the industry. According to the U.S. Department of Labor, the banking industry should experience 8 percent job growth from 2008 to 2018. Part of this growth is expected to come from the opening of new branches as banks compete for customers. A second factor driving job growth is deregulation. As banks are allowed to provide more services, they will need new employees to sell and manage new product lines. The aging of the population also should drive job growth. Retirees will need assistance with finan-

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cial planning as they roll over or begin withdrawing from their 401(k)s or other retirement accounts. Older customers also tend to make more bank visits than younger customers. All of these factors mean that despite the increasing use of technology, banks will continue to hire tellers and administrative and operations workers to meet the needs of their customers. An additional factor keeping the prospect of employment bright is that despite the extensive use of computer technology, administrative, operational, and customer service personnel still are needed to take care of customer needs. The fact that Internet banking has not replaced the brickand-mortar banks means that banking is still a business based on personal interaction.

Annual Earnings Earnings in the banking industry dropped sharply because of the 2007-2009 recession, the accompanying housing crisis, and related economic fallout. Many banks experienced a wave of foreclosures as home prices fell and unemployment rose. They have often had to sell these properties at a loss. Defaults on other types of loans also contributed to banking losses. The credit crisis meant that banks were making fewer new loans, traditionally their main source of income. Additionally, interest rates PROJECTED EMPLOYMENT fell to historic lows, further reducFOR SELECTED OCCUPATIONS ing revenue from new loans. According to the FDIC, net income for Finance and Insurance Industry commercial banks reached a peak in 2005, when banks earned a toEmployment tal of $113.9 billion. In 2007, that number slid to $97 billion, then 2009 Projected 2018 Occupation plummeted to $10 billion in 2009. 99,860 117,300 Accountants and auditors To help combat these losses, banks have sought new sources of reve314,540 372,800 Insurance sales agents nue, such as increased fees and new 271,130 314,000 Loan officers services. The financial crisis was global in 255,370 314,000 Securities, commodities, and scope, with similar problems affectfinancial services sales agents ing the banking sector around the 559,870 620,300 Tellers world. However, prospects for longterm growth appear to be bright. Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Researchers at McKinsey and ComOccupational Employment Statistics and Employment pany, for example, predicted that Projections Program. the global banking industry’s revenue and earnings would double by

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Banking Industry

2016. Lessons learned and the disappearance of weaker banks from the market will strengthen the industry for the future.

RELATED RESOURCES FOR FURTHER RESEARCH American Bankers Association 1120 Connecticut Ave. NW Washington, DC 20036 Tel: (800) 226-5377 http://www.aba.com Credit Union National Association 601 Pennsylvania Ave. NW, South Bldg. Washington, DC 20004-4454 Tel: (202) 638-5777 Fax: (202) 638-7734 http://www.cuna.org Independent Community Bankers of America 1615 L St. NW, Suite 900 Washington, DC 20036 Tel: (800) 422-8439 Fax: (202) 659-3604 http://www.icba.org Mortgage Bankers Association 1717 Rhode Island Ave. NW, Suite 400 Washington, DC 20036 Tel: (202) 557-2700 http://www.mortgagebankers.org National Bankers Association 1513 P St. NW Washington, DC 20005 Tel: (202) 588-5432 Fax: (202) 588-5443 http://nationalbankers.org

ABOUT

THE

AUTHOR

Robert E. McFarland graduated from West Georgia College in 1989 and earned his M.A. in his-

tory from the University of Georgia and his Ph.D. in history from the University of Alabama. He has taught at North Georgia College, Berry College, and Reinhardt University. He is the owner of Southern Historical Consultants, which works with businesses to develop, preserve, and market their historical heritage. He has published numerous articles on a wide variety of historical and business subjects.

FURTHER

READING

Careers-in-Finance.com. “Commercial Banking.” http://careers-in-finance.com/cbsal.htm. Dietz, Miklos, Robert Reibestein, and Cornelius Walter. “What’s in Store for Global Banking.” The McKinsey Quarterly, January, 2008. Dilley, Deborah. Essentials of Banking. New York: Wiley, 2008. Foster, John Bellamy, and Fred Magdoff. The Great Financial Crisis: Causes and Consequences. New York: Monthly Review Press, 2009. Hanc, George. “The Future of Banking in America: Summary and Conclusions.” FDIC Banking Review 16, no. 2 (2004): 1-28. Heffernan, Shelagh. Modern Banking. New York: Wiley, 2005. King, Brett. Bank 2.0: How Customer Behavior and Technology Will Change the Future of Financial Services. New York: Marshall Cavendish Reference, 2010. Paradis, Adrian. Opportunities in Banking Careers. Rev. ed. New York: Contemporary, 2000. Ring, Trudy. Careers in Finance. New York: McGraw-Hill, 2004. Sumichrast, Michael, and Martin Sumichrast. Opportunities in Financial Careers. New York: VGM Career Books, 2004. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

Batteries and Fuel Cells Industry ©Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Disposable Battery Manufacturing; Electrochemical Generator Manufacturing; Fuel Cell Manufacturing; Primary Battery Manufacturing; Rechargeable Battery Manufacturing; Storage Battery Manufacturing Related Industries: Alternative Power Industry; Automobiles and Personal Vehicles Industry; Chemicals Industry; Computer Hardware and Peripherals Industry; Electrical and Gas Appliances Industry; Electrical Power Industry; Scientific, Medical, and Health Equipment and Supplies Industry Annual Domestic Revenues: Battery and fuel cell material industry: $4.9 billion USD (Freedonia, 2009); fuel cell industry: $266 million (PriceWaterhouseCoopers, 2006) Annual International Revenues: Fuel cell industry: $304 million USD (Freedonia, 2009, estimate) Annual Global Revenues: Fuel cell industry: $570 million USD (Freedonia, 2009, estimate) NAICS Numbers: 33591, 334413, 335999

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DEFINITION

Summary A battery, or electrochemical power source, is a device in which the energy released in a chemical reaction is directly converted into electricity. Batteries can act either as portable sources of electric power or as an apparatuses for storing electricity from an external source. Primary batteries are not rechargeable, whereas secondary batteries are. Small batteries can be used in such household devices as smoke alarms, remote controls, and flashlights, and large batteries can be used in automobiles, submarines, and aircraft. A fuel cell is a device that, like a battery, converts the chemical energy of reactants into direct current electricity. Unlike a battery, however, fuel cells store reactants (or fuel) outside their electrodes; the reactants are fed to them only when electric power generation is needed. Fuel cells have a variety of applications, from small appliances to electric vehicles to large grids associated with utility power plants. History of the Industry Although some scholars trace the origin of the battery to a two-thousand-year-old device unearthed in a village near Baghdad, this

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Batteries and Fuel Cells Industry

Small button cell batteries power many devices. (©Dreamstime.com)

copper-and-iron contraption in a terra-cotta jar had no lasting influence, and most scholars begin their treatment of the history of the battery with the work of Luigi Galvani and Alessandro Volta in the late eighteenth and early nineteenth centuries. Galvani, an anatomist, conducted experiments on frog legs, beginning a development that has continued to the present: During the latter decades of the eighteenth century, he noticed that an electric machine could make frog muscles twitch, but more important, he found that the leg muscles jerked whenever they were in contact with two dissimilar metals. He erroneously attributed this behavior to “animal electricity” and published his experimental results and interpretations in 1791. Galvani’s friend Volta, a physicist, read about these experiments and went beyond them, discovering that two different metals interconnected by a moist, salty intermediary produced an electric current. Abandoning bowls of salt solution that he had used to make his initial discovery, Volta piled copper and zinc discs interspersed with salt-solutionmoistened cardboard to create a “Voltaic pile,” the first modern electric battery. Volta misinterpreted the cause of the current as “contact tension.” The source is now known to be chemical reactions. Indeed, chemists made excellent early use of Voltaic piles in decomposing water into hydrogen and oxygen, as well as in discovering such new elements as potassium and sodium. Sodium was discovered by the English chemist Humphry Davy, who employed a battery with more than 250 metallic discs

and also discovered the elements barium, strontium, calcium, and magnesium. Other scientists soon improved Volta’s battery. For example, William Cruickshank, an Englishman, solved the problem caused by leaking salt solution in the vertical column by arranging the components horizontally in a box, the so-called trough battery. Another problem that shortened Voltaic battery life was the formation of hydrogen bubbles on the copper plate. John F. Daniell, a British chemist, solved this problem in 1820 by creating a new electrochemical device, named the Daniell cell in his honor. At the bottom of a wide-mouthed jar, he placed a copper plate, and he suspended above it a porous earthenware cup that contained a zinc electrode shaped like a crow’s foot. He poured a saturated copper sulfate solution into the jar and a zinc sulfate solution into the cup. This Daniell cell was superior to the Voltaic cell as a source of longer and more reliable current and became widely used in the new telegraph industry. The fuel cell owes its theoretical origin to Christian F. Schönbein, a German Swiss chemist who formulated its basic principles, but credit for the first practical fuel cell belongs to William Robert Grove, a Welsh barrister and amateur physicist who, in the late 1830’s, found that he could generate electricity by reversing the electrolysis of water (the resulting “Grove cell” was not named the “fuel cell” until 1889). Grove situated the ends of two platinum electrodes in a container of sulfuric acid, with the other ends connected to sealed containers of oxygen and hydrogen (along with some water). In what he called his “gas battery,” hydrogen combined with oxygen to form water and an electric current. Although the Grove cell produced higher current and voltage than the Daniell cell and saw some use in telegraphy, it also generated poisonous fumes and made use of expensive platinum. Consequently, it was replaced by superior rechargeable batteries, such as the lead-acid cell and the gravity cell (a variant of the Daniell cell). Before the lead-acid cell, all batteries died with the cessation of their chemical reactions. In 1859, Gaston Planté, a French physics teacher, devised a cell consisting of a positive lead electrode (an anode) and a negative lead oxide electrode (a cathode) immersed in sulfuric acid. As in previous cells, chemical reactions produced an electric current, but in this cell these chemical reactions could

Batteries and Fuel Cells Industry be reversed by current from a generator, thus recharging the battery. Though the weight of the cell restricted its early use, it later found a large market in the automobile industry. During the rest of the nineteenth century, other cells made their appearances; for example, the Leclanche cell, with its zinc anode and manganese dioxide cathode, was extensively used in telegraphy and the early telephone industry. In 1887, Carl Gassner, a German scientist, patented the first “dry cell,” consisting of a manganese dioxide cathode immersed in a paste of ammonium chloride and plaster of Paris (later replaced by coiled cardboard). These cells could be used in any direction without spillage and were substantially maintenance free. Dry cells ultimately made such portable electrical devices as flashlights possible and popular. The evolution of the battery continued in the twentieth century. The great American inventor Thomas Alva Edison, hoping to find a light-

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weight substitute for the lead-acid battery, devised a nickel-iron alkaline cell, which was used on railroads and in certain other industries but failed to supplant the lead-acid battery for automobiles. In the 1930’s in England, Francis T. Bacon, a Cambridge University engineer, began work on a fuel cell that eventually produced a practical device. In place of expensive platinum electrodes, he used inexpensive nickel gauze and an alkaline electrolyte. During World War II, he tried to develop fuel cells that could function effectively on submarines, but it was not until 1959 that he and his collaborators were able to demonstrate a powerful fuel cell capable of running large machines. By this time, many companies manufacturing traditional batteries had become successful. The Industry Today With the expansion of the microelectronic, aerospace, and alternative-energy industries in the late twentieth and early twenty-first centuries, the

A car mechanic checks the voltage in a conventional car battery. (©Dreamstime.com)

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battery and fuel cell industries experienced a concomitant expansion. Throughout the nineteenth century and the first half of the twentieth, scientific and industrial research had centered on ionic solutions, molten salts, and solid electrolytes, whereas in the second half of the twentieth century and into the twenty-first, researchers and developers focused on the structures of such interfaces as solidliquid, solid-solid, and solid-gas, as well as on the electron transfers occurring across these interfaces. In 1992, Rudolf Marcus received the Nobel Prize in Chemistry for giving a quantum mechanical explanation of these and other electron transfers. Companies such as Eveready and Rayovac took advantage of advances in battery and fuel cell research and development to introduce new products. For example, an engineer working for Eveready invented a battery with a manganese dioxide cathode and a zinc anode, connected with an alkaline electrolyte. It had a very long life and was marketed as the Energizer. Rayovac had success in miniaturizing batteries for use in hearing aids and watches. It diversified even more extensively with the introduction of specialized batteries for computer clocks, smoke alarms, electronic remote controls, and fluorescent lights; it also developed renewable alkaline batteries. Toward the end of the twentieth century, Rayovac issued an initial public offering of stock—7.7 million shares at $14 per share—and during the first decade of the twentyfirst century it acquired Remington Products and United Industries, as well as battery manufacturing facilities in Europe, China, and Brazil. Although Eveready introduced the first commercial alkaline battery in 1959, Mallory Battery Company introduced its Duracell brand alkaline batteries in 1964, and other companies then entered the competition in this growing and lucrative market. Fuel cells, like batteries, had their historical roots in research and development efforts in the nineteenth century, but they were initially unable to succeed commercially. In the early twentieth century, some scientists hoped that fuel cells that could convert coal into electricity might be economically viable, but the success of the lead-acid battery in the automobile industry quashed these hopes. What provided an energizing stimulus to the fuel cell industry was the American space program. The primary concern for those investigating

various space applications of fuel cells was the power generated per unit weight of a cell. Scientists calculated that, especially for long missions, the fuel cell would be much more effective than the primary batteries available in the 1950’s and 1960’s. The National Aeronautics and Space Administration (NASA) consequently assigned over two hundred contracts to researchers in universities, technical institutes, and industry to study the electrochemistry of fuel cell reactions and to develop reliable fuel cells for NASA spacecraft. These newly developed fuel cells were first successfully used in the Gemini program, during which fuel cells manufactured by General Electric were employed. The Pratt & Whitney Aircraft Division of United Aircraft Corporation (later called United Technologies Corporation, or UTC) researched, developed, and manufactured the fuel cells for the Apollo mis-

An electric car is being charged. (©Dariusz Kopestynski/ Dreamstime.com)

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sions, which landed astronauts on the Moon. General Electric and UTC developed lighter and more powerful fuel cells for the American space shuttle program. Some scholars have said that these fuel cell advances provided “the single most important impetus to the development of electrochemical engineering science” dealing with energy conversion. Others over-optimistically predicted that these fuel cell successes would be “the solution to the world’s energy problems.” Successes of fuel cells in the general marketplace did not follow these NASA triumphs. Fuel cells did find uses in scientific research—for example, in underwater vessels exploring ocean depths. The American Gas Association funded a program called An artist’s conception of what a hydrogen fuel cell would look like as AA batTARGET (Team to Advance Reteries. (©Dreamstime.com) search on Gas Energy Transformation) whose goal was to create ing candidate of all fuel cells in terms of its potena natural-gas fuel cell that could produce both electial for real-world applications. In 1993, Ballard tricity and heat for homes. Despite the stimulus to Power Systems developed a prototype bus powered this program created by the Arab oil embargo of by PEFCs. Ballard researchers continued to imthe 1970’s, the millions of dollars invested did not prove their hydrogen-fueled buses through the have the desired commercial payback. Similar 1990’s, and Vancouver, British Columbia, estabproblems plagued other fuel cell developments. lished a fuel-cell-powered bus line in 1997. In the For example, problems surfaced with producing mid-1990’s, Toyota began experimenting with a and working with pure hydrogen gas. For a time, PEFC-powered automobile with metal hydride fuel cell research and development declined prestorage. Ford Motor Company joined with Daimlercipitously because promised technologies failed to Benz and Ballard to commercialize a fuel-cell-powmaterialize and private investment declined. ered car for the twenty-first century. General MoThe situation changed dramatically in the 1990’s tors and Chrysler announced their own programs and the first decade of the twenty-first century. The at the end of the twentieth century. environmental movement had stimulated the need In the first decade of the twenty-first century, for cleaner, more fuel-efficient automobiles. The many manufacturers, especially automobile comCalifornia Air Resources Board pressured autopanies in the United States, Europe, and Japan— makers to create zero-emission vehicles. Automosometimes individually, sometimes cooperatively— biles powered by fuel cells offered hope to those multiplied projects in the research, development, concerned with the environment. The polymer and manufacture of fuel cell technologies. Buses in electrolyte fuel cell (PEFC), sometimes called a several countries now make use of hydrogen in proton exchange membrane (PEM) cell, makes transportation. Most automobile companies are use of a solid polymer electrolyte membrane developing cars powered by fuel cells. Most of sandwiched between a hydrogen anode and an oxthese vehicles generate electricity by some version ygen cathode. It has been called the most promis-

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An experimental fuel cell car. (©Dreamstime.com)

of a hydrogen-based fuel. Successful commercialization will depend on power, range, and economic factors for these fuel-cell-powered vehicles, which will have to compete with conventional, gasoline-powered cars. A new infrastructure of stations dispersing hydrogen rather than gasoline will be needed, and the costs of providing it, possibly through adapting existing gas stations, will be high. Government actions have also played a role in the development of fuel cell technologies and their commercialization. For example, in the United States, an energy bill passed by the Senate in 2005 included a tax credit for fuel cells. This bill had a positive effect on investment in fuel cell companies. Although the commercialization of fuel cells has repeatedly run into problems, the realization that traditional fossil fuels represent an ultimately dwindling resource has stimulated new companies to develop what they believe is a fuel for the future. This fuel cell energy will have not only high-powered applications in motor vehicles but also more modest applications in devices such as cell phones.

Several analysts believe that the battery and fuel cell industries face unique challenges that will not be met by a single dominant application but will instead find multiple market niches depending on the growing need for clean, economical, and reliable power.

INDUSTRY MARKET SEGMENTS Battery and fuel cell companies range in size from small concerns, employing fewer than a hundred workers, to midsize businesses, with workforces in the hundreds, to large companies, with thousands of employees. The following sections provide a survey of each of these different segments. Small Businesses The sizes of battery and fuel cell companies depend on their evolution, degree of commercialization, and other factors. In general, battery compa-

Batteries and Fuel Cells Industry nies tend to be larger and more varied than fuel cell companies because battery companies have been manufacturing successful products for longer periods of time. What constitutes a small battery or fuel cell company varies country by country. For example, the Small Business Administration of the United States characterizes as small those concerns with fewer than one hundred employees, whereas the European Union favors defining such businesses as having fewer than fifty employees. New companies, such as start-up enterprises based on new fuel cells, tend to be small, though some large companies with established battery businesses have added fuel cell divisions. Potential Annual Earnings Scale. Even among small battery and fuel cell businesses, considerable variation exists with regard to capitalization, degree of market success, and number of employees. The earnings of individuals depends on their value to their employers. According to the U.S. Bureau of Labor Statistics (BLS), the mean annual salary of a chemical engineer in the electrical component field—which includes battery manufacturing— was $85,860 in 2009. The mean salary of an engineering manager was $111,240, while the combined mean salary of all relevant production occupations was $32,410. Employees of small businesses generally earn salaries below these averages. Clientele Interaction. Small battery companies typically distribute and supply a variety of batteries to small and midsize businesses, as well as to such large concerns as AT&T, Verizon, and American Airlines. They often specialize in hard-to-find batteries. The sizes of the batteries they distribute vary, from coin-size batteries for watches and electronic devices to large batteries for trucks and forklifts. The clientele for some small battery businesses are local, whereas others have a nationwide clientele. Amenities, Atmosphere, and Physical Grounds. Where and how batteries are made play a role in the amenities and environment of workers. Manufacturing processes vary considerably for the type of battery or fuel cell being made and the industrial standards set by the countries within which they are made. Historically, batteries were produced by individuals or small groups, and not much attention was paid to the dangers of working with such toxic substances as lead, cadmium, and bromine. With the growth of the battery business, standards for safe working conditions became

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prevalent, although cases of lead poisoning continue to occur, especially outside the United States. Because of the large number of American small businesses, competition exists to attract excellent employees by providing them with safe and comfortable surroundings. Differences in conditions exist among corporate headquarters, research and development facilities, and factory floors. The physical grounds of small battery and fuel cell businesses also vary. A small battery-supply company may be housed in a single building at an inner-city location, whereas some fuel cell concerns develop and produce their devices on attractive rural campuses. Typical Number of Employees. Small battery and fuel cell companies generally have fewer than one hundred employees. They tend to specialize, with a modest number of employees, in developing new designs, materials, and processes. Others sometimes target specific markets, for example, defense, energy, or health. Traditional Geographic Locations. Battery businesses are located in such large cities as New York and Baltimore or in their suburbs. Other American battery companies of modest size can be found either in exurbs or in rural areas. Traditionally, fuel cell technologies often have been developed by academics at such institutions as the University of California, Berkeley, Stanford University, and the University of Wisconsin, and the companies that owe their origins to this research frequently grow and prosper in locations near their provenance. Pros of Working for a Small Business. Some small companies are run by charismatic leaders who attract scientists and engineers who themselves sometimes go on to found their own companies. Fuel cell companies are often engaged in the development of new technologies, and chemical engineers often find it deeply satisfying to oversee the manufacture of these new devices, which increasingly have positive consequences for energy efficiency and environmental health. Small companies, which are occasionally family businesses, can foster a congenial sense of cooperation in working toward a goal shared by all. Cons of Working for a Small Business. Small companies often produce a narrow range of batteries, fuel cells, or services, making it more likely that they will be adversely affected when markets for

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their products change. Since the manufacture of batteries and fuel cells can, in many instances, involve toxic and hazardous materials, those directly engaged in production may experience negative health effects. Statistics reveal that chemists and chemical engineers dealing with toxic and hazardous materials have shorter lives and more health problems than, say, theoretical physicists. Even success in these businesses does not guarantee security, as small companies may be acquired in hostile takeovers by larger concerns. Such acquisitions often lead to layoffs and to reduced salaries and benefits for those who remain in the merged company. Costs Payroll and Benefits: Small battery and fuel cell companies pay hourly wages or salaries depending on the position. Hourly wages are more likely for low-level production workers, while engineers are more likely to earn salaries and benefits. The owner-operators of small businesses must pay themselves out of the profits of the company, and, if there are no profits left after employees and debts are paid, an owner must draw no pay. Supplies: Battery and fuel cell manufacturers require various chemicals, including such metals as lead, nickel, cadmium, mercury, zinc, and silver and such chemicals as sulfuric acid, phosphoric acid, potassium hydroxide, zirconium oxide, and hydrogen. Certain polymers are in demand for fluoropolymer membranes used in particular fuel cells. These companies also need the equipment used to manipulate the raw materials into finished products, the equipment needed to develop new products, and the tools necessary to maintain that equipment. Administrative, scientific, and technical workers in these small businesses require computers, software, and sundry other office supplies. External Services: An efficient transportation system is needed to bring in bulk and fine chemicals to businesses manufacturing batteries and fuel cells, and their products need to be properly packaged and shipped, generally via contracted services. Small businesses may also contract with outside firms to handle payroll, equipment maintenance and repair, security, cleaning, advertising, tax preparation, and the food and health concerns of employees during the workday.

Utilities: Small firms need access to water, electricity, gas or oil for heat, telephones, and the Internet. Taxes: Certain fuel cell companies have been given tax breaks because the American government wants to encourage energy-efficient and environmentally friendly technologies, but both battery and fuel cell concerns have to pay their share of local, state, federal, and, in some instances, foreign taxes, including corporate income taxes, property taxes, and payroll taxes. Midsize Businesses Some define a midsize business as employing between one hundred and five hundred workers, whereas others extend the upper limit to one thousand workers. Small battery and fuel cell businesses are generally valued in the hundreds of thousands of dollars; in contrast, midsize companies often sell for $10 million to $100 million. Compared to small businesses, which often have a local focus, midsize concerns have national and international ambitions. Midsize concerns are also better than small companies at information management, technological research and development, market research, and cooperative agreements with other firms. Potential Annual Earnings Scale. According to the BLS, the mean annual salary of a chemical engineer in the electrical component field—which includes battery manufacturing—was $85,860 in 2009. The mean salary of an engineering manager was $111,240, while the combined mean salary of all relevant production occupations was $32,410. Employees of midsize businesses generally earn salaries in line with these averages. Clientele Interaction. Midsize battery and fuel cell companies generally sell a wider variety of products than small companies, and they therefore require their representatives to have expertise in dealing with the relevant personnel in government, the military, and other technological companies who will decide whether to purchase their wares. If a company has substantial dealings with customers in foreign countries, then staff is needed with the requisite language skills. Amenities, Atmosphere, and Physical Grounds. Because so many midsize businesses are concerned with researching, designing, developing, maintaining, repairing, distributing, and sell-

Batteries and Fuel Cells Industry ing batteries and fuel cells, and because so many different kinds of these devices exist (with new ones appearing annually), the factories and other facilities required to make these many contrivances resist facile generalization. The amenities for a modest battery distribution company are very different from those of an expanding manufacturing establishment producing a variety of batteries. Designing, modeling, and constructing fuel cells requires a physical plant compatible with production lines that can be upgraded and automated as market conditions warrant. Some companies are able to handle production with one or two buildings, but others require a larger number. Successful companies providing batteries and fuel cells for the defense, aerospace, medical, and telecommunications industries often have the wherewithal to provide employees with a safe and air-conditioned work environment, with stock incentives based on an employee’s role in improving the quality and quantity of production. Some engineers prefer the paradoxical atmosphere of simultaneous competition and cooperation that exists in these midsize firms. Typical Number of Employees. Midsize businesses generally employ between one hundred and one thousand people. Traditional Geographic Locations. Historically, because of the chemical pollution often associated with the manufacture of batteries, factories were located away from populated areas, though administrative offices could frequently be found in major cities. Some companies prefer to build their facilities for making batteries near transportation hubs that provide ease of access to raw materials and simplify conveying finished products to markets. Some companies locate their manufacturing facilities in countries such as Mexico or China that have less stringent environmental laws than the United States. Pros of Working for a Midsize Business. Because of their intermediate size between small and giant firms, midsize companies often find a niche in the marketplace for their specialized batteries and fuel cells. Government agencies have been willing to provide financial support for the development of these new products, and many chemists and chemical engineers find this environment conducive to fulfilling work. Some scientists and technical workers come to various industries hav-

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ing already done preliminary work on new batteries and fuel cells at universities and technical institutes. Chemical engineers, in particular, then find themselves in the admirable position of being able to design and develop production facilities for the manufacture of these new electrochemical devices. Cons of Working for a Midsize Business. Although midsize companies tend to be more diversified than small ones, they, too, can suffer when markets for their products decline. Because the prices of certain components of fuel cells, such as platinum, are high, some designers have discovered to their chagrin that the prices of their batteries rendered their final products financially prohibitive. The more closely tied a worker is to the successful production of a battery or fuel cell, the less likely he or she is to be fired during a recession or takeover. Costs Payroll and Benefits: Compensation and entitlements tend to correlate with the education and experience of the employee. Engineers and technicians usually sign contracts with midsize firms, and these often contain provisions for health benefits, vacation time, and stock awards for services valuable to the firms. Supplies: Midsize battery and fuel cell companies require access to raw materials and the tools and technologies needed to maintain and improve their production facilities. Computers and other information technologies have become essential not only for scientists and engineers but also for executives and administrators. External Services: Midsize battery and fuel cell companies generally purchase their bulk and fine chemicals from other firms. While engineers often design production facilities, the machines involved are commonly constructed by other companies. These midsize firms may also contract the maintenance of their production facilities and grounds, their food and medical services, and their accounting and payroll needs. Utilities: The administrative and production facilities of midsize companies rely on such public utilities as water and sewage, electrical power, and gas or oil for heat. They typically make use of telephone, cable television, and Internet services. Taxes: Because certain battery and fuel cell businesses have been the source of products that

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may help alleviate various energy and environmental problems, the governments of several countries have been willing to grant tax benefits for the development of certain innovative technologies. Nevertheless, these products are subject to sales taxes, and companies cannot entirely escape from paying local, state, federal, and foreign taxes. Large Businesses The dividing line between midsize and large businesses is often given as one thousand employees. Large companies are typically valued at hundreds of millions, or even billions, of dollars. They usually have a large number of divisions and produce a wide variety of products. Although large battery and fuel cell companies generally center their operations in a particular country, where they have historical roots, their focus has become increasingly international, and they design, manufacture, and sell products all over the world. Potential Annual Earnings Scale. Some large companies have as their principal focus the production, distribution, and recycling of batteries. Exide Technologies, for example, which had net sales of about $3.3 billion in 2009, specializes in lead-acid batteries, and the company operated in eighty countries. Other giant corporations, such as General Electric, with historical roots in the battery business, have made fuel cell technologies an important part of their highly diversified line of products. In 2009, this company had 300,000 employees working in more than one hundred countries. Wages vary from country to country and also depend on the levels of education and experience of the employees. Since earnings of these large businesses are generally higher than of small and midsize companies, wages, too, tend to be higher. According to the BLS, the mean annual salary of a chemical engineer in the electrical component field—which includes battery manufacturing— was $85,860 in 2009. The mean salary of an engineering manager was $111,240, while the combined mean salary of all relevant production occupations was $32,410. Employees of large firms often earn more than these averages. Chemical engineers with doctoral degrees, for example, make more than $100,000 a year at large companies. Clientele Interaction. Large battery and fuel cell businesses can afford larger sales, marketing,

and customer-service staffs than small and midsize businesses, leading to more frequent, though often more distant and bureaucratic, relations with clients. Amenities, Atmosphere, and Physical Grounds. Certain large companies, such as Rayovac, which had over $700 million in sales in 2000, include in their mission statements the creation and maintenance of a safe and healthy working environment for their employees. Company leaders have stated that they also realize their responsibility to the communities where their facilities are located and to the environment. Large companies such as Eveready that specialize in a variety of batteries and those companies such as General Electric that have major battery and fuel cell divisions are in intense competition for talented employees, and an important way of attracting these desirable workers is by providing such amenities as climatecontrolled buildings, food services, and access to residential communities within easy commuting distance that have excellent schools and cultural attractions. With their hierarchical structure and multiple divisions, large companies offer employees greater opportunities for career progress than small and midsize companies. Some workers are comfortable in a niche for which their expertise suits them, while others enjoy participating in the research, design, development, and marketing of new technologies. These opportunities are abundant in successful large concerns. Physically, large companies tend to have extensive properties—for example, administrative offices in high-rise buildings in cities, as well as production facilities in several buildings in the suburbs or exurbs. These factories are usually airconditioned, with cafeterias and adequate parking. Typical Number of Employees. Large battery and fuel cell companies may employ thousands or hundreds of thousands of people. For example, Rayovac Corporation had 3,380 employees in 2000, whereas General Electric had about 300,000 employees in 2009, but only a small percentage of these were engaged in the design, research, development, and marketing of batteries and fuel cells. Traditional Geographic Locations. Several large companies have their headquarters on prime real estate in large cities. For example, Union Car-

Batteries and Fuel Cells Industry bide Corporation has its main offices on Park Avenue in New York City. Production facilities tend to be located outside of major cities, either in small cities or in suburbs. For example, General Electric manufactures batteries in Gainesville, Florida. Pros of Working for a Large Business. Large companies can, to a certain extent, insulate their workers from the ups and downs of the marketplace, and during periods of prosperity, ample opportunities exist for electrochemical engineers to design and develop new batteries and fuel cells. In order to retain their talented and productive employees, these large companies tend to pay high salaries accompanied by superior benefits packages, including excellent retirement plans and generous vacation time. Scientists are also encouraged to participate in professional meetings all over the world, the better to keep abreast of the accelerating innovations in the battery and fuel cell fields. Cons of Working for a Large Business. Historically, the battery and especially the fuel cell industry has been affected by political changes. For example, during the Jimmy Carter administration, public investment in energy research nearly quadrupled and fuel cell companies benefited, but during the Ronald Reagan administration, government investment in energy companies declined to less than one-sixth of its peak level in 1979, leading to the bankruptcies of some concerns and massive layoffs at others. The Barack Obama administration has as one of its major goals making the United States the world’s leading producer of clean energy technologies. Workers in fuel cell businesses have experienced significant changes in job security as the political climate has changed. Costs Payroll and Benefits: The salary structure of large companies tends to be hierarchical, with vast differences between the highest-paid employee (usually the chief executive officer) and the lowest-paid employees (usually maintenance or production line workers). Most full-time and all permanent skilled workers tend to earn salaries at large companies, while unskilled, part-time, and temporary workers may be paid hourly wages. Salaried and full-time hourly employees generally receive benefits. Supplies: Giant battery and fuel cell companies make use of large amounts of raw materials in

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order to manufacture their products, including chemicals and metals, as well as the tools and equipment to transform these materials into finished products. The administrative and sales sections of these companies require office supplies, and the scientific and engineering personnel need chemicals, laboratory equipment, and computers. External Services: When it is economically advantageous, large companies frequently contract with outside firms to take care of their payroll, computer maintenance, and food and health services. Chemical engineers sometimes employ other companies to manufacture automated equipment for their production lines. Utilities: Not only do large battery and fuel cell companies manufacture devices that produce electrical power, but they also need electrical power to run their administrative and production facilities. They are generally tied into the local water and sewage systems, and they make use of gas and oil services to control the climate of their facilities. Administrative, sales, and research and development divisions make use of telephone, cable television, and Internet services. Taxes: Because of increased foreign competition and because of government policies designed to foster renewable energy, some companies making advanced fuel cells have been able to take advantage of tax incentives. Nevertheless, these large companies are required to pay property taxes, as well as city, state, and federal income taxes. Since these large companies have dealings with many foreign countries, they have to pay foreign taxes. During times of international trade conflicts, some large companies may have to pay additional duties on their exported products.

ORGANIZATIONAL STRUCTURE AND JOB ROLES During the final decades of the twentieth century and the initial decade of the twenty-first the primary and secondary battery industry experienced phenomenal growth, both in sales and in product diversification. Before this time, the gen-

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eral public was basically aware of only automotive and flashlight batteries, which constituted most of the batteries being manufactured. In recent decades, however, many innovative batteries have been introduced, extending from minute devices for pacemakers to lithium-ion batteries for electric bicycles, even to large arrays for electric automobiles. Battery businesses were frequently structured around the production of a particular kind of battery, before changing markets and competition led to diversification. Job roles then changed and expanded in diversified companies, as batteries were being made for both the general public and specialized applications. The transformation of the fuel cell industry in recent decades has been even more dramatic than progress in the battery business, with more fuel cells being designed, developed, and commercialized than at any other time in their history. Many scholars point to the energy and environmental crises as principal causes of this transformation. Countries around the world have grown dependent on finite and rapidly diminishing supplies of fossil fuels, the use of which has been implicated in global warming and air pollution. Members of the fuel cell industry believe that their expanding and diversifying technologies have the potential to satisfy the energy needs of a multiplying but increasingly environmentally sensitive population. Initially, fuel cell production and the job roles associated with it were structured around specific applications—for example, creating efficient and reliable fuel cells for NASA’s Gemini and Apollo programs. In recent decades, the fuel cell business and the jobs associated with it have advanced so quickly that many market opportunities are now available, from portable power applications (such as cell phones, camcorders, and laptops), to car and bus transportation, and even to massive hybrid power plants. The following umbrella categories apply to the organizational structure of businesses in the battery and fuel cell industry:

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Business Management Business managers provide top-level decision making and guidance for their companies. They set corporate goals, establish overall budgets and financial plans, and oversee all aspects of research, development, production, marketing, and sales. They also establish the corporate cultures characterizing their companies, contributing intangibly to the atmosphere experienced by every employee. During the early history of the battery and fuel cell business, the chief executive officer (CEO) was often the person largely responsible for the development of the battery or cell that became the company’s primary product, and these leaders sometimes gave their names to the cells and companies they created. John F. Daniell and William Robert Grove are early examples, and Thomas Alva Edison is a later one. Furthermore, Edison not only was instrumental in researching and developing many products, but he also sometimes acted as his own entrepreneur. On the other hand, Edison and others were not averse to sharing responsibilities with the heads of divisions. However, twentieth and twenty-first century battery and fuel cell businesses have required more collaborative and less autocratic management styles than those that characterized earlier periods. In fact, modern modes of governance have emphasized networks of collaboration among divisions, firms, and government agencies. Some analysts even believe that the costs and risks of developing innovative batteries and fuel cells are so great that the likelihood of an isolated business succeeding is very small. Business management occupations may include the following: ■ ■ ■

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Business Management Marketing and Sales Customer Service Office and Administrative Support Research and Development Production

Maintenance and Repair Distribution Government Relations Information Technology

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President/Chief Executive Officer (CEO) Chief Technology Officer (CTO) Chief Financial Officer (CFO) Chief Operating Officer (COO) General Counsel Managing Director Engineering Manager Advertising and Marketing Manager Public Relations Manager

Batteries and Fuel Cells Industry ■

Sales Manager Office and Administrative Staff Manager

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Marketing and Sales In general, marketing is concerned with those processes involved in transmitting goods from producer to consumer, and sales concerns those processes involving the actual selling of goods and services to consumers. Marketing developed slowly in the battery and fuel cell business. Initially, it involved informing potential customers of the features of a company’s battery for the telegraph, telephone, or automobile markets and determining a fair selling price for products. Modern markets tend to be more heterogeneous than traditional ones. The global market of the twenty-first century is much more complex than the local or national markets of the past. Those marketing fuel cells have to be knowledgeable about those products’ science and technology and their benefits and risks to the consumer and the environment. Those marketing these devices to customers in foreign countries should also have an understanding of their cultures and languages. Marketing and sales occupations may include the following:

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Sales Expert in Primary Batteries Sales Expert in Secondary Batteries Sales and Marketing Expert in Fuel Cells National Sales Director International Sales Director Director of Sales to the European Union/Japan/China

Customer Service Modern battery and fuel cell companies have a great variety of products to sell, and, once those are sold, they have a responsibility to help maintain and service devices, repair or replace defective ones, and help customers understand the proper ways to optimally use their products. Customer service representatives need to have a basic understanding of their companies’ products, and, at a minimum, they should know what scientist, engineer, or technician in the firm will have the knowledge to reply effectively to customer questions, complaints, and misconceptions about the products. Customer service occupations may include the following:

Customer Relations Representative Customer Relations Representative for International Sales Customer Relations Representative for Sales to the European Union/Japan/ China

Office and Administrative Support The size of a company’s administrative staff depends on the size of the company, with large companies needing extensive staffs in multiple divisions to keep their thousands of employees working efficiently and to manage their national and international operations. These employees keep track of the raw materials needed to make many kinds of batteries and fuel cells, while they also monitor the sales and returns of finished products. Since much of this information is computerized, office workers should have professional expertise in modern methods of information management. Office and administrative support occupations may include the following: ■ ■ ■ ■

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Bookkeeper Accountant Auditor Shipping and Receiving Clerk Administrative Assistant Executive Assistant Secretary Computer Specialist

Research and Development Successful battery and fuel cell businesses rely on the improvement of their basic products and on the research, design, and development of newly patented devices. Industrial scientists and engineers have often developed innovative devices, but academics working in colleges, universities, and technical institutes also have made valuable contributions. Cross-fertilization between industry and academia has led to many new batteries and fuel cells (though conflicts sometimes surface resulting from competing claims). Research and development occupations may include the following: ■ ■ ■

Electrochemist Chemical Engineer Materials Scientist

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Materials Engineer Electrochemical Engineering Technician

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Production Particular experts dominate the processes by which batteries and fuel cells are made. For example, workers in the field of electric batteries need expertise in the materials, processing, fabrication, and testing of various batteries. These experts have the education and experience to oversee the production of several specific types of batteries and fuel cells. They also test and reverseengineer batteries and fuel cells for numerous applications. Production occupations may include the following: ■ ■ ■

Battery Technology Expert Battery Applications Expert Battery Monitoring System Expert

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Battery Recycling Expert Battery Reliability Expert Fuel Cell Technology Expert Fuel Cell Reliability Expert

Maintenance and Repair Highly trained workers not only are needed to develop equipment to manufacture batteries and fuel cells, but they also are in demand to maintain and repair that equipment. Maintenance workers attempt to forestall problems with machinery by keeping it in working order and determining when wear and tear are causing a particular part or machine to near the end of its life. When unforeseen problems cause breakage, they must also repair faulty equipment as quickly as possible to prevent downtime within their companies’ production facilities. Maintenance and repair occupations may include the following:

OCCUPATION

PROFILE

Science Technician Considerations

Qualifications

Description

Uses the principles and theories of science and mathematics to solve problems in research and development, production, sales, and customer service.

Career clusters

Agriculture, Food, and Natural Resources; Health Science; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work inside

Minimum education level

Junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

RIE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Batteries and Fuel Cells Industry ■ ■ ■

Maintenance and Repair Manager Maintenance and Repair Technician Automated Production Line Maintenance and Repair Specialist

Distribution Supplying products to retailers is often an important part of the battery business. Some distributors specialize in battery types, such as lead-acid, nickel-cadmium, or lithium-ion. Others concentrate on renewable energy system batteries. Environmental legislation, concern about the energy crisis, and consumer demand have caused an accelerated interest in electric cars, some of which require hydrogen stations for their fuel cells. The development of hydrogen distribution networks has begun in several countries. Distribution occupations may include the following: ■ ■ ■ ■ ■

Battery/Fuel Cell Wholesaler Battery/Fuel Cell Retailer Director of Batteries and Supplies Battery Supply Specialist Supplier and Distributor for Hydrogen Fueling Stations

Government Relations Because of the pivotal role that government agencies have played in the development of hydrogen and fuel cell technologies, it is essential that certain employees of concerned businesses take advantage of grants and other help in fostering and accelerating technological innovations. Public officials, aware of fuel cells’ environmental and energy-efficiency advantages, have exhibited a willingness to provide substantial financial support for initiatives leading to innovative batteries and fuel cells. These grants also help minimize market risks and failures. Government relations occupations may include the following: ■ ■ ■ ■ ■ ■

Government Grants Manager Grant Writer Publicist Lobbyist Patents and Grants Attorney Agency Liaison

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Information Technology Although computer specialists constitute an important part of the workforce in such divisions as administration, marketing, and sales, they have also become important in computer-controlled automated processes for making batteries and fuel cells. Thus, many battery and fuel cell manufacturers have dedicated information technology (IT) departments. While IT personnel may specialize in automation technologies, they may also support broader company infrastructure by working on company-wide networks, security, troubleshooting, and other computer-related tasks. IT occupations may include the following: ■ ■ ■ ■

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Computer Scientist Programmer/Software Engineer Lead Programmer/Software Engineer Computer Maintenance and Repair Technician Computer Security Specialist Computer Networking Specialist

INDUSTRY

OUTLOOK

Overview According to a 2009 Freedonia report, the demand in the United States for materials used in batteries and fuel cells is expected to decline slightly in the years after 2010, with a decrease to about $6.4 billion by 2013, but this forecast conflicts with a 2007 Business Wire study asserting that the U.S. battery and fuel cell materials market would grow by 3.9 percent annually through 2011. This discrepancy illustrates that market prediction constitutes an unscientific art based on numerous uncertainties. Because these prognostications depend, in part, on extrapolations from trends established in previous years, it may be instructive to examine some of these trends. During the last decade of the twentieth century and the first decade of the twenty-first century, the market demand for primary batteries was high, leading to growth in the retail battery market. For example, the value of total shipments increased from $2.3 billion in 1997 to $2.8 billion in 2000, a trend that continued in the twenty-first century. Some analysts attributed this growth to the everincreasing use of portable electronic products. In

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particular, alkaline devices came to dominate the primary battery market, and some experts predict that this trend will continue because these batteries are capable of being stored for about ten years and generate much higher energy densities than do secondary batteries. Lead-acid batteries have accounted for about half the demand for rechargeables, and some prognosticators believe that this trend will also continue into the second decade of the twenty-first century, though others think that lithium-based rechargeables may diminish lead-acid battery dominance, particularly if their market price can be lowered and their active life extended. The decline in automobile sales due to the recession of 20072009 has had a negative effect on lead-acid battery sales. Also affecting these sales has been improved lead-acid battery lives, which have resulted in a decline in the need for replacements. Since both batteries and fuel cells depend on metals, businesses manufacturing these devices are unavoidably linked to the ups and downs of the metals market. When metal prices are high, as they were in the 2003-2008 period, prices for batteries and fuel cells are correspondingly high. Also affecting battery and fuel cell costs are catalysts and other additives designed to improve the performance and longevity of these devices. Prices for fuel cells employing platinum electrodes are extremely sensitive to the market price of this precious metal. An important issue being debated in the twentyfirst century is the effect that the development of various kinds of batteries and fuel cells will have on the emerging market for electric cars. The increasing pressure on automakers to minimize their products’ negative environmental effects and to create sustainable forms of transportation has led to large investments in the research on and development of electric-car battery technologies. In the first decade of the twenty-first century, the demand for secondary batteries steadily increased, and, with many analysts predicting greater sales of hybrid vehicles in the future, this trend is foreseen as continuing. However, critics of these alternative technologies exist, and they predict, barring a major breakthrough, that fuel cells will play only a minor role in future applications. In terms of the global manufacture of batteries and fuel cells, similarities exist between American

trends and those in Europe and Asia. At the start of the twenty-first century, the largest Asian makers of batteries were Japan, China, and Korea. For example, such Japanese firms as Sanyo and Sony were world leaders in the making of lithium-ion cells. By the end of the decade, China’s output of primary batteries had surpassed those of the United States and Japan, and it ranked third in producing secondary batteries. Because of the widespread use of portable electronic products, the market for disposable batteries remains strong in Europe and Asia. As has been true of Americans, Asians and Europeans have been purchasing powerful alkaline batteries, even though nonalkaline batteries still predominate. To take advantage of the growing Chinese market for its products, Duracell built a $60-million alkaline-battery plant in China. (After the United States and Italy, China was Duracell’s third largest market.) To deal effectively with global competition, the United States Advanced Battery Consortium encourages the design, research, development, and marketing of innovative batteries. However, the future of the battery and fuel cell industry is clouded by the uncertainties that have always been part of the industry’s evolution. These include costs of innovation; the effect of new technologies on the battery market; and the effects of alliances, mergers, and acquisitions on market competition. Employment Advantages In its Career Guide to Industries, the BLS has collected information on certain professions relevant to the battery and fuel cell industry, such as scientific research and development, chemical manufacturing, and electronic products manufacturing. In 2008, scientific research and development provided 621,700 jobs, and the projected change for the following decade (2008-2018) was a nearly 25 percent increase. On the other hand, a decline of 21 percent was projected for chemical engineers, whereas industrial engineering jobs were projected to decline by over 7 percent. Data collected from within the battery and fuel cell industry present a more complex picture. For example, a 2006 survey found that in 2005, there had been an 8 percent increase in employment and a 20 percent increase in revenues in the fuel cell industry. For those seeking jobs in North America, a troubling trend has been the decline in certain Ameri-

Batteries and Fuel Cells Industry can battery and fuel cell companies relative to those in Asia. Nevertheless, because of large government investments, the United States continues to be a world leader in fuel cells. Secondary batteries accounted for about 70 percent of U.S. battery and fuel cell material use in 2008, driven largely by the lead-acid battery market. This situation led to more job opportunities in the secondary as opposed to the primary battery business. With many countries emphasizing ultra-clean power generation, some analysts foresee a growth in job opportunities for those who have expertise in such applications of fuel cells as transportation (including automobiles, boats, aircraft, and trains), microelectronics (especially portable devices), and infrastructure (such as hydrogen distribution). Annual Earnings Accurate estimates of global earnings for the battery and fuel industry are difficult to determine because of the great variety of companies existing in many countries and because some companies tend to be secretive about their profits and losses. In 2008, the annual domestic revenue for the U.S. battery and fuel cell industry was estimated at $4.9 billion, with the fuel cell industry accounting for about $266 million. According to the 2006 fuel cell industry survey mentioned above, the total market capitalization of this industry in 2005 was $3.2 billion. Ballard was the most highly capitalized business at $471 million, with other industry leaders including Plug Power and FuelCell Energy. From 2004 to 2005, total full-time employment in the industry increased by 8 percent, to over three thousand employees. An American firm, Quantum Fuel Systems, led in the number of employees in 2005, followed by Ballard. According to the U.S. Census Bureau’s Industry Statistics Sampler, in which forty-six primary battery manufacturers were surveyed in 1997, 9,189 paid employees received an annual payroll of $296,907,000, or about $32,300 per employee. These employees were engaged in shipping products whose total value was $2,387,867,000, or almost $260,000 per employee. Thus, productivity was between eight and nine times salary in the industry. According to the 2010-2011 edition of the BLS’s Career Guide to Industries, the general outlook for scientists and engineers in the second decade of the twenty-first century should be favorable, de-

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spite increased competition for corporate and government funds. The outlook for chemical engineers for the 2008-2018 decade is less favorable, with declines in jobs and wages expected. Similarly, employment in the electronic product manufacturing industry is foreseen to decline over the decade.

RELATED RESOURCES FOR FURTHER RESEARCH American Chemical Society 1155 16th St. NW Washington, DC 20036 Tel: (800) 227-5558 Fax: (202) 872-6257 http://www.acs.org American Institute of Chemical Engineers 3 Park Ave. New York, NY 10016-5991 Tel: (800) 242-4363 Fax: (203) 775-5777 http://www.aice.org Battery Council International 401 N Michigan Ave., 24th Floor Chicago, IL 60611-4267 Tel: (312) 644-6610 Fax: (312) 527-6640 http://www.batterycouncil.org Electrochemical Society 65 S Main St., Building D Pennington, NJ 08534-2839 Tel: (609) 737-1902 Fax: (609) 737-2743 http://www.electrochem.org National Hydrogen Association 1211 Connecticut Ave. NW, Suite 600 Washington, DC 20036-2701 Tel: (202) 223-5547 Fax: (202) 223-5537 http://www.hydrogenassociation.org U.S. Fuel Cell Council 1100 H St. NW, Suite 800 Washington, DC 20005

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Tel: (202) 293-5500 Fax: (202) 785-4313 http://www.usfcc.com

ABOUT

THE

AUTHOR

Robert J. Paradowski is a historian of science and technology who specializes in the history of chemistry, with a particular emphasis on the life and work of Linus Pauling. He is a summa cum laude graduate of Spring Hill College, with a master’s degree in chemistry from Brandeis University and a Ph.D. in the history of science from the University of Wisconsin (1972). He has taught at Brooklyn College, Eisenhower College, and the Rochester Institute of Technology, where he is a professor in the Department of Science, Technology, and Society/Public Policy.

FURTHER

READING

Appleby, A. J., and F. R. Foulkes. Fuel Cell Handbook. New York: Van Nostrand Reinhold, 1989. Avadikyan, Arman, Patrick Cohender, and JeanAlain Héraud, eds. The Economic Dynamics of Fuel Cell Technologies. New York: Springer Verlag, 2003. Basu, Suddhasatwa, ed. Recent Trends in Fuel Cell Science and Technology. New York: Springer, 2007. Bode, Hans. Lead-Acid Batteries. New York: John Wiley & Sons, 1977. Bossel, Ulf. The Birth of the Fuel Cell, 1835-1845. Oberrohrdorf, Switzerland: European Fuel Cell Forum, 2000. Brandon, Nigel P., and Dave Thompsett. Fuel Cells Compendium. San Diego, Calif.: Elsevier, 2005.

Crompton, T. R. Battery Reference Book. 3d ed. Woburn, Mass.: Newnes, 2000. Kordesch, Karl, and Günter Simader. Fuel Cells and Their Applications. New York: VCH, 1996. Linden, David. Handbook of Batteries and Fuel Cells. New York: McGraw-Hill, 1983. Long, Kenneth, and Joseph Iorillo. World Batteries. Cleveland, Ohio: Freedonia Group, 2004. Norbeck, Joseph. Hydrogen Fuel for Surface Transportation. Warrendale, Pa.: Society of Automotive Engineers, 1996. Parker, Philip M. The 2009-2014 World Outlook for Lithium-Ion Batteries for Plug-In Hybrid and Pure Electric Vehicles. San Diego, Calif.: Icon Group, 2008. Spiegel, Colleen S. Designing and Building Fuel Cells. New York: McGraw-Hill, 2007. Srinivasan, Supramanian. Fuel Cells: From Fundamentals to Applications. New York: Springer, 2006. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Vincent, Colin A., et al. Modern Batteries: An Introduction to Electrochemical Power Sources. Baltimore: Edward Arnold, 1984. Viswanathan, B., and M. Aulice Scigioh. Fuel Cells: Principles and Applications. Boca Raton, Fla.: CRC Press, 2007. Yoshio, Masaki, Ralph J. Brodd, and Akiya Kozawa, eds. Lithium-Ion Batteries: Science and Technologies. New York: Springer, 2009.

Beverage and Tobacco Industry ©Andrey Noskov/Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The beverage and tobacco industry encompasses several subcategories of products that are distinct but related, including nonalcoholic beverages, fermented and distilled alcoholic beverages, and tobacco products. These products and brands are well known around the world and have some of the largest marketing budgets and highest profitability of any industry. Brand loyalty and recognition make the industry highly saturated and competitive. Manufacturing, sales, and distribution of alcoholic beverages and tobacco products are highly taxed and regulated, but this has done little to deter global consumption. Despite international economic fluctuations, regulations, and high taxes, the demand for beverage and tobacco products remains steady.

General Industry: Agriculture and Food Career Cluster: Agriculture, Food, and Natural Resources Subcategory Industries: Beverage Manufacturing; Bottled Water Manufacturing; Breweries; Chewing Tobacco and Snuff Manufacturing; Cigar Manufacturing; Cigarette Manufacturing; Coffee and Tea Manufacturing; Distilleries; Fluid Milk Manufacturing; Ice Manufacturing; Pipe Tobacco Manufacturing; Soft Drink Manufacturing; Tobacco Manufacturing; Tobacco Stemming and Redrying; Wineries Related Industries: Farming Industry; Food Manufacturing and Wholesaling Industry; Restaurant Industry Annual Domestic Revenues: $453.6 billion USD (Datamonitor Global, 2008) Annual International Revenues: $1.627 trillion USD (Datamonitor Global, 2008) Annual Global Revenues: $2.081 trillion USD (Datamonitor Global, 2009) NAICS Numbers: 312, 31192, 311511

History of the Industry The consumption of water and liquids is vital to sustaining human life, and this need has driven the beverage industry for centuries. Early civilizations discovered that the juice of fermented fruit or grains tasted good and had the power to alter a person’s mental state. The grape species Vitus vinifera, which is related to current types of wine grapes, was being cultivated as early as 6000 b.c.e. in the Middle East and Asia. Ancient writings indicate that the 159

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Greeks learned to make wine from the Egyptians in 2000 b.c.e. Both the New and Old Testaments include passages about wine consumption. In early times, fermented or distilled beverages were considered among the safest beverages because water and milk were often contaminated, causing sickness and disease. Wine and grapevines were imported to North America in the early 1700’s, supported by Thomas Jefferson. Ancient writings of the Babylonians, as early as 6000 b.c.e., describe over twenty different recipes for beer. Pharaoh Ramses III made an annual sacrifice of thirty thousand gallons of beer to the “thirsty gods.” Beer was most often brewed in areas where wine ingredients were difficult to acquire. Hops were discovered to be natural preservatives and therefore gained popularity in Europe in the Middle Ages. The duke of Bavaria declared the world’s first beverage law in 1516, the German Beer Purity Law, proclaiming that only barley, hops, and pure water could be used to make beer in that region. The first American brewery was opened by the Dutch West Indies Company in 1632 in lower Manhattan. Medicinal potions were distilled by the Chinese and the peoples of the East Indies as early as 800 b.c.e. These extremely potent liquids soon became popular beverages, and each region developed a specialty made from local ingredients, such as Dutch gin made from juniper berries or rum made from sugarcane in the West Indies. In the United States, George Washington gave each voter a barrel of rum, beer, wine, or hard cider when he was running for a position in the Virginia legislature. Congress enacted the first whiskey tax in 1791. The American temperance movement, which believed that any type of alcoholic drink led to sin and damnation, emerged in the early 1800’s. In 1851, Maine became the first state to prohibit alcoholic beverages, and by 1880 Kansas had passed a constitutional amendment that outlawed both the manufacture and the sale of alcohol. From 1920 to 1933, the Eighteenth Amendment to the U.S. Constitution rendered illegal the manufacture, sale, or transportation of alcoholic beverages anywhere in the United States. The first nonalcoholic, noncarbonated soft drinks were made using mineral water, lemon juice, and honey in the seventeenth century. Vendors in France carried large tanks of the mixture

to sell by the cupful. Carbonated water was created in 1767 by Joseph Priestley in England, and within three years Swiss chemist Torben Bergman developed an apparatus that could produce large amounts of carbonated mineral water. It was thought that drinking mineral water was very healthy, and soon medicinal herbs and extracts were being added to the water by physicians and pharmacists. Patients wanted to take these drinks home with them, providing an impetus for softdrink bottling. Meanwhile, native peoples of North America had been growing, drying, eating, and smoking tobacco for medical and ceremonial purposes for generations before they introduced this practice to early European explorers and settlers. In the early sixteenth century, Spanish explorers became the first to introduce tobacco to Europe, and it was

According to the Center for Tobacco Growing Research, in 2009, the largest tobacco-producing states were North Carolina and Kentucky. (©Jun He/Dreamstime.com)

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considered a sacred herb with numerous medicinal properties. John Rolfe arrived at the Jamestown settlement in Virginia in 1609 and became the first settler to grow tobacco for commercial use. This tobacco was exported to Europe and became the key cash crop for the region, often being used as currency. From 1617 to 1793, tobacco remained the most valuable export from the United States. Until the 1960’s, the United States grew, manufactured, and exported more tobacco than any other country. Cigarettes were rolled by This Coca-Cola delivery truck transports the company’s soft drinks to the market. hand until 1881, when James (Bloomberg via Getty Images) Bonsack created a machine that could chop tobacco, drop dustry has responded with green initiatives. New it into a long tube of paper, and slice the tube into plastic bottles are being developed that use 50 perindividual cigarettes. In 1964, scientific evidence cent less plastic than previous bottles but remain atindicated that tobacco use was harmful to human tractive enough to entice consumers. Rather than health, leading to the passage of laws restricting its selling water in bottles, some companies are now use and distribution. offering natural spring water in recyclable cartons that provide an environmentally preferable alterThe Industry Today native while still also providing portability and conToday, beverage and tobacco product manufacvenience. turing is a trillion-dollar industry, offering consumTraditional vending machines are being redeers around the world more product options than signed to use carbon dioxide rather than hydroever before. Over 360 billion cigarettes are smoked fluorocarbons to cool beverages, reducing their in the United States each year, and, according to energy requirements and their harmful emissions. the Beverage Marketing Corporation, the average Production plants and distribution warehouses are person consumes 192 gallons of beverages annuimplementing sustainable engineering guidelines ally. Carbonated soft drinks make up 26.2 percent to monitor water and energy use on every producof this total, followed by bottled water (14.4 pertion line and every piece of equipment in real time. cent), beer (11.4 percent), coffee (11.4 percent), PepsiCo reports that this technology will reduce milk (10.9 percent), fruit juice (7.0 percent), tea carbon emissions by an estimated 3,100 tons and (4.1 percent), wine (1.1 percent), sprits (1 perconserve 100 million liters of water annually. Tocent), and tap water and others (12.5 percent). bacco manufacturer Philip Morris was recognized Beverages are no longer just thirst quenchers: with two gold level Governor’s Environmental ExSome claim to offer increased energy, vitamins, cellence Awards from the Virginia Department of fewer calories, more convenience, and environEnvironmental Quality. mentally friendly packaging. These options cater The global beverage and tobacco industry is to the predicted and expressed needs of the condominated by large companies such as PepsiCo, sumer. Coca-Cola, Nestlé, and Philip Morris that hold over Consumer demand has sparked the develop10 percent of the total global market value. These ment of products that minimize their impact on companies have diversified their products to inthe environment. The beverage and tobacco in-

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The health benefits of bottled water are debatable, but many prefer its taste. (©Ferdinand Bernales/Dreamstime.com)

clude a wide range of brands, reducing their dependence on revenues from a single product. Coca-Cola offers more than 3,300 sparkling and still beverage products, including juices and juice drinks, sports drinks, energy drinks, teas, coffees, and water. Philip Morris has 150 distinct tobacco brands, further divided into 1,900 different products. Raw materials for beverage and tobacco products can be subject to import and export regulations, crop size, and seasonal conditions. The industry is reliant for its raw materials on suppliers that can guarantee consistency because brand loyalty is the largest driver of the market. Large corporations have entered partnerships and arrangements with other food and beverage producers in order to present more diverse product lines. Some of the well-known brands are thought to be exclusive by consumers, but these various brands are often under the umbrella of the same major producer. Nestlé produces Nesquik, but it also produces Pure Life waters and Libby’s

fruit juices. A few of the well-known products that fall under the PepsiCo corporate brand are Pepsi, Gatorade, Tropicana juices, SoBe, and Aquafina. PepsiCo has also started selling ready-to-drink tea and coffee through joint ventures with Unilever and Starbucks. Also, concentrates and syrups of well-known and recognized products are sold to smaller bottlers to repackage as generic or store brands at reduced prices. Tobacco companies have also diversified their product lines to target new customers, including scented, flavored, and slim cigarettes intended for women and young adults. Advertising for tobacco and beverage brands is highly competitive, and the industry’s major corporations serve as key sponsors of almost every major sporting and entertainment event. In 2008, PepsiCo spent $1.7 billion and Coca-Cola spent $2.7 billion advertising their brands globally, while tobacco companies collectively spent over $15 billion on advertising and promotions in the United States alone. Large beverage brands frequently negotiate exclusive placement at events or restaurant chains, restricting all other competitors’ products from those venues. The advertising budgets of large corporations paired with the restrictions on tobacco marketing and advertising make it extremely difficult for new products and smaller businesses to enter the industry. Smaller businesses tend to not try to compete against the industry’s leaders because of the high costs of doing so, as well as the difficulty of competing with strongly established brands. Instead, these businesses enter the industry by creating and sustaining new niches for themselves. These niches include organic options and environmentally friendly or more cost-effective packaging. Small companies in the industry tend to keep their products localized to their own country or region in order to avoid the stringent importation regulations regarding beverage and tobacco production in other countries. Since the U.S. surgeon general issued a report linking smoking to lung cancer and heart disease in 1964, the tobacco industry has encountered serious setbacks and challenges. Many governments around the world have implemented advertising regulations and labeling requirements for tobacco products. Beginning in California in 1998, smoking bans in public places started to appear to protect the public from the effects of secondhand

Beverage and Tobacco Industry smoke. As the scientific evidence of tobaccorelated illness and death grew, so did legal action against the tobacco industry. In 1992, the U.S. Supreme Court ruled that tobacco companies could be held liable for harm to the public caused by smoking, and a rush of lawsuits ensued. Settlement talks between state attorneys general formed a master settlement that required tobacco companies to pay an estimated $206 billion to states in order to avoid further legal battles and also finance a $1.5billion antismoking campaign. Congress has been divided on the laws affecting the tobacco industry. Members agree that marketing restrictions and high taxes need to be imposed on products to balance the high cost of treating smoking-related illnesses; however, they do not wish to bankrupt an industry that employs so many people and whose failure would harm the national economy.

INDUSTRY MARKET SEGMENTS The beverage and tobacco industry is relatively unfragmented and brand-dependent. A few multinational corporations dominate the industry and purvey many products that enjoy significant brand loyalty. Despite this structure, small and midsize companies also operate within the industry, and they are able to succeed precisely because they offer alternatives to what is otherwise a deceptively homogeneous industry. Such companies often either sell to niche markets or market their products as hand-crafted, local, or otherwise distinct from international brands. Small Businesses Small beverage or tobacco businesses are commonly created to answer the needs of very specific market niches. Most develop unique products targeted at specific consumers or geographic regions, while others produce raw materials for larger businesses. Businesses in this segment have fewer than

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one hundred employees, and it is not uncommon for each employee to take on more than one role. Over 83 percent of businesses in the beverage and tobacco industry in North America have fewer than one hundred employees. Potential Annual Earnings Scale. Earnings in a small business in this industry can vary greatly and a lot of the work is seasonal. According to the U.S. Bureau of Labor Statistics (BLS), the average annual income of a farmworker in the beverage and tobacco industry was $23,100 in 2009. Industry food batchmakers earned an average of $29,130, while packaging and filling machine operators and tenders earned an average of $32,680, and sales representatives earned an average of $53,720. Food scientists and technologists earned an average of $59,820, while food science technicians earned an average of $41,180. Employees of small businesses are likely to earn salaries below these averages. Experienced winemakers may be highly sought and well paid by small wineries, earning over $70,000 annually, although in many small establishments the vineyard owner is also the winemaker. Clientele Interaction. Whether a small business produces its own product, produces raw materials for another, or sells and distributes beverage and tobacco products from others, many positions interact directly with clients and consumers. Sales staff, distributers, and delivery drivers are often the

Beer and wine are popular alcoholic beverages. (©Marco Pitacco/Dreamstime.com)

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first representatives of their businesses. Agriculture and general labor positions will have limited interaction with clientele. Amenities, Atmosphere, and Physical Grounds. Many small beverage and tobacco businesses are family run and owned. Some have been operating as family businesses for generations. The physical grounds may involve one or a combination of orchards, fields, vineyards, warehouses, production plants, and retail facilities. Some small businesses produce, package, and sell their products to the public, all at the same location. Juice, wine, beer, and spirit makers may cater to tourists, offering tours and education to the public on how their products are made and combining retail stores and restaurants with their production facilities to serve visitors. Typical Number of Employees. In order to keep expenses down, owners of small businesses try to keep the number of employees down. Many of the beverage and tobacco products in this market are seasonally produced, so employees may be brought in for temporary or seasonal work. Typically, between five and one hundred employees make up a small business, and many take on more than one role within the firm. Traditional Geographic Locations. Small beverage and tobacco businesses tend to be located near the source of the raw materials for their products. Tobacco needs to be grown in warm climates, so tobacco companies are typically located in Virginia, Kentucky, and Tennessee in the United States and in regions with similar climates in China, India, Brazil, Turkey, and Greece. Coffee is grown in over fifty countries and requires a similarly warm climate and growing conditions, often in tropical areas at high altitude. Wine grapes require lots of sunlight but not too much heat. Popular wine regions include areas of France, Italy, Argentina, Chile, South Africa, Australia, the United States, and Canada. Pros of Working for a Small Beverage or Tobacco Business. Small businesses may provide employees with opportunities to learn new skills and take on a variety of responsibilities that allow them to gain valuable, broad bases of experience. Small businesses tend to be family owned or operated, so employees may value being part of a close-knit team. Small businesses may allow for more flexibility in work schedules.

Cons of Working for a Small Beverage or Tobacco Business. Products in these markets are very concentrated, and dominance of existing brands makes it very challenging for new businesses and products to enter. Restrictions on tobaccoproduct advertising make it extremely difficult for new products to gain customer recognition. Shelf space in retail outlets is often limited, and retailers may be unwilling to stock products of an entirely new, unproved brand. Even if shelf space is available, small businesses may not be able to produce enough of their products to fill that space in large retail chain outlets throughout a region or country. Large chains may refuse to carry products if their supply is insufficient to meet the chains’ needs. Products that rely on raw materials related to agriculture can face uncertain seasonal and weather patterns that can reduce productivity for an entire season. Also, it takes many years, even decades, to develop mature orchards, fields, and vineyards, so starting a new beverage company may be a very long-term process. Costs Payroll and Benefits: Typically, small beverage and tobacco companies pay their employees an hourly wage. Full-time employees usually receive benefits at the discretion of the owner or manager. However, many part-time or seasonal employees are not entitled to benefits. Some seasonal employees may live on site and have their food and accommodations provided. Supplies: Necessary supplies vary by product and subsector, but they may include raw agricultural materials, heavy production equipment, packaging equipment and supplies, and office supplies and equipment. External Services: Some small businesses may contract external distribution services, delivery drivers, accounting, payroll services, advertising and marketing services, or packaging or bottling services. Many small beverage companies initially outsource bottling to an existing bottling facility. However, many bottling plants require a minimum production run, typically of 500,000 bottles, which can be expensive and risky for a small business. Utilities: Typical utilities for a small beverage or tobacco business include water, sewage, electricity, gas or oil, telephone, and Internet access.

Beverage and Tobacco Industry Water utilities may be higher in the production of some goods or if irrigation systems are required. Electricity or gas may be higher if product processing requires excessive heating of the product or drying of raw materials. Taxes: Small businesses are required to pay local, state, and federal income and property taxes, as well as business and service taxes and permitting fees. Tobacco products and alcoholic beverages are subject to specific state and federal excise taxes. Permits and Licenses: Beverage and tobacco companies of any sort are highly regulated and require government licenses and permits. Health permits are also often required. Costs vary by geographic area and the product being made. Midsize Businesses Many midsize beverage and tobacco businesses started as small, independent or family-run businesses and have grown or merged to form larger companies. They tend to be emerging outside the confines of their product niches or geographic areas to become more widely recognized. These companies have between one hundred and ten thousand employees. Business operations, production, bottling, and packaging are likely to be managed on site in a midsize business, rather than being outsourced. Potential Annual Earnings Scale. Earnings in a midsize business in this industry can vary greatly, and some positions may be seasonal. According to the BLS, the average annual income of a farmworker in the beverage and tobacco industry was $23,100 in 2009. Industry food batchmakers earned an average of $29,130, while packaging and filling machine operators and tenders earned an average of $32,680, and sales representatives earned an average of $53,720. Food scientists and technologists earned an average of $59,820, while food science technicians earned an average of $41,180. Operators of purifying machines of various sorts earned an average of $40,960, and production supervisors earned an average of $54,330. Sales managers earned an average of $106,110, and general managers earned an average of $118,780. Clientele Interaction. Fewer employees of midsize businesses interact directly with clients or consumers. Agriculture, general labor, warehouse, and production positions involve limited clientele

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interaction. Sales staff, merchandisers, marketing personnel, distributers, and delivery drivers are often the public representatives of their businesses. Many midsize businesses also have dedicated customer service personnel to interact with consumers and retailers. Amenities, Atmosphere, and Physical Grounds. Beverage and tobacco companies’ physical grounds may involve one or a combination of orchards, fields, vineyards, warehouses, production plants, and retail facilities. Some midsize businesses produce, package, and sell their products to the public, all at the same location, as well as distributing them to other retailers. Juice, wine, coffee, beer, and spirit makers may offer tours of their plants and provide additional facilities (such as restaurants and hotels) and attractions (such as theme parks and gardens). Typical Number of Employees. The typical number of employees of a midsize beverage or tobacco business depends on the business’s products and the geographic area it serves. These companies have between one hundred and ten thousand employees, covering a wide range of positions. Traditional Geographic Locations. Midsize beverage and tobacco businesses tend to be located near the source of their raw materials. Tobacco needs to be grown in warm climates, so tobacco companies are typically located in Virginia, Kentucky, and Tennessee in the United States and in regions with similar climates in China, India, Brazil, Turkey, and Greece. Coffee is grown in over fifty countries around the world and requires a similarly warm climate and growing conditions, often in tropical areas at high altitude. Wine grapes require lots of sunlight but not too much heat. Popular wine regions include areas of France, Italy, Argentina, Chile, South Africa, Australia, the United States, and Canada. Pros of Working for a Midsize Beverage or Tobacco Business. Most entry-level positions at midsize businesses require minimal, if any, advanced education or training. Midsize companies tend to pay their employees hourly or annual salaries, and seasonal positions are fewer, resulting in more income stability. Midsize companies often provide benefits plan options to their employees. Cons of Working for a Midsize Beverage or Tobacco Business. Midsize company employees usually work on more structured schedules than do

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those of small companies, and they receive more direct supervision. Production quotas and larger geographic distribution areas can increase employee stress. Products in these markets are very concentrated, and dominance of existing brands makes it very challenging for new businesses and products to enter. Restrictions on tobacco-product advertising make it extremely difficult for new products to gain customer recognition. Shelf space in retail outlets is often limited, and retailers may be unwilling to stock products of an entirely new, unproved brand. Products that rely on raw materials related to agriculture can face uncertain seasonal and weather patterns that can reduce productivity for an entire season. Also, it takes many years, even decades, to develop mature orchards, fields, and vineyards. Costs Payroll and Benefits: Typically, midsize beverage and tobacco companies pay their employees an hourly wage. Full-time employees usually receive benefits, at the discretion of the owner or manager. However, many part-time or seasonal employees are not entitled to benefits. Some seasonal employees may live on site and have their food and accommodations provided. Supplies: Necessary supplies vary by product and subsector, but they may include raw agricultural materials, heavy production equipment, packaging equipment and supplies, and office supplies and equipment. As the size of a business grows, the need for automation and technology supplies also rises. External Services: Midsize businesses generally contract fewer external services than do small companies. They may still contract cleaning and maintenance of facilities and delivery vehicles. Utilities: Typical utilities for a midsize beverage or tobacco business include water, sewage, electricity, gas or oil, telephone, and Internet access. Water utilities may be higher in the production of some goods or if irrigation systems are required. Electricity or gas may be higher if product processing requires excessive heating of the product or drying of raw materials. Taxes: Midsize businesses are required to pay local, state, and federal income and property taxes, as well as business and service taxes and permitting fees. Tobacco products and alco-

holic beverages are subject to specific state and federal excise taxes. Some midsize tobacco companies are included in the master settlement under which companies pay the states an estimated combined total of $206 billion and also finance a $1.5 billion antismoking campaign. Permits and Licenses: Beverage and tobacco companies of any sort are highly regulated and require government licenses and permits. Health permits are also often required for products for human consumption. Costs vary by geographic area and product. Large Businesses Large beverage and tobacco businesses are major multinational corporations that enjoy international brand recognition, manufacturing, and distribution. Each of these parent companies may produce hundreds of different, highly recognizable products within the industry. In addition, most of them have extensive holdings outside the industry. For example, PepsiCo owns the Frito-Lay and Quaker food brands, and until 1997 it owned the KFC, Pizza Hut, and Taco Bell fast-food chains. Coca-Cola from 1982 to 1989 owned the Columbia Pictures motion picture studios. These corporations employ more than ten thousand people each. They include companies such as Coca-Cola, PepsiCo, and Altria, which includes Philip Morris and other companies. Potential Annual Earnings Scale. According to the BLS, the average annual income of a farmworker in the beverage and tobacco industry was $23,100 in 2009. Industry food batchmakers earned an average of $29,130, while packaging and filling machine operators and tenders earned an average of $32,680, and sales representatives earned an average of $53,720. Food scientists and technologists earned an average of $59,820, while food science technicians earned an average of $41,180. Operators of purifying machines of various sorts earned an average of $40,960, and production supervisors earned an average of $54,330. Sales managers earned an average of $106,110, and general managers earned an average of $118,780. Chief executives earned an average of $190,620. Managerial and executive salaries at large corporations may be significantly higher than these averages. Clientele Interaction. The beverage and tobacco industry is becoming more high-technology

Beverage and Tobacco Industry and automated. Retailer services and deliveries can be managed electronically. Customer service is most often provided online or by telephone. Delivery, sales, and marketing personnel have the greatest amount of clientele interaction during product delivery. Delivery personnel, as the recognizable face of their companies, are required to wear uniforms, adhere to appearance standards, have good communications skills, and be knowledgeable about their products. Amenities, Atmosphere, and Physical Grounds. Depending on the product, the physical grounds may involve one or a combination of orchards, fields, vineyards, warehouses, production plants, and retail facilities. Most commonly, there is a production facility where the manufactured

OCCUPATION

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goods are created, a bottling or packaging facility, and a distribution warehouse. Delivery personnel and loading-dock and other workers spend a great deal of time outside or in their fleet vehicles. Business management of these large companies is often centralized in head offices of geographic divisions. Research facilities and laboratories for product development and testing also exist. Many juice, wine, coffee, beer, and spirit makers welcome visitors, offering tours, additional facilities (such as restaurants, resorts, and hotels), and attractions (such as theme parks and gardens). Typical Number of Employees. Large beverage and tobacco corporations employ more than 10,000 people globally. At the end of 2009, PepsiCo reported having 203,000 employees. Coca-Cola

PROFILE

Inspector and Compliance Officer Considerations

Qualifications

Description

Examines, tests, and investigates the conditions of plants and animals, the quality of consumer services and products, and the operation of businesses to verify and enforce compliance with public laws, regulations, and standards for health, safety, and other matters.

Career clusters

Agriculture, Food, and Natural Resources; Business, Management, and Administration; Finance; Government and Public Administration; Manufacturing; Transportation, Distribution, and Logistics

Interests

Data; people

Working conditions

Work inside; work both inside and outside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

ERS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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operated in over two hundred countries and employed 92,800 people, Anheuser-Busch had over 31,000 employees, and Philip Morris International had over 75,000 employees. Traditional Geographic Locations. Large beverage and tobacco businesses prefer to have major production facilities located near the source of their raw materials. They distribute and have distribution centers worldwide. Coca-Cola operates 440 facilities and fifty-five thousand fleet vehicles for distribution, and it manages 2.4 million coolers, vending machines, and beverage dispensers. Tobacco needs to be grown in warm climates, so it can typically be found in Virginia, Kentucky, and Tennessee in the United States and in regions with similar climates in China, India, Brazil, Turkey, and Greece. Coffee is grown in over fifty countries around the world and requires a similarly warm climate and growing conditions, often in tropical areas at high altitude. Wine grapes require lots of sunlight but not too much heat. Popular wine regions include areas of France, Italy, Argentina, Chile, South Africa, Australia, the United States, and Canada. Pros of Working for a Large Beverage or Tobacco Business. Beverage and tobacco workers in many countries have the ability to unionize and collectively bargain for better wages and benefits. Benefits provided to almost all workers include cost of living adjustment (COLA) payments, overtime payments, health insurance, and pensions. Wages and benefits at the large corporations are typically above average. Each employee at a large corporation is normally responsible for only one job, rather than covering multiple roles as do employees of smaller companies. Coca-Cola, Nestlé, and Philip Morris all are included on a 2009 list of the world’s top fifty most attractive employers. Philip Morris’s employees are reputed to enjoy the best pension and benefits package in the United States. PepsiCo made pension contributions of approximately $700 million in 2010. Many of the large corporations have developed programs for learning and capability-building activities for employees. Employees can take classes in areas such as leadership and marketing, as well as receiving training directly related to their positions. Cons of Working for a Large Beverage or Tobacco Business. These companies are a very popular career choice for many people; therefore, hiring processes are very competitive. Production at

large companies is often conducted twenty-four hours per day, requiring shift work. Production work is assembly-line, rationalized, very routine labor and can be tedious and uninteresting. The environment, time commitments, and production quotas can be stressful for some people. Costs Payroll and Benefits: Large companies employ thousands of people with varying skills and job descriptions. Large teams of people are hired solely to manage the payroll and benefits for employees, who generally receive annual salaries or hourly wages, as well as full benefits. Supplies: Necessary supplies vary by product and subsector, but they may include raw agricultural materials, heavy production equipment, packaging equipment and supplies, distribution vehicles and fuel, and office supplies and equipment. External Services: Large beverage and tobacco companies tend to have internal staffs to cover all requirements for development, operations, and production. Maintenance of facilities and equipment is often managed on site by employees of the company. They are likely to contract external auditors when situations arise that require them, and they may contract advertising firms to consult with their in-house advertising staffs on major campaigns. Utilities: Large companies operate thousands of offices, retail spaces, warehouses, and production facilities. Utilities include water, sewage, electricity, oil or gas, telephone, and Internet access. Water utilities may be higher in the production of some goods or if irrigation systems are required. Electricity or gas may be higher if product processing requires excessive heating of the product or drying of raw materials. Taxes: Large corporations are required to pay local, state, federal, and international corporate and property taxes, as well as business and service taxes and permitting fees. Import and export taxes can be applied by the originating and the destination country. Tobacco products and alcoholic beverages are subject to specific federal and state excise taxes. Large tobacco companies are included in the master settlement under which they must pay the states an estimated $206 billion and also finance a $1.5 billion antismoking campaign.

Beverage and Tobacco Industry Permits and Licenses: Beverage and tobacco companies of any sort are highly regulated and require government licenses and permits. Health permits are also often required. Costs vary by geographic area and product.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of a beverage or tobacco company is usually based on the size of the company, its products, and its geographic distribution area. Some smaller companies may only have a few employees who take on more than one role each, and some producers of raw materials or agriculture-based businesses may have seasonal employees. Not only are the largest corporations extremely departmentalized, bureacratic organizations, but also their beverage or tobacco operations form only one portion of their corporate portfolios. They operate in all major countries and employ tens of thousands of people worldwide. The following umbrella categories apply to the organizational structure of businesses in the beverage and tobacco industry: ■ ■ ■ ■ ■

■ ■ ■

Business Managment Customer Service Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources

Business Management Management and executive positions are the highest-ranking positions within beverage and tobacco corporations. The management team normally comprises a small group of individuals who are supported by a larger team of administrative and other professionals. The team makes decisions to ensure that their companies generate maximum profits. They seek to optimize their companies’ revenues, costs, and services to achieve that goal. Businesses that sell and deliver products around the world often have global public affairs executives

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who manage relations and regulatory compliance in foreign markets. Government affairs executives manage their companies’ compliance with federal, state, and international regulations, requirements, and taxation. Chief executive officers (CEOs) are compensated well, receiving high salaries, performance bonuses, stock options, and other benefits. The CEO of Philip Morris in 2008 had an annual base salary of over $1.5 million and additional compensation equaling over $36.8 million. In 2007, the highranking executives of PepsiCo received between $5 million and $11.7 million in compensation packages. Executive and business management occupations may include the following: ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) Chief Information Officer (CIO) Global Public Affairs Executive Government Relations Executive

Customer Service Customer service personnel often create the very first and most lasting impression of a company on its customers. Personnel respond to inquiries, resolve problems, and sell products, and they must strive to provide accurate information and assistance to customers. Customer service can take many forms in different businesses and may include receiving orders and submitting them to production, following up on product releases, and shipping and ensuring final delivery to customers. Staff also manage customer complaints and forward them to the appropriate person or department for resolution. Positions in customer service do not often require previous training or specialized education. Employees often need to demonstrate excellent communication skills, professionalism, patience, telephone etiquette, and good problem-solving and multitasking skills. Customer service occupations may include the following: ■ ■ ■

Customer Service Representative Retail Sales Clerk Customer Relations Manager

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Sales and Marketing Beverage and tobacco sales are highly competitive. Customers have numerous choices but also tend to be extremely loyal to particular brands and products. Sales and marketing personnel seek to ensure that advertising dollars are well spent and that both their brands and customer relationships remain strong. Sales and marketing executives promote, initiate, and negotiate exclusivity contracts with events, venues, and restaurants. For example, Anheuser-Busch is the official beer of the National Football League, and Coca-Cola products are the exclusive brand of McDonald’s restaurants. Businesses use advertising to represent their products and influence current and prospective customers. Marketing staffs may consist of single individuals or teams of thousands. Large companies spend billions of dollars advertising and sponsoring events in order to increase the visibility of

their brands. Government regulatory agencies impose strict guidelines for product labeling, including limiting health claims and mandating nutrient content information. Marketing and communications personnel need to project their messages to potential customers; they also need to protect their companies’ reputations by identifying and managing emerging issues that may harm them. Effective media relations and media monitoring are critical in handling crises and other issues. A key measurement of corporate success is revenue, so sales of products and services are imperative. A sales team needs to contact customers and prospective customers to be certain that they are aware of current and upcoming products and services and are satisfied with current service. Sales and marketing analysts determine if allocated advertising budgets have been effectively utilized. They report whether proposed sales goals and targets have been achieved and develop analy-

OCCUPATION

PROFILE

Wholesale Sales Representative Considerations

Qualifications

Description

Sells products for wholesalers to retailers, schools, hospitals and other businesses, traveling to and visiting with prospective buyers.

Career clusters

Agriculture, Food, and Natural Resources; Architecture and Construction; Business, Management, and Administration; Human Services; Marketing, Sales, and Service

Interests

People; things

Working conditions

Work inside

Minimum education level

Junior/technical/community college

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ESA

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Beverage and Tobacco Industry ses and recommendations for future sales opportunities and problems. Marketing and sales personnel search out opportunities to align product launches with emerging technologies or to time them to coincide with major events such as the Super Bowl or Olympic Games. Promotions staff attend events and promote or provide free samples of their products to other event attendees. Sales positions make up 9.1 percent of the beverage and tobacco industry’s workforce. Workers are often compensated with base salaries plus commissions based on individual or team performance. Key skills for such positions include communication, influence, negotiation, problem solving, and organization. Marketing and communications positions usually require degrees or training in the area, and the salary can start near $25,000 annually for entry or fellowship positions and in excess of $90,000 for marketing managers and directors. Key skills include strong communication and organizational skills, innovation and creativity, and knowledge of branding, promotions, trade shows and event planning, advertising, and research. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Vice President of Sales and Marketing Sales Manager Marketing Manager Account Executive Account Associate Sales Analyst Wholesale Sales Representative Corporate Communications Director Corporate Relations Specialist Media Relations Representative Market Research Manager Market Research Analyst Promotions Staff

Facilities and Security Facilities personnel ensure the smooth running and maintenance of physical plants, buildings, and grounds. Production lines can produce thousands of items each minute, so any delay or mechanical breakdown can have a tremendous detrimental impact on company profits. Facilities workers make minor repairs and conduct routine maintenance

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for production facilities. Basic knowledge of electrical wiring, plumbing, and carpentry are required. Specialized maintenance of production equipment and warehouse and delivery vehicles is often contracted to other companies, or larger companies may keep individuals on staff to repair and maintain fleet vehicles. Personnel employed by businesses that grow their own raw materials provide a different range of services, such as maintaining irrigation equipment and controlling weeds and pests. Adherence to strict facility procedures by staff is critical when manufacturing products for human consumption. Government regulatory inspections are frequently made at production facilities and warehouses. Facilities and security occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Security Specialist Security Guard Loss Prevention Specialist Facility Manager Maintenance and Repair Technician Mechanic Electrical Engineer Custodian/Janitor

Technology, Research, Design, and Development Beverage and tobacco research and development teams perform quality assurance in addition to product development. They ensure that processes and products meet all regulatory requirements and are safe for human consumption. Laboratory technicians perform microbiological, chemical, calibration, and other tests in order to determine whether raw materials, packaging, and manufactured products meet quality standards and specifications. Researchers also work with designers to create new products and packaging to increase customer appeal. They evaluate ingredients, products, and packaging materials via visual inspection or by measuring weight, density, stress resistance, dimensions, torque, and strength in order to determine physical properties and compliance with standards. Beverage chemists test the interaction of chemicals and desired ingredients, such as vitamins and minerals, in order to monitor the taste and consistency of beverages. They create flavors for products

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in laboratory settings. Technology has a tremendous impact on the production and distribution of beverage and tobacco products, as well as on marketing strategies. Information technologists work with businesses to develop strategies and applications to improve efficiency and tracking of employee performance, orders, shipping and distribution, billing, productivity, security, and quality control. As consumers become more technology savvy, marketing departments are employing adAccording to the National Coffee Association, in 2009, 54 percent of American vertising strategies more heavily adults drank coffee. (©Dreamstime.com) based on mobile, online, and social media technologies. Web or mobile delivery personnel creasingly automated, but workers are needed to ensure successful, effective, and efficient impleoperate and monitor the machines according to mentation of Web and mobile applications. Posiestablished quality, productivity, and safety stantions in this area usually require degrees or educadards. A single soft-drink production line can gentional certificates. erate over two thousand items each minute. BlendTechnology, research, design, and development ing technicians blend various fruit juices and occupations may include the following: drinks for bottling or canning to exact specifica■ Laboratory Technician tions within the blend process. Fillers operate and ■ Food Scientist maintain filling and capping equipment. Work is ■ Food Technologist similar to that performed on assembly lines and is ■ Food Science Technician very routine. ■ Industrial Engineer For any products that are intended for public ■ Chemical Engineer consumption, very specific safety and quality cri■ Industrial Engineering Technician teria are in place to protect consumers. Safety ■ Chemical Engineering Technician and quality assurance personnel are positioned ■ Chemist throughout production facilities to ensure compli■ Programmer Analyst ance with corporate and government require■ Systems Analyst ments. ■ Technical Analyst Winemakers and brewmasters use their experi■ Application Manager ence and knowledge to select the appropriate ■ Application Analyst equipment and mixtures of raw materials such as ■ Web/Mobile Delivery Personnel grapes, fruit, hops, or grains to create the desired ■ Information Technologist wine or beer. Most tobacco products for smoking are manufactured by automated equipment; however, some smaller and specialized companies roll Production and Operations their products by hand. Some businesses transport Production and operations represent the inner skilled cigar rollers and raw materials to special workings of the beverage and tobacco industry and events and make hand-rolled cigars on site for ataccount for over 9.8 percent of its workforce. In tendees. larger corporations, production is becoming in-

Beverage and Tobacco Industry Raw materials for many beverage and tobacco products are sourced from farms, plantations, and orchards. Agriculture workers maintain and pick the fruit, grains, and leaves. Depending on geographic area, some of this work may be seasonal. Production and operations occupations may include the following: ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Production Manager Operations Manager Food Safety/Quality Assurance Technician Inspector/Compliance Officer Production Technician Blending Technician Separating Machine Operator Packaging and Filling Machine Operator Filler Winemaker Brewmaster Cigar Roller Farmhand/Picker

Distribution Distribution of beverage and tobacco products often involves the product being transported from the bottling or manufacturing plant to retailers, consumers, or other businesses for further production. As electronic communication for ordering becomes more common, distribution and delivery personnel can interact directly with retailers and customers. Merchandisers work with the sales team to convince retailers to stock their product and then secure high-profile displays or positions on store shelves. Cooler technicians keep products stocked in retail locations in coolers, displays, or vending machines. Delivery and distribution drivers make up over 9.3 percent of the industry workforce. Some beverage and tobacco producers distribute and deliver their own products, but many turn to distributing companies that accumulate and warehouse a range of products and present them to prospective customers on behalf of the producers. Distribution occupations may include the following: ■ ■

Long-Haul Driver Merchandiser

■ ■ ■ ■ ■

173

Cooler Field Technician Distribution and Delivery Driver Warehouse Manager Shipping and Receiving Clerk Freight Loader/Unloader

Human Resources Human resources personnel ensure that employees have the tools and training that they need to be effective and productive. They manage a variety of processes, including recruiting, hiring, training and development, compensation and benefits, pension, retirement, and dismissal. Human resources staffs also ensure that all employee relations and practices comply with legal requirements and corporate policies. In some smaller businesses, the owner or manager performs most human resources tasks. Most positions within human resources require degrees or equivalent experience. Managers in this field, depending on their title, earned average salaries of $97,110 or $101,880 in 2009. Human resources is often a challenging area, and employee relations require patience, collaboration, negotiation, and conflict-resolution skills. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Compensation and Benefits Manager Human Resources Coordinator Human Resources Analyst Administrative Assistant Human Resources Generalist Benefits Specialist Payroll Clerk

INDUSTRY

OUTLOOK

Overview The outlook for the beverage and tobacco industry shows it to be on the rise. Despite the economic downturn of 2007-2009 and increased health concerns involving tobacco and sugary beverages, this industry is expected to grow at an average rate of more than 3 percent annually. Some sectors of the beverage industry have seen minimal growth; however, health and wellness

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estimated 3,100 tons and conserve 100 million litrends have positively affected the market. Even though carbonated soft drinks have the largest ters of water annually. market share, products such as enhanced or flaThe tobacco market encompasses the sale of vored waters and beverages marketed to provide chewing tobacco, cigarettes, cigars, cigarillos, and additional health and energy benefits have beloose tobacco. Cigarettes, however, are by far the come primary industry drivers. Consumers are willmost significant of these products: In 2008, cigaing to pay higher prices for products they feel have rette sales generated revenues of $384.1 billion, aca functional benefit or higher value than tradicounting for 92.1 percent of the tobacco-product tional beverages. High fuel prices paid by distribumarket. The main competitive threat to the totion divisions, as well as packaging costs, have had bacco industry is the emergence of strong tobacco negative effects on some of the larger corporasubstitutes, such as nicotine gum or patches. These tions, but the global recognition and reach of their products fulfill the consumer’s addictive need for products continues to rise. Beverage producers nicotine, without the harmful effects of inhaling have diversified their offerings, occupying differsmoke, and unlike tobacco products, they do not ent areas of the industry at the same time, thereby have imposed advertising restrictions. The governreducing their dependence on revenues from a ment regulations on tobacco advertising make it single product. Consumers have begun to demand that products have PROJECTED EMPLOYMENT less environmental impact, and FOR SELECTED OCCUPATIONS the beverage industry has responded with green initiatives. Beverage and Tobacco Product On average, packaging of prodManufacturing ucts in this industry represents 35 percent of the total cost of Employment the product. New plastic bottles are being developed that use 50 2009 Projected 2018 Occupation percent less plastic but remain 7,910 9,000 Driver/sales workers attractive to entice consumers. Rather than bottled water, some 4,640 4,600 First-line supervisors/managers of companies are now offering natproduction and operating workers ural spring water in recyclable 1,500 1,600 Industrial production managers cartons that provide environ8,380 7,300 Laborers and freight, stock, and mentally friendly portability and material movers, hand convenience. Traditional vending machines are being rede22,140 20,300 Packaging and filling machine signed to use carbon dioxide, operators and tenders rather than hydrofluorocar10,520 9,900 Sales representatives, wholesale bons, to cool beverages, which and manufacturing, except will use less energy and produce technical and scientific products fewer harmful emissions. Production plants and distribution 10,790 12,100 Separating, filtering, clarifying, warehouses are implementing precipitating, and still machine sustainable engineering guidesetters, operators, and tenders lines to monitor water and energy use on every production Source: U.S. Bureau of Labor Statistics, Industries at a Glance, line and every piece of equipOccupational Employment Statistics and Employment ment in real time. PepsiCo reProjections Program. ports that this technology will reduce carbon emissions by an

Beverage and Tobacco Industry increasingly difficult for smaller businesses to make consumers aware of their products. Illicit tobacco supplies have a negative impact on the revenues of legitimate companies, and it is estimated that over 10 percent of global tobacco consumption, approximately 600 billion cigarettes per year, is supplied by smuggled or counterfeit trade. The dilemmas faced by governments are social and economic. Tobacco provides jobs, tax revenue, and foreign exchange earnings, but government has a duty to protect public health and reduce the high costs of treating tobaccorelated illnesses. Despite stricter regulations, smoking bans, health concerns, and high taxation on products, the tobacco industry continues to grow. There has been a decline in tobacco consumption since the 1990’s in developed countries, but some demographics—such as women and people in less developed, highly populated areas of the world—have seen a consistent increase in tobacco-product use. Employment Advantages The beverage and tobacco industry is forecasted by market analysts to grow by more than 3 percent per year into the mid-2010’s. Despite economic downturns, increased regulation, and marketing restrictions on some products, consumer demand remains resilient in most markets. Positions within the beverage and tobacco industry are desirable and cover a broad range of skills and experience. Career paths include agriculture, production, sales, distribution, technology, administration, and science, among many others. Most career opportunities in this industry include advanced skills training, as well as additional learning opportunities for career and personal development. Many entry-level positions do not require candidates to possess advanced education, and large corporations provide above-average wages, automatic pay raises, and benefits such as paid vacation time, pensions, and life and health insurance. The average salary for all workers in the industry, $41,030 as of 2009, is above the average for all industries, despite only 21 percent of workers having university degrees. Coca-Cola, Nestlé, and Philip Morris are all included on a 2009 list of the world’s top fifty most attractive employers. It is reported that Philip Morris employees enjoy the best pensions and benefits in the United States.

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Annual Earnings Beverages and tobacco products constitute a trillion-dollar industry. It is highly competitive and driven by consumer loyalty and brand recognition. The global economic downturn has had a widespread impact; however, this industry appears be resilient. There are over eight hundred beverage companies in the United States alone. Global beverage revenues were over $2 trillion in 2009, and the industry is forecasted to grow by 3.8 percent over the five-year period from 2009 to 2014. The tobacco industry has faced strict regulation by governments concerned by tobacco’s effects on health and the expense of treating tobacco-related illnesses. Health concerns and regulations have led to a decline in tobacco use in Europe and North America. Tobacco use and production have increased in Asia, however. Areas such as Cambodia report that over 80 percent of the population uses tobacco products regularly. China produces over 30 percent of the world’s tobacco products and only exports 2 percent; the remainder are consumed domestically. The United States produces over 20 percent of global tobacco products and exports over one-third of its output. The compound annual growth rate of the market between 2004 and 2008 was 3.1 percent.

RELATED RESOURCES FOR FURTHER RESEARCH Alcohol and Tobacco Tax and Trade Bureau 1310 G St. NW, Suite 300 Washington, DC 20220 Tel: (202) 453-2000 Fax: (202) 453-2304 http://www.ttb.gov American Beverage Association 1101 16th St. NW Washington, DC 20036 Tel: (202) 463-6732 Fax: (202) 659-5349 http://www.ameribev.org International Council of Beverages Associations 77-79 Blvd. Saint Michel B-1040 Brussels

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Belgium Tel: 32-2-743-4050 Fax: 32-2-732-5102 http://www.icba-net.org

FURTHER

International Tobacco Growers Association Av. Gen. Humberto Delgado, no. 30-A, 1st dt. 6000-081 Castelo Branco Portugal Tel: 351-272-325-901 Fax: 351-272-325-906 http://www.tobaccoleaf.org National Alcohol Beverage Control Association 4401 Ford Ave., Suite 700 Alexandria, VA 22302-1473 Tel: (703) 578-4200 Fax: (703) 820-3551 http://www.nabca.org Tobacco Merchants Association P.O. Box 8019 Princeton, NJ 08543-8019 Tel: (609) 275-4900 Fax: (609) 275-8379 http://www.tma.org

ABOUT

THE

AUTHOR

April D. Ingram, a graduate of the University of Calgary, works as a writer and researcher in the Okanagan Valley, British Columbia, which is home to vineyards, fruit orchards, and over sixty wineries, breweries, and distilleries.

READING

Allen, Gary, and Ken Albala. The Business of Food: Encyclopedia of the Food and Drink Industries. Westport, Conn.: Greenwood Press, 2007. ClearWay Minnesota. Unfiltered: A Revealing Look at Today’s Tobacco Industry. Minneapolis: Author, 2010. Jones, Raymond. Strategic Management in a Hostile Environment: Lessons from the Tobacco Industry. Westport, Conn.: Quorum Books, 1997. Mahon, John F., and Richard A. McGowan. “The Cigarette Industry.” Chapter 4 in Industry as a Player in the Political and Social Arena: Defining the Competitive Environment. Westport, Conn.: Quorum Books, 1996. Parker, Philip M. The World Market for Beverages and Tobacco: A 2005 Global Trade Perspective. San Diego, Calif.: ICON Group, 2004. Plunkett, Jack W. Plunkett’s Food Industry Almanac, 2009. Houston, Tex.: Plunkett Research, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Van Liemt, Gijsbert. The World Tobacco Industry: Trends and Prospects. Geneva, Switzerland: International Labour Office, 2002.

Biofuels Industry ©Jim Parkin/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Energy Career Clusters: Agriculture, Food, and Natural Resources; Manufacturing Subcategory Industries: Industrial Organic Gas Manufacturing; Nonpotable Ethanol Manufacturing; Transesterification of Vegetable Oils to Produce Fuels or Fuel Additives Related Industries: Automobiles and Personal Vehicles Industry; Coal Mining Industry; Farming Industry; Mass Transportation Vehicles Industry; Natural Resources Management; Petroleum and Natural Gas Industry Annual Domestic Revenues: $20 billion USD (Market Research, 2010) Annual International Revenues: $26.5 billion USD (Clean Energy Trends, 2010; Frost & Sullivan’s, 2010) Annual Global Revenues: $46.5 billion USD (Clean Energy Trends, 2010; Frost & Sullivan’s, 2010) NAICS Numbers: 325120, 325193, 325199

INDUSTRY

ent, biofuels are made mainly from plant materials such as corn, sugarcane, or rapeseed. Thus, the industry depends heavily on agriculture. Biofuels are excellent transportation fuels that are used as gasoline and diesel substitutes. Biofuels can also be burned in electrical generators to produce electricity. They are considered by many as a future substitute for fossil fuels such as coal, petroleum, and natural gas.

History of the Industry People have been using biofuels such as wood or dried manure to heat their houses for thousands of years. The use of biogas was mentioned in ancient Chinese literature two to three thousand years ago. The first biogas plant was built in a leper colony in Bombay, India, in the middle of the nineteenth century. In Europe, the first sewage sludge digester for biogas production was built in Exeter, England, in 1895. Biogas from this digester was used to fuel street lamps in Exeter. In 1900, Rudolf Diesel, the inventor of the diesel

DEFINITION

Summary The biofuels industry uses organisms to generate renewable fuels. The major products of this industry are ethanol, biodiesel, and biogas. At pres177

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Soybeans, converted into biodiesel fuel, run this bus. (U.S. Department of Energy [DOE])

engine, used peanut oil to power his engine during the World Exhibition in Paris, France. Diesel said “the use of vegetable oil for engine fuels may seem insignificant today, but such oils may become, in the course of time, as important as petroleum.” Henry Ford’s first 1908 car, the Model T, was made to run on pure ethanol. In the 1920’s, 25 percent of fuels used to power American cars were biofuels. Biogas was used occasionally as a source of energy during World War II. In the 1940’s, the relatively low cost of petroleum led to its wholesale adoption as a fuel. Biofuels and the biofuel industry became virtually nonexistent. Since that time, interest in biofuels has been renewed occasionally when oil supplies become limited and when prices have increased for other reasons. For example, a return to biofuels was considered in the United States during the oil embargo of the 1970’s. While the United States did not act upon these plans, Brazil responded to the 1970’s oil crisis by beginning large-scale production of ethanol as an automobile fuel. The country had already been using ethanol in cars since the

1920’s, and by the 1980’s it had built the world’s largest and most successful ethanol fuel program. Most cars in contemporary Brazil have flexible-fuel engines, which allow them to run on either ethanol or gasoline. As a result of this successful program, Brazil reached complete self-sufficiency in energy supply in 2006. In the early twenty-first century, concerns over global warming, energy independence, peak oil, and oil prices have all combined to reignite interest in biofuels. A large-scale biofuel industry has begun to develop in many countries. In a short time, a large-scale American bioethanol industry has developed, making the United States the world’s second-largest ethanol producer after Brazil. There are more than 170 ethanol plants in the United States operating in more than twenty-five states. In 2005, Congress passed the Energy Policy Act, which included several sections related to biofuels. In particular, this law required mixing ethanol with gasoline. Nearly all U.S. fuel stations sell a mix of 90 percent gasoline and 10 percent ethanol (known as E10), and a handful sell a mix of 15 percent gaso-

Biofuels Industry line and 85 percent ethanol (E85). Congress also enacted tax credits and grants for biofuel companies. In addition, the Energy Policy Act required the country to conduct more research on biofuel generation and to increase production of secondand third-generation biofuels. The birth and growth of the ethanol industry worldwide was followed by the birth of the biodiesel and biogas industries. Biodiesel is mass-produced in more than twenty countries, and Europe is home to seventy-four biodiesel production plants. Germany is the world’s number one producer of biodiesel, producing 500 million gallons per year, based on canola oil. Over fifteen hundred outlets sell biodiesel in Germany. Several developing countries, such as Thailand, India, and Malaysia, produce biodiesel from palm oil and export it to Europe. In the United States, the first biodiesel pump was opened in 2001 in Sparks, Nevada. In late 2007, the country had more than 1,570 retail biodiesel locations. By 2009, U.S. biodiesel production reached 500 million gallons per year. Continental Airlines has successfully used a mixture of 50 percent standard fuel and 50 percent biodiesel to power the engines of a Boeing 737-800. The biodiesel used in the jet engines was produced from algae and plants. In China in the 1990’s, millions of small farmers maintained simply constructed underground digesters near their houses for biogas production. As many as ten thousand biogas digesters were operating in food factories, wineries, and other locations. Such companies were able to transfer their biogas to centralized supply stations or to biogaspowered electric power stations. China has become the world leader in biogas production. The Industry Today Since the beginning of the twenty-first century, the biofuel industry has undergone unprecedented growth and expansion. This record growth is especially visible in the U.S. ethanol industry. In 2008, that industry produced 9 billion gallons of ethanol, and in 2009 it produced 10.6 billion gallons—compared to 175 million gallons in 1980. The industry now supports 500,000 well-paid jobs in the United States alone. Support from the U.S. government and constant innovation are largely responsible for the rapid growth of the American ethanol industry. In

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the United States, most manufactured ethanol (C2H5OH) is grain alcohol, which is produced by yeast (fungal) fermentation of sugar from cornstarch. Sugar is extracted using enzymes, and yeast cells convert the sugar into ethanol and carbon dioxide (CO2). Then, the ethanol is distilled from the fermentation broth. The U.S. starch-based ethanol industry has consistently improved and developed. New technologies, such as low-heat fermentation, have lowered energy use, improved efficiencies, and increased yields. The industry is rapidly commercializing technologies to utilize new types of feedstocks, in addition to corn, to produce new advanced biofuels. For example, ethanol can be manufactured from cellulosic feedstocks, including woodchips, native grasses, and corn stalks, as well as from municipal solid waste and nonedible plants such as poplar.

This fuel pump in Columbus, Ohio, dispenses E85, a mixture of 85 percent ethanol and 15 percent petroleum. (AP/ Wide World Photos)

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chemical reaction with alcohol (ethanol or methanol) that is catalyzed by acids or bases such as sodium or potassium hydroxide. Transesterification produces alkyl esters of fatty acids that can be burned by diesel engines. In the United States, biodiesel is obtained mainly from soybean plants, while in Europe it is obtained from canola oil. Other vegetable oils that have been used in biodiesel production include corn, sunflower, cottonseed, jatropha, palm, and rapeseed oil. Another potential source for biodiesel production is microscopic algae (microalgae), microorganisms similar to plants. Research conducted by the U.S. Department of Energy Aquatic Species Program from the 1970’s through the 1990’s demonstrated that many species of algae produce sufficient quantities of oil to become economical feedstock for biodiesel production. Oil productivity of many microalgae greatly exceeds oil productivity of the most productive oil crops. Microalgal oil content can exceed 80 percent per cell dry weight, and oil rates of 20 to 50 percent are quite common. Algae use oil (lipids) as a storage material. Compared to other crops, algae can grow their mass within hours. In addition, algae can grow everywhere: in oceans, rivers, lakes, the snow of mountaintops, forests, and desert soils, as well as on rocks. Algae do not need many inputs for growth— just solar light, water, carbon dioxide, and small quantities of mineral salts. Moreover, they not only can produce biodiesel but also can remove carbon dioxide from the atmosphere, potentially reducing the greenhouse effect that contributes to global warming. Crop land and potable water are not necessary for microalgae cultivation, since microalgae can grow in wastewater. Development of biodiesel from algae is becoming one of the most popular potential energy alternatives. As a result, more than one hundred algae-to-biodiesel start-up companies were established in Most of the ethanol in the United States is produced by fermenting corn. (©Dreamsthe United States between 2005 time.com) and 2010. Cellulosic materials are very attractive as ethanol fuel feedstocks because they are in abundant supply. Earth’s plants produce almost 100 billion tons of cellulose per year, making it the most abundant organic compound on the planet. In addition, cultivation of nonedible plants for ethanol production requires fewer nutrients and less fertilizer, herbicide, and cultivated land. Thus, cellulosic ethanol production requires less energy in general than does corn ethanol production. For that reason, major research and development efforts are under way to reduce the cost of converting cellulose to ethanol. In the United States alone, more than three hundred cellulosic ethanol projects are under development, and more than two dozen advanced biofuel plants are being constructed to achieve a projected production capacity of 170 million gallons of ethanol per year. One company in California, for example, plans to convert the organic material from municipal solid waste into ethanol. The biodiesel industry is also a site of considerable research and development. Worldwide, biodiesel production has increased elevenfold since 2000, from less than 300 million gallons to almost 4 billion gallons. Biodiesel is a diesel substitute that is currently being derived mainly from vegetable oils, such as soybean oil and restaurant greases. It is produced by the transesterification of oils, a simple

Biofuels Industry

Rapeseed, which has bright yellow flowers, is another plant used to make biofuels. (©Joseph Gough/Dreamstime.com)

The biogas industry has also grown to meet the demand for renewable energy sources. Biogas is gas that is produced by the metabolism of communities of microorganisms. There are different types of biogas. The type with the greatest current industrial potential contains a mixture of methane (5075 percent) and carbon dioxide. Methane is a colorless, odorless gas with the molecular formula CH4. It is the main chemical component of natural gas (representing 70 to 90 percent of most natural gas), which currently accounts for up to 20 percent of the U.S. energy supply. Thus, biogas is a potential substitute for natural gas. The greatest growth in the twenty-first century biogas industry has occurred in China. In 2007, more than four thousand biogas plants were operating in China. The Chinese government is planning to build 4 million additional plants by 2030 to satisfy the energy needs of 600 million households.

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However, according to market estimates for 2010, Germany will lead world biogas production. The German biogas market increased by 80 percent in 2009. In the United States, several landfill gas facilities generate electricity using biogas. The city of San Francisco has extended its recycling program to include the conversion of dog waste into methane to produce electricity and residential heating. With a city dog population of 120,000, this initiative promises to generate a significant amount of fuel and achieve a huge reduction in waste at the same time. Some forty U.S. and Canadian companies operate eighty biogas production plants. Traditional biofuels such as biomass (wood material), ethanol, and biodiesel produced from crops are sometimes called first-generation biofuels. Second-generation biofuels, such as cellulosic ethanol, can be produced from agricultural and forestry residues and need not compete with food production. Many new second-generation biofuels, such as biohydrogen, are under development. Biohydrogen is an ideal fuel to be used for transportation, since the energy content of hydrogen is three times greater than that of gasoline by mass. Burning hydrogen is also virtually nonpolluting. A growing number of automobile manufacturers around the world are making hydrogen-powered vehicles. A study conducted by the International Energy Agency concluded that the potential of second-generation biofuels is considerable, while first-generation biofuels have only limited potential. Fuels such as butanol are referred to as thirdgeneration biofuels. Butanol (C4H9OH) is an alcohol fuel, but its energy content is roughly 80 percent that of gasoline—higher than that of ethanol. It does not absorb water as ethanol does, is not as corrosive as ethanol, and is more suitable for distribution through existing pipelines developed for gasoline. Butanol is produced as a result of fermentation by the bacterium Clostridium acetobutylicum. Substrates for such fermentation—including starch, molasses, cheese whey, and lignocellulosic materials—are the same as those used for ethanol production. The first butanol production plant was running in Terre Haute, Indiana, before World War II. Significant research and development efforts are needed over a period of at least fifteen years to ensure the successful deployment of second- and third-generation biofuels.

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This simple, small-scale biogas plant being built in Vietnam uses the methane produced by pig manure.

INDUSTRY MARKET SEGMENTS The biofuel industry ranges from small start-up companies concentrating entirely on biofuels to big multinational corporations, such as Archer Daniels Midland or BP, that have considerably broader portfolios. Some are actively producing and distributing biofuels, while others are still in the research and development phase and are surviving entirely on venture capital until they can bring their products to market. Small Businesses Small biofuel businesses include start-up research and development companies that study feedstocks and approaches for biofuel production. These companies seek to find new fuels or new ways to produce existing fuels at competitive prices. Once they do so, they plan either to begin production themselves or to sell their techniques

to production companies. They may be funded by investment firms or by government agencies such as the U.S. Department of Energy (DoE). Other small businesses actively produce and distribute biofuels (mainly biodiesel) in small localities. For example, more than fifty small companies around the world concentrate on the production of biofuels from algae. These companies, whose activities range from early-stage research to commercial operations, include GreenFuel Technologies, Solazyme, and Solix Biofuels. Other small companies sell equipment for biofuel production to individual users who want to generate fuels at home. Some farm owners own biogas plants, using manure to generate electricity that also can be sold locally. Potential Annual Earnings Scale. The biofuel industry falls within the larger category of the basic chemical manufacturing industry. According to the U.S. Bureau of Labor Statistics (BLS), the average salary of a chemical engineer working in this industry in 2009 was $91,400, while the average

Biofuels Industry salary of an industrial engineer was $84,950. Biochemists and biophysicists earned $78,630, on average, chemical technicians earned $50,070, and production-plant chemical equipment operators earned $45,900. Generally speaking, salaries for workers at small start-up firms are below average, but firms may offer stock options or other profitsharing bonuses that could become quite lucrative if their ventures prove successful. Clientele Interaction. Start-up companies usually treat their clients with a more personal touch. Some clients of small businesses are governmental agencies that provide grants to finance their operations. In this case, small companies are required to submit periodic reports to the granting agencies. Similarly, research and development companies’ only clients may be investors, and they must ensure that those investors feel that their investments are likely to pay off by periodically reporting on their progress, either formally or informally. Amenities, Atmosphere, and Physical Grounds. Small biofuel companies normally rent office and laboratory space in business parks or on university campuses. Research and developmentcentered companies devote most of their facilities to technical and support operations, while other firms may have traditional business offices to coordinate sales and distribution. Technology start-ups often have close-knit atmospheres and cultivate company loyalty and team spirit. Because many employees of such start-ups earn less money than they could at established firms, companies often attempt to provide minor, inexpensive perks in their offices. Such amenities make employees feel appreciated without adding much expense to the bottom line of companies operating on tight budgets. Typical Number of Employees. In many cases, start-up companies have very small staffs, and sometimes the owners are the only employees. Most small biofuel companies have between one and fifty employees. Traditional Geographic Locations. American ethanol start-up companies are mainly located in the Midwest, near corn-producing farms. Biodiesel companies that use crops as feedstock also tend to be located near major farmlands to minimize transportation costs and to ensure access to a range of different growers who will compete to offer the best prices. Algae-based biodiesel companies rely on abundant sunlight to power their operations, so

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many such start-ups are located in states with abundant sunlight: California, Arizona, Florida, and Hawaii. Small biogas plants can be located almost anywhere, since their feedstock, organic waste, is produced everywhere people live. Pros of Working for a Small Biofuel Company. The advantage of working for a small biofuel company is the potential for large financial rewards if the company becomes successful. Small firms often grant their employees greater autonomy and authority than do larger firms, which are more bureaucratic and have more management and supervisorial staff. Moreover, small firms’ employees may be involved in multiple projects and gain more varied experience than do employees of larger firms. Especially at start-ups, employees tend to collaborate with creative and enthusiastic people and have the opportunity to develop new ideas. Small companies usually have relatively fast-paced work environments, which may appeal to some people. Cons of Working for a Small Biofuel Company. Small companies pay less and offer fewer benefits than larger companies, and start-ups traditionally pay their staffs less than the market value of their labor and experience. Employees of such start-ups are taking a calculated risk: They sacrifice current pay and benefits for the chance of significant financial reward in the future. In addition to the risk of this gamble not paying off, there is the added risk that a company will fail entirely and workers will lose their jobs. While there are often opportunities to “learn by doing” in such companies, there are relatively few opportunities for formal training or professional development. Costs Payroll and Benefits: Small biofuel companies generally provide annual salaries. Benefits such as medical insurance, sick time, and vacation leave are normally provided. Supplies: Many small biofuel companies are involved in research and development. They require research equipment, chemicals, and feedstock for biofuel experiments and production. Those engaged in production and distribution require heavy production machinery, tools with which to maintain it, and vehicles capable of transporting fuels. In addition, small companies need office supplies, computers, and telephones.

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External Services: Small companies may contract such services as maintenance and office and laboratory cleaning, as well as accounting, legal counsel, and consulting. Some even engage external research companies to supplement or confirm their own research findings. Utilities: Small companies require electricity, water, sewage, air-conditioning, gas, telephone, and Internet access. Taxes: Start-up companies are required to pay local, state, and federal income taxes, as well as property taxes. Some tax benefits are available for advanced biofuel companies to promote the development and commercialization of secondand third-generation biofuels. Algal biofuel companies have not yet received these tax benefits, and they are lobbying Congress for the same tax incentives provided to other advanced biofuel companies. Midsize Businesses Midsize biofuel companies typically produce between 40 million and 60 million gallons of ethanol or biodiesel per year. Companies this size are often in a growth stage and are likely to develop into large companies if successful. Some pursue a strategy of technologial discovery while building networks of commercial partners. Mascoma is an example of a midsize cellulosic ethanol production company, while World Energy is a midsize biofuel distribution firm. Individual plants, such as Commonwealth Agri-Energy’s ethanol refinery in Kentucky, may sometimes also be considered as midsize businesses. Potential Annual Earnings Scale. The biofuel industry falls within the larger category of the basic chemical manufacturing industry. According to the U.S. Bureau of Labor Statistics (BLS), the average salary of a chemical engineer working in this industry in 2009 was $91,400, while the average salary of an industrial engineer was $84,950. Biochemists and biophysicists earned $78,630, on average, chemical technicians earned $50,070, and production-plant chemical equipment operators earned $45,900. Industrial production managers earned $102,040, general and operations managers earned $126,060, and chief executives earned $193,840. Salaries at midsize biofuel companies may diverge somewhat from these broader averages. The average annual salary of all employees at such com-

panies is about $84,000. Plant managers may earn $150,000 or more per year. Some 11 percent of employees earn less than $40,000 per year. Annual salary increases with the length of employment in the biofuel industry. Clientele Interaction. In order to save on transportation costs, midsize companies tend to sell biofuels locally. Local grain producers often coown biofuel plants, as well as being the main customers of those plants. Many biofuel companies serve numerous governmental organizations, such as the U.S. Postal Service and the military. Governmental organizations are often required to use biofuels to power their vehicle fleets. Amenities, Atmosphere, and Physical Grounds. Midsize companies do not have many employee amenities on company grounds, but they do seek to create a positive work atmosphere. Vending machines or fitness centers may be available. Usually, midsize biofuel companies are located in rural areas near farms. They resemble oil refineries with tall grain elevators or distillation towers and giant steel tanks. Typically, ethanol plants produce occasional odors similar to those produced by breweries or industrial bakeries. Biogas plants may release sewage odors. Biofuel plants are usually clean. Safety goggles are mandatory and worn throughout the plants. Typical Number of Employees. Midsize companies generally employ fewer than two hundred people, including some employees who may work largely outside the plants themselves, such as truck drivers. A single ethanol plant may have between thirty and fifty employees. Traditional Geographic Locations. Many midsize companies are found in the Midwest, near many production-scale farms. Top ethanol-producing companies are located in Iowa, Illinois, Nebraska, South Dakota, and Minnesota. Pros of Working for a Midsize Biofuel Company. If midsize companies grow into large companies, the potential for large financial rewards is significant. In addition, employee achievements are more likely to be noticed and appreciated at a midsize company than at a large one. According to industry statistics, employees who work at midsize facilities are 67 percent more likely to receive a raise because of a promotion or change in responsibilities than are employees at other firms. They are also somewhat more likely to have some involvement in

Biofuels Industry business decisions. Midsize companies have fewer managers than do large companies, so there may be fewer levels of bureaucracy to contend with and greater autonomy in employees’ daily tasks. It is commonplace in midsize biofuel companies for ambitious and capable employees to work their way up to become top plant managers. Cons of Working for a Midsize Biofuel Company. Midsize biofuel companies depend heavily on feedstock prices, other product prices, and continuing governmental support. Employees have relatively low job security. For example, several midsize biofuel companies declared bankruptcy during 2008 as a result of the global economic crisis and higher feedstock prices. Large biofuel companies such as Poet Energy and Archer Daniels Midland are somewhat protected from economic downturns because they are diversified beyond this one industry. Costs Payroll and Benefits: Personnel are generally paid annual salaries, as well as benefits such as medical, dental, vision, disability, and life insurance and pension or retirement plans. Paid sick, holiday, and vacation leave is also usually provided. Employees may also be given the opportunity to buy company shares or provided monetary bonuses. The majority of biofuel plant employees are considered exempt, so they are not compensated for overtime. Supplies: Biofuel companies require heavy trucks and storage facilities, such as grain elevators and liquid and gas storage tanks, as well as laboratory and protective supplies, including laboratory coats, safety glasses, tools, and instruments. They also need office supplies and equipment. Ethanol companies need industrial-scale fermenters, distillation equipment, feedstock pretreatment tanks, feedstock, enzymes to digest the feedstock, and yeast or bacterial cultures to carry on fermentation. Biodiesel companies need industrial chemicals, biodiesel processors or converters, and oil presses. Biogas companies need electrical generators (or gas engines), anaerobic digesters, and wastewater or manure to use as feedstock. External Services: Biofuel companies often transport feedstock and biofuels by rail, requiring the services of railroad freight companies. They

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may also contract machinery and equipment maintenance and repair services, often from the manufacturers. Ethanol must be blended with gasoline in blending terminals, which may be accomplished by external vendors. Companies may also contract landscaping, cleaning, routine maintenance, or security services. Utilities: Midsize companies pay for electricity, water, sewage, air-conditioning, gas service, telephone, and Internet access. Taxes: Companies are required to pay local, state, and federal income taxes, as well as property taxes. U.S. companies producing alcohol and fuel are heavily regulated and taxed, but biofuel companies receive tax credits designed to help the industry develop. Biodiesel companies receive $1 per gallon in tax credits, while ethanol producers receive 45 cents per gallon. In addition, the domestic ethanol industry benefits from a tariff of 54 cents per gallon imposed on imported ethanol. Large Businesses Large companies typically produce more than 100 million gallons of ethanol or biodiesel per year. Many large biofuel businesses are big multinational conglomerates such as Archer Daniels Midland, Monsanto, and BP. These large companies produce not only biofuels but also other, unrelated products. The largest American ethanolproducing company is Poet Energy. Poet Energy sells not only ethanol but also services, such as the management of biofuel plants for other companies. Other big companies include Abengoa Bioenergy and VeraSun Energy. Potential Annual Earnings Scale. The biofuel industry falls within the larger category of the basic chemical manufacturing industry. According to the U.S. Bureau of Labor Statistics (BLS), the average salary of a chemical engineer working in this industry in 2009 was $91,400, while the average salary of an industrial engineer was $84,950. Biochemists and biophysicists earned $78,630, on average, chemical technicians earned $50,070, and production-plant chemical equipment operators earned $45,900. Industrial production managers earned $102,040, general and operations managers earned $126,060, and chief executives earned $193,840. Salaries at the largest companies are likely to be above these averages.

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Clientele Interaction. In big companies, clientele interaction is the purview of specific departments, such as customer service and sales. Many employees may never interact with clients, whereas a few do so every day as their primary task. Amenities, Atmosphere, and Physical Grounds. Big biofuel companies usually have fitness centers, on-site day care, and cafeterias for their employees. They are situated in massive industrial plants, which may or may not also house management and research and development facilities. Often, company headquarters occupy office buildings in major urban areas, while production plants are likely to be located in rural areas near sources of feedstock. Many large conglomerates have international offices, and they may either devote entire offices to biofuel-specific operations or share offices among different units. Typical Number of Employees. Large companies employ anywhere from two hundred to tens of thousands of persons. For, example, Archer Daniels Midland has twenty-eight thousand employees. Traditional Geographic Locations. Many large American biofuel production companies are located in the Midwest, near an abundance of production-scale farms. Normally, these companies have several plants in different states. For example, VeraSun Energy has ethanol plants in South Dakota, North Dakota, Minnesota, Indiana, Ohio, Nebraska, and Iowa. Pros of Working for a Large Biofuel Company. Large companies offer relatively stable employment. They also institute significant divisions of labor, allowing each employee to specialize in a particular area. They pay well—including starting salaries—and provide good benefits, and their national and international spans make it easy for employees to relocate if they so desire. Employees may also enjoy traveling internationally at their companies’ expense. Employees of large firms receive more support of various kinds than do employees of smaller firms. They tend to have assistants or other support staff working under them. They are also more likely to have professional development opportunities, including in-house staff trainings and budgets to attend external conferences. Cons of Working for a Large Biofuel Company. In a big company, it may be hard to be noticed by the top management. Employees are

rarely promoted to higher-level manager positions, both because large companies often hire managers from without and because what internal promotion opportunities do exist are subject to significant competition among a large workforce. Large companies tend to be highly bureaucratic, and the energy industry tends to be highly regulated. The combination of these two factors results in a great deal of paperwork that must be filled out and stringent policies and procedures that must be followed. Costs Payroll and Benefits: Large biofuel companies tend to pay most professional and production staff annual salaries, while maintenance workers, truck drivers, and similar staff are paid hourly wages. Large companies usually offer benefits such as medical, dental, and vision insurance for both employees and their families, as well as life and disability insurance for employees alone. Employees also receive pension or retirement plans and paid sick, holiday, and vacation leave. Companies may provide service awards and bonuses, as well as company stockpurchasing programs, tuition reimbursement and scholarship programs, and other benefits. Supplies: Biofuel companies require heavy trucks and storage facilities, such as grain elevators and liquid and gas storage tanks, as well as laboratory and protective supplies, including laboratory coats, safety glasses, tools, and instruments. They also need office supplies and equipment. Ethanol companies need industrial-scale fermenters, distillation equipment, feedstock pretreatment tanks, feedstock, enzymes to digest the feedstock, and yeast or bacterial cultures to carry on fermentation. Biodiesel companies need industrial chemicals, biodiesel processors or converters, and oil presses. Biogas companies need electrical generators (or gas engines), anaerobic digesters, and wastewater or manure to use as feedstock. External Services: Biofuel companies often transport feedstock and biofuels by rail and barge, requiring the services of railroad and water-based freight companies. They may also contract machinery and equipment maintenance and repair services, often from the manufacturers. Ethanol must be blended with gasoline in blend-

Biofuels Industry ing terminals, which may be accomplished by external vendors or by another division of the same company. Companies may also contract landscaping, cleaning, routine maintenance, or security services, either at all their locations or only at those locations ill-equipped to hire permanent staff to provide those services. Large corporations generally have their own public relations staff, but they often hire outside advertising agencies and public relations consultants to help mount major advertising campaigns. Similarly, such companies employ their own accounting and financial services staffs, but they may also contract external auditors when appropriate. Utilities: Biofuel companies pay for electricity, water, sewage, gas service, air-conditioning, telephone, and Internet access. Large corporations may have their own physical plants to support their utilities. Taxes: Large companies are required to pay local, state, federal, and international income taxes, as well as property taxes and value-added taxes. They benefit from U.S. tax credits for biofuel producers, but they may also be required to pay tariffs on fuels they export.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of the biofuels industry varies somewhat by segment since smaller companies are more likely to be start-ups focused primarily on research and development while larger companies are more likely to be engaged in full-scale production and distribution. However, even most start-ups anticipate becoming producers, so the basic contours of the industry’s structure apply to most companies, either currently or in their future business plans. On average, employees with college degrees earn $20,600 more than those with less education. The following umbrella categories apply to businesses in the biofuels industry: ■ ■ ■

Business Management Customer Service Sales and Marketing

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Security Technology, Research, Design, and Development Production Distribution Human Resources Administrative Support Legal Accounting Purchasing Maintenance Information Technology Public Relations

Business Management Business managers oversee the general operations of biofuel companies, as well as specific departments, teams, and plants. They set goals and make and implement plans. Many business managers have degrees in business, finance, or management. More than 30 percent of them have master’s degrees or Ph.D.’s. A majority of the executive managers in the biofuel industry come from other industries, such as agricultural processing, food and beverage manufacturing, or industrial manufacturing. Plant managers usually have at least ten years of experience in the biofuels industry, however. Executive managers generally earn the highest salaries paid by their employers. Business management occupations may include the following: ■

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President/Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) Vice President of Operations Executive Manager Corporate Manager Plant Manager Department Manager Marketing Director General Counsel

Customer Service Customer service personnel interact with customers, providing information in response to inquiries, concerns, and requests about their companies’ products and services. They should cultivate strong relationships with their customers. These

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personnel also receive, schedule, fulfill, and invoice customer orders. Key competencies in this area include interpersonal and communication skills, listening skills, and a general customer service orientation. Customer service personnel usually have high school diplomas or bachelor’s degrees. In 2009, the average salary of a customer service representative in the basic chemical manufacturing sector was $41,160 per year. Customer service occupations may include the following: ■ ■ ■

Media Relations Specialist Customer Service Representative Customer Service Manager

Sales and Marketing Salespeople plan and carry out all sales activities. Marketing personnel manage and drive customer communications and marketing campaigns in close collaboration with salespeople. Marketing campaigns include participation at trade shows, conferences, and other events. Marketing personnel also communicate with media, trade associations, industry journals, and other resources to promote company interests. Salespeople usually have high school diplomas or bachelor’s degrees. They usually receive performance bonuses to stimulate their productivity. Marketing specialists may require master’s degrees in marketing or communications. Marketing managers earned an average of $122,320 in 2009. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Vice President of Sales Sales Manager Sales Representative Marketing Manager Communications Manager Marketing Services Assistant Market Research Analyst

Security Security personnel protect companies’ employees, as well as their physical and intellectual property. They may also enforce internal company rules. Public safety certification is required for these positions. Many employees in this area have military or law enforcement backgrounds. In 2009,

average annual salaries were $34,630 for a security guard and $66,450 for a supervisor. Security occupations may include the following: ■ ■

Security Guard Security Director

Technology, Research, Design, and Development Biofuels represent an emergent industry that is heavily dependent on research and development and new technologies. Biofuel companies not only generate fuel today but also develop the fuels of tomorrow. Much of the indutry’s success is due to the hard work of scientists, engineers, and technicians, who have spent countless hours working to improve biofuel production. Personnel in these occupations carry out research, including analyzing biofuel feedstocks, investigating potential new feedstocks, and modifying existing ones. Industry scientists are creating “super-bugs,” new organisms designed to achieve superior biofuel yields. They are trying to improve the efficiency of existing production processes and to make them more environmentally friendly. They are also studying chemical processes and enzymes to improve existing bioprocesses for biofuel production. In addition, engineers and scientists design and develop new production apparatuses, such as bioreactors or fermenters, and new applications for the by-products of biofuel production. Biofuel scientists, especially those employed by small and midsize companies, may be asked to write grant proposals to governmental and private funding agencies. Because they work in a cuttingedge, rapidly developing industry, scientists and engineers must constantly update their knowledge—reading scientific journals and books and attending conferences—to keep their skills marketable. Technicians assist scientists in research activities and may conduct some research independently. Most scientists, developing engineers, and laboratory technicians work in laboratories or in experimental plants. Their work hours vary greatly and may include evenings and weekends depending on the requirements of each experimental project. Most biofuel companies hire scientists and engineers with master’s or doctoral degrees. In start-up companies, scientists or engineers may

Biofuels Industry hold executive management positions. Technicians usually have bachelor’s or associate’s degrees in chemistry. In 2009, chemists earned an average of $71,210, chemical technicians earned an average of $50,070, and chemical engineers earned an average of $91,400. Natural science managers earned $141,580. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Laboratory Manager Chemist Chemical Engineer Chemical Technician Laboratory Technician Process Development Engineer/Scientist Biofuels Feedstock Technologist Gas Engine Engineer Product Development Engineer Process Engineer

production process. Computerization of production processes is gradually reducing the number of production jobs. Most of the time, a single biofuel plant operator monitors the entire production process at a given plant. Plant engineers ensure that production processes run efficiently. Production managers make sure that products meet quality standards. Biofuel plant operators generally have technical training in production processes. Experienced operators sometimes advance to supervisory positions, such as shift supervisor. Average annual salaries in 2009 were $55,420 for chemical plant and system operators and $55,810 for gas plant operators. Engineers generally require a master of engineering (M.E.) degree, and industrial engineers earned an average of $84,950 in 2009. Production occupations may include the following: ■

Production Production personnel operate and fix plant machinery, transport raw materials, and monitor the

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Production Manager Plant Process Engineer Plant Technician Shift Supervisor

SPECIALTIES

Chemists Specialty

Responsibilities

Analytical chemists

Analyze chemical compounds and mixtures to determine their composition and conduct research to develop or improve techniques, methods, procedures, and the application of instruments to chemical analysis.

Biochemists

Study the chemical composition of living things.

Inorganic chemists

Conduct experiments on substances that are free or relatively free of carbon; may also conduct research in relation to metals, ores, gases, heavy chemicals, and products such as glass.

Organic chemists

Study the chemistry of carbon compounds, conduct research into agricultural products and foods, and have a responsibility in the development of many commercial products such as drugs, plastics, and fertilizers.

Physical chemists

Conduct research into the relationships between chemical and physical properties of organic and inorganic compounds. Their research often results in new and better sources of energy.

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Biofuels Industry Plant Operator Process Automation Engineer Data Analyst Boilermaker Lead Operator Inspector

Distribution The biofuel industry uses the same distribution system as do the petroleum and gas industries. Biofuel distribution requires governmental licensing. A majority of small and midsize companies use other companies to distribute and sell their biofuels, but all biofuel companies need to pack their biofuels and send them either to distributors or directly to customers. Distribution personnel package products (both biofuels and by-products such as cake feed, carbon dioxide, or glycerol), load them into trucks and rail cars, and send them to customers. Duties may also include transferring

feedstock from storage to production and operating tractor-trailers or loaders. International companies sometimes hire import-export compliance specialists, who manage those operations. High school diplomas or the equivalent are required for these positions. Large biofuel companies maintain their own fleets of vehicles to deliver biofuels to customers. Drivers are responsible for picking up and delivering biofuels and by-products. They may also transport products between production plants and distribution centers, between distribution centers and customers, or between different distribution centers. Most truck drivers take driver-training courses at technical or vocational schools to obtain commercial driver’s licenses (CDLs). In 2009, chemical packers and packagers earned an average of $29,430; shipping, receiving, and traffic clerks earned an average of $36,290; and heavy truck drivers earned an average of $42,010.

OCCUPATION

PROFILE

Chemist Considerations

Qualifications

Description

Analyzes organic and inorganic compounds to determine their chemical and physical properties, as well as their structure and composition.

Career cluster

Agriculture, Food, and Natural Resources; Health Science; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Biofuels Industry OCCUPATION

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PROFILE

Boilermaker Considerations

Qualifications

Description

Builds, assembles, installs, tests, and repairs metal structures such as boilers, tanks, furnaces, smoke stacks, heat exchangers, antipollution systems, and pressure vessels (containers for storing or moving liquid or gas under pressure).

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work; heavy work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest scores

RES; RIE; RSE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Distribution occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Commodity Manager Commodity Assistant Utility Worker Packaging Superintendent Hand Packager Commercial Compliance Specialist Transportation Dispatcher Forklift Operator Inventory Control Specialist Importer/Exporter Shipping and Receiving Clerk Truck Services Manager Truck Driver Mechanic

Human Resources Human resources personnel recruit, hire, and fire employees; oversee employee relations; and administer payrolls and benefits. They also coordinate employee training, enforce company discipline, and respond to employee grievances. Basic chemical manufacturers’ human resources managers earned an average of $101,600 in 2009. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Vice President of Human Resources Human Resources Director Human Resources Coordinator Human Resources Manager Administrative Assistant Compensation and Benefits Analyst Human Resources Generalist Benefits Manager

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Biofuels Industry Training Manager Employee Relations Manager

Administrative Support All biofuel companies need effective office and administrative support to operate efficiently. High school diplomas or bachelor’s degrees are sufficient for these personnel. Average annual wages of secretaries in this field in 2009 were $34,710, while administrative assistants and executive secretaries earned an average of $43,670. Administrative support occupations may include the following:

receivable, verify all invoices for payment, process checks, and execute or assist internal and external audits. Bachelor’s degrees in finance or business administration are required for these positions. Accountants earned mean annual wages of $68,790 in 2009. Accounting occupations may include the following: ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■

Office Manager Executive Secretary Administrative Assistant Mail Room Supervisor Mail Clerk Records Manager General Clerk Receptionist

Legal Legal personnel draft and review contracts and other legal documents. They protect their companies’ intellectual property and trade secrets by securing patents, prosecuting patent infringements, negotiating patent licenses and completing the necessary paperwork to establish and monitor them, resolving disputes, and managing technology transfer. Lawyers must pass bar examinations in their geographical area, and they must complete either law school degrees or rigorous apprenticeships to become eligible to take those examinations. Lawyers employed by chemical manufacturers earned an average of $131,760 in 2009. Legal occupations may include the following:

■ ■ ■ ■ ■ ■

Purchasing Purchasing personnel acquire biofuel feedstocks, such as corn or soybeans, primarily by buying them directly from agricultural producers. They also manage databases of such producers. In addition, purchasing personnel buy chemicals, equipment, computers, spare parts, office supplies, and all other supplies necessary for their companies’ operations. They attempt to negotiate the lowest possible prices for the highest quality goods. They generally require college degrees in agriculture business or marketing. Purchasing managers earned an average of $98,210 in 2009. Purchasing occupations may include the following: ■ ■

■ ■ ■ ■

Corporate Counsel Intellectual Property Attorney Intellectual Property Manager Legal Secretary

Accounting Accounting personnel perform advanced and specialized accounting assignments, maintain accounting records for fixed assets, provide financial return analysis, recommend investments and costreduction initiatives, oversee accounts payable and

Senior Accountant Accountant Accounting Clerk Senior Cost Analyst Controller Accounts Payable Clerk Accounts Receivable Clerk Payroll Manager Tax Preparer Financial Analysis Manager Internal Auditor

■ ■

Purchasing Manager Purchasing Agent Grain Buyer Grain Commodity Clerk

Maintenance Maintenance staff maintain and repair plant systems, such as plumbing, electrical hardware, and other machinery. They also record and analyze causes of production delays. They generally require training or certification in electronics, instruments and electrical systems, or plumbing. Maintenance workers in the industry earned an av-

Biofuels Industry erage of $30,010 in 2009. Quality assurance personnel in this department are responsible for routine testing and analysis of raw materials, finished materials, and water samples. Quality testers require bachelor’s degrees in biochemistry or a related field. Maintenance occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Maintenance Manager Maintenance Engineer Chief Engineer Maintenance Mechanic Plumber Electrician Quality Assurance Manager Quality Assurance Analyst Safety Manager Facility Manager

Information Technology Information technology (IT) personnel manage computers and computer-controlled systems at biofuel companies. They also help maintain computer hardware and software, design computer programs and systems, and troubleshoot computers and networks generally. Computer specialists generally need bachelor’s degrees in computer science plus experience with a range of computer systems and technologies. Industry computer support specialists earned an average of $50,690 in 2009, while programmers earned an average of $73,330. IT occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Information Technology Director Computer Operations Supervisor Computer Engineer Help Desk Specialist Network Administrator Software Engineer PC Hardware Technician Programmer Web Designer

Public Relations Public relations personnel are important to the biofuels industry because of its emergent status: Launching a new industry is a difficult endeavor. These personnel prepare advertisements for their companies and design campaigns to promote com-

193

pany interests. They also implement public exposure strategies. For example, a public relations office might issue a press release that could be printed in newspapers or shown on television across the country. Public relations personnel work in comfortable offices and operate within a teamwork environment. However, long hours, including evenings and weekends, are common. Positions in public relations require bachelor’s degrees, preferably with broad liberal arts exposure. Industry public relations specialists earned an average of $64,710 in 2009. Public relations occupations may include the following: ■ ■ ■ ■

Public Relations Manager Public Relations Specialist Spokesperson Press Secretary

INDUSTRY

OUTLOOK

Overview The outlook for the biofuels industry shows it to be on the rise. The production capacity of the biofuels industry is growing exponentially, as biofuel demand is driven by environmental, social, and economic factors and backed by governmental support. The U.S. Governmental Energy Independence and Security Act of 2007 sets an annual biofuel production goal of 36 billion gallons by 2022 (11.1 billion gallons were produced in 2009). As a result, the ethanol industry alone is projected to create about 1 million new jobs across the economy by 2022. Companies producing advanced biofuels (such as ethanol from cellulose) may create as many as twenty-nine thousand jobs over the next few years, and hundreds of thousands more by 2030, contributing more than $140 billion to economic growth. World biodiesel production is projected to reach 37 billion gallons by 2016, growing at an average annual rate of 42 percent. The main reason that the biofuels industry is on the rise is the ability of biofuels to help mitigate the devastating impacts of oil price increases. Oil prices reached a record $140 per barrel in 2008. If biofuels can be produced more cheaply than oil, then replacing oil with biofuels will lower the average price of energy and satisfy an increasing de-

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mand that may not be met by oil alone. Moreover, competition from biofuels affects oil prices directly. The biofuel industry is keeping world oil prices 15 percent lower than they would otherwise be. Biofuels are considered by many as a future substitute for oil. Pollution from oil use affects public health, and carbon dioxide released by burning fossil fuels contributes to global climate change. Using biofuels as an energy source generates fewer pollutants than using oil, and it produces little or no carbon dioxide—if the feedstocks are not produced with fossil-fuel-based fertilizers and the production process is not powered by fossil fuels. In addition, the utilization of biofuels reduces U.S. dependence on foreign oil. The 2022 U.S. governmental production target of 36 billion gallons of biofuels includes 21 billion gallons from advanced biofuels. If this target is met, U.S. dependence on oil may be reduced by more than 328 million barrels per year. The biofuels industry is also on the rise internationally. This industry promises economic opportunities, environmental benefits, and energy security. World ethanol production in 2009 reached a record volume of 20 billion gallons, representing growth of nearly 400 percent since 2000 and 12 percent growth from 2008. As the world market for biofuels expands, opportunities for new jobs in trade and technology development will grow as well. The International Energy Agency (IEA) has estimated that more than 1 million barrels of oil are displaced by global biofuel production each day. In the United States, the ethanol industry is lobbying the government to raise the required ethanol content in gasoline from 10 percent to 15 percent. The approval of a mix of 85 percent gasoline and 15 percent ethanol (E15 blend) by the Environmental Protection Agency would open new opportunities for the ethanol industry to increase production and expand production facilities. It would create thousands of new jobs and trigger economic growth. More than 136,000 jobs would be created, and the economy would grow by more than $24 billion. Even greater economic benefits could result from the use of a 20 percent ethanol blend. Some critics, however, argue that higher blends could harm engines, although the ethanol industry disagrees. In addition, advanced biofuel

technologies that could enter the market within the next few years would bring more high-quality jobs. Some 50 percent of U.S. companies are considering options to generate or buy renewable energy sources, including biofuels. These companies include JCPenney, the U.S. Postal Service, Costco, United Parcel Service (UPS), and Green Mountain Coffee. Some of these companies will generate biofuels on site. BP and Shell, traditional oil companies, plan to invest $8 billion in biofuel technologies over ten years. The growing biofuel industry also provides jobs in satellite industries such as plant construction, particularly in rural communities, and in the agricultural sector. Investments in biofuels are also rising. U.S.based venture capital investments in renewable energy production, including biofuels, accounted for 12.5 percent of total activity in 2008—the largest share in the history of renewable energy. In the United States, in addition, $100 billion of the $787 billion American Recovery and Reinvestment Act of 2009 went to fund clean energy activities. South Korea will commit $84 billion to renewable energy by 2013. China plans to spend $440 billion to $660 billion on clean and renewable energy over ten years. Continued strong growth of the biofuels industry depends on its profitability, which will be influenced by several factors, such as biomass oil feedstock prices, product and coproduct prices, production technologies, and continuing governmental support. Employment Advantages Despite the worldwide economic crisis, the biofuels industry is moving forward, creating more, and more varied, jobs. Improvements in efficiency and innovations in production combined with improved farming techniques have allowed the industry to increase productivity with existing crop acreage. The industry’s rapid expansion, broad range of available career paths, and explorative nature present great opportunities for job seekers. According to the BLS, wages in the biofuels industry will continue to increase by about 11 percent over the 2008-2018 time period. Industry employees have excellent chances for advancement. In the past, 75 percent of industry employees received raises from their employers. Employment of scientists in the research areas of the industry is ex-

Biofuels Industry pected to increase by 83 percent. Finally, people working in the biofuels industry may be proud to be part of the biofuel revolution and to make a difference in the world. Annual Earnings Like other industries, the biofuels industry was affected by the economic crisis of 2007-2009. Several ethanol plants were closed, some plants worked below their capacity, and some companies filed for Chapter 11 bankruptcy protection. Such events led to layoffs and hiring freezes. Nevertheless, in general, the industry was growing and saw a return to profitability in the second half of 2009. Worldwide industry revenues were $46.5 billion in 2009 and are expected to grow to $113 billion by 2019. One segment of the biofuels industry was not affected by the recession at all: the biogas industry. Eighty-nine hundred new biogas plants were built worldwide in 2009. According to market analysts, the biogas industry is at a turning point and can grow at a rate of 24 percent between 2010 and 2016. In general, the future of the biofuels industry is bright, and revenues will continue to increase.

RELATED RESOURCES FOR FURTHER RESEARCH American Coalition for Ethanol 5000 S Broadband Ln., Suite 224 Sioux Falls, SD 57108 Tel: (605) 334-3381 Fax: (605) 334-3389 http://www.ethanol.org Biomass Power Association 100 Middle St. P.O. Box 9729 Portland, ME 04104-9729 Tel: (202) 429-4929 http://usabiomass.org Biotechnology Industry Organization 1201 Maryland Ave. SW, Suite 900 Washington, DC 20024 Tel: (202) 962-9200 Fax: (202) 488-6301 http://www.bio.org

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International Energy Agency 9 rue de la Fédération 75739 Paris CEDEX 15 France Tel: 33-1-40-57-65-00 Fax: 33-1-40-57-65-59 http://www.iea.org National Biodiesel Board 605 Clark Ave. P.O. Box 104898 Jefferson City, MO 65110-4898 Tel: (800) 841-5849 Fax: (573) 635-7913 http://www.biodiesel.org Renewable Fuels Association 1 Massachusetts Ave. NW, Suite 820 Washington, DC 20001 Tel: (202) 289-3835 http://www.ethanolrfa.org U.S. Department of Energy 1000 Independence Ave. SW Washington, DC 20585 Tel: (202) 586-5000 Fax: (202) 586-4403 http://www.energy.gov

ABOUT

THE

AUTHOR

Sergei A. Markov received a Ph.D. in microbiology from Lomonosov Moscow State University, where he began researching biofuels. From 1991 to 1995, he worked in England at King’s College London and Ecotec Research & Consulting. Later, he was invited to the United States to join the National Renewable Energy Laboratory of the U.S. Department of Energy in Golden, Colorado, where he worked for several years. At present, he is a professor at Austin Peay State University in Tennessee. His biofuel research is supported by grants from the National Science Foundation and the Environmental Protection Agency. He is the author of more than sixty research publications on biofuels and holds a patent in the field.

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Biofuels Industry FURTHER

READING

Bart, Jan C. J., and Natale Palmeri. Biodiesel Science and Technology: From Soil to Oil. Cambridge, England: Woodhead, 2010. Bourne, Joel K. “Green Dreams.” National Geographic, October, 2007, 38-59. Briggs, Michael, and Palligarnai T. Vasudevan. “Biodiesel Production: Current State of the Art and Challenges.” Journal of Industrial Microbiology and Biotechnology 35 (2008): 421430. Bryan, Tom. “2006 U.S. Ethanol Industry Salary Survey Report.” Ethanol Producer Magazine, December, 2006. http://ethanolproducer .com/article.jsp?article_id=2539. Clean Edge. Clean Energy Trends, 2010. Alameda, Calif.: Author, 2010. http://www.cleanedge .com/reports/reports-trends2010.php. Curtis, Brian. U.S. Ethanol Industry: The Next Inflection Point. Washington, D.C.: U.S. Department of Energy, 2008. http:// bcurtisenergies.com/pdf/Biomass2008.pdf. Emerging Markets Online. Algae, 2020: Advanced Biofuels Markets and Commercialization Outlook. Houston, Tex.: Author, 2009. Erbaum, Jason B. Bioethanol: Production, Benefits, and Economics. New York: Nova Science, 2009. Hall, David O., and Joanna I. House. “Biomas: A Modern and Environmentally Acceptable Fuel.” Solar Energy Materials and Solar Cells 38 (1995): 521-542. Hokhman, Gal, et al. The Effect of Biofuel on the International Oil Market. Berkeley: University of California, Berkeley, Department of Agricultural and Resource Economics, 2010. Korosec, Kristen. “Big Ethanol’s Lobbying Investment of 2010: Tax Credits and Tariffs.” BNET.com, February 17, 2010. http:// industry.bnet.com/energy/10003067/bigethanols-lobbying-investment-of-2010-taxcredits-and-tariffs. Langeveld, Hans, Marieke Meeusen, and Johan Sanders. The Biobased Economy: Biofuels, Materials, and Chemicals in the Post-oil Era. Washington, D.C.: Earthscan, 2010.

Markov, S. A. “Potential of Using Microalgae for Biofuel Production and CO2 Removal from Atmosphere.” International Scientific Journal of Alternative Energy and Ecology 70 (2009): 83-91. Mikityuk, Andrey. “Mr. Ethanol Fights Back.” Forbes, November 24, 2008, 52-57. National Renewable Energy Laboratory. Department of Energy’s Aquatic Species Program: Biodiesel from Algae. Golden, Colo.: Author, 1998. http://www.nrel.gov/docs/legosti/ fy98/24190.pdf. Pahl, Greg. Biodiesel: Growing a New Energy Economy. White River Junction, Vt.: Chelsea Green, 2008. Renewable Fuels Association. Ethanol Industry Outlook, 2010: Climate of Opportunity. Washington, D.C.: Author, 2010. United Nations Environment Programme. Towards Sustainable Production and Use of Resources: Assessing Biofuels. Paris: Author, 2009. http://www.unep.fr/scp/rpanel/pdf/ Assessing_Biofuels_Full_Report.pdf. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Energy. Breaking the Biological Barriers to Cellulosic Ethanol: A Joint Research Agenda. Report from the December 2005 Workshop, DOE/SC-0095. Washington, D.C.: U.S. Department of Energy Office of Science, 2006. Westhoff, Patrick C. The Economics of Food: How Feeding and Fueling the Planet Affects Food Prices. Upper Saddle River, N.J.: FT Press, 2010. Zarrilli, Simonetta. The Emerging Biofuels Market: Regulatory, Trade, and Development Implications. New York: United Nations, 2006.

Broadcast Industry AP/Wide World Photos

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The broadcast industry transmits visual and audio information across a number of electronic mass media. It includes terrestrial and satellite television and radio, as well as a burgeoning Internet segment. The Internet segment includes Web television, which distributes original, short-form content, often referred to as “Webisodes”; Internet television, which uses Internet protocols to deliver previously aired traditional television programs to a computer or other networked device; and podcasts, or serialized digital recordings that are meant to be downloaded and played at consumers’ leisure. Because mass information-transmittal technologies continue to evolve, the broadcast industry itself is a diverse field in a constant state of evolution. Broadcast corporations consistently upgrade to take advantage of new technologies and communications outlets. Even as the industry evolves, however, its major source of revenue across all platforms and media remains advertising.

General Industry: Communications Career Cluster: Arts, A/V Technology, and Communication Subcategory Industries: Cable and Other Subscription Programming; Cable Television Distribution Services; Cable Television Providers; Network Television Broadcasting; Radio Broadcasting; Satellite Radio; Web Broadcasting Related Industries: Advertising and Marketing Industry; Internet and Cyber Communications Industry; Motion Picture and Television Industry; Music Industry; Publishing and Information Industry; Telecommunications Equipment Industry; Telecommunications Infrastructure Industry Annual Domestic Revenues: Television: $57 billion USD (Hoover’s Inc., 2009); radio: $16 billion USD (First Research, 2009) Annual Global Revenues: Television: $130.7 billion USD (PricewaterhouseCoopers, 2003); overall satellite industry: $144.4 billion USD (Satellite Industry Association, 2008) NAICS Numbers: 515, 51913, 517110

History of the Industry The technologies behind the broadcast industry date back to communications technologies developed in the eighteenth and early nine197

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Broadcast Industry

teenth centuries, such as the nonelectric telegraph (invented in 1794 by Claude Chappe) and the electric telegraph (which Bavarian inventor Samuel Thomas von Sömmerring introduced in 1809). The introduction of the electromagnet in 1825 enabled an electric current to travel over wires from one source to another, leading to the development of the telegraph (perfected by Samuel Morse in

1835). Morse would also invent a code by which long-distance communications could take place via the telegraph. Called Morse code, it become popular among citizens and businesses worldwide. The telegraph became the popular vehicle for long-distance communications for nearly half a century, until the telephone was invented in 1877. Shortly before the invention of the telephone, however, another innovation would take the dissemination of information on a different path. After two physicists, James Clerk Maxwell of Scotland and Heinrich Hertz of Germany, theorized that radio waves could be projected into space in the same manner that heat and light could be projected (an idea that would be verified in 1866 by American dentist Mahlon Loomis), Italian inventor Guglielmo Marconi put the concept to practical use. He projected the first wireless radio signal across the English Channel in 1899 and across the Atlantic Ocean in 1902, creating a wireless equivalent of the telegraph. Marconi’s device had the potential to form the basis of a broadcast system. However, at the time he invented it, there was still no real concept of mass broadcasting—that is, of sending information instantaneously to many different recipients. The primary mass medium remained newspapers. It did not take long, however, for entrepreneurs to realize that with wireless transmission, a single sender could reach many different receivers. Once people began to capitalize on that fact, broadcasting was born. By the early 1920’s, several radio broadcast stations were licensed and functioning in the United States. Radio broadcasts would remain the dominant form of broadcast Radio towers like this one broadcast music, local and national news, talk shows, communications for the first few and sporting events. (©Nataly Rayhel/Dreamstime.com) decades of the twentieth century.

Broadcast Industry

199

According to Nielsen, the average American home had 2.86 television sets in 2009. (AP/Wide World Photos)

Known as old-time radio (OTR), these broadcasts represented the golden age of radio programming. However, the invention of television in the 1920’s would drastically change the broadcast landscape for decades to come. Television was not invented by a single individual but rather by several people working independently. In 1926, Scottish inventor John Logie Baird gave the first public demonstration of a mechanical television. One year later, Bell Telephone Labs and American Telegraph and Telephone gave the first American demonstration of the television system, and in 1928 General Electric released the Octagon, a television system with a three-inch screen that is considered by some to be the first commercially available television. (The Baird Televisor, sold between 1930 and 1933 in the United Kingdom, is often considered the first mass-produced television.) French and Russian versions soon followed, and

over the next decade, a number of other countries introduced their own versions of the television. Consequently, broadcasts using this growing medium increased in volume. This trend continued until World War II, and television growth surged once again after the war’s end. Over the decades that followed, televisions became more prevalent in private households and gained features such as color screens and remote controls. Running parallel with the evolution of radio and television broadcast technologies was the development of content to broadcast. In addition to news broadcasts, a variety of entertainment programs also began to emerge. The number of radio and television stations grew exponentially from the beginning of the twentieth century, and each was able to survive from steady advertising revenues. By the 1950’s, radio entertainment began to fade in the face of television’s growing prevalence and

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Broadcast Industry

popularity. Instead of featuring a variety of comedic and dramatic entertainment programming, radio reverted primarily to playing music and broadcasting occasional news programs and sporting events. Soap operas and other fictional programming, once a prominent part of radio’s repertoire, moved to television. In the 1940’s and 1950’s, rural and remote areas of Arkansas, Oregon, and Pennsylvania that had been receiving poor television signals were able to connect to common antennae via cable hookups. This strategy gave rise to cable television. The growth of popular use of cable television continued through the 1960’s, as investors became increasingly interested in the technology. Answering fears that cable companies were impinging on the territory of established television networks, the Federal Communications Commission (FCC) imposed heavy restrictions on cable companies, denying them access to network television signals. These restrictions continued in the United States until the early 1970’s, when the government began to ease and modify its regulatory hold on the industry. Cable companies adapted, first with the creation of Home Box Office (HBO) and later with the establishment of the Turner Broadcasting Service (TBS). Continued deregulation of cable television spurred rapid growth of the cable industry. Other avenues for television transmission arose to augment and compete with cable, including the introduction of a satellite-based system for distribution by HBO. Cable developed additional features in the early twenty-first century, such as video-ondemand technologies and other forms of interactive television. By 1998, nearly two-thirds of American households had some sort of cable subscription. The emergence of Internet broadcasting (or Webcasting) as another aspect of late twentieth century broadcasting has given a new visage to this ever-evolving industry. During the early years of Internet-based radio and television, Internet content and distribution channels were considered primary competitors for the traditional radio and television studios and stations. However, over time, traditional broadcast corporations began to utilize the Internet technologies and integrate them into their business models. Today, for example, the radio industry has largely incorporated Web-based broadcasting. Some radio stations offer both on-

line streaming simulcasts and downloadable podcasts of their traditional content. Others offer online news twenty-four hours per day, so that listeners seeking information can still obtain it from these stations even when they are broadcasting music over the airwaves. In addition, some independent Internet radio stations continue to thrive. In much the same way, major television networks offer “rebroadcasts” of television programs online, and they also provide original content related to their popular programs, such as brief behindthe-scenes documentaries, alternate endings, and Webisodes that fill in plot gaps between full-length episodes. The Industry Today The broadcast industry today is vast and widespread, employing a variety of media to entertain, inform, and otherwise share information with viewers, listeners, and clients. Many of the media technologies that had grown to prominence by the early twentieth century still exist, albeit in updated forms. At the same time, newer technologies have added to the ability of these media to reach and retain audiences and have even supplanted these traditional media sources. The contemporary broadcast industry includes a number of subsectors. One of the longest-standing subsectors is radio. Although television and other visual media have absorbed some of radio’s earlier functions (such as fictional programming), radio remains an extremely viable medium that broadcasts all musical genres, news-oriented talk shows, and many sporting events. While this content remains relatively stable, radio technology has evolved signficantly. In addition to maintaining traditional programming on amplitude-modulated (AM) and frequency-modulated (FM) broadcast bands, radio has diversified to include subscription-funded, commercial-free satellite radio services that resemble cable or satellite television services. High-definition radio systems have also been established. These systems use digital signals to transmit more information than analog systems can handle. Some radio stations have suffered in the face of these changes, but radio continues to grow and thrive, largely because radio stations and networks are increasingly incorporating new technologies such as high-definition and online streaming to reach broader audiences.

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201

and television personalities have joined Web-based media in order to broadcast their particular brands of entertainment, possibly reaching a larger volume of fans. In other cases, Web-based applications are used to enhance traditional radio and Value Added Amount television stations. Still, a large number of Gross domestic product $344.6 billion major, stand-alone stations are in operaGross domestic product 2.4% tion and are thriving in a diverse market as Persons employed 1.337 million a result of a strong influx of advertising Total employee compensation $116.3 billion capital. The diversity of the broadcast industry Source: U.S. Bureau of Economic Analysis. Data are for has imparted it with a modicum of insula2008. tion from dramatic drops in revenues. In many cases, the industry is also heavily protected by the government. While the U.S. broadcast industry is mostly privatTelevision broadcasting is also undergoing a ized (yet subject to government regulation), many steady evolution. Television remains one of the other countries’ respective industries are more most popular media, and it continues to provide an carefully managed publicly. The Japanese governeclectic collection of programs and systems from ment, for example, owns 100 percent of the public which consumers may choose. Traditional netshare of Japanese corporations’ broadcasting revework-based programming, showing popular pronues. Likewise, most Scandinavian nations own 93grams, news, and sporting events, is still perform95 percent of their broadcasting industries. The ing well in the contemporary economy. Many exception is Denmark, which owns 65 percent. networks are integrated into complex cable sysSuch governance entails strong state involvement tems that enable viewers to watch both broadcastin broadcast programming and content, as well as network television and cable-only programming. political and economic support for broadcast comIn 2009, all broadcast television programming was panies. required by law to transition to digital formats, so Revenues in the broadcast industry have trathat former analog-television frequencies would ditionally been derived from advertising sales— become available for public-safety communicastation and network advertising departments sell tions and personal wireless systems. With this conversion to digital programming, consumers have increased abilities to record shows for later viewInputs Consumed by the ing, obtain cooking lessons, order popular films at home, and access a wide range of other entertainBroadcasting and ment services. Digital picture quality is also often Telecommunications significantly improved over that of analog broadIndustries casting. The Internet has emerged as another vital part Input Value of the broadcast industry. A wide range of live news Energy $9.7 billion reports and programs, do-it-yourself (DIY) shows, Materials $39.5 billion and entertainment shows traditionally found on Purchased services $250.3 billion television or radio are being produced for and Total $299.5 billion broadcast on the Internet. In many cases, television and radio utilize the Internet to enhance their own Source: U.S. Bureau of Economic Analysis. Data programming: Behind-the-scenes access videos, are for 2008. show trivia, and brief Webisodes now accompany some popular television shows. Many former radio

The Broadcasting and Telecommunications Industries’ Contributions to the U.S. Economy

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television and radio air time for commercials, often to advertising firms that than resell the time to their individual clients. In the latter part of the twentieth century, however, this traditional course of revenue generation was altered to include banner advertising on Web sites. Television and radio advertising is generally targeted based on the demographic audience assembled by a particular network or program. Web advertising, by contrast, may be targeted not only by specific content—say, a Webisode of the National Broadcasting Company (NBC) program Heroes—but also by key words found on the Web page (say, any page featuring the term “super heroes” or “powers”). The benefits of such advertising are obvious—rather than reaching only a geographically limited television station or radio broadcast range, Internet banner advertising reaches out to a worldwide audience that is tuned toward Web-based activity or business. Moreover, Web advertisers need not rely on a particular show or network to be popular with (and thereby assemble) their target audiences. Rather, they can use key words and browser logs to find target consumers anywhere on the World Wide Web. A microcosm of the global broadcasting industry may be found in the largest broadcasting company in the world, the British Broadcasting Company (BBC). Encompassing radio, television, and Internet distribution, as well as an extensive news agency, the BBC has affiliates all over the world. The company’s commercial arm—BBC Worldwide—reported revenues topping £1 billion in 2009, with more than half of that number coming from abroad. However, the global recession and increased competition from private stations, satellite broadcasting, and Internet outlets has led the network to lay off about 20 percent of its approximately nineteen thousand employees. At the same time, the BBC continues to dominate as the single largest broadcasting company, with viewers around the world. From the perspective of viewers, listeners, or Web patrons, the broadcast industry provides entertainment, news, and information in various forms. From the perspective of broadcasters, meeting these consumer demands allows them to earn more money, through a combination of consumer payments for pay-per-view (PPV) programming, monthly service membership dues, sales, and a steady influx of revenue from advertising compa-

nies. Particularly for broadcast networks, however, the importance of advertising revenue indicates that the traditional model of the viewer-as-consumer does not apply to television, for example. In broadcast network television, the viewing audience is the product being sold, the network (which uses its content as a mechanism to assemble the audience) is the seller, and advertisers are the consumers. It is precisely for this reason that the competing model of Internet distribution of content has destabilized the industry, rather than simply augmenting it. The broadcast industry continues to be a major industry and economic contributor, generating hundreds of billions of dollars in revenue around the world and directly employing hundreds of thousands of people. These employees include actors and other celebrity personalities, as well as screenwriters, programmers, sales representatives, makeup artists, set designers, equipment handlers, and so on. The industry is also surrounded by a number of peripheral partner industries, including electrical engineering, advertising, public relations, and manual labor. Although some sectors have been adversely affected by the evolution of broadcasting systems, the industry as a whole continues to diversify and thrive in the early twenty-first century.

INDUSTRY MARKET SEGMENTS The industry is best understood as segmented based on the technologies it uses to disseminate information. These technologies include radio, television, and the Internet. Radio broadcasting is ubiquitous, as radios are included in almost every motor vehicle, and portable radios are both cheap and usable in most locations without sacrificing signal quality. Television broadcasting, while not quite as versatile as radio, is still widespread. Nearly every American household contains at least one television, and such establishments as bars and taverns often include televisions on which they show live sporting events. Internet broadcasting includes methods for disseminating radio and television programming through computer networking protocols, as well as the creation and transmission of original programming.

Broadcast Industry Radio Traditional commercial radio broadcasting earns revenue through advertising, adopting the model of selling an audience to an advertiser. Some public radio stations, by contrast, are run as nonprofit outlets that are paid for in part by government and corporate underwriting but mostly by voluntary contributions by listeners. Another radio technology, satellite radio, operates on a fee-forservice model, in which listeners subscribe to a whole menu of stations for a monthly fee and most of the content is commercial free. Potential Annual Earnings Scale. Radio industry salaries vary based on the size and range of the employer stations, the type of position held, and the length of the employee’s professional experience in the industry. At the higher end of the scale are program directors. According to PayScale, these professionals earn an average of about $47,000 per year. At the lower end of the spectrum is on-air talent (those with limited air time or roles in a given radio show), earning a median annual salary of just under $30,000. Clientele Interaction. As in much of the broadcast industry, the client of a radio station or network may be a listener or it may be an advertiser. The level of interaction with listeners varies based on the position held—disc jockeys and show hosts will speak with listeners and the general public more than advertising executives, for example. Advertising account managers are the primary personnel responsible for interacting with advertising clients, cultivating and maintaining their business, and ensuring that they see an adequate return on their investment. Regardless of position, radio industry employees must be prepared for public interaction in some form during their tenures. Amenities, Atmosphere, and Physical Grounds. Radio stations are generally small, although they may be part of larger communications organizations or networks that control other stations or networks. On-air personalities such as disc jockeys, hosts, and others tend to dress casually, while advertising and business managers and executives will be more professional in appearance. Radio stations are centralized around the booths in which the show hosts or disc jockeys perform, although many such facilities also have office areas for administrative and nonentertainment tasks, such as accounting, advertising, and human resources.

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Typical Number of Employees. The number of employees at a radio station also varies in terms of the station size and broadcast range, as well as the amount of money generated from advertising sales. Some radio programs feature a number of disc jockeys, hosts, or other on-air personalities, while other programs employ a producer and a single disc jockey or host to conduct a number of tasks. Some stations employ dozens of individuals, while others—considerably smaller in size and range—employ only a handful of individuals to oversee radio shows and perform other tasks. Traditional Geographic Locations. Radio stations are found in virtually every geographical setting. The largest radio stations are typically located in urban centers and metropolitan areas, where larger concentrations of listeners reside and more potential advertisers are located. Small radio stations with limited range are found in rural and more sparsely populated areas, with only a small number of employees and limited advertising revenue. Pros of Working for a Radio Station. Radio offers those interested in the communications field the opportunity to build their skills while honing their interest in music, politics, or other popular fields of study through on-the-job training. In many cases, those who are interested in becoming a radio host or disc jockey will be given the occasional opportunity to perform on air. The atmospheres of radio stations can be exciting and stimulating, depending on the music played or the topics of on-air discussion. Cons of Working for a Radio Station. Although it continues to evolve, the radio industry jobs market is continuously shrinking in terms of on-air positions. Although advertising sales remain relatively strong, many stations only employ a few salespeople. In addition, many disc jockeys and onair personalities are being replaced with automated music programming or syndicated shows. The wages are lower than those of other industries, and hours can often be erratic. Additionally, on-air figures must be careful to stay within the parameters set forth by the station and their producers. Costs Payroll and Benefits: Salaries for radio industry personnel vary based on the position as well as the station and geographic location in which the position is offered. The highest paid em-

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ployees of a radio station are usually management, such as the general manager, while on-air talent, such as news reporters or disc jockeys, earn salaries at the lower end of the range. Supplies: Radio stations require a number of major supplies, including microphones, computers, satellite dishes, transmitters, and electrical supplies. Some also require mobile broadcasting systems. Additionally, radio stations require office supplies, including telecommunication systems and stationery. External Services: Radio stations may call upon external vendors to assist in the maintenance of small and large hardware systems, such as transmitters, telephone and microphone systems, and computer networks. Larger radio stations, by virtue of occupying larger spaces, may contract private security and janitorial vendors. Additionally, many stations may use the services of restaurants and caterers for public relations events and other venues. Utilities: Radio stations use a considerable amount of energy, particularly electricity, in the course of their regular operations. Because of this high degree of use, some stations are turning to renewable energy sources to power their signal and operations. Radio stations also use a great deal of telephone service, maintaining a large number of phone lines for caller use, as well as for general office use. Taxes: The degree to which radio stations pay taxes depends largely on the geographic location of the station. They routinely withhold income taxes from full-time employees and pay local property taxes and state and federal business income taxes. Many countries are considering taxes on the purchase and use of music. The industry has resisted such taxes, but as governments seek additional revenues in the early twenty-first century, the issue has not yet been settled. Royalties: Broadcasters must pay royalties on the material they broadcast. Television Premium cable television stations, such as HBO and Showtime, provide content to viewers for a fee. Basic cable stations also receive some revenue from cable subscription fees. Most television programming, however—including both broadcast televi-

sion networks and basic cable stations—sells audiences to advertisers as its primary source of income. Potential Annual Earnings Scale. The salaries of television and cable-television employees vary based on the financial standing of the station itself, geographic location of the position, and the level of experience the position demands. At the highest end of the pay scale are the executive producers, who according to PayScale earned about $120,000 per year in 2009. At the other end of the spectrum are news reporters and production coordinators, with median annual salaries of $40,000. Clientele Interaction. Client interaction in television broadcasting is dependent on the level of interaction a program requires. For example, newscasters, television reporters, and program hosts must interact considerably with the public while on location, while production crews and advertising salespeople spend considerably less time engaging the general viewing public. It falls to advertising salespeople, however, to interact most directly with the advertisers who are their stations’ primary clients. Overall, a television station and network must be focused on viewers, how to generate a larger audience, how to generate a more valuable audience (which may be based on desirable demographic targets, rather than sheer size), and how best to sell access to that audience to its advertisers. It is thus important for a network simultaneously to cultivate its brand for viewers and to maintain a positive reputation among advertisers as well. Amenities, Atmosphere, and Physical Grounds. The overall atmosphere of a television station or network headquarters is dynamic and fast-paced yet professional. There are many working parts and teams within such a setting, all of which must work closely during programming and off-air operations. Hours vary based on the position held and the type of work performed. Typical Number of Employees. The number of employees at a television station or network varies based on the size of the company, the amount of money it generates, and the range of its broadcast operations. For example, television giant NBC, along with its other ventures through NBCUniversal, has over 300,000 people working for it around the world. By contrast, a small television station on the Isle of Wight in Great Britain has only twelve full-time staff members. Some community television stations have even fewer employees.

Broadcast Industry Traditional Geographic Locations. Television stations tend to be located close to major population centers in order to reach the maximum number of viewers (as well as to enjoy close proximity to advertisers). New York City, for example, has about sixteen stations operating within its city limits. Many small American municipalities have community-access television stations, which offer local programming and updates. Pros of Working for a Television Station. Television stations are dynamic venues with fastpaced environments. Pay is typically above average, particularly for those who have experience in front of a camera, and the opportunities for growth act as an incentive for those who enter the industry at a lower pay scale. Additionally, those who seek a more prominent role in television may gain the experience they need at a smaller station or network before moving on to a larger market or upward within the small station. Cons of Working for a Television Station. The hours of work at a television station or network are often long and erratic, depending on the pro-

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gramming schedule. Although news anchors and senior management earn competitive salaries, there is a sizable gap between those individuals and lower-level employees in terms of salary. Additionally, television is a very competitive industry—those who seek to join it and advance quickly must have great flexibility and patience, starting their careers in smaller markets before advancing to larger ones. Costs Payroll and Benefits: The payroll and benefits offered at television stations vary based on the size of the station or network and the strength of the company’s financial outlook. The highest salaries go to station managers and executive producers, while production assistants and reporters earn lower salaries, trading financial gain for professional experience. Supplies: Television broadcasting requires a great deal of electronic software and hardware supplies. Among these items are cameras, microphones, recording equipment, transmitters, and computers. Many stations use remote systems,

Every broadcasting venue must have skilled individuals who are responsible for handling and managing equipment, such as this camera operator. (©iStockphoto.com)

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such as news vans and helicopters. They also require a broad range of office administrative supplies and equipment, such as stationery, telephone and computer systems, and copy machines. External Services: Although the operations of most television systems are managed in-house (or, in the case of broad networks like NBC, governed through a parent company), some external services are required. Among these are catering, makeup and hair, vehicle rental, and custodial and security services. Additionally, many of the systems used, such as Internet, phone, and satellite links, are provided by outside companies. Utilities: Television stations require a great deal of energy-oriented utilities, such as electricity and fuel (to power generators at remote locations). Additionally, they require extensive telephone services and networks, as well as Internet and cable services. Taxes: Like any business, television stations collect and pay employee income taxes, as well as paying commercial income taxes, property taxes, and other assessments. In some countries in which government funds are used to support the industry, taxes are being sought on the relationship between these stations and cable television providers so that additional tax revenues may be generated. In the United States, many public and community-access television stations and networks are eligible for exemption from income taxes because they are nonprofit entities. Royalties: Broadcasters must pay royalties on the material they broadcast. Internet Broadcasters Internet broadcasters include purveyors of original, online-only content, as well as services that make available traditional television and radio programming via Internet protocols. They generally allow content to be “streamed,” or accessed as a temporary file that is only consumed while it is downloaded and is then erased. Some sites also allow consumers to download and retain content to be consumed at a later time, possibly on a portable device. Original video and audio shows may be made available through Web sites that mimic traditional

radio or television stations, providing one or more live streams of broadcast content throughout the day. They may also be offered through more encyclopedic broadcasting services that provide access to a wide range of content from many different sources, either through the Web or through proprietary Internet software such as Apple’s iTunes. In addition to such large-scale options, the ease of hosting content online through third-party Web hosting vendors allows individual, extremely low budget shows to have their own, dedicated Web sites and to operate independently of any parent network or organization. Such a show, such as The Guild, may provide only a single, brief episode each week through its Web site, and it may flesh out the site with information about performers and offers of merchandise for sale. Potential Annual Earnings Scale. The pay scales of Internet broadcasting companies and stations depend largely on the financial support and advertising-based revenues they earn. Salaries also depend on the positions at hand. At the high end of the pay scale is the strategic planning analyst, who may earn as much as $80,000 per year, while Web content developers may earn just over $50,000 per year. The salaries of online radio broadcasters vary based on the size of the station and the amount of advertising dollars it earns. Many large online radio stations, such as those managed by Clear Channel, Disney, and AOL, seek out individuals to manage their own online stations through their companies, paying hourly wages. According to Simply Hired, the average annual salary for an online radio disc jockey as of 2009 was $66,000. Clientele Interaction. Internet broadcasting employees see a wide range of client interaction, based on the size and revenue model of the company. Online disc jockeys conduct much of this interaction via the Web, using e-mail and other Internet-based communications services. Dedicated sales and advertising personnel, however, may have more direct contact with potential clients and listeners alike as a major portion of their work schedules. Small single-show or -podcast operations may be sole proprietorships, in which the podcast personality also takes orders for T-shirts. Amenities, Atmosphere, and Physical Grounds. Many online radio stations are operated out of an individual’s home, although a significant

Broadcast Industry number of them are managed through corporate headquarters. In light of the medium, the atmosphere for such stations is usually casual and reflective of the tastes and interests of the employee. The majority of the work is conducted on a computer, so equipment requirements tend to be simpler than those in a television or traditional radio station. Typical Number of Employees. Internet broadcasters may be considerably smaller in terms of operations than traditional radio or television stations. At times, only one or two people manage such Web sites, although larger stations may be operated by corporations with hundreds of advertising, technical, and administrative personnel in addition to disc jockeys and show hosts. Traditional Geographic Locations. Internetbased broadcasting companies are found all over the world. The virtue of the Internet in this arena is the fact that any individual who has Internet service may establish an online radio station. Thus, online stations may be found even in rural locations. Pros of Working for an Internet Broadcasting Company. For individuals who would like to enter radio or television broadcasting but at the same time avoid the competitive environment and hierarchy of such stations, online broadcasting provides an alternative. Individuals in this field are often free to speak their minds and play their preferred music while enjoying exposure to the entire Internet, as opposed to a limited geographical location. Additionally, many online radio and television stations are based in an employee’s home, adding to the comfort and relaxed atmosphere of the job. Cons of Working for an Internet Broadcasting Company. While some online broadcasters may earn over $60,000 per year, most online stations do not offer high salaries. Additionally, such stations have budgets that depend wholly on advertising and word of mouth—a lack of money and viewership in an increasingly saturated market may cause some stations to cease operations. Costs Payroll and Benefits: Large media companies with an Internet broadcasting component pay salaries and benefits to Internet staff comparable to those paid to other staff. Small concerns whose scope is such that they could be viable

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only on the Internet may be run by only a few people or even a single person and may not pay regularly at all. Many Internet broadcasters exist between these extremes. Supplies: Internet broadcasters require a great deal of computer hardware and software in order to conduct their broadcasting operations. Those stations with television-style programs also require sets, microphones, and digital equipment. Larger stations need basic office supplies and telephones in order to conduct sales and marketing activities. External Services: The external services employed by Internet broadcasting companies and stations include accounting and marketing vendors, electricians and technical services, and advertising. They may also call upon consultants and externally based content writers to minimize full-time employee salaries and benefits packages. Utilities: Internet broadcasting companies use a great deal of electricity and telephone services, particularly as the latter of these utilities often serves as the fundamental vehicle over which Web-based programming is broadcast. Additionally, these stations and organizations require fuel for heating and water usage. Taxes: Internet broadcasters are typically liable for payroll taxes, sales taxes, and income taxes, subject to state and federal laws and depending on the size of the organization. Some states in the United States apply special use taxes for broadcasters that use public telephone networks to generate profits or deliver a high volume of for-profit programming. Some programmers are exempted from income and sales taxes by their public service programming. Royalties: Broadcasters must pay royalties on the material they broadcast.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of each broadcast industry subsector is often specific to that subsector. For example, camera operators would not be found in radio stations or in many Internet broadcasters, and smaller broadcasters may not

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use mobile units and helicopters for broadcasts. However, there is a wide range of general positions that span the industry, each of which plays an important role in developing, programming, and supporting broadcasts across the spectrum of broadcasting. The following umbrella categories apply to the organizational structure of the broadcast industry: ■ ■ ■ ■ ■ ■ ■

General Management Producers On-Air Personnel News Reporters Technical Crew Advertising and Marketing Human Resources

from within the company or from the bottom rungs of the industry. Many are college educated; some have advanced degrees such as a master of business administration (M.B.A.) in fields such as accounting, human resource development, or communications. General management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

General Management The highly experienced personnel who manage the overall operations of broadcast companies are familiar with all of their companies’ various systems and departments and understand how those components work with one another. Managers are responsible for establishing goals, implementing policies, and setting strategic plans. To produce effective short- and long-term strategies, they must be fully versed in all aspects of their stations and networks. They must set forth specific tasks and goals for subordinate personnel, draft and implement budgets, and ensure that any content that is released to consumers is in keeping with the style and branding of the company. General managers and executive personnel are charged with ensuring that each component of broadcast operations runs smoothly and connects effectively to other departments. They must be skilled in handling diverse employee ranks and departments, each of which performs a number of tasks. In the event of public scrutiny or controversy, it is the general and executive management of a broadcasting company that must act as the public face of the company. In light of this requirement, executives must be comfortable with public relations. The general managers of a broadcasting company generally earn the highest salaries of any individuals directly employed by the company. These individuals may be well educated in the operation of such facilities, and most are also highly experienced, often having built their careers by working

President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Chief Information Officer (CIO) Vice President General Manager Station Manager Administrative Assistant

Producers Producers in the broadcast industry are responsible for planning, organizing, and managing a given program or programs. Producers are called upon to ensure that every aspect of a given broadcast—whether of a radio show, a television program, or a podcast—operates smoothly and adheres to the programming tastes of the station or network. Radio producers, for example, must work with on-air personalities such as disc jockeys to ensure that music and content stays within the station’s guidelines. Television producers, however, have a more extensive set of priorities: In addition to ensuring that a specific program is performed and recorded successfully, they must handle budgets and other areas of general business surrounding the station and the program. Producers must be effective communicators, working with general management personnel, as well as with actors, directors, financial managers, set crews, and other diverse members of a given production. They must also be adept at assessing a program’s relevance and appeal to its target audience. Above other qualifications, broadcast industry producers must know the field in which they operate. In other words, a radio producer must be fully familiar with musical genres, news stylings, and similar company-specific attributes. This knowledge base comes from a career dedicated to such programming. Many radio producers, for example, began their careers as newscasters or disc

Broadcast Industry jockeys before moving into operations management. Producer occupations may include the following: ■ ■ ■ ■ ■ ■

Program Director Director Radio Producer Television Producer Executive Producer Production Assistant

On-Air Personnel On-air personnel are the individuals whose faces and voices are broadcast to the listening or viewing audience. They may work in a variety of genres, including comedy, music-oriented programming, drama, and news. They must be well versed in the equipment and tricks of the trade, such as set positioning and improvisation, in order to improve a show’s content and prevent on-air gaffes. On-air personnel come from a wide range of backgrounds. They include experienced journalists, music aficionados, actors, comedians, former politicians, and models. Many receive advanced training and educations in their particular field of interest, as well as technical training on sets and equipment. On-air personnel are generally hired on a contract basis, working within a set programming plan that is managed by producers. On-air occupations may include the following: ■ ■ ■ ■ ■ ■

Disc Jockey Newscaster Spokesperson On-Air Personality Actor Radio or Television Host

News Reporters News reporters investigate and write about current events, as well as sometimes acting as on-air newscasters. Their areas of expertise may vary from reporter to reporter. Although their career paths are journalistic, on-air news reporters must also take into account the media in which their reporting takes place. Such knowledge helps on-air newscasters and personalities, as well as producers and directors, tailor program content appropriately.

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News reporters typically have experience both in journalism and in the medium in which they work. Most have undergraduate degrees and many have advanced degrees in such fields as journalism and communications. Further, many who report on specific topics have advanced degrees in nonmedia areas, such as medicine or law, that help them investigate and report on developments in those areas. News reporters are not necessarily called upon to report on-air on a consistent basis, but they may do so in cases that require more than one reporter to cover a multidimensional story. Camera operators are considered to be part of the news reporting team, since they are responsible for capturing unscripted events as they happen, contributing significantly to stories. News reporting occupations may include the following: ■ ■ ■ ■

Journalist Content Writer Correspondent Camera Operator

Technical Crew Every broadcasting venue must have skilled individuals who are responsible for handling and managing equipment. This crew acts behind the scenes, filming and recording on-air personnel, operating lighting and sound equipment, and ensuring the operability of the myriad technical devices used in a given production. Technical crew members must understand how various devices and technologies work together to ensure that the production is broadcast effectively. They must work within their abilities to ensure that systems are operational and that the on-air personnel look and sound their best. Technical crew members typically are trained either at an undergraduate level or via vocational schools. Most important to producers who hire such individuals is the amount of experience they have in a given arena and their level of familiarity with the equipment they will use. Technical crew occupations may include the following: ■ ■ ■

Camera Operator Production Manager Editor

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SPECIALTIES

Broadcast Technicians Specialty

Responsibilities

Audio operators

Control audio equipment to regulate volume level and sound quality during television broadcasts.

Field engineers

Install and operate portable field transmission equipment to broadcast programs or events originating outside the studio.

Plant and maintenance technicians

Repair, adjust, set up, and service electronic broadcasting equipment. It is their job to determine the cause of signal breakdown and repair it.

Recording engineers

Operate and maintain video and sound recording equipment. They operate the disk or recording machine to record music, dialogue, or sound effects during recording sessions, radio and television broadcasts, or conferences.

Transmitter operators

Monitor and log outgoing signals and operate the transmitter.

Video operators

Control video consoles to regulate the transmission of television screens and control the quality, brightness, and contrast of the video output.

■ ■ ■ ■ ■

Engineer Rigger Sound Technician Key Grip Hair Stylist/Makeup Artist

Advertising and Marketing Broadcast companies of all types rely on advertising revenues for all aspects of their operations. Advertising salespeople are charged with securing on-air, print, and banner advertisements from corporations of all sizes for presentation during broadcast programs. Marketing personnel work to promote the station or network at events, conferences, and similar venues, as well as distributing promotional materials. Advertising sales and marketing personnel are responsible for making a broadcast company’s name visible outside of its regular operations and programming schedule and for demonstrating to companies the value of purchasing advertising air

time or placement within that schedule. Advertising sales and marketing professionals must therefore be experienced in the broadcasting industry as well as the fields of advertising and marketing. Advertising sales and marketing personnel are generally college educated, and many of them have advanced degrees, such as an M.B.A. Because of the high-profile nature of the broadcasting industry, those who are employed in this capacity within broadcasting must also have considerable experience and a lengthy list of contacts. Advertising and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Vice President of Marketing Advertising Executive Sales Manager Marketing Coordinator Public Affairs Manager Communications Manager Administrative Assistant

Broadcast Industry Human Resources Human resources personnel are charged with recruiting, hiring, and terminating employees. They also help organize employee benefits packages, insurance programs, and training programs. They may be involved in obtaining the services of on-air personalities, newscasters, actors, and disc jockeys, playing a role in writing contracts for such individuals. Human resources professionals are highly conversant in issues pertaining to federal and state employment practices, as well as protocols for hiring and terminating employees. They are typically college educated, and many have advanced training or degrees in business management, human resources, and similar fields. Human resources occupations may include the following: ■ ■ ■

Human Resources Director Human Resources Coordinator Administrative Assistant

INDUSTRY

OUTLOOK

Overview Developed in the early twenty-first century, the broadcast industry has become one of the main vehicles by which news and entertainment are distributed to a mass audience. It reaches into the homes of people in every country via radio, television, and computer. The industry employs over 330,000 people in the United States alone, with the largest percentage employed by the largest 15 percent of establishments. The industry is expected to grow at a modest rate during the early twenty-first century. It is forecast to increase by about 9 percent during the period between 2009 and 2016, while the average U.S. industry is forecast to grow by about 11 percent during that period. The industry’s growth is expected to be limited in large part by the ongoing evolution of broadcast technologies. Previously, much of the equipment and systems used in television and radio required specialized training, and stations needed large staffs of specialists, each trained to operate a separate piece of equipment. Increasingly, however, much broadcast technology is becoming more user-friendly and multipurpose,

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so fewer personnel are needed to accomplish the same number of tasks. As the technologies used in the industry continue to evolve, it is likely that this trend will continue. Loosening regulations regarding studio consolidation may also hamper the growth of the industry. Networks and stations are now more freely able to merge operations with one another than they were in the past. As a result, single companies own multiple stations. This trend allows networks to grow by enveloping smaller stations and networks, but this type of growth tends to produce fewer jobs than does the creation of entirely new stations or companies. Thus, the dramatic twenty-first century evolution of the broadcast industry is expected to continue. Much of this change may be attributed to the increased popularity of newer elements of the industry. For example, conventional AM/FM radio stations are experiencing slowed job growth largely because satellite radio stations are gaining in popularity. Satellite stations, by virtue of their subscription-based, nationwide listening audience, are able to sell larger advertising contracts to major corporations more effectively than AM/FM stations can. Internet broadcasters also compete with traditional radio and television stations. Network television, meanwhile, continues to suffer from the explosion of competing cable and satellite stations. Even if the networks remain the most-watched stations, the sheer number of competing stations, as well as on-demand entertainment and video streaming services such as Netflix, has resulted in the fragmentation of the viewing audience, such that no one station consistently enjoys the market share that broadcast networks once did. One development in broadcasting is credited with giving the overall broadcast industry a tremendous boost. Digital network television, cable stations, and radio are becoming increasingly prevalent throughout the world. In comparison with analog systems, these digital technologies offer better sound and picture quality, more channels (and thus more viewing options), and more interactive abilities between the system and the consumer. Digital conversions have already taken place in the United States and are planned in Europe. China is seeing an extremely high return on investment in such systems, as the country has become the fastest-growing digital broadcast televi-

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sion market (outpacing both satellite and cable). It is believed that because of the introduction of digital technology, global industry revenues will likely increase considerably, despite declines in revenues for terrestrial radio and traditional television networks. In a field that is constantly changing as a result of both creative demand and improving technology, it is difficult to present a fully accurate forecast of broadcasting’s revenues in the future. This difficulty is primarily because such technologies as the Internet, high-definition (HD) formats, and satellite systems are increasingly being integrated into both television and radio rather than acting as direct competitors. Such technologies are expected to improve the delivery of programming to viewers and listeners.

high profile of the subject is an element that few other industries may offer their employees. Broadcasters are also among the first entities on the scene when news breaks and major incidents occur, whether those incidents are political, sportsrelated, or otherwise newsworthy. Broadcasting is an atypical career. Television, radio, and Internet broadcasters’ work hours are rarely fixed, and subject matter varies from program to program. Broadcasting demands talent, skill, dedication, and creativity from every component. Annual Earnings As the early twenty-first century unfolded, the network television broadcast industry saw competition from both the satellite television industry and the emergence of digital cable, as well as additional competition from new media such as the Internet. This competition has prompted the broadcast industry, which is experiencing declining advertising revenue, to embrace multiple platforms and invest in alternative content-delivery technologies, such as Web-based broadcasting and mobile technology. The 2007-2009 global financial crisis also had an impact on industry earnings. In 2009, Barclays Capital, a global investment bank, lowered its U.S.

Employment Advantages The broadcast industry is an attractive one, offering employees such professional rewards as wealth and celebrity (albeit, often to only a select few). Competition for jobs in broadcasting is high, largely because of this perception of glamour and also in light of the relatively few stations and companies that offer upward mobility. The broadcast industry offers potential employees an obvious benefit, one that few other industries outside of the entertainment field may offer: Those PROJECTED EMPLOYMENT who are employed by broadFOR SELECTED OCCUPATIONS casters have an opportunity to reach a large audience. The Broadcasting high profile of broadcasts demands the highest quality a Employment broadcaster can muster, and 2009 Projected 2018 Occupation industry workers often evince a great deal of passion and 29,550 32,000 Advertising sales agents zeal. If they succeed, the wide 24,020 25,200 Broadcast technicians audience for their work will include potential future employ27,800 28,400 Producers and directors ers and colleagues. 32,910 30,900 Radio and television announcers Another important advantage and benefit broadcasting 10,260 10,500 Reporters and correspondents offers is an opportunity to work with actors, political leaders, Source: U.S. Bureau of Labor Statistics, Industries at a Glance, professional athletes, and other Occupational Employment Statistics and Employment Projections celebrities. Whether a broadProgram. caster is creating a show, an interview, or a news story, the

Broadcast Industry advertising revenue estimates for broadcast television networks for 2009 and 2010, decreasing them to 17.5 percent and 1 percent, respectively. Overall, the company expected U.S. advertising expenditures to decrease by an estimated 13 percent in 2009. According to Hoovers, the annual domestic revenue for the U.S. television broadcast industry in 2009 was $57 billion. The radio industry, meanwhile, has experienced considerable flux as a result of the increased popularity of Internet and satellite radio services. As these technologies are integrated into the industry, the new, broader radio industry appears to be generating improved revenues. With an estimated $16 billion in revenue reported in 2009, the United States’ domestic radio industry holds the largest percentage of the global market. While advertising revenue for terrestrial radio is declining, online radio revenues are expected to experience double-digit growth moving forward, with an estimated $441 million in revenue in 2009, up 12 percent from the previous year. Similarly, satellite radio revenue growth is expected to grow each year; Sirius XM, the only satellite radio network in the United States, realized a modest profit in the last quarter of 2009, and it had 18.8 million subscribers at the beginning of 2010. Standing alone, the Internet broadcasting subsector continues to represent a growing trend. According to consumer technology analyst firm TDG Research, global Internet television, which began in 2004, is expected to see revenue growth reaching $20 billion by 2010; according to industry research firm Parks Associates, American revenues from Internet video will reach $7 billion that same year. Lastly, podcasting continues to grow and mature as a viable industry. In 2007, eMarketer, an Internet market research firm, estimated that the U.S. podcast audience will reach 65 million in 2012, with nearly 40 percent of that number representing “active users,” or those that listen to podcasts at least weekly.

RELATED RESOURCES FOR FURTHER RESEARCH Association of International Broadcasting P.O. Box 141 Cranbrook TN17 9AJ

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United Kingdom Tel: 44-20-7993-2557 Fax: 44-20-7993-8043 http://www.aib.org.uk British Broadcasting Company P.O. Box 1133 Belfast BT1 9GP United Kingdom Tel: 44-20-8433-2000 Fax: 44-20-8749-0538 http://www.bbc.co.uk International Association of Broadcasting Manufacturers P.O. Box 2264 Reading, Berkshire RG31 6WA United Kingdom Tel: 44-118-941-8620 Fax: 44-118-941-8630 http://www.thiabm.org National Association of Broadcasters 1771 N St. NW Washington, DC 20036 Tel: (202) 429-5300 Fax: (202) 429-4199 http://www.nab.org North American Broadcasters Association P.O. Box 500, Station A Toronto, ON M5W 1E6 Canada Tel: (416) 598-9877 Fax: (416) 598-9744 http://www.nabanet.com

ABOUT

THE

AUTHOR

Michael P. Auerbach has over sixteen years of professional experience in public policy and administration, economic development, and the hospitality industry. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He is a veteran of state and federal government, having worked for seven years in the Massachusetts legislature and for four years as a federal government contractor.

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READING

Albarran, Alan B., and Gregory G. Pitts. The Radio Broadcasting Industry. Boston: Allyn & Bacon, 2001. Anderson, Christopher. “National Broadcasting Company.” In The Encyclopedia of Television. 2d ed. Chicago: The Museum of Broadcast Communications, 2004. http://www .museum.tv/archives/etv/N/htmlN/ nationalbroa/nationalbroa.htm. Bensman, Marvin R. “The History of Broadcasting, 1920-1960.” Bensman Radio Program Archive, University of Memphis. https://umdrive.memphis.edu/mbensman/ public/history1.html. Curtin, Michael, and Jane Shattuc. The American Television Industry. New York: Palgrave Macmillan, 2009. Duffy, Brooke Erin, and Joseph Turow, eds. Key Readings in Media Today: Mass Communication in Contexts. New York: Routledge, 2009. Global Industry Analysts. “Global Radio Industry to Reach $62.08 Billion by 2015.” June 29, 2009. http://www.cascademedia.net/a633203global-radio-industry-to-reach-.cfm. Hanlon, Mike. “Internet Video Revenues to Exceed US$7 Billion in 2010.” Gizmag, November 7, 2006. http://www.gizmag.com/ go/6577. Hein, Gary, and Rota Jakuska. Podcast Industry. Dearborn: University of Michigan, School of Management, 2007. http://www.umdilabs .com/casestudies/documents/Podcast%20 Industry%20White%20Paper.pdf. Kackman, Michael, ed. Flow TV: Television in the Age of Media Convergence. New York: Routledge, 2010. M.C.: Marketing Charts. “SNL Kagan U.S. Cable TV Summary Data, 2006.” http:// www.marketingcharts.com/television/snlkagan-cable-subscription-data-contradicts-fccchairman-kevin-martin-2634/snl-kagan-cablesummary-data-2006jpg/.

Mogel, Leonard. This Business of Broadcasting: A Practical Guide to Jobs and Job Opportunities in the Broadcasting Industry. New York: Billboard Books, 2004. National Cable and Telecommunications Association. “History of Cable Television.” 2009. http://www.ncta.com/About/About/ HistoryofCableTelevision.aspx. PayScale.com. “Salary Survey for Country: United States.” 2009. http://www.payscale.com/ research/US/Country=United_States/Salary. Radio Business Report. “Radio Pros Look to the Near Future.” September 23, 2009. http:// www.rbr.com/features/ideas-working-now/ 17234.html. Rodman, George. Mass Media in a Changing World: History, Industry, Controversy. Boston: McGraw-Hill, 2010. Schneider, Chris. Starting Your Career in Broadcasting: Working On and Off the Air in Radio and Television. New York: Allworth Press, 2007. Soundararajan, Mani. “Penetration of Digital Technology Sustains Growth in the Broadcasting Industry.” September 9, 2008. TMCnet.com. http://www.tmcnet.com/voip/ ip-communications/articles/39170-reportpenetration-digital-technology-sustains-growththe-broadcasting.htm. Teitelbaum, Michael. Radio and Television. Milwaukee: World Almanac Library, 2005. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Building Architecture Industry ©Dreamstime.com

INDUSTRY

and facilities, religious congregations, cultural facilities, recreational facilities, and transportation resources, as well as residential properties. Although the practice of architecture centers on the act of design rather than construction, architects may administer the bidding process among construction companies, help select contractors, and verify through site visits that construction is proceeding according to plan. Architects typically work with professionals in related disciplines, who may or may not work within the same firm as the architects. These related disciplines include but are not limited to interior design, planning, landscape architecture, plumbing, and structural, civil, mechanical, and electrical engineering.

SNAPSHOT

General Industry: Architecture and Construction Career Cluster: Architecture and Construction Subcategory Industries: Architectural Consulting Services; Architectural Design Services; Architectural Services; Drafting Services Related Industries: Building Construction Industry; Landscaping Services Annual Domestic Revenues: $40.9 billion USD (U.S. Census Bureau, 2008) NAICS Numbers: 54131, 54134

INDUSTRY

History of the Industry The distinction between building designers and building constructors is very old. An early example of a building designer not directly involved in construction is Imhotep, whose designs for early Egyptian pyramids date from the third millennium b.c.e. In the civilizations of antiquity, architects designed structures requiring advanced skills and knowledge—such as the buildings populating the Athenian Acropolis, most famously the Parthenon—and public and military buildings found throughout the Roman Empire, most famously the Roman Coliseum. These projects required thoughtful application of proportion and geome-

DEFINITION

Summary The architecture industry’s primary purpose is to design structures for human habitation and use. This broad field of design includes new construction, renovations, and additions. Common types of architect-designed buildings include those housing offices, retail businesses, hospitality providers, industrial businesses, educational institutions, health care providers, government offices 215

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try along with knowledge of construction trades. Architects cater to the values and needs of each civilization; thus, as world civilizations grew larger and more diverse, building designers adapted with a broadening array of building types. For example, the expansion of the Roman Empire brought about the introduction of concrete, standardization of vaults, and new building types such as circuses, baths, and apartments. Building designers developed buildings to meet new user demands; early Christian churches were initially similar to earlier Roman structures but were later modified to incorporate larger spans and various functional subspaces useful to Christians, including naves and apses. Throughout history, building designers helped create new types of buildings and implement new construction methods. The architecture industry transformed rapidly during the Industrial Revolution in response to new means of construction and fundamental shifts in patterns of urbanization and industry. In contrast to the more limited construction methods used since the fall of the Roman Empire, industrial-age architecture incorporated iron and reintroduced concrete. In less than two centuries, innovations such as reinforced The focus of the architecture industry remains what it has been throughout concrete, float glass, and reliable elevathe history of the profession: designing buildings and administering detor technology further expanded the signs during construction. (©Endostock/Dreamstime.com) options open to designers. The task of housing people in increasingly dense urban locations resulted in new master fatal consequences of incompetence, led governplans for entire cities and the introduction of modments to adopt formal standards of education, exern zoning methods. The challenge of adapting to amination, and licensure in the twentieth century. these changes led to rapid expansions in the archiIn response to public demands for fire safety, tecture industry. building accessibility to mobility- and sight-imPartly in response to the sweeping changes of paired people, and reduced environmental imthe eighteenth through the twentieth centuries, pacts, the architecture industry has accrued a vast design professionals such as architects and engiquantity of shared professional knowledge. Civilineers required increasing knowledge of a growing zations continue to change, and the architecture body of construction methods, published building profession continues to keep pace with these standards, and building typologies in order to changes. An industry that once catered almost exserve the public. The increased knowledge necesclusively to the wealthiest and most powerful clisary for such professions, as well as the potentially

Building Architecture Industry ents has come to cater to the diverse needs of the general public. The Industry Today The focus of the architecture industry remains what it has been throughout the history of the profession: designing buildings and administering designs during construction. While that focus remains the same, however, the range of modes in which architects and engineers practice is growing larger. A modern building designer could design a department store as an employee of a large corporation, examine plans for a city government, lead a design department in a design-build firm, provide specialized design-support services for another designer in a large architecture firm, counsel a homeowner on a small remodeling project, or perform any other function that capitalizes on architects’ and engineers’ educations. The exact manner in which architectural firms practice today is changing in response to several ongoing trends. Changes influencing the architecture industry today include the following: ■ ■ ■ ■

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niche, may provide price incentives in the form of reduced professional fees in relation to overall construction costs. Professionals catering to large corporations may offer services including project management, facilities management, engineering, and environmental planning. Larger firms, rather than interacting with engineers or contractors in separate companies, may include all of these elements under one roof. Design-build firms, which provide both design and construction services, are examples of this ongoing trend. For clients, the consolidation of the multiple disciplines involved in building construction has in many cases simplified the process of hiring building-related professionals. Increasing world population, especially when coupled with increased per capita income and availability of credit, promotes construction of new buildings and renovations of existing buildings. Market volatility in the late twentieth and early twenty-first century has affected the way many architecture firms do business. Firms today often use part-time, contract, or temporary staff to handle surges in consumer demand when it is unclear how

Promulgation of corporate architecture World population growth Market volatility Transformations in information technology Environmental concerns Formalization of architect licensure requirements

These trends are discussed in the subsections below to help illuminate the status of the architecture industry and the steps being taken in response to industry trends. Modern corporations have transformed the built environment the world over. Buildings built for large companies such as Walmart are spaced thousands of miles apart but often contain identical functional and aesthetic elements. The desire to display corporate power encourages architects, builders, and engineers to work together to design and build ever-taller habitable structures, such as Chicago’s Willis Tower. To better cater to the needs of large clients, including corporations, the architecture industry is evolving to include specialists serving individual corporations. These specialized architects, if they attain efficiency within their

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The Willis Tower in Chicago is 1,450 feet tall.

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long such surges will last. Increasingly, construction documentation and other services are being contracted to foreign firms to diminish the costs and risks associated with retaining a large workforce of permanent employees. In years of strong economic growth, the proportion of bonus or overtime pay architects receive is higher than the proportion of such pay received by professionals in other industries; overtime pay allows firms to employ smaller workforces, and bonus compensation can be reduced in the event of a downturn. As recently as 1980, most firms relied on handdrafting to produce project documents, but today the majority of this work is performed using computer modeling and drafting. Computer-aided design (or computer-aided drafting, CAD) has increased efficiency. New modeling software enhances architecture firms’ ability to educate clients about proposed building plans. Some types of buildings, such as the museums designed by Gehry Partners in the 1990’s and the early twenty-first century, would have been impossible to design and build without state-of-the-art computer modeling technology. The industry is rapidly adopting building information modeling, or BIM, systems that allow architects to create intelligent models of buildings that automatically coordinate design

documents, assist in engineering coordination, and recalculate values in schedules. Internet marketing, including that conducted through social and professional networking sites, blogs, and firm Web sites, plays a role of increasing importance in attracting new clients and employees. Environmental concerns encourage a new set of priorities for clients and designers. Through a variety of channels, the public is becoming increasingly aware of burgeoning landfill waste caused by construction industry by-products, airborne contaminants emitted by construction materials and their manufacture, building-related energy usage, and habitat destruction caused by extraction of building materials and redevelopment. Some organizations, such as the International Code Council, have updated published building standards to promote sustainability in building construction and operation. Architects serve as advisers to such organizations, and many of these revised standards are enforced legally. An increasing number of architects seek additional training and accreditation through the Leadership in Energy and Environmental Design (LEED) programs offered by the U.S. Green Building Council. One-third of architecture firms have LEED-accredited staff. Organizations such as LEED promote public awareness through building certification programs. Partly in response to code revision, building typology expansion, and innovations in construction methodology, all fifty states have increased their formal requirements for architect licensure during the last century. For most architects, these requirements include accredited postsecondary professional degrees, internships, and examinations. The National Architectural Accrediting Board (NAAB) currently lists 151 accredited architecture programs across the United States that offer a variety of doctoral, master’s, and bachelor’s degrees. Such programs typically take Before the 1980’s, most plans were drawn by hand but now they are made using four to eight years to complete. computer-aided design. (©Dreamstime.com) Traditionally, a large share of

Building Architecture Industry architect training has been the responsibility of firms, which provide internships for rising architecture students and recent graduates. Over the last few decades, internships have largely been administered by the National Council of Architectural Registration Boards (NCARB). NCARB requires that all architectural interns enrolled in its program, which typically takes three or more years to complete, gain requisite experience in several different categories of architecture, including document creation, cost estimation, specification design, coordination with other design professionals, and administration of contracts during construction. The seven-part Architect Record Examination covers various subject areas. Each part requires a solution to a design problem, and six of the parts pose other questions in addition to these problems. Many state jurisdictions require further procedures to verify architectural skills, such as oral tests, written tests, or continuing education after initial licensure. Continuing education is also required by professional organizations such as the American Institute of Architects (AIA).

INDUSTRY MARKET SEGMENTS Architects and engineers in the United States are required by law to supervise the design of most midsize and large buildings, including hospitals, office buildings, sports arenas, educational facilities, apartment buildings, airports, parking garages, museums, churches, and many other building types. In addition, architects design some smaller buildings. Architects may be involved in master planning for groups of buildings—including college, corporate, and medical campuses— and architects often take part in large-scale urban design as well. The scope of architectural services can be very large, as in the previous examples, but it can also be small. An architect may design individual workstations, furniture, or renovations to small existing structures. Architects performing these various functions can work for firms ranging from very small to very large; the division of the services architects provide is influenced, but not determined, by firm size.

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Small Businesses Small architecture firms, like all architecture firms, can be partnerships, corporations, or sole proprietorships. Small firms employ fewer than fifty people, and they may employ as few as one: Approximately 20 percent of architects are selfemployed. The proportion of self-employment among architecture professionals is twice as high as the average across all industries. Over 80 percent of architecture firms have fewer than ten employees, making this a small-business-intensive industry. Small architecture firms are found throughout the country; they exist alongside larger firms and are present in small, midsize, and large communities. A small firm may or may not specialize in one or a few building types. Small firms occasionally work on large projects. Small firms tend to be singlediscipline and do not often include engineers, landscape architects, or professionals other than architects. Potential Annual Earnings Scale. The earnings of a small architecture firm vary depending on the types of services offered and the firm’s geographic location. According to the AIA Compensation Report, 2008, average worker earnings correlate with firm size. As an example, the mean income of junior architects working in firms employing one to four people was approximately 92 percent of the mean income of architects in equivalent positions in firms employing fifty to ninety-nine people. According to the report, at architecture firms employing one to four people, workers’ total mean incomes were as follows (positions are those defined by the AIA; for each position, base pay is listed first, and cash earnings beyond base pay follow in parentheses): ■ ■ ■ ■ ■

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President: $100,200 ($25,800) Principal: $92,500 ($23,600) Design Director: $81,800 ($15,200) Operations Director: $67,600 ($24,100) Senior Project Designer: $74,000 ($4,800) Project Designer: $63,300 ($2,700) Senior Project Manager: $73,500 ($5,300) Project Manager: $62,300 ($5,900) Architect 1: $52,400 ($4,600) Unlicensed Architecture/Design Staff 1: $47,100 ($3,900)

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Building Architecture Industry Architect 2: $57,200 ($3,700) Unlicensed Architecture/Design Staff 2: $55,200 ($3,600) Architect 3: $63,900 ($4,300) Unlicensed Architecture/Design Staff 3: $55,200 ($2,800) Intern 1: $32,900 ($1,500) Intern 2: $40,700 ($1,800) Intern 3: $43,700 ($3,100) CAD/BIM Specialist: $35,900 ($700) Business/Administrative Manager: $35,900 ($2,200) Accountant: $26,300 ($400)

Clientele Interaction. Project architects, project managers, and executive managers typically engage in regular correspondence with existing and potential clients before, during, and after projects. They solicit or receive initial requests for qualifications and proposals; interview clients and participate in meetings to determine their needs; and continue to meet and interact with them to gain feedback on evolving designs, to help shepherd approved designs through the permitting process, and to help ensure that plans are executed correctly. Unless construction administration duties are formally transferred to different firms, design architecture firms are typically retained to fulfill those duties, which involve conducting regular meetings with owners, contractors, and other affected individuals. After completion of construction, architects sometimes provide postoccupancy services, including making adjustments to work done, compiling “lessons learned” for future projects, and providing additional documentation such as fire safety plans. Amenities, Atmosphere, and Physical Grounds. Architects typically work in air-conditioned, comfortable office environments, though many architectural employees occasionally travel to construction sites. Some travel quite extensively, both domestically and internationally, though employees of small firms are more likely to travel within a limited geographical area. Architects may also participate in off-site meetings, seminars, or model building. Many presidents and principals spend a significant portion of their time traveling to meetings, presentations, and interviews with potential clients. Junior employees usually spend the majority of their time producing docu-

ments at computer stations equipped with CAD, BIM, or other three-dimensional-modeling software. Typical Number of Employees. Small firms may employ up to forty-nine persons, but 80 percent of all architecture firms employ fewer than ten persons. The number of employees in the smallest of firms may remain fairly constant by personal choice of the firms’ owners, but most firms with more than one employee occasionally take on or reduce employees as their workloads require. This is especially true in the architecture industry, given the fluctuating demand for building construction. In severe economic recessions, it is not uncommon for small firms to lay off employees. Conversely, in times of unusually high demand, it is not uncommon for firms to bring on people on a per-project basis. Traditional Geographic Locations. Architecture firms may be found in a variety of locations, with many architects working in home offices. Many firms are located in larger urban locales in order to capitalize on larger bases of potential clients, but small architecture firms are located in every major geographic region within the United States. Pros of Working for a Small Architecture Firm. Small architecture firms and sole proprietorships offer potential advantages over larger firms. For nonarchitectural staff, the prospect of assisting in the design of something large and tangible, such as a building, may be an attraction. For those drawn to architecture because of the wide range of duties potentially required of architects, small firms often allow young professionals to fulfill many separate roles that might be delegated among specialized individuals in larger firms. Cons of Working for a Small Architecture Firm. Small architecture firms may enjoy less name recognition than larger firms. They may also take on a narrower range of project types in a given time period. Small firms usually pay less wages and offer fewer fringe benefits than larger firms, and they may provide less opportunity than larger firms to work with diverse in-house staff. Though small firms do at times work on high-profile projects, larger firms tend to work on project types seldom seen at smaller firms, such as large airport terminals, extreme high-rise structures, and other largescale, well-publicized projects.

Building Architecture Industry Costs Payroll and Benefits: Small firms pay workers in several ways, including by contract (lump sum, cost-plus-fee, and so on), commission, salary, or hourly wages. When payment is by salary or hourly wages, benefits beyond base pay often include bonus pay or profit sharing. There is great variation in the rate of fringe benefit compensation, and some small firms offer no benefits beyond what is required by law. Others, however, pay their employees’ professional expenses, such as licensing fees (including a portion of the time spent preparing for and taking exams), membership dues in professional organizations such as the AIA, and tuition and other costs of continuing professional education. The cost of payroll and benefits varies widely, depending on the geographic region and projects pursued. In the United States, average compensation is greatest on the East Coast and in the Southwest. It is lowest in the west north central, east south central, and west south central regions. The geographic variability of average wages is most likely due to variable employee demand, cost of living, and project workload in these respective regions. Supplies: Small firms often tend to invest less heavily in design-related technology than do larger firms, and they are less likely to possess fully equipped model shops, large-scale plotters, advanced design software and hardware, or other design-related supplies. Small firms typically require general office supplies, computers, design software, resource books, material libraries, and telephones. They may also have cleaning and property-maintenance supplies on hand, though these may also be supplied by outside janitorial services. External Services: Small firms occasionally use computer repair services, especially since they are less likely to have full-service in-house technology staff. They may engage a range of outside consultants as well. For example, small firms often retain structural, mechanical, electrical, plumbing, civil, or acoustic engineers to assist in the production of construction documents, provide consultation, or provide construction administration. They may also contract accounting, Web design, graphic design, marketing, life safety, catering, code, weatherproofing, estima-

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tion, or specification vendors or consultants. Small firms may hire outside services for physical and digital modeling. They also require printing services if they lack in-house plotters. Small firms may hire other architecture, landscape architecture, or interior architecture firms under contract to produce architectural documentation where allowable by law. Firms also purchase professional liability insurance, as well as property insurance and auto insurance as appropriate. Utilities: Small firms pay for telephone, cable television, gas, electricity, water, sewage, and Internet access. Taxes: Small businesses are required to pay local, state, and federal taxes on income and property. Some small-business owners pay these taxes on their personal income statements; these owners must also pay self-employment taxes. Midsize Businesses Midsize architecture firms employ from 50 to 249 persons. Like all architecture firms, they can be partnerships, corporations, or sole proprietorships, though corporations are becoming the dominant form of ownership. Midsize firms are found across the country, alongside larger and smaller firms, and are typically located in midsize or large communities. A midsize firm may or may not specialize in one or a few building types. Midsize firms work on small, midsize, and large projects. Potential Annual Earnings Scale. The earnings of a midsize architecture firm vary widely depending on the types of services offered and the firm’s geographic location. Nationally, average worker earnings correlate with firm size. As an example, according to the AIA Compensation Report, 2008, the mean income of junior architects working in firms employing 50 to 99 people was approximately 90 percent of the mean income of architects in equivalent positions at firms employing more than 249 people. According to the report, at architecture firms employing 50 to 99 people, workers’ total mean incomes were as follows (positions are those defined by the AIA; for each position, base pay is listed first, and cash earnings beyond base pay follow in parentheses): ■ ■

President: $192,400 ($171,300) Principal: $144,700 ($84,100)

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Building Architecture Industry Design Director: $131,900 ($54,000) Finance Director: $107,600 ($30,800) Human Resources Director: $79,400 ($12,300) Information Technology Director: $83,400 ($11,300) Operations Director: $124,600 ($23,600) Director of Planning and/or Urban Design: $111,700 ($17,900) Director of Structural Engineering: $95,400 ($20,700) Senior Project Designer: $91,700 ($13,900) Project Designer: $70,400 ($9,900) Senior Project Manager: $95,400 ($18,300) Project Manager: $77,600 ($11,800) Architect 1: $57,900 ($4,200) Unlicensed Architecture/Design Staff 1: $53,000 ($3,700) Architect 2: $69,800 ($6,100) Unlicensed Architecture/Design Staff 2: $61,500 ($5,600) Architect 3: $85,500 ($11,600) Unlicensed Architecture/Design Staff 3: $71,700 ($5,700) Intern 1: $38,600 ($3,200) Intern 2: $43,700 ($3,600) Intern 3: $47,300 ($4,000) Senior Structural Engineer: $93,500 ($9,900) Intermediate Structural Engineer: $63,300 ($1,700) Entry-Level Structural Engineer: $51,400 ($1,200) Senior Interior Designer: $75,600 ($9,100) Intermediate Interior Designer: $51,900 ($4,600) Entry-Level Interior Designer: $39,800 ($2,900) Landscape Architect: $70,400 ($5,600) Planner: $65,000 ($4,100) Systems/Information Technology Manager: $66,800 ($8,100) Senior CAD/BIM Specialist: $65,900 ($7,300) CAD/BIM Specialist: $51,900 ($3,900) Business/Administrative Manager: $63,400 ($6,100) Accountant: $58,100 ($3,700)

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Human Resources Generalist: $60,800 ($4,400) Marketing Manager: $75,500 ($7,400) Marketing Coordinator: $48,300 ($3,700) Graphic Designer: $48,900 ($3,300)

Clientele Interaction. Project architects, project managers, and executive managers typically engage in regular correspondence with existing and potential clients before, during, and after projects. They solicit or receive initial requests for qualifications and proposals; interview clients and participate in meetings to determine their needs; and continue to meet and interact with them to gain feedback on evolving designs, to help shepherd approved designs through the permitting process, and to help ensure that plans are executed correctly. Unless construction administration duties are formally transferred to different firms, design architecture firms are typically retained to fulfill those duties, which involve conducting regular meetings with owners, contractors, and other affected individuals. After completion of construction, architects sometimes provide postoccupancy services, including making adjustments to work done, compiling “lessons learned” for future projects, and providing additional documentation such as fire safety plans. Amenities, Atmosphere, and Physical Grounds. Architects typically work in air-conditioned, comfortable office environments, though many architectural employees occasionally travel to construction sites. Some travel quite extensively, both domestically and internationally, though employees of midsize firms are more likely to travel only within a single country. Architects may also participate in off-site meetings, seminars, or model building. Many presidents and principals spend a significant portion of their time traveling to meetings, presentations, and interviews with potential clients. Junior employees usually spend the majority of their time producing documents at computer stations equipped with CAD, BIM, or other threedimensional-modeling software. Typical Number of Employees. Midsize firms employ between 50 and 249 persons, though most have fewer than 100 employees. As is true of small firms, they occasionally take on or reduce employees in response to fluctuating demand for building construction.

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Traditional Geographic Locations. Architecture firms may be found in a variety of locations, but midsize firms are typically located in midsize to large cities. Architecture firms tend to locate in larger urban locales that have large potential client bases. Midsize architecture firms are located in every major geographic region within the United States. Pros of Working for a Midsize Architecture Firm. Midsize architecture firms usually include separate teams or departments. This compartmentalization can create the effect of working within a small firm while still providing opportuArchitects may visit the construction site to see that the plans have been folnities outside of one’s specific team. lowed correctly. (©Andres Rodriguez/Dreamstime.com) For nonarchitectural staff, the prospect of assisting with the design of something large and tangible, such for and taking exams), membership dues in proas a building, may be an attraction. Occasionally, fessional organizations such as the AIA, and tuimidsize firms may have engineering departments tion and other costs of continuing professional or other departments that smaller firms might not education. The cost of payroll and benefits varpossess, allowing architects to work directly with ies widely, depending on the geographic region other disciplines under the same roof. Wages in and projects pursued. In the United States, avermidsize firms tend to exceed those in smaller firms. age compensation is greatest on the East Coast Cons of Working for a Midsize Architecture and in the Southwest. It is lowest in the west Firm. Midsize architecture firms may enjoy less north central, east south central, and west south name recognition than larger firms. They may also central regions. The geographic variability of avtake on a narrower range of project types in a given erage wages is most likely due to variable emtime period. Midsize firms’ pay and benefits, while ployee demand, cost of living, and project workusually superior to small firms, are usually inferior load in these respective regions. to large ones. Similarly, opportunities to work with Supplies: Midsize firms may possess fully equipped diverse in-house staffs are greater than at small model shops, large-scale plotters, and advanced firms but less than at large ones. Employees of design software and hardware. They require midsize firms may experience more pressure than general office supplies, computers, resource those at small firms to specialize; such specializabooks, material libraries, and telephones, and tion may seem constricting to some architects. they may have cleaning and property-maintenance supplies on hand. Costs External Services: Midsize firms typically use Payroll and Benefits: Midsize firms pay workers computer repair services. They may engage a in several ways, including by contract (lump range of outside consultants as well. For examsum, cost-plus-fee, and so on), commission, salple, midsize firms often retain structural, meary, or hourly wages. When payment is by salary chanical, electrical, plumbing, civil, or acoustic or hourly wages, benefits beyond base pay often engineers to assist in the production of coninclude bonus pay or profit sharing, as well as struction documents, provide consultation, or professional expenses, such as licensing fees (inprovide construction administration. They may cluding a portion of the time spent preparing

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also contract accounting, Web design, graphic design, marketing, life safety, catering, code, weatherproofing, estimation, or specification vendors or consultants. Midsize firms may hire outside services for physical and digital modeling. They also require printing services if they lack in-house plotters—and sometimes even if they possess such plotters. Midsize firms may hire other architecture, landscape architecture, or interior architecture firms under contract to produce architectural documentation where allowable by law. Firms also purchase professional liability insurance, as well as property insurance and auto insurance as appropriate. Utilities: Midsize firms generally pay for telephone, cable television, gas, electricity, water, sewage, and Internet access. Taxes: Midsize businesses are required to pay local, state, and federal corporate and property taxes.

ploying more than 249 people. According to the report, at architecture firms employing more than 249 people, workers’ total mean incomes were as follows (positions are those defined by the AIA; for each position, base pay is listed first, and cash earnings beyond base pay follow in parentheses): ■ ■ ■ ■ ■

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Large Businesses Large architecture firms employ more than 249 people. Like all architecture firms, they can be partnerships, corporations, or sole proprietorships, though corporations are fast becoming the dominant form of ownership. Large architecture firms are found across the country, alongside smaller firms. They are typically based in large cities, and they may have separate branch locations in large or midsize cities. A large firm may or may not specialize in one or a few building types. Large firms frequently work on very large projects. Large firms tend to be multidisciplinary and often employ engineers, interior designers, landscape architects, or other professionals alongside their architects. Large businesses make up only a tiny proportion of architecture firms but earn a significant portion of the industry’s revenue and employ a significant share of the industry’s architectural personnel. Potential Annual Earnings Scale. The earnings of a large architecture firm vary depending on the types of services offered and geographic location. According to the AIA Compensation Report, 2008, average worker earnings correlate with firm size. As an example, the mean income of junior architects working in firms employing 1 to 4 people was approximately 82 percent of the mean income of architects in equivalent positions in firms em-

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President: $240,400 ($65,400) Principal: $172,800 ($51,400) Design Director: $160,700 ($24,900) Finance Director: $155,000 ($54,800) Human Resources Director: $116,800 (15,400) Information Technology Director: $119,500 ($17,800) Operations Director: $155,000 ($28,300) Director of Planning and/or Urban Design: $127,300 ($103,100) Director of Structural Engineering: $128,500 ($53,900) Senior Project Designer: $108,600 ($15,700) Project Designer: $74,900 ($13,400) Senior Project Manager: $106,100 ($17,500) Project Manager: $85,100 ($11,100) Architect 1: $63,600 ($5,500) Unlicensed Architecture/Design Staff 1: $52,000 ($4,100) Architect 2: $74,200 ($9,400) Unlicensed Architecture/Design Staff 2: $69,000 ($8,000) Architect 3: $91,100 ($19,300) Unlicensed Architecture/Design Staff 3: $74,900 ($6,500) Intern 1: $43,400 ($5,300) Intern 2: $44,700 ($3,600) Intern 3: $53,300 ($3,800) Senior Structural Engineer: $88,700 ($46,100) Intermediate Structural Engineer: $69,300 ($5,100) Entry-Level Structural Engineer: $53,600 ($3,500) Senior Interior Designer: $82,800 ($18,900) Intermediate Interior Designer: $61,200 ($5,400) Entry-Level Interior Designer: $40,300 ($2,400)

Building Architecture Industry ■ ■ ■

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Landscape Architect: $74,700 ($11,300) Planner: $65,900 ($12,500) Systems/Information Technology Manager: $85,400 ($16,600) Senior CAD/BIM Specialist: $81,700 ($10,600) CAD/BIM Specialist: $52,100 ($3,300) Business/Administrative Manager: $72,400 ($6,000) Accountant: $68,000 ($3,900) Human Resources Generalist: $62,600 ($8,300) Marketing Manager: $101,000 ($10,000) Marketing Coordinator: $53,100 ($6,700) Graphic Designer: $55,600 ($9,400)

Clientele Interaction. Project architects, project managers, and executive managers typically engage in regular correspondence with existing and potential clients before, during, and after projects. They solicit or receive initial requests for qualifications and proposals; interview clients and participate in meetings to determine their needs; and

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continue to meet and interact with them to gain feedback on evolving designs, to help shepherd approved designs through the permitting process, and to help ensure that plans are executed correctly. Unless construction administration duties are formally transferred to different firms, design architecture firms are typically retained to fulfill those duties, which involve conducting regular meetings with owners, contractors, and other affected individuals. After completion of construction, architects sometimes provide postoccupancy services, including making adjustments to work done, compiling “lessons learned” for future projects, and providing additional documentation such as fire safety plans. Amenities, Atmosphere, and Physical Grounds. Architects typically work in air-conditioned, comfortable office environments, though many architectural employees occasionally travel to construction sites. Some travel quite extensively, both domestically and internationally. Architects may also participate in off-site meetings, seminars, or model building. Many presidents and principals

OCCUPATION

PROFILE

Architect Considerations

Qualifications

Description

Designs structures for human habitation and use.

Career cluster

Architecture and Construction

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

AIR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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spend a significant portion of their time traveling to meetings, presentations, and interviews with potential clients. Junior employees usually spend the majority of their time producing documents at computer stations equipped with CAD, BIM, or other three-dimensional-modeling software. Typical Number of Employees. Large architectural firms employ 250 or more people, sometimes many more. They occasionally take on or reduce employees in response to fluctuating demand for building construction. Traditional Geographic Locations. Large architecture firms tend to be headquartered in major cities, often in large office buildings designed by the firms themselves. They may have branch offices in large or midsize communities and sometimes in other countries. Large architecture firms are located in every major geographic region within the United States. Pros of Working for a Large Architecture Firm. Large firms may enjoy greater name recognition than do smaller firms. They may engage in a broad range of project types and offer greater opportunities than smaller firms to work with diverse in-house staff. They often pay higher wages than do smaller firms. For nonarchitectural staff, the prospect of assisting in the design of something large and tangible, such as a building, may be an attraction. Large firms tend to work on project types seldom seen at smaller firms, such as airport terminals, extreme high-rise structures, and other largescale, well-publicized projects. Cons of Working for a Large Architecture Firm. A large firm may divide and distribute duties to specialists that, in a smaller firm, might be handled by one person. In some cases, employees may feel more pressure than those at smaller companies to perform repetitive duties within specified niche roles. Those who work in large firms typically must either live in large communities that can support such large firms or commute long distances to work. Costs Payroll and Benefits: Large firms pay workers in several ways, including by contract (lump sum, cost-plus-fee, and so on), commission, salary, or hourly wages. When payment is by salary or hourly wages, benefits beyond base pay often include bonus pay or profit sharing, as well as pro-

fessional expenses, such as licensing fees (including a portion of the time spent preparing for and taking exams), membership dues in professional organizations such as the AIA, and tuition and other costs of continuing professional education. The cost of payroll and benefits varies widely, depending on the geographic region and projects pursued. In the United States, average compensation is greatest on the East Coast and in the Southwest. It is lowest in the west north central, east south central, and west south central regions. The geographic variability of average wages is most likely due to variable employee demand, cost of living, and project workload in these respective regions. Supplies: Large firms often invest heavily in design-related technology and are likely to possess fully equipped model shops, large-scale plotters, advanced design software and hardware, and other design-related supplies. Large firms typically require general office supplies, computers, design software, resource books, material libraries, and telephones. They may have cleaning and property-maintenance supplies on hand. External Services: Large firms may contract computer support services if they develop technology issues that cannot be handled by in-house technology staff. They may engage a range of outside consultants as well. For example, large firms often retain structural, mechanical, electrical, plumbing, civil, or acoustic engineers to assist in the production of construction documents, provide consultation, or provide construction administration. They may also contract accounting, Web design, graphic design, marketing, life safety, catering, code, weatherproofing, estimation, or specification vendors or consultants. Large firms may hire outside services for physical and digital modeling or for printing. They may hire other architecture, landscape architecture, or interior architecture firms under contract to produce architectural documentation where allowable by law. Firms also purchase professional liability insurance, as well as property insurance and auto insurance as appropriate. Utilities: Large firms may pay for cable television, gas, telephone, electricity, water, sewage, and Internet access.

Building Architecture Industry Taxes: Large businesses are required to pay local, state, and federal corporate and property taxes. International companies must pay taxes in all relevant countries.

ORGANIZATIONAL STRUCTURE AND JOB ROLES

ness planning, and technology management. In firms of all sizes, executive managers take active roles in marketing their companies, including seeking new clients. Executive management occupations may include the following: ■ ■ ■

Specialization is typically present in architectural design firms, regardless of the size of the firm. This specialization can be due to varying degrees of professional experience, or it can be designed to allow increased depth of knowledge within a given specialty. Larger firms tend to be more specialized; this may be one of the primary reasons that they are able to pay greater wages than smaller firms. At large, departmentalized firms, each job function is likely to be fulfilled by a different employee. At small and very small firms, each employee must fulfill a range of functions. Regardless of their distribution among staff, however, all functions must be fulfilled. ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Design Management Architectural Design Technology Nonarchitectural Design Human Resources Marketing Administrative and Technical Support

Executive Management Executive managers direct the overall activities of their firms. They are typically the highest-paid employees within their firms, and in good economic periods they may earn large bonuses and profit-sharing incomes. Presidents and principals serve as the face of thier organizations and lead their firms, and they are assisted by the directors and managers of various functions and departments who report to them. In many U.S. jurisdictions, a set proportion of each firm’s executive management staff must be composed of licensed architects, though it is common for some executive managers to be unlicensed. In small firms, managers may perform some or all of the firm’s marketing, human resource management, design, busi-

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President Principal Chief Financial Officer (CFO) Operations Director Design Director Human Resources Director Information Technology Director Finance Director Director of Urban Design Director of Structural Engineering Business Manager

Design Management Design managers direct designers and other staff members directly engaged in projects. In small firms, these managers serve as client liaisons as well, ensuring that clients are kept appraised of the status of their projects. Typically, senior project managers and operations directors take on responsibility for the largest and most complex projects, while junior managers oversee small projects, or components of larger projects, under senior managers’ supervision. Project managers require at least eight years of experience, an accredited architecture degree, and sometimes licensure. Design management occupations may include the following: ■ ■ ■

Operations Director Senior Project Manager Project Manager

Architectural Design This category makes up the bulk of architecture firm personnel and is primarily engaged in the actual design of buildings. Architects typically progress through a series of ranks, from intern through senior architect. The designation “architect 1” applies to a licensed professional with at least five years of experience. The “architect 2” designation requires at least eight years of experience, while the “architect 3” designation requires at least ten years of experience. Those without licenses may

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have similar duties but earn less money for performing them. Architectural design occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

President Principal Design Director Senior Project Designer Project Designer Architect 1 Architect 2 Architect 3 Intern 1 Intern 2 Intern 3

and implement and maintain firm technology. They may play important roles in facility security as well. In smaller firms, there may be only one person to handle technology-related tasks, and in some cases this person may handle other tasks as well, such as architectural design support. Technology occupations may include the following: ■ ■

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Technology Technology personnel manage information technology within their firms, assist others with issues relating to software and hardware function,

OCCUPATION

Information Technology Director Systems/Information Technology Manager Senior CAD/BIM Specialist CAD/BIM Specialist

Nonarchitectural Design Although the following positions are rarely found in very small firms, architecture firms are increasingly incorporating professionals from related disciplines to assist in communication, explore novel design solutions, and provide en-

SPECIALTIES

Architects Specialty

Responsibilities

Architectural drafters

Prepare detailed drawings of architectural designs and plans for buildings, according to the specifications, sketches, and rough drafts that are provided by architects.

Landscape architects

Plan and design the development of land areas for projects, such as recreational facilities, airports, highways, hospitals, schools, and sites that are planned for residential, commercial, and industrial development.

Landscape drafters

Prepare detailed scale drawings and tracings from rough sketches or other data provided by a landscape architect.

Marine architects

Design and oversee the construction and repair of marine craft and floating structures, such as ships, barges, submarines, torpedoes, and buoys.

School-plant consultants

Formulate and enforce the standards for the construction of public school facilities. They develop legislation relative to school building sites and school design and construction.

Sustainable/clean energy/ green building architects

Design buildings that use clean energy technologies to meet new environmental standards.

Building Architecture Industry OCCUPATION

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PROFILE

Interior Designer Considerations

Qualifications

Description

Designs interior environment of a building, from space planning and wall and floor treatments to furnishings and artwork.

Career clusters

Architecture and Construction; Arts, A/V Technology, and Communications; Marketing, Sales, and Service

Interests

Data; things

Working conditions

Work inside

Minimum education level

Junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

AES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

hanced coordination of documents. Senior structural engineers must have seven or more years of experience; they design and coordinate structural components with builders and architects, from conceptual design through project completion. Senior structural engineers are often registered engineers, with bachelor’s degrees in engineering. In-house structural engineers are most often associated with midsize and large design firms. Senior interior designers have eight or more years of experience and often have bachelor’s degrees in interior design. They manage complex interior design projects, including all phases of design and construction. In-house interior designers are most associated with midsize and large design firms. Nonarchitectural design occupations may include the following: ■ ■

Director of Urban Design Director of Structural Engineering

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Structural Engineer Interior Designer Landscape Architect Planner

Human Resources Human resources personnel recruit, hire, and fire employees. They administer payroll and benefits, address employee concerns and grievances, and conduct or arrange employee training, including providing opportunities for continuing education. Unlike most employees in architecture firms, human resources workers do not typically have professional licenses, but they often have bachelor’s degrees in business or human resource management. In small companies without human resources staff, the owner, president, principal, or another senior manager generally handles human resources responsibilities. Human resources occupations may include the following:

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Human Resources Director Human Resources Generalist Benefits Specialist Payroll Clerk

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Marketing Marketing personnel assist executive managers in soliciting work, retaining clients, and seeking opportunities to enhance firm profit and prestige. Their duties—including production of visual communication and communication with existing and potential clients—are often shared with architectural design, executive management, and design management staff. Marketing occupations may include the following: ■ ■ ■

Marketing Manager Marketing Coordinator Graphic Designer

Administrative and Technical Support Various administrative and support personnel are necessary to the operations of large and midsize firms. At some small and midsize firms, these duties may be performed by interns or junior employees. Some specialized technical support functions may be contracted out by firms without sufficient support staff. Administrative and technical support staff occupations may include the following: ■ ■ ■ ■ ■ ■

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Administrative Assistant Mail/Delivery Specialist Receptionist Specification Writer Estimator Three-Dimensional Modeler/ Renderer Architectural Drafter Physical Model Builder

INDUSTRY

OUTLOOK

Overview Before the onset of the recession of 20072009, the architecture industry experienced a multiyear period of intense growth. Ac-

cording to the U.S. Census Bureau, the nonresidential construction sector grew by 34 percent between 2005 and 2008. According to the AIA, the architecture industry as a whole experienced approximately 6 percent annual growth from 2003 to 2005, with slower growth from 2006 to 2008. Outsourcing to foreign architecture firms has affected the domestic employment rate of architects, and architects entering the field have experienced fierce competition for positions in top-tier firms, even during the height of the 2005-2007 construction boom. The period immediately following that boom has been relatively difficult for the building architecture industry. The recession acutely affected the

PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Wood Product Manufacturing Employment 2009

Projected 2018

Occupation

12,120

12,400

Cabinetmakers and bench carpenters

14,280

17,500

Carpenters

15,090

15,500

First-line supervisors/ managers of production and operating workers

13,340

12,600

Machine feeders and offbearers

29,380

34,000

Sawing machine setters, operators, and tenders, wood

35,940

43,600

Team assemblers

44,030

86,500

Woodworking machine setters, operators, and tenders, except sawing

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Building Architecture Industry construction industry, and architecture firms have seen dramatic changes in employment, earnings, and sources of revenue as a result of diminished construction activity. According to the AIA, nearly as many architectural jobs were lost between 2007 and mid-2009 as were gained between 2002 and 2007. The difficulties faced by the architecture industry are by no means isolated to the United States. According to the International Labour Office, the worldwide average rate of growth in gross domestic products slowed from 3 percent in January of 2008 to −1.4 percent in July of 2009. This slowdown has strongly affected the global architecture industry, though its effects have by no means been uniform. The long-term prospects for architecture firms are positive. According to the U.S. Bureau of Labor and Statistics (BLS), from 2008 to 2018, the architecture industry is expected to expand by 22,900 architect positions, a 16.2 percent increase, and by 10,800 architectural and civil drafters, a 9.1 percent increase. During this period, the BLS anticipates a total need for 46,800 architects and 36,200 drafters to replace professionals leaving the profession, as well as to fill the new positions. The steady increase in world population coupled with the imminent retirement of the baby-boom generation will fuel demand for health care facilities, nursing homes, and other building types. In general, the long-term prognosis for the industry is very good. Employment Advantages The benefits of a career in architecture are many. Architects enjoy a wide variety of potential responsibilities, as well as opportunities for creativity and mental stimulation. Every project provides new and interesting challenges. Most architects enjoy professional work environments that are safe and comfortable, while also traveling to construction sites occasionally to observe and help oversee the realization of their visions. A career in architecture is a good choice for a candidate who enjoys cultivating diverse skills. Architecture is a constantly changing industry that responds to shifts in the means of construction, costs of resources and energy, demographics, building uses, geographic patterns of human habitation, building law, and human ecology. An architect may reasonably expect the unexpected, and a wellqualified candidate should be adaptable and amenable to a lifetime of learning opportunities.

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Annual Earnings According to the U.S. Census Bureau, the architecture industry earned revenues of $40.9 billion in 2008. This figure does not include the earnings of engineering firms, interior design companies, or architects working in other industries, such as those serving as inspectors or administrators in public offices. It also does not include design work performed by builders as part of construction projects that are not required to be designed by architects. The architecture industry has a steadily changing relationship with the related engineering and construction industries, as architects, engineers, and builders seek new forms of partnership with one another. The earnings of the architecture industry could theoretically change not only as a result of public demand for new and reconfigured buildings but also as a result of shifting proportions of buildings designed by engineers and contractors or expansion of services performed by architects.

RELATED RESOURCES FOR FURTHER RESEARCH American Institute of Architects 1735 New York Ave. NW Washington, DC 20006-5292 Tel: (202) 626-7300 Fax: (202) 626-7547 http://www.aia.org American Institute of Architecture Students 1735 New York Ave. NW Washington, DC 20006-5209 Tel: (202) 626-7472 Fax: (202) 626-7414 http://www.aias.org National Architectural Accrediting Board 1735 New York Ave. NW Washington, DC 20006-5292 Tel: (202) 783-2007 Fax: (202) 783-2822 http://www.naab.org National Council of Architectural Registration Boards 1801 K St. NW, Suite 700K

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Washington, DC 20006-1310 Tel: (202) 783-6500 Fax: (202) 783-0290 http://www.ncarb.org

ABOUT

THE

AUTHOR

Andrew McKelvey is an Oregon-registered architect who has provided services for clients in Oregon, Washington, Utah, and China. He serves as a project architect with Neil Richardson Architect and is a committee member at the Benton Habitat for Humanity in Corvallis, Oregon. As an intern, McKelvey coauthored an exterior wall design guidebook, and as a student he coauthored the article “Learning Design Process with Digital Sketching,” published in the 2006 International Journal of Architectural Computing. Andrew received a bachelor of arts degree from the University of Minnesota in 2003 and a master of architecture degree from the University of Oregon in 2005.

FURTHER

READING

American Institute of Architects. AIA Compensation Report: A Survey of U.S. Architecture Firms. New York: Author, 2008.

_______. Architect’s Essentials of Starting, Assessing, and Transitioning a Design Firm. Hoboken, N.J.: John Wiley & Sons, 2008. _______. The Business of Architecture: An AIA Report on Firm Characteristics. New York: Author, 2009. Clear, Nic. Architectures of the Near Future. Hoboken, N.J.: Wiley, 2009. Franck, Karen A., and Teresa von Sommaruga Howard. Design Through Dialogue: A Guide for Clients and Architects. Chichester, West Sussex, England: Wiley, 2010. Guthrie, Pat. The Architect’s Portable Handbook. 4th ed. New York: McGraw-Hill, 2010. Klingmann, Anna. Brandscapes: Architecture in the Experience Economy. Cambridge, Mass.: MIT Press, 2007. Roaf, Susan. Transforming Markets in the Built Environment: Adapting to Climate Change. London: Earthscan, 2010. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Construction Trades and Related Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ oco1009.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

Building Construction Industry ©Dreamstime.com

tional requirements and its expectations for design and quality at the lowest possible cost and General Industry: Architecture and Construction on a predictable schedule. A Career Clusters: Architecture and Construction; general contractor offering its Manufacturing construction services hopes to Subcategory Industries: Commercial and Institutional produce quality work, earn a Building Construction; Highway, Street, and Bridge profit, and complete the project Construction; New Multifamily Housing Construction; New in a timely fashion. However, the Single-Family Housing Construction building process is full of uncerRelated Industry: Building Architecture Industry tainty. It is subject to the moveAnnual Domestic Revenues: $908 billion USD (U.S. Census ments of the labor market, comBureau, 2009) modity prices, and the weather. NAICS Numbers: 236115-236116, 236220, 237310 Despite the best planning efforts, delays occur and mistakes are made. The pressures of schedule and cost inevitably minimize the margin for miscalculation. In this high-stakes INDUSTRY DEFINITION environment, the relationship between the owner and contractor must be structured to share reasonSummary ably between them the potential rewards and risks. The building construction industry is a complex field dealing with all aspects of building structures, History of the Industry from skyscrapers to highways. It also involves clearThe building construction industry in the United ing sites and developing nonhabitable structures. States has made tremendous strides since the midBuilding construction also covers integral structwentieth century. Evolutionary tools and mechatural services equipment, such as plumbing, heatnized earth-moving equipment have lifted it from ing, central air-conditioning, electrical wiring, lightpick-and-shovel primitiveness to a high degree of ing equipment, elevators, and escalators. sophistication. Site development has become a sciAn owner wishing to construct a building hopes ence in itself, demanding the expertise of civil engito achieve a finished project that meets its funcINDUSTRY

SNAPSHOT

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plex structures and building with efficient sequencing. Finally, great improvements have been made in material handling and packaging. For example, structural parts are Value Added Amount stacked, wrapped, or taped in such a way Gross domestic product $639.3 billion that the parts flow readily into use from Gross domestic product 4.4% first to last. The entire package can be Persons employed 7.439 million moved from truck to truck to floors of the Total employee compensation $438.0 billion structure by machinery. This process, of course, requires heavy machinery and Note: Includes all construction. skilled operators. Consequently, whole Source: U.S. Bureau of Economic Analysis. Data are for sections of a structure are now handled 2008. mechanically and put in place on the site. Builders use forklifts, trucks, carryalls, bulldozers, tractors, graders, power shovels, backhoes, trenching wheels, and drilling and neers as well as highly skilled operators using large hole-boring equipment. On a smaller scale, they and expensive equipment. Maintenance of this also use electric saws, drills, staplers, routers, planequipment alone is an excellent, profitable, and reers, nailing machines, electric power mixers, conwarding trade or a profitable business on its own. crete and paint spray guns, small portable lifts, The cement industry also has contributed to this chain saws, and many other power tools to perform progress. The proof is visible in modern superhighthe many tasks involved in a construction project. ways, bridges, towering skyscrapers, and airway terminals: Building these structures quickly was made The Industry Today possible by the development and use of compoThe focus of the building construction industry nent parts. For example, new factories use refinis the same as it always has been: the building of ished walls, new offices use outside panels hoisted structures for human habitation or other uses. The in place, and new commercial or industrial buildexact manner in which building construction is acings use inside curtain walls. Refinished applicacomplished is changing in response to several factions are not limited to nonresidential use; much tors: construction becoming an economic indicaof the systems development is employed in residentor, city expansion and services, new complexity of tial construction, and this use will certainly inprojects, and green construction. crease in the future. Modern buildings are very different from those constructed at the beginning of the twentieth century. Even a commercial or residential building Inputs Consumed by the erected only three or four decades ago is, in most cases, functionally obsolete by modern standards. Construction Industry There are more insulation, better drainage, and greater variety of materials and equipment that did Input Value not exist at the turn of the last century: garbage disEnergy $65.4 billion posers, trash compactors, dishwashers, washers Materials $454.1 billion and dryers, air-conditioners, humidifiers, air cleanPurchased services $119.2 billion ers, and multiple garages. Total $638.7 billion Production engineering management of the construction process also has been an integral Note: Includes all construction. part of this development. The Critical Path Method, Source: U.S. Bureau of Economic Analysis. Data a technique that enables the user to think through are for 2008. a problem and create a logical, precise plan for its solution, has allowed the planning of com-

The Construction Industry’s Contribution to the U.S. Economy

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General contractors take full responsibility for the construction of a building and generally specialize in residential or commercial buildings. (©Dreamstime.com)

The building construction industry, like most major cities, is a sprawling economic machine. Construction alone accounts for approximately one-tenth of the United States’ annual gross national product. The majority of construction spending is done by private individuals and businesses for work on physical structures such as homes, stores and buildings, mills and factories, highways and streets, bridges, railroads, airports, wharves and docks, pipelines, tunnels, dams, power plants, irrigation projects, public works, and defense installations. These building types have come to be an exercise in economic expansion. The building construction industry is directly linked to the financial system, which provides the capital in the form of loans for projects. This has become a key factor in the growth of the construction industry; it has evolved into a speculative economic indicator. New-construction figures have become a standard by which to gauge the nation’s economic well being. Effectively, the nation’s banks, insurance compa-

nies, pension plans, and other financial institutions have a major stake in the building construction industry. The country is continually forced to make major repairs to its infrastructure—highways, tunnels, bridges, dams, schools, power plants, water and sewer systems, subways, and airports—which ensures the widespread availability of employment in highway and heavy construction work. Building construction is the largest industry in the world. Because of the continuous expansions of cities, the number of jobs in the construction industry is projected to rise steadily, compared with the slower growth that is projected for many other industries. This growth also depends on the level of construction and remodeling activity, which is expected to increase. Consequently, employment is growing fastest in specialty trades contracting—the largest segment of the industry—as a result of the demand for subcontractors in light and heavy construction and for workers to repair and remodel existing

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Heavy and civil engineering construction contractors build projects related to infrastructure, such as the Hoover Dam Bridge, shown during construction in June, 2009. (©Dreamstime.com)

homes. After the start of the recession in 2007, home-improvement-and-repair construction outpaced new-home construction. Effectively, remodeling has become the fastest-growing sector of the housing-construction industry because of a growing stock of old residential and nonresidential buildings. In addition to the increased number of municipal projects, the projects themselves have grown in both size and complexity. Laws have set higher standards for building and construction materials, worker safety, energy efficiency, and pollution control and are being addressed by skilled professionals with expertise in construction science, engineering, and management. Construction managers—those who oversee projects and ensure that laws and regulations dealing with construction, safety, and the environment are upheld— are in high demand. The field is expected to grow faster than the average for all other careers in the field through 2016.

Environmentally conscious practices have emerged as a growing trend in the building construction industry. “Green construction” is defined by the U.S Environmental Protection Agency as the “practice of creating structures and using processes that are environmentally responsible and resource-efficient throughout a building life cycle from siting to design, construction, operation, maintenance, renovation, and deconstruction.” Green construction has changed the industry, creating new project possibilities and new roles to fill. Sustainable construction seeks to reduce a project’s negative effects on the environment and on the health and safety of construction workers, thereby improving construction performance. This trend has opened the door for unprecedented collaboration among architects, building owners, and construction companies. Basic objectives such as reducing consumption of nonrenewable resources, minimizing waste, and creating safe, productive environments for workers are

Building Construction Industry changing the traditional process of building new homes and buildings. In some cases, a construction company is required to have green construction experience before it can be granted a contract.

INDUSTRY MARKET SEGMENTS The construction industry is divided into three major segments. Construction of buildings involves contractors, usually called general contractors, who build residential, industrial, commercial, and other buildings. Heavy and civil engineering construction contractors build sewers, roads, highways, bridges, tunnels, and other projects related to infrastructure. Specialty trade contractors perform specialized activities related to all types of construction, such as carpentry, painting, plumbing, and electrical work. Construction usually is done or coordinated by general contractors, who specialize in one type of construction, such as residential or commercial building. They take full responsibility for the complete job, except for specified portions of the work that are omitted from the general contract. Although general contractors might do a portion of the work with their own crews, they often subcontract most of the work to heavy construction or specialty trade contractors. Specialty trade contractors usually perform only one trade, such as painting, carpentry, or electrical work, or two or more closely related trades, such as plumbing and heating. Beyond coordinating their work with that of the other trade contractors, specialty trade contractors have no responsibility for the structure as a whole. They obtain orders for their work from general contractors, architects, or property owners. Repair work almost always is done on direct order from owners, occupants, architects, or rental agents. Building construction firms can be broadly organized into small (fifty or fewer workers), midsize (fifty to two hundred workers), and large firms (more than two hundred workers). Keep in mind that various local, state, and national programs offer their own categorizations. Small Businesses The majority of building construction companies are small businesses. According to the U.S. Bu-

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reau of Labor Statistics, about 91 percent of the 884,300 construction establishments in the United States have fewer than twenty employees. These companies usually handle one major project at a time, at a total cost of up to $15 million. Small construction companies typically are very local and do work ranging from home renovations to building small commercial spaces. Approximately 12 percent of general contractors are self-employed; about 64 percent of wage and salary jobs in construction are in the specialty trade contractor sector, primarily plumbing, heating, and air-conditioning, electrical, and masonry. A small firm might specialize in only one or a few building types. However, small companies also occasionally work on large projects. They act as prime contractors on projects that involve a range of specialized construction activities, which they often subcontract.

Specialty trade contractors usually perform only one trade, such as painting. Large buildings such as this need skilled painters. (©Dreamstime.com)

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Potential Annual Earnings Scale. Because small companies’ size makes them vulnerable to dramatic earnings fluctuations, the wages of their employees often are volatile. The housing market provides more than half of the work for small construction companies; after the start of the recession in 2007, new-home construction lessened considerably. This has directly affected the specialty tradespeople who typically are self-employed and are subcontracted by small companies. Small companies also have the largest hourly workforce in the industry. According to the Bureau of Labor Statistics, mean annual earnings for occupations in firms of fifty or fewer employees in the building construction industry are as follows: accountants, $26,300; bricklayers and stonemasons, $24,200; business/ administrative managers, $35,900; carpenters, $24,240; cement masons, $22,920; civil engineers, $48,140; construction inspectors, $31,270; project construction managers, $47,000; cost estimators, $33,150; drafters, $28,220; drywall installers and finishers, $24,200; electricians, $28,160; floor covering installers, $21,280; heating and cooling technicians, $25,350; marble and tile setters and terrazzo workers, $22,140; operating engineers, $25,930; painters and paperhangers, $22,360; plasterers, $24,970; plumbers and pipefitters, $27,500; roofers, $22,100; sheet metal workers, $23,760; surveyors, $29,600; welders, $22,570; officers-in-charge, $89,000; superintendents, $45,900; project engineers, $40,000; foremen, $41,000; value engineers, $45,600; human resources managers, $49,800; marketing managers, $53,500; marketing coordinators, $41,300; systems/information technology managers, $59,500; and senior project construction managers, $79,800. Clientele Interaction. Client interaction includes initial requests for proposals, submitting of bids, interviews, meetings to determine coordination between the construction company and architect, and additional meetings during construction to ensure the project’s owner and architect that the contractor is complying with construction documents. In the construction industry, the architect usually is a representative for the client, which means that the general contractor must treat the architect as the client. Construction managers and operating engineers usually attend these meetings. In turn, they delegate all work to specialty trades

personnel; in this scenario, laborers have no interaction with clients. Amenities, Atmosphere, and Physical Grounds. In the construction industry, work is divided into two categories: nonconstruction staff and laborers. Nonconstruction staff, construction managers, and personnel who support office operations typically work in air-conditioned, comfortable office environments, although many construction managers travel frequently—even daily—to construction sites to check progress. Laborers do all the manual labor in the erection of a new building. They typically work outside in all weather conditions except heavy rain or snow. In some cases, travel can be quite extensive, including trips to foreign countries, although in small firms it is more likely that travel will be limited to a smaller geographical area. Such travel usually is done by nonconstruction staff. Typical Number of Employees. The number of employees in the smallest of firms tends to fluctuate with economic conditions. In severe recessions, it is not uncommon for layoffs to take place in small firms first. Conversely, in times of unusually high demand, firms often hire workers on a per-project basis. Traditional Geographic Locations. Small construction companies can be found anywhere, even alongside large companies. Many small companies are family run and have found a niche within the local construction market, independent of largescale competition. Pros of Working for a Small Construction Business. For many small construction companies, size is their main advantage. Because they take on projects that are smaller and less involved than do larger construction companies, the work can be streamlined and done relatively quickly, with fewer parties involved. For example, having fewer government agencies, engineers, and architects dictating the course of the work typically means fewer delays and less time spent on coordination. This simplicity also reduces the possibility of litigation, which is rampant in the construction industry. Cons of Working for a Small Construction Business. Size also can be a disadvantage, especially in terms of economic inferiority to larger firms. The building construction industry is the largest industry in the world, and larger companies tend to earn larger profits. Small construction

Building Construction Industry companies are more quickly and powerfully affected by economic downturns, lose jobs first, and consequently suffer the most in lost revenue. They also tend to go out of business with more frequency because of inability to pay debt, which is used to execute construction projects. Costs Payroll and Benefits: On average, smaller construction companies pay lower wages than larger firms do for the same jobs. Small firms pay workers in several ways, including by contract, commission, salary, or hourly wages. Individuals paid by contract usually are subcontractors. Small construction companies have simpler salary structures than larger companies. Professional nonconstruction personnel (such as construction managers and accountants) typically work on salary, while most laborers are paid hourly wages. Wages are heavily influenced by trade and experience level. Benefits such as vacation time and sick time are offered to employees. However, most work in the construction industry is done by subcontractors, who do not receive company benefits and effectively are self-employed. Wages vary regionally depending on cost of living, project workload, and demand for employees. Supplies: Small construction companies require many supplies, including cement, metals, wood, roofing materials, curtain wall systems, carpet, plastics, windows, elevators—anything to build a building. All of these items are included in the total construction budget, but it is up to the construction company to buy these materials. Supplies are bought at wholesale warehouses and large-scale commercial building supply stores. Construction companies also buy machinery to execute building operations. External Services: Subcontracting work that a construction company cannot execute is industry standard. A small construction company usually specializes in a particular construction method or system. If the company lacks experience or manpower in a certain field, it usually subcontracts the work. Therefore, subcontracting portions of the construction project to even smaller builders or tradespeople is essential and standard in orchestrating a small-scale building project.

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Utilities: Typical utilities for a small construction company are those vital to a construction project. Water and sewer, electricity, and gas/oil service are all paid by the construction company from the total construction budget. Office buildings also require Internet connectivity and telephone service. Taxes: Small construction companies pay local, state, and federal taxes. Licenses: Small construction companies require business licenses and other state-issued certifications to perform work. However, companies are not directly responsible for the licenses held by specialty trade contractors such as electricians, plumbers, and roofers. Specialty tradespeople are solely responsible for their licenses. A specialty trade contractor cannot be hired as a subcontractor without a valid license. Dues: Many small firms pay membership dues to industry organizations such as the American Institute of Contractors, American Council for Construction Education, or other constructionrelated groups. Continuing Education: Many small firms pay for continuing education opportunities for employees, including seminars, college courses, books, or periodical subscriptions. Insurance: Small construction companies typically hold professional liability insurance and insurance protecting property (if the company owns property). If the firm provides company cars, auto insurance policies are required. Companies also must be bonded for any work. Midsize Businesses Midsize construction companies make up a smaller percentage of the building construction industry than do small firms. These companies usually handle multiple major projects with total costs between $15 million and $45 million. They typically work on projects ranging from small high-rise office buildings to midsize commercial buildings. They also do extensive civil work, such as streets, highways, bridges, and underground infrastructure. A midsize firm might specialize in one or a few building types. Potential Annual Earnings Scale. Nationally, average worker earnings correlate with company size. Midsize companies do extensive work with high budgets, which usually translates into higher

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wages than smaller companies. Compared with small companies, midsize firms have higher profitmargin expectations and usually apply the “change order” mechanism to charge the client for unexpected work. This practice produces more revenue. According to the Bureau of Labor Statistics, mean annual earnings for occupations in firms with fifty to two hundred employees are as follows: architects, $70,320; bricklayers and stonemasons, $41,715; carpenters, $38,940; cement masons, $35,080; civil engineers, $74,600; construction inspectors, $50,180; cost estimators, $56,510; drafters, $44,490; drywall installers and finishers, $37,700; electricians, $46,420; floor covering installers, $37,030; heating and cooling technicians, $39,680; landscape architects, $58,960; marble and tile setters and terrazzo workers, $39,210; operating engineers, $39,270; painters and paperhangers, $32,960; plasterers, $37,470; plumbers and

pipefitters, $45,640; roofers, $33,630; sheet metal workers, $40,290; surveyors, $52,980; welders, $33,560; business/administrative managers, $63,400; accountants, $58,100; human resources managers, $60,800; marketing managers, $75,500; marketing coordinators, $48,300; systems/information technology managers, $66,800; senior project construction managers, $95,400; project construction managers, $79,860; marketing managers, $89,000; marketing coordinators, $48,000; officersin-charge, $172,800; directors of finance, $122,000; project managers, $76,100; superintendents, $61,900; project engineers, $58,000; foremen, $49,000; and value engineers, $53,600. Clientele Interaction. Client interaction includes initial requests for proposals, submitting of bids, interviews, meetings to determine coordination between the construction company and architect, and additional meetings during construction to ensure the property owner and architect that the

Laborers at construction sites work in all kinds of weather and amid moving equipment, which means that they must follow safety precautions. (©Eric Brow/Dreamstime.com)

Building Construction Industry contractor is complying with construction documents. In midsize firms, a project construction manager usually attends all these meetings as the representative of the firm. The project construction manager coordinates and communicates information pertaining to daily activities with engineers and oversees legal contracts and financial protocol for the duration of the project. The project manager delegates all work to subconstruction managers, who in turn issue work orders to specialty trade personnel. Laborers have no interaction with clients. Amenities, Atmosphere, and Physical Grounds. In the construction industry, work is divided into two categories: Nonconstruction staff and laborers. Nonconstruction staff, construction managers, and personnel who support office operations typically work in air-conditioned, comfortable office environments, although many construction managers travel frequently—even daily—to construction sites to check progress. Laborers do all the manual labor in the erection of a new building. They typically work outside in all weather conditions except heavy rain or snow. In some cases, travel can be quite extensive, including trips to foreign countries, although in midsize firms it is more likely that travel will be limited to a smaller geographical area. Such travel usually is done by nonconstruction staff. Typical Number of Employees. The number of employees in midsize firms may fluctuate with economic conditions. In severe economic recessions, midsize firms do experience layoffs. Conversely, in times of unusually high demand, it is not uncommon for firms to hire on a per-project basis. The number of employees usually ranges from fifty to two hundred and varies based on the market within which the company performs work. Traditional Geographic Locations. Midsize construction companies are found in midsize to large metropolitan areas, the only markets that can sustain operations of this size. Large regional economies have more demand for medium- to largescale projects. Pros of Working for a Midsize Construction Business. Midsize construction firms usually include separate teams or departments. Working in this manner gives the impression that one is working in a small firm. Many midsize construction companies use their size to their advantage. The

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scale of the projects they can undertake provides exposure, higher profit potential, and greater opportunity for salaried employees to collect bonuses. Larger projects also create potential for larger market share, meaning the company can take on more work than small companies. Statistics indicates that wages in midsize firms exceed those in smaller firms. Cons of Working for a Midsize Construction Business. Disadvantages of working at a midsize construction firm often, but do not always, include the following: less individual recognition compared with smaller firms, complex projects that require many layers of management, lower wages and fringe benefits compared with large firms, and less opportunity than in large firms to work with diverse in-house staff. Compared with small companies, midsize businesses take on more complex projects, which can increase exposure to liability and litigation. Midsize companies spend more money fighting lawsuits and settling disputes than smaller companies. Costs Payroll and Benefits: Midsize firms pay workers in several ways, including by contract, commission, salary, or hourly wages. Individuals paid by contract usually are subcontracted workers. Midsize construction companies typically have more complex salary structures than smaller companies, usually because they employ a greater number of subcontractors. Professional nonconstruction personnel are typically paid by salary, while most laborers are paid hourly wages. Wages are heavily influenced by the trade and experience level. Benefits such as vacation time and sick time are offered to employees but not to subcontractors, who are effectively selfemployed. Wages vary geographically based on demand, workload, and cost of living. On average, midsize companies pay lower wages than larger firms for the same work. In the United States, average compensation is greatest on the East Coast and in the Southwest and lowest in the west north central, east south central, and west south central regions. Supplies: Midsize construction companies require many supplies, including cement, metals, wood, roofing materials, curtain wall systems, carpet, plastics, windows, elevators. All of these items

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are included in the total construction budget, but it is up to the construction company to buy these materials. Supplies are bought at wholesale warehouses and large-scale commercial building supply stores. Companies also buy machinery to execute building operations. Unlike small companies, midsize firms usually need supplies that require long lead times to produce, such as beams, columns, and precast concrete walls. The complexity of acquiring these materials is a key difference between midsize and small firms. External Services: Subcontracting work that a construction company cannot execute is industry standard. A midsize construction company usually can handle varying construction methods or systems, but if the company lacks specific technical knowledge or manpower, it usually subcontracts the work. Subcontracting also helps maximize profits because a subcontractor typically is paid less than an in-house employee. Utilities: Typical utilities for a midsize construction company are those vital to a construction project. Water and sewer, electricity, and gas/ oil service are all paid by the construction company from the total construction budget. Office buildings also require Internet connectivity and telephone service. Taxes: Midsize construction companies pay local, state, and federal taxes. Licenses: Midsize construction companies require business licenses and other state-issued certifications to perform work. However, companies are not directly responsible for the licenses held by specialty trade contractors such as electricians, plumbers, and roofers. Specialty tradespeople are solely responsible for their licenses. A specialty trade contractor cannot be hired as a subcontractor without a valid license. Dues: Many midsize firms pay membership dues to industry organizations such as the American Institute of Contractors, American Council for Construction Education, or other constructionrelated organizations. Continuing Education: Many midsize firms will pay for continuing education opportunities for employees, including seminars, college courses, books, or periodical subscriptions. Insurance: Midsize construction companies typically hold professional liability insurance and in-

surance protecting property (if the company owns property). If the firm provides company cars, auto insurance policies are required. Companies also must be bonded for any work. Large Businesses Large construction companies make up the smallest segment of the building construction industry. These companies usually handle multiple major projects with total costs of $45 million or more. Ironically, considering they collect the largest revenues, large companies also employ considerably fewer personnel than do smaller construction companies. These companies typically work on projects ranging from complex skyscrapers to huge commercial and industrial buildings. They are typically based in large cities and may have separate branches in other large or midsize cities or even other countries. Having offices abroad separates large firms from smaller ones and gives them unrivaled market share. A large firm might specialize in one or a few building types. These companies also do extensive civil work, such as streets, highways, bridges, and underground infrastructure. Potential Annual Earnings Scale. Nationally, average worker earnings correlate with firm size. Large companies do extensive work with the biggest budgets, which usually translates into the highest wages in the industry. Compared with small companies, midsize firms have higher profit margin expectations and usually apply the “change order” mechanism to charge the client for unexpected work. This practice produces more revenue. According to the U.S. Department of Labor, profits for these firms will continue to grow as population growth around the world drives the demand for more large-scale building. According to the Bureau of Labor Statistics, mean annual earnings for occupations in construction companies with two hundred or more employees are as follows: architects, $70,320; bricklayers and stonemasons, $41,715; carpenters, $38,940; cement masons, $35,080; civil engineers, $74,600; construction inspectors, $50,180; construction managers, $79,860; cost estimators, $56,510; drafters, $44,490; drywall installers and finishers, $37,700; electricians, $46,420; floor covering installers, $37,030; heating and cooling technicians, $39,680; landscape architects, $58,960; marble and tile setters and terrazzo workers, $39,210; operat-

Building Construction Industry OCCUPATION

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SPECIALTIES

Construction and Building Inspectors Specialty

Responsibilities

Construction inspectors Examine and oversee the construction of bridges, dams, highways, and other types of construction work to ensure that procedures and materials comply with specifications. Electrical inspectors

Check electrical installations to verify safety laws and ordinances are being followed.

Elevator inspectors

Examine the safety of lifting and conveying devices such as elevators, escalators, ski lifts, and amusement rides.

Mechanical inspectors

Examine the installation of kitchen appliances, heating and airconditioning equipment, and gasoline tanks to ensure that they comply with safety standards.

Plumbing inspectors

Check plumbing installations for conformance to governmental codes, sanitation standards, and construction specifications.

ing engineers, $39,270; painters and paperhangers, $32,960; plasterers, $37,470; plumbers and pipefitters, $45,640; roofers, $33,630; sheet metal workers, $40,290; surveyors, $52,980; welders, $33,560; senior project managers, $106,100; project managers, $85,100; systems/information technology managers, $85,400; business/administrative managers, $72,400; accountants, $68,000; human resources generalists, $62,600; marketing managers, $101,000; marketing coordinators, $53,100; officers-in-charge, $172,800; directors of finance, $155,000; project managers, $85,100; superintendents, $74,900; project engineers, $69,000; foremen, $52,000; and value engineers, $62,600. Clientele Interaction. Client interaction includes initial requests for proposals, submitting of bids, interviews, meetings to determine coordination between the construction company and architect, and additional meetings during construction to ensure the property owner and architect that the contractor is complying with construction documents. In large firms, a project construction manager usually attends all these meetings as the representative of the firm. The project construction manager coordinates and communicates information pertaining to daily activities with engineers and oversees legal contracts and financial protocol

for the duration of the project. The project manager delegates all work to subcontractors, who in turn issue work orders to specialty trade personnel. Laborers have no interaction with clients. Amenities, Atmosphere, and Physical Grounds. In the construction industry, work is divided into two categories: Nonconstruction staff and laborers. Nonconstruction staff, construction managers, and personnel who support office operations typically work in air-conditioned, comfortable office environments, although many construction managers travel frequently—even daily—to construction sites to check progress. Laborers do all the manual labor in the erection of a new building. They typically work outside in all weather conditions except heavy rain or snow. In some cases, travel can be quite extensive, including trips to foreign countries. Such travel usually is done by nonconstruction staff. Large firms can become extravagant multinational companies. Typical Number of Employees. The number of employees in a large firm may fluctuate with economic conditions. In severe economic recessions, large firms do experience layoffs, which can be widespread. Conversely, in times of unusually high demand it is not uncommon for firms to hire on a per-project basis. The number of employees usu-

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ally exceeds two hundred and can reach into the thousands. Company size varies according to the market in which the firm works. Traditional Geographic Locations. Large construction companies are found in midsize to large metropolitan areas and can have branch offices around the world. Increasingly, large companies have ventured into emerging markets such as China, India, and Brazil. This internationalization has created challenges in all segments of the industry, but especially in developing global building standards. Only very large markets can sustain large-scale construction companies. Also, these large regional economies have more demand for large-scale projects. Pros of Working for a Large Construction Business. Large construction firms usually include separate teams and/or departments. Working in this manner gives the impression that it is a smaller firm. Diversity in the work environment is much greater in large firms than in smaller companies. Their large size also allows these companies to build complex structures that generate high profits. This gives employees more opportunity to earn higher wages, collect bonuses, and work on exciting projects, including projects in other countries. Large size also gives a firm the potential for larger market share, meaning it can bid for and take on more projects than can smaller companies. Large companies pay higher wages overall than do small and midsize firms. Cons of Working for a Large Construction Business. Disadvantages of working at a large construction firm often involve the added complexity of the projects undertaken by such a company. Large-scale projects expose a firm to high liability and potential for costly litigation because of the number of people and amount of money involved. Big companies spend more money fighting lawsuits and settling disputes than do smaller companies and often have an in-house team of attorneys. Costs Payroll and Benefits: Large firms pay workers in several ways, including by contract, commission, salary, or hourly wages. Individuals paid by contract usually are subcontracted workers. Midsize construction companies typically have more complex salary structures than smaller companies, usually because they employ a greater

number of subcontractors. Professional nonconstruction personnel are typically paid by salary, while most laborers are paid hourly wages. Wages are heavily influenced by the trade and experience level. Benefits such as vacation time and sick time are offered to employees but not to subcontractors, who are effectively self-employed. Wages vary geographically based on demand, workload, and cost of living. On average, large firms pay higher wages than smaller companies for the same jobs. In the United States, average compensation is greatest on the East Coast and in the Southwest and lowest in the west north central, east south central, and west south central regions. The extent of wage variability is unique to large firms, especially ones that have international operations. Supplies: Large construction companies require enormous quantities of supplies, including cement, metals, wood, roofing materials, curtain wall systems, carpet, plastics, windows, elevators; anything to build a building. All of these items are included in the total construction budget, but it is up to the construction company to buy these materials. Supplies are bought at wholesale warehouses and large-scale commercial building supply stores. They also buy machinery to execute building operations, for which large numbers of people are also required for maintenance. Unlike small companies, large firms usually need supplies that need the longest lead times to produce, such as beams, columns, and precast concrete walls. This is usually because these large projects require vast numbers of the same thing. Large construction firms increasingly buy supplies from foreign suppliers. The complexity in planning when to buy materials is a huge difference compared to smaller firms. External Services: Subcontracting work that a construction company cannot execute is industry standard. A large construction firm usually can handle varying construction methods or systems. Large companies usually do not lack the technological knowhow or manpower, but they still usually subcontract. They do this to maximize profits since a contracted party will typically be paid less than in-house resources. Utilities: Typical utilities for a large construction company are those vital to a construction project. Water and sewer, electricity, and gas/oil ser-

Building Construction Industry vice are all paid by the construction company from the total construction budget. Office buildings also require Internet connectivity and telephone service. Taxes: Large construction companies pay local, state, and federal taxes. Licenses: Large construction companies require business licenses and other state-issued certifications to perform work. However, companies are not directly responsible for the licenses held by specialty trade contractors such as electricians, plumbers, and roofers. Specialty tradespeople are solely responsible for their licenses. A specialty trade contractor cannot be hired as a subcontractor without a valid license. Dues: Many large firms pay membership dues to industry organizations such as the American Institute of Contractors, American Council for Construction Education, or other constructionrelated organizations. Continuing Education: Many large firms will pay for continuing education opportunities for employees, including seminars, college courses, books, or periodical subscriptions. Insurance: Large construction companies typically hold professional liability insurance and insurance protecting property (if the company owns property). If the firm provides company cars, auto insurance policies are required. Companies also must be bonded for any work.

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Executive Management Construction Management

Specialty Trades Business Administration Technology Human Resources Marketing Administrative Support

Executive Management Executive management dictates business and construction operational activities of the firm. These jobs tend to be the highest paid positions in a firm, and in good fiscal years, large portions of executives’ payment might come in the form of bonuses or profit sharing. In small firms, executive managers also might perform some or all of the firm’s marketing, human resource management, business planning, and technology management. In firms of all sizes, executive managers take an active role in marketing the company, including seeking new clients. Occupations within this department include the following:

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Specialization is prevalent in the building construction industry. Larger firms historically are more specialized, a factor that is considered one of the primary reasons for their high average wages. These firms are the only ones that can build certain types of structures, and therefore they charge a premium for this service. Although a firm’s specific business model dictates its overall organization, the following are job categories commonly found in a typical small construction firm of fifty workers or fewer:

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Officer-in-Charge (President): The officerin-charge is the principal official in the construction company who is responsible for construction operations. This executive generally signs construction contracts and is the person to whom the company owner turns in the event of any problems with the project manager. Construction Director: Not typically present in the smallest firms, the director of construction oversees the firm’s construction activities and directs managers responsible for those activities. Finance Director: Not typically present in the smallest firms, the director of finance oversees the firm’s financial activities and directs managers responsible for those activities. Information Technology Director: Not typically present in the smallest firms, the director of information technology manages the firm’s hardware and software and ensures that information technology furthers the goals of the firm. Human Resources Director: Not typically present in the smallest firms, the director of human resources is in charge of

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Building Construction Industry hiring employees and assists with activities related to hiring, including staffing, training, and benefits.

Construction Management Construction management directs project managers and other staff directly engaged in projects. In a small firm, the construction manager serves a customer service role in addition to overseeing the efforts of other managers within the firm. Occupations within this department include the following: ■

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Project Manager: The project construction manager has overall responsibility for completing a project in compliance with contract documents, within budget, and on time. The project manager organizes and manages the company’s project team. Responsibilities include coordinating and participating in the development of the project budget and schedule, developing a strategy for executing the project, communicating frequently with the company’s owner and the project’s architect, and negotiating contracts. Superintendent: The superintendent is responsible for the direct daily supervision of construction activities on the project, whether the work is being performed by the business’s workers or subcontractors. Responsibilities include determining construction methods, preparing daily reports, planning, scheduling, and coordinating. Project Engineer: The project engineer is responsible for resolving any technical issues relating to completion of the project. On small projects, the project engineer’s duties may be performed by the project manager. Responsibilities include maintaining submittal and field logs, reviewing submittals, preparing contract documents, and reviewing subcontractor invoices. Foreman: The foreman is responsible for the direct supervision of the workers. The construction firm assigns a foreman to oversee work being performed

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by the company’s own construction workers. A foreman for subcontracted work is assigned by each subcontractor. Responsibilities include coordinating the layout and execution of individual trade work; verifying that all work tools, equipment, and materials are available on site; and preparing daily timesheets. Value Engineer: The value engineer seeks to identify unnecessary costs in both design and construction and proposes alternative schemes or technology without sacrificing project quality. Estimator: The estimator is one of the contractor’s most trusted employees. This employee’s task is to forecast and then monitor actual costs of work items, materials, and subcontractor bids on each project. Construction Manager: Construction managers are part of a new class of workers in the industry. These are individuals who are placed under separate contract with the company owner to evaluate design approaches and contractibility and to provide value engineering and management on a project. Subcontractors: Subcontractors are individuals or organizations with expertise in one of the specific types of work required on a project (supplying and installing ceramic tile, for example). By concentrating their efforts in a narrow field, these organizations become expert and can perform with good speed and quality.

Specialty Trades Specialty trade personnel are workers who are trained and skilled in a narrow-scope trade, usually involving a limited range of materials or systems. These people are experienced in applying the best methods for installation of the materials or systems using the latest techniques and technology. They usually have an in-depth understanding of all the work they are to perform. In many instances, jurisdiction over the trade has been established through a collective bargaining contract. Some in the industry advocate cross-training and multitasking, but the large majority still concentrate on a single

Building Construction Industry ■

area of work. Occupations within this field include the following:

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Worker: This is the general, all-inclusive term to describe individuals who have particular skill sets, education, training, and knowledge about specific types of construction. Installer: An installer is a trained worker whose primary function is to locate, assemble as necessary, anchor, and adjust materials, equipment, or apparatus for full and proper functioning. Technician: These individuals are mechanics or other persons who repair equipment or building components such as central heating and cooling. Bricklayer and Stonemason Carpenter Cement Mason Drywall Installer and Finisher

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Electrician Floor Covering Installer Heating, Ventilation, and AirConditioning (HVAC) Specialist Marble and Tile Setter and Terrazzo Worker Painter and Paperhanger Plasterer Plumber and Pipefitter Roofer Sheet Metal Worker Surveyor Welder

Business Administration The following professionals work with executive management to provide increased efficiency and profit to construction firms. In the smallest firms, the following roles often are handled either by other employees, specialized professionals outside the firm, or a combination of the two approaches.

OCCUPATION

PROFILE

Brickmason/Stonemason Considerations

Qualifications

Description

Builds stone structures such as walls and fireplaces and creates sidewalks and curbstones.

Career cluster

Architecture and Construction

Interests

Data; things

Working conditions

Work outside

Minimum education level

On-the-job training; high school diploma/technical training; apprenticeship

Physical exertion

Heavy work

Physical abilities

Must lift, push, pull, and carry heavy objects

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest scores

ERS; REI; RES; RIE; RSE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Occupations within this field include the following: ■ ■ ■ ■ ■

Officer-in-Charge (President) Senior Project Manager Finance Director Accountant Business Manager: In a small or midsize firm, the business manager also might perform some accounting duties.

tions listed below, it is common for marketing duties, including production of visual communications and communications with existing and potential clients, to be shared with executive management and construction management staff. Occupations within marketing include the following: ■ ■ ■

Technology Employees working in this department manage information technology within the firm, assist other workers with issues relating to software and hardware function, and implement and maintain firm technology. The technology department may play an important role in facilities security as well. Occupations within this department include the following: ■ ■

Information Technology Director Systems/Information Technology Manager

Human Resources These employees often have bachelor’s degrees relating specifically to business or human resource management. Occupations within this department include the following: ■ ■

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Human Resources Director Officer-in-Charge (President): In small firms, the president may take on additional duties managing the firm’s human resources. Principal: Performs duties similar to those of the officer-in-charge. Human Resources Generalist Business Manager: In small or midsize firms, this role also might include aspects of the accountant or human resource generalist duties.

Marketing The marketing department assists executive management in soliciting work, retaining clients, and seeking opportunities to enhance the company’s profit and prestige. In addition to the posi-

Marketing Manager Marketing Coordinator Graphic Designer

Administrative Support The following positions are typically found in firms of all sizes. Administrative assistant, mail/delivery specialist, and receptionist duties may be held by interns or other junior employees in small or midsize firms. Occupations within this department include the following: ■ ■ ■

Administrative Assistant Mail/Delivery Specialist Receptionist

INDUSTRY

OUTLOOK

Overview Despite the 2007-2009 recession, the construction industry is expected to continue to be an excellent source of job opportunities, especially for skilled tradespeople, because of the large number of anticipated retirements and the lack of individuals with applicable education and experience entering the skilled trades. Even in times of economic recession, it is rare for all segments of the construction industry to struggle simultaneously, so workers often are able to switch from building homes to building offices, depending on demand. According to the Bureau of Labor Statistics, the number of wage and salary jobs in the construction industry is expected to grow about 11 percent through 2014, compared with the 14 percent growth projected for all industries combined. Employment in this industry depends primarily on the level of construction and remodeling activity, which is expected to increase. Rising numbers of immigrants, as well as the children of the baby boomers, will generate demand for homes and apartments. In addition, a de-

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At construction sites, subconstruction managers issue work orders to specialty trade contractors, who manage laborers. (©Dreamstime.com)

sire for larger homes with more amenities will fuel demand for move-up homes and the renovation and expansion of older homes. However, employment will grow faster in nonresidential construction over the decade. Replacement of many industrial plants has been delayed for years, and a large number of structures soon will have to be replaced or remodeled. Construction of nursing homes and other residential facilities for the elderly, as well as all types of health care facilities, will be needed to serve the growing elderly population. School construction also will continue to be in demand, especially in the South and West, where the population is growing the fastest. In other areas, however, replacing and renovating older schools will create jobs. Employment in heavy and civil engineering construction is projected to increase because of growth in highway, bridge, and street construction and in mainte-

nance and repairs to prevent further deterioration of existing highways and bridges. Employment in specialty trades contracting, the largest segment of the industry, will grow the fastest as demand increases for subcontractors in building and heavy construction and as more workers are needed to repair and remodel existing homes. Home improvement and repair construction is expected to continue to grow faster than new-home construction. Remodeling is likely to be the fastestgrowing sector of housing construction because of the abundance of old or aging residential and nonresidential buildings. Many older, smaller homes will be remodeled to appeal to more affluent buyers; remodeling tends to be more labor-intensive than new construction. In addition, the construction industry increasingly is contracting the services of specialty trade workers instead of keeping these workers on staff.

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Annual Earnings According to the NAICS, the building construction industry had revenues of $908 billion in Construction Industry 2009. This figure includes all three segments of the construcEmployment tion industry: construction of 2009 Projected 2018 Occupation buildings, heavy and civil engineering construction contrac615,550 830,300 Carpenters tors, and specialty trade contrac682,120 971,400 Construction laborers tors. These high revenues give the industry unmatched influ165,380 223,100 Construction managers ence over the greater national 441,310 557,900 Electricians economy. The building construction in232,590 301,100 Operating engineers and other dustry has an ever-evolving relaconstruction equipment operators tionship with the engineering and architecture industries as Source: U.S. Bureau of Labor Statistics, Industries at a Glance, architects, engineers, and buildOccupational Employment Statistics and Employment Projections ers seek new forms of collaboraProgram. tion. These relationships and possible future shifts in the division of labor also have the potential to alter future earnings in the construction Employment growth will vary among occupaindustry. Although many individuals employed in tions in the construction industry. Employment of construction were left jobless during the 2007-2009 construction managers is expected to grow as a rerecession, the Associated General Contractors of sult of the increasing complexity of construction America projects that construction jobs will return work and the proliferation of laws dealing with because of the obvious need for new building. building construction, worker safety, and environmental issues. An especially favorable job outlook is expected for individuals who have bachelor’s degrees in construction science with emphasis on RELATED RESOURCES FOR construction management and related work expeFURTHER RESEARCH rience in construction management services firms. American Institute of Constructors and Employment Advantages the Constructor Certification Careers in construction offer many advantages Commission for people with diverse skills. Construction is a con700 N Fairfax St., Suite 510 stantly changing industry because of evolution and Alexandria, VA 22314 variation in means of construction, costs of materiTel: (703) 683-4999 als and resources, demographics, building uses, Fax: (571) 527-3105 education, building laws, and human ecology. http://www.aicnet.org Construction also is a relatively easy field to enter. It is not mandatory to have a specific degree or Associated Builders and Contractors training and, in many states, a contractor does not 4250 N Fairfax Dr., 9th Floor need to be licensed unless the individual practices Arlington, VA 22203 a specific trade (for example, an electrician or Tel: (703) 812-2000 plumber). http://www.abc.org PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Building Construction Industry Associated General Contractors of America 2300 Wilson Blvd., Suite 400 Arlington, VA 22201 Tel: (800) 242-1767 Fax: (703) 548-3119 http://www.agc.org Building and Construction Trades Department, AFL-CIO 815 16th St., Suite 600 Washington, DC 20006-4101 Tel: (202) 347-1461 http//www.buildingtrades.org

ABOUT

THE

AUTHOR

Ernesto Alonso Contreras is an architect who has provided services for clients in Oregon, Washington, Utah, New York, and Texas. He serves as architect/designer with Zimmer Gunsul Frasca Architects in Portland, Oregon. He has worked on various projects, including high-rise towers, airports, stadiums, museums, townhomes, and retail spaces. He also has participated in LEED-accredited construction projects. He received a bachelor’s degree in architecture from Texas A&M University in 2000.

FURTHER

READING

Allen, Edward, and Joseph Iano. Fundamentals of Building Construction Materials and Methods. 5th ed. Hoboken, N.J.: Wiley, 2009.

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Associated General Contractors of America. Project Delivery Systems for Construction. Arlington, Va.: Author, 2004. Careers in Focus: Construction. 5th ed. New York: Ferguson, 2010. Chudley, R., and Roger Greeno. Building Construction Handbook. 8th ed. Burlington, Mass.: Butterworth-Heinemann, 2010. Fisk, Edward. Construction Project Administration. 6th ed. Upper Saddle River, N.J.: Prentice Hall, 2000. Kubal, Michael T. Building Profits in the Construction Industry. New York: McGraw-Hill, 2000. Ryan, Mary Meghan, ed. Handbook of U.S. Labor Statistics: Employment, Earnings, Prices, Productivity, and Other Labor Data. 13th ed. Lanham, Md.: Bernam Press, 2010. Schaufelberger, John. Construction Business Management. Upper Saddle River, N.J.: Prentice Hall, 2009. Simmons, H. Leslie. Construction: Principles, Materials, and Methods. 7th ed. New York: John Wiley & Sons, 2001. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Construction Trades and Related Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ oco1009.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

©mediaphotos/iStockphoto.com

Business Services

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary Business services companies provide support for the day-to-day operations of other businesses by undertaking tasks those companies might otherwise elect to manage internally. A given business services company may specialize in one service or provide an entire range of them, including employment and recruiting support, facilities management, office administration, travel planning, collections and credit reporting, surveillance and security, waste management, and pest control. The business services industry also includes consulting firms that provide management, administration, or business consultants to companies seeking outside expertise. The business services industry includes a very wide variety of occupations, ranging from support positions (for example, call center agents and garbage truck drivers) to tertiary qualified specialists (for example, a recruiter or business administrator). While some large companies dominate specific specialty areas, the overall industry is highly fragmented, comprising more than 350,000 establishments, with the largest 50 of them accounting for less than half of the industry’s revenue. The proportion of the industry composed of very small enterprises is increasing.

General Industry: Business, Management, and Administration Career Cluster: Business, Management, and Administration Subcategory Industries: Business Support Services; Employment Services; Facilities Support Services; Investigation and Security Services; Management Consulting Services; Office Administrative Services; Services to Buildings and Dwellings; Travel Arrangement and Reservation Services; Waste Management and Remediation Services Related Industries: Accounting Services; Building Construction Industry; Computer Systems Industry; Corporate Education Services; Day-Care Services; Home Maintenance Services; Travel and Tourism Industry; Waste Management Industry Annual Domestic Revenues: $636.7 billion USD (U.S. Census Bureau, 2008) Annual Global Revenues: Estimated $1.32 trillion USD (Datamonitor, 2009) NAICS Numbers: 56, 541611

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intelligence company Standard and Poor’s was History of the Industry founded in 1860. Business-to-business transactions can be traced The business services industry experienced its back to antiquity. In ancient Rome, for example, strongest growth beginning in the 1980’s, when services were commonly exchanged between enoutsourcing became a popular trend in manageterprises that specialized in removing waste, warement philosophy. Outsourcing involves contracthousing, shipping, importing and exporting, transing a third party to perform routine functions that porting freight, providing labor (including the support a company’s core operations. In addition slave trade), and overseeing agriculture. The emerto saving costs, outsourcing frees a company to fogence of the nation-state around the fourteenth cus its resources on its core competencies. For excentury c.e. sparked a growing interest in the rule ample, a computer company may decide to proof law. This interest began to influence how society vide a telephone help desk for its customers. and commerce were organized. Feudal practices, Rather than establish an inbound call center in particular, were reformed, and countries started within the company itself, the help desk operation to assert distinct political, geographical, and culmay be outsourced to another company that spetural identities. cializes in call-center services. This decision is likely At the same time, human labor was being reto save the company a considerable amount of placed by mechanized manufacturing, and large money because it eliminates the need to invest in numbers of people were moving from the countryequipment, facilities, and staff. It also allows the side into cities. Production became mechanized, as company to remain focused on its core activity of labor shifted from being performed by individual building and servicing computers. humans using tools to being performed by coordinated groups of people organized around and by The Industry Today machinery. The combination of urbanization and The contemporary business services industry is mechanization gave rise to comparatively large enhighly fragmented, comprising a large number of terprises that had to coordinate human, logistical, competing companies that are quite diverse both and material resources to succeed and that had forin size and in the range of services they provide. mal legal and financial obligations. As a result, large Large and small companies have been able to coexenterprises required increasingly complex administ because the sizes and needs of their various cliistrative functions in order to support their core operations. Business service providers emerged in response to the day-to-day demands facing these enterprises. In 1841, the Mercantile Agency, a network of researchers and correspondents, was launched in the United States to provide reliable credit information about merchants. The company was purchased a few years later by the Bradstreet Company, which popularized the concept of credit ratings. (The company is still operating today as Dunn & Bradstreet.) Similarly, armored security deliveries date back to the 1850’s, when an antecedent of the contemporary Brink’s Company Information processing and data and records management are two important business services. (©Shirley Hu/Dreamstime.com) was founded. The corporate

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call-center support, business processing, and clerical and administrative services. Revenues in the Indian business services industry, for example, grew from $4 billion per year in 1998 to $58 billion per Value Added Amount year in 2008. McKinley Quarterly projects Gross domestic product $375.9 billion that the business services industry in India Gross domestic product 2.6% will reach an annual revenue of $60 bilPersons employed 7.747 million lion by around 2011, with nearly 80 perTotal employee compensation $289.2 billion cent of that revenue attributable to international clients. Note: Administrative and support services, excluding waste The business services sector is being management. transformed by new communication techSource: U.S. Bureau of Economic Analysis. Data are for nologies, especially Internet technology. 2008. In many instances, services that traditionally demanded personal interaction are being replaced by technology-mediated ents differ. Client companies often seek to partner solutions. The travel services sector is a good examwith business services providers that match their ple of this phenomenon. An increasing number of own size and geographical diversity. For example, companies are utilizing automated online travelmultinational companies will often partner with reservation and electronic-commerce systems business services providers that have international rather than arranging travel with human agents. experience and capabilities, while smaller compaMany sectors of the business services industry (such nies may prefer to partner with local providers that as credit reporting, call-center operations, inforhave local knowledge and a local physical presmation processing, and document management) ence. Independent consultants and small consultare highly transactional. These sectors are thereing groups, however, may also find opportunities fore good candidates for technology-mediated with large client companies that are in need of automation, including self-serve and Web-based partners with their particular areas of expertise. solutions. This type of automation can demand exDemand in the business services industry correpensive, specialized software and systems, so the lates closely with business spending. Strong growth service providers that feature automated systems in the industry during the 1980’s and 1990’s, theremay experience significant market pressures to fore, is attributable not only to a sympathetic business model but also to a generally strong economy. According to the U.S. Census Bureau, in the five Inputs Consumed by the years between 2002 and 2007, revenue in the business services industry grew by 47 percent, from Business Services Industry $432.5 billion to $636.7 billion. Despite the financial crisis that followed this period, the business serInput Value vices industry is projected to continue growing at a Energy $28.4 billion rate faster than the national average. Enterprises Materials $21.2 billion will most likely experience declining profit marPurchased services $162.2 billion gins, however, as competition becomes more inTotal $211.8 billion tense and global. Labor generally represents a business services Note: Administrative and support services, company’s highest cost of operations. As a result, excluding waste management. an increasing number of client companies are electSource: U.S. Bureau of Economic Analysis. Data ing to outsource their support services to providers are for 2008. in countries where labor costs are comparatively low. Popular offshore business services include

The Business Services Industry’s Contribution to the U.S. Economy

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Business support, including call centers, is a subsector of the industry. (©Andres Rodriguez/Dreamstime.com)

achieve large economies of scale in their operations. The business services industry’s largest subsectors include such administration and support services as information processing, data and records management, and employment services. The latter services are provided by specialist companies that offer a range of human resource management services including permanent, temporary, and contract recruitment; employee assessment and selection; and human resource consulting. Some of the major providers in this sector include Manpower, Kelly Services, and Adecco. The remaining industry subsectors account for a much smaller proportion of the industry. Facilities services represent a primary subsector, consisting of specialist companies that provide building and facilities support services, such as engineering maintenance, janitorial services, parking attendants, and landscape services. Two of the major providers in this subsector are ABM Indus-

tries and Rollins Incorporated. Another primary subsector is waste management and remediation. Companies in this subsector specialize in collecting, processing, and recycling hard waste (trash). Other subsectors include business support services (call centers, private mail services, collection agencies, credit bureaus, and document preparation services), travel arrangements and reservations, and investigative and security services. Security companies provide private investigation services, security guards and patrols, armored vehicles, locksmiths, and security-system monitoring.

INDUSTRY MARKET SEGMENTS Business services companies range in size from small, independent consultants to large, multinational corporations. Companies of any size may either specialize in one business service or offer a di-

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lections specialists earned between $21,900 and $41,700 per year, administrative or office managers earned between $28,700 and $50,500 per year, and call-center managers earned between $39,000 and $57,300 per year. Small Businesses Clientele Interaction. Small businesses have Small business-services firms generally have anstrong opportunities to interact closely with their nual revenues of between $20,000 and $1 million. clients. For many small businesses, this ability is a In the employment services sector, for example, strong selling point to clients that would not get the annual average revenue per worker is around personal treatment from a larger firm. Local $40,000. Small businesses can have as few as one knowledge and personal service uniquely situate owner-operator and as many as one hundred emsmall businesses to understand and respond to the ployees. needs and concerns of local clients. Many small businesses serve local clients and In many cases, small-business owners are rehave an established brand in their immediate comquired to fulfill multiple roles within their busimunities. With the rise of the Internet, however, nesses, including sales, administration, receptionsome small businesses have been able to reach a ist and clerical duties, and accounting. This need larger clientele across a wider geographic region. can benefit small businesses because it places workSmall businesses can also often compete successers in closer contact with their clients, but it can fully by specializing in a niche area. In fact, 95 peralso test businesses’ resources. Small-business owncent of consulting establishments employ fewer ers, therefore, need a broad set of business skills. than twenty workers. Some business services firms follow a franchise business model. A very small business-services firm, such as a small consulting enterprise, may consist of one or Potential Annual Earnings Scale. Business sertwo owner-operators. These owners might coordivices firms offer salaries that differ by subsector, nate a team of three or four other contract consulnumber of employees, and geographical location. tants and specialize in a specific type of consulting, According to PayScale, in 2009 an employment sersuch as business process reengineering. Such small vices specialist working at a small company was likely or boutique businesses are independent, but they to earn between $30,600 and $49,600 per year. Coloften collaborate with complementary firms to form project teams according to their clients’ needs. Often, very small consulting firms do not require dedicated office space because each consultant works independently and meets with clients on the clients’ premises. For many companies, a business services provider becomes an extension of their operations. This process demands a high level of professionalism, up-to-date knowledge, and consistency of service from the provider. Service reliability, provider knowledge, and return on investment are significant components of customer satisfaction in the business services Waste management and recycling are an important part of the business services industry. (©Jeffrey Roach/Dreamstime.com) industry. verse, “one-stop shop” for clients seeking a range of services. The following sections provide a comprehensive breakdown of each market segment.

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Facilities support services may include janitorial service and parking attendants. (©Margie Hurwich/Dreamstime.com)

Amenities, Atmosphere, and Physical Grounds. The amenities of small business-services firms differ by subsector. A small employment agency, for example, will require a small commercial office space, while a waste management company will need both office space and storage and maintenance facilities for its vehicles, dumpsters, and other equipment. Many small businesses are suitable for home-based operations, especially when only one or two people are involved or the work is based mainly at the client’s site. Examples of home-based businesses include independent recruiters who specialize in targeted talent acquisition, administrative assistants who interact with clients remotely, and management consultants who work with clients on their premises. Small businesses that find it advantageous to have offices of their own in which to interact with clients, that require larger facilities for equipment, or that have larger numbers of staff generally lease commercial space. Enterprises where customers

are present on-site must tailor their office space to clients’ expectations. For example, a recruiting company that conducts candidate interviews in its office needs a location that is convenient to potential employment candidates, as well as to their clients. A small corporate recruitment company may need to locate its office in or near an urban center, while a manufacturing recruitment company may more sensibly situate its offices in a suburban area. Small business-services firms can avoid the expense of high-traffic areas and street frontage because they do not market to consumers. Rather, they market their services directly to other companies and generally do not rely on street exposure or walk-in business. One of the common issues facing small businesses is the cost of overhead (necessary business costs that do not result in profits). While larger companies are able to defray their overhead costs across a greater number of clients, small businesses must often deal with operating expenses that take

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up a significant proportion of their income. For this reason, small-business owners must attempt to minimize expenses by, for example, working from a home office, hiring the minimum necessary number of employees, leasing affordable space, maximizing tax benefits, and reducing energy and equipment costs. Typical Number of Employees. The majority of consulting companies employ fewer than twenty people. In the business services industry, small businesses will often consist of ten to fifty employees who perform a range of administrative and operational functions. Traditional Geographic Locations. Location depends on the type of service a company offers, but many business services companies try to establish locations in areas that are convenient to their clientele and businesses. Given that most business service offerings are labor- and technology-intensive, a large proportion of such companies are located in urban areas, where human and technology resources are plentiful. Business services companies that utilize Internet and other communication technologies or have minimal face-to-face interactions with their clients may find that their choice of locations is much wider than companies that interact heavily with their clients. Pros of Working for a Small BusinessServices Company. Owners and employees of small business-services firms can experience a great deal of independence and autonomy. They may be selective about the clients they target and the type of services they offer. Many small firms have extensive experience in their areas of specialization, making them an in-demand resource for organizations that need their specific competencies. Small-business owners are their own bosses and can set their own work hours and conditions. In this industry, experience is often considered more important than formal education or other qualifications. This situation may appeal to seasoned professionals who have many years of experience, as well as the expertise to deliver superiorquality services to clients. Small firms’ employees are also likely to gain well-rounded experience through their employment, in addition to delivering the core services of the company. Finally, wages in this industry are higher than average. Cons of Working for a Small BusinessServices Company. For small-business owners,

autonomy and independence come with the vast responsibility of running a business. They must generate revenue, as well as ensuring that their companies fulfill their legal and regulatory obligations. Where there is potential reward, there is also potential risk, and owner-operators assume total responsibility for their companies’ financial performance and viability. Nearly three-quarters of all businesses in the United States are nonemployers (meaning they are sole proprietorships), but these businesses account for only 3.4 percent of business revenue. Small businesses must compete with larger businesses on price, but they carry larger proportionate overhead and sales costs. Small business-services firms are likely to take the form of consultancies, and such highly transactional operations demand economies of scale to be affordable. Depending on the type of business, the initial equipment investment may be considerable, especially where heavy machinery, expensive technology, infrastructure, or software are required. While small-business owners can set their own work conditions, many find that they need to work long hours to realize a profit. Likewise, they need to juggle the competing demands of prospecting for clients and running their businesses. For employees of small businesses, career advancement opportunities are often restricted. Costs Payroll and Benefits: Small businesses pay hourly wages or salaries, depending on the type of work performed. Independent consultants usually charge their clients on a project, hourly, or retainer basis. Some positions in this industry attract bonuses and commissions. Benefits such as vacation and sick days, health insurance, and 401(k) accounts are offered at the discretion of the business owner. Supplies: Materials and machinery vary, but standard supplies include computers, telephones, office consumables, and furniture. External Services: Few external services are mandatory, but some owners elect to engage computing support, bookkeeping, equipment and tools maintenance, cleaning services, merchant (credit card) services, or a post office box. Companies that deliver their services via the Internet may need to engage an external secure hosting

Business Services company that can promise uninterrupted service. Utilities: Typical utilities include electricity, airconditioning and heating, water, telephone, and Internet. Some companies (for example, a security company that manages a fleet of cars or a waste management company that manages a fleet of garbage trucks), may also elect to purchase and store wholesale gasoline. Taxes: State and federal taxes are payable according to business revenue. Midsize Businesses Midsize business-services firms generally have annual revenues of between $1 million and $20 million. They range in size from around one hundred to one thousand employees, and they include independent consultants, as well as giant multinationals. In the employment services sector, for example, the annual average revenue per worker is around $40,000 and half of all jobs are in establishments with 250 or more employees. Many midsize businesses serve both a local and a regional clientele, and they are likely to have an established name across at least one state, if not a wider geographical region. Some firms, for example, specialize in serving the Atlantic or Pacific coast, or some other regional territory. They may or may not have multiple locations. With the rise of the Internet, many businesses have been able to reach a clientele that stretches across a wider geographic region than previously. Midsize businesses may compete in general or in niche areas. Potential Annual Earnings Scale. Salaries differ by industry subsector, number of employees, and geographical location. According to PayScale, in 2009, an employment services specialist working in a midsize business was likely to earn between $34,200 and $51,900 per year. Collections specialists earned between $31,200 and $43,500 per year, administrative or office managers earned between $33,200 and $52,100 per year, and call-center managers earned between $40,800 and $60,000 per year. Clientele Interaction. Employees in midsize businesses have strong opportunities to interact closely with clients. Midsize businesses also benefit from greater economies of scale than do small businesses, freeing owners and managers to work as leaders of their firms rather than as key producers.

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Many midsize business-services firms are able to couple their local knowledge and personal approach to service with a wider geographical scope that appeals to larger clients. This ability also increases efficiency and service quality while decreasing costs. Employees in midsize businesses experience less pressure to fulfill multiple roles within the business and have greater opportunities to specialize in niche areas. An example of a midsize business-services firm would be an employment services company specializing in general recruiting in a defined region of the United States (for example, the southeastern states or the Atlantic seaboard). The company would consist of a headquarters, where the central administration was based, plus five to ten satellite offices. This organization would allow the company to distribute a proportion of its overhead costs across a larger operation, while also maintaining a local, personal feel to its service delivery. The company would employ around 150 people, with a mix of full-time, part-time, and contract employees. The staff would represent a range of experience levels and industry specialties. Those in management and supervisory roles may have less client interaction and more team leadership responsibilities than those working in associate-level positions. Employees are expected to be personable, professional, and highly knowledgeable in their dealings with clients. For many companies, a business services provider becomes an extension of their operations. These clients demand a high level of professionalism, up-to-date knowledge, and consistency of service. Service reliability, provider knowledge, and return on investment are significant components of customer satisfaction in the business services industry. As business services companies increase in size, they are more likely to interact with clients remotely using communications technology. This is especially true when a company has a centralized processing facility, as in call-center operations, credit bureaus, document processing, and records management. Amenities, Atmosphere, and Physical Grounds. The amenities requirements of midsize businesses differ by subsector. Midsize employment or administrative support agencies, for example, require commercial office space appropriate to the number of staff they employ and the nature

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of their business. Many business services companies operate satellite offices. Some own their properties, while others lease them. Businesses that invite clients to their sites require the type and quality of space that meet their clients’ expectations, while being mindful to minimize unnecessary costs. A 150-seat call center, credit bureau, or record-management facility, for example, may require advanced technology services but only basic office amenities. While workstation design and ergonomics are important considerations in administrative environments, many midsize operators choose to keep their costs down by providing only basic office equipment and by locating their operations in areas where labor is affordable and plentiful. Labor is likely to be an employer’s largest expense in this industry. As in the small business sector, midsize businesses can avoid the expense of high-traffic areas and street frontage because they do not market to consumers. Typical Number of Employees. Midsize businesses employ between 100 and 1,000 people who perform a range of administrative, operational, and specialist functions. The majority of operations employ around 250 people. Traditional Geographic Locations. Midsize enterprises often manage their costs by choosing locations where labor is affordable and plentiful. Site selection depends heavily on the target clients’ common locations and type of business, the level of demand for the firm’s services, and employees’ demographic profile. Midsize business-services operations, especially those providing administrative and business support services from a centralized processing facility, are increasingly situated in urban areas that are easily accessible by public transport. They have increasingly avoided the unnecessary lease and building expenses associated with downtown city tenancy, as well as the difficulties of attracting unskilled labor to downtown locations. Thus, they are often located in mid-density suburban areas and commercial parks. Pros of Working for a Midsize BusinessServices Company. Employees of midsize business-services companies enjoy greater career advancement opportunities than do their peers working in small businesses. The midsize sector offers opportunities to gain supervisory and management experience and to work in an environment that provides exposure to a range of clients. Em-

ployees in this sector may also benefit from working across a number of different disciplines and from receiving exposure to other functional areas of the business. Experience gained with a midsize business-services organization may prepare candidates for specialist job opportunities with clients who perform their functions in-house. Midsize companies are more likely than their smaller counterparts to offer exposure to industry-standard software and systems, as well as formal training and study opportunities. Job stability is also likely to be greater with a midsize company than with a small one. Cons of Working for a Midsize BusinessServices Company. Midsize business-services companies often have a less personal feel to them than their smaller counterparts, and this impersonal component may not appeal to some employees. Midsize companies may try to match large companies in service range and price, but they must do so on a much smaller budget, potentially stretching resources and decreasing job satisfaction for employees forced to cover for system inadequacies. Employees seeking to specialize in niche areas may find that their jobs demand more general skills in the midsize sector. In addition, while career advancement opportunities are better in the midsize sector than in the small sector, opportunities for promotion may still be somewhat limited. Costs Payroll and Benefits: Midsize businesses pay hourly wages or salaries, depending on the kind of work performed. Some positions in this industry attract bonuses and commissions. Benefits such as vacation and sick days, health insurance, and 401(k) accounts are offered at the discretion of the business owner. Midsize businesses often employ contract employees, who act as independent consultants. They require no benefits. Supplies: Standard supplies will include computers, telephones, office consumables, and furniture. External Services: Few external services are mandatory, but some owners elect to engage computing support, bookkeeping, equipment and tools maintenance, cleaning services, merchant (credit card) services, or post office boxes. Com-

Business Services panies that deliver their services via the Internet may need to engage external secure hosting companies that can promise uninterrupted service. Utilities: Typical utilities include electricity, airconditioning and heating, water, telephone, and Internet. Some companies (for example, a security company that manages a fleet of cars, or a waste management company that manages a fleet of garbage trucks), may also elect to purchase and store wholesale gasoline. Taxes: State and federal taxes are payable according to business revenue. Property taxes may also be applicable. Large Businesses Large business-services firms generally have annual revenues of greater than $20 million, and some earn billions of dollars annually. Many large companies in the business services industry are publicly owned, national or multinational operations. They typically have large headquarters, complex organizational hierarchies, and multiple satellite sites and employ thousands of people in specialist positions, as well as business support roles. Large companies in the employment services subsector include organizations such as Manpower and Kelly Services. They employ thirty thousand people, operate in eighty-two countries, and have annual revenues of $22 billion. The Brink’s Company is one of the largest companies in the security subsector. It employs more than fifty thousand people worldwide and operates in fifty countries. Potential Annual Earnings Scale. Salaries differ by industry subsector, number of employees, and geographic location. For example, according to 2009 estimates, an employment services specialist working in a large business services company was likely to earn between $44,000 and $67,900 per year. Collections specialists earned between $29,700 and $43,700 per year, administrative or office managers earned between $35,600 and $59,500 per year, and call-center managers earned between $47,100 and $75,900 per year. Clientele Interaction. Employees’ levels of client interaction in a large business depend on their role. One of the advantages of large business, however, is that those who seek career advancement without sacrificing client interaction have an op-

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portunity to advance into key account-management and senior relationship-management roles. Those who prefer less client interaction have an opportunity to advance into management and executive positions. The large size of the business, however, means that senior and executive staff are generally likely to experience less client interaction than associate-level staff. Service strategies in large business-services companies tend toward a team approach, as well as centralized, system-based solutions. Amenities, Atmosphere, and Physical Grounds. The amenities requirements of large businesses will differ by subsector. Most are likely to have large corporate national or global headquarters where senior management and their shared-services units are based. The enterprises generally include a number of regional satellite offices where the staff serves clients locally. Large businesses endeavor to position themselves as industry leaders. This goal is reflected not only in their systems, processes, staff caliber, training, and materials but also in their physical environments. Their properties are likely to be extremely well equipped and furnished, reflecting a highly developed corporate culture, as well as sensitivity to the expectations of their blue-chip clients. Some businesses own their properties, while others lease them. Typical Number of Employees. Large businessservices corporations employ from one thousand to tens of thousands of persons. Their employees perform a range of administrative, operational, and specialist functions. Traditional Geographic Locations. Unlike their small and midsize counterparts, large businesses in this industry may elect to position their offices in high-traffic, high-exposure areas, including downtown city locations. Such locations may help further the companies’ brand dominance and allow them to be near their target clienteles. However, in order to lower costs, many large businesses are electing to locate their processing facilities away from high-cost cities, in areas where labor is affordable and plentiful. These companies often receive state or local government incentives to relocate, open, or maintain their facilities in these locations because their operations can stimulate local economies by employing comparatively large numbers of people.

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Business Services OCCUPATION

PROFILE

Budget Analyst Considerations

Qualifications

Description

Helps research, develop, and implement budgets, overseeing performance and recommending improvements.

Career cluster

Business, Management, and Administration; Finance; Government and Public Administration

Interests

Data

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

CER

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Pros of Working for a Large BusinessServices Company. Employees of large companies enjoy the career-advancement opportunities that come from working within a highly structured organization. This sort of organization presents opportunities such as promotion into management, horizontal career progression into a different field, national and overseas relocation, and professional specialties. Experience gained with a large business-services organization also can prepare candidates for specialist job opportunities with clients who perform specialist functions in-house. Working with a large company is also likely to ensure exposure to industry gold-standard systems, access to thought leaders in the industry, formal and on-thejob training, professional certifications, and other educational opportunities. Other benefits include job stability, which may be greater with a large company than with a small one, and above-industryaverage compensation and benefits. Owners and managers in large business-services

companies are not expected to be key producers. Their role is to provide strategic direction and management that maintain shareholder favor and ensure that their companies meet their legal and fiduciary obligations. Employees of large businesses experience less pressure to fulfill multiple roles, and they have greater opportunity to specialize in niche areas. They are required, however, to adhere strictly to company policies and procedures. Corporate culture is also likely to entail involvement in committee-based decision making, and complex organizational hierarchies. Cons of Working for a Large BusinessServices Company. People who prefer a high degree of personal contact with their clients or who like to work autonomously, make their own decisions, and become involved with the workings of an entire organization may find highly structured corporate environments stifling. The complexity of large business can be frustrating for those not accustomed to committee-style decision making and

Business Services authority structures. Those who rise to senior management positions are likely to experience fewer opportunities to work with clients and to spend an increasing amount of their time involved in business strategy, people management, and administration. Costs Payroll and Benefits: Large businesses pay hourly wages or annual salaries, depending on the type of work performed. Some positions in this industry also attract bonuses and commissions. Large companies are more likely to offer aboveaverage compensation and benefits packages, including vacation and sick days, health insurance, and 401(k) plans. Supplies: Necessary materials and machinery depend on the type of business. Supplies include computers, telephones, and standard office equipment and furniture. Large businesses are likely to make large investments in proprietary systems and software. External Services: Large and publicly owned businesses are likely to engage external accounting and audit services. Other external services may include security and surveillance, secured information-server facilities (to host their systems and software), waste management, payroll, and other applicable business services. The extent to which a business outsources these services depends on its internal capabilities. Utilities: Typical utilities include electricity, airconditioning and heating, water, telephone, and Internet. Some companies (for example, a security company that manages a fleet of cars or a waste management company that manages a fleet of garbage trucks) may also elect to purchase and store wholesale gasoline. Taxes: State and federal taxes are payable according to business revenue. Property taxes may also be applicable.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The business services industry comprises a wide scope of services, and any given company in the industry may offer only one subset of one service or almost every type of service. As a result, organiza-

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tional structure may vary more widely in this industry than in some others. Moreover, in smaller companies, one person may hold several roles within several different groups, while in larger companies, specialists are expected to fulfill unique requirements in specific groups. The following umbrella categories apply to the organizational structure of business services companies: ■ ■ ■ ■ ■ ■ ■ ■

Business Management Professionals Sales and Marketing Administration Information Technology Facilities and Grounds Maintenance Security Human Resources

Business Management Management is responsible for a company’s financial performance and for ensuring that it runs smoothly and efficiently. Responsibilities include establishing the company’s financial and operational objectives and formulating its strategic direction. Day-to-day duties may include hiring and managing personnel; managing finances and other resources; providing leadership, coaching, and direction; making high-level business decisions; and ensuring that the company fulfills its legal and fiduciary obligations. Business managers also coordinate key relationships with business partners and may be involved with important clients at an executive, nonoperational level. When a business has a board of directors, the business manager reports to and follows directions from the board. Increasing numbers of business managers possess advanced degrees in business administration, management, accounting, and other specialist areas. Extensive practical work experience at a senior level is also usually a prerequisite for employment as a manager, and it may substitute for formal qualifications. Commensurate with the level of responsibility, typical salaries for business managers are higher than salaries received by employees in other functions within the company. Management salaries in the consulting sector outperform equivalent positions in other industries. Management occupations may include the following:

264 ■ ■ ■ ■ ■

■ ■ ■ ■

Business Services Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Regional Manager Recruitment/Collections/Call-Center Manager Business Manager Office Manager Accountant Operations Director

Professionals Professional specialists design and deliver service solutions for clients. Their qualifications and experience differ according to their specialties. However, they tend to be highly educated and experienced to qualify as experts in their fields. Some roles are likely to demand an undergraduate degree, advanced degree, or professional certification, while others may demand only practical work experience. A recruiter in the employment services industry, for example, is likely to require at least an undergraduate degree in human resource management, while practical experience may be more important for a collections manager. Professional experts engage with clients and de-

OCCUPATION

velop solutions that respond to their clients’ needs and problems. They must be very knowledgeable about their areas of specialty; for this reason, the majority of professionals working in business services and consulting are between the ages of thirtyfive and sixty-four. At higher levels, these jobs tend to involve a considerable amount of management, leadership, and strategic decision making. At lower levels, professional roles may also include basic clerical and administrative work. Operations and technical specialist salaries vary according to subsector and location. According to 2009 estimates from PayScale, the median salary for a recruitment specialist working with a company or private firm ranges from $33,800 to $51,500. For a collections specialist, the median salary range is from $21,200 to $47,900. The U.S. Bureau of Labor Statistics (BLS) reports that, in 2007, travel agent salaries ranged from $18,000 to $46,000. The average salary range for a self-employed management consultant is between $41,100 and $116,200. Professional occupations may include the following: ■ ■

Recruiter Compensation and Benefits Specialist

SPECIALTIES

Management Analysts and Consultants Specialty

Responsibilities

Clerical-methods analysts

Examine and evaluate clerical work to develop improved methods and procedures.

Forms analysis managers

Direct and coordinate the activities of workers who analyze business forms.

Records analysis managers

Direct and coordinate activities of workers who analyze systems of records management.

Records management directors

Plan, develop, and administer policies to streamline handling of business records.

Reports analysis managers

Direct and coordinate activities of workers who analyze business reports.

Reports analysts

Examine and evaluate business reports to improve format, use, and control.

Business Services ■ ■ ■ ■ ■

Employment/Human Resource Specialist Staffing Specialist Labor Relations Specialist Agent/Specialist Consultant

Sales and Marketing Sales and marketing personnel solicit, acquire, and expand client accounts. The aim of the sales and marketing group is to generate revenue by designing and executing campaigns that convert prospects into clients. Sales and marketing employees usually possess undergraduate degrees in business, marketing, communications, or a related discipline, although practical experience is highly regarded. Marketing is usually an office-based function, requiring incumbents creatively to synthesize market data into promotional and public-relations campaigns. The sales function, on the other hand, often demands face-to-face meetings with prospects, telephone conversations, and attendance at conferences and conventions. In the business services industry, customer service strategy (also known as “customer experience”) is also often included as a sales and marketing function. The median annual salary for sales representatives ranges from $30,800 to $47,700. Entry-level positions may be expected to pay somewhat lower than this range. Salaries for sales staff usually consist of a base salary plus incentives and performance bonuses. Sales management roles attract an average national median salary of $50,400 to $94,100. The national median salary for marketing specialists ranges from $37,900 to $52,800, with marketing managers attracting a national average of $43,900 to $77,800 annually. The national average for customer service manager roles ranges from $39,200 to $60,500. Sales and management salaries in the consulting sector generally outperform equivalent positions in other industries. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■

Sales Manager Salesperson Sales Administrator Account Executive Territory Manager Marketing Manager

■ ■ ■

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Marketing Administrator Marketing Officer Customer Service Manager

Administration Administrative staff members support the dayto-day running of the company. They perform functional tasks such as accounting, purchasing, secretarial and executive assistance, reception, and switchboard operation, as well as providing business support within other departments. Necessary experience and qualifications depend on the job role and level of responsibility. Transactional accounting personnel (for example, accounts payable and receivable clerks) may not require formal qualifications, while an accounting manager who assumes financial management and reporting responsibilities is likely to require an undergraduate or advanced degree. Secretarial and clerical roles may have special prerequisites, depending on the type of company. Salary varies significantly according to one’s area of administrative specialty. Average administration specialist salaries range from $36,700 to $48,200, and administration management salaries range from $37,400 to $61,200. Administrative salaries in the consulting sector outperform equivalent positions in other industries. Administrative occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Accounting or Finance Manager Accounts Payable Clerk Accounts Receivable Clerk Finance Officer Secretary Executive Assistant Administrator Administration Manager Administrative Assistant Payroll Administrator Purchasing Manager Contracts Manager

Information Technology Business services companies increasingly offer their clients technology-mediated services and solutions. While some companies outsource some or all of these services, most retain an information technology (IT) group within the organization. It

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is the IT department’s responsibility to maintain computer hardware, software, and the company’s overall technology infrastructure. This task is especially important when a company delivers its services via centralized processing facilities. Service providers that store confidential client information, as well as companies that provide online service systems, must provide twenty-four-hour support for these systems. Information technology personnel typically have degree qualifications or industry certifications in fields such as computer science, computer networking, and software engineering. Some business services companies may also develop proprietary software. The average annual salary for an information technology manager ranges from $59,000 to $99,400. Information technology occupations may include the following: ■ ■ ■ ■ ■

Information Technology Manager Information Technologist Computer Support Specialist Network Administrator Webmaster

by a company depends on the nature of its business and the type of facility it occupies. Small businesses have relatively low security requirements that may be served by as little as secured door locks, fireproof filing cabinets, and a monitored alarm. Large organizations, however, have greater needs for surveillance and security. Very large companies may utilize security screening points, identification tags and badges, coded entry points, and hi-tech surveillance systems to ward against corporate espionage and extortion. Security personnel are expected to have training in public safety, which may be obtained via undergraduate programs, vocational training, or a security certification program. Some companies may require their security staff to also be trained in emergency-response and first-aid techniques. Companies in the business services industry are likely to outsource their security requirements to an external provider. The average salary for security managers ranges from $41,700 to $72,500. Security occupations may include the following: ■ ■ ■

Facilities and Grounds Maintenance Maintenance staff are charged with maintaining office facilities and the surrounding grounds. Their duties may include janitorial services, carpet cleaning, building maintenance and repair, and landscape services. In the security, waste management, and remedial business services subsectors, they also perform vehicle and equipment maintenance. Maintenance staff are rarely required to possess postsecondary degrees. Depending on the facility, they may be hired on a full-time, part-time, or contract basis. They are likely to be paid an hourly wage. Facilities and grounds occupations may include the following: ■ ■ ■ ■ ■

Maintenance Manager Maintenance Officer Custodian/Janitor Landscaping Worker Building Engineer

■

Human Resources The human resources department is responsible for managing a company’s personnel and employment requirements, including compensation and benefits, recruitment, selection, dismissal, and redundancies. Human resources staff must ensure that their company’s practices adhere to appropriate labor laws. In large organizations, human resource departments may also include training and development, relocation, labor relations, and compensation specialists. Human resource specialists usually possess an undergraduate or postgraduate degree in human resource management. The national average annual salary for a human resource manager ranges from $46,900 to $73,300. Human resources occupations may include the following: ■

Security Security staff are responsible for monitoring the security of a facility. The level of security required

Security Guard Security Officer Security Manager Investigator

■ ■ ■

Human Resources Manager Human Resources Coordinator Personnel Administrator Employee Services Officer

Business Services INDUSTRY

OUTLOOK

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technology and business services outsourcing. Where many companies utilize a number of different providers for different functional areas (for example, one provider for payroll, another for data storage, and another for computing), in the emerging model, customers will be able to approach a single business service provider for an end-to-end solution. The rise in unemployment levels caused by the economic downturn is expected to balance out reduced business spending in the business services industry. A glut of human talent in the labor market is expected to drive down domestic contract wages, and this lowering of wages, in turn, will theoretically drive up demand for local business service providers and contract consultants. The same factors will slow the growth in demand for overseas business services. While these factors may underpin continued general growth in the domestic business services industry, they will simultaneously exert downward pressure on profit margins. In response to their clients’ emphasis on cutting costs

Overview The outlook for the business services industry shows it to be growing rapidly. According to the U.S. Census Bureau, between 2002 and 2007, the industry grew by 16 percent, and is expected to continue growing faster than the national economy. In employment services, jobs are expected to grow 19 percent between 2006 and 2016, compared with 11 percent for jobs across all industries. Growth will be driven mainly by the expansion of temporary staffing agencies, as well as specialist human resource services. In the consulting sector, growth is projected to be nearly seven times faster than average. Growth in this industry reflects a continuing business trend toward outsourcing as companies attempt to become more efficient while also dealing with the added complexities of doing business. In light of the 2007-2009 global economic crisis— and in an endeavor to maintain operational flexibility and market competitiveness— many companies have elected to downsize their permanent staff and PROJECTED EMPLOYMENT to engage private providers to perFOR SELECTED OCCUPATIONS form their noncore functions. Experts predict that business process Management of Companies and outsourcing will continue to rise, esEnterprises pecially as providers further reduce costs and improve the quality of outEmployment comes using technology. New online collaboration tools and 2009 Projected 2018 Occupation technology-mediated service-delivery 74,030 84,600 Accountants and auditors models promise greater flexibility, 82,860 82,600 Bookkeeping, accounting, and speed, and convenience and lower auditing clerks costs for clients. These tools are available not only to midsize and large 48,620 52,700 Financial managers companies but also to small business44,420 44,100 First-line supervisors/managers service providers that are now able to of office and administrative interact with clients with a level of support workers reach and cost-efficiency once reserved for only technology-savvy or67,310 69,200 General and operations ganizations. Improved customization managers in business-process software is also expected to expand the market to inSource: U.S. Bureau of Labor Statistics, Industries at a Glance, clude clients that were once too diffiOccupational Employment Statistics and Employment cult to accommodate. Outsourcing Projections Program. experts therefore predict a future convergence between information

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and reducing risk, business service companies and consultants are likely to lower their prices. Despite the decrease in demand for overseas services, the business services industry is expected to continue losing business to offshore providers, albeit at a slower rate. Countries such as India and China are leading this movement of U.S. business support jobs offshore, and they are being joined by burgeoning operations in countries such as Vietnam, Malaysia, Thailand, and Mexico. Offshore providers experience lower relative labor costs and lower regulatory demands, as well as other benefits associated with a very large labor pool. For multinational companies, partnering with an offshore business process provider may also provide the cultural and logistical advantages of being able to service both English- and Asian-speaking customers from a centralized location. Such centralization is an important consideration for companies hoping to take advantage of rapidly expanding opportunities in developing parts of the world. Nonetheless, business services outsourcing to offshore providers can also risk difficulties, not the least of which is the potential for customer dissatisfaction. English-speaking customers can be frustrated dealing with foreign service agents. Likewise, offshore providers experience higher staff turnover rates and suffer from a lack of experienced management talent. Intellectual property infractions are another common problem, especially in China, where intellectual property laws are more lenient than in the United States. Many of these disadvantages combine to encourage companies to use domestic service providers. Nonetheless, business services importing from cheaper offshore locations is expected to continue. Employment Advantages Expansion in the business services industry coincides with a surge in demand, as well as a rapid increase in the supply of business service providers, contractors, and consultants. Thus, while wages and industry growth will both exceed the economywide average, job competition is expected to tighten. The most highly qualified and experienced candidates will have the best job prospects. Already, 75 percent of all workers in this sector pos-

sess bachelor’s degrees, and an increasing number have advanced specialty qualifications. Complementary job experience is also highly regarded. The business services industry provides myriad career paths, including various professional specialties and key support functions. There are opportunities to begin in entry-level positions and to progress vertically or horizontally within the industry. Candidates who prefer close contact with customers or who value autonomy may enjoy working in small businesses, while those who prefer working within a structured organization or who desire exposure to national and international markets may find satisfaction in the midsize and large sectors. Most enterprises in this industry require their employees to possess a range of skills and to remain updated on trends and knowledge. These requirements result in employer-sponsored training and professional development opportunities. Some employers may also contribute toward formal education expenses. Annual Earnings Earnings in the business services industry are expected to grow strongly, although many businesses may experience lower profit margins because of increased competition. Publicly owned companies, such as Adecco and Kelly Services, have heavily cut their budgets in response to falling revenues. Thus, strong growth in the business services industry may attract new entrants, but keen competition will discriminate against those who struggle with costs or who fail to keep abreast of industry trends. Providers in the corporate travel arrangements sector, for example, will be confronted with new challenges as they compete with self-serve, Internet-enabled solutions. Providers who reduce their reliance on the U.S. market are expected to do better than average, as are sectors such as security. The Brink’s Company merges these two principles—more than 70 percent of its revenue is derived from non-U.S. markets, and demand for security services has rapidly expanded since the events of September 11, 2001. As a result, Brink’s improved its profit margin between 2007 and 2008 by 8.6 percent, and it is projected to keep growing.

Business Services RELATED RESOURCES FOR FURTHER RESEARCH Association of Executive and Administrative Professionals 900 S Washington St., Suite G-13 Falls Church, VA 22046 Tel: (703) 237-8616 Fax: (703) 533-1153 http://www.theaeap.com Association of Executive Search Consultants 12 E 41st St., 17th Floor New York, NY 10017 Tel: (212) 398-9556 Fax: (212) 398-9560 http://www.aesc.org Association of Management Consulting Firms 370 Lexington Ave., Suite 2209 New York, NY 10017 Tel: (212) 262-3055 Fax: (212) 262-3054 http://www.amcf.org International Association of Outsourcing Professionals 2600 South Rd., Suite 44-240 Poughkeepsie, NY 12601 Tel: (845) 452-0600 Fax: (845) 452-6988 http://www.outsourcingprofessional.org Travel Industry Association 1100 New York Ave. NW, Suite 450 Washington, DC 20005-3934 Tel: (202) 408-8422 Fax: (202) 408-1255 http://www.tia.org ABOUT

THE

AUTHOR

Kylie Grimshaw Hughes has fifteen years of professional experience, including work with industry leaders such as Parker Hannifin, Honeywell, and the Hanover Finance group. At Honeywell, she was responsible for overseeing the outsourcing of pay-

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roll, travel, fleet, and document-management services. Hughes has a bachelor of arts degree with honors in labor studies and politics from the University of Adelaide and a master of arts degree in communication studies from the University of South Australia, as well as professional certifications in adult education and financial services. She lives in the United States, where she works as a consultant and freelance writer.

FURTHER

READING

Alexander, James A., and Mark W. Hordes. SBusiness: Reinventing the Services Organization. New York: SelectBooks, 2003. Burkholder, Nicholas C. Outsourcing: The Definitive View, Applications, and Implications. Hoboken, N.J.: John Wiley & Sons, 2006. Business History. “Industries: Business History of Business Services.” December, 2008. http:// businesshistory.com/ind._bus._services.php. Cohen, Linda, and Allie Young. Multisourcing: Moving Beyond Outsourcing to Achieve Growth and Agility. Boston: Harvard Business School Press, 2006. Goolsby, Kathleen. “New Impacts on Outsourcing in 2009.” Outsourcing Journal, November, 2008. http://www.outsourcingjournal.com/nov2008-outsourcing.html. Hoover’s. “Business Services Industry Overview.” http://industries.hoovers.com/businessservices. International Association of Outsourcing Professionals. “Top Five Outsourcing Trends for 2009 Predicted by International Association of Outsourcing Professionals.” Press release, December 29, 2008. http:// www.outsourcingprofessional.org/content/ 23/196/1782. Kaka, Noshir. “Strengthening India’s Offshoring Industry.” McKinsey Quarterly, August, 2009. PayScale.com. “Salary Survey for Country: United States.” 2009. http://www.payscale.com/ research/US/Country=United_States/Salary. Reuvid, Jonathan, ed. Managing Business Support Services: Collaborating to Compete. Sterling, Va.: Kogan Page, 2005. Small Business Notes. “Professional and Business Services Industry.” http://

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www.smallbusinessnotes.com/businesses/ professional.html. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://

www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Casino Industry ©Massimo Sala/Dreamstime.com

they must pay the casino a fee for hosting the game. In all games of chance played against the General Industry: Hospitality and Tourism house, the casino has a matheCareer Cluster: Hospitality and Tourism matical advantage. Thus, while Subcategory Industries: Casino Hotels; Floating Casinos; an individual may win, over the Stand-Alone Casinos long run and across all players, Related Industries: Food Services; Hotels and Motels the casino comes out ahead. Industry; Music Industry; Restaurant Industry; Theater and Most large casinos generate their Performing Arts Industry; Themed Entertainment gambling revenues through playIndustry; Travel and Tourism Industry ers’ losses. In some legal jurisdicAnnual Domestic Revenues: $32.54 billion USD (American tions, “house games” are illegal, Gaming Association, 2008) but small casinos are able to Annual Global Revenues: $306 billion USD (Datamonitor, operate solely on the basis of 2006) hosted games such as poker NAICS Numbers: 713210, 721120 tournaments. When most people think about casinos, they perhaps think first about such games as slot machines, blackjack, and roulette. While accuINDUSTRY DEFINITION rate, this perception reflects a somewhat dated view of casinos, stemming from their inception as Summary “saloons” that catered only to those interested in Casinos are large gambling facilities. Generally, gambling. Today, most casinos offer many addithey are owned and operated by either Native tional services and attractions outside of gambling American tribes or private entities. Casinos host in order to attract the public. Casinos are often optwo general sorts of games: competitions among erated inside or connected to hotels, and many feapatrons and competitions between patrons and the ture live performances and musical events, fine casino itself (which in the latter case is commonly dining and themed restaurants, retail shopping, referred to as “the house”). When patrons comsporting events, and even art galleries and other pete with one another, such as by playing poker, INDUSTRY

SNAPSHOT

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Casino Industry

cultural activities. In fact, in some of the largest and most prominent casinos, it may actually appear that gambling is only a secondary attraction. Casinos are highly regulated and complex, offering a multitude of services, so the labor force necessary to staff them is staggering. In 2008, in the United States alone, the non-Indian commercial casino industry employed more than 375,000 individuals—a number that exceeds the total number of employees working in the automotive industry. There are countless job categories within the casino industry. Many are customer-service-oriented, while others are professional or executive in na-

ture. Careers in the casino industry may include, for example, card dealers, security guards, waiters, accountants, attorneys, and high-level executives. A career in the casino industry offers a relatively high level of job security, as this industry has grown in recent years despite economic challenges.

History of the Industry Gambling, in one form or another, has existed for thousands of years. For example, dice have been found in Egyptian tombs, and evidence exists of games of skill and chance being played in the ancient Chinese, Greek, and Roman cultures as early as 2300 b.c.e. Both European and Native American colonists brought their respective histories and traditions associated with gambling to the New World. In fact, lotteries were a popular form of voluntary taxation in England prior to the American Revolution. Drawing on that history, the United States used lotteries to raise funds for large governmental purchases and expenditures, including waging the Revolutionary War. Lotteries were also instituted to purchase equipment for Harvard, Yale, Columbia, and other institutions of higher learning. There are two primary forms of casinos in the United States: Native American, or Indian, casinos and private casinos. Native American tribes began building gambling establishments in the 1970’s. After years of legal battles fought in both state and federal courts nationwide, as well as the U.S. Supreme Court, Native Americans were granted the right to erect casinos. Further, Congress and the federal government—rather than individual state governments—assumed the power to regulate Indian casinos, including determining the The Pechanga Resort and Casino in Temecula, California, is owned by the types of games that could be offered. The states generally had Pechanga Band of Luiseño Indians. (AP/Wide World Photos)

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Las Vegas casino resorts, such as the Venetian, are often created around fanciful themes. (AP/Wide World Photos)

opposed Native American casinos for a variety of reasons. In 1988, Congress enacted the Indian Gaming Regulatory Act (IGRA), under which three classes of gaming were identified: Class I and II gaming included smaller activities such as bingo halls and lotteries; Class III gaming included casinos and racetracks that offered high jackpots. While Class I and II gaming does not require a license, Class III gaming requires Native American tribes and relevant state governments to enter into tribal-state compacts. A tribal-state compact is a delicate agreement, balancing federal, state, and Native American law and requiring the state and the tribe to negotiate in good faith with each other. Additionally, a tribal-state compact is not valid until signed by the U.S. secretary of the Interior. Among other provisions, such a compact allows a state government to tax or share in revenues earned by a casino. For example, the Connecticutbased Mohegan Sun Casino, one of the largest casinos in the United States, must pay its host state 25 percent of its slot machine revenues, or $80 million

annually. Accordingly, tribal-state compacts can result in large, consistent sources of revenue for state governments. Private casinos have a markedly different history in the United States than do Indian casinos. In 1931, Nevada became the first state to legalize casino gaming. In their infancy, casinos were operated or manipulated largely by organized crime syndicates. In fact, one early casino, the Flamingo, was owned and operated by noted mobster Bugsy Siegel. In response to the association between private casinos and organized crime, the U.S. Senate Special Committee to Investigate Organized Crime in Interstate Commerce (also known as the Kefauver Committee) began to hold hearings in 1950 to explore the influence of organized crime in gambling. Subsequently, the state of Nevada established the Gaming Control Division and, later, the State Gaming Commission, which could issue— and revoke—gaming licenses, thus giving to the state a greater degree of control over commercial gaming enterprises.

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The boardwalk at Atlantic City is lined with casinos. (Getty Images)

In the 1960’s, Nevada passed laws that removed prohibitions on corporate involvement in casinos. In 1973, Harrah’s Entertainment became the first casino to be traded on the New York Stock Exchange. Three years later, New Jersey became the second state to legalize casino gambling. In 1989, South Dakota and Iowa legalized gaming, bringing about much expansion in the casino industry. In 1992, racetrack casinos (or “racinos”) were legalized in Rhode Island; Delaware, Iowa, Louisiana, and West Virginia followed suit shortly thereafter. By the 1990’s, casinos not only were gaming enterprises but also had become vacation destinations for tourists. As large, luxury casinos developed, they began hiring celebrities to entertain guests. In-residence artists performed nightly, and top chefs opened branches of their established restaurants in casinos, helping transform them from gaming establishments into resort destinations. Since 2006, Pennsylvania, Florida, and Indiana have legalized racinos, Kansas has legalized casino

gambling, and Maryland passed a statewide referendum allowing fifteen thousand slot machines in four locations. The Industry Today The casino industry is thriving in the United States. As of 2009, the following states had commercial casinos: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Nevada, New Jersey, Pennsylvania, and South Dakota. Additionally, the following states have racinos: Delaware, Florida, Indiana, Iowa, Louisiana, Maine, New Mexico, New York, Oklahoma, Pennsylvania, Rhode Island, and West Virginia. Class III Native American gaming establishments operate in the following states: Washington, Oregon, California, Nevada, Arizona, New Mexico, Colorado, Kansas, Idaho, Montana, North Dakota, South Dakota, Minnesota, Iowa, Wisconsin, Michigan, New York, Connecticut, North Carolina, Mississippi, and Louisiana.

Casino Industry Nevada has the most commercial casinos in the country, with 266. Colorado, Mississippi, and South Dakota also have comparatively large numbers of casinos. As of 2009, there were approximately 490 commercial casinos and racinos in the United States. As of 2007, there were approximately 425 Native American gaming facilities. Not surprising, the Las Vegas Strip is the largest casino market in the United States. Its casinos collectively earned $6.12 billion in revenue in 2008. Atlantic City, New Jersey, was second, with $4.54 billion in casino revenues. It was followed by the Chicagoland gaming market, located in Illinois and Indiana, which earned $2.25 billion, and Connecticut—home to the Foxwoods and Mohegan Sun casinos—which earned $1.57 billion. Casinos earn substantial gaming revenue. Gaming revenue is generally defined as the amount wagered by gamblers, minus the winnings returned to gamblers. In 2007, commercial casinos generated approximately $34.4 billion in such revenue. By comparison, Native American casinos generated $26 billion during the same period. Notably, these figures do not include revenue generated from on-site restaurants, ticket sales, and other sources of income that, although ancillary to gaming, still generate substantial income. As previously noted, casinos—both commercial and Native American—pay back to state and local governments a portion of the revenues they take in. In 2008, the twelve states that have commercial casinos received $5.66 billion in state and local taxes on casinos. Similarly, state and local governments in the twelve states that operated racinos in 2008 received $2.59 billion. The casino industry generates jobs for hundreds of thousands of Americans. It has experienced substantial growth in the early twenty-first century. The casino industry employed more than 375,000 people in 2008 and paid more than $14.1 billion in wages. Notably, the number of employees working in this industry has increased by 80 percent since 1990, indicating that the industry has experienced significant growth across the country. The industry also actively promotes the hiring of employees of color. In 2007, it was reported that the proportion of workers of color in the casino workforce is 20 percent greater than that proportion in the overall U.S. workforce. Employees working in the casino industry generally report that they are satisfied

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with their careers. A 2007 report titled “A Survey of Attitudes of Casino Industry Employees” revealed that more than 85 percent of employees found their jobs to be satisfying and that 83 percent would strongly recommend their job to others. The casino industry has been affected by the economic downturn that occurred in the United States from 2006 through 2009. Gambling, dining out, and attending musical or sporting events— all of which are popular activities at casinos— declined as economic decline forced consumers to limit their spending. Gambling, in fact, is typically one of the first expenditures eliminated from a budget. From 2007 to 2008, the commercial casino industry experienced a 4.7 percent decrease in revenue. The American Gaming Association (AGA) has noted that, for each month in 2009, gross revenue was less than it had been in the same month in 2008. As a consequence of this difficult economic environment, some commercial and Native American casinos were forced to lay off employees or to reduce their wages or hours of employment. Importantly, casinos have also canceled or delayed physical development projects and renovations that would result in the creation of many new jobs. Nonetheless, projections indicate that the industry is relatively stable and, as a whole, will experience substantial growth in the future. In 2006, the U.S. Bureau of Labor Statistics (BLS) estimated that 283,000 individuals were employed in the casino hotels industry; by 2016, this number is expected to increase to 329,100. Because of the wide scope of the casino industry, many of the occupations that exist in the public and private sector will also exist, in some related form, in the casino industry. For example, careers in the following employment sectors exist in the commercial and Native American casino industry: chief executive officer (CEO), accountant/bookkeeper, advertising agent, attorney, baker, bartender, carpenter, cashier, information technology (IT) staff, cook, electrician, administrative assistant, gaming dealer, manager, surveillance officer and investigator, hairdresser, human resources manager, janitor, retail salesperson, tailor, driver, customer service employee, usher, ticket agent, and wait staff. Both Native American and commercial casinos are, for the most part, large businesses. Even the smallest casinos must hire sufficient staff to manage gaming, advertising, security, facilities, food or

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drink service, and the executive operations of the business. Complex enterprises such as casinos generally offer their employees competitive wages, a set working schedule, and health benefits. Some employees may be eligible to join unions, based on their job classifications. Additionally, because of their size, commercial casinos are required to comply with federal guidelines relating to the selection and retention of employees. They may not discriminate in their employment on the basis of race, color, religion, sex, national origin, disability, or age. Native American casinos often seek to employ primarily members of the tribe that oversees casino operations. On many Native American reservations, a casino is the largest employer. Though tribal-state compacts differ widely, tribal members may be eligible to receive a portion of the revenue earned by their casinos.

INDUSTRY MARKET SEGMENTS Although employees of Native American and of commercial casinos share many characteristics, there may be significant differences between employment in each of these types of gaming establishment, specifically with respect to hiring practices and geographic location. For instance, tribal casinos are more akin to governmental organizations, whereas commercial casinos are inherently private entities. Moreover, commercial casinos are often closely packed within areas where they are legal, facing significant competition from other casinos. Indian casinos are often located in otherwise distant locations with no other casinos nearby. While such a casino may benefit from being “the only game in town,” it will need to expend more advertising and marketing resources to entice consumers to make a special trip to its location. Small Casinos Casinos—even small casinos—sometimes have restaurants and accommodations as part of the overall structure. Consequently, it is impossible to accurately compare and contrast revenue, as some casinos have revenue-producing sources absent at other casinos. Notwithstanding these inconsistencies, some data do exist with respect to small casino revenue. For consistency, this overview will analyze

data from Nevada, which is the largest casino market in the United States. According to the Nevada Gaming Commission and State Gaming Control Board, in the small casino category—considered to be casinos with between $1 million and $12 million in total gaming revenue—the average annual revenue from gaming, accommodations, and food and beverage was approximately $9.3 million for the fiscal year 2008. Potential Annual Earnings Scale. Employee earnings vary, from the state or federal minimum wage to well over $1 million annually for key executives and performers. Clientele Interaction. Clientele interaction at a small casino varies widely on the basis of the particular employee’s job title and corresponding duties. For example, a card dealer, waiter, or front-desk supervisor at a hotel is likely to experience a very high degree of client interaction, whereas an internal surveillance monitor, accountant, or floor manager may not have as much interaction with customers. Employees at smaller casinos may also find themselves performing more than one role, sometimes with varying duties. Amenities, Atmosphere, and Physical Grounds. Casinos are designed primarily to attract and retain customers for as long as possible. (To that end, casinos are typically designed without windows or clocks, so patrons will lose track of time). Thus, amenities and atmosphere are generally attractive, and include a wide variety of gaming, food, and beverage options, as well as accommodations. Flashy lights, the lure of high jackpots, and the possibility of free food and drink all operate to attract clientele. Small casinos, however, lack some amenities that midsize and large casinos traditionally have. For example, dining options may be limited, the casino may not have the latest in gaming technology, the physical structures may be older and less aesthetically pleasing, and the casino may be unable to attract the most popular performing artists or celebrity chefs. The physical grounds of a small casino vary on the basis of its location, the source of the casino’s funding, and the age of the facility. Native American casinos are traditionally located on the tribe’s reservation. Often, Indian reservations are located in rural areas, relatively far from cities. Similarly, small commercial casinos are often located in rural areas. Small casinos offer fewer choices in terms of

Casino Industry overall games offered and their variety, as well as entertainment, food, and lodging choices and, accordingly, do not require as much physical space as midsize or large casinos. It is still necessary to have attractive physical grounds in order to lure and maintain clientele—casinos should be clean and well maintained, both inside the casino and with respect to the exterior grounds. Typical Number of Employees. The number of employees at small casinos varies on the basis of the needs of a particular casino. For instance, a small casino without a hotel will require many fewer staff members than a similarly sized casino that offers hotel accommodations. On the Las Vegas Strip in the 2008 fiscal year, the thirty-five casinos classified as small employed approximately 1,750 employees in the casino department, 1,073 in the rooms department, 1,740 in the food department, and 457 in the beverage department, as well as 869 general and administrative employees and 221 miscellaneous employees. This totals 6,110 employees, for an average staff of approximately 170 employees per small casino. Traditional Geographic Locations. With the exception of the Las Vegas Strip and Atlantic City, it is common to find small casinos in smaller cities, or even in rural areas. This is especially true for Native American casinos, as tribal reservations are located on thousands of acres of land, most often in undeveloped, natural areas. Even small casinos require ample physical space—sufficient to accommodate thousands of guests, hundreds of employees, and parking for all. Naturally, then, the more space available, the more attractive a particular location is to casino developers. Additionally, because real estate located in rural areas is traditionally less expensive than is real estate in populated cities, many casinos are developed in rural areas. Pros of Working for a Small Casino. Even in a difficult economic climate, casinos still attract clientele, and job security exists in most areas of casino employment. Further, the wages, hours, and conditions of employment are regulated and well documented, as casino operators must adhere to federal and state employment and labor laws. With respect to small casinos, employees may find that, since there are fewer employees, they may be eligible for raises or promotions more quickly than they would be if they worked for larger enterprises, where more employees compete for each promo-

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tion. Additionally, they may be able to transfer laterally from one position to another, thereby learning more skills and increasing their value to their employer—or their marketability should they wish to seek employment elsewhere. Cons of Working for a Small Casino. Smoking is permitted in casinos. Employees that work on the casino floor or in the restaurants, bars, hotels, and other areas are likely to be exposed to significant secondhand smoke during the course of their workday. Additionally, at small casinos, employees may find that the prospect for advancement is limited, simply because the opportunity for promotions may not exist as often. Employees may also feel isolated from the general public if they work in small towns where their casino is the largest—and sometimes one of the only—employers. Lastly, if the casino is independent—that is, not part of a chain of casinos—employees will not be eligible for transfers or promotions to sister casinos located in other cities or states. Costs Payroll and Benefits: Casinos generally pay competitive salaries and benefits, as a result of the combination of their reputation for earning high revenues, the unionization of many casino workers, and the high level of governmental regulation and scrutiny of the businesses. Native American casinos may provide revenue-sharing plans in addition to salary. Supplies: Casinos require all the supplies needed by their subsidiary businesses, such as furniture, linens, and so on for hotels; ticketing systems and audiovisual equipment for entertainment venues; and cooking equipment and ingredients for restaurants. In addition, they require gaming supplies such as cards, dice, tables, slot machines, and other specialized furniture and equipment. Many casinos provide complimentary items to regular gamblers, and these must be purchased as well. External Services: Casinos may outsource such services as advertising and promotion, and small casinos may employ external companies to provide services that are taken care of in-house by larger operations, such as concert management, security, maintenance, or accounting. Utilities: Casinos use a great deal of electricity, given both their sizes and the insular nature of

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the venues, which require artificial lighting and climate-control twenty-four hours a day. Taxes: Commercial casinos must pay normal income taxes and property taxes, but many must also pay additional gambling taxes or fees instituted by their states or municipalities. Fees paid by Indian casinos are determined by compacts negotiated between the tribes and governmental agencies. Midsize Casinos There is no general definition of what constitutes a midsize casino, but the middle range of casinos in Nevada are those with annual gaming revenues of between $36 million and $72 million. There are thirty-four such casinos in the state. According to the Nevada Gaming Commission, the average total revenue of these midsize casinos, including revenues from lodging, dining, and entertainment, was $87,383,150 in the fiscal year 2008. Potential Annual Earnings. As with small casinos, employee earnings vary, from the state or federal minimum wage to well over $1 million annually for key executives and performers. Clientele Interaction. All casinos have frontline employees, such as dealers, concierges, frontdesk receptionists, and so forth, whose primary function is to interact with clients and who must cultivate a pleasant or welcoming demeanor. Other employees operate behind the scenes, monitoring a casino’s ubiquitous surveillance cameras, managing personnel, or attending to other tasks. The larger the casino, the more such employees it will have, as a larger front-line staff requires a correspondingly larger managerial and support staff. Amenities, Atmosphere, and Physical Grounds. As the size of a casino increases, the clientele can expect that the number of amenities— including new and popular casino games, upscale hotel rooms, popular entertainment acts, and restaurants featuring celebrity chefs—also will increase. Casinos compete with one another for patrons, knowing that not all potential patrons are attracted to gambling. Even midsize casinos are becoming resort destinations, featuring beautiful hotels, elaborate shows, and luxurious spas. Midsize casinos seeking to attract more visitors require increased physical space, especially hotel space. In Nevada, the thirty-four midsize casinos offer many varieties of gaming, including bingo/

keno areas, averaging 6,700 square feet; slotmachine and electronic-games areas, averaging 37,700 square feet; poker areas, averaging 1,300 square feet; and racing and sports betting areas, averaging 2,500 square feet. (The average size of these combined gaming areas is over 47,000 square feet; this does not include hotel, restaurant, entertainment, and parking space.) With respect to hotel space, these casinos offered 9.5 million available rooms in 2008. Typical Numbers of Employees. In fiscal year 2008, the thirty-four midsize casinos in Las Vegas employed 7,852 people in the casino department, 4,830 in the rooms department, and 2,003 in the beverage department, as well as 4,973 general and administrative employees and 1,513 miscellaneous employees. They employed a total of 28,861 people, representing an average staff of approximately 849 employees per casino. Thus a midsize casino employs approximately five times as many employees as a small casino. Traditional Geographic Locations. Midsize casinos are located throughout the country, in many different states, cities, and even rural areas. Several are located on the Las Vegas Strip, which is a small, compact area in which casinos stand next to one another. Many others are located on American Indian reservations, in largely rural, sparsely populated areas. Pros of Working for a Midsize Casino. In addition to enjoying the pros of casino employment in general, including job security, benefits, and the opportunity for advancement, employees of midsize casinos may find a good balance between the structured, corporate environment offered by large casinos and the sense of individuality associated with small casinos. Employees of midsize casinos likely will be eligible for promotions and pay raises in recognition of good performance while avoiding the overly corporate nature of the largest establishments. Cons of Working for a Midsize Casino. The general downsides of working at casinos include constant exposure to secondhand smoke and limited opportunities for advancement for many employees lacking advanced educations. With respect to midsize casinos specifically, seasonal downturns in gaming may hit these casinos the hardest. In Atlantic City, New Jersey, for example, more than one thousand employees were laid off in September of

Casino Industry 2009, following the Labor Day holiday. It is generally expected that casinos’ business will decrease each fall, and it is not uncommon for casinos to trim their staffs accordingly. Small casinos may be prepared for such annual changes, and it may be easier to shift employees from one job to another based on demand. Large casinos, especially in a good economy, may be able to retain most employees year-round simply because of strong revenue. Midsize casinos, however, may be stuck in the unenviable position of being unable to afford to pay their employees during periods of economic uncertainty or seasonal slowdowns. Costs Payroll and Benefits: Casinos generally pay competitive salaries and benefits, as a result of the combination of their reputation for earning high revenues, the unionization of many casino workers, and the high level of governmental regulation and scrutiny of the businesses. Native American casinos may provide revenue-sharing plans in addition to salary. Supplies: Casinos require all the supplies needed by their subsidiary businesses, such as furniture, linens, and so on for hotels; ticketing systems and audiovisual equipment for entertainment venues; and cooking equipment and ingredients for restaurants. In addition, they require gaming supplies such as cards, dice, tables, slot machines, and other specialized furniture and equipment. Many casinos provide complimentary items to regular gamblers, and these must be purchased as well. External Services: Casinos may outsource such services as advertising and promotion, concert management, security, maintenance, or accounting, although some may assign some or all of these tasks in-house. Utilities: Casinos use a great deal of electricity, given both their sizes and the insular nature of the venues, which require artificial lighting and climate-control twenty-four hours a day. Taxes: Commercial casinos must pay normal income taxes and property taxes, but many must also pay additional gambling taxes or fees instituted by their states or municipalities. Fees paid by Indian casinos are determined by compacts negotiated between the tribes and governmental agencies.

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Large Casinos In Nevada, it would be fair to categorize large casinos as those that have annual total gaming revenues in excess of $72 million. There were fortyseven such casinos in Nevada in 2008. During that fiscal year, the average total revenue, including lodging, dining, and entertainment revenue, of these casinos was $416,971,363, as reported by the Nevada Gaming Commission. Potential Annual Earnings. Employee earnings vary, from the state or federal minimum wage to well over $1 million annually for key executives and performers. Clientele Interaction. For many employed in a large casino, client interaction is their most important job function. Those working on the casino floor and in the hotels, restaurants, and entertainment facilities may find that the bulk of their work shift is spent with clients. Large casinos, however, also employ a higher number of key employees— employees that hold top-level management positions. These employees may not typically encounter members of the public in the same manner as do traditional employees. To the contrary, key employees spend their time on policy, politics, and management. Amenities, Atmosphere, and Physical Grounds. The nation’s largest casinos are also among the largest and most successful resort destinations. Gambling, although the largest source of revenue for such establishments, may sometimes seem to be an ancillary attraction. Top chefs such as Wolfgang Puck and Bobby Flay own and operate dozens of restaurants in large casinos; trendy nightclubs attract celebrity guests; musical acts such as Elton John and entertainers such as Penn and Teller perform nightly to sold-out crowds; and lavishly decorated hotels boasting luxurious spas cater to an elite clientele. Large casinos are massive in size. As an example, Mohegan Sun Casino, located in Uncasville, Connecticut, boasts over 300,000 square feet of gaming space; a thirty-four-story-high hotel with twelve hundred luxury rooms; 130,000 square feet of retail shopping; thirty restaurants; two separate entertainment venues, including a ten-thousand-seat arena and a three-hundred-seat theater; 100,000 square feet of meeting space for business conventions and other events; a 10,000-square-foot indoor pool; and a 17,500-square-foot outdoor terrace.

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Mohegan Sun is not unique with respect to its physical grounds: The largest casinos offer similar attractions and must have sufficient grounds to support these attractions. Typical Numbers of Employees. The largest casinos have the greatest number of employees. In Nevada, the forty-seven largest casinos employ 34,071 people in the casino department, 23,494 in the rooms department, 37,879 in the food department, and 9,738 in the beverage department, as well as 20,631 general and administrative workers and 12,858 miscellaneous workers. In total, 138,671 persons are employed in these forty-seven casinos, for an average staff of 2,950 employees per large casino. This figure is more than three times the average number of workers employed at midsize casinos and seventeen times the size of the average small casino’s staff.

Slot machines and players line the walls of a casino. (Getty Images)

Traditional Geographic Locations. As with small and medium casinos, large Native American and commercial casinos are located throughout the country. In terms of 2008 revenue reported by the AGA, the ten largest U.S. casino markets are the Las Vegas Strip; Atlantic City, New Jersey; Chicagoland, in Indiana and Illinois; Uncasville and Mashantucket, Connecticut; Detroit, Michigan; Tunica and Lula, Mississippi; St. Louis, Missouri and Illinois; Biloxi, Mississippi; Shreveport, Louisiana; and the Boulder Strip, Nevada. The ten largest racino markets are Yonkers, New York; Charles Town, West Virginia; Providence, Rhode Island; Bensalem, Pennsylvania; Dover and Harrington, Delaware; Chester, Pennsylvania; Delaware Park and Wilmington, Delaware; Chester, West Virginia; Meadowlands, Pennsylvania; and Broward County, Florida. These lists demonstrate that the largest and most popular casinos and racinos are located both in large cities and in rural areas. Pros of Working for a Large Casino. Large casinos may afford increased opportunities for movement within the company or Native American tribal structure. Many commercial casinos, such as the MGM Grand, own properties in several states. When developing new properties, in addition to hiring new local staff, many casinos seek to staff certain positions with existing employees, in order to make easier the transition period for the new casino. Additionally, large casinos have more management positions and opportunities for promotion available. Cons of Working for a Large Casino. As with many large organizations, it may be difficult for employees to distinguish themselves to the management of a large casino. Accordingly, although the employees of large casinos may be more capable of climbing the corporate ladder, because of competition and sheer numbers, actually climbing that ladder may prove very difficult. Consequently, employees may find that they feel stuck in their current positions. Costs Payroll and Benefits: Casinos generally pay competitive salaries and benefits, as a result of the combination of their reputation for earning high revenues, the unionization of many casino workers, and the high level of governmental reg-

Casino Industry ulation and scrutiny of the businesses. Native American casinos may provide revenue-sharing plans in addition to salary. Supplies: Casinos require all the supplies needed by their subsidiary businesses, such as furniture, linens, and so on for hotels; ticketing systems and audiovisual equipment for entertainment venues; and cooking equipment and ingredients for restaurants. In addition, they require gaming supplies such as cards, dice, tables, slot machines, and other specialized furniture and equipment. Many casinos provide complimentary items to regular gamblers, and these must be purchased as well. External Services: Casinos may outsource such services as advertising and promotion, concert management, security, maintenance, or accounting, although some may assign some or all of these tasks in-house. Utilities: Casinos use a great deal of electricity, given both their sizes and the insular nature of the venues, which require artificial lighting and climate-control twenty-four hours a day. Taxes: Commercial casinos must pay normal income taxes and property taxes, but many must also pay additional gambling taxes or fees instituted by their states or municipalities. Fees paid by Indian casinos are determined by compacts negotiated between the tribes and governmental agencies.

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Any Indian casino, commercial casino, or racino needs to account for activities in the following areas. At small casinos, one person may hold more than one role for the casino; in larger casinos, specialists fulfill unique requirements for specific groups. Regardless of size and scope, all functions must be fulfilled in order for the casino to operate efficiently and effectively. The following umbrella categories apply to the organizational structure of casinos generally: ■ ■ ■

Accounting/Finance/Auditing Executive Management Games/Operations

Compliance Construction Entertainment Facilities Food Service Hotel Human Resources Information Technology Legal Marketing Office Services/Administration Security/Surveillance Sales Transportation/Parking

Accounting/Finance/Auditing Casinos function and survive based on precise numerical calculations. Management must know roughly how many gamblers will come to the casino, how much will they spend, and the rate of return on the slot machines, among many other variables. Accounting employees at all levels must accurately track money coming and going, analyze balance sheets, perform budget analyses, and develop budgets and forecasts, among other duties. Certain employees within this group must have knowledge of gaming regulations, as well as federal and state tax laws. Accounting, finance, and auditing occupations may include the following: ■

ORGANIZATIONAL STRUCTURE AND JOB ROLES

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Chief Financial Officer (CFO) Payroll Manager Cage Manager Business Operations Analyst Cage Cashier Revenue Auditor Tax Manager Accountant

Executive Management Executive officers of casinos are charged with the day-to-day operation of the casinos and are responsible for the overall profitability of their businesses. They are generally seasoned business managers who understand gaming, business, finance, politics, and human resources. As a result of their increased responsibilities, they are traditionally the best-compensated employees at a casino. They are also among the first employees that can be

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asked to resign if the casino’s profit margin falls below a level that is deemed acceptable by a board of directors, or by shareholders if the casino is a publicly traded corporation. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) President Vice President General Manager General Counsel

pliance positions are multifaceted and involve investigating internal disputes and customer complaints concerning, for example, a faulty machine or a dishonest dealer, as well as ensuring corporate compliance with internal regulations and written laws of the tribal, state, or federal government. Positions in compliance blend investigatory work, legal and ethical analysis, and technological savvy. Compliance occupations may include the following: ■ ■ ■ ■

Games/Operations Employees in this category perform many of the functions that allow casino games, including both slot machines and table games, to take place. Card dealers manage the games, take bills from customers, and pay winning gamblers. Technicians manage the slot machines and assist gamblers who need to receive payouts or who are having difficulty with the machines. Additionally, technician employees keep machines in good repair, renovating and fixing machines and keeping the slot machines “online” with one another and with the central computer system. Many of these positions involve a high degree of interaction with clientele, either as dealers, as cashiers, or as technicians or supervisors responding to issues on the casino floor. Casino games and operations occupations may include the following:

Construction Casinos are massive physical structures. In a good economy, corporations such as MGM and Trump continually plan the development of new casinos. Although many workers in this area are full-time employees of casino companies, many others are temporary, local employees hired on a contract basis to help complete a specific construction project. It is not uncommon for casinos to employ hundreds or thousands of local temporary construction employees when building a new facility. Construction occupations may include the following: ■ ■ ■

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Director of Slots Slot Manager Gaming Manager Floor Supervisor Dealer Croupier Pit Boss Slot Technician Cashier

Compliance Gaming is a heavily regulated industry. State, federal, and even Native American laws affect many important decisions that casinos make, including what games can be offered, as well as the integrity or accuracy of the gaming machines. Com-

Director of Gaming Compliance Officer Accounting/Gaming Auditor Gaming Inspector

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Architect Developer Project Manager Carpenter Electrician Mason Plumber Construction Worker

Entertainment Most midsize and large casinos, as well as some small casinos, offer forms of entertainment to attract clientele that may have only a passing interest in gambling. For all intents and purposes, this is a separate career category altogether. Employees generally work behind the scenes to book talent, sell tickets, and guide customers to their seats during events. Moreover, casino employees must promote entertainment events to the public and me-

Casino Industry dia outlets in order to sell tickets and make the events as profitable and successful as possible. Entertainment occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Box Office Manager Sales Director Marketing Coordinator Venue Manager Account Manager Promoter Lounge Singer House Performer Sales Agent Usher Venue Security Guard Venue Concessions Salesperson

gamblers at the tables. The employment needs of casino restaurants are substantially similar to the needs of restaurants in general. At large casinos, hundreds of jobs in the food and beverage division need to be filled. Food service occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Facilities Employees working in facilities-related jobs are responsible for the integrity of physical grounds and keeping casinos in good repair. Facilities-related duties are numerous, from inspecting buildings for safety, performing repairs, and painting, to performing carpentry, electrical, and plumbing services as necessary, to monitoring and repairing HVAC (heating, ventilating, and air-conditioning) systems. Facilities managers may also be responsible for ensuring that their casinos are set up in a safe and logical manner while maintaining maximum customer occupancy. Facilities occupations may include the following:

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Facility Director Engineer Plant Operator Heating, Ventilation, and AirConditioning (HVAC) Technician Fire Protection Systems Specialist

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Food Service All casinos offer some food and beverage service, both to attract customers and to ensure that they do not need to leave the establishment to secure sustenance. Large casinos have several restaurants and bars, ranging from inexpensive dining options to luxury restaurants owned by celebrity chefs. Wait staff will often also be deployed to the gaming areas to bring cocktails and other drinks to

Head Chef Sous Chef Restaurant/Bar Manager Cook Dishwasher Waiter Bartender Table Busser Sommelier Host/Hostess Cashier High-Roller Butler

Hotel Casinos also seek to attract and retain customers by making available on-site lodging. Many casinos offer average-quality, affordable hotel rooms in order to encourage customers to spend more time at their facilities. The country’s largest casinos incorporate luxury hotels that are tourist destinations in their own right. Some hotels have thousands of rooms and must staff hundreds of employees in order to run efficiently. Hotel occupations may include the following: ■

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Hotel Manager Front-Desk Supervisor Guest Services Manager Concierge Conference Coordinator Housekeeper Laundry Worker Cleaning Specialist Bookkeeper/Auditor

Human Resources Human resources staff assist in personnel management, including the hiring, retention, discipline, benefits management, and termination of employees. Human resources employees write job postings for vacancies, perform initial telephone and in-person interviews, compile internal regula-

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tions, provide training and instruction to new employees, train current employees on new technology and procedures, give instruction concerning workplace safety and laws, and respond to internal employee grievances. They also compile and update employee handbooks, which codify the internal regulations governing employment at their casinos. Human resources occupations may include the following: ■ ■ ■ ■

Human Resources Director Candidate Sourcing Specialist Training Manager Benefits Manager

Information Technology Like any large business, casinos are heavily dependent on computer technology. Moreover, with so much action happening all at once within casinos, it is very important for a dedicated team of information technology (IT) employees to make sure that the computer systems that control everything from cash registers to security cameras function properly at all times. When issues arise, these employees must be able to act quickly and decisively in order to solve the problems, and they must have the skills necessary to troubleshoot issues in order to find temporary solutions that will allow their casinos to maintain their operations. Additionally, IT employees must have customer service skills and a friendly demeanor, as they assist fellow employees from all departments with their technology needs. Information technology occupations may include the following: ■

■ ■ ■ ■ ■

Information Technology Systems Engineer Systems Coordinator Data Analysis Manager Application Developer Technician Technical Support Specialist

Legal A casino’s legal department has several important functions. It assists the casino in reviewing and negotiating contracts for services, such as entertainment contracts and contracts to purchase goods

and services from other businesses. Attorneys also litigate matters in which the casino is involved, including, for example, contract disputes and claims against gamblers who have unpaid debts. Finally, the legal department is responsible for managing the legal affairs of the company with respect to employee grievances and disputes, and it may assist the human resource department on such issues as employee discipline and employee handbooks. Legal occupations may include the following: ■ ■ ■ ■

General Counsel Deputy/Assistant General Counsel Paralegal Administrative Assistant

Marketing Especially in areas such as the Las Vegas Strip and Atlantic City that are densely packed with casinos, each casino must market its unique attributes in order to attract and retain clients. Meanwhile, Indian casinos such as Mohegan Sun in Connecticut and Morongo in California—which compete with Las Vegas and Atlantic City by offering themselves as alternative venues—must market themselves as attractive alternative tourist destinations. Employees in the marketing department are responsible for developing and initiating promotions, overseeing player-loyalty programs, mailing promotional materials to both existing and prospective customers, monitoring existing programs and promotions used by other casinos, and creating short-term and long-term marketing plans to best advertise their casinos. Marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Marketing Director Vice President of Marketing Advertising Manager Special Events/Promotions Director Marketing Representative Player Development Director Casino Host

Office Services/Administration Casinos are like any other business in the sense that, in order to succeed, each department must have employees who perform important administrative work. Administrative employees in each

Casino Industry department answer phones and assist customers, respond to business correspondence, assist managers in their daily work and scheduling, and perform other tasks that help each office function. Each department in a casino has its own group of administrative employees, each with responsibilities and duties unique to that department. Accordingly, job titles will vary from department to department. Administrative occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Executive Secretary Administrative Assistant Personal Assistant Paralegal Office Manager Telephone Operator Receptionist Customer Service Representative

Security/Surveillance One of the most important job groups in the casino industry is security and surveillance. Millions of dollars are exchanged in casinos daily; in fact, very wealthy gamblers may each bring in excess of $1 million with them in a single trip to a casino. Casinos must also be aware of those trying to steal money, either by cheating at table games or by using technological means to rig slot machines to pay jackpots. The safety of customers is also of the utmost importance. It is thus crucial that a casino have a group of employees devoted to the safety and security of the casino. Whether quietly patrolling the gaming floor or watching security-camera footage taken from thousands of hidden cameras, security employees protect the casino’s finances. Occupations or titles in this area may include the following: ■ ■ ■

Surveillance Manager Surveillance Supervisor Surveillance Operator/Observer

Sales With so many casinos offering premiere accommodations, world-class entertainment, and stellar gaming facilities, competition for a customer’s dollar is fierce—especially during a period of economic downturn. Thus, casinos cannot rely on ba-

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sic marketing alone; rather, a dedicated team of employees must actively solicit sales, usually from groups, in order to help their casinos meet their revenue goals. Sales employees help organize group trips to casinos, offering packages that might include lodging and meals, as well as transportation to and from the casinos. Sales employees may also sell overnight entertainment packages that feature golf or spa activities, among other amenities. Finally, other types of sales employees may work in gift shops, assisting customers wishing to purchase casino-related merchandise. Sales occupations may include the following: ■ ■ ■ ■ ■

Sales Manager Retail Manager Account Executive Sales Associate Retail Sales Associate

Transportation/Parking With thousands of customers coming and going each day, casinos must have the staff and resources to facilitate customers’ arrivals and departures without traffic congestion. Many casinos have valet parking available, as well as shuttle service to and from nearby airports and local attractions such as golf courses. Shuttles may also transport casino employees to and from off-site parking facilities. Transportation and parking occupations may include the following: ■ ■ ■

Valet Attendant Shuttle Driver Parking Attendant

INDUSTRY

OUTLOOK

Overview The outlook for the casino industry shows it to be on the rise, despite the fact that it has been adversely affected by the 2007-2009 global economic crisis. The industry, in fact, may have been more affected than other industries, since it trades in luxuries that are easy to forego in times of economic downturn. As a result of declining revenue, casinos in Atlantic City, one of the largest gambling markets in the United States, laid off 1,067 casino employees in September, 2009. The Press of Atlantic City

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noted that 3,700 Atlantic City casino jobs were lost between October, 2008 and October, 2009. Notwithstanding these temporary economic setbacks, there is evidence to suggest that the casino industry will stabilize in the near future and that industry employment will increase nationally. In addition to the BLS projection of overall casino employment growth of 16.2 percent by 2016, specific occupations within the casino industry are expected to increase more dramatically. For example, BLS projects that network systems and data analyst positions will increase 60 percent; food preparation and serving staff positions will increase 30 percent; supervisorial and managerial positions within the housekeeping and janitorial division will increase 22.6 percent; and security guard positions will increase 18.8 percent. Importantly, however, other occupations within the industry are projected to decline significantly. File clerk positions will decrease 40 percent; computer operator positions will decrease 22.8 percent; personal care and service worker positions will decrease 15.4 percent; and mail clerk/mail machine operator positions will decrease 12.7 per-

PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

cent. These figures demonstrate that the overall stability—or even expansion—of an industry does not necessarily translate into security or opportunity for every employment category within that industry. These projected employment decreases are not necessarily representative of issues specific to the gambling industry; they may instead reflect national or global trends that exist across industries. Employment Advantages For individuals who enjoy careers working with other employees in teams or working directly with members of the public, a career in the casino industry may be rewarding. The benefits and hours of employment are very competitive when compared to those of other industries, and the wages— depending on the job and its educational requirements—may be very stable and competitive. The industry offers opportunities for pay raises and promotions based on superior job performance, and employment in the industry is expected to remain stable and secure. Additionally, careers in at least some segments of the casino industry are available in many states. Regardless of whether one prefers an urban or rural location or to work for a small or large casino, prospects for employment exist across the board.

Gambling Industry Employment 2008

Projected 2018

25,600

29,800

1,200

1,400

32,000

37,200

5,400

6,300

9,700

11,400

300

400

Occupation Gaming dealers Gaming managers Gaming services workers Gaming supervisors Security guards and gaming surveillance officers Ushers, lobby attendants, and ticket takers

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Annual Earnings The casino industry is heavily influenced by the state of the economy in general. The AGA reports that commercial casinos in the United States generated gross gaming revenues of more than $32.5 billion in 2008. Importantly, casinos must give back a substantial portion of their gaming revenues to state and local governments. In fact, of the $32.5 billion in gaming revenues, casinos gave back approximately 17 percent, or $5.6 billion, in taxes. Total U.S. gaming revenue, which includes many different forms of gambling, including commercial and Native American casinos, lotteries, legal bookmaking, and charitable gaming and bingo, was $90.9 billion in 2007. In 2008, this number increased by 1.5 percent to $92.3 billion.

Casino Industry These statistics do not include entertainment, lodging, or dining revenues, which also total in the billions of dollars. It is fair to assume, however, that when gaming revenue is static or declining, the other revenue categories at casinos will be static or declining as well. If fewer customers patronize casinos, all portions of the industry will suffer. If customer volume remains high but each patron gambles less money, it is likely that patrons will spend less on entertainment, food, and lodging as well. As the economy improves, consumers are likely to return to casinos as a popular form of entertainment, and gross gaming revenues, as well as casino employment figures, will improve.

RELATED RESOURCES FOR FURTHER RESEARCH American Gaming Association 1299 Pennsylvania Ave. NW, Suite 1175 Washington, DC 20004 Tel: (202)552-2675 http://www.americangaming.org Casino Careers 2327 Ridgewood Plaza, Suite 205, New Road Northfield, NJ 02885 Tel: (609) 813-2333 http://www.casinocareers.com National Indian Gaming Association 224 2d St. SE Washington, DC 20003 Tel: (202) 546-7711 http://www.indiangaming.org Navegante Group 1100 Grier Dr. Las Vegas, NV 89119 Tel: (702) 798-1000 http://www.navegantegroup.com

ABOUT

THE

AUTHOR

Andrew Walter is an attorney licensed to practice in the state of Connecticut and is employed as an attorney at the Connecticut Supreme Court. He received a bachelor’s degree in international man-

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agement, with a minor in English, from Gustavus Adolphus College in St. Peter, Minnesota, and a juris doctorate degree from Roger Williams University School of Law in Bristol, Rhode Island. He has a lifelong interest in state-funded and private gaming and has worked for two state lotteries, researching and writing on legal and public policy issues affecting gambling institutions nationwide.

FURTHER

READING

Cornell Hospitality Quarterly. “Focusing on Gaming,” May, 2008. Durham, Steve, and Kathryn Hashimoto. The History of Gambling in America. Upper Saddle River, N.J.: Prentice Hall, 2007. Eade, Vincent H., and Raymond H. Eade. Introduction to the Casino Entertainment Industry. Upper Saddle River, N.J.: Prentice Hall, 1997. Institute for Career Research. Careers in the Gaming Industry: Casino Resort Employment— Dealers to Managers, State Regulators. Chicago: Author, 2007. Roberts, Chris, and Kathryn Hashimoto. Casinos: Organization and Culture. Boston: Prentice Hall, 2010. Rudd, Denis P., and Lincoln H. Marshall. Introduction to Casino and Gaming Operations. 2d ed. Upper Saddle River, N.J.: Prentice Hall, 2000. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. University of Nevada, Las Vegas, International Gaming Institute. The Gaming Industry: Introduction and Perspectives. New York: John Wiley & Sons, 1996. Vosk, Stephanie. “Indian Casinos’ Revenue Growth Surges.” Cape Cod Times, August 24, 2008.

©Angelo Gilardelli/Dreamstime.com

Chemicals Industry

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Explosives Manufacturing; Paint, Coating, and Adhesive Manufacturing; Pesticide, Fertilizer, and Other Agricultural Chemical Manufacturing; Petrochemical Manufacturing; Photographic Film, Paper, Plate, and Chemical Manufacturing; Printing Ink Manufacturing; Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing; Soap, Cleaning Compound, and Toilet Preparation Manufacturing; Synthetic Dye and Pigment Manufacturing Related Industries: Petroleum and Natural Gas Industry; Pharmaceuticals and Medications Industry; Plastics and Rubber Manufacturing Industry; Textile and Fabrics Industry Annual Domestic Revenues: $632 billion USD (Research & Markets, 2007) Annual International Revenues: $1.702 trillion USD (Research & Markets, 2007) Annual Global Revenues: $2.334 trillion USD (Research & Markets, 2007) NAICS Numbers: 3251-3253, 3255-3259

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DEFINITION

Summary The chemical industry processes raw materials to manufacture a wide variety of products that can be sold directly for use in manufacturing, construction, or agriculture, among other sectors. These products include basic chemicals (including petrochemicals, industrial gas, dye, pigments, alkalies, gum and wood chemicals, and other organic and inorganic chemicals), resins, synthetic rubber, synthetic fibers, agricultural chemicals (such as fertilizers and pesticides), paint, coating, adhesives, soaps, cleaning compounds, printing ink, explosives, and photographic chemicals. The chemical industry comprises many large companies, as well as a large number of small and midsize companies worldwide. The North American Industrial Classification System categorizes the pharmaceutical industry as a subsector of the chemical industry, but that industry is normally treated separately, and it is not considered to be part of the chemical industry for the purposes of this overview. History of the Industry There is evidence of chemical manufacturing dating back to the Egyptian civilization between 6000 and 2000 b.c.e., which produced

Chemicals Industry plaster, paper, glass, and various medicines. However, the modern chemical industry is said to begin in the middle of the eighteenth century, when increasing scientific knowledge of chemistry developed alongside an increasing demand for chemical products. Antoine Lavoisier made significant contributions to the science of chemistry by defining the process of combustion through chemical action of oxygen and subsequently established chemical nomenclature and isolated thirty-three elements that would be included in the later periodic table of elements. Lead-coated chambers were developed by John Roebuck in 1746 and provided cheap, acid-proof containers capable of holding sulfuric acid. They were useful in the production and transportation of acids used to treat metals. With the Industrial Revolution came an increasing demand for raw materials, such as those used to make soap and textile dyes, in greater quantity and quality while maintaining low prices. Nicolas Leblanc in France patented a process for massproducing sodium bicarbonate, which is used in the soapmaking process. This technology quickly traveled beyond France’s borders, and by the middle of the nineteenth century England rose as the leader in the chemical industry as a result of the country’s efficient entrepreneurial leadership, abundant raw materials, ability to transport materials, and exploitation of the Leblanc process. The first evidence of the chemical industry in America came in 1773 with the production of the first lead sulfuric-acid containment chamber, designed by John Harrison, who learned the process

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Inputs Consumed by the Chemical Products Industry Input

Value

Energy Materials Purchased services Total

$32.1 billion $306.8 billion $86.7 billion $425.6 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

in England. The need for gunpowder fueled America’s interest in the chemical industry and heightened the importance of importing raw materials such as sulfur. Charles Goodyear discovered that the combination of sulfur and rubber produced a hard shell and began producing hard rubber in the mid-1800’s. Production skyrocketed by the end of the century with the use of rubber tires on bicycles. With the development of gas plants came a rise in ammonium sulfate production, and with the discovery of salt deposits came the use of potash in agriculture, replacing manure and guano organic fertilizers and beginning the rise of artificial fertilizers. Breakthroughs in organic chemistry beginning in the early nineteenth century allowed scientists to discover new products such as synthetic dyes. The first synthetic die, mauve, was discovered by William Perkin and patented in 1856. By 1880, synthetic dyes had replaced natural dyes of many colors. The United States beThe Chemical Products Industry’s gan to compete seriously in the international chemical industry during World Contribution to the U.S. Economy War I. With supplies cut off from Germany, the need for a more independent Value Added Amount structure became apparent, and several Gross domestic product $212.8 billion private U.S. companies merged to form Gross domestic product 1.5% larger, more competitive firms. World Persons employed 849,000 War II sparked another period of growth Total employee compensation $87.5 billion for the U.S. chemical industry, which developed the capability to produce fibers Source: U.S. Bureau of Economic Analysis. Data are for and plastics from petrochemicals. 2008. Despite experiencing a crisis in the late 1960’s caused by the rise of chemical in-

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Chemicals Industry

of Labor. The chemical industry is composed of major corporate producers, as well as thousands of smaller and midsize companies located throughout the world. These companies subject raw materials to various chemical processes to manufacture what are generally intermediate products used by other industries to manufacture other goods. Some chemical products, however, are sold directly to consumers. These include cosmetics, cleaning solvents, and pesticides. The area of specialty chemicals is rapidly growing to meet the needs of both chemical companies and consumers. Specialty chemicals, which include coatings, electronic chemicals, and advanced polymers and plastics, have received increased interest in part as a result of the economic downturn of 2008-2009. As the industry has experienced reduced production rates in the wake of this downturn, it has shifted research, development, and production capacity to this area of growing demand. Increased concerns over environmental protection and climate change have also affected the chemical industry. Companies are seeking both to reA scuba diver’s wetsuit is made from neoprene, a type of polymer. (©Dirkduce their own environmental footjan Mattaar/Dreamstime.com) prints and to develop technologies for sale to other industries that would enable them to reduce their greenhouse gas emisdustries in other countries, the chemical industry sions and other sources of pollution. Many spein the United States exploited advances in chemicialty chemical products are used to produce cal engineering to increase its production of mateenergy-efficient appliances, for example. Nanorials while minimizing costs. Further, advances in technology may also result in products that can be science, specifically polymer science, enabled comproduced with less energy and less waste. panies to manufacture more and better synthetic The U.S. government is responsible for enactfibers, plastics, paints, coatings, and adhesives. The ing and enforcing regulations to protect human chemical industry thus experienced a steady rise and environmental health and safety. As climate into the twenty-first century. change and greenhouse gas emissions become part of that mandate, legislative and regulatory acThe Industry Today tion are likely to have significant effects on the The chemical industry continues to grow and chemical industry, altering production methods, expand in the contemporary era and remains a costs, and ultimately the prices charged. Some critical component of the U.S. economy. The industry is a key employer, employing about 560,000 chemicals and chemical products—such as plastic workers in 2008 according to the U.S. Department bags—will see decreased demand as their use is

Chemicals Industry limited by environmental concerns. At the same time, the industry’s interest in the market for green and energy-efficient technologies may lead it to create lucrative new products for that market, and efforts by chemical manufacturers to reduce the toxicity of both their products and their by-products are likely to continue. In response to concerns over environmental management codes, many chemical industry trade associations have developed the Responsible Care Initiative. The goal of this initiative is to encourage companies to improve their environmental and safety performance. Many large chemical companies, accounting for up to 90 percent of the output of basic chemicals, follow the initiative’s guidelines. While there are greater numbers of small chemical companies, they generally are not members of these associations, and many of them are not required to report hazardous waste or toxic chemicals. Thus, it is unknown whether small companies are adhering to the guidelines. The chemical industry has enjoyed steady rises in the production of most chemicals during the twenty-first century, but it has had to overcome

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many adversities to do so. In 2005, the Gulf Coast, which is home to a number of major chemical plants, was barraged with hurricanes that left many plants unable to run for many months. The global economic crisis of 2007-2009 again sent the chemical industry into crisis mode because it decreased the demand for the chemicals used in construction and automobile production. Companies implemented many cost-cutting measures in order to survive, including downsizing staffs and reducing work hours or pay for those remaining. Reduced profits led to many mergers and consolidations of chemical companies, and the merged businesses eliminated redundant employees and resources. Many companies focused on research and development to improve production processes, as well as automating those processes and further reducing the number of employees needed to run a facility. These efficient cost-cutting measures have secured many chemical companies during the financial crisis, and, while many employees were laid off, overall industry output and profits have rebounded and are set to increase in the future. Globalization, including the expansion of for-

More and more plastic bottles are being made from recyclable materials. (©Angelo Gilardelli/Dreamstime.com)

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Chemicals Industry

eign production, is continuing to increase. U.S. corporations expect to encounter greater competition from abroad in the future, as well as intense competition from other U.S. companies to open and succeed in new international markets. The greatest developments are occurring in the Middle East and Asia, where great efforts are underway to recruit talent and improve technology. As foreign chemical production increases, global supply is expected to exceed demand, and all chemical manufacturers will need to formulate and execute plans to remain competitive when this occurs. The chemical industry has experienced steady linear growth in the twenty-first century, but this growth has been slowed by the global economic crisis. Many companies have been able to institute cost-cutting measures that allowed them to survive, and they are now focused on remaining competitive in an increasingly global market. Industry transformations, including mergers, consolidations, and increased focus on specialty chemicals, will provide opportunities for strong chemical firms to thrive and remain competitive in the future.

INDUSTRY MARKET SEGMENTS The chemical industry comprises businesses that range from small companies with just a handful of employees to massive companies employing tens of thousands of people. The smallest companies are likely to be local concerns, catering to their immediate regions. The largest companies are multinational, competing throughout the globe and enjoying the advantage of significant financial reserves and economies of scale. Small and midsize chemical businesses are often grouped together and referred to as small and medium enterprises (SMEs). SMEs constitute the majority of chemical companies. Many of them arise when chemists working for large businesses or in the academic community strike out on their own and found new firms. SMEs employ nearly 50 percent of the chemists working in the private sector. They manufacture a wide range of products, and many sell those products to larger chemical companies, which may use them as raw materials to create more complex products. Additionally, many SMEs focus on custom specialty products, selling

them to both larger chemical companies and other types of manufacturing plants. They are able to provide individualized services and appeal to customers who want to purchase in smaller quantities than would be possible at a larger company. The majority of all chemical companies are relatively small and specialized. SMEs are known to contribute much of the innovation seen in the chemical industry, and they contribute in large part to the United States’ ability to remain competitive in an increasingly global market. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the mean annual salary of a chemical manufacturing company’s chief executive was $195,190 in 2009. The mean annual salary of a chemical engineer was $90,190, that of a chemist was $70,820, and that of a chemical technician was $47,300. Chemical equipment operators earned an average of $45,330 per year, and members of chemical assembly teams earned an average of $27,550 per year. Small-business owners’ incomes may vary dramatically. The owner of a start-up may have no earnings to speak of as the company gets off the ground. Owners of well-established, highly successful businesses, though, can draw whatever salaries they wish from their companies’ profits, and they may be able to pay themselves considerably more than the average chief executive salary. Clientele Interaction. Almost all chemical manufacturers market to other businesses, whether to other manufacturers or to retailers, so their clients are the purchasing agents and other decision makers at those firms. Generally speaking, most employees do not interact with clients, as clientele interaction is assigned to dedicated sales and marketing staff or to business owners and managers. Technical staff may be called upon to make presentations to potential clients, however. Small businesses often trade on their ability to provide personalized service that large companies cannot, so sales representatives attempt to develop strong relationships with clients in order to cultivate both repeat business and new business based on reputation and referrals. Amenities, Atmosphere, and Physical Grounds. Chemical manufacturing companies’ production facilities are designed for functionality, efficiency, and safety. Many of a company’s raw materials and products may be toxic or hazardous

Chemicals Industry

293

This plant produces phosphate, an important ingredient in fertilizer. (©Judith Frederich/Dreamstime.com)

if improperly handled, so industrial safety gear and precautions are necessary. For some products, strict cleanliness may be required, while other types of facilities are likely to resemble any industrial production floor. Smaller companies may combine production and administrative offices in a single location, while larger firms may separate the two. Typical Number of Employees. Depending on the type of manufacturing being done, a small or midsize chemical company may employ anywhere from just a handful of people to five hundred people. So many companies have downsized, however, that the average number of employees is lower than it was before the global financial crisis. Traditional Geographic Locations. Because chemical companies use and produce substances that are often costly to transport, they tend to be located in or near regions with strong transportation infrastructures. Thus, SMEs often cluster together or concentrate themselves around larger chemical companies. Both small and midsize businesses often colocate with other firms. Typically, these companies concentrate in areas where there is a spe-

cific manufacturing focus, such as the Great Lakes region, which is the center of the U.S. automotive industry, or the Gulf Coast, near petroleum and natural-gas plants. They may also locate themselves close to major shipping ports. Pros of Working for a Small or Midsize Chemical Company. The culture within a small chemical company is in general friendlier than that in a larger firm, while also being more motivated and entrepreneurial. Also, returns are generally higher because sales are usually higher per employee than they are in larger companies with many employees. Individuals tend to stay in their positions for longer periods of time and are typically very experienced in their jobs. Further, smaller companies’ success is often dependent on their ability to excel in the production of specialty chemicals. Thus, individuals looking to excel in the area of research and development often find employment by SMEs very satisfying and the environment more conducive to their success. Cons of Working for a Small or Midsize Chemical Company. Small companies must survive on fewer employees, so those employees may

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Chemicals Industry

need to take on more widely diverse sets of tasks and responsibilities. For example, a manufacturing worker may also be responsible for overseeing safety techniques, while a larger company may employ a dedicated safety officer. Midsize businesses, while employing somewhat larger workforces, still have leaner staffs than do large companies. The small staffs of SMEs may create barriers in certain areas, such as regulatory compliance, which requires extensive measures and a significant amount of labor and oversight. Large companies have more resources and are able to proactively implement measures to ensure compliance. With the increasing trend toward globalization in the chemical industry, many midsize companies are merging with or being acquired by large companies, pooling resources to allow them to compete internationally. Employees of such companies may therefore have less job security than they might otherwise have, since mergers and acquisitions often lead to downsizing to eliminate redundant positions. Costs Payroll and Benefits: Small chemical companies are able to divide their profits among fewer individuals and are often able to pay them competitive salaries. Benefits, including vacation and sick time, are often available to these employees, and many smaller companies offer flexible schedules as well. Supplies: Chemical manufacturing companies require specialized scientific equipment, including safety equipment, as well as manufacturing machinery and tools, computers and specialized software packages, and containers appropriate to the chemicals being manipulated and produced. They also require standard office supplies and—if they perform their own cleaning and maintenance—industrial cleaning materials. External Services: Small and midsize chemical manufacturers may contract such services as cleaning, maintenance, security, shipping, accounting and tax preparation, marketing, or legal counsel. They may also need to hire an external vendor to handle hazardous waste disposal. Utilities: Chemical manufacturers require all of the typical utilities, including water, sewage, electricity, gas/oil, telephone, Internet access,

and hazardous waste disposal where it is provided by a government entity. (Otherwise, a private disposal company must be contracted.) Taxes: Chemical manufacturers must pay corporate and property taxes, including payroll taxes. Sales taxes must also be collected on all products sold at retail, but this is unusual in the chemical industry. Large Businesses Large chemical companies often are chemical plants producing on a grand scale. Large companies are able to bring in higher sales and have greater market advantages, as well as a greater ability to handle economic hardship. They are in a better position to compete in an increasingly globalized industry. Potential Annual Earnings Scale. According to the BLS, the mean annual salary of a chemical manufacturing company’s chief executive was $195,190 in 2009. The mean annual salary of a chemical engineer was $90,190, that of a chemist was $70,820, and that of a chemical technician was $47,300. Chemical equipment operators earned an average of $45,330 per year, and members of chemical assembly teams earned an average of $27,550 per year. Clientele Interaction. The vast majority of employees at a large corporation contribute to the company’s main operations and have no interaction with customers. Such interaction is reserved mainly for sales professionals, who seek to develop personal rapport with their clients in order to solicit sales of their products. In addition, when dealing with clients that are themselves large corporations, senior management may interact with the senior management of a potential client firm. Amenities, Atmosphere, and Physical Grounds. Large chemical companies are often also chemical plants, and production facilities may be located outdoors or indoors. They typically include dedicated areas for waste treatment, maintenance and tool workshops, and shipping and receiving, as well as storage facilities. Large chemical companies often have laboratories on site to analyze or research chemical products and conduct quality control analysis. Plants are usually clean, although their continually running machines are sometimes loud and the interiors of many plants can be hot. Hardhats and safety goggles are manda-

Chemicals Industry tory and worn throughout chemical plants. Workers are required to maintain such safe practices, as well as to practice extra safety procedures when working with hazardous chemicals. Protective gear is often necessary and may consist of body suits coupled with breathing devices when working close to harmful fumes. Typical Number of Employees. Large chemical companies account for most of the jobs in the industry, and they may employ tens of thousands of people. The Dow Chemical Company, one of the largest chemical companies in the United States, employs fifty-two thousand people. Traditional Geographic Locations. Large chemical plants are typically located near resources that will benefit them. Locations near sources of raw materials or near shipping ports help reduce transportation and shipping costs, while being close to water also offers advantages, as water is a key component of the chemical production process. A great number of plants are located on the Gulf Coast, in Texas and Louisiana, near a center of the petroleum and natural gas industries. There is also a cluster of plants on the West Coast, near many electrical component manufacturers. Pros of Working for a Large Chemical Company. Large, well-established chemical companies are able to expend more resources on research

Carbon-fiber-reinforced polymer is a lightweight, strong material often used in bicycles and bicycle forks. (©iStockphoto.com)

295

and development and are able to recruit and maintain talented individuals who can devote themselves exclusively to this area. Smaller companies may require researchers to perform multiple functions, splitting their focus and energy. Large businesses’ leaders are often more knowledgeable about global trends and are in better positions to handle changes in the market. Together with their greater financial resources, this market savviness may provide employees with greater job stability. Opportunities for advancement, especially in management, are greater. Further, employees seeking to relocate to other parts of the country or the world may be able to transfer within their companies. Cons of Working for a Large Chemical Company. The bureaucratic, compartmentalized structure of most large companies can hamper their response times and delay the implementation of necessary changes. Further, the sheer quantity of chemicals produced by large corporations can pose significant dangers to human health and the environment if those chemicals and their by-products are not properly handled. Large corporations are tightly regulated by the Environmental Protection Agency and the Occupational Safety and Health Administration, creating extra layers of bureaucracy and requiring that a great deal of effort and resources be devoted to compliance. If, despite such compliance, an accident occurs, it may be large enough to create serious public relations and liability problems for a company. Costs Payroll and Benefits: Large chemical corporations often pay production and transportation workers hourly, while they pay scientists, chemical engineers, and managers annual salaries. They are often able to provide better benefits to their employees than are smaller firms. Supplies: Large chemical plants require various units and vessels to maintain certain temperatures or pressures and hold large volumes of chemicals. Certain chemical reactors may be needed for stirring, mixing, heating, or cooling chemicals. Storage tanks are necessary to hold raw materials, final products, and waste by-products. Larger chemical companies often have their own laboratories and require specialized instruments such as those used for gas chroma-

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Chemicals Industry

tography and high-performance liquid chromatography. They may also require industrial cleaning materials and tools to maintain their machinery and equipment, and all such corporations require large amounts of office supplies and the safety equipment necessary to comply with workplace regulations and guidelines. External Services: Large chemical companies may contract cleaning; catering; laboratory utilities, provisions, and maintenance; machining services; and industrial equipment maintenance. They may also contract marketing, public relations, or lobbying services, as well as human resources and security. Hazardous waste disposal is a significant concern for large chemical companies, and they may hire a dedicated hazardous waste management company to accomplish it. Utilities: The utilities necessary to run a large chemical plant represent a large portion of its main operating costs and in many cases are generated and distributed by the facility itself. These utilities include water, sewage, electricity, gas/oil, telephone, Internet access, and hazardous waste disposal. Taxes: Large chemical companies pay local, state, and federal income taxes, as well as propertay taxes. They are also responsible for collecting sales taxes if they sell their products at retail. Multinational companies must pay taxes in multiple countries, and any company with international distribution channels may need to pay tariffs or duties on exports and imports.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Given the wide variety of companies involved in the chemical industry, the organizational structure and specific job roles vary. Factors that affect the number and types of jobs are the size of a company and the production methods needed in the manufacturing of a wide range of chemicals and materials. In smaller, personally owned companies, there are more jobs than employees, so workers and owners must each handle multiple tasks. A relatively large percentage of the positions at smaller companies are skilled, technical positions, since small

companies typically focus on research and development of specialty chemicals. Larger companies hire more unskilled workers because they produce on such a mass scale that modern production methods require the type of strict division of labor that leads to each production line task being relatively simple and repetitive. At such large firms, then, technical employees design production systems that are employed by less skilled employees. While a larger company may have a wider range of positions than a smaller one, many tasks are similar throughout the chemical industry. The following umbrella categories apply to the organizational structure of businesses in the chemical industry: ■ ■ ■ ■ ■ ■

■ ■ ■

Business Management Sales and Marketing Facilities and Maintenance Environmental Health and Safety Security Technology, Research, Design, and Development Production Distribution Human Resources

Business Management Managers within the chemical industry include executive, administrative, engineering, and sales managers, who oversee the general operations and strategic planning of their divisions. These positions require college degrees, typically bachelor’s degrees within their specialties, along with technical experience. Managers are responsible for setting and achieving corporate goals and work with many departments. They are often responsible for both domestic facilities and foreign satellite offices. Executive managers oversee entire corporate operations and coordinate operations within their companies. They determine and research processes to improve productivity. Executive manager is generally the highest-paid position within a company, averaging $195,190 per year in 2009 according to the BLS. General and operations managers put into effect the policies and daily operating plans necessary for a company to achieve its goals. The average salary for this position in 2009 was about $134,810 per year.

Chemicals Industry Industrial production managers oversee and plan manufacturing operations within the boundaries of specific cost, quality, and quantity boundaries. Their average salary in 2009 was $100,930. Engineering managers require college degrees in engineering; they design plant facilities, provide cost estimates, and plan daily operations. This position accounts for nearly 50 percent of all managerial positions within the chemical industry, and the 2009 average salary for engineering managers was $122,240. Natural sciences managers plan and direct activities in the areas of life sciences, physical sciences, mathematics, and statistics relevant to chemical production. The average salary of this position in 2009 was $152,840. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Technology Officer (CTO) Chief Operating Officer (COO) General or Operations Manager Administrative Support Manager Human Resources Manager Purchasing Manager Industrial Production Manager Transportation, Storage, and Distribution Manager Engineering Manager Natural Sciences Manager General Counsel

Sales and Marketing Sales and marketing personnel promote the sales of their companies’ products. They develop advertising, marketing, and promotional campaigns to sustain and expand sales, and they are also responsible for public relations. A typical sales group consists primarily of managers and sales representatives and engages in direct contact with existing and new customers to discuss sales, systems, and capital equipment. Some positions may require interactions with other areas of the company, including market management and technical support, and sales managers must be involved in developing plans to increase corporate profits. Sales and marketing positions require bachelor’s degrees in engineering or other technical areas, as well as experience in technical sales. Travel across the

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United States and abroad is common and required for many of these positions. Sales managers supervise sales representatives and typically have degrees in marketing or technical backgrounds in chemistry or chemical engineering. According to the BLS, the average annual salary for such managers in 2009 was $123,800. Sales representatives promote their companies’ products through direct interaction with potential customers. Because these customers are wholesale buyers at manufacturing companies, chemical sales representatives need technical or scientific backgrounds. In 2009, the average salaries of wholesale and manufacturing chemical sales representatives were $79,740 for those selling technical and scientific products and $68,770 for those selling other types of products. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Sales Manager Market Sales Manager Global Marketing Manager Sales Representative General or Operations Manager Account Manager Demonstrator and Product Promoter Sales Engineer Telemarketer

Facilities and Maintenance Facilities and maintenance personnel maintain and repair the mechanical equipment used to store, produce, and manipulate chemicals. A number of maintenance and repair workers are involved in the general maintenance of machines, mechanical equipment, and overall facilities. They troubleshoot problems and repair mechanical equipment, fitting pipes, welding, engaging in carpentry, and repairing both electrical and mechanical equipment. Other maintenance workers maintain machinery and may perform duties such as lubricating machinery, changing parts, or installing piping systems, valves, and vessels. Hazardous waste technicians are responsible for the proper storage and transportation of hazardous waste. They must follow strict regulations for the handling and disposal of such waste and adhere to safety precautions. Most of these positions do not require postsec-

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ondary education but rather receive on-the-job training. Certain specific skill sets may be required, as is the case with the instrument repairers who are responsible for the maintaining electronic equipment. As the machines used to produce chemicals run continuously, maintenance personnel often work round the clock, including nights and weekends. Facilities and maintenance occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Maintenance Manager Maintenance and Repair Worker Pipefitter Machinist Lead Burner Boilermaker Instrument Repairer Hazardous Waste Technician Cleaning Personnel Manager Custodian/Janitor

Environmental Health and Safety The processes used to produce chemicals, especially on a mass scale, pose potential threats to worker safety and environmental health. A number of laws and regulations attempt to ensure safety in the workplace. Strict compliance with standards of environmental health and safety is crucial for chemical companies, especially large facilities. As a result, these companies employ staff to ensure that standards and regulations are obeyed. Safety specialists often have bachelor’s degrees in engineering or another technical specialty and knowledge of federal and state regulations. Certain certifications in environmental health and safety may also be required and include standards enforced by the Occupational Safety and Health Administration (OSHA), incident management, and hazardous communications training. These personnel develop and implement strategies to comply with regulations and cooperate in compliance audits, and they train workers in best practices. Other duties may include environmental and chemical sampling, maintaining material and safety data sheets (MSDSs), first-aid management, incident investigations, and complying with workers’ compensation regulations. Occupational health and safety specialists earned an average of $68,140 in 2009, while occupational health and safety tech-

nicians earned an average of $48,390, and health and safety engineers earned an average of $79,090. Environmental health and safety occupations may include the following: ■ ■ ■ ■ ■

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Environmental Engineer Plant Safety Manager Safety Manager Director of Regulatory Affairs Environmental Health and Safety Manager Fire Protection Engineer Firefighter Occupational Health and Safety Specialist Occupational Health and Safety Technician Health and Safety Engineer

Security Security has become a top priority for the chemical industry following the terrorist attacks of September 11, 2001. As a result, the Responsible Care Security Code has been instituted, putting in place a plan for enhanced security of facilities that manufacture or store potentially dangerous chemicals. The code incorporates security for stationary facilities, transportation networks, and computer networks and systems. Strategic security plans are required within chemical facilities, and assessments of compliance are recorded during security vulnerability assessments (SVAs). Managers of security departments are responsible for demonstrating their adherence to the code. Security managers supervise all plant security operations and ensure that facilities, personnel, and products are safe. They determine their companies’ security needs and manage the installation and use of security and surveillance systems. They oversee investigations of any suspicious activity and report to the appropriate authorities. They must also meet all reporting and contract compliance requirements and ensure that all staff are trained to follow these regulations. Security managers should have college degrees in criminal justice or business administration, as well as previous experience in management and security or some type of military or law enforcement background. Protective service managers earned an average of $58,990 in 2009.

Chemicals Industry OCCUPATION

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SPECIALTIES

Chemical Engineers Specialty

Responsibilities

Chemical process design engineers

Design equipment and processes to produce chemical changes in elements and compounds.

Chemical research engineers

Conduct research on chemical processes and equipment to test or modify engineering theory.

Chemical test engineers

Supervise and use instruments, equipment, and control devices necessary to test, record, and simplify chemical processes. They conduct tests to check the performance of chemicals and fuels.

Chemical-engineering technicians

Apply chemical engineering principles and technical skills to assist chemical engineers in developing, improving, and testing chemical-plant processes, products, and equipment. They prepare charts and diagrams, and they record engineering data to clarify design data.

The role of security guards in chemical plants has become increasingly important. Guards protect against theft or violence. They inspect premises and observe and investigate suspicious activities. They may also play a role in planning and implementing security protocols. The average annual salary for security guards in 2009 was about $31,980. Security occupations may include the following: ■ ■ ■

Security Guard Shift Supervisor Security Manager

Technology, Research, Design, and Development Technology, research, design, and development chemists conduct qualitative and quantitative analyses and experiments. They seek to develop new products, as well as contributing to quality and process controls for existing products. They analyze and test materials at a molecular level to develop new uses for existing substances, as well as developing new materials. A bachelor of science degree is needed for these positions, and many jobs require master’s degrees or Ph.D.’s in addition to knowledge of computer modeling and statistics. Experi-

ence in high-performance liquid chromatography, gas chromatography, and product development may also be necessary to obtain these positions. The average salary for a chemist is $70,820. These types of positions are relatively secure, as the chemical industry is dependent on technological advances that stem from research and development. Chemical technicians assist scientists in conducting laboratory tests. They earn average salaries of $47,300. Chemical engineers are crucial to the design of mass-production equipment. They are also involved in research and development of new chemicals and chemical applications. Bachelor’s degrees in engineering are required and master’s degrees are often preferred for these positions. The average salary for this position is $90,190. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■

Chemist Chemical Engineer Chemical Technician Materials Scientist Environmental Science Technician Natural Sciences Manager

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SPECIALTIES

Chemical Equipment Operators Specialty

Responsibilities

Batch-still operators

Tend batch stills to separate, by distillation, liquids having divergent volatilization temperatures.

Catalytic converter operators

Control catalytic converters to alter chemical composition of liquid or gaseous substances according to knowledge of the process and the sequence of operations.

Chief operators

Control chemical process equipment from an instrumented control board or other control station. They monitor the recording instruments, panel lights, and other indicators and listen for warning signals to verify conformity of the process conditions to the standards of safety and efficiency of the plant.

Continuous-still operators

Control continuous stills from a control station to separate and condense liquids and maintain process control by instrument readings and test results.

Dissolver operators

Control equipment that dissolves and precipitates chemicals used in manufacturing chemical products such as butadiene and styrene.

Fermentation operators

Control fermentation chambers and tanks to produce enzymes from fungal or bacterial growth for use as industrial catalysts.

Kettle operators

Control heat reaction kettles to process liquid and solid materials into specified chemical products.

Saturator operators

Control saturator tanks and auxiliary equipment to precipitate ammonium sulfate.

Specialties operators

Control equipment to prepare chemical solutions to meet customer orders or specifications.

Production Production occupations are essential to a facility’s overall functioning. While plant automation is increasingly reducing the number of jobs needed for production, a great number of positions remain necessary. An advanced degree is not required for production work, and many employees are hired directly from high school in entry-level jobs. There is plenty of room for advancement, as individuals acquire raw skills, technical training, and greater responsibilities. Chemical operators supervise entire production processes and workers involved in those pro-

cesses. They oversee operations and ensure that final products meet their necessary specifications. Many operators begin in lower production positions and advance by gaining experience and technical training. The average salary of a chemical plant and system operator in 2009 was $53,880. An array of other positions are included in this category, and very specific technical skills are required for each. These skills can be obtained through technical training either on-site or through two-year technical programs. Some average salaries for these other positions include $37,540 for inspectors, testers, sorters, samplers, and weighers;

Chemicals Industry $33,130 for furnace, kiln, oven, drier, and kettle operators and tenders; and $45,300 for chemical equipment operators and tenders. Production occupations may include the following: ■ ■ ■ ■ ■ ■

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■

■ ■ ■

■

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Chemical Plant Operator Plastics Processing Machine Operator Rubber Processing Machine Operator Water and Waste Plant Operator Team Assembler Extruding and Drawing Machine Setter and Operator Molding, Coremaking, and Casting Machine Setter and Operator Welding, Cutting, Soldering, and Brazing Worker Stationary Engineer/Boiler Operator Chemical Equipment Operator Extruding, Forming, Pressing, and Compacting Machine Setter and Operator Inspector, Tester, Sorter, Sampler, and Weigher Coating, Painting, and Spraying Machine Setter and Operator Furnace, Kiln, Oven, Drier, and Kettle Operator

Distribution Transportation and material-moving occupations are critical to the chemical industry’s ability to deliver products to customers. Industrial trucks or tractors are generally necessary to move raw materials and finished products through and between facilities. Chemicals must be handled safely and in accordance with governmental regulations. Previous experience, as well as a commercial driver’s license, may be required in order to operate tractortrailers, but many jobs are open to individuals without experience or training. Loaders, for example, assist in loading and unloading materials onto railroad tank cars, trucks, and ships. Other material movers and laborers move materials from facilities to delivery vehicles. Packers typically assist in packaging materials and inspect products for quality control. Distribution positions often involve heavy lifting and working shifts that include evenings and weekends. For this reason, the pay scale is often higher

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than it is in other manufacturing industries. The average salary for freight, stock, and material movers in 2009 was $29,270, while their supervisors earned an average of $48,700. Distribution occupations may include the following: ■ ■ ■

■ ■ ■ ■

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Transportation and Material Mover Truck Driver Hand Laborer/Freight, Stock, and Material Mover Packer and Packager Conveyor Operator Machine Feeder and Offbearer Gas Compressor/Gas Pumping Station Operator Pump Operator Tank Car, Truck, and Ship Loader

Human Resources Human resources (HR) personnel recruit, hire, train, and fire employees. They administer payroll and benefits, respond to staffing issues, help employees who are relocating, and institute corporate workplace policies. They seek to increase productivity and improve employee motivation and relations. They also ensure that their companies adhere to their own policies and practices, as well as those mandated by law. An HR manager typically reports to a president or vice president of operations and oversees the activities of the HR department. Strong communication and leadership skills are key to successful management of the HR processes and ensure performance improvement, as well as employee retention within a company. The average salary for an HR manager was $106,250 in 2009. HR assistants may help develop and implement performance management protocols. They also work to ensure regulatory compliance and prepare affirmative action plans. HR staff also investigate employee complaints and address employee grievances. Typically, four-year bachelor’s degrees are required for these positions. Salaries for HR assistants averaged $39,860 in 2009. Human resources occupations may include the following: ■ ■

Human Resources Manager Human Resources Assistant

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Chemicals Industry

panies allows them to reduce departments and consolidate tasks, as well as to move certain opera■ tions to locations that are more cost-effective, in■ cluding those in other developing countries. ■ Chemical production continues to rise, even while employment in the industry is steadily declining. While nearly half of all employees in the industry are involved in production, installation, INDUSTRY OUTLOOK maintenance, or repair occupations, advances in production technology—including plant automaOverview tion—have resulted in fewer employees being An overall increase in output from chemical needed in these types of positions. Advancements companies has resulted from the industry overin automation have allowed machines to replace coming barriers such as the global recession of workers, with a net increase in accuracy and a decrease time and labor costs. Companies can thus 2007-2009, increasing raw material and energy cut production costs while maintaining or increascosts, and natural forces such as the hurricanes that ing output. However, these cuts reduce the numtore into the Gulf Coast in 2005. The U.S. chemical ber of production employees needed by the indusindustry experienced a reduction in output during try, so employment is expected to decline in these the recession, but it is in the process of recovering areas by up to 13 percent between 2008 and 2018. and is expected to remain competitive in the global This decline disproportionately affects unskilled market in part as a result of low natural-gas prices positions and simultaneously increases the techniand a weak dollar. In the wake of the economic crical skills required of supervisors, who must supersis, company mergers and consolidation have bevise computerized machines as well as human come increasingly common. The merging of comlaborers. Thus, the production employees remaining in the chemical industry need greater knowledge PROJECTED EMPLOYMENT bases on average than they once FOR SELECTED OCCUPATIONS did. Chemical companies are fightChemical Manufacturing ing to remain competitive, both by reducing overall costs to keep the Employment prices of their products low and by 2009 Projected 2018 Occupation finding specialty niches to occupy. Such niches allow companies to 36,220 33,200 Chemical equipment operators stand out from the competition in a and tenders specific, albeit limited, arena and 24,720 22,900 Chemical technicians to manufacture products that are in high demand among a limited 26,760 27,300 Chemists number of customers. Companies 54,820 70,200 Mixing and blending machine are continuing to fund research setters, operators, and tenders and development in order to compete effectively for these specialty 48,190 46,000 Packaging and filling machine and niche chemical markets, such operators and tenders as advanced polymers and plastics. Although the chemical industry Source: U.S. Bureau of Labor Statistics, Industries at a Glance, has experienced a downturn beOccupational Employment Statistics and Employment cause of economic and environProjections Program. mental challenges, it is recovering. With changes in production tech■

Benefits Specialist Executive Secretary Administrative Assistant Payroll and Timekeeping Clerk Bookkeeping, Accounting, and Auditing Clerk

Chemicals Industry

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nologies, mergers, and the ability to excel in specialty chemicals, as well as temporary pay cuts and other reduction measures, many companies have been able to overcome their challenges and will likely experience slow but steady growth in the future.

others. Asia is projected to became a key major player in the chemical industry in the near future, as its production and revenues increase significantly. Foreign competition in general continues to grow, placing pressure on the U.S. industry.

Employment Advantages The BLS projects a rapid decline in employment in chemical manufacturing, with a decrease of up to 13 percent from 2008 to 2018. This decline can be attributed to improved productivity, mergers and acquisitions, and a shift in production to foreign countries. Therefore, the competition for jobs in this industry is intense, and those individuals with experience and continuing education will have the advantage in attaining them. Because advances in production technology are increasing productivity and decreasing the demand for labor, there is an increasing need for workers with the skills to oversee computerized processes. At the same time, as the chemical industry’s workforce ages, it will need many young workers to replace retirees. Many of these positions requiring replacements are specialist positions that require unique skill sets and specialized training. Students who gain this type of specialized training will have a competitive advantage in the job market. Many companies in the United States and globally are interested in attracting young individuals and channeling them into training programs that will qualify them for work in these specialized areas. An advantage arises from competition from other sectors for these young workers, in that labor costs remain higher than average manufacturing rates.

RELATED RESOURCES FOR FURTHER RESEARCH

Annual Earnings With about $632 billion in annual revenues, the chemical industry is a major contributor to the U.S. economy. Although the industry experienced revenue declines during the global financial crisis of 2007-2009, many industry players expect marketing activity and profits to increase. The American Chemistry Council projected an increase in U.S. chemical output of 3 percent in 2010. Increases were expected globally as well, with the European Chemical Industry Council predicting a 4.7 percent increase. Projections throughout the chemical industry vary by specialty, with increases expected in some areas and decreases expected in

American Chemical Society 1155 16th St. NW Washington, DC 20036 Tel: (800) 227-5558 Fax: (202) 872-6067 http://www.acs.org American Chemistry Council 1300 Wilson Blvd. Arlington, VA 22209 Tel: (703) 741-5000 Fax: (703) 741-6050 http://www.americanchemistry.com American Institute of Chemical Engineers 3 Park Ave. New York, NY 10016-5991 Tel: (800) 242-4363 Fax: (203) 775-5177 http://www.aiche.org CHEMICAL AND ENGINEERING NEWS P.O. Box 3337 Columbus, OH 43210 Tel: (800) 333-9511 Fax: (202) 872-8727 http://pubs.acs.org/cen

ABOUT

THE

AUTHOR

Terry J. Shackleford is a 2001 graduate of Kansas State University with a degree in biochemistry; she received a Ph.D. from the University of Texas— Health Science Center Graduate School of Biomedical Science in 2008. Her thesis work was conducted at the University of Texas—M. D. Anderson Cancer Center and focused on identifying the mechanisms of regulation of a potential oncogenic protein, Jab1, which is known to be overexpressed

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in a number of tumor types. She also evaluated Jab1’s role in resistance to the breast cancer treatment trastuzumab (Herceptin). Her work has been disseminated at national and international meetings and is forthcoming in several scholarly journals. Her current research involves the development of blood-based biomarkers for pharmaceutical applications.

FURTHER

READING

Aftalion, Fred. History of the International Chemical Industry. Philadelphia: University of Pennsylvania Press, 1991. Arora, Ashish, Ralph Landau, and Nathan Rosenberg. Chemicals and Long-Term Economic Growth: Insights from the Chemical Industry. New York: John Wiley & Sons, 1998. Blair, Margaret M. Corporate Restructuring in the Chemical Industry in the Deal Decade: What Takeovers and Leveraged Buyouts Mean for Corporate Governance. Washington, D.C.: Brookings Institution, 1993. Boswell, Clay. “SMEs Continue to Hold a Sizeable Portion of the Market Place, Showing That It Still Pays to Be Nimble and Focused.” ICIS Chemical Business, July 25, 2008. http:// www.icis.com/Articles/2008/07/28/9142582/ global-chemical-small-and-medium-sizedenterprises-profiled.html. Chapman, K. The International Petrochemical Industry. Oxford, England: Basil Blackwell, 1991.

Chemical and Engineering News. “Facts and Figures of the Chemical Industry.” July 10, 2006. http://pubs.acs.org/cen/coverstory/84/ 8428factsandfigures.html. Landau, Ralph. “The Chemical Industry: From the 1850’s Until Today.” Business Economics, March 22, 2010. http://findarticles.com/p/ articles/mi_m1094/is_4_34/ai_56973853/ Landau, Ralph, and Ashish Arora. The Dynamics of Long-Term Growth: Gaining and Losing Advantage in the Chemical Industry in U.S. Industry in 2000: Studies in Competitive Performance. Washington, D.C.: National Research Council, 1999. Milmo, Sean. “Employee Numbers in the Chemical Industry Are in Decline: And an Aging Population Will Pose Challenges.” ICIS Chemical Business, February 28, 2008. http:// www.icis.com/Articles/2008/03/03/9104613/ chemical-industry-employment-levelscontinue-to-decline-in-the-us-and-europe.html U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Civil Services: Planning ©Gary Blakeley/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Government and Public Administration Career Cluster: Government and Public Administration Occupations Subcategory Industries: County Development Agencies; Government Community Development Agencies; Government Housing Programs, Planning, and Development; Government Land Redevelopment Agencies; Government Rural Development Administration; Government Urban Planning Administration; Regional Planning and Development Program Administration; Zoning Boards and Commissions Related Industries: Building Architecture Industry; Building Construction Industry; Federal Public Administration; Landscaping Services; Local Public Administration Annual Domestic Revenues: Federal expenditures on community planning and development: $8.5 billion USD (U.S. Department of Housing and Urban Development, 2010) NAICS Number: 9251

INDUSTRY

agencies, help determine how land and its resources are developed and managed in urban, suburban, and rural communities. Planning and development agencies exist at the local, county, state, and federal levels of government. Governmental entities do not earn revenues as for-profit businesses do. Instead, they are funded primarily by taxes, fees, and intergovernmental transfers, including federal grants to state and local governments. Civil planning agencies employ thousands of people, who work in such areas as urban planning, civil engineering, geology, demographics, and related disciplines.

History of the Industry The earliest urban plans in the United States were created for the cities of Philadelphia, Pennsylvania (1682); Annapolis, Maryland (1695); Williamsburg, Virginia (1699); and Savannah, Georgia (1733). In 1791, Pierre L’Enfant designed the plan for Washington, D.C., in the classic European Baroque tradition, employing such features

DEFINITION

Summary Civil planning services, also referred to as governmental community planning and development 305

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as diagonal and radial avenues that provided grand views of monuments and civic buildings. These early city plans were singular efforts and did not take into account future growth and other changes. The Industrial Revolution began in England, and after the United States achieved independence, it spread to the new nation and began to influence the growth of commerce and new businesses. Agricultural production increased, and millions of European peasants were displaced from their former farming jobs and needed to find new sources of employment. This pool of displaced laborers first moved to European cities in the eighteenth century, creating the industrial labor force that made the Industrial Revolution possible. During the nineteenth century, still more expropriated rural dwellers needed to find work. About 70 million of them left Europe, and about half of those migrants traveled to the United States, creating in that country a potential industrial labor

Civil planners are trained to take a holistic approach, viewing individual elements, such as housing, social needs, land use, and economic development, as a single picture (©Dreamstime.com)

force such as the one that had already transformed England. The sudden increase in the U.S. population greatly affected the supply of available housing. Services such as clean water, trash collection, and sewage proved to be incapable of handling such rapid growth, and soon outbreaks of cholera, typhoid, and yellow fever occurred. As a result, initial urban reforms in the United States were primarily aimed at disease prevention. Additional efforts at reform led to various planning movements, including the park movement and the City Beautiful movement. Other reform efforts, along with campaigns for housing regulations, attempted to improve public health by expanding and maintaining clean water supplies and improving sewage methods. Progressive-era reformers believed that an increase in governmental control would help alleviate the conditions resulting from unbridled growth, and they helped raise public concern to address the issues of overcrowding, poverty, and political corruption. Modern city planning was largely inspired by the Chicago World’s Fair in 1893, which commemorated the four hundredth anniversary of Christopher Columbus’s arrival to the New World in 1492. Designed principally by Daniel Burnham and Frederick Law Olmsted, the exhibition was a prototype for the ideal city. Featured at the fair were nearly two hundred buildings of classical design, which thereafter greatly influenced architecture, the arts, and the emerging industrial optimism. In 1916, New York City adopted the first zoning ordinance. This ordinance regulated land use and building locations, but its primary objective was to protect private property values. In 1926, the U.S. Supreme Court confirmed the legality of zoning, and by the late 1920’s zoning regulations had been developed to meet the needs of most local areas. The Great Depression of the 1930’s required the direct involvement of the federal government. Through the Works Progress Administration (WPA), over a hundred urban planning studies across the nation were funded for the purpose of constructing public buildings and roads. These projects employed millions of workers. During this time, city and county planning departments were being created to replace what had been independent citizen planning commissions. Planning studies began to include economic and social compo-

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Housing developments fill the suburbs of Las Vegas. (©Ron Chapple Studios/Dreamstime.com)

nents in addition to physical design elements, bringing a more holistic approach to urban planning. After World War II, the GI Bill (officially, the Servicemen’s Readjustment Act of 1944) provided loans to returning veterans to help them purchase or develop education, homes, farms, and businesses. Using these funds, many veterans bought newly built homes in suburban communities that were being developed throughout the country. Developers applied the principles of mass production to housing and created thousands of nearly identical houses on moderately sized lots. Such developments can still be found throughout the country. Suburban areas continued to grow, attracting sizable populations of potential laborers. Corporations soon followed these workers into the suburbs. Office complexes, corporate campuses, warehouses, light industry, and other businesses

continue to push the suburban boundaries ever outward. As the United States continues to develop, urban planners will be called upon to help solve the challenges of constructing adequate streets, sewers, water systems, schools, and utilities, while keeping in mind environmental concerns and design features that will maintain property values. The Industry Today Today, civil planning and development officials formulate strategies to meet the present and future needs of urban and rural areas, as identified through technical analysis and public commentary. Planners forecast five, twenty, and even fifty years into the future to anticipate the specific requirements of particular communities, and then they design and plan accordingly. Such plans typically include fundamental infrastructure such as

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Planners working at the federal level face a number of demanding challenges coming from different areas of the country that require different alternatives. For example, administering public housing in New York, which is largely subsidized by federal funds, requires an understanding of how federal housing policies have changed in ways that may not match the needs of those being served. Planning for the protection of life and property is also done by the federal government. After Hurricane Katrina, the U.S. Army Corps of Engineers repaired and restored 220 miles City maps indicating land use help planners make appropriate decisions. of floodwalls and levees to provide (©Dreamstime.com) flood protection infrastructure to a one-hundred-year protection level. Other challenges imposed roads and highways, transportation systems and faby natural occurrences such as flooding, tornacilities, and water and sewage systems, as well as does, and earthquakes also require planning, engischools, affordable housing, energy availability, anneering, and construction that will help prevent or ticipated population changes and composition, mitigate future loss of life or property damage. economic health, environmental considerations, Other national necessities that require federal and relevant cultural and political issues. planning include revitalizing abandoned and deThe three major levels of civil planning are fedcaying industrial areas; building, or promoting eral, state, and local. The focus of planning at each access to, affordable housing; and repairing and level has distinguishing differences. There are also replacing worn infrastructure, such as railways, areas where the responsibilities, goals, and activihighways, bridges, and airports. Additionally, rural ties of different levels of government may overlap. communities require development activities such According to a statement released by the Barack as constructing and renovating rural water and Obama administration, that administration’s dowastewater systems, issuing low-income housing mestic policies are based on the principle that loans, and instituting rural business programs. “strong cities are the building blocks of strong reBecause of the wide variety of geographical togions, which in turn are essential for a strong Amerpography and seasonal changes throughout the ica.” A fundamental building block of a healthy United States, civil planning differs from one state economy is an efficient road system. Planning to another. For example, in western states, which done under the umbrella of the federal governtend to be drier, planning, design, and engineerment must take a system-wide approach, as it gening may have more to do with the acquisition and erally results in projects of a larger magnitude than delivery of water and water services than they do in those developed at the state or local level. For exstates with higher levels of rainfall. States with ample, building, maintaining, or improving the abandoned industrial areas require planning, denational highway system, which passes through varsign, and engineering agencies to redevelop those ious cities and states, requires specific design and areas to provide new economic and environmental construction methods to be followed as relates to benefits. earthwork, bases, surfacing, pavements, and traffic Other factors that may influence civil planning control devices. at the state level include population density, work-

Civil Services: Planning force distribution, housing distribution, and business and economic conditions, as well as demographic data such as a community’s average age, income level, and educational attainment level. Taking such factors into consideration, state civil planning programs may design, engineer, and construct highways, bridges, ports, state buildings, and state facilities such as hospitals, universities, libraries, and prisons, as well as housing and urban development and redevelopment. Since each state’s planning needs differ, there is no universal or standard urban or regional planning design. However, states with common issues often belong to planning associations or groups that facilitate sharing ideas and problem-solving techniques. The majority of civil planning takes place at the local level, where the decisions made reflect the needs and values of each community. Every community has its own unique identity and character.

This aerial view of a pedestrian walkway helps planners envision usage patterns. (©Steven Jones/Dreamstime.com)

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Consequently, to address a given city’s issues of concern, tailor-made plans and designs are required. Before any plan can be developed, data on the city must be collected, analyzed, and studied, so predictions or forecasts can be developed to guide the city in establishing its own specific urban planning and development policies. To address and analyze adequately issues of concern, local communities utilize a collaborative planning method that encourages citizen participation during all stages of the process. Such involvement allows citizens to inform planners of public needs and preferences. Incorporating that information helps planners achieve better outcomes. Local plans are created after thorough studies have been completed to assess existing structures and forecast future needs. Comprehensive reports are then prepared that include information on a city’s developmental capacity to meet identified needs, such as streets, highways, airports, water, sewage, utility lines, schools, libraries, and cultural and recreational sites. Planners are trained to take a holistic approach, viewing individual elements, such as housing, social needs, land use, and economic development, as a single picture. To effectively address identified community issues, they often work closely with engineers and architects to create plans that accomplish officially established goals and objectives. As communities plan for their futures, they are increasingly coordinating the efforts of departments such as building services, engineering, parks and recreation, maintenance, and planning to work collectively rather than in isolation from one another. Such overlap and coordination results in community development projects that reflect the goals of the citizens while supporting economic activities that sustain the delivery of public services back to the community. As projects are developed, planners look for ways to partner with other agencies to increase efficiency, improve benefits, and distribute costs widely. For example, in the area of highway or road construction, federal partners may include the U.S. Department of Transportation, the Federal Highway Administration, the National Highway Traffic Safety Administration, and the Environmental Protection Agency; state departments of transportation, environmental quality, and water resources; and other related state agencies. Re-

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gional partners may include regional planning associations, county governments, and other identified agencies whose involvement is critical to success. Local transportation partners may include associations of cities, local highway jurisdictions, association of counties, and other multijurisdictional agencies, such as various utility providers whose interest and participation may also be vital for completion.

INDUSTRY MARKET SEGMENTS In general, civil planning and development takes place at one of three jurisdictional levels: local (including towns, municipalities, and counties), state, and federal. Agencies serve a broad range of clients, from local citizens to major developers. The following sections provide a comprehensive breakdown of each of these different segments. Local Planning The smallest level of civil planning and development is the local level. Local planning and development agencies and activities may differ dramati-

cally in size and scope, from a small township to a county such as Los Angeles, which has a population of 10 million people. Local planning activities are affected by such factors as population density, land area, growth patterns, level of development activity, economic health and stability, and geographic constraints, among other conditions. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), urban and regional planners employed by local governments earned average incomes of $62,170 in 2009. Civil engineers earned an average of $80,190, surveyors earned an average of $60,790, and surveying and mapping technicians earned an average of $43,200. Actual salaries vary from these averages based on region, size of jurisdiction, and other factors. Clientele Interaction. Urban and regional planners at the local level work closely with individuals throughout their communities, including local officials such as mayors, city managers, and city council members, as well as members of the public. They work with the members of planning or zoning commissions to explore and resolve how land being developed should be used to best serve the community, operating according to applicable

Local planning for a county such as Los Angeles is much different than for a rural county in a midwestern state. (©Jose Gil/ Dreamstime.com)

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SPECIALTIES

Civil Engineers Specialty

Responsibilities

Environmental engineers

Apply a knowledge of engineering by correcting or improving various areas of environmental concern, such as air, soil, or water pollution.

Hydraulic engineers

Design and direct the construction of power and other hydraulic engineering projects for the control and use of water.

Sanitary engineers

Design and oversee the construction and operation of hygienic projects.

Structural engineers

Plan, design, and oversee the erection of steel and other structural materials in buildings, bridges, and other structures that require a stress analysis.

Transportation engineers

Design and prepare plans, estimates, and specifications for the construction and operation of surface transportation projects. They may specialize in a particular phase of the work, such as making surveys of roads, improving road signs or lighting, or directing and coordinating construction or maintenance activity.

legal regulations. Planners also work with developers, real estate professionals, and business and corporate representatives to determine whether proposed developments fit within the larger context and goals of the community at large. Some proposals may be opposed by some citizens while being favored by other citizens or by officials interested in new sources of revenue and jobs. In such cases, planners must be able to manage conflict effectively and create consensus among opposing groups. Other projects may necessitate working with legal professionals, banking and financial representatives, and representatives of other governmental agencies, including county, state, or federal entities. Planners need to be technically competent and skilled communicators in order to converse comfortably with people from diverse backgrounds and professions. Amenities, Atmosphere, and Physical Grounds. Depending on the project at hand, local civil planners may spend their time working in offices or in the field. Typical office environments include private offices for individuals at higher levels and shared work spaces for those at lower levels. Additional office amenities may include private

conference rooms where meetings requiring confidentiality may be held. Most local governmental offices are designed to facilitate productivity and a positive social climate. They are arranged to minimize distractions and allow employees to concentrate on job-related tasks. Field assignments may include monitoring development projects on-site. Development sites may be dirty and cluttered with tools, materials, or debris. Monitoring and inspection may be required at any stage of development, subjecting planners to all types of weather conditions. Monitoring the progress of a development project may require taking photographs, writing reports, and using specialized computer software to ensure compliance with the terms of the project’s contract. Such onsite monitoring is critical since many development projects are complex endeavors that include numerous phases of construction. Monitoring ensures that each phase is completed and conforms to the overall development plan. Typical Number of Employees. Small towns, large cities, and counties have radically different staffing needs. In general, civil planning offices and agencies may employ anywhere from fewer

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than ten to more than seventy-five people, including professional, technical, and support staff. Traditional Geographic Locations. Most local planning departments are located within their governments’ primary civic center areas or civic administration buildings. In large cities and counties, additional satellite offices provide needed planning services to areas located further away from central offices. Pros of Working for a Local Planning Agency. Local civil planners have the opportunity to interact with the top levels of management and to interact with staff in more functional areas. Often, smaller jurisdictions lack large staffs, so planners are expected to take on multiple roles and responsibilities. Doing so gives them the opportunity to develop their talents while handling a variety of projects. In this way, they may gain broader skills and experience, thus building their level of competency and growing their particular areas of expertise. Working at the local level is also viewed as a good stepping stone by planners who aspire to work at higher professional levels in larger governmental agencies. One of the keys to successful community planning and development is participation at all levels of the process by the citizens of the community. Planners at the local level have a greater opportunity than those at higher levels to build community relationships and facilitate consensus. To better inform the public about planning projects under consideration, planners increasingly use specialized software that visually represents how finished projects will look, what their environmental impacts will be, and how they will contribute to their overall communities. Another advantage of working at the local level is that there may be fewer levels of approval required, resulting in quicker response times that more rapidly produce community benefits. Cons of Working for a Local Planning Agency. Local governmental planning departments generally have smaller budgets and smaller staffs, resulting in increased workloads and less opportunity to share tasks and responsibilities. These small staffs with few resources are less able to adapt to unforeseen circumstances and complications when they arise, so their projects experience greater pressure on deadlines and completion dates. Smaller budgets also tend to result in less upto-date equipment and software. Fewer staff mem-

bers can result in less personal autonomy, which can have the effect of magnifying any work mistakes. For individuals desiring to grow in their profession, smaller governmental agencies with their smaller budgets often afford fewer opportunities for growth and promotion. Also, smaller budgets may not include the funding needed to attend ongoing training programs, such as professional conferences or seminars. Planners who are required to assume multiple roles and responsibilities also risk being pigeonholed as generalists, possibly reducing their ability to specialize and develop technical expertise. Costs Payroll and Benefits: Local governments hire staff at salary levels that have generally been determined through compensation surveys that compare the pay and benefits being offered by similar municipalities. Similarities may include geographic size, number of citizens served, services provided, number and type of positions being surveyed, and other related factors. Salary rates are a product of supply and demand, and municipalities with similar positions to fill tend to compete for the same pool of employees. Most local governments also provide government-mandated benefits, in addition to vacation and sick leave. Supplies: Local planning agencies require office supplies, information technology (telephones and computers), geographic information systems (GIS) and mapping programs, computeraided drafting and design (CAD) programs, surveying equipment, building code manuals, state code manuals, and large-scale copiers or plotters. External Services: Depending on the project, there may be times when outside consultants or professionals with specific expertise are contracted by local governments. For example, a city redevelopment agency that wants to finance the reconstruction of a local shopping mall may contract with attorneys who specialize in landuse planning or zoning laws and attorneys who specialize in municipal bond issuance for advice related to that specific project. Most routine services, such as payroll processing, computer maintenance, and facility maintenance, are usu-

Civil Services: Planning ally performed by employees of the relevant departments within the local administration. Utilities: Planning offices must pay for water, sewage, electricity, gas or oil, telephone, Internet access, and cable television if applicable. Taxes: Local municipalities are required to pay applicable state and federal payroll, income taxes, and property taxes. They are generally exempt from taxes levied by their own jurisdictions. State Planning State civil planning agencies and activities fluctuate in size and scope as a result of various factors, such as state policies and state constitutional mandates, population growth or decline, environmental conditions, level of private economic development activity, level of natural resources, geographical limitations, and other conditions such as flooding, earthquakes, tornados, hurricanes, or other natural events that may influence the level of planning required. Potential Annual Earnings Scale. According to the BLS, civil engineers employed by state governments earned average incomes of $75,870 in

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2009. Civil engineering technicians earned an average of $43,120, surveyors earned an average of $71,440, and surveying and mapping technicians earned an average of $48,270. Actual salaries vary from these averages based on region, size of jurisdiction, and other factors. Clientele Interaction. State planners provide coordination and linkage between state and local agencies and functions related to ongoing state development and planning activities. They also organize and manage planned public works projects to meet schedules and budgets. Planners work with city, county, area, and regional governing boards, planning commissions, and zoning boards. They may also appear before legislative bodies to explain and defend project proposals. Planners work closely with other professionals such as civil engineers, architects, surveyors, representatives from institutions granting financial assistance such as the federal government, and other public agencies such as utility companies. Amenities, Atmosphere, and Physical Grounds. Depending on the project at hand, state planners may spend their time working in an office

SPECIALTIES

Drafters Specialty

Responsibilities

Architectural drafters

Produce architectural and structural working drawings of any type of building or other structure to comply with building codes.

Civil drafters

Prepare detailed construction drawings, topographical profiles, maps, and specification sheets used in the planning and construction of highways, in flood control and drainage, and in other projects.

Commercial drafters

Perform general duties in all-around drafting, such as laying out building locations, planning arrangements, and preparing charts, forms, and records.

Electrical drafters

Prepare wiring diagrams and drawings of electrical equipment for use by construction and repair workers who build, install, and repair electrical equipment and wiring.

Marine drafters

Make drawings of ships, docks, and other marine structures and equipment.

Mechanical drafters

Prepare detailed working drawings of machinery and mechanical devices.

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environment or in the field. Typical office environments include private offices for individuals at higher levels and shared work spaces for those at lower levels. Additional office amenities may include private conference rooms, where meetings requiring confidentiality may be held. Most state governmental offices are designed to facilitate productivity and a positive social climate. They are arranged to minimize distractions and allow employees to concentrate on job-related tasks. Typical Number of Employees. As of 2009, state governments in the United States employed 32,780 civil engineers, an average of more than 650 civil engineers per state. The number employed by each state varied considerably, and these engineers are distributed to branch offices throughout the country. While such branch offices may be of various sizes, the total civil planning staff of a given state may range from dozens to more than one thousand employees depending on the size and budget of the state. Traditional Geographic Locations. State planners may be based at a headquarters office, usually located in one or more state facilities within the capital city, or they may be based at regional offices throughout the state—on either a temporary or a permanent basis. Location of positions can also be influenced by factors such as the distribution of growing or expanding communities within the state or the need to rebuild specific communities after natural disasters. Pros of Working for a State Planning Agency. Working at the state level offers many advantages, including diverse and interesting job opportunities, competitive salaries, enhanced benefits, and greater career mobility. Work assignments are generally on a larger scale than those at the local level, and they often include statewide projects. Most states have their own training departments, which offer employees ongoing training and development opportunities. Because staffing levels are generally higher and are adequate, individual responsibility is appropriately assigned, resulting in a more equitable workload balance among employees. Cons of Working for a State Planning Agency. State agencies usually involve larger bureaucracies than local agencies, and employees may find they have less opportunity for direct decision making than those of smaller government entities. Additional levels of approval are needed for

most decisions, and those who do make decisions have less flexibility to shift resources such as staff members and budget allocations among projects. It is often difficult to eliminate long-standing procedures or practices, regardless of whether they are ineffective or counterproductive. As staffing levels increase, so does the potential for communication breakdowns. For individuals who desire greater levels of professional growth, there are generally fewer opportunities at successively higher levels. Costs Payroll and Benefits: State governments generally hire salaried employees paid on a monthly basis. They can usually offer broader benefit packages than those available to local government employees. Compensation and benefit levels are tailored to the needs of each state, based on the requirements of well-qualified job candidates. In some state governments, employees are represented by collective bargaining units that affect the level and type of compensation and benefit packages offered, while other states’ compensation and benefits are formulated based on other factors. Typical benefit packages include paid leave, such as vacation, sick leave, and paid holidays. Other benefits may include health insurance, dental benefits, eye care, flexible benefit programs offering eligible employees tax savings for anticipated dependent medical care, employee assistance plans that provide counseling and support services for employees and their dependents, flexible working hours, telecommuting, paid or subsidized commuter and parking programs, child care, group legal services, long-term care insurance, home loan programs, and savings bonds. Supplies: State planning and development employees require office supplies, information technology (telephones and computers), GIS and mapping programs, CAD programs, surveying equipment, building code manuals, state code manuals, and large-scale copiers or plotters. External Services: State agencies may contract outside consultants or professionals to work on specific projects requiring their specific expertise. Most routine services such as payroll processing, computer maintenance, and facility maintenance are performed by other state em-

Civil Services: Planning ployees. For example, payroll checks for State of California employees are processed by the State Controller’s Office and then delivered to each state agency for distribution. In cases where regional facilities are leased, however, services such as cleaning and maintenance may be contracted. Utilities: Typical utilities include water, sewage, electricity, gas or oil, telephone, cable television, and Internet access. Taxes: State government agencies are required to pay all applicable federal taxes. They are generally exempt from state property taxes, for example. Federal Planning The federal government is the nation’s largest single employer (although local governments collectively employ far more people). Of the three branches of government, the executive branch has the broadest responsibilities and employs about 97 percent of approximately 2.5 million civilian employees, not counting the Postal Service, in about four hundred major agencies. Potential Annual Earnings Scale. According to the BLS, urban and regional planners employed by the federal government earned average incomes of $88,230 in 2009. Civil engineers earned an average of $88,040, surveyors earned an average of $82,110, and surveying and mapping technicians earned an average of $46,830. These incomes include locality bonuses paid to federal employees based on the metropolitan areas in which they reside to account for differences in cost of living in different localities. In 2010, the secretary of housing and urban development earned an annual salary of $196,700. Clientele Interaction. The federal government, with its many programs and public services, carries out a variety of activities in thousands of locations throughout the United States. Planners working for the federal government may be employed in any number of agencies, including the Army Corps of Engineers, the Federal Highway Administration, military installations such as Navy field offices, the Department of Housing and Urban Development, or the Department of Agriculture. Planners and development officials may interact with local and state agencies that also have an interest or stake in their projects. For example, new construc-

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tion or reconstruction of a highway or bridge may require planners to work with local civic leaders, members of the public, and other public officials in an effort to ensure a smooth and collaborative process. Working with local officials also allows their input into the overall design and implementation of the project. Planners may also work with subcontractors or other private businesses that may be involved with various aspects of federal or federally funded projects. Amenities, Atmosphere, and Physical Grounds. Federal buildings serve a critical function in symbolizing the operations, stability, and endurance of the government. They have been developed and designed to provide safe and productive workplaces and to enhance the communities in which they are located. According to the Government Accounting Office, the United States owns approximately 435,000 buildings, most of which are assigned to one of thirty federal agencies. Although many of these buildings are multistoried, modern commercial office buildings, other federal buildings are of modest size and designed to fit well within their specific locales. Federal planners may be assigned to offices located in large multistoried buildings, as well as smaller one-story buildings located on military bases or elsewhere. Federal planners may spend their time working in an office environment or in the field. Typical office environments are relatively relaxed and include private offices for individuals at higher levels and semiprivate offices for those at lower levels. Additional office amenities may include private conference rooms for holding confidential meetings. Some federal office buildings may also include cafeterias, child-care centers, physical fitness centers, and on-site parking facilities. Federal governmental offices are also designed to facilitate accessibility, safety, and security. Some federal planners’ duties may require travel to attend meetings, complete training, or perform inspections. Some planners may also work alternative or compressed work schedules. Typical Number of Employees. As of 2004, the Department of Housing and Urban Development employed about 10,500 people. Other federal agencies also employ planning and development staff. Traditional Geographic Locations. The geographic locations of federal planners vary depending on their agencies and specific projects they

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oversee. Planners may find themselves working in metropolitan centers, on military bases, near large waterway areas, at utility installations such as dams, or in various suburban and rural communities. Pros of Working for a Federal Planning Agency. Since the federal government is the single largest employer in the nation, it offers many more planning positions than does any individual state or local government to candidates with specialized knowledge in areas such as transportation, urban renewal, environmental planning, economic development, planning systems, and planning administration. Federal planners have the ability to work in a variety of challenging assignments throughout the United States that may lead to potential career advancement. They also receive training and professional development opportunities. Federal employment offers planning professionals high salaries and benefits, overall job stability, flexible work hours, and the opportunity to serve the public good. Cons of Working for a Federal Planning Agency. The federal government is one of the largest bureaucracies on earth. Many levels of approval may be required for decision making, and policy-level decisions can be made only by temporary presidential appointees, as opposed to career civil servants. Some decisions, especially those involving projects occurring at several jurisdictional levels, may affect the overall time frames of those projects. Because budgeted funds must be used only for the purpose for which they were congressionally approved, resources cannot be shifted from one project to another. Federal career employees may also be negatively affected by changes in presidential administrations, which bring changes in policy and can alter the parameters of previously approved projects, resulting in their reduction in scale or even elimination. Costs Payroll and Benefits: Federal employees are paid according to a congressionally approved scale known as the general schedule that includes fifteen pay grades and ten steps within each grade. Employees receive base salaries plus locality bonuses as established by law. Senior officials are compensated according to another pay scale, also set by law. They also receive generous benefits, including health and life insurance op-

tions, retirement plans, vacation, and sick leave. They may receive job performance bonuses and awards. Supplies: Federal urban and regional planning and development agencies require vehicles, office supplies, information technology (telephones and computers), GIS and mapping programs, CAD programs, surveying equipment, building code manuals, state code manuals, and large-scale copiers or plotters. Field operations may also require safety equipment such as hard hats and first-aid kits. External Services: The federal government, in addition to being the nation’s largest employer, is its largest customer of independent contractors. In an effort to operate at the lowest possible cost, federal agencies routinely accept external vendors’ bids for supplies and services. Some projects may require the government to hire outside consultants or professionals with specific areas of expertise, such as heavy-equipment operators. Depending upon the agency, services such as payroll processing and computer maintenance may be performed by other federal employees, while other services such as cleaning and maintenance may be provided by contractors. Utilities: Typical utilities include water, sewage, electricity, gas or oil, telephone, cable television, and Internet access. Taxes: Federal government agencies are exempt from paying property taxes, but they do pay income taxes for their employees.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Governmental organizations organize their employees and workloads based on successive levels of authority, job specialization, and recognized rules and procedures. Authority for making decisions and distributing work assignments is critical for successful outcomes and orderly processes. This method promotes an efficient means of getting people to work together on complex and largescale tasks. The overall size and scope of responsibilities of the federal governmental reflects the need for such a comprehensive organizational structure.

Civil Services: Planning Additionally, accountability to the public requires that tasks and functions be assigned to employees in an efficient manner. Consequently, there are significant variations in structure between that of a small municipality and that of a large federal agency. Additional factors such as the geographical uniqueness of an area also affect the planning activities and responsibilities of a government agency. For example, communities that are located along major coastal areas or rivers may require shoreline or harbor services. Cities committed to preserving historical buildings require special planning to achieve that goal. In each case, job duties include ensuring that a community’s needs are met, and agency organizational structures may be affected by those needs. In general, however, basic planning functions and purposes are similar throughout the field of urban planning within the public sector. The following umbrella categories apply to the organizational structure of government agencies responsible for planning and development:

especially important when it becomes necessary to reconfigure staff assignments as new projects come on line. The benefit of such reconfiguration is that it allows staff to learn new skills, as well as to broaden their existing abilities. Along with planning and supervising the work of subordinates, it is managers’ responsibility to make sure that all subordinates have the necessary resources to complete their jobs. Executive management occupations may include the following: ■

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Executive Management Public Affairs Business Development Facilities and Security Technology, Research, Design, and Development Planning and Development Administrative Support

Executive Management Executive managers, in consultation with the head of their government’s executive branch, set the priorities of their agencies, including formulating proposed budgets to present to legislative bodies and other decision makers. They also act as the leaders of their agencies, including delegating tasks, communicating policies and objectives to agency employees, and speaking as the public face of their agencies. They are accountable for all actions and inactions attributed to their agencies, and they must attempt to be good stewards and managers of public funds and to execute projects that will benefit the public. Because managers organize people and resources, they must know—or be able to determine—the strengths and weaknesses of each employee. This is

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Secretary of Housing and Urban Development Assistant Secretary of Housing and Urban Development for Community Planning and Development White House Liaison Planning Commissioner Planning Director Executive Director Community Development Director Communications Director Civil Engineering Manager Inspector General General Counsel

Public Affairs Public affairs staff facilitate communication between their agencies and the public. They issue press releases and write speeches to convey official statements and messages, but they also receive feedback from the public, respond to their concerns, and convey those concerns to appropriate agency personnel. The planning process includes participation at all levels by members of the public. To ensure public support, planners are expected to possess those skills that facilitate interactive dialogue, incorporate adequate feedback mechanisms, and resolve objections that may be raised. Consequently, planners need to possess good communication skills. They need to speak at a level easily understood by the public and avoid using acronyms or terms that only those in the profession would understand. Planners need to have well-developed listening skills, not only to understand the particulars of the situation they are addressing but also to hear the input and feedback of others that may result in ideas for improvement.

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Planners promote customer services by offering well-thought-out, effective solutions or responses when addressing public concerns or objections to a particular project or portion of a project. The ability to handle protests in an effective manner is critical to maintaining public goodwill while demonstrating respect for opposite views. Whether it is support staff at the front desk answering the telephone, greeting a member of the public or other walk-in, or answering a query from another department or division, providing accurate and helpful information in a friendly and courteous manner fulfills the interest of both the organization and the public it serves. Many planning departments also keep their communities informed through public newsletters and brochures on services provided, provide information on new projects under discussion on local cable television channels, and report on the progress of those projects already in development through local newspapers. The majority of governmental planning agencies also maintain Web presences, so interested parties may obtain facts about planning activities, goals and objectives, and related information. Public affairs personnel also often function as intergovernmental and legislative affairs personnel. They provide input to elected officials regarding proposed legislation, legislative processes, and related issues, draft letters to elected representatives on behalf of elected city councils or similar bodies, and perform other duties related to governmental affairs. The opportunity to give input to legislation that may adversely impact an agency’s ability to provide services to its citizens is an important responsibility for individuals at this level. The opportunity to lobby for needed resources to provide services is equally critical. Public affairs occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Public Affairs Director Assistant Secretary for Public Affairs Speechwriter Press Assistant Public Engagement Director Intergovernmental Affairs Staff Legislative Liaison New Media Director Web Designer Webmaster

Business Development In today’s hypercompetitive environment, communities large and small compete for the economic resources brought in by business parks, industrial centers, and other business enterprises that serve to increase the local tax base. To compete effectively for such resources, planning departments often create economic development units to establish and coordinate a variety of strategies with the primary purpose of attracting new developments. Typically, such projects complement existing businesses and enhance the overall community, as well as create or retain employment for its citizens. Working through various financial options, businesses may be eligible for various grants or longterm debt financing that serves to encourage new business start-ups or the expansion and modernization of existing firms. Additionally, some states and communities may also be eligible for federal funding from the Department of Housing and Urban Development if they meet certain eligibility requirements and are located within a federally defined empowerment zone. Because of the significant amount of money spent in delivering programs and services, the public sector has shifted to a more managerial, business-like operation. In that capacity, planners utilize a number of tools that mimic the sales and marketing techniques rooted in the private sector. Sales and marketing concepts are applied to help encourage program adoption, improve services, and support citizen values and satisfaction. Of the tools and techniques used, some of the more common include holding public meetings—usually with local planning or zoning commissions—for the purpose of discussing development proposals, answering questions, and giving opportunity for public input. Planners also attend various industry conferences to promote the benefits of their particular communities as desirable locations for potential business or industry partners. Business development occupations may include the following: ■ ■

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Business Development Director Senior Planner for Community Partnerships Director of Urban Renewal/ Redevelopment

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PROFILE

Urban and Regional Planner Considerations

Qualifications

Description

Develops plan for use of land and existing structures in an area such as a town, city, metropolitan area, or county.

Career clusters

Architecture and Construction; Government and Public Administration; Transportation, Distribution, and Logistics

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; volunteer work; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

ESI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Facilities and Security Most governmental organizations operate in an environment with open access to public spaces and closed access to secure areas. In an effort to provide for the safety and security of employees, government property, and vital information, it has become necessary to balance openness with security. Currently several tools are being used by public agencies for protection depending on the level of security needed and the potential vulnerability of the facility. One such tool is the closed circuit television system (CCTV), which allows security personnel continuously to monitor the identity of individuals conducting business with their agencies. Such cameras are strategically placed to allow facility and security personnel to monitor the entry and departure of all individuals on a given site. Because they can record and store images, CCTV systems are being integrated with other monitoring devices, such as alarm systems and access-control devices.

In other governmental facilities, employees are issued magnetic identification cards that must be swiped in card readers in order to gain access to facilities or work sites. An upgraded version of the magnetic stripe card is the smart card, which contains an embedded microchip with greater information storage capacity than magnetic stripes. Smart cards allow information to be updated or modified and have the advantage of advanced encryption. In some smaller municipalities, security functions may be handled by local police departments. Security functions at some governmental facilities may also be contracted to private security firms. Facilities and security occupations may include the following: ■ ■ ■ ■

Facility Manager Director of Buildings and Grounds Custodian/Janitor Maintenance and Repair Worker

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Civil Services: Planning Security Guard Network Security Specialist Security Director Public Safety Officer Public Safety Commander

Technology, Research, Design, and Development Emerging technologies are increasingly being used to support the way communities plan, develop, and manage their urban areas. As municipalities strive to balance community life and economic development, information technologies such as GIS, graphic modeling software, and land-use systems that project various development scenarios are increasingly being used. GIS is a computer-based information system that captures and stores information about an area in a collection of digital map layers. These layers are then overlaid and linked together in a variety of ways that allow planners to plan more effectively for appropriate land use and development. Along with GIS, some planners are also using remote sensing (RS) imaging systems that provide data primarily obtained through electromagnetic images that graphically illustrate land usage as observed from satellites orbiting the earth. Such information provides planners with reliable and accurate images that can be used to analyze the impact of proposed development, as well as to determine the impact of existing development. The use of the Internet and GIS technology also enables citizens to become involved at earlier stages in the planning process and to provide input about proposed projects before the final plans are developed. New modeling technology also allows planners to create various design scenarios and situations that are then formulated into multiple development options that can be thoroughly analyzed and evaluated before any construction begins. Additionally, the development of interactive Web applications and advanced Web browsers has enabled elected officials, urban planners, and citizens to communicate in new and important ways not previously available to them. Such communication links benefit elected officials and urban planners, who can take advantage of their citizens’ localized knowledge of various community distinctions to better plan development, as more details can be in-

corporated for final consideration. Social networking sites and tools such as Twitter, Facebook, and LinkedIn facilitate cities’ and other government agencies’ dissemination of official information. Technology as related to work product and work flow enables planners to specify priorities, estimate resource requirements and schedule projects that take into account the possibility of work interruptions or delays for various reasons, such as funding availability. Computers with high-speed processors and high-resolution graphics allow planners to create designs and plans that can be modified much more quickly than previously handdrawn versions, reducing staff time and resources. Such designs and plans can also be distributed simultaneously to various individuals for review and input, which also reduces time and expenditures and promotes meeting project schedules and deadlines. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■

Chief Technology Officer (CTO) System Administrator Information Systems Director Geographic Information System Analyst Information Technology Specialist Data Analyst

Planning and Development Planners are expected to make efficient use of talent and resources and to be effective in terms of meeting customer requirements, whether that means obtaining citizen support of a new public park, attracting new businesses, or engaging in joint projects such as new highway construction with other governmental agencies. To deliver quality public services requires optimizing work flow, decreasing waste and redundancy, and establishing flexible work priorities that allow changes to be made when necessary. Planners in the public sector work under the policy goals and objectives established by elected government officials based upon public need and upon budgetary considerations. Planning managers are expected to negotiate for budgetary levels that support goal achievement along with quality work performance. Planning and development occupations may include the following:

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Executive Director Planning Director Senior Planner Associate Planner Assistant Planner Civil Engineer Civil Engineering Technician Special Assistant Grants Officer Development Project Supervisor

Administrative Support Administrative support staff pay bills, hire staff, provide basic technical and computer support, and conduct front-line interactions with the public by answering phones and greeting visitors. They help implement policies and procedures that relate to budget management for training and development, travel, software license agreements, conferences and seminars, memberships in professional organizations and associations, and related items. Planners also help select and hire wellqualified individuals to ensure a workforce that is diverse and prepared to carry out established goals and objectives. Additionally, they provide leadership, guidance, and direction on strategic planning activities, and they oversee performance management objectives and organizational improvement processes. Government agencies are bureaucratic entities. Support staff must help develop and oversee various policy guidelines, manuals, environmental impact reports, regulatory impact statements, compliance statements, comprehensive plans, development guidelines, council resolutions, and related documents. These documents must be produced, disseminated, and filed effectively. In addition to these bureaucratic tasks, administrative staff answer telephone calls, greet members of the public and others who come into their offices, respond to various inquiries, and provide information as requested. They scan and photocopy documents, answer routine correspondence, arrange meetings, and coordinate schedules and calendars. They assist in preparing policies, procedures, operating manuals, written materials, budgets, payroll, employee records, charts, and other documents, as well as maintaining agency records and files. Administrative support occupations may include the following:

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Executive Assistant Administrative Assistant Secretary Payroll Clerk Recruiting Agent Accountant Human Resources Generalist Receptionist Help Desk Staff

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise. Urban and regional planning in the public sector in one sense reveals the economic conditions of the nation. The connection between urban and regional planning and the economy is related to general building activity, the processing demand for development applications, and the dayto-day activities related to overseeing and monitoring such projects as housing developments, retail centers, and new business parks. Following the economic crisis of 2007-2009—which was initially spurred by the housing collapse of 2006-2007—the banking and finance industry’s decrease in available loans and millions of dollars in mortgage foreclosures greatly affected governmental entities that depend on property taxes as part of their revenue streams. This revenue loss resulted in some public planning departments reducing staff, implementing pay cuts, placing staff on unpaid job furloughs, and transferring some planners to other departments. One bright spot of the recession, though, has been that some planners in the public sector have now been able to devote attention to long-term planning activities. Communities that might have hired consulting firms to do this type of work while development activities were numerous are now able to utilize in-house staff. Potential benefits of bringing this work in-house include reinforcing the value of planning to the community and providing staff with the opportunity to do the comprehensive planning they have been trained to do. An additional benefit is that when development activity resumes, projects can then be evaluated and incorporated pursuant to the goals and objectives of long-term plans.

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In response to the recession, Congress passed the American Recovery and Reinvestment Act in February, 2009, providing federal funds to improve U.S. infrastructure nationwide. These funds were directed toward projects that were through the planning stage and simply awaiting the necessary cash to initiate, widely described as “shovel-ready” projects. The act therefore emphasized the importance of skilled and efficient planning. Several factors contribute to the continued need for public sector urban and regional planners. The primary objective of the federal government is to establish and maintain viable urban communities through partnerships with state and local governments, along with private investment, to support community development activities that can directly benefit citizens and the nation. In the long term, as the economy recovers, the number of public sector urban and regional planners is expected to grow. Communities of all sizes rely on three primary sources of revenue: income tax, property tax, and sales tax. Growing or maintaining these tax bases requires a stable economy and vibrant market activity. To secure adequate revenues to provide ongoing public services, local communities are increasingly engaged in competition with one another for industrial plants, corporate headquarters, hightechnology firms, business centers, and government facilities. They offer reduced tax rates, cheap land, skilled laborers, and other amenities in an effort to attract investors. The payoff is that large developments bring with them jobs and economic resources that often cycle back through local businesses, thereby adding to the needed tax revenues. Planners, engineers, and architects work in collaboration to transform the needs of developers into projects that meet their communities’ overall development goals and objectives while adhering to all local building requirements. Employment Advantages The BLS projects that employment for urban and regional planners will increase by approximately 19 percent between 2008 and 2018, a rate significantly faster than the average across all industries of 11 percent job growth. A 2008 salary survey conducted by the American Planning Association revealed that 67 percent of planners work in

public agencies, with 63 percent reporting their work location was in a city. A majority of urban and regional planners are hired by local governments because the community level is where changes to transportation, housing, land use, and development are first recognized. Civil planning offers individuals the opportunity to make a significant difference at the community and national level. Most civil planning positions require at least a bachelor’s degree, and many require a graduate degree. Most planners specialize in one or more areas, such as community development and redevelopment, land-use or code enforcement, transportation planning, environmental and natural resources, urban design, or economic planning and development. Those with a background in planning management, budget, and finance are especially sought after. Public sector employment is considered relatively stable and generally less susceptible to fluctuations in the economy than private sector employment. Annual Earnings Civil services as governmental entities do not produce annual earning statements because they are not revenue-generating businesses. Funded primarily by taxes, fees, and other funding sources, including intergovernmental transfers, they report instead on how their funds are used, including jobs created in the public sector. Although planning positions at the state and local levels may not grow as rapidly in the near future as they have in the past, they are expected to resume growing once the economy recovers. In the meantime, planning positions at the federal level are expected to increase. According to the BLS, employment in the federal government is projected to increase overall by 10 percent between 2008 and 2018. The Government Accountability Office reported in February, 2009, that by the year 2012 approximately one-third of the federal workforce will be eligible to retire. This will result in a sizable number of job openings for federal positions in various occupational groups. Many federal agencies utilize planning positions. These include the Environmental Protection Agency, the National Oceanic and Atmospheric Administration, the United States Geological Survey, the National Aeronautics and Space Admin-

Civil Services: Planning istration, the Forest Service, and various military branches. Federal planning positions also may offer a variety of professional career choices, travel and relocation opportunities, and salary and benefit levels at or exceeding those of the private sector.

RELATED RESOURCES FOR FURTHER RESEARCH American Planning Association 1776 Massachusetts Ave. NW Washington, DC 20036-1904 Tel: (202) 872-0611 Fax: (202) 872-0643 http://www.planning.org

ABOUT

THE

National Association of Development Organizations 400 N Capitol St. NW, Suite 390 Washington, DC 20001 Tel: (202) 624-7806 Fax: (202) 624-8813 http://www.nado.org National Association of Local Government Environmental Professionals 1333 New Hampshire Ave. NW, 2d Floor Washington, DC 20036 Tel: (202) 638-6254 Fax: (202) 393-2866 http://nalgep.org Urban Land Institute 1025 Thomas Jefferson St. NW, Suite 500 West Washington, DC 20007 Tel: (202) 624-7000 Fax: (202) 624-7140 http://www.uli.org

AUTHOR

Jo Ann M. Langston has more than twenty years of professional experience in public administration. She holds a master’s degree in public administration from California State University, Fullerton, and a bachelor of science degree in business management from California State Polytechnic University, Pomona. Her professional experience at the state, county, and local levels of government in human resources administration includes recruitment and selection, classification and pay, testing and examinations, employee relations, and training and development.

FURTHER Community Development Society 17 S High St., Suite 200 Columbus, OH 43215 Tel: (614) 221-1900, ext. 217 Fax: (614) 221-1989 http://www.comm-dev.org

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READING

Bruegmann, Robert. Sprawl: A Compact History. Chicago: University of Chicago Press, 2005. Federal Highway Administration. Planning for Transportation in Rural Areas. http:// www.fhwa.dot.gov/planning/rural/ planningfortrans/3resprurpln.html. Houghton, Gillian. Careers in Urban Planning. New York: Rosen, 2003. Howell-Moroney, Michael, and Donna Milam Handley. Restoring the Intergovernmental Partnership: What Needs to Change. Washington, D.C.: International City/County Management Association, 2009. Kaliski, John. “Democracy Takes Command: The New Community Planning and Challenge to Urban Design.” In Urban Planning Today: A Harvard Design Magazine Reader. Minneapolis: University of Minnesota Press, 2006. PayScale.com. “Salary Survey for Job: Urban Planner (United States).” http://www .payscale.com/research/US/Job=Urban _Planner/Salary/by_Employer_Type. Staley, Samuel R., and Adrian T. Moore. Mobility First: A New Vision for Transportation in a Globally Competitive Twenty-first Century. Lanham, Md.: Rowman and Littlefield, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://wwwbls.gov/ oco/cg.

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_______. “Urban and Regional Planners.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos057.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Whitehouse.gov. “Urban Policy.” http:// www.whitehouse.gov/issues/urban-policy.

Civil Services: Public Safety AP/Wide World Photos

While the term “public safety” is very broad, the primary service provided in this area is police General Industry: Government and Public Administration and law enforcement. Public Career Cluster: Government and Public Administration safety occupations include poOccupations lice and sheriff’s patrol officers, Subcategory Industries: Administration of Environmental police detectives, criminal invesQuality Programs; Justice, Public Order, and Safety tigators, fish and game wardens, Activities; Law Enforcement and Criminal Justice Statistics transit and railroad police, and Centers; National Security; Police Protection the supervisors and managers of Related Industries: Criminal Justice and Prison Industry; those personnel. The industry Federal Public Administration; Legal Services and Law does not include private occupaFirms; Local Public Administration; National and tions responsible for safety, such International Security Industry; Public Health Services as security guards or private inAnnual Domestic Revenues: Police protection vestigators, nor does it include expenditures: $98.9 billion USD (Bureau of Justice the corrections system. It does, Statistics, 2006) however, include an extensive Annual Global Revenues: Police protection expenditures: list of governmental regulatory $194 billion USD (“What Does the World Spend on functions, such as oversight of Policing?” International Journal of Comparative Sociology, environmental modification, en2001) ergy generation and use, water NAICS Numbers: 924, 92212, 922190, 928110 use and quality, transportation, public health and welfare, construction, and aviation, as well as emergency medical services, emergency management, and so on. This list can INDUSTRY DEFINITION also be expanded to encompass security functions at government buildings, government-sponsored Summary programs, and national security services, including Civil services are those services that are provided homeland security and the military. by governments at the local, state, and federal levels. INDUSTRY

SNAPSHOT

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The United States does not have a national police force, but there are numerous regulatory and investigative agencies that have jurisdiction across all fifty states and the District of Columbia. There are more than 2 million sworn law enforcement personnel in the United States, not including a very diverse group of administrative and support staff positions. The other positions that support police services include 911 operators, dispatchers, analysts, crime scene investigators, payroll personnel, administrative assistants, secretaries, clerks, public relations personnel, tacticians, instructors, and mechanics. The numbers and diversity of these personnel vary with the size of each department and the complexity of its authority. History of the Industry Today’s public safety and community protection “industry” in the United States has its roots in thirteenth century England. At that time, the feudal system was in place, and power flowed down

from the king to various royal representatives. His representatives in the shires, or counties, were shire reves, who served as shires’ primary law enforcement officers. In the modern United States, this position has evolved into that of a county sheriff. Each state’s chief law enforcement officer is its attorney general, but in a counties, the chief law enforcement officer is still known as a sheriff. In some major cities, such as New York, Chicago, and Philadelphia, city officials may have greater law enforcement authority than county officials. By the middle of the eighteenth century in England, urban populations had increased. In London, the first disciplined police force was known as the Bow Street Runners. They reported to the chief magistrate, Henry Fielding, and their duties involved catching petty criminals and serving warrants, for a fee. Over the years, the Bow Street Runners evolved into a police force with a patrol function. Following the passage of the Metropolitan Po-

According to the Bureau of Justice, the California Highway Patrol has the largest number of law enforcement personnel with arrest authority of any state law enforcement entity. (©Michael Ludwig/Dreamstime.com)

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These Philadelphia police officers are part of the more than 2 million sworn law enforcement personnel in the United States. (AP/Wide World Photos)

lice Act of 1829, Sir Robert Peel established London’s Metropolitan Police Force, which became the model for police organizations. His law enforcement officers became known as “Bobbies,” after his first name, and they were organized in a uniformed paramilitary style. Even today, London’s Metropolitan Police officers are still referred to as Bobbies. The success of the Metropolitan Police Force led other cities in England to be required to establish their own police forces. Cities in the United States, such as New York and Boston, closely followed the British lead, employing uniformed officers, patrols, and personnel who provided services. The evolution of police departments did not come easily. At one point, city police officers were also part sanitation officers; in another city, the police department was plagued by rampant corruption and political patronage that needed to be erased. Professionalism was eventually instituted, however, and U.S. police officers became civil servants. Officers were available, or on

duty, around the clock, every day of the week. The southern and western portions of the country, however, took a while to catch up with the Northeast. Before cities and states in the so-called Wild West were able to form effective law enforcement institutions, vigilante justice was the norm. People would take the law into their own hands. Due process and civil rights were concepts, not concrete realities. Local farmers and settlers found justice at the end of a gun or a rope. Until the start of the twentieth century, law enforcement in the United States was a profession reserved for white males of certain ethnic origins. In the early twentieth century, one police department with a visionary chief led the way in police professionalism. August Vollmer was a self-taught criminologist who became the chief of police in Berkeley, California. A former United States Marine and town marshal, he was the first chief to recognize the importance of education and training. He has become known as the “father of modern law enforce-

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ment,” and he was responsible for convincing the University of California to start teaching courses in criminal justice. Vollmer wanted officers with college degrees. Under his leadership, police officers patrolled in cars and on motorcycles, used radios to communicate with one another, and used lie detectors as investigative tools. A progressive chief, he was active in promoting diversity through hiring racial minorities. It was not until the latter half of the twentieth century, however, that most police departments saw men of color and women join their ranks and move into leadership positions. While begrudgingly accepted in most cities, diversity became more characteristic of police departments in larger cities. It was the passage of the Civil Rights Act of 1964 and the integration of schools that brought about equal access to all the positions in law enforcement, including the chief of Grand Teton National Park mountain rangers rescue an injured climber. (AP/ police. It was not until the Wide World Photos) twenty-first century, however, that a person of color was apnants of these Western systems of law enforcement pointed U.S. attorney general, the nation’s senior can be found today in agencies such as the Texas law enforcement officer. Rangers and the U.S. Marshals Service. In some departments today, the demographics The U.S. Marshals Service is the oldest federal of personnel employed in law enforcement have law enforcement agency in the country. After the completely changed. Careers in law enforcement passage of the Judiciary Act of 1789, the first thirand public safety are open to everyone. The type of teen U.S. marshals were appointed by President law enforcement practiced by such Western law ofGeorge Washington, one for each of the U.S. disficers as Wyatt Earp and Bat Masterson is alien to trict courts. Over time, as the number of states and the modern world of police internal affairs departterritories grew, so did the number of U.S. marments and citizen complaint review boards. Some shals and their deputies. The U.S. marshals prowould argue, however, that those Western officers vided services from court security, to service of proacted as best they could in the new territories to cess, to maintaining law and order in the Deep bring about peace and the rule of law in the face of South and the West. Today, the U.S. Marshals Servery difficult challenges. The key to general law envice is one of the premier law enforcement organiforcement survival was the tough standard that was zations in the country. The organization is as diimposed by state and federal governments. Rem-

Civil Services: Public Safety verse in its functions as are the men and women who are part of it. While the Marshals Service provides court services and transports prisoners, its functions also include providing judicial security and overseeing the famous Witness Protection Program. Although law enforcement and police departments are the most visible institutions of public safety, there are numerous others. The government has passed laws to ensure the safety of workers and the public. It regulates working conditions, child labor, the production and distribution of dangerous drugs, health and safety standards, the environment, land use, transportation, and so on. For every regulation that is written, public safety officers are needed to protect both workers and consumers. The Industry Today Modern public service has expanded far beyond local and federal law enforcement officers. In the United States, those employed in the area of public safety and law enforcement are over 2 million strong and occupy a variety of positions. The field has been significantly affected by two distinct factors: technology and terrorism. Early police officers went from plain street clothes and commissions to uniforms and badges (worn by sworn officers). Today, uniforms vary with the nature of the duties assigned: Patrol, mounted, bicycle, and motorcycle officers; detectives; special weapons and tactics (SWAT) officers; supervisors; commanders; undercover officers; pilots, and others wear different uniforms to fit their different assignments. Uniforms also vary with the customs associated with specific organizations and geographic areas, in terms of uniform color and style, cap, weapons, footwear, and special equipment (such as the “Sam Brown” shoulder strap or eyewear). Police officers’ duties are diverse. The New York Police Department, for example, describes these duties as follows: Police Officers perform general police duties and related work in the New York City Police Department. They patrol an assigned area on foot or in a vehicle; apprehend crime suspects; intervene in various situations involving crimes in progress, aided cases, complaints, emotionally disturbed per-

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sons, etc; respond to and investigate vehicular accidents; investigate specific offenses; interact with prisoners; operate and maintain patrol vehicle; issue summonses; obtain information regarding incidents by interviewing witnesses, victims, and/ or complainants; safeguard and voucher found, seized or recovered property; provide information to the public; handle situations involving maltreated, abused or missing children; interact with juveniles; prepare forms and reports; testify in court; and perform related work. Some of the physical activities by police officers and environmental conditions experience[d] are: working outdoors in all kinds of weather; walking and/or standing in an assigned area during a tour; driving or sitting in a patrol car during a tour while remaining alert; running after a fleeing suspect; climbing up stairs; carrying an injured adult with assistance; gripping persons to prevent escape; restraining a suspect by use of handcuffs; detecting odors such as those caused by smoke or gas leaks; engaging in hand to hand struggles to subdue a suspect resisting arrest; being physically active for prolonged periods of time; understanding verbal communications over the radio with background noise; reading and writing under low light conditions; carrying or wearing heavy equipment and wearing a bulletproof vest. (This is a brief description of what you might do in this position and it does not include all the duties and responsibilities of this position.)

As is the case with most other industries, the growth in technology has revolutionized law enforcement: Officers now require a higher level of education, training, physical skill, and technical ability than previously. Today, they may carry any combination of radios, cell phones, mace, pepper spray, tasers, P-29 batons, minicomputers, fingerprint scanners, handcuffs, handguns, and even video cameras connected to their headgear. There have also been several advances in officer mobility to decrease response time and increase the area that can be covered by a patrol. Officers went from leather shoes, to horses, to bicycles, to scooters, to motorcycles and cars. Each advance represented a significant decrease in officer response time, as well as an increase in cost and performance. While these means of transportation continue to be used, the list expanded in the later twentieth century to include Segways, airplanes, helicopters, jet skis, and various watercraft. Not all officers use all of this

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equipment, but they must be able to learn the proper use of the equipment employed by their departments. Basic training must also cover first-aid skills, crime scene investigation, high-speed driving, the handling and deployment of a variety of weapons, writing reports, drug identification, computer skills, legal subjects, hand-to-hand combat, and how to deal with the public (such as through crowd control). While terrorism did not start with the September 11, 2001, attacks on the World Trade Center, those attacks brought terrorism and the fight against it to a new level. Domestically, the efforts to prevent and respond to terrorism are led by public safety personnel at the local, state, and federal levels. Police officers are the first line, the “boots on the ground,” in cities, towns, and states, and the number of support positions to aid them has increased. These new positions include all the civil service and public safety positions in the federal government that are part of, or support, the Department of Homeland Security (DHS) and similar agencies. Support fields include intelligence, hazard response, computer analysis, forensic medicine, border security, and building security. Fusion

centers—designed to ensure that intelligence information is shared among federal, state, local, and tribal law enforcement agencies—are appearing in greater numbers across the country. While the initial funding for fusion center positions has been based on grants, these centers are intended to extend beyond their initial grants. There has been extensive growth in personnel numbers and career opportunities in all of these civil service areas; in addition, the aging and retirement of current law enforcement and public safety officers is opening more positions. Each federal agency has a team of public safety officers and others who are trained to enforce laws and regulations. More than one hundred federal enforcement entities execute mandates that may require them to look for water pollutants from nuclear bomb facilities or ensure that paint is leadfree. Federal agencies that provide opportunities for public service employment in law enforcement, security, and related occupations include virtually every cabinet department, as well as regulatory bodies such as the Environmental Protection Agency and the Federal Communications Commission. In addition to these departments and

A U.S. Coast Guard helicopter on patrol. (AP/Wide World Photos)

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Border Patrol agents are responsible for preventing unauthorized individuals and products from coming across the U.S. border. (AP/Wide World Photos)

agencies, assorted bureaus and services have law enforcement, regulatory, security, and oversight functions that are also excellent sources of public service career opportunities. For example, public safety and enforcement positions can be found within the Department of Agriculture in the department’s Forest Service, Natural Resources Conservation Service, Farm Service Agency, Foreign Agricultural Service, Food Safety and Inspection Service, and Animal and Plant Health Inspection Service, among other divisions. The Department of Justice includes the Federal Bureau of Investigation; Bureau of Prisons; U.S. Marshals Service; Drug Enforcement Administration; and Bureau of Alcohol, Tobacco, Firearms, and Explosives. One additional example is the Department of Homeland Security; it includes the Transportation and Security Administration, Customs and Border Protection (including the Border Patrol), Immigration and Customs Enforcement, Secret Service,

Federal Protective Service, Federal Emergency Management Agency, U.S. Coast Guard, and the Office of Inspector General. Each federal agency has an inspector general whose mission it is to fight fraud, waste, and mismanagement within that organization. Career opportunities also exist in the private sector as a result of advances in technology, the increased threat of terrorism, and the development of new programs, particularly at the federal level. For example, terrorism has prompted a need for increased border and facility security, as well as intelligence analysis. In addition to Border Patrol agents, who are responsible for preventing unauthorized individuals and products from coming across the U.S. border, careers in this area include positions associated with border technology, manufacturing and deploying devices such as fences, motion sensors, biometrics, thermal-imaging devices, drones, and robots. The border is the first

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place to stop terrorists and their contraband, but closely related are those security services that protect government employees and buildings. Thousands of intelligence analysts have also been hired by the federal government and employed as government contractors. Today, there are more contractor employees working in DHS programs than federal employees. When such employees’ contracts with the DHS and other agencies expire, those agencies will expand their own employee rosters. Many of the contractors—having already fulfilled the required roles and developed specialized skills and relationships within the agencies—may be hired to fill the permanent positions that replace their contracted positions. Two areas where large numbers of contract personnel are used are protective services and open source intelligence analysis. Protective services are provided both within the United States and in the overseas locations where American civilian personnel are assigned. Domestic security services may be provided under the supervision of the Federal Protective Service, which is responsible for the security of federal government facilities. Overseas, these services may be overseen by DHS, the Department of State’s Diplomatic Security Service, or several other federal entities. Many of the sixteen intelligence agencies that compose the U.S. intelligence community have advanced the gathering and analyzing of data collected through open sources. These are data that are collected through publicly available information sources, including the Internet, print and electronic news organizations, and business publications. Intelligence officers no longer need to speak Arabic, Mandarin, Russian, or other languages, because computers can automatically translate the data they are analyzing. Private companies develop and market software that does this and much more, providing an example of private industry complementing the public safety sector.

INDUSTRY MARKET SEGMENTS Most industries can be analyzed by their employee numbers, market share, gross sales or profits, product diversification, and so on. According to

the U.S. Department of Justice’s Bureau of Justice Statistics (BJS), local, state, and federal governments spend more than $215 billion annually for police services, corrections, and legal expenses, with almost one-half being spent for police services. With civil service public safety positions, there are two major factors: size of the department and source of authority. State law enforcement authority, or the police power, is guaranteed by the U.S. Constitution; local law enforcement authority is delegated by each state through its constitution and laws. While serving as a state or local public safety officer, one’s authority is limited to a specific jurisdiction. The federal government has certain legal and regulatory authority that is also constitutionally based. Unlike state officers, federal agents’ authority and jurisdiction usually extend throughout the United States. Local Public Safety Organizations According to the BJS, local police departments account for about 61 percent of sworn officers, and sheriffs’ offices account for about 24 percent. The number of workers these local departments employ varies, from only one officer in the smallest jurisdictions to nearly forty thousand sworn officers in the largest. More than ninety-five hundred departments have fewer than twenty-five officers each. Even a small Pennsylvania suburban township can have a dozen police officers, in addition to code administrators and inspectors, who ensure that buildings comply with codes and are safe. However, volunteer fire departments are the norm in small townships; paid fire chiefs and staff are more common in larger towns and cities. In small townships, other health, safety, and code compliance services may be the responsibility of a nearby city or of the county government. Small municipalities may not have the resources to fund fire departments, health departments, and other public safety functions that are provided to residents of large cities. Most public safety personnel, especially police and deputy sheriffs, are civil servants and retain their positions when county administrations change. Sheriffs, however, are elected officials and are unemployed if not reelected. Mayors, members of county boards of supervisors, and members of city and town councils hire and fire police chiefs, who serve at the discretion of the elected officials.

Civil Services: Public Safety Appointed law enforcement chiefs normally serve contract terms but may be relieved at the discretion of the public officials who appointed them. The tenure of most department personnel is not as tenuous. Potential Annual Earnings Scale. The smallest local departments may pay only the state minimum wage. According to O*NET, the 2009 median annual salary for police patrol officers, sheriffs, and deputy sheriffs was $53,210. Salary.com indicates that the average police officer’s base salary as of June, 2010, was $49,581; including benefits, total average compensation was $70,439. O*NET indicates that the median salary for California police and sheriff’s patrol officers in 2008 was $75,300, with 10 percent of officers earning more than $100,600 and 10 percent earning less than $52,900. In 2010, the Suffolk County Police Department in New York signed a contract providing officers with a base annual salary of $106,000 after six years of service, the highest in the nation. There are numerous supplements to base salaries. According to the U.S. Bureau of Labor Statistics (BLS), in May, 2008, the annual median salary for police and detective supervisors at all levels of government was $75,490. The top 10 percent of earners earned more than $114,300 and the bottom 10 percent earned less than $46,000. The median salary for such supervisors in local governments was slightly less, at $74,820. Clientele Interaction. The clients of public safety officers are the members of the public within the officers’ jurisdictions. The majority of local law enforcement officers interact with clients every day as an integral part of their jobs. In addition to responding to emergencies, many personnel build relationships with members of their communities, both in order to improve their ability to do their jobs and in order to help strengthen their communities. One benefit of working for a local public safety department is the ability to make a significant contribution to one’s community on a daily basis, both on and off the job. Amenities, Atmosphere, and Physical Grounds. Law enforcement officers spend their time variously outdoors, in cars, behind desks, and in courtrooms. They walk the streets, help people, drive on patrols, direct traffic, inspect vehicles, issue citations (tickets), write reports, testify in court, respond to alarms and calls for assistance, keep the

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peace, render first aid to victims involved in accidents and assaults, and protect children and adults as they go about their daily activities. At times, the work can be both exciting and dangerous. Intervening in a fight, domestic disturbance, or crime in progress is always dangerous, so training is an important part of the job. Learning the best way to recognize and approach a dangerous situation reduces risk and minimizes danger to the extent possible. Typical Number of Employees. Relying on BJS research, Samuel Walker and Charles Katz have noted that the national average staff for local police agencies is 2.5 sworn officers per 1,000 residents, while cities with populations of over 100,000 may see that ratio reduced to about 1.8 per 1,000. Traditional Geographic Locations. Local public safety officers are found in rural, urban, and suburban areas and are generally engaged to protect individual towns, counties, or cities. Pros of Working for a Local Public Safety Department. According to the BJS, about 76 percent of police officers are employed at the local level. Most of these officers will work in the same township, city, or county for their entire careers. Because local departments are smaller than state and federal agencies, these officers are more likely to be generalists than are their state and federal counterparts. They must rely on other departments or state and federal agencies for very specialized assistance. Local officers may have different assignments each week. They work closely together and develop a high level of trust, developing relationships that may last a lifetime. Cons of Working for a Local Public Safety Department. While there are more opportunities for diversity in assignments at the local level, hiring is less centralized, so it can be difficult to reach all local departments in one’s area when seeking a first job. While most departments follow a civil service hiring process, advertisements of vacancies can be at any location in a village, township, city, or county. However, there are central, defined locations in each state where an applicant for employment can learn about public service opportunities. Small town public safety departments may offer fewer opportunities for career advancement than larger departments, as promotion opportunities may depend on someone’s retirement or the growth of the population being served.

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Costs Payroll and Benefits: Law enforcement officers generally earn base salaries plus overtime pay and benefits. Considering all of the benefits and the supplies provided by the department, the costs to a municipality for each officer are significant. Benefits vary but are generally excellent in major cities. The New York City Police Department, for example, provides paid vacation and sick leave; a choice of paid medical programs; prescription, dental, and eyeglass coverage; an annuity fund; retirement plans; and generous supplementary retirement benefits after twenty years of service. Supplies: Law enforcement departments require specialized equipment such as weapons, ammunition, handcuffs, batons, field communications systems (including mobile computers), and uniforms. They also require vehicles, fuel, and maintenance equipment, as well as standard office supplies and equipment. Some may require significant forensic equipment and supplies. External Services: Law enforcement departments may contract external private vendors or municipal agencies to supply vehicle maintenance, building repairs, and custodial services. Utilities: Law enforcement departments require electricity, heat, air-conditioning, telephone, and Internet access. Some departments rely on mobile telephones to communicate with officers in the field, while others use two-way radios and other communication systems. Taxes: Departments are generally responsible for federal employer-paid payroll taxes on employee income. State Public Safety Agencies Forty-nine state governments have law enforcement agencies, with Hawaii being the exception (its Department of Public Safety is primarily responsible for providing court-, security-, and airport-related services). According to the BJS, the California Highway Patrol (CHP) has the largest number of sworn personnel, or law enforcement personnel with arrest authority, of any state law enforcement entity. The other top employers of sworn personnel are New York, Pennsylvania, and Texas. Three of the smallest state agencies are the Wyoming Highway Patrol, the South Dakota High-

way Patrol, and the North Dakota Highway Patrol. Delaware, Alaska, and Vermont are the top three states in sworn personnel per capita. Potential Annual Earnings Scale. The BJS indicates that the median annual earnings among state police personnel in 2008 were approximately $51,000. Detectives and criminal investigators earned about $54,000, on average. Small state law enforcement departments generally pay low starting salaries. The South Dakota Department of Public Safety offers a starting salary of $36,256, while the North Dakota State Highway Patrol pays $42,300, the California Highway Patrol pays $65,185, and the New York State Police pays $50,374 to start. Without considering overtime and other benefits, officers in California and New York can expect to earn $79,248 and $87,732 per annum, respectively. Those promoted to a higher rank earn more. A survey by the BJS indicates that the median salary for state police and detective supervisors is over $75,000. Clientele Interaction. Most state agencies are reactive in nature. Officers respond to calls for assistance, such as auto accidents, burglaries, robberies, and disasters. When they patrol, they tend to patrol highways and state roads, rather than residential and commercial neighborhoods. As a result, they do not enjoy the same level of daily contact with local residents as is experienced by local law enforcement officers. However, many states, such as Pennsylvania, task state police agencies with providing law enforcement for communities that do not have their own police coverage. In other states, such as California, this function may fall to county sheriffs. Amenities, Atmosphere, and Physical Grounds. Law enforcement officers spend their time variously outdoors, in cars, behind desks, and in courtrooms. They walk the streets, help people, drive on patrols, direct traffic, inspect vehicles, issue citations (tickets), write reports, testify in court, respond to alarms and calls for assistance, keep the peace, render first aid to victims involved in accidents and assaults, and protect children and adults as they go about their daily activities. At the end of a shift, officers file reports to document their activities during the shift in the event that they may be called upon to appear in court and testify. At times, their work can be both exciting and dangerous. Intervening in a fight, domestic disturbance, or

Civil Services: Public Safety crime in progress is always dangerous, so training is an important part of the job. Learning the best way to recognize and approach a dangerous situation reduces risk and minimizes danger to the extent possible. Most state agencies are involved in matters that cross local jurisdictional boundaries that could limit the ability of local law enforcement to handle such matters effectively. Patrolling a state’s highway system is normally a prime responsibility of state departments. Many departments also have specialized services and labs that are outside the budgets of local departments. Typical Number of Employees. States vary dramatically in size; some have populations smaller than those of large cities. The BJS indicates that states may employ from about two hundred to more than seven thousand sworn law enforcement personnel. However, recent state budget shortfalls have reduced hiring, training, and promotions to below-normal levels. Many states have suspended their processing of new recruits unless they have received supplemental support from the federal government, especially the Department of Homeland Security. Traditional Geographic Locations. State police agencies are normally headquartered in state capitals, with other offices throughout their states. Some states have only investigative services, while others concentrate their police services on highway patrol systems. As a result, the actual structure of the state and how it divides its public safety responsibilities depend on the various locations where law enforcement personnel are stationed. Pros of Working for a State Agency. State agencies provide more opportunities and centralized resources for potential employees through their civil service hiring systems. Because they are often larger than local departments, state agencies present greater opportunities for growth and promotion. State departments usually have more diversified workforces and offer greater opportunities for employee training and education. Cons of Working for a State Agency. State personnel may be required to work long hours anywhere in the state. In addition, some state agencies require officers to sign mobility statements as a condition of employment, so personnel can be reassigned throughout their states based on the needs of the agency. This is not an issue in most lo-

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cal departments, but it is something that state agencies have in common with most federal law enforcement agencies. Costs Payroll and Benefits: State agencies pay base salaries plus overtime as necessary, as well as benefits. Some pay additional amounts based on geographical cost of living, bilingual ability, increased responsibilities or hazards, shift differential, and so on. Benefits may include a uniform allowance, retirement plans, health and medical coverage, leave, vacation, holidays off, and life and disability insurance. Supplies: Law enforcement departments require specialized equipment such as weapons, ammunition, handcuffs, batons, field communications systems (including mobile computers), and uniforms. They also require vehicles, fuel, and maintenance equipment, as well as standard office supplies and equipment. Some may require significant forensic equipment and supplies. Highway patrols in particular require equipment for managing and investigating automobile accidents. External Services: Vehicle maintenance, building repairs, custodial services, and other support services are normally included as part of a state budget, as most public safety departments are located with other state agencies. Utilities: State agencies require electricity, heat, air-conditioning, telephone, and Internet access. Some agencies may use mobile telephones to communicate with officers in the field, in addition to two-way radios and other communication systems. Taxes: Agencies are generally responsible for federal employer-paid payroll taxes on employee income. Federal Public Safety Agencies One factor that significantly separates civil service careers—particularly in federal law enforcement—from other careers is workplace diversity. Federal law enforcement personnel can be assigned anywhere in the world. U.S. embassies employ Federal Bureau of Investigation (FBI) special agents as legal attachés. They also have on staff representatives from the Drug Enforcement Administration (DEA) and the DHS, as well as regional se-

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curity officers from the Department of State’s Diplomatic Security Service (DSS). Federal police forces such as the U.S. Marshals Service and the Federal Protective Service also provide security at important government institutions where they have special jurisdiction, such as the Pentagon, the Supreme Court and other federal courts, and Central Intelligence Agency (CIA) and FBI facilities. Investigators, detectives, special agents, and other law enforcement personnel do not always carry weapons, although a 2008 survey by the Government Accountability Office indicated that approximately 140,000 federal personnel have weapons authority, either direct or delegated. The federal government employs law enforcement personnel in the National Park Service, the National Oceanic and Atmospheric Administration

OCCUPATION

(NOAA), the Forest Service, the Fish and Wildlife Service, the Bureau of Land Management, and the U.S. Park Police (who have a very visible presence in Washington, D.C.). A Secret Service employee could spend an entire career inside the White House, protecting the first family and visiting dignitaries. Potential Annual Earnings Scale. Federal employees are paid according to the government’s general schedule pay structure, which is divided into fifteen pay grades and ten steps per grade. Law enforcement officers (LEOs) are paid according to a modified version of this structure that alters base pay rates for grades 3 through 10. As of January, 2010, the minimum pay grade for a federal law enforcement officer was general schedule grade 3 (GS-3), step 1. This grade earned a base pay of

SPECIALTIES

Federal Law Enforcement Agents Specialty

Responsibilities

Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents

Regulate and investigate violations of federal firearms and explosives laws, as well as of federal alcohol and tobacco tax regulations.

Central Intelligence Agency (CIA) agents

Collect, evaluate, and report on foreign intelligence to assist the president and other top U.S. government officials in making decisions related to the country’s national security.

Customs and Border Protection (CBP) agents

Protect more than 8,000 miles of international land and water boundaries. They detect and prevent the smuggling and unlawful entry of undocumented foreign nationals into the United States, guard against terrorist infiltration of U.S. borders, apprehend those persons found in violation of immigration laws, and intercept contraband. They investigate violations of narcotics smuggling, money laundering, and customs fraud.

Diplomatic security agents

Advise U.S. ambassadors on all security matters, manage security programs, investigate passport and visa fraud, conduct personnel security investigations, issue security clearances, and protect the secretary of state and foreign dignitaries.

Drug Enforcement Administration (DEA) agents

Enforce laws and regulations relating to illegal drugs. (continued on next page)

Civil Services: Public Safety $26,208 plus a locality pay bonus based on cost of living in the assigned area. For example, a GS-3, step 1, uniformed officer based in the Washington, D.C., area earned $32,556 including locality bonus. Criminal investigators generally start at either the GS-5 or the GS-7 level, depending on education and experience. These personnel earned 2010 base pay of $33,829 or $38,511, respectively, plus locality pay, plus law enforcement availability pay (LEAP), which is a bonus of 25 percent of base pay earned by personnel who routinely work a substantial number of unscheduled hours. The highest salary on the federal general schedule is GS-15, step 10, which represented a base salary of $129,517 in 2010. The maximum GS salary permitted by law, including locality and LEAP bonuses, was $155,500. Federal cabinet secretaries,

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such as the secretary of homeland security and the U.S. attorney general, earned $199,700 in 2010. Salary or step increases are awarded based on merit or longevity. Steps may be awarded annually based on merit. Longevity increases are awarded at the rate of one step per year for the first three years, one step per two years for steps 4 through 6, and one step per three years for steps 7 through 10. Clientele Interaction. In some cases, federal officers’ work may be very enjoyable and impressive, especially when their assignments are at the White House, the Supreme Court, Congress, or an embassy. This work could result in assignments all over the world, including in combat zones. Generally, uniformed officers interact with the public more closely than do investigative officers, but their work parameters depend on the statutory au-

Occupation Specialties: Federal Law Enforcement Agents (continued) Specialty

Responsibilities

Federal Bureau of Investigation (FBI) agents

Investigate organized crime, public corruption, financial crime, fraud against the government, bribery, copyright infringement, civil rights violations, bank robbery, extortion, kidnapping, air piracy, terrorism, espionage, interstate criminal activity, drug trafficking, and other violations of federal laws.

Immigration and Customs Enforcement (ICE) agents

Facilitate the entry of legal visitors and immigrants to the United States and detain and deport those arriving illegally.

Secret Service agents

Protect the president, the vice president, and their immediate families; presidential candidates; former presidents; and foreign dignitaries visiting the United States. They also investigate counterfeiting, forgery of government checks or bonds, fraudulent use of credit cards, and computer and telecommunications fraud.

Uniformed Secret Service officers

Protect the White House grounds, residences of top government officials, and embassies of foreign nations located in Washington, D.C. They are the police force for the Secret Service.

U.S. marshals

Protect the federal courts and ensure the effective operation of the judicial system. They provide protection for federal judges, transport federal prisioners, protect federal witnesses, pursue and arrest federal fugitives, and manage assets seized during criminal investigations.

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thority of their particular employing agency or department. Amenities, Atmosphere, and Physical Grounds. Federal officers may work in large cities, deserts, forests, or just about anywhere in the United States or abroad. As is true of most large organizations, federal agencies provide significant opportunities for advancement and training, as well as extensive employee benefits. Like most law enforcement officers, federal officers may experience a fair amount of danger, particularly if they are assigned to work overseas in combat zones or undercover within criminal or terrorist organizations. Typical Number of Employees. About 14 percent of law enforcement personnel work at the federal level. There are approximately 140,000 federal law enforcement personnel with weapons authority, in over one hundred federal entities. The majority of these personnel work in the DHS, the DEA, the FBI, and the Federal Bureau of Prisons (FBP). DHS and FBP alone account for almost 80 percent of these officers. Traditional Geographic Locations. Federal offices and employees are located throughout the United States. Exactly where employees can anticipate working depends on the law enforcement authority of the agencies that employ them. Someone who enforces the Federal Antiquities Act is likely to work in the western United States, while ensuring that pharmacies comply with food and drug laws could result in an assignment in almost any city or town inside, or even outside, the country. A regional security officer employed by the DSS could be assigned anywhere in the world and might work alongside INTERPOL or the United Nations. Pros of Working for a Federal Agency. Federal agency employees have the opportunity to work throughout the United States and sometimes in foreign countries. They receive extensive general and specialized training (depending on the agency) and may even learn new languages or critical skills. Assignments could include protecting the president, working undercover in a drug cartel, or simply verifying safety information provided to the government by a nuclear plant licensee. It is very easy to move between different federal agencies, so workers can change their environment, city, state, or legal area without losing their salaries or benefits.

Cons of Working for a Federal Agency. About 14 percent of law enforcement officers are employed at the federal level. Most federal agencies require their public safety officers to sign mobility statements, so they can be reassigned anywhere in the United States, or even throughout the world, including combat zones. Federal agencies are extremely bureaucratic institutions, and some employees may chafe at the level of red tape involved in working for such institutions. Costs Payroll and Benefits: The federal government pays salaries and benefits established and codified by law. Salaries include locality bonuses and either overtime or LEAP bonuses as appropriate. Benefits are administered by the Office of Personnel Management and include guaranteed retirement benefits, medical benefits, survivor benefits, and a thrift savings plan. Supplies: The range of supplies required by federal agencies is immense and includes vehicles, computer systems, weapons, forensic equipment, office supplies, secure communications systems, uniforms, and so on. External Services: While many government agencies employ all necessary personnel directly, other may contract a range of services, including officers. For example, the Federal Protective Service, which is responsible for safeguarding more than nine thousand buildings, directly employs only 1,225 personnel. To fulfill its mandate, the service contracts more than 15,000 additional security guards. Utilities: Federal agencies collectively use a great deal of electricity and gas, as well as telephone and Internet service. Taxes: Federal agencies do not pay federal taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES According to the BJS, federal officers’ duties include criminal investigation (38 percent of activity), police response and patrol (21 percent), corrections and detention (16 percent), court operations (5 percent), and security and protection (4 percent), in addition to other miscellaneous re-

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PROFILE

Park Ranger Considerations

Qualifications

Description

Creates and conducts programs to inform people of the scientific, natural, and historical importance of parks.

Career clusters

Government and Public Administration; Hospitality and Tourism; Law, Public Safety, and Security

Interests

Data

Working conditions

Work outside; work both inside and outside

Minimum education level

Apprenticeship; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; volunteer work; part-time work

Licensure and certification

Recommended

Employment outlook

Average growth expected

Holland interest score

ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

sponsibilities (16 percent). Police departments at the local to state levels perform most of the same functions. Sheriffs may be responsible for court security and service of process, while state troopers usually patrol state highways and areas outside of local municipalities. There is no national federal police force. The FBI and other federal agencies that have national jurisdiction are investigative organizations and do not provide uniformed police officers to patrol and keep the general peace. The federal agencies that employ uniformed police personnel, such as the Federal Protective Service and the Park Police, have very limited jurisdictions. The following umbrella categories apply to the organizational structure of public safety agencies: ■ ■ ■ ■

Senior Administration Supervision Investigation Uniformed Officers

■

■ ■

Technology, Research, Design, and Development Operations and Support Security

Senior Administration Various titles are used to designate the senior commanders of public safety organizations, including senior executive, police commissioner, police chief, and sheriff. Federal law enforcement agencies are led by administrators, commissioners, and directors. Additional senior leaders are members of the Senior Executive Service (for pay purposes), and their exact titles vary with each organization but may include division director, special agent in charge, or assistant inspector general. Larger police departments may have both commissioners of public safety and chiefs of police. In such cases, fire and health services may also report to the public safety commissioner. One U.S. marshal is appointed to each of the ninety-four U.S. district

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courts, and those who work under the marshals are considered deputies. This structure is very similar to the system of county sheriffs, who are elected and usually designate those who serve under them as deputy sheriffs. Senior administration occupations may include the following:

mally be hired directly into this type of position. At the local level, by contrast, police officers with good performance and experience compete for promotion to an investigative grade. Investigative occupations may include the following: ■

■ ■ ■ ■

■ ■ ■ ■

FBI Director Inspector General DEA Administrator Federal Law-Enforcement Training Center Director Federal Protective Service Director Police Commissioner/Chief Sheriff U.S. Marshal

Supervision Executive managers serve over several supervisors, who direct subordinate investigators, detectives, and officers. At the federal level, supervisors have titles such as division director or special agent in charge. In police departments, lieutenants and captains usually manage other groups, with more diversity coming with the higher grade. Supervisors, group supervisors, team supervisors and similar titles are used in federal services. In police departments, these individuals may be designated as sergeants or corporals. Federal, state, and local personnel usually use “senior” to designate someone who is a step above other agents or officers, but not yet a supervisor. Supervision occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Captain Lieutenant Group Supervisor Division Director Special Agent in Charge Regional Security Officer Regional Inspector General

Investigation Special agents and detectives are the primary investigators of crimes. These nonuniformed personnel search for the pieces of the puzzle to catch criminals and collect the evidence required to convict them. In a federal agency, a person will nor-

■ ■ ■

Special Agent Detective Investigator Inspector

Uniformed Officers Police and other uniformed officers respond to calls for assistance, patrol areas to protect lives and property, and enforce laws. While a significant number of calls relate to roadside assistance and violations and domestic disturbances, these can also be the most dangerous types of calls to answer. Officers write reports, testify in court, collect evidence, and generally make their presence known in whatever community they serve. In addition to these relatively mundane duties, however, there will be times filled with tremendous stress and danger. The greatest challenge for uniformed officers is being ready at a moment’s notice. They must maintain physical and mental agility to ensure that their skills are the best. Some police officers have special skills or training, such as in crime scene investigation, K-9 (canine) handling, or hazardous material handling. Prospective officers with bilingual skills or a record of military service have an increased chance for being hired. Uniformed occupations may include the following: ■ ■ ■ ■

Police Officer Trooper Border Patrol Agent Patrol Officer

Technology, Research, Design, and Development Technological careers in police and public safety services cover a range of functions, from forensic analysis through design and implementation of weapons, information technology, and communications systems. Technology has transformed basic aspects of police work. For example, rolling a person’s fingers across a piece of glass with

Civil Services: Public Safety black printer’s ink on it to take prints is becoming less frequent. Digital images of fingerprints can be taken with a device no larger than a cell phone and sent through the National Crime Information Center (NCIC) and the Integrated Automated Fingerprint Identification System (IAFIS) in a matter of minutes. Computers are a secondary means of communication in patrol vehicles, and some officers wear video cameras attached to their headgear. There are portable drug test kits, and officers must know when to call specialists to dismantle methamphetamine labs. Research and design specialists develop new technological devices and train officers in their use. With every new development in the collection and analysis of evidence, such as using deoxyribonucleic acid (DNA) to identify suspects, public safety becomes more effective. At the same time, people who break the law are developing methods

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341

to evade law enforcement technology. There are just as many people working to improve such technology as there are using it in the field. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■

Crime Scene Investigator Researcher Firearms Instructor/Armorer Technician

Operations and Support Depending on their size, departments and agencies may employ numerous and diverse support staff. One support field that has been growing since the terrorist attacks of September 11, 2001, is intelligence analysis. This area involves both national security and crime analysis. In earlier times, a police department worked with informants and

SPECIALTIES

Police Officers Specialty

Responsibilities

Deputy sheriffs

Maintain law and order and serve the legal processes of the courts. They patrol an assigned area to enforce laws, investigate crimes, and arrest violators. They also serve subpoenas and transport or escort prisoners between prisons, courtrooms, and medical facilities.

Internal affairs investigators

Investigate complaints filed against police officers by citizens by interviewing the persons making the complaints and obtaining facts concerning the complaints. They conduct an investigation, using witnesses and tangible evidence, and submit their report to the commanding officer for review.

Narcotic and vice detectives

Investigate and apprehend persons suspected of illegal sales or use of narcotics or of violating anti-vice laws.

Special agents

Investigate alleged or suspected criminal violations of federal, state, and local laws to determine if evidence is sufficient to recommend prosecution. They analyze the type of the complaint or charge and help identify the issues involved and the types of evidence needed.

State highway police officers

Patrol state highways within an assigned area, in vehicles equipped with two-way radios, to enforce motor vehicle and criminal laws.

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pin maps. While informants still represent a key resource, there has been tremendous growth in the area of information analysis and sharing. New data centers called “fusion centers” have been established to support law enforcement operations and facilitate intelligence sharing. There are about fifty such centers throughout the United States, and much of their funding has come from the federal government. Federal, state, and local public safety departments share operational responsibilities and intelligence analysis. One of the earliest successes in this area has been the El Paso Intelligence Center in Texas. Although started by the U.S. Department of Justice, it has evolved into a multinational operation that includes local and tribal police departments. These centers represent one area of increasing opportunity for operations and support personnel. Operations and support occupations may include the following: ■ ■ ■ ■

Intelligence Analyst Computer Programmer Communications Specialist Liaison Officer

Security Security personnel ensure that those who enforce the laws are themselves honest, law-abiding citizens. They run clearances on new officers and agents to ensure that they are trustworthy. They also maintain and ensure the integrity of physical security systems. They evaluate and monitor all government buildings and all personnel who work on sensitive government programs and research. In many cases, salary opportunities for security personnel may be the same as for police and criminal investigators. Security systems are integral to the successful protection of government officials, from the president downward, and security officers are therefore indispensable members of protective details and teams. Security occupations may include the following: ■ ■ ■ ■

Computer Analyst Forensic Accountant Security Officer Data Analyst

INDUSTRY

OUTLOOK

Overview The outlook for the public safety sector shows it to be stable or on the rise. The BLS projects growth in patrol officer jobs of 7 to 13 percent between 2008 and 2018, while detective and criminal investigator positions are projected to grow by 17 percent during the same period. The smallest projected employment increase is among transit and railroad police, with only a 5 percent anticipated change over those same ten years, representing as few as two hundred new positions. Employment Advantages The advantages of careers in public safety, public service, and homeland security are primarily twofold: making a contribution to society and enjoying a secure professional position. Many people seek occupations that will allow them to contribute to their community, state, or nation. They may become soldiers, sailors, teachers, social workers, firefighters, mayors, and so on to improve their communities. Careers in law enforcement and public safety provide firsthand opportunities to do just that. Such careers may not resemble their depictions in television or in films, but they have positive effects by making people, property, and institutions more safe and secure. There will always be a need for public safety employees, and society recognizes these men and women as the professionals they are. Many departments and agencies offer generous salaries and extensive benefits, including health insurance and reasonable pension plans. Professionals in the field know that they will not become rich or famous, but they also recognize that they will have job security. Law enforcement and public safety careers are respected and a source of pride. A special bond develops among the brothers and sisters, parents and children who enter this line of work. The recession of 2007-2009 led to budget cuts and shortfalls, and police officers went without raises so that their fellow officers could retain their positions and the streets could remain safe. Being the first responder to a crime or accident bears significant responsibility and pride. Saving a life is an employment advantage that cannot be measured.

Civil Services: Public Safety Annual Earnings In 2006, according to the BJS, federal, state, and local governmental expenditures on police protection totaled $98.9 billion. Between 1982 and 2006, these expenditures increased by 420 percent, or an average of 7.1 percent per year. Government at all levels was affected by the financial crisis of 20072009; however, in most jurisdictions, public safety spending is considered to be among the highest budgetary priorities, and it sometimes escapes cuts that are otherwise made across the board. In the long term, spending on public safety can be expected to continue growing in line with its past growth.

RELATED RESOURCES FOR FURTHER RESEARCH Administrative Office of the United States Courts 1 Columbus Circle NE Washington, DC 20544 Tel: (202) 502-2600 http://www.uscourts.gov Government Accountability Office 441 G St. NW Washington, DC 20548 Tel: (202) 512-3000 http://www.gao.gov Office of Personnel Management 1900 E St. NW Washington, DC 20415 Tel: (202) 606-1800 http://www.opm.gov U.S. Department of Homeland Security 245 Murray Ln. SW Washington, DC 20528 Tel: (202) 282-8000 http://www.dhs.gov U.S. Department of Justice 950 Pennsylvania Ave. NW Washington, DC 20530-0001 http://www.justice.gov

ABOUT

THE

343

AUTHOR

Keith Gregory Logan is an assistant professor in the Department of Criminal Justice at Kutztown University and a consultant specializing in whistleblower retaliation. He teaches courses in homeland security and defense, criminal law and procedure, and contemporary issues. He holds an undergraduate degree in political science, a master’s degree in criminal justice, and a law degree (J.D.). He is a member of the District of Columbia Bar and the Virginia State Bar. A former federal law enforcement officer and security officer, he also served as a special assistant United States attorney in the District of Columbia and the Eastern District of Virginia (EDVA) and represented the United States Attorney’s Office, EDVA, before the Fourth Circuit Court of Appeals. He served with the following agencies during his career: DEA, U.S. Agency for International Development, General Services Administration, Department of Interior, Department of Education, Environmental Protection Agency, and Nuclear Regulatory Commission. In 2007, he was a guest lecturer on the American criminal justice system and homeland security at the Russian Federation Diplomatic Academy in Moscow. He is the editor of Homeland Security and Intelligence, published April 15, 2010.

FURTHER

READING

Cole, George F., and Christopher E. Smith. The American System of Criminal Justice. 11th ed. Belmont, Calif.: Thomson Wadsworth, 2007. Cordner, Gary, and Kathryn Scarborough. Police Administration. 7th ed. New Providence, N.J.: LexisNexis/Anderson, 2010. Dempsey, John S., and Linda S. Forst. An Introduction to Policing. 5th ed. Belmont, Calif.: Cengage Learning, 2010. Hess, Karen. Introduction to Law Enforcement and Criminal Justice. 9th ed. Belmont, Calif.: Cengage Learning, 2009. O*NET OnLine. Summary Report for: 3303021.05—Immigration and Customs Inspectors. http://online.onetcenter.org/ link/summary/33-3021.05.

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Reaves, Brian A. Census of State and Local Law Enforcement Agencies, 2004. Washington, D.C.: U.S. Department of Justice, Bureau of Justice Statistics, 2007. http://bjs.ojp.usdoj.gov/ index.cfm?ty=pbdetail&iid=539. _______. Federal Law Enforcement Officers, 2004. Washington, D.C.: U.S. Department of Justice, Bureau of Justice Statistics, 2006. http://bjs. ojp.usdoj.gov/index.cfm?ty=pbdetail&iid= 867. Schmalleger, Frank. Criminal Justice Today. 9th ed. Upper Saddle River, N.J.: Prentice Hall, 2007. Stojkovic, Stan, David Kalinich, and John Klofas. Criminal Justice Organizations: Administration and Management. 4th ed. Belmont, Calif.:

Thomson Higher Education, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Walker, Samuel, and Charles M. Katz. Police in America. 6th ed. Boston: McGraw Hill, 2008.

SURVEY OF

American Industry and Careers

SURVEY OF

American Industry and Careers Volume 2 Coal Mining Industry—Food Retail Industry

The Editors of Salem Press

Salem Press Pasadena, California

Hackensack, New Jersey

Editorial Director: Christina J. Moose Project Editor: Rowena Wildin Manuscript Editors: Stacy Cole, Andy Perry Acquisitions Manager: Mark Rehn Administrative Assistant: Paul Tifford, Jr.

Research Supervisor: Jeffry Jensen Photo Editor: Cynthia Breslin Beres Design and Layout: James Hutson Additional Layout: William Zimmerman

Cover photo: ©Pauline St. Denis/CORBIS

Copyright ©2012, by Salem Press, A Division of EBSCO Publishing, Inc. All rights in this book are reserved. No part of this work may be used or reproduced in any manner whatsoever or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without written permission from the copyright owner except in the case of brief quotations embodied in critical articles and reviews or in the copying of images deemed to be freely licensed or in the public domain. For information, address the publisher, Salem Press, at [email protected]. ∞ The paper used in these volumes conforms to the American National Standard for Permanence of Paper for Printed Library Materials, X39.48-1992 (R1997). Library of Congress Cataloging-in-Publication Data Survey of American industry and careers / The Editors of Salem Press. v. cm. Includes bibliographical references and indexes. ISBN 978-1-58765-768-9 (set : alk. paper) — ISBN 978-1-58765-769-6 (vol. 1 : alk. paper) — ISBN 978-158765-770-2 (vol. 2 : alk. paper) — ISBN 978-1-58765-771-9 (vol. 3 : alk. paper) — ISBN 978-1-58765-772-6 (vol. 4 : alk. paper) — ISBN 978-1-58765-773-3 (vol. 5 : alk. paper) — ISBN 978-1-58765-774-0 (vol. 6 : alk. paper) 1. Business—Vocational guidance—United States. 2. Industries—United States. 3. Occupations— United States. 4. Vocational guidance—United States. I. Salem Press. HF5382.5.U5S87 2012 331.7020973—dc23 2011019601 First Printing

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Contents Complete List of Contents . . . . . . . . . . . . . . . . . . . . xxxvii List of Tables and Sidebars . . . . . . . . . . . . . . . . . . . . . . xli Coal Mining Industry . . . . . . . . . . . . . . . . . . . . . . . . 345 Complementary and Alternative Health Care Industry . . . . . . 362 Computer Hardware and Peripherals Industry . . . . . . . . . . 379 Computer Software Industry . . . . . . . . . . . . . . . . . . . . 397 Computer Systems Industry . . . . . . . . . . . . . . . . . . . . . 414 Construction Equipment Industry . . . . . . . . . . . . . . . . . 432 Corporate Education Services. . . . . . . . . . . . . . . . . . . . 452 Counseling Services . . . . . . . . . . . . . . . . . . . . . . . . . 469 Criminal Justice and Prison Industry . . . . . . . . . . . . . . . . 485 Day-Care Services . . . . . . . . . . . . . . . . . . . . . . . . . . 503 Defense Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . 523 Dental and Orthodontics Industry . . . . . . . . . . . . . . . . . 541 Electrical and Gas Appliances Industry. . . . . . . . . . . . . . . 559 Electrical Power Industry . . . . . . . . . . . . . . . . . . . . . . 578 Environmental Engineering and Consultation Services . . . . . . 593 Farming Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . 613 Federal Public Administration . . . . . . . . . . . . . . . . . . . 631 Financial Services Industry . . . . . . . . . . . . . . . . . . . . . 648 Fishing and Fisheries Industry . . . . . . . . . . . . . . . . . . . 663 Food Manufacturing and Wholesaling Industry . . . . . . . . . . 681 Food Retail Industry . . . . . . . . . . . . . . . . . . . . . . . . . 704

xxxv

Complete List of Contents VOLUME Contents . . . . . . . . . . . . . . . . . . . . . . v Publisher’s Note . . . . . . . . . . . . . . . . . vii Contributors . . . . . . . . . . . . . . . . . . . xi Complete List of Contents . . . . . . . . . . . xiii List of Tables and Sidebars . . . . . . . . . . xvii Accounting Services . . . . . . . . . . . . . . . 1 Advertising and Marketing Industry . . . . . . 19 Airline Industry . . . . . . . . . . . . . . . . . 36 Alternative Power Industry . . . . . . . . . . . 54 Animal Care Services . . . . . . . . . . . . . . 74 Apparel and Fashion Industry . . . . . . . . . 86 Automobiles and Personal Vehicles Industry . . . . . . . . . . . . . . . . . . . 105

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Banking Industry . . . . . . . . . Batteries and Fuel Cells Industry Beverage and Tobacco Industry. Biofuels Industry . . . . . . . . . Broadcast Industry . . . . . . . . Building Architecture Industry . Building Construction Industry . Business Services . . . . . . . . .

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125 141 159 177 197 215 233 252

Casino Industry. . . . . . . Chemicals Industry. . . . . Civil Services: Planning . . Civil Services: Public Safety

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271 288 305 325

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Contents . . . . . . . . . . . . . . . . . . . . xxxv List of Tables and Sidebars . . . . . . . . . . . xli

Defense Industry . . . . . . . . . . . . . . . . 523 Dental and Orthodontics Industry . . . . . . 541

Coal Mining Industry . . . . . . . . . Complementary and Alternative Health Care Industry . . . . . . . . Computer Hardware and Peripherals Industry . . . . . . . . . . . . . . . Computer Software Industry . . . . . Computer Systems Industry . . . . . . Construction Equipment Industry . . Corporate Education Services . . . . . Counseling Services . . . . . . . . . . Criminal Justice and Prison Industry .

Electrical and Gas Appliances Industry . . . . 559 Electrical Power Industry . . . . . . . . . . . 578 Environmental Engineering and Consultation Services . . . . . . . . . . . . 593

. . . . 345 . . . . 362 . . . . . . .

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379 397 414 432 452 469 485

Farming Industry . . . . . . . . . . . . Federal Public Administration . . . . Financial Services Industry . . . . . . Fishing and Fisheries Industry. . . . . Food Manufacturing and Wholesaling Industry . . . . . . . . . . . . . . . Food Retail Industry . . . . . . . . . .

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613 631 648 663

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Day-Care Services. . . . . . . . . . . . . . . . 503 VOLUME Contents . . . . . . . . . . . . . . . . . . . . . lix Complete List of Contents . . . . . . . . . . . lxi List of Tables and Sidebars . . . . . . . . . . . lxv

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Food Services . . . . . . . . . . . . . . . . . . 721 Freight Transport Industry . . . . . . . . . . 742 Funerary Industry . . . . . . . . . . . . . . . 760

xxxvii

Survey of American Industry and Careers Furniture and Home Furnishings Industry . . . . . . . . . . . . . . . . . . . 775 Hand Tools and Instruments Industry . . Health and Fitness Industry . . . . . . . . Heavy Machines Industry . . . . . . . . . Higher Education Industry . . . . . . . . Highway, Road, and Bridge Construction Industry . . . . . . . . . . . . . . . . . Home Maintenance Services . . . . . . . Hospital Care and Services . . . . . . . . Hotels and Motels Industry . . . . . . . . Household and Personal Products Industry . . . . . . . . . . . . . . . . .

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793 808 825 844

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863 881 899 918

Industrial Design Industry . . . . . . . . . . . 952 Insurance Industry . . . . . . . . . . . . . . . 971 Internet and Cyber Communications Industry . . . . . . . . . . . . . . . . . . . 989 Landscaping Services . . . . . . Legal Services and Law Firms . Libraries and Archives Industry Light Machinery Industry . . . Livestock and Animal Products Industry. . . . . . . . . . . . Local Public Administration . .

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1005 1026 1043 1060

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Contents . . . . . . . . . . . . . . . . . . . lxxxiii Complete List of Contents . . . . . . . . . . lxxxv List of Tables and Sidebars . . . . . . . . . lxxxix

Nuclear Power Industry . . . . . . . . . . . 1297

Logging Industry . . . . . . . . . . . . . . . 1113

Paper Manufacturing and Products Industry. . . . . . . . . . . . . . . . Passenger Transportation and Transit Industry. . . . . . . . . . . . . . . . Personal Services . . . . . . . . . . . . Petroleum and Natural Gas Industry . Pharmaceuticals and Medications Industry. . . . . . . . . . . . . . . . Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry . Plastics and Rubber Manufacturing Industry. . . . . . . . . . . . . . . . Political Advocacy Industry. . . . . . . Postal and Package Delivery Services .

Mass Transportation Vehicles Industry . Medicine and Health Care Industry . . . Metals Manufacturing Industry . . . . . Mining Industry . . . . . . . . . . . . . . Motion Picture and Television Industry . Museums and Cultural Institutions Industry. . . . . . . . . . . . . . . . . Music Industry . . . . . . . . . . . . . .

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1131 1151 1169 1187 1204

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National and International Security Industry. . . . . . . . . . . . . . . . . . . 1260 Natural Resources Management . . . . . . . 1276

Outdoor Recreation Industry . . . . . . . . 1312

VOLUME Contents . . . . . . . . . . . . . . . . . . . . cvii Complete List of Contents . . . . . . . . . . . cix List of Tables and Sidebars . . . . . . . . . . cxiii Printing Industry . . . . . . . . . . . Private Education Industry . . . . . . Public Elementary and Secondary Education Industry . . . . . . . . Public Health Services . . . . . . . . Publishing and Information Industry

. . . . 1495 . . . . 1515 . . . . 1537 . . . . 1554 . . . . 1572 xxxviii

. . . 1332 . . . 1351 . . . 1369 . . . 1384 . . . 1403 . . . 1423 . . . 1440 . . . 1458 . . . 1476

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Real Estate Industry. . . . . . . . . Rental and Leasing Services . . . . Residential Medical Care Industry . Restaurant Industry . . . . . . . . . Retail Trade and Service Industry .

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1588 1606 1626 1644 1664

Scientific and Technical Services . . . . . . 1682 Scientific, Medical, and Health Equipment and Supplies Industry . . . . 1703

Complete List of Contents Shipbuilding, Submarines, and Naval Transport Industry. . . . . . . . . . Space Exploration and Space Science Industry. . . . . . . . . . . . . . . . Spectator Sports Industry. . . . . . . . Sports Equipment Industry. . . . . . .

Telecommunications Equipment Industry. . . . . . . . . . . . . . . . . . . 1799 Telecommunications Infrastructure Industry. . . . . . . . . . . . . . . . . . . 1819

. . . 1722 . . . 1741 . . . 1762 . . . 1783

VOLUME

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Contents . . . . . . . . . . . . . . . . . . . cxxxi Complete List of Contents . . . . . . . . . cxxxiii List of Tables and Sidebars . . . . . . . . cxxxvii

Waste Management Industry . . . . . . . . . 1981 Watches and Jewelry Industry . . . . . . . . 1999 Water Supply Industry . . . . . . . . . . . . 2017

Textile and Fabrics Industry . . . . . . Theater and Performing Arts Industry Themed Entertainment Industry . . . Toys and Games Industry. . . . . . . . Travel and Tourism Industry. . . . . .

Employment by Industry, 2008 and Projected 2018 . . . . . . . . . . . Fortune 500 Companies by Industry, 2009. . . . . . . . . . . . . . . . . Bibliography. . . . . . . . . . . . . . Electronic Resources . . . . . . . . .

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1839 1859 1877 1893 1910

Veterinary Industry . . . . . . . . . . . . . . 1927 Video, Computer, and Virtual Reality Games Industry . . . . . . . . . . . . . . 1947

. . . . 2037 . . . . 2044 . . . . 2060 . . . . 2129

Industries by Career Cluster . . . . . . . . . 2161 Jobs and Careers . . . . . . . . . . . . . . . 2164 Subject Index . . . . . . . . . . . . . . . . . 2181

Warehousing and Storage Industry . . . . . 1964

xxxix

List of Tables and Sidebars Accommodation Industry’s Contribution to the U.S. Economy, 920 Accountant: Occupation Profile, 12 Accountants and Auditors: Occupation Specialties, 4 Activities Therapist: Occupation Specialties, 1636 Actor: Occupation Specialties, 1871 Actuary: Occupation Profile, 984 Advertising Account Executive: Occupation Profile, 25 Advertising Agent: Occupation Specialties, 27 Aerospace Engineer: Occupation Profile, 1756 Aerospace Engineer: Occupation Specialties, 1755 Agricultural Scientist: Occupation Specialties, 627 Agriculture: Projected Employment for Selected Occupations, 628 Air Transportation: Projected Employment for Selected Occupations, 51 Aircraft Mechanic: Occupation Profile, 48 Airline Industry’s Contribution to the U.S. Economy, 39 Ambulatory Health Care Services’ Contribution to the U.S. Economy, 1153 Amusement Parks: Projected Employment for Selected Occupations, 1889 Animal Caretaker: Occupation Profile, 81 Animal Caretaker: Occupation Specialties, 82 Apparel Industry: Projected Employment for Selected Occupations, 102

Apparel Worker: Occupation Specialties, 92 Architect: Occupation Profile, 225 Architect: Occupation Specialties, 228 Archivist and Curator: Occupation Profile, 1235 Archivist and Curator: Occupation Specialties, 1237 Athletic Trainer: Occupation Profile, 1773 Auditor: Occupation Profile, 14 Automobile Salesperson: Occupation Profile, 112 Automotive Technician: Occupation Specialties, 119 Bank Teller: Occupation Profile, 135 Barber: Occupation Profile, 1374 Bellhop/Bell Captain: Occupation Specialties, 931 Beverage and Tobacco Product Manufacturing: Projected Employment for Selected Occupations, 174 Bindery Worker: Occupation Specialties, 1510 Biomedical Engineer: Occupation Profile, 1714 Biomedical Equipment Technician: Occupation Profile, 1716 Boilermaker: Occupation Profile, 191 Brickmason/Stonemason: Occupation Profile, 247 Broadcast Technician: Occupation Specialties, 210 Broadcasting and Telecommunications Industries, inputs consumed by the, 201 Broadcasting and Telecommunications xli

Industries’ Contributions to the U.S. Economy, The, 201 Broadcasting: Projected Employment for Selected Occupations, 212 Budget Analyst: Occupation Profile, 262 Bulldozer Operator: Occupation Specialties, 873 Bus Driver: Occupation Profile, 1364 Business Services Industry’s Contribution to the U.S. Economy, 254 Camera Operator: Occupation Profile, 1220 Career/Technology Education Teacher: Occupation Profile, 464 Chemical Engineer: Occupation Specialties, 299 Chemical Equipment Operator: Occupation Specialties, 300 Chemical Manufacturing: Projected Employment for Selected Occupations, 302 Chemical Products Industry’s Contribution to the U.S. Economy, 289 Chemist: Occupation Profile, 190 Chemist: Occupation Specialties, 189 Child-care Worker: Occupation Profile, 518 Chiropractor: Occupation Profile, 370 Cinematographer: Occupation Profile, 1217 Civil Engineer: Occupation Specialties, 311 Clergy: Occupation Profile, 1435 Clothes Designer: Occupation Profile, 98

Survey of American Industry and Careers College Faculty Member: Occupation Profile, 859 Compositor and Typesetter: Occupation Profile, 1509 Computer and Electronic Product Manufacturing: Projected Employment for Selected Occupations, 394 Computer and Electronic Products Industry’s Contribution to the U.S. Economy, 381 Computer-Controlled Machine Tool Operator: Occupation Profile, 443 Computer-Controlled Machine Tool Operator: Occupation Specialties, 440 Computer-Controlled Tool Programmer: Occupation Profile, 442 Computer Engineer: Occupation Profile, 391 Computer Programmer: Occupation Profile, 408 Computer Security Specialist: Occupation Profile, 1000 Computer Systems Analyst: Occupation Profile, 426 Computer Systems Industry’s Contribution to the U.S. Economy, 416 Construction and Building Inspector: Occupation Specialties, 243 Construction Industry: Projected Employment for Selected Occupations, 250 Construction Industry’s Contribution to the U.S. Economy, The, 234 Construction Manager: Occupation Profile, 874 Contribution of Apparel and Leather Manufacturers to the U.S. Economy, 87 Contribution of Food, Beverage, and Tobacco Product Manufacturing to the U.S. Economy, 685

Contribution of Food Services and Drinking Places to the U.S. Economy, The, 1646 Contribution of Funds, Trusts, and Other Financial Vehicles to the U.S. Economy, The, 651 Contribution of Hospital, Nursing, and Residential Care Facilities to the U.S. Economy, 902 Contribution of Personal Services to the U.S. Economy, 1371 Contribution of Securities, Commodity Contracts, and Investments to the U.S. Economy, The, 650 Contribution of Textile and Textile Produce Mills to the U.S. Economy, The, 1841 Contribution to the U.S. Economy of Scientific, Technical, and Miscellaneous Professional Services, 1683 Cook/Chef: Occupation Profile, 1656 Cook/Chef: Occupation Specialties, 1657 Copywriter: Occupation Profile, 30 Corrections Officer: Occupation Profile, 494 Corrections Officer: Occupation Specialties, 493 Cosmetologist: Occupation Specialties, 1375 Cost Estimator: Occupation Specialties, 1507 Counter and Rental Clerk: Occupation Profile, 1619 Couriers and Messengers Industry: Projected Employment for Selected Occupations, 1492 Dancer/Choreographer: Occupation Profile, 1872 Dancer/Choreographer: Occupation Specialties, 1873 Dental Hygienist: Occupation Profile, 554 xlii

Dental Laboratory Technician: Occupation Specialties, 555 Dentist: Occupation Specialties, 553 Dietician and Nutritionist: Occupation Specialties, 819 Dispatcher: Occupation Profile, 1489 Drafter: Occupation Specialties, 313 Education Administrator: Occupation Specialties, 1527 Educational Counselor: Occupation Specialties, 1549 Educational Services: Projected Employment for Selected Occupations, 1551 Electrical and Electronics Engineer: Occupation Profile, 572 Electrical Equipment, Appliance, and Component Manufacturing: Projected Employment for Selected Occupations, 575 Electrical Equipment, Appliances, and Components Industry’s Contribution to the U.S. Economy, 561 Electrical Line Installer and Repairer: Occupation Specialties, 588 Electromechanical Equipment Assembler: Occupation Profile, 573 Electronic Commerce Specialist: Occupation Profile, 997 Elementary School Teacher: Occupation Profile, 1547 Energy Conservation and Use Technician: Occupation Profile, 607 Energy Conservation and Use Technician: Occupation Specialties, 608 Engineering Technician: Occupation Specialties, 1689 Environmental Engineer: Occupation Profile, 606

List of Tables and Sidebars Fabricated Metal Product Manufacturing: Projected Employment for Selected Occupations, 1183 Farmer/Farm Manager: Occupation Specialties, 625 Farming Industry’s Contribution to the U.S. Economy, 614 Federal Government’s Contribution to the U.S. Economy, The, 633 Federal Law Enforcement Agent: Occupation Specialties, 336-337 Finance and Insurance Industry: Projected Employment for Selected Occupations, 139 Firefighter: Occupation Profile, 1565 Fishing Industry: Projected Employment for Selected Occupations, 677 Fitness Trainer and Aerobics Instructor: Occupation Profile, 818 Flight Attendant: Occupation Profile, 46 Food and Beverage Service Worker: Occupation Profile, 736 Food and Beverage Stores: Projected Employment for Selected Occupations, 718 Food Manufacturing: Projected Employment for Selected Occupations, 700 Food Service Manager: Occupation Profile, 733 Food Services and Drinking Places: Projected Employment for Selected Occupations, 739 Forester and Conservation Scientist: Occupation Specialties, 1288 Forestry Worker: Occupation Profile, 1122 Forklift Operator: Occupation Profile, 1977

Funeral Director: Occupation Profile, 771 Furniture and Related Product Manufacturing: Projected Employment for Selected Occupations, 790 Furniture Manufacturing Industry’s Contribution to the U.S. Economy, 776 Gambling Industry: Projected Employment for Selected Occupations, 286 Gardener and Groundskeeper: Occupation Profile, 1020 Gardener and Groundskeeper: Occupation Specialties, 1021 Geologist and Geophysicist: Occupation Profile, 356 Hazardous Waste Manager: Occupation Profile, 1994 Health Care and Social Assistance Industry: Projected Employment for Selected Occupations, 1166 Health Information Technician: Occupation Profile, 910 Heavy and Civil Engineering Construction: Projected Employment for Selected Occupations, 877 Heavy Equipment Service Technician: Occupation Profile, 839 Highway Maintenance Worker: Occupation Profile, 875 Home Appliance Repairer: Occupation Profile, 888 Hospitals Industry: Projected Employment for Selected Occupations, 915 Hotel/Motel Manager: Occupation Specialties, 927 Hotels Industry: Projected Employment for Selected Occupations, 934 Housekeeper: Occupation Specialties, 1376 xliii

Industrial Designer: Occupation Profile, 965 Industrial Engineer: Occupation Profile, 966 Industrial Hygienist: Occupation Profile, 1091 Industrial Machinery Mechanic: Occupation Profile, 1071 Inputs Consumed by Ambulatory Health Care Services, 1154 Inputs Consumed by Food Services and Drinking Places, 1646 Inputs Consumed by Funds, Trusts, and Other Financial Vehicles, 651 Inputs Consumed by Hospital, Nursing, and Residential Care Facilities, 902 Inputs Consumed by Manufacturers of Food, Beverages, and Tobacco Products, 685 Inputs Consumed by Personal Services, 1371 Inputs Consumed by Scientific, Technical, and Miscellaneous Professional Services, 1684 Inputs Consumed by Securities, Commodity Contracts, and Investments, 650 Inputs Consumed by State and Local Governments, 1097 Inputs Consumed by Textile Mills and Textile Product Mills, 1842 Inputs Consumed by the Accommodation Industry, 921 Inputs Consumed by the Airline Industry, 39 Inputs Consumed by the Apparel and Leather Manufacturing Industry, 88 Inputs Consumed by the Broadcasting and Telecommunications Industries, 201 Inputs Consumed by the Business Services Industry, 254

Survey of American Industry and Careers Inputs Consumed by the Chemical Products Industry, 289 Inputs Consumed by the Computer and Electronic Products Industry, 381 Inputs Consumed by the Computer Systems Industry, 416 Inputs Consumed by the Construction Industry, 234 Inputs Consumed by the Electrical Equipment, Appliances, and Components Industry, 562 Inputs Consumed by the Farming Industry, 614 Inputs Consumed by the Federal Government, 634 Inputs Consumed by the Furniture Manufacturing Industry, 776 Inputs Consumed by the Insurance Industry, 973 Inputs Consumed by the Legal Services Industry, 1029 Inputs Consumed by the Machinery Manufacturing Industry, 830 Inputs Consumed by the Mining Industry, 1191 Inputs Consumed by the Motion Picture and Sound Recording Industries, 1209 Inputs Consumed by the Motor Vehicle Industry, 107 Inputs Consumed by the Oil and Natural Gas Extraction Industry, 1387 Inputs Consumed by the Paper Products Industry, 1335 Inputs Consumed by the Pipeline Transportation Industry, 1388 Inputs Consumed by the Plastics and Rubber Products Industry, 1443 Inputs Consumed by the Primary Metals Manufacturing Industry, 1172

Inputs Consumed by the Printing Industry, 1499 Inputs Consumed by the Publishing Industry, 1575 Inputs Consumed by the Real Estate Industry, 1590 Inputs Consumed by the Rental and Leasing Industry, 1607 Inputs Consumed by the Retail Trade Industry, 1666 Inputs Consumed by the Transit and Ground Passenger Transportation Industry, 1353 Inputs Consumed by the Truck Transportation Industry, 744 Inputs Consumed by the Utilities Industries, 581 Inputs Consumed by the Warehousing and Storage Industry, 1967 Inputs Consumed by the Waste Management Industry, 1984 Inputs Consumed by the Water Transportation Industry, 1725 Inspector and Compliance Officer: Occupation Profile, 167 Inspector and Tester: Occupation Specialties, 533 Insulation Worker: Occupation Profile, 894 Insurance Carriers and Related Activities: Projected Employment for Selected Occupations, 986 Insurance Claims Adjuster and Examiner: Occupation Profile, 983 Insurance Industry’s Contribution to the U.S. Economy, 973 Interior Designer: Occupation Profile, 229 Jeweler and Watch Repairer: Occupation Profile, 2009 Journalist: Occupation Specialties, 1583 xliv

Landscape Architect: Occupation Profile, 1019 Laundry/Dry Cleaning Machine Operator: Occupation Specialties, 1373 Lawyer: Occupation Specialties, 1037 Legal Services Industry’s Contribution to the U.S. Economy, 1029 Librarian: Occupation Specialties, 1053 Library Technician: Occupation Profile, 1055 Locomotive Engineer: Occupation Profile, 1365 Logging Industry: Projected Employment for Selected Occupations, 1128 Lumber Production Worker: Occupation Specialties, 1124 Machinery Manufacturing Industry’s Contribution to the U.S. Economy, The, 829 Machinery Manufacturing: Projected Employment for Selected Occupations, 841 Machinist: Occupation Profile, 803 Mail Carrier: Occupation Profile, 1490 Mail Clerk and Messenger: Occupation Specialties, 1491 Management Analyst and Consultant: Occupation Specialties, 264 Management of Companies and Enterprises: Projected Employment for Selected Occupations, 267 Manufacturers Representative: Occupation Profile, 694 Marine Biologist: Occupation Profile, 1289 Marine Engineer and Architect: Occupation Profile, 1735 Marine Engineer and Architect: Occupation Specialties, 1734

List of Tables and Sidebars Marriage Counselor: Occupation Profile, 473 Meat Cutter: Occupation Profile, 1088 Mechanical Engineer: Occupation Profile, 1074 Media Specialist: Occupation Specialties, 1056 Medical and Health Services Manager: Occupation Specialties, 911 Medical Records Administrator: Occupation Profile, 1637 Medical Scientist: Occupation Profile, 1566 Medical Social Worker: Occupation Profile, 478 Medical Technologist: Occupation Specialties, 1567 Merchandise Displayer: Occupation Profile, 1671 Metal/Plastic Working Machine Operator: Occupation Profile, 1144 Metallurgical/Materials Engineer: Occupation Specialties, 1180 Millwright: Occupation Profile, 697 Mining and Geological Engineer: Occupation Specialties, 1198 Mining and Quarrying: Projected Employment for Selected Occupations, 1201 Mining Industry’s Contribution to the U.S. Economy, 1190 Motion Picture and Sound Recording Industries’ Contribution to the U.S. Economy, 1209 Motion Picture, Video, and Sound Recording Industries: Projected Employment for Selected Occupations, 1222 Motor Vehicle Manufacturing: Projected Employment for Selected Occupations, 122 Motor Vehicles Industry’s Contribution to the U.S. Economy, The, 107

Museums, Historical Sites, and Similar Institutions: Projected Employment for Selected Occupations, 1238 Music Therapist: Occupation Profile, 480 Musical Instrument Repairer: Occupation Specialties, 1254 Musician and Composer: Occupation Profile, 1252 Musician and Composer: Occupation Specialties, 1251 Nuclear Engineer: Occupation Profile, 1306 Nuclear Engineer: Occupation Specialties, 1307 Nuclear Quality Control Inspector: Occupation Profile, 1308 Nurse Practitioner: Occupation Profile, 1638 Nursing and Residential Care Facilities: Projected Employment for Selected Occupations, 1641 Occupation Profile: Accountant, 12 Occupation Profile: Actuary, 984 Occupation Profile: Advertising Account Executive, 25 Occupation Profile: Aerospace Engineer, 1756 Occupation Profile: Aircraft Mechanic, 48 Occupation Profile: Animal Caretaker, 81 Occupation Profile: Architect, 225 Occupation Profile: Archivist and Curator, 1235 Occupation Profile: Athletic Trainer, 1773 Occupation Profile: Auditor, 14 Occupation Profile: Automobile Salesperson, 112 Occupation Profile: Bank Teller, 135 Occupation Profile: Barber, 1374 xlv

Occupation Profile: Biomedical Engineer, 1714 Occupation Profile: Biomedical Equipment Technician, 1716 Occupation Profile: Boilermaker, 191 Occupation Profile: Brickmason/Stonemason, 247 Occupation Profile: Budget Analyst, 262 Occupation Profile: Bus Driver, 1364 Occupation Profile: Camera Operator, 1220 Occupation Profile: Career/ Technology Education Teacher, 464 Occupation Profile: Chemist, 190 Occupation Profile: Child-care Worker, 518 Occupation Profile: Chiropractor, 370 Occupation Profile: Cinematographer, 1217 Occupation Profile: Clergy, 1435 Occupation Profile: Clothes Designer, 98 Occupation Profile: College Faculty Member, 859 Occupation Profile: Compositor and Typesetter, 1509 Occupation Profile: ComputerControlled Machine Tool Operator, 443 Occupation Profile: ComputerControlled Tool Programmer, 442 Occupation Profile: Computer Engineer, 391 Occupation Profile: Computer Programmer, 408 Occupation Profile: Computer Security Specialist, 1000 Occupation Profile: Computer Systems Analyst, 426 Occupation Profile: Construction Manager, 874 Occupation Profile: Cook/Chef, 1656

Survey of American Industry and Careers Occupation Profile: Copywriter, 30 Occupation Profile: Corrections Officer, 494 Occupation Profile: Counter and Rental Clerk, 1619 Occupation Profile: Dancer/ Choreographer, 1872 Occupation Profile: Dental Hygienist, 554 Occupation Profile: Dispatcher, 1489 Occupation Profile: Electrical and Electronics Engineer, 572 Occupation Profile: Electromechanical Equipment Assembler, 573 Occupation Profile: Electronic Commerce Specialist, 997 Occupation Profile: Elementary School Teacher, 1547 Occupation Profile: Energy Conservation and Use Technician, 607 Occupation Profile: Environmental Engineer, 606 Occupation Profile: Firefighter, 1565 Occupation Profile: Fitness Trainer and Aerobics Instructor, 818 Occupation Profile: Flight Attendant, 46 Occupation Profile: Food and Beverage Service Worker, 736 Occupation Profile: Food Service Manager, 733 Occupation Profile: Forestry Worker, 1122 Occupation Profile: Forklift Operator, 1977 Occupation Profile: Funeral Director, 771 Occupation Profile: Gardener and Groundskeeper, 1020 Occupation Profile: Geologist and Geophysicist, 356

Occupation Profile: Hazardous Waste Manager, 1994 Occupation Profile: Health Information Technician, 910 Occupation Profile: Heavy Equipment Service Technician, 839 Occupation Profile: Highway Maintenance Worker, 875 Occupation Profile: Home Appliance Repairer, 888 Occupation Profile: Industrial Designer, 965 Occupation Profile: Industrial Engineer, 966 Occupation Profile: Industrial Hygienist, 1091 Occupation Profile: Industrial Machinery Mechanic, 1071 Occupation Profile: Inspector and Compliance Officer, 167 Occupation Profile: Insulation Worker, 894 Occupation Profile: Insurance Claims Adjuster and Examiner, 983 Occupation Profile: Interior Designer, 229 Occupation Profile: Jeweler and Watch Repairer, 2009 Occupation Profile: Landscape Architect, 1019 Occupation Profile: Library Technician, 1055 Occupation Profile: Locomotive Engineer, 1365 Occupation Profile: Machinist, 803 Occupation Profile: Mail Carrier, 1490 Occupation Profile: Manufacturers Representative, 694 Occupation Profile: Marine Biologist, 1289 Occupation Profile: Marine Engineer and Architect, 1735 Occupation Profile: Marriage Counselor, 473 xlvi

Occupation Profile: Meat Cutter, 1088 Occupation Profile: Mechanical Engineer, 1074 Occupation Profile: Medical Records Administrator, 1637 Occupation Profile: Medical Scientist, 1566 Occupation Profile: Medical Social Worker, 478 Occupation Profile: Merchandise Displayer, 1671 Occupation Profile: Metal/ Plastic Working Machine Operator, 1144 Occupation Profile: Millwright, 697 Occupation Profile: Music Therapist, 480 Occupation Profile: Musician and Composer, 1252 Occupation Profile: Nuclear Engineer, 1306 Occupation Profile: Nuclear Quality Control Inspector, 1308 Occupation Profile: Nurse Practitioner, 1638 Occupation Profile: Occupational Therapist, 515 Occupation Profile: Office Machine Repairer, 1073 Occupation Profile: Online Merchant, 941 Occupation Profile: Packer/ Packager, 1905 Occupation Profile: Painting/ Coating Machine Operator, 1904 Occupation Profile: Paralegal, 1038 Occupation Profile: Park Ranger, 339 Occupation Profile: Parole and Probation Officer, 495 Occupation Profile: Pharmaceutical Sales Representative, 1416 Occupation Profile: Pharmacist, 1410

List of Tables and Sidebars Occupation Profile: Plumber and Pipefitter, 892 Occupation Profile: Precision Assembler, 535 Occupation Profile: Prepress Technician, 1584 Occupation Profile: Principal, 1546 Occupation Profile: Production Coordinator, 1812 Occupation Profile: Professional Athlete, 1774 Occupation Profile: Public Administrator, 1108 Occupation Profile: Public Relations Specialist, 1470 Occupation Profile: Quality Control Inspector, 1795 Occupation Profile: Range Manager, 1290 Occupation Profile: Real Estate Sales Agent, 1601 Occupation Profile: Recreation Program Director, 1324 Occupation Profile: Recreation Worker, 1325 Occupation Profile: Refuse Collector, 1995 Occupation Profile: Research Assistant, 857 Occupation Profile: Retail Salesperson, 715 Occupation Profile: Retail Store Sales Manager, 1675 Occupation Profile: Riveter, 1145 Occupation Profile: Robotics Technician, 804 Occupation Profile: Science Technician, 154 Occupation Profile: Secondary School Teacher, 1531 Occupation Profile: Ship Loader, 755 Occupation Profile: Software Designer, 409 Occupation Profile: Soil Scientist, 1291 Occupation Profile: Solar Energy System Installer, 69

Occupation Profile: Stationary Engineer, 1811 Occupation Profile: Teacher Assistant, 1532 Occupation Profile: Technical Sales Representative, 1715 Occupation Profile: Telecommunications Installer and Repairer, 1834 Occupation Profile: Telephone Installer and Repairer, 1813 Occupation Profile: Textile Machine Operator, 1852 Occupation Profile: Tool and Die Maker, 2012 Occupation Profile: Upholsterer, 788 Occupation Profile: Urban and Regional Planner, 319 Occupation Profile: Veterinary Assistant/Technician, 1939 Occupation Profile: Water and Wastewater Engineer, 2029 Occupation Profile: Water Treatment Plant Operator, 2030 Occupation Profile: Wholesale Sales Representative, 170 Occupation Profile: Wind Energy Engineer, 71 Occupation Profile: Woodworker, 789 Occupation Specialties: Accountants and Auditors, 4 Occupation Specialties: Activities Therapist, 1636 Occupation Specialties: Actor, 1871 Occupation Specialties: Advertising Agent, 27 Occupation Specialties: Aerospace Engineer, 1755 Occupation Specialties: Agricultural Scientist, 627 Occupation Specialties: Animal Caretaker, 82 Occupation Specialties: Apparel Worker, 92 Occupation Specialties: Architect, 228 xlvii

Occupation Specialties: Archivist and Curator, 1237 Occupation Specialties: Automotive Technician, 119 Occupation Specialties: Bellhop/Bell Captain, 931 Occupation Specialties: Bindery Worker, 1510 Occupation Specialties: Broadcast Technician, 210 Occupation Specialties: Bulldozer Operator, 873 Occupation Specialties: Chemical Engineer, 299 Occupation Specialties: Chemical Equipment Operator, 300 Occupation Specialties: Chemist, 189 Occupation Specialties: Civil Engineer, 311 Occupation Specialties: Computer-Controlled Machine Tool Operator, 440 Occupation Specialties: Construction and Building Inspector, 243 Occupation Specialties: Cook/ Chef, 1657 Occupation Specialties: Corrections Officer, 493 Occupation Specialties: Cosmetologist, 1375 Occupation Specialties: Cost Estimator, 1507 Occupation Specialties: Dancer/ Choreographer, 1873 Occupation Specialties: Dental Laboratory Technician, 555 Occupation Specialties: Dentist, 553 Occupation Specialties: Dietician and Nutritionist, 819 Occupation Specialties: Drafter, 313 Occupation Specialties: Education Administrator, 1527 Occupation Specialties: Educational Counselor, 1549

Survey of American Industry and Careers Occupation Specialties: Electrical Line Installer and Repairer, 588 Occupation Specialties: Energy Conservation and Use Technician, 608 Occupation Specialties: Engineering Technician, 1689 Occupation Specialties: Farmer/ Farm Manager, 625 Occupation Specialties: Federal Law Enforcement Agent, 336337 Occupation Specialties: Forester and Conservation Scientist, 1288 Occupation Specialties: Gardener and Groundskeeper, 1021 Occupation Specialties: Hotel/ Motel Manager, 927 Occupation Specialties: Housekeeper, 1376 Occupation Specialties: Inspector and Tester, 533 Occupation Specialties: Journalist, 1583 Occupation Specialties: Laundry/Dry Cleaning Machine Operator, 1373 Occupation Specialties: Lawyer, 1037 Occupation Specialties: Librarian, 1053 Occupation Specialties: Lumber Production Worker, 1124 Occupation Specialties: Mail Clerk and Messenger, 1491 Occupation Specialties: Management Analyst and Consultant, 264 Occupation Specialties: Marine Engineer and Architect, 1734 Occupation Specialties: Media Specialist, 1056 Occupation Specialties: Medical and Health Services Manager, 911 Occupation Specialties: Medical Technologist, 1567

Occupation Specialties: Metallurgical/Materials Engineer, 1180 Occupation Specialties: Mining and Geological Engineer, 1198 Occupation Specialties: Musical Instrument Repairer, 1254 Occupation Specialties: Musician and Composer, 1251 Occupation Specialties: Nuclear Engineer, 1307 Occupation Specialties: Packer/ Packager, 1906 Occupation Specialties: Pharmacist, 1409 Occupation Specialties: Police Officer, 341 Occupation Specialties: Power Plant Operator, 587 Occupation Specialties: Precision Assembler, 534 Occupation Specialties: Property and Real Estate Manager, 1600 Occupation Specialties: Psychologist, 471 Occupation Specialties: Public Relations Specialist, 1469 Occupation Specialties: Rail Transportation Worker, 752 Occupation Specialties: Recreation Worker, 1326 Occupation Specialties: Renewable Energy Technician, 70 Occupation Specialties: Reservation and Ticket Agent, 1920 Occupation Specialties: Science Technician, 1694 Occupation Specialties: Small Engine Mechanic, 1072 Occupation Specialties: Special Education Teacher, 1548 Occupation Specialties: Sports Instructor/Coach, 1772 Occupation Specialties: Telecommunications Equipment Installer/ Repairer, 1833 xlviii

Occupation Specialties: Textile Machine Operator, 1853 Occupation Specialties: Travel Agent, 1921 Occupation Specialties: Veterinarian, 1938 Occupation Specialties: Welder, 1144 Occupational Therapist: Occupation Profile, 515 Occupations in Pharmaceutical and Medicine Manufacturing: Projected Employment for Selected Occupations, 1420 Office Machine Repairer: Occupation Profile, 1073 Oil and Gas Extraction Industry’s Contribution to the U.S. Economy, 1387 Oil and Gas Extraction: Projected Employment for Selected Occupations, 1400 Online Merchant: Occupation Profile, 941 Packer/Packager: Occupation Profile, 1905 Packer/Packager: Occupation Specialties, 1906 Painting/Coating Machine Operator: Occupation Profile, 1904 Paper Manufacturing: Projected Employment for Selected Occupations, 1347 Paper Products Industry’s Contribution to the U.S. Economy, 1335 Paralegal: Occupation Profile, 1038 Park Ranger: Occupation Profile, 339 Parole and Probation Officer: Occupation Profile, 495 Performing Arts: Projected Employment for Selected Occupations, 1874 Personal and Laundry Services: Projected Employment for Selected Occupations, 1382

List of Tables and Sidebars Petroleum and Coal Products Manufacturing: Projected Employment for Selected Occupations, 1401 Pharmaceutical Sales Representative: Occupation Profile, 1416 Pharmacist: Occupation Profile, 1410 Pharmacist: Occupation Specialties, 1409 Pipeline Transporation Industry’s Contribution to the U.S. Economy, The, 1388 Plastics and Rubber Products Industry’s Contribution to the U.S. Economy, 1443 Plastics and Rubber Products Manufacturing: Projected Employment for Selected Occupations, 1455 Plumber and Pipefitter: Occupation Profile, 892 Police Officer: Occupation Specialties, 341 Postal Service Industry: Projected Employment for Selected Occupations, 1493 Power Plant Operator: Occupation Specialties, 587 Precision Assembler: Occupation Profile, 535 Precision Assembler: Occupation Specialties, 534 Prepress Technician: Occupation Profile, 1584 Primary Metal Manufacturing: Projected Employment for Selected Occupations, 1184 Primary Metals Manufacturing Industry’s Contribution to the U.S. Economy, 1172 Principal: Occupation Profile, 1546 Printing and Related Support Activities: Projected Employment for Selected Occupations, 1512 Printing Industry’s Contribution to the U.S. Economy, 1499

Production Coordinator: Occupation Profile, 1812 Professional Athlete: Occupation Profile, 1774 Professional, Scientific, and Technical Services: Projected Employment for Selected Occupations, 1700 Projected Employment for Selected Occupations: Agriculture, 628 Projected Employment for Selected Occupations: Air Transportation, 51 Projected Employment for Selected Occupations: Amusement Parks, 1889 Projected Employment for Selected Occupations: Apparel Industry, 102 Projected Employment for Selected Occupations: Beverage and Tobacco Product Manufacturing, 174 Projected Employment for Selected Occupations: Broadcasting, 212 Projected Employment for Selected Occupations: Chemical Manufacturing, 302 Projected Employment for Selected Occupations: Computer and Electronic Product Manufacturing, 394 Projected Employment for Selected Occupations: Construction Industry, 250 Projected Employment for Selected Occupations: Couriers and Messengers Industry, 1492 Projected Employment for Selected Occupations: Educational Services, 1551 Projected Employment for Selected Occupations: Electrical Equipment, Appliance, and Component Manufacturing, 575 xlix

Projected Employment for Selected Occupations: Fabricated Metal Product Manufacturing, 1183 Projected Employment for Selected Occupations: Finance and Insurance Industry, 139 Projected Employment for Selected Occupations: Fishing Industry, 677 Projected Employment for Selected Occupations: Food and Beverage Stores, 718 Projected Employment for Selected Occupations: Food Manufacturing, 700 Projected Employment for Selected Occupations: Food Services and Drinking Places, 739 Projected Employment for Selected Occupations: Furniture and Related Product Manufacturing, 790 Projected Employment for Selected Occupations: Gambling Industry, 286 Projected Employment for Selected Occupations: Health Care and Social Assistance Industry, 1166 Projected Employment for Selected Occupations: Heavy and Civil Engineering Construction, 877 Projected Employment for Selected Occupations: Hospitals Industry, 915 Projected Employment for Selected Occupations: Hotels Industry, 934 Projected Employment for Selected Occupations: Insurance Carriers and Related Activities, 986 Projected Employment for Selected Occupations: Logging Industry, 1128

Survey of American Industry and Careers Projected Employment for Selected Occupations: Machinery Manufacturing, 841 Projected Employment for Selected Occupations: Management of Companies and Enterprises, 267 Projected Employment for Selected Occupations: Mining and Quarrying, 1201 Projected Employment for Selected Occupations: Motion Picture, Video, and Sound Recording Industries, 1222 Projected Employment for Selected Occupations: Motor Vehicle Manufacturing, 122 Projected Employment for Selected Occupations: Museums, Historical Sites, and Similar Institutions, 1238 Projected Employment for Selected Occupations: Nursing and Residential Care Facilities, 1641 Projected Employment for Selected Occupations: Oil and Gas Extraction, 1400 Projected Employment for Selected Occupations: Paper Manufacturing, 1347 Projected Employment for Selected Occupations: Performing Arts, 1874 Projected Employment for Selected Occupations: Personal and Laundry Services, 1382 Projected Employment for Selected Occupations: Petroleum and Coal Products Manufacturing, 1401 Projected Employment for Selected Occupations: Pharmaceutical and Medicine Manufacturing, 1420 Projected Employment for Selected Occupations: Plastics and Rubber Products Manufacturing, 1455

Projected Employment for Selected Occupations: Postal Service Industry, 1493 Projected Employment for Selected Occupations: Primary Metal Manufacturing, 1184 Projected Employment for Selected Occupations: Printing and Related Support Activities, 1512 Projected Employment for Selected Occupations: Professional, Scientific, and Technical Services, 1700 Projected Employment for Selected Occupations: Publishing Industries, 1585 Projected Employment for Selected Occupations: Rail Transportation, 1147 Projected Employment for Selected Occupations: Real Estate Industry, 1603 Projected Employment for Selected Occupations: Real Estate Rental and Leasing, 1604 Projected Employment for Selected Occupations: Religious, Grantmaking, Civic, Professional, and Similar Organizations, 1437 Projected Employment for Selected Occupations: Rental and Leasing Services, 1623 Projected Employment for Selected Occupations: Restaurants, 1660 Projected Employment for Selected Occupations: Retail Trade Industry, 1679 Projected Employment for Selected Occupations: Scenic and Sightseeing Transportation, 1922 Projected Employment for Selected Occupations: Securities, Commodity Contracts, and Related Activities, 661 l

Projected Employment for Selected Occupations: Social Assistance, 520 Projected Employment for Selected Occupations: Specialty Trade Contractors, 897 Projected Employment for Selected Occupations: Sporting Goods, Hobby, Book, and Music Stores, 1796 Projected Employment for Selected Occupations: Support Activities for Mining, 1399 Projected Employment for Selected Occupations: Support Activities for Transportation, 1367 Projected Employment for Selected Occupations: Telecommunications Industry, 1832 Projected Employment for Selected Occupations: Textile Mills, 1851 Projected Employment for Selected Occupations: Textile Product Mills, 1854 Projected Employment for Selected Occupations: Transit and Ground Passenger Transportation, 1366 Projected Employment for Selected Occupations: Transportation Equipment Manufacturing, 1147 Projected Employment for Selected Occupations: Truck Transportation, 757 Projected Employment for Selected Occupations: Utilities Industry, 590 Projected Employment for Selected Occupations: Warehousing and Storage, 1978 Projected Employment for Selected Occupations: Waste

List of Tables and Sidebars Management and Remediation Services, 1997 Projected Employment for Selected Occupations: Water Transportation, 2031 Projected Employment for Selected Occupations: Wood Product Manufacturing, 230 Property and Real Estate Manager: Occupation Specialties, 1600 Psychologist: Occupation Specialties, 471 Public Administrator: Occupation Profile, 1108 Public Relations Specialist: Occupation Profile, 1470 Public Relations Specialist: Occupation Specialties, 1469 Publishing Industries: Projected Employment for Selected Occupations, 1585 Publishing Industry’s Contribution to the U.S. Economy, 1574 Quality Control Inspector: Occupation Profile, 1795 Rail Transportation: Projected Employment for Selected Occupations, 1147 Rail Transportation Worker: Occupation Specialties, 752 Range Manager: Occupation Profile, 1290 Real Estate Industry: Projected Employment for Selected Occupations, 1603 Real Estate Industry’s Contribution to the U.S. Economy, 1590 Real Estate Rental and Leasing: Projected Employment for Selected Occupations, 1604 Real Estate Sales Agent: Occupation Profile, 1601 Recreation Program Director: Occupation Profile, 1324

Recreation Worker: Occupation Profile, 1325 Recreation Worker: Occupation Specialties, 1326 Refuse Collector: Occupation Profile, 1995 Religious, Grantmaking, Civic, Professional, and Similar Organizations: Projected Employment for Selected Occupations, 1437 Renewable Energy Technician: Occupation Specialties, 70 Rental and Leasing Industry’s Contribution to the U.S. Economy, 1607 Rental and Leasing Services: Projected Employment for Selected Occupations, 1623 Research Assistant: Occupation Profile, 857 Reservation and Ticket Agent: Occupation Specialties, 1920 Restaurants: Projected Employment for Selected Occupations, 1660 Retail Salesperson: Occupation Profile, 715 Retail Store Sales Manager: Occupation Profile, 1675 Retail Trade Industry: Projected Employment for Selected Occupations, 1679 Retail Trade Industry’s Contribution to the U.S. Economy, 1666 Riveter: Occupation Profile, 1145 Robotics Technician: Occupation Profile, 804 Scenic and Sightseeing Transportation: Projected Employment for Selected Occupations, 1922 Science Technician: Occupation Profile, 154 Science Technician: Occupation Specialties, 1694 Secondary School Teacher: Occupation Profile, 1531 li

Securities, Commodity Contracts, and Related Activities: Projected Employment for Selected Occupations, 661 Ship Loader: Occupation Profile, 755 Small Engine Mechanic: Occupation Specialties, 1072 Social Assistance: Projected Employment for Selected Occupations, 520 Software Designer: Occupation Profile, 409 Soil Scientist: Occupation Profile, 1291 Solar Energy System Installer: Occupation Profile, 69 Special Education Teacher: Occupation Specialties, 1548 Specialty Trade Contractors: Projected Employment for Selected Occupations, 897 Sporting Goods, Hobby, Book, and Music Stores: Projected Employment for Selected Occupations, 1796 Sports Instructor/Coach: Occupation Specialties, 1772 State and Local Governments’ Contribution to the U.S. Economy, 1097 Stationary Engineer: Occupation Profile, 1811 Support Activities for Mining: Projected Employment for Selected Occupations, 1399 Support Activities for Transportation: Projected Employment for Selected Occupations, 1367 Teacher Assistant: Occupation Profile, 1532 Technical Sales Representative: Occupation Profile, 1715

Survey of American Industry and Careers Telecommunications Equipment Installer/Repairer: Occupation Specialties, 1833 Telecommunications Industry: Projected Employment for Selected Occupations, 1832 Telecommunications Installer and Repairer: Occupation Profile, 1834 Telephone Installer and Repairer: Occupation Profile, 1813 Textile Machine Operator: Occupation Profile, 1852 Textile Machine Operator: Occupation Specialties, 1853 Textile Mills: Projected Employment for Selected Occupations, 1851 Textile Product Mills: Projected Employment for Selected Occupations, 1854 Tool and Die Maker: Occupation Profile, 2012 Transit and Ground Passenger Transportation Industry’s Contribution to the U.S. Economy, 1353 Transit and Ground Passenger Transportation: Projected Employment for Selected Occupations, 1366

Transportation Equipment Manufacturing: Projected Employment for Selected Occupations, 1147 Travel Agent: Occupation Specialties, 1921 Truck Transportation Industry’s Contribution to the U.S. Economy, 744 Truck Transportation: Projected Employment for Selected Occupations, 757 Upholsterer: Occupation Profile, 788 Urban and Regional Planner: Occupation Profile, 319 Utilities Industries’ Contribution to the U.S. Economy, 580 Utilities Industry: Projected Employment for Selected Occupations, 590 Veterinarian: Occupation Specialties, 1938 Veterinary Assistant/Technician: Occupation Profile, 1939 Warehousing and Storage Industry’s Contribution to the U.S. Economy, 1966

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Warehousing and Storage: Projected Employment for Selected Occupations, 1978 Waste Management and Remediation Services: Projected Employment for Selected Occupations, 1997 Waste Management Industry’s Contribution to the U.S. Economy, 1983 Water and Wastewater Engineer: Occupation Profile, 2029 Water Transportation Industry’s Contribution to the U.S. Economy, 1724 Water Transportation: Projected Employment for Selected Occupations, 2031 Water Treatment Plant Operator: Occupation Profile, 2030 Welder: Occupation Specialties, 1144 Wholesale Sales Representative: Occupation Profile, 170 Wind Energy Engineer: Occupation Profile, 71 Wood Product Manufacturing: Projected Employment for Selected Occupations, 230 Woodworker: Occupation Profile, 789

SURVEY OF

American Industry and Careers

Coal Mining Industry ©Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The coal mining industry locates coal, extracts it from the earth, processes it, and sells it for use in generating energy and for other industrial purposes. Miners often extract coal from horizontal sedimentary layers in the ground, though the processes used for coal extraction depend on the location of the coal, the type of coal being extracted, and the thickness and lateral extent of the coal bed. Coal close to the surface can sometimes be surface mined by removing overlying sediment to expose it. Coal located deeper underground may require mines to be constructed. Coal is widespread throughout much of the world, so mining is a worldwide industry. Over the course of the twentieth and twenty-first centuries, smaller coal companies have been shutting down or have been incorporated into larger companies, which have been steadily increasing.

General Industry: Energy Career Cluster: Agriculture, Food, and Natural Resources Subcategory Industries: Anthracite Mining; Bituminous Coal and Lignite Surface Mining; Bituminous Coal Underground Mining; Coal Mining Blasting Services on a Contract Basis; Exploration Services for Coal on a Contract Basis; Mine Shaft Sinking Services on a Contract Basis; Mine Tunneling on a Contract Basis; Stripping and Overburden Removal on a Contract Basis; Support Activities for Coal Mining Related Industries: Electrical Power Industry; Mining Industry; Petroleum and Natural Gas Industry Annual Domestic Revenues: $22 billion USD (World Coal Institute, 2008, based on an annual production of 1.1 billion tons) Annual International Revenues: $134 billion USD (World Coal Institute, 2008, based on an annual production of 6.7 billion tons) Annual Global Revenues: $156 billion USD (World Coal Institute, 2008) NAICS Numbers: 2121, 213113

History of the Industry Coal has been used for heating for thousands of years. For example, the Welsh used it for this purpose three to four thousand years ago, while the Romans heated public baths by burning coal in the second century c.e. People in England were using coal for heating by the twelfth cen345

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tury, since some coal was easily obtained at the surface and burning it produced more heat than did burning wood. By the early eighteenth century, industries were heating coal in air-free chambers to produce coke. Coke burns with a much hotter flame than does coal, so it could be used to smelt iron ores into iron. Steam engines were also invented during the eighteenth century, and most of them burned coal to produce steam. By the early nineteenth century, steam engines were used to propel trains and ships, rapidly expanding transportation networks within and among nations. The United States has abundant coal deposits, and the eastern states began to mine the substance by the mid-eighteenth century to propel ships and trains. Electric generators run by coal-fired steam were developed in the late nineteenth century, and coal became the major fuel for generating electricity in the twentieth century. Thus, much of the coal used during the first half of the twentieth century was used for heating, trains, and electricity. As petroleum and natural gas became more readily avail-

able in the late twentieth century, those substances became more common for heating and powering trains. Most coal use then became devoted to electrical generation. Lesser amounts of coal have also been used by other industries to, for example, produce steel from iron ores. Initially, coal was mined using hand tools such as picks to break it up and remove it from the surrounding earth, often in underground mines. The coal was then carried away in handcarts. Many coal beds are fairly flat-lying or are layers that can be followed laterally, but some beds may be less than a meter thick. This situation can result in underground mines that are only as thick as the coal beds themselves. Children, because of their small size and the low wages for which they would work, were often used in the nineteenth century to bring out the coal from such mines in many countries, such as England and the United States. Work hours were also long, with miners working as many as sixty hours per week. These hours were gradually reduced in the twentieth century, when heavier ma-

A miner holds excavated coal. (©Grzegorz Kula/Dreamstime.com)

Coal Mining Industry chines came to be used to more readily break up and transport the coal. The unionization of miners in the United States also led to shorter hours and better pay for those workers. Underground jobs are dangerous, especially in the early years when miners breathed coal dust and silicate dust without protection, resulting in black lung disease and silicosis. The buildup of gases such as methane in some mines resulted in many catastrophic explosions. More than 120,000 miners in the United States alone have been killed by accidents in coal mines since 1870. Most of these deaths occurred in the early twentieth century, and the number of deaths has decreased drastically in contemporary mines as safety measures have been adopted. The use of large machines to break up, extract, and move coal has brought about a significant reduction in the coal mining workforce in the United States, from around 700,000 persons in the 1920’s to around 170,000 persons in the early twenty-first century. Even with fewer workers and coal mines, mechanization has increased total coal production in the United States, from around 300 million tons per year in the early twentieth century to nearly 1.2 billion tons per year in 2005. The Industry Today Coal is formed over millions of years from buried swamp plants such as those now found in the Florida Everglades. When such plants die, some of their remains can become preserved in the swamp water if its oxygen content is low enough. As the dead plants are gradually buried by sediment, their remains transform into peat, lignite, and subbituminous, bituminous, and anthracite coal— in that order—as they become buried more deeply and reach higher temperatures. During this process, the amount of volatiles such as water contained by the coal gradually decreases, and its carbon content gradually increases, so each type of coal burns hotter than its precursor. As coal develops, it forms horizontal beds that are associated with other sedimentary rocks, such as mudstones, sandstones (mostly composed of sand), and limestones (mostly composed of calcium carbonate). Coal beds’ thickness ranges from a few centimeters to tens of meters or more. Even though the beds are originally horizontal, they may become folded or fractured, requiring some effort on the part of

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geologists to interpret their distribution. Coal is widely distributed throughout the world. More than two-thirds of the world’s coal reserves occur in China, Russia, and the United States. South Africa, Australia, Germany, Poland, and England also have major coal reserves. Most coal in the eastern and central United States is either bituminous or anthracite, with high sulfur content, and some of this coal is extensively folded or faulted. Most coal in the nothern Great Plains and the Rocky Mountain region is lignite or subbituminous, with low sulfur content. Wyoming contains large amounts of thick, horizontal coal beds at or near the surface. Such deposits may be surface mined more economically than those in the eastern United States that require underground mines. The size, thickness, and shape of a coal deposit, as well as the kind of coal in the deposit, influence whether the deposit is mined by surface or underground mining. In 2001 in the United States, 65 percent of coal mines were surface mines, employing 48 percent of miners (34,590 miners), and 35 percent were underground mines, employing about 52 percent of miners (37,180 miners). To engage in surface mining, miners must remove the overburden (noncoal sediment covering the coal), so the coal itself can be extracted with machinery and explosives. Often, the coal is taken in successive strips across the coalface, so the term “strip mining” is used to describe this process. For surface mining to be costeffective, the overburden cannot be too thick. Surface mining is usually more economical than underground mining because it is easier to break up and remove coal with large machines at the surface than it is to work with the smaller tools and machines that fit within tunnels—especially if the coal beds are thick as they are in Wyoming. Also, surface mines have fewer air, electricity, and water problems than do underground mines. Underground mines are often smaller operations than surface mines, and they disturb much less land surface than do strip mines, unless they collapse during or after operations. In underground mines, the coal is often broken into pieces with electric drills and cutters and then moved by conveyor to the surface, where it is loaded onto trucks or railroad cars. Some mines use machines with rotating cutters that move back and forth across coal beds, both breaking up and

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Coal Mining Industry

A man operates a dragline at a coal mine. Draglines can move up to 130 tons of material in their shovels at one time. (©John Casey/Dreamstime.com)

transporting pieces of coal. Enough pillars of coal must be left standing within a mine to support the layers of rock above it, so it does not collapse. Coal beds as thin as sixty centimeters usually can be mined economically. The greatest hazards within underground mines include methane gas (which can collect locally and explode), falling rock, and mining machines themselves, which can be quite dangerous. Several other gases can cause problems if they build up sufficiently in a mine. Carbon dioxide can suffocate miners by displacing oxygen, and carbon monoxide can cause sickness or death. The well-ventilated underground mines of today often avoid problems with these gases, however. Overburdens and the coal in surface mines are usually removed first by using explosives to break up the material and then by using large machines

such as bulldozers, huge shovels, loaders, and draglines to move the fragments. Draglines are two-thousand- to thirteen-thousand-ton machines that can move up to 130 tons of material in their shovels at one time. If the overburden becomes too thick in a surface mine, the operation may proceed underground. During the early twentieth century, most coal was mined underground, in part because there was no economical way to remove overburdens above even shallow coal beds. Moreover, the coal that was most easily accessible to surface mining was located in Wyoming, too far from the large energy markets in the eastern United States. In the twenty-first century, by contrast, the development of large-scale equipment has made it much more economical to mine near-surface coal with overburden thicknesses as great as thirty meters, and Wyoming’s thick, low-sulfur coal beds are now close to many electrical generating plants. As a result, coal mining has shifted from east to west in the United States, with a greater use of the low-sulfur lignite and subbituminous coal in the Great Plains relative to the higher-sulfur bituminous and anthracite coals of the eastern United States. Wyoming’s movement to larger surface coal mines has also greatly increased coal production per miner, and mines are safer than they once were, though major accidents do still occur. A number of environmental problems result from coal mining that can be very costly for mining companies to solve. High-sulfur coals have iron sulfide minerals in them that react with water and the atmospheric oxygen within mines, producing sulfuric acid waters high in iron and some other dissolved elements. These acid waters can contaminate groundwater and streams and kill fish and other organisms, as has happened in Pennsylvania and West Virginia in the eastern United States. The dissolved iron also oxidizes at the surface and produces large amounts of unsightly iron compounds in contaminated streams. Burning high-sulfur coal produces sulfur dioxide, which reacts with atmospheric water vapor to produce acid rain. Thus, laws have been passed capping the permissible amount of sulfur dioxide emissions from coal burning. These laws have increased the use of low-sulfur coal in electrical generating plants, since it is very expensive to capture or otherwise minimize the sulfur dioxide released

Coal Mining Industry by burning high-sulfur coal. Burning coal also gives off a lot of carbon dioxide, which has possibly contributed to global warming and the acidification of the oceans. A number of other environmental problems are associated with the coal industry, such as the collapse or burning of coal in old, abandoned underground mines and the destruction of countryside caused by surface mining. Some mining operations in West Virginia have formed massive piles of fine-grained waste, much of which rapidly runs off into streams during major rainfalls. Now, mines are supposed to fix such problems, and the expense of doing so reduces their profit margins.

INDUSTRY MARKET SEGMENTS The mining industry has moved from smaller mining operations to larger operations, mainly as a result of the higher profit margins that can be achieved with the greater resource investment potential of large mines. Large mines have the resources, for instance, to purchase the larger pieces of equipment needed to move a large amount of overburden and coal from surface mines, thus increasing the total amount of coal produced per worker. Small Businesses Small coal mines generally produce less than 500,000 tons of coal per year. Small companies often mine smaller seams of coal of lower quality than those mined by larger companies. Investors are not attracted to put money into smaller mines because of the low probability of realizing a profit, so small companies tend to use smaller and more economical machines than do large companies. Because they have high overhead relative to sales, small coal companies have low profit margins, so many may go out of business if, for example, the price of coal suddenly drops. Smaller companies are also less likely to be unionized. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), continuous coal-mining machine operators earned an average of $47,550 in 2009, while construction equipment operators earned an average of $43,120 and operators of coal-excavating and -loading ma-

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chines and draglines earned an average of $42,160. Mining and geological engineers in the coal industry earned $76,580, on average. General and operations managers averaged $105,730. Salaries for all of these positions are likely to be below these averages at small companies. Clientele Interaction. Most persons working in coal mines have little interaction with clients since the coal is often sold to electrical generating plants or other industries. Small mines may not have their own sales departments, but in some cases one of the mine’s personnel may make some sales. Small mines may hire their own sales agents, or they may even conduct sales through the sales departments of larger coal companies. Often, small companies sell their coal locally to minimize transportation costs, so their prices are competitive with larger mines that transport their coal over longer distances. Amenities, Atmosphere, and Physical Grounds. Underground coal mines are generally not pleasant places for many people to work, and underground mining is one of the most dangerous jobs in the United States, even with the many safety regulations now in effect. Nevertheless, mining conditions are much improved over the horrible conditions common in the early twentieth century—although many small coal mines in China still present poor working conditions. Underground coal mines make many people feel confined, and the mines are often dark, dusty, and musty. Underground mining machinery is extremely noisy. Even with safety regulations, accidents such as methane explosions, machinery accidents, and roof collapses still occur. Miners often interact in small groups, so they are aware of how to protect themselves and one another. Often, general mine workers come from families in which at least one other person has worked in a mine. Surface coal mines are more pleasant places for most people to work since they are open to the atmosphere, to which dust and gases can escape. Also, the noise of machinery and explosives is not as loud outdoors as it is in underground mines. Typical Number of Employees. Mining companies seek to minimize labor expenses by employing as few people as possible. Small mines may employ fewer than twenty-five people full time, although they may need to hire supplemental temporary workers at times of high activity.

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Traditional Geographic Locations. Coal mines must be located where there is mineable coal either close to or at the land’s surface and where it is possible to conduct mining operations to reach that coal. They are almost always in rural areas, since it is not feasible to lease and mine on urban land. Sometimes, small towns comprising mostly miners are built near mines, and they are often largely abandoned once mining operations cease. Coal mines are often developed near coal purchasers to reduce transportation costs. Pros of Working for a Small Mining Company. Employees of small companies may enjoy closer relationships with their fellow workers. They often must perform more than one task, which appeals to those seeking more varied work experiences. Cons of Working for a Small Mining Company. While close interactions with coworkers can appeal to some miners, small companies afford few opportunities for employees to avoid any coworkers with whom they do not get along. If relationship problems arise, a worker may have no choice but to leave the company. This issue has arisen, for example, among women facing prejudice or harassment in what has traditionally been a male-dominated industry. Mining, moreover, entails a great deal of overhead, so small companies that are unable to exploit economies of scale may struggle to realize profits. Finally, coal miners in general receive pensions and other benefits through the major mining union, the United Mine Workers of America. Small mining companies are less likely to be unionized than larger companies, so their employees are less likely to have access to these benefits. Costs Payroll and Benefits: Most general mine employees are hired at hourly wages, while some professionals, such as engineers, may receive salaries. Other employees, such as electricians, may be hired temporarily on contract to perform specialized work. Generally, wages are lower in most small mines than in larger mines. Health benefits and compensation for injuries may be offered. Supplies: Coal mining companies require very heavy machinery and explosives, the tools necessary to maintain the machinery, hand-mining tools, safety equipment, lights, surveying equipment, construction materials, storage and trans-

portation containers and vehicles, gasoline, and air supplies. Their offices require standard office supplies and equipment. External Services: Small mining companies may contract electricians, plumbers, explosive experts, geologists, mining engineers, or sales representatives. They may also contract individual independent truckers or large trucking companies, as well as freight railroad companies, to transport coal. Small companies often have limited access to railroad cars, and they may have to pay more for them than do large companies. Utilities: Mining companies must pay for electricity, water, sewage, heating, telephone, and Internet access. Taxes: Mining companies must pay local, state, and federal taxes and fees. State taxes may include sales, property, corporate income, or severance taxes. Severance taxes are calculated based on the amount or value of coal extracted. The highest state taxes are levied by Wyoming, at 15 percent of gross revenue (0 percent sales, 10.5 percent severance, 1 percent property, and 3.5 percent corporate income). The lowest are levied by Utah, which charges only a property tax equal to 0.6 percent of gross revenue. Other Expenses: There are other kinds of costs that influence small coal mines, such as the reclamation and safety costs resulting from the Coal Mine and Safety Act of 1969 and the Mine Control and Reclamation Act of 1977. These costs made it impossible for many small mines to stay in business. The Clean Air Act of 1990 indirectly affects coal mines since it requires that coal-burning electrical power plants emit no more than 1.2 pounds of sulfur dioxide gas per 1 million British thermal units (BTU) of heat produced. This regulation caused some coal mines with high-sulfur coals to go out of business. Finally, most small mining operations are nonunion. If these nonunion mines sell coal to union mining companies, the National Bituminous Coal Wage Agreement (1978) requires that they pay a significant fee per ton of coal sold. This has also helped drive some small mines out of business. Midsize Businesses Midsize coal businesses produce between 500,000 tons and 1 million tons of coal per year.

Coal Mining Industry

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Many of these companies operate intrastate, inteinteract with clients than do those of small compagrated, or interstate mines. Intrastate mining businies. Midsize companies are more likely to have nesses operate multiple mines in one state. Intetheir own sales departments to sell directly to buygrated mining businesses mine coal for their own ers such as electrical power generating plants. use. Interstate mining businesses have mines in difAmenities, Atmosphere, and Physical ferent states. Investors are more often attracted to Grounds. Underground mines run by midsize invest in midsize coal businesses than to small ones, coal companies may be bigger than those run by allowing midsize companies to purchase more and small companies, but they are still dark, damp, larger equipment to more rapidly and efficiently dirty, and noisy. There is still a possibility for acciaccess, extract, process, and transport coal. Often, dents, such as roof falls, sudden water intrusions midsize coal businesses have the resources to mine from other mines, or explosions. Many midsize coal beds that are thicker or deeper than those that mining companies employ special personnel to imsmall businesses are able to exploit. Some midsize plement safety rules for mine workers and to train businesses may have the resources to develop new the workers in such protocols. As a result, there is mines, which typically take up to ten years, from often a lower rate of accidents at midsize coal comthe planning and development stage to the extracpanies than at small coal companies. Miners still tion stage, before any money can be made. work together in small groups for safety. Surface Potential Annual Earnings Scale. According coal mines remain more pleasant to work in than to the BLS, continuous coal-mining machine operunderground mines. ators earned an average of $47,550 in 2009, while Typical Number of Employees. Midsize comconstruction equipment operators earned an averpanies employ from twenty to several hundred perage of $43,120 and operators of coal-excavating sons, most of whom work full time. In 2001 in the and -loading machines and draglines earned an United States, there were 823 midsize coal mines, average of $42,160. Mining and geological engiemploying a total of nearly sixty thousand miners neers in the coal industry earned $76,580, on averand twenty-seven hundred office workers. Most age. General and operations managers averaged $105,730. Salaries at midsize companies are likely to be roughly in line with these averages. Hourly workers in the eastern United States generally earn less money than do those working the same job in the western United States. Union mine workers sometimes earn more money than nonunion workers in similar jobs. Finally, hourly employees working in surface mines earn more for a corresponding job than do those in underground mines. By contrast, employees with a yearly salary usually earn more money in underground mines than do those in corresponding jobs in surface mines, with the exception of environmental coordinators. Clientele Interaction. Most midsize mining company employAn excavator in action at a coal mine. (©Dreamstime.com) ees have even less opportunity to

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miners at midsize companies perform only one job function each. Traditional Geographic Locations. Coal mines must be located where there is mineable coal either close to or at the land’s surface and where it is possible to conduct mining operations to reach that coal. They are almost always in rural areas, since it is not feasible to lease and mine on urban land. Sometimes, small towns comprising mostly miners are built near mines, and they are often largely abandoned once mining operations cease. Coal mines are often developed near coal purchasers to reduce transportation costs. Some mines, known as “captive mines,” sell all their coal to a single purchaser, such as an electrical power station neighboring a given mine. Pros of Working for a Midsize Coal Company. Employees of midsize coal companies may work at only one kind of job, rather than having to split their attention among multiple functions as may be necessary at small companies. They tend to have opportunities for satisfying personal interactions with other employees within the same working

group, although a miner may not know everyone else working at the same mine. Salaries paid by midsize companies are likely to be somewhat higher than those paid by small companies. Midsize mines are more likely to be profitable than small mines, while they are less likely to have accidents. Cons of Working for a Midsize Coal Company. Some miners may not enjoy working at the same job every day, especially in underground mines filled with dust, noise, and the possibility of severe accidents. Midsize companies are still small enough that it may be difficult to avoid coworkers or supervisors with whom one has personal difficulties. Costs Payroll and Benefits: General mine employees in midsize coal companies are paid hourly wages, while supervisors and technical employees are paid yearly salaries. As at small mining companies, some people may be hired on short contracts to perform specialized work. Wages for many jobs tend to be higher in midsize coal

A coal mine in Wyoming. (©Phil Augustavo/iStockphoto.com)

Coal Mining Industry companies than in smaller companies. Midsize companies are more likely to be unionized than small companies. If they are, they are required to contribute toward employee benefits and pensions. Supplies: Coal mining companies require very heavy machinery and explosives, the tools necessary to maintain the machinery, hand-mining tools, safety equipment, lights, surveying equipment, construction materials, storage and transportation containers and vehicles, gasoline, and air supplies. Their offices require standard office supplies and equipment. The machinery employed by midsize companies is often bigger and more expensive than that employed by small companies. This machinery is often custom-made on-site, so replacement parts and repairs can be very expensive. External Services: Midsize mining companies are more likely to have full complements of workers than are small companies, but they may still contract electricians, plumbers, explosive experts, geologists, mining engineers, or sales representatives as necessary. They may also contract individual independent truckers or large trucking companies, as well as freight railroad companies, to transport coal. Utilities: Mining companies must pay for electricity, water, sewage, heating, telephone, and Internet access. Taxes: Mining companies must pay local, state, and federal taxes and fees. State taxes may include sales, property, corporate income, or severance taxes. Severance taxes are calculated based on the amount or value of coal extracted. The highest state taxes are levied by Wyoming, at 15 percent of gross revenue (0 percent sales, 10.5 percent severance, 1 percent property, and 3.5 percent corporate income). The lowest are levied by Utah, which charges only a property tax equal to 0.6 percent of gross revenue. Other Expenses: Midsize companies must pay the same reclamation and safety costs as small companies. Large Businesses Large coal mining businesses produce more than 1 million tons of coal per year; some of them produce considerably more. Many operate interstate and intrastate mines. Large coal businesses

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have a great deal of power, and they can, for instance, set coal prices and sell their coal directly to users. Large coal businesses can attract investors to purchase huge pieces of equipment, such as draglines and trucks, to move coal more efficiently and thus make more money. Large coal businesses have large corporate headquarters with many layers of executives and staff. Some of these staff members work to acquire smaller companies, expanding the large companies’ holdings and operations. Large companies often serve a number of coal users, especially those on the East Coast. Potential Annual Earnings Scale. According to the BLS, continuous coal-mining machine operators earned an average of $47,550 in 2009, while construction equipment operators earned an average of $43,120 and operators of coal-excavating and -loading machines and draglines earned an average of $42,160. Mining and geological engineers in the coal industry earned $76,580, on average. General and operations managers averaged $105,730. Salaries at large companies are likely to be equal to or greater than these averages. Clientele Interaction. Hourly mineworkers and many managers have no interaction with clients. Large companies often have large sales departments that sell coal directly to users such as electrical power generating plants. Amenities, Atmosphere, and Physical Grounds. Underground mines in large mining companies are still dark, dirty, and noisy. Large companies, however, have better safety training programs than smaller companies, so their accident rates are lower. Surface coal mines operated by large companies are huge compared to those of smaller companies. For example, some such mines use specialized equipment, such as electric shovels and draglines with twenty- to fifty-cubic-meter shovels or 170-ton trucks that are two stories high and ten meters wide with V-16 three-thousand-horsepower engines. Some large mines may operate twenty-four hours per day, seven days per week. Their headquarters are large offices, housing executives and support staff such as secretaries, computer specialists, and various helpers. Typical Number of Employees. Large companies employ hundreds or thousands of workers. For example, ten large mining operations in 2001 employed 5,500 miners and 174 office staff. Most employees work at only one specialized job. For ex-

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A front-end loader picks up a shovel full of coal. (©Jason Doucette/iStockphoto.com)

ample, one miner may drill holes for explosive charges, while another may place the charges, and still others may support these two demolition experts. Traditional Geographic Locations. Coal mines must be located where there is mineable coal either close to or at the land’s surface and where it is possible to conduct mining operations to reach that coal. They are almost always in rural areas, since it is not feasible to lease and mine on urban land. Sometimes, small towns comprising mostly miners are built near mines, and they are often largely abandoned once mining operations cease. Coal mines are often developed near coal purchasers to reduce transportation costs. Some mines, known as “captive mines,” sell all their coal to a single purchaser, such as an electrical power station neighboring a given mine. Pros of Working for a Large Coal Company. Employees of large mines may be quite specialized, allowing them to gain significant experience and expertise in a particular task. They often work together in small groups, developing personal and professional relationships within each group. Pay is generally better at large companies than at smaller ones. Employees who work hard and get along well with others may have greater opportuni-

ties for advancement than are available in smaller companies. Cons of Working for a Large Coal Company. Some miners may not enjoy working at the same job every day, especially in underground mines filled with dust, noise, and the possibility of severe accidents. Large companies are often heavily regulated; while these regulations may result in better conditions for some workers, they may also represent significant obstacles for managers. In addition to these external regulations, large companies often develop their own internal bureaucracies, which can reduce efficiency and frustrate some workers, especially those in middle management. Costs Payroll and Benefits: General mine employees in large coal companies are paid hourly wages, while supervisors and technical employees are paid yearly salaries, and contract workers are hired as necessary to perform specialized work. Large companies are often unionized and provide benefits and pensions accordingly. Supplies: Coal mining companies require very heavy machinery and explosives, the tools necessary to maintain the machinery, hand-mining tools, safety equipment, lights, surveying equip-

Coal Mining Industry ment, construction materials, storage and transportation containers and vehicles, gasoline, and air supplies. Their offices require standard office supplies and equipment. The machinery employed by large companies is often bigger and more expensive than that employed by smaller companies. This machinery is often custom-made on-site, so replacement parts and repairs can be very expensive. External Services: Large mining companies are more likely to have full complements of workers than are smaller companies, but they may still contract electricians, plumbers, explosive experts, geologists, or mining engineers as necessary. They may also contract individual independent truckers or large trucking companies, as well as freight railroad companies, to transport coal. Utilities: Mining companies must pay for electricity, water, sewage, heating, telephone, and Internet access. Taxes: Mining companies must pay local, state, and federal taxes and fees. State taxes may include sales, property, corporate income, or severance taxes. Severance taxes are calculated based on the amount or value of coal extracted. The highest state taxes are levied by Wyoming, at 15 percent of gross revenue (0 percent sales, 10.5 percent severance, 1 percent property, and 3.5 percent corporate income). The lowest are levied by Utah, which charges only a property tax equal to 0.6 percent of gross revenue. Other Expenses: Large companies must pay the same reclamation and safety costs as small companies.

ORGANIZATIONAL STRUCTURE AND JOB ROLES

ent jobs. Some of the best engineers may be promoted into management. The following umbrella categories apply to the organizational structure of businesses in the coal mining industry: ■ ■ ■ ■ ■ ■ ■ ■

Executive Management On-Site Management Sales Operations Administration and Human Resources Maintenance and Warehouse Transportation Environmental Control and Safety

Executive Management The layers of management can be quite extensive in large mining operations, but they are much more limited in smaller ones. In large mining operations, there may be a chief executive officer (CEO), a president, and a number of vice presidents. These managers, for instance, look at the broader aspects of managing many mines, including acquiring new mines, funding, purchasing equipment, ensuring that their companies are working smoothly, and assessing their overall budgets. Smaller companies are more likely to simply have on-site managers for their mines. Executives are often college graduates with a number of years of experience in management, and they include some mining engineers who have been promoted. Executives earn the most money of anyone in their companies. CEOs of the largest companies, for example, can earn millions of dollars in salaries and stock benefits. The average annual income of a coal mining executive was $103,770 in 2009. Executive managment occupations may include the following: ■

The organization of jobs and tasks is similar at different-sized coal companies, but the way these tasks are implemented may be somewhat different. For example, some coal mining engineers in larger mines may be in charge of mine studies and design, others may oversee the construction of the mine, and others may oversee daily operations. In smaller coal mines, only a few engineers may work on these tasks, so one engineer may have a number of differ-

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■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) President Vice President Chief Sales Officer

On-Site Management Each active mine within a company has its own general manager, who is in charge of the entire op-

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eration at that mine. Larger companies may also assign each mine its own on-site managers of accounting, engineering, coal processing, personnel, and maintenance. Within each mine, a pit supervisor is usually directly responsible for ensuring that coal extraction is moving smoothly and for resolving any problems that arise. Generally, mining engineers solve major problems that interfere with mining operations, since they are the employees who have planned, developed, and maintained those operations. Other supervisors may oversee processing plants, loading facilities, office buildings, repair buildings, or roads in a given mining area. Some geologists may manage the search for new coal beds, especially if such beds are likely to be folded or fractured rather than horizontal and continuous. Engineering and geology managers must have at least bachelor’s degrees, and some may have master’s degrees. They also generally have a number of years of mining experience. Pit supervisors may have begun as general mine workers without

any college work and been promoted up the chain of command. Engineering managers earned an average of $107,370 in 2009. On-site management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

General Manager Chief Engineer Mining Engineer Construction Engineer Pit Engineer Geologist Pit Supervisor

Sales Sales personnel attempt to negotiate the best price for their companies’ coal through short-term and long-term contracts. Smaller companies may employ their own sales staffs, or they may sell their coal through larger companies. Sales personnel may also negotiate transportation contracts. Sales managers, for example, may establish contacts with

OCCUPATION

PROFILE

Geologist and Geophysicist Considerations

Qualifications

Description

Studies the physical composition and structure of the Earth.

Career clusters

Agriculture, Food, and Natural Resources; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work; medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest scores

IRE; IRS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Coal Mining Industry electrical power generating companies or other industrial purchasers to determine the types and quantities of coal that they desire. They must take into account the locations of prospective purchasers and the anticipated expenses of supplying coal to each purchaser when negotiating prices. Managers may also need to train the sales representatives who will have the most direct contact with users. Salespeople usually have college degrees in marketing, business, or related fields and should be able to speak and write well and use wordprocessing, spreadsheet, and statistical computer programs. Coal mining sales staff members earned an average of $78,260 in 2009. Sales occupations may include the following: ■ ■

Sales Manager Sales Representative

Operations Operations personnel perform the actual mining and extraction of coal. In surface mines, these personnel may include various kinds of explosives experts, as well as equipment operators who break up and move overburden and coal. Some, for instance, may operate scrapers, wheeled vehicles that can scrape and move overburden to another location. Powder crews can also use explosives to break up overburden and coal, so they can then be removed by large machines. Smaller coal mines may employ outside contractors to perform such tasks, but large mines employ their own scraper and powder crews. Any size company can use bulldozers or front-end loaders to move overburden and coal. Both machines have front shovels to push or carry material, but bulldozers run on treads, whereas front-end loaders have wheels. Loading shovels and draglines have huge scoops to move material directly into large trucks. Loading shovels move on treads, but draglines can be moved only slowly. Loading shovels and draglines are usually too expensive to be used by small mines. Other specialized equipment is used to remove coal in the confined spaces of underground mines. For instance, coal plows with moving blades can shear off underground coal in pieces and move them by conveyor belt to where they can be transported out of the mine. Rotary drum shearers have even larger rotating blades that break up coal. As in

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surface mines, explosives may be used to break up coal into pieces that can be picked up with loaders and moved to conveyors or mining cars. Alternately, another kind of machine with vertical rotating drums, a “dash three miner,” may break up the coal and move the coal pieces to a conveyor. The general coal mine workers who operate these machines are often high school graduates with mechanical skills, and they are trained at coal mines upon employment to operate heavy machinery. The most successful workers are those who are willing to work hard, who can get along with coworkers and supervisors, and who precisely follow managers’ rules for operating equipment. The mean hourly wages for the most common operations occupations in 2009 ranged from $20.73 to $22.86. Operations occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Scraper Operator Powder Crew Worker Bulldozer/Front-End Loader Operator Shovel/Dragline Operator Coal Plow/Rotary Drum Operator Conveyor Operator General Laborer

Administration and Human Resources A variety of office personnel support coal mining executives, managers, and sales staff. These include secretaries, clerks, human resources administrators, computer specialists, and accountants. They help their superiors perform such necessary chores as filling out government forms, balancing the books, paying taxes, and running errands. Human resources personnel administer employee benefits, fill out paperwork for hiring and dismissal, and oversee employee relations. The mean annual income of a coal mining office or administrative support worker was $36,150 in 2009. Administration and human resources occupations may include the following: ■ ■ ■ ■ ■ ■

Secretary Clerk Accountant Computer Specialist Human Resources Manager Human Resources Coordinator

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Maintenance and Warehouse A mine’s equipment, electrical lines, plumbing, water supply, and air supply need to be maintained, and any problems in these systems must be fixed quickly so that coal production is not stopped. Mechanics, welders, electricians, and plumbers carry out these tasks. Smaller mining operations may hire some of these workers on a contract basis as needed to fix a given problem. Larger mining operations, however, may have full-time employees who can respond to problems as they arise. Mining personnel may also make some spot repairs on some of the bigger machines, but major repairs may need to be made by the manufacturers. Mechanics may also be hired to fix trucks and other coal-transport vehicles. Maintenance personnel should have the mechanical abilities and training necessary to repair any problems within their areas of responsibility. Many are high school graduates. Pay ranges are similar to those of machine operators. Maintenance and warehouse occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Electrician Plumber Welder Mechanic Helper Laborer Warehouse Worker

Environmental Control and Safety Environmental control and safety personnel address environmental and safety problems: They seek to decrease acid drainage, avoid accidents, and ensure that overburdens are placed back over surface mines after the coal has been removed. For example, some of the bulldozer and front-end loader operators who initially remove the overburden and coal may need to use their machines to backfill mine pits with overburden material and soil and to plant vegetation on top of it. Safety experts attempt to train miners to avoid accidents and to check for poisonous or explosive gases in underground mines. Environmental specialists attempt, for example, to reduce acid mine drainage. Some of these personnel may not work directly for mining companies; instead, they may be employed as consultants. Environmental specialists and safety experts are likely to have some college education and further training in their specialties. Environmental engineers in the coal industry earned an average of $79,490 in 2009, while environmental engineering technicians earned an average of $45,940. Environmental control and safety occupations may include the following: ■ ■ ■ ■

Transportation Coal must be transported out of mines by conveyors, carts, and loaders and into trucks that take it to and from railroads to its destination. Coal companies generally contract with railroads to transport coal, and larger mines are generally able to negotiate better prices and easier access to coal cars than the smaller mines. Truck drivers and other transportation employees should have enough mechanical ability to perform their assigned tasks. Drivers also require commercial driving licenses. Most are high school graduates. Pay ranges are similar to those of the other machine operators. Transportation occupations may include the following: ■ ■ ■

Conveyor Operator Freight Loader/Unloader Truck Driver

Environmental Coordinator Environmental Science Technician Safety Trainer Bulldozer/Front-End Loader Operator

INDUSTRY

OUTLOOK

Overview The outlook for coal mining suggests that coal production will increase worldwide between 2010 and 2030 by nearly 50 percent. This projected increase contrasts with other mining industries, which are expected to decline in production over the same period. In the United States, the energy produced by coal is expected to increase from 22 quadrillion BTU in 2006 to 26.6 quadrillion BTU in 2030. Coal in the United States is mostly used for electrical generation; lesser amounts are employed for industrial applications such as steel and cement production. Electrical production is expected to grow in the future, so coal use is likely to become even more important. Western states such as Wyo-

Coal Mining Industry ming and Montana are expected to increase their coal production, while eastern states such as West Virginia are expected to decrease production. The expected increase in coal use for energy is subject to change as technology and markets change. Natural gas, nuclear energy, wind, solar energy, and hydroelectric facilities can also be used to produce electricity. Natural gas prices have fluctuated and have generally increased more than coal prices, making coal use more attractive. Nevertheless, these other fuel sources are expected to increase in use alongside coal. Fuel cells are also being used by some major companies, such as Google and Walmart, in some of their plants to reduce the amount of outside electricity used. If the use of fuel cells or other alternative energy sources increases drastically, the amount of coal required by electrical plants could decrease. Moreover, environmental problems may decrease or hamper the growth of coal, especially in the United States, where energy reform is an ongoing concern of the federal government. Most of Canada’s domestic coal use, like that of the United States, is dedicated to electrical generation. Canada also exports about 40 percent of its coal to coal-poor countries such as Japan. Canada’s coal production is expected to increase between 2010 and 2030. Increased energy use in China is expected to increase coal production in that country by over 100 percent by 2030, as annual production goes from 24.9 quadrillion BTU in 2006 to 57 quadrillion BTU in 2030. This growth rate is markedly higher than that of the United States or Canada. The predicted increase in coal production in China is partly due to the country’s lack of natural gas and petroleum resources, forcing it to rely more heavily on coal. China also plans greatly to expand electrical production and other industries that use coal, such as the steel industry. It also plans rapidly to increase production of synthetic liquids derived from the processing of coal. China is investing significant resources in improving its coal production and building new railroads to meet the expected higher demand for coal. Coal use in Europe and Russia is not likely to grow as much as in China, and in some European countries coal use may actually decrease by 2030. Environmental problems arising from the use of coal will contribute to this possible decrease. Some

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countries plan to more rapidly increase their use of renewable resources and natural gas. Australia and New Zealand are expected slowly to increase coal use, from 2.6 quadrillion BTU in 2006 to 2.9 quadrillion BTU in 2030. South Africa uses most of the coal in Africa. Its coal use is expected to increase slowly between 2010 and 2030. Several old electrical generating plants that use coal have been reopened, and a number of other plants are being planned. The use of coal in Central and South America is also expected slowly to increase. Brazil is the largest coal producer in this region, with much of its coal being used in large steel mills. Employment Advantages Coal production is expected to grow in the United States through 2018, according to the BLS, especially in the light of the projected increased use of coal to generate electricity. However, the continued demand for coal is expected to raise industry employment by only 4 percent, less than the average increase of 11 percent across all industries. Miners, on average, are in their early fifties, so many miners are expected to retire soon, increasing the number of available positions. A wide range of jobs is available in the coal industry, especially for those persons who enjoy working outside in surface mines or underground in subsurface mines. Those who like technical work, science, and mathematics can gain college degrees in mining engineering, geology, or environmental science. Those who like working or repairing machines, have high school diplomas, and enjoy working hard can obtain specialized training, often at mine sites, to become equipment operators, truck drivers, or repair personnel. Those who like to work in office buildings can seek work as secretaries, computer specialists, accountants, or general office workers. These jobs likely will require some advanced training beyond high school. Other office jobs include administrators and managers, but these positions require significant work experience in mining and often college degrees in business or engineering. Annual Earnings Coal mining, like other types of mining and the petroleum industry, has experienced a number of changes in production in response to issues of sup-

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Coal Mining Industry

ply and demand. Coal production, however, has seen less fluctuation than metal or petroleum production. For example, coal production in the United States varied from about 600 million to 675 million tons from 1944 to 1949, but production decreased to 450 million to 475 million tons between 1950 and 1965. Then coal production increased to about 1.1 billion tons in 2005, with a net worth of over $18 billion. Of that total, surface coal mines produced over $8 billion worth of coal, and subsurface mines produced over $9 billion worth of coal. The price per ton of coal has also varied signifiantly with time: In 1950, coal cost about $5 per ton, rising to nearly $20 per ton in 1975. Since 1975, coal prices have ranged from $17 to $25 per ton.

RELATED RESOURCES FOR FURTHER RESEARCH Energy Information Administration 1000 Independence Ave. SW Washington, DC 20585 Tel: (202) 586-8800 http://www.eia.doe.gov Mine Safety and Health Association 1100 Wilson Blvd., 21st Floor Arlington, VA 22090-3939 Tel: (201) 693-9400 http://www.nsga.gov National Mining Association 101 Constitution Ave. NW, Suite 500 East Washington, DC 2001-2133 Tel: (202) 463-2600 Fax: (202) 463-2666 http://www.nma.org Society for Mining, Metallurgy, and Exploration 8307 Shaffer Parkway Littleton, CO 80127 Tel: (800) 763-3132 http://www.smenet.org United Mine Workers of America 8315 Lee Hwy. Fairfax, VA 22031

Tel: (703) 208-7200 http://www.umwa.org World Coal Association 5th Floor, Heddon House 149-151 Regent St. London W1B 4JD United Kingdom Tel: 44-20-7851-0052 Fax: 44-20-7851-0061 http://www.worldcoal.org

ABOUT

THE

AUTHOR

Robert Cullers has carried out research and taught geology and geochemistry for more than thirty years at Kansas State University, including courses in natural resources, mineralogy, petrology, and water chemistry. He received a bachelor’s degree in geology in 1959 and a master’s degree in chemistry in 1962 from Indiana University, as well as a Ph.D. in geology-geochemistry from the University of Wisconsin, Madison, in 1971.

FURTHER

READING

Brister, Brian S., and L. Greer Price. New Mexico’s Energy, Present, and Future. Socorro: New Mexico Bureau of Geology and Mineral Resources, 2002. Burke, D. Barlow, and Robert E. Beck. The Law and Regulation of Mining: Minerals to Energy. Durham, N.C.: Carolina Academic Press, 2010. Craig, James R., David J. Vaughn, and Brian J. Skinner. Resources of the Earth: Origin, Use, and Environmental Impact. Upper Saddle River, N.J.: Prentice Hall, 2001. Godell, Jeff. Big Coal: The Dirty Secret Behind America’s Energy Future. New York: Houghton Mifflin, 2006. Gore, Tony, et al. Coalfields and Neighbouring Cities: Economic Regeneration, Labour Markets, and Governance. York, North Yorkshire, England: Joseph Rowntree Foundation, 2007. Kolker, Allan, et al. Emissions from Coal Fires and Their Impact on the Environment. Reston, Va.: U.S. Geological Survey, 2009.

Coal Mining Industry Parker, Philip M. The 2009-2014 World Outlook for Coal Mining. San Diego, Calif.: ICON Group, 2008. Rouse, Michael J., and Usher Fleising. “Miners and Managers: Workplace Cultures in a British Columbia Coal Mine.” Human Organization 54 (1995): 238-248. Schmidt, Richard A. Coal in America: An Encyclopedia of Reserves, Production, and Use. New York: McGraw-Hill, 1979. Simpson, David. Productivity in Natural Resource Industries: Improvement Through Innovation. Washington, D.C.: Resources for the Future, 1999.

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Thomas, Larry. Coal Geology. Hoboken, N.J.: John Wiley & Sons, 2002. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

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Complementary and Alternative Health Care Industry

INDUSTRY

SNAPSHOT

General Industry: Health Science Career Cluster: Health Science Subcategory Industries: Acupuncturists’ Offices; Chiropractors’ Offices; Herbalists’ Offices; Homeopaths’ Offices; Hypnotherapists’ Offices; Midwives’ Offices; Naturopaths’ Offices Related Industries: Health and Fitness Industry; Hospital Care and Services; Medicine and Health Care Industry; Personal Services Annual Domestic Revenues: $33.9 billion USD (National Health Statistics Report, 2009) NAICS Numbers: 62131, 621399

INDUSTRY

herbal therapy could interact with conventional medications. Patients turn to CAM therapies when conventional medical care is not relieving their symptoms, such as chronic pain. In the United States, these therapies are most often used by welleducated Caucasian women.

History of the Industry Some CAM therapies have been in practice since the beginning of human civilization. Herbs have been used to treat and prevent illness for at least as long as the concept of an herb has existed. Midwives, or their ancient equivalent, were most likely the first nonfamily members to assist in the delivery of infants. The ancient Chinese developed a medical system that included acupuncture for the treatment of their health problems. Early physicians were not interested in delivering infants. As a result, untrained midwives delivered all infants until the 1700’s. If a mother had complications of delivery, she often died because midwives lacked medical skills. In the 1700’s, surgeons began to deliver infants for the wealthy. New York City began to require that midwives be li-

DEFINITION

Summary The complementary and alternative health or medical care (CAM) industry produces and applies a wide range of herbal, vitamin, and food remedies; patient-practiced therapies; and practitioner services. They are not considered part of conventional medical practice, although complementary care may be used along with it. Alternative health care, by contrast, is used in place of conventional medical care and can interfere with it. For example, 362

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censed. In 1799, doctors Valentine Seaman and part because conventional medical treatments were William Shippen opened a school to train midoften ineffective. Homeopathy is frequently critiwives. In the early 1800’s, physicians began to take cized by conventional medicine as being ineffecover the delivery of infants for the middle class. tive. Very little research has been done to establish The practice of midwifery declined. Increasingly, its effectiveness. mothers delivered their infants in hospitals. Naturopathy was introduced to the United In the 1970’s, women clamored for the opportuStates in the late 1800’s by Benedict Lust, although nity to demedicalize childbirth and to deliver their it had been practiced in Germany earlier. In the infants at home. Nursing schools began to offer early 1900’s, it was widely accepted, but after that it programs in nurse-midwifery. Both nurse-midexperienced a decline in popularity. Beginning in wives and nonnurse midwives received formal the 1970’s, there has been increased interest in nattraining. Physicians fought to hold onto childbirth, ural treatments such as those proposed by naturoand laws were created to limit the practice of midpaths. wifery. Many states required that midwives practice Hypnosis was originally performed as part of the only under the supervision of physicians. Other system of Chinese medicine. It was not studied and states licensed nonnurse midwives and permitted practiced until the 1800’s. James Braid, a Scottish them to practice independently. surgeon, began this exploration. Subsequently, the There is evidence that acupuncture has been study of hypnosis became popular in France. One practiced for at least eight thousand years. From of the students of the French school of hypnosis 650 to 692 c.e., the development and practice of was Sigmund Freud. Hypnosis was first studied in acupuncture increased, and acupuncture schools the United States in 1933 by Clark L. Hull. were established. In 1911, Western medicine was introduced to China, and acupuncture and herbal The Industry Today medicines experienced a decline. In 1950, the ChiCAM is fairly popular today, in part because connese merged Western medicine with acupuncture. ventional medical care is sometimes impersonal Gradually, acupuncture came to the United States. and fragmented. Consumers want to be treated as Starting in 1971, acupuncture began to be well whole people, not just body parts. Stress-related known in the United States, and by 1997, it was symptoms are common in contemporary society. widely available. Some conventional medical treatments do not cure Chiropractic care was recognized as a medical patients or treat their symptoms effectively. CAM treatment in 1895. It was introduced by Daniel Dapractitioners practice holistic medicine, meaning vid Palmer. Spinal adjustment is the basis of chiropractic medicine, and it is used to treat a wide variety of conditions. It is thought that spinal adjustment has been practiced since ancient times. Palmer defined the practice of chiropractics and started a training school. In the early 1900’s, states began regulating and licensing chiropractors. Homeopathy was developed by a German physician, Samuel Hahnemann, in 1796. It was introduced to the United States in 1828 by John Franklin Acupuncture is used to treat a wide variety of conditions, such as depression, Gray. It was quite popular with chronic pain, and the nausea caused by chemotherapy. (©Dreamstime.com) patients in the early 1900’s, in

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that they base their treatments on the total needs of each individual patient, rather than concentrating only on the particular system or body part that demonstrates symptoms. Patients’ medical and psychological histories, body types, and family histories are all considered when treating them. CAM providers have been successful in treating some health issues that conventional medicine has been unable to cure. Acupuncture is used to treat a wide variety of conditions, such as depression, chronic pain, and the nausea caused by chemotherapy. An acupuncturist inserts many very fine needles into various locations on the body to assist the flow of chi, or life energy. Acupuncturists work in individual or group practices, and some are employed by hospitals in their integrative therapy clinics. Persons with no medical training must have at least two thousand hours of acupuncture training in order to practice acupuncture. Some physicians, dentists, and other medical practitioners train in the practice of acupuncture. If they use it in their regular practices,

they need one to two hundred hours of training. If they plan to devote their practices solely to acupuncture, they require fifteen hundred hours of training. Most states require licensure for acupuncturists. Most midwives choose to become nurse-midwives to avoid the legal limitations placed upon nonnurse midwives. Nurse-midwives have master’s degrees in nursing with majors in midwifery. They are usually employed by either physician practices or hospitals. In physicians’ offices, nurse-midwives provide pre- and postnatal care, and they also assist in delivery rooms. They perform only normal vaginal deliveries. If there appears to be a complication during childbirth, a physician takes over the delivery. Nurse-midwives do not perform surgery. They are permitted to prescribe medications in some states. Some states permit nurse-midwives and nonnurse midwives to have their own practices and to participate in home childbirth. Chiropractors practice either alone or with other chiropractors. They can also practice as part

A chiropractor adjusts a woman’s back. (©Lisa F. Young/Dreamstime.com)

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This traditional Chinese herbalist works in a Chinatown neighborhood of New York City. (Getty Images)

of hospital-based integrative medical clinics, but this is not as common. Chiropractors work on the musculoskeletal and nervous systems. Frequently, they use spinal realignment as a treatment to improve nerve conduction. Potential chiropractors must have at least ninety semester hours of undergraduate study, or bachelor’s degrees, before they can enter chiropractic programs. Such programs provide four years of training in the medical sciences and public health, and they grant the degree of doctor of chiropractic (DC). Licensure is required for the practice of chiropractic in all U.S. states and the District of Columbia. The basis of the practice of homeopathy is the belief that “like cures like” and that the body is able to heal itself of symptoms by confronting similar symptoms. Homeopaths use very dilute solutions of substances that come from plants, minerals, or animals to treat their patients. Homeopathy is often used to treat allergies, rheumatoid arthritis, irritable bowel syndrome, minor injuries, and muscle sprains. It is never used to treat persons with severe, acute injuries or serious illnesses such as heart disease or cancer. Homeopaths may be medi-

cal doctors who have taken homeopathy courses, or they may be nonphysicians who have taken fouryear courses in homeopathy. Only three states license homeopaths: Arizona, Connecticut, and Nevada. Licensure for homeopathy does not include standards for practice. Naturopaths believe that an imbalance in one’s life is the cause of illness and that by restoring a natural balance, the illness can be cured. The balance is restored by natural treatments and improvements in lifestyle. Naturopaths do not perform any surgical procedures. They are trained as general practitioners or primary care providers and are able to treat a wide range of conditions. A bachelor’s degree, including completion of premedical courses, is required for admission to a school of naturopathy. Naturopathy students study for four to five years. Often, the fifth year of study is devoted to a specialty such as obstetrics. There are only three or four schools of naturopathy in the United States and Canada. A number of states have licensure requirements and standards for practice. These standards include education and passing the Naturopathic Physicians Licensing Examina-

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Pills used in homeopathy. The basis of the practice of homeopathy is the belief that “like cures like.” (©Frank Pieth/ iStockphoto.com)

tions (NPLEX). The areas requiring licensure are Alaska, Arizona, California, Connecticut, Hawaii, Idaho, Kansas, Maine, Montana, New Hampshire, Oregon, Utah, Vermont, Washington, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Hypnosis consists of guided relaxation and focused attention that induces a trancelike state in which the subject blocks out external stimuli. It is thought that hypnosis increases suggestibility and helps subjects change their thoughts. Not everyone is susceptible to hypnosis. Hypnosis is used to achieve weight loss and to treat addictions to cigarettes, alcohol, and drugs; insomnia; anxiety; asthma; and irritable bowel syndrome. Hypnosis has been successfully used to alleviate the pain of childbirth. There are no educational requirements for hypnotists in the United States, so consumers must evaluate hypnotists themselves. Some psychologists, counselors, psychiatrists, and dentists are trained in hypnosis. Four states—Colorado, Connecticut, Indiana, and Washington— require licensure for hypnotists, and some other states regulate their practice.

An important issue for CAM providers and recipients is health insurance coverage. Many health insurance plans do not cover any CAM therapies. Of the classes of those therapies, chiropractic and acupuncture are the most likely to be covered by health insurance, but insurance plans may limit the number and frequency of treatments for which they will pay. Other plans may contract with specific CAM providers and obtain discounts for their members. Most CAM treatments must be paid for directly by patients. In the past, some animosity has existed between CAM providers and conventional medical providers. While some research has been done to evaluate CAM practices, it has not been adequate to reach definitive conclusions. Moreover, some existing studies do not validate their hypotheses. If a patient chooses a CAM treatment over conventional medical treatment for a serious condition, the patient’s life can be at risk. Some efforts are being made by the National Center for Complementary and Alternative Medicine (NCCAM) to increase CAM research. Meanwhile, some conventional medical institutions such as hospitals are

Complementary and Alternative Health Care Industry setting up CAM clinics in order to integrate CAM therapies with conventional medicine, and some conventional medical providers use CAM treatments in their practices.

INDUSTRY MARKET SEGMENTS Unlike most industries, CAM providers fall entirely within two segments: small or large. CAM providers either operate small practices of one or several providers or they operate as part of hospitals or hospital systems. Thus, there are no midsize businesses in this industry. Small Businesses The majority of CAM providers are employed in small businesses. The typical model for a CAM practice is an office with one to five providers of the same type of CAM care and, possibly, some support staff. Some CAM providers go into practice with other CAM providers in holistic care clinics. CAM provider offices are most commonly located in cities. Nurse-midwives may work in physician practices, which are also small businesses. Potential Annual Earnings Scale. Salaries for CAM providers in the United States vary with provider type, provider experience, office size, the number of patients seen per week, and office location. Chiropractors earn from $32,380 to $159,640 per year. Naturopaths earn from $50,000 to $100,000 per year. Acupuncturists earn from $25,000 to $100,000 per year. Homeopaths earn from $45,710 to $156,000 per year. Hypnotists earn from $60,000 to $125,000 per year. Midwives working in physician practices earn from $55,000 to $80,000 per year. Nonnurse midwives are typically paid by birth, often about $2,000. Clientele Interaction. CAM providers tend to form close relationships with their patients because of the holistic nature of their practices. One of the draws of these practitioners is the time that they spend with their patients and the individualized treatment they provide. Typically, CAM providers spend thirty minutes or more getting to know their patients. Since they often provide regular, frequent services, they rely on having good relationships with their clients to maintain their businesses.

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Amenities, Atmosphere, and Physical Grounds. CAM providers usually have small, comfortable offices with some amenities—such as relaxing music or freshly cut flowers—but limited decorations. Offices are usually clean, but there may be only one or two examination rooms, and the waiting room may be small. Chiropractors and nurse-midwives are likely to have larger offices. Chiropractors may have radiology equipment and exercise equipment. Physician offices where nursemidwives work may have larger waiting rooms, larger back offices, and larger examination rooms. Typical Number of Employees. In order to keep business costs low, CAM providers have few employees. A practice usually consists of one to five providers and three or fewer support staff. Providers may have receptionists to make appointments, or they may make their own appointments. They may use answering machines in lieu of phone staff. With the exception of nurse-midwives and possibly chiropractors, many CAM providers operate cashonly businesses, so they do not require billing staffs either. Those providers that need to bill health insurers generally must hire billing persons and purchase computer software to keep track of their bills. They are likely to order their own supplies and equipment and perform their own marketing. They are likely to advertise on the Internet, at health fairs, at grocery stores, at health food stores, at beauty salons or day spas, or in smaller, alternative newspapers or magazines. Nurse-midwives who are employed by physicians are not involved with running their offices unless they are very small. Many physician practices have staffs of six to ten persons who work as receptionists, billing staff, and medical assistants to each physician. Some practices may have business managers. Each physician practice either has a single billing person or uses a professional billing service, depending on its size. Larger physician groups may have their own billing services. They send claims to health insurers for most of the services that they provide. Chiropractors tend to operate in a similar manner to physicians. They usually have receptionists and several medical assistants. They accept cash payments from some patients, but they also require either billing persons or billing services. Traditional Geographic Locations. CAM providers tend to have offices in locations where physicians and other medical providers have offices.

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Most of their offices may be in cities, but they also may be in the suburbs. They are less likely to be located in rural areas, since they want to be conveniently accessible to their clients. Holistic health clinics with multiple CAM providers are frequently located in college towns, where residents are thought to be more open-minded about nontraditional health care providers. Hospitalbased CAM clinics are usually in separate office buildings owned by their parent hospitals, usually on or near the hospitals’ campuses. Physician offices where nurse-midwives may be employed are often in large medical office buildings near hospitals. Pros of Working for a Small Practice. Practitioners working in small practices have significant control over their business. They are, generally speaking, their own bosses. Even in partnerships of five or six providers, few decisions—such as hiring receptionists or choosing a location—need to be made jointly. Otherwise, each provider maintains responsibility for his or her own patients and is ultimately answerable only to him- or herself. They set their own hours and determine their own workloads—although nurse-midwives and chiropractors are more likely to work typical business hours. In addition, practitioners working in small practices usually are able to develop closer and better relationships with their clients, since they are not insulated from them by office staff. Nurse-midwives who work in physician practices and chiropractors in practice with more than three other chiropractors are exceptions to this principle because such practices usually place several staff members between clients and their providers. Cons of Working for a Small Practice. The owners of a small practice are at significant risk of financial loss if they cannot operate profitably. One- or two-person practices cannot afford to hire many staff. As a result, they must fulfill many business roles, including accountant, secretary, receptionist, supply clerk, marketer, business manager, and possibly housekeeper. These additional responsibilities increase practitioners’ working hours. All CAM practitioners must meet state licensing requirements, including those for education. Malpractice insurance is necessary for all medical providers, including CAM providers, and it can be a significant expense. In the provision of health care, malpractice is always a risk.

Costs Payroll and Benefits: CAM support staff are usually paid hourly wages, whereas practitioners hired by a practice’s owners to help with the workload earn annual salaries and may become business partners. Partners and owners pay themselves out of their profits; if there are no profits, they receive no pay. Very small practices may offer no benefits, but practices attempt to offer standard benefits when feasible to retain qualified support staff. Supplies: CAM practitioners require examination tables, pillows, paper or linens to cover them, and hospital gowns. Acupuncturists need acupuncture needles, Chinese herbs, and audio systems or players to play music during treatment. Midwives require gynecological examination tables with stirrups, paper or sheets to line the tables, sterile and unsterile gloves, tools for patient examination, and stethoscopes. Hypnotists do not require any specific equipment for their practice. A homeopath needs either a supply of homeopathic solutions or a relationship with a homeopathic pharmacy. Naturopaths need stethoscopes and other patient care supplies. Chiropractors need X-ray machines, hot and cold packs, possibly small whirlpool baths, infrared and ultraviolet lights, ultrasound machines, electrical stimulation machines, and traction. All CAM providers need office supplies, antiseptic solutions, sterilizing machines (autoclaves), telephones, computers, and cleaning supplies. If the providers own their office buildings, they may require landscaping equipment and snow removal equipment. External Services: CAM practices may contract laundry, landscaping and snow-removal, accounting, credit-card processing, patient billing, and computer maintenance services. Smaller practices use as few external services as possible. Some may wash their own laundry, maintain their own accounting books, and fix their own computers. They may not accept credit cards. Larger practices are likely to employ more of these services. Most practices purchase malpractice insurance. Utilities: Utilities used by CAM providers include water, telephone, gas or oil, sewage, cable television, and Internet access. Smaller offices may not use cable or require Internet access. If of-

Complementary and Alternative Health Care Industry fices are rented, water, sewage, heat, and cooling may be included in the rent. Taxes: The taxes paid by CAM providers include local, state, and federal income and property taxes. Small practices may pay these as corporate taxes, or practitioners may report their business income on their personal returns, in which case they must also pay self-employment taxes. In some states, taxes are applied on medical services. In such states, providers must apply these taxes to patients’ bills, collecting the taxes from patients and passing them on to the state government. Other Expenses: Additional costs of doing business as a CAM provider include paying fees for state licensure and possibly fees for national certification within professional organizations. Some states require continuing education credits for nurse-midwives, in which case those practitioners must bear the costs of the requisite seminars or classes. Large Businesses CAM providers are much less likely to be employed by large businesses. When they are, they are usually employed by hospitals in integrative care departments. Some types of CAM providers are more likely to be employed by hospitals. Nursemidwives may work in the labor and delivery departments of hospitals. Acupuncturists, hypnotists, and naturopaths are the most likely to be employed by hospitals in their integrative care departments. Chiropractors usually practice with other chiropractors in offices. It is uncommon for them to work in hospitals. Unless homeopaths are also physicians, they are unlikely to be employed by hospitals. A 2007 survey performed by Optimal Healing Environments for the American Hospital Association found that 37 percent of respondent U.S. hospitals had integrative care departments. Most of these departments provided only outpatient services, but some also provided inpatient services. Potential Annual Earnings Scale. Pay scales for CAM providers who work in hospital integrative care clinics vary according to whether the integrative care department is intended to be self-supporting, whether the hospital is supporting the department, or whether the department is supported by outside grants. If the integrative care department is intended to be self-supporting, the CAM providers

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are paid based on the number of patients seen. If the hospital is supporting the department or the department is supported by outside grants, the CAM providers are paid either an hourly wage or an annual salary. Some integrative care departments may employ volunteer CAM providers on a part-time basis. CAM providers working in a hospital often earn less than providers with their own offices. Nurse-midwives who work in hospital labor and delivery departments earn an average of $55,000 to $80,000 per year. They may be paid salaries or hourly wages. As employees of hospitals, CAM providers are usually but not always given government-mandated benefits, vacation time, and sick time. Clientele Interaction. CAM providers strive to achieve supportive and caring relationships with their patients. The goal of CAM providers is to care for patients as complex, whole entities, and this can only be achieved if they take the time to get to know each patient individually. Typically, patient care sessions are scheduled to last thirty minutes to one hour. Much CAM business is repeat business, and new patients are often referred by friends who use the provider, so maintaining good relationships is necessary. Amenities, Atmosphere, and Physical Grounds. Hospital buildings are usually clean and well kept, inside and out. They attempt to create a quiet and calming atmosphere. The most common amenity is soothing and relaxing music that is played during treatments. Many hospitals have paintings of country or other outdoor scenes to foster a relaxing atmosphere. Clean bathroom facilities are available, and they may be locked so that they will only be used by patients and family members. Most physician office buildings and hospital buildings have information desks and security guards in their lobbies. Grounds around hospital buildings are well kept and frequently have decorative flower gardens. Typical Number of Employees. Hospitals have hundreds to thousands of employees, depending on the number of beds they provide. On average, small hospitals employ five or six persons per bed, while larger hospitals employ eight or nine persons per bed. Hospitals are in the business of providing care twenty-four hours per day, seven days per week, particularly emergency care. They must employ sufficient staff to cover all of these hours. Hos-

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pital employees, such as nurse-midwives, often work rotating shifts to provide coverage for their departments. Integrative care departments may have providers on call for emergencies, but they typically provide treatments only during the work week and during the day. Some may have evening or Saturday hours. Their staffs are much smaller than those of other hospital departments. They may have six to ten employees, depending on the types of services that they provide. Traditional Geographic Locations. Usually, hospitals are located in large cities, but some may be located in small towns. Large city hospitals are more likely to have integrative care departments, but smaller community hospitals may also have such departments. City hospitals are often located in some of the less affluent sections of a city. They are often located in residential areas of cities or towns. Pros of Working for a Hospital. Large businesses such as hospitals are departmentalized, al-

lowing each employee to perform a single job role and concentrate on a narrow area of expertise. CAM providers at such facilities need only provide care and need not attend to financial record keeping, patient scheduling, or ordering supplies. CAM providers working in hospitals usually enjoy government-mandated benefits, paid vacation, and sick time. Nurse-midwives can count on consistent paychecks, and, in integrative care departments, providers may also receive consistent paychecks, depending on their contracts. Hospitals provide continuing education for their staffs, so employees may have access to free classes on a wide variety of topics, including computer software. Hospitals always have employee cafeterias, and they sometimes subsidize the cost of the food. Cons of Working for a Hospital. Hospital workloads may be inconsistent. Employees in labor and delivery units may wait with nothing to do at some times, only to find themselves facilitating multiple simultaneous births at other times. Simi-

OCCUPATION

PROFILE

Chiropractor Considerations

Qualifications

Description

Treats people for various illnesses through manipulation of the spine; often incorporates other alternative health practices such as nutritional therapy.

Career cluster

Health Science

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

Doctoral degree

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

ISR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Complementary and Alternative Health Care Industry larly, in integrative care departments, providers may not be very busy part of the day, but then, at other times, they may be overloaded, forcing patients to wait for care. This occurs because hospitals experience peak hours, as patients often come before or after work, or on their lunch hour. Hospital employees must all generally work on-call shifts, and they may not be able to leave work on schedule. Hospitals are dramatically more bureaucratic than small practices. Business decisions are made by administrators at a level that is unrelated to direct patient care. Thus, staffing may be reduced, and hours and policies may be changed by hospital executives without consulting providers. Individual employees in large organizations may have relatively little control over their work lives. It is unusual for professional providers, such as CAM providers, to be unionized, even if other hospital employees are. Costs Payroll and Benefits: Nurse midwives may be paid either annual salaries or hourly wages. Hospitals usually provide government-mandated benefits, vacation time, and sick time. CAM providers working in hospital integrative care departments may earn salaries, hourly wages, or payments for each patient seen. Some may even be volunteer workers. If they are considered hospital employees, some will receive government-mandated benefits, vacation, and sick time. Other CAM providers may be independent contractors, in which case they will not receive such benefits. Supplies: Hospitals require many different types of supplies, including landscaping and snowremoval equipment, cleaning supplies, office supplies, computers and software, telephones, food and dinnerware, beds and bed linens, towels, autoclaves, dressing supplies, personal care supplies, acupuncture needles, examination tables, medications, intravenous fluids, physical therapy equipment, electronic patient care equipment, medication administration equipment, operating- and delivery-room equipment, scrub uniforms, hospital gowns and pants, dialysis equipment, and laboratory equipment and supplies. They also require radiology equipment, including computed tomography (CT) scanners, magnetic resonance imaging (MRI)

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scanners, and fluoroscopy machines, as well as medication administration machines, patient care supply machines, infant beds, isolette infant beds (for premature or ill newborns), cribs, wheelchairs, and stretchers. External Services: Hospitals may contract lawn and grounds care services, parking vendors, computer maintenance services, computer software trainers, vending machine companies, cleaning services, security services, MRI or CT scanner rental services, medical engineering services, billing services, and oxygen and other gas vendors. Larger hospitals may use their own staff for some or all of these services. Utilities: Hospitals must pay for water, sewage, oil or gas, telephone service, cable television, Internet access, and electricity. Taxes: As large businesses, private for-profit hospitals must pay local, state, and federal income taxes, as well as property taxes. Nonprofit hospitals may be exempted from these taxes. Some states charge for-profit hospitals additional taxes per patient. Other Expenses: CAM providers are required to pay for their own state licensing fees, malpractice insurance, and board certification when necessary. Some states and individual hospitals require ongoing continuing education credits for professional employees, who must pay for their own continuing education. Although professional employees should have their own malpractice insurance, hospitals must also have institutional malpractice insurance.

ORGANIZATIONAL STRUCTURE AND JOB ROLES There are two settings where CAM providers are employed, private practices and general hospitals. In smaller offices, either providers themselves or office managers must fulfill multiple roles to keep the businesses running. In larger offices, several staff members will fulfill these roles. A majority of CAM practitioners work in private practices. Some CAM practitioners are employed by general hospitals. Some work in integrative medicine departments, while nurse-midwives are generally employed in labor and delivery departments. In

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hospitals, most business functions are performed by hospital staff. The following umbrella categories apply to the organizational structure of businesses in the complementary and alternative health care industry, including general hospitals that employ CAM providers:

Management occupations may include the following: ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■

Management Public Relations Marketing Human Resources Housekeeping Maintenance Information Technology Nursing Billing

Management In small CAM provider offices, usually one provider manages the practice. Managers may meet periodically with the other providers in their practices to make major decisions. Larger CAM offices may hire dedicated business managers; the owners or partners nevertheless retain ultimate authority in such practices. Different types of CAM providers have different educational backgrounds. Acupuncturists require at least fifteen hundred to two thousand hours of acupuncture study. Naturopaths require four to five years of study in naturopathy. Nurse-midwives require master’s degrees in nursing with specialties in midwifery. Nonnurse midwives must have midwifery training. Chiropractors require four years of study in chiropractic medicine. Most homeopaths are either medical doctors or osteopathic physicians with additional training in homeopathy. Office managers usually have bachelor’s degrees in business, but experience may be more important than education, especially in smaller practices. Office managers are usually paid annual salaries. The management team of a hospital is responsible for high-level decisions and usually consists of four or five executives. The persons in these positions oversee operations, set institutional goals, work with physicians, and make strategic plans. Most executive management team members have master’s degrees in business administration, accounting, or nursing. They are paid annual salaries.

■ ■ ■ ■

Owner/Sole Practitioner Managing Partner Office/Business Manager Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Director of Patient Care Services Controller General Counsel

Public Relations In CAM provider offices, any public relations work is performed by providers or business managers. It is performed as needed only, although CAM providers work hard to maintain good relationships with their patients. Public relations includes responding to patient complaints or problems, as well as soliciting patient feedback. Hospitals have dedicated public relations departments that respond to patient complaints and solicit feedback, as well as maintaining media and government relations and issuing press releases as necessary. If patients or former patients complain about their treatment by phone or by mail, public relations personnel must follow up with them. Any valid problems are then communicated to the appropriate departments, so changes can be made. In order to get feedback, some hospitals send questionnaires to discharged patients or participate in national surveys of hospital patients. In a fairly competitive hospital market, feedback is important to ensure that patients are satisfied with their care. Hospital public relations departments can vary in size and type of personnel. Generally, there is a director, a clerical person, and one or more representatives. Directors have bachelor’s degrees and sometimes master’s degrees, as do representatives. Secretary require at least high school educations. Directors are paid annual salaries. Representatives and clerical staff are usually paid hourly wages. Public relations occupations may include the following: ■ ■ ■

Business Manager Public Relations Director Spokesperson

Complementary and Alternative Health Care Industry ■ ■

Public Relations Representative Administrative Assistant

Marketing In CAM provider offices, marketing is performed by providers or office managers. Usually, marketing consists of placing advertisements in newspapers, on the Internet (particularly on CAM Web sites), in local advertising magazines, in supermarkets, at health fairs, at day spas, or in alternative newspapers. Private practices look for ways to market their services that are low in cost yet effective. This type of marketing does not reach a very large number of people. A given hospital may employ one marketing person or a whole marketing department, depending on the hospital and how competitive its market is. Hospital marketing budgets are much larger than those of private practices. They include money for advertising through television, radio, the Internet, large local newspapers, and billboards. Some hospitals may publish newsletters about their services, either on paper or online. This kind of marketing reaches a wide range of persons. Marketing personnel generally have bachelor’s degrees in marketing and may have master’s degrees as well. Marketing directors often have master’s degrees in marketing or business. Clerical personnel have at least high school educations. Directors are paid annual salaries, while their staffs may also be paid salaries or may be paid hourly wages. Clerical staffs are paid hourly. Marketing occupations may include the following: ■ ■ ■ ■

Marketing Director Marketing Assistant Market Research Analyst Administrative Assistant

Human Resources CAM private practices lack formal human resources staffs. Either providers or office managers hire and fire staff. They also interview prospective staff, check references and previous employers, and negotiate salaries. Usually, the partners in a given practice make the ultimate hiring or firing decisions for that practice. In addition, office managers or practice managers advertise for job applicants, conduct performance appraisals, and deal

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with any personnel problems. If there is no office staff except the providers, there is little to do in the area of human resources. Hospitals have human resources departments whose staff members advertise for employees, hire them, respond to employee grievances, check prospective employees’ references and previous employers, and conduct exit interviews. Support staff members work as receptionists, give out employment applications, check that submitted applications are complete, and answer questions. Typically, human resources departments have directors, representatives, and clerical staffs. Directors have bachelor’s degrees, may have master’s degrees, and are paid annual salaries. Human resources representatives have bachelor’s degrees and are generally paid hourly wages. Clerical staff members have high school educations and are paid hourly wages. Human resources occupations may include the following: ■ ■ ■ ■ ■

Human Resources Director Human Resources Generalist Payroll Clerk Benefits Manager Administrative Assistant

Housekeeping For private CAM offices, housekeeping is a required service. Offices must be cleaned, as must lobbies, hallways, elevators, and common restrooms. Provider offices located within larger office buildings generally need not worry about spaces outside the offices proper, which are cleaned by building cleaning staff. Cleaning staff may clean only common areas, however, requiring practices to engage their own cleaning services. CAM providers pay either hourly rates or set per-visit fees. Cleaning services do not have educational requirements for their workers, who generally earn hourly wages. Most hospitals have housekeeping departments that clean all areas within the hospitals themselves, as well as their attached medical office buildings. Some smaller hospitals outsource this function, but this is uncommon. It is critical that hospital patient care areas be spotlessly clean, and cleaning personnel must be trained in the handling of medical waste and the sterilizing of medical equipment

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and surfaces. Employing their own staffs allows hospitals to exercise more control over their cleanliness. Housekeeping staff are responsible for cleaning patient beds after discharge, so they have some control over how soon the beds are available for admissions. Housekeeping managers or supervisors oversee crews. Managers and supervisors may or may not have bachelor’s degrees, but they usually have high school educations. There are no educational requirements for housekeeping personnel. Usually, managers and supervisors are paid annual salaries, and their staffs are paid hourly wages. Housekeeping occupations may include the following: ■ ■ ■

Housekeeping Manager Housekeeper Custodian/Janitor

Maintenance Private practices may rely on their office buildings’ maintenance staff for routine problems. However, problems requiring greater expertise, such as plumbing problems or medical equipment repairs, may require the use of external vendors. Hospital maintenance departments are usually called “engineering departments.” Department personnel maintain plumbing; electrical systems; and heating, ventilation, and air-conditioning (HVAC) systems, as well as performing major equipment repairs and renovations. Medical engineers maintain their hospitals’ patient care equipment. Most hospital maintenance workers have trained either in vocational schools or with other maintenance professionals to learn their trade. Some may have engineering degrees. They are paid based on their experience and education. Chief engineers usually have master’s degrees and are paid annual salaries. Plumbers, HVAC technicians, electricians, and medical engineers are paid hourly wages. Maintenance occupations may include the following: ■ ■ ■ ■

Office Building Maintenance Person Chief of Engineering Plumber Heating, Ventilation, and AirConditioning (HVAC) Technician

■ ■

Electrician Medical Engineer

Information Technology Private CAM practices may or may not use computers. Large physician practices usually use computers, as do chiropractors. They often keep their patients’ medical records on their systems, as well as their office finances and patient billing accounts. Other providers may not see the need for computers or feel their expense is justified. Some offices rely on computers for patient billing and record keeping. Others do not use them at all. Modern hospitals use computers throughout their buildings and departments. They generally have dedicated information technology (IT) departments. IT personnel assist with computer access and troubleshooting, back up computer data, and maintain data security. Directors of IT are paid annual salaries and usually have undergraduate or graduate degrees in information technology. IT assistants and help desk staff assist hospital staff with their computer problems. They usually have some college training or bachelor’s degrees in information technology. They are paid hourly wages. IT occupations may include the following: ■ ■ ■

Information Technology Director Information Technology Assistant Help Desk Staff

Nursing Some CAM providers employ nurses to assist them in caring for patients in their offices. Not all CAM offices have nursing staffs. CAM office nurses may be registered nurses (RNs), licensed practical nurses (LPNs), or nurses’ aides. Hospital nursing staffs provide direct patient care throughout their hospitals. Hospitals employ nurse managers, nursing supervisors, staff nurses, and patient care assistants. Nursing supervisors and nurse managers must have bachelor’s and master’s degrees in nursing or related fields, as well as experience in nursing, usually including emergency care. Nurse clinicians and nurse midwives have master’s degrees in nursing. Staff nurses have completed accredited nursing programs. Nurses are usually paid by the hour, although some nursing supervisors and nurse managers are paid annual salaries.

Complementary and Alternative Health Care Industry Patient care assistants are trained by hospitals to assist nursing staffs. They are taught technical skills, such as taking electrocardiograms and drawing blood for testing. They also provide direct care to patients. LPNs are trained in one-year programs and lack the medical science knowledge that RNs have. Nurses’ aides are trained by hospitals, nursing homes, or technical schools in programs that last several months. Patient care assistants, LPNs, and nurses’ aides are paid by the hour. Nursing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Office Nurse Nursing Supervisor Nurse Manager Nurse Clinician/Nurse Midwife Registered Nurse Licensed Practical Nurse Patient Care Assistant

Billing If CAM practitioners provide services that are covered by their patients’ health insurance, they need personnel to handle insurance billing. Some CAM providers operate on a cash-only basis because their services are not covered by health insurance. They do not need billing departments because they are generally paid for their services at the time they are administered. Some providers receive insurance payments from some patients and cash payments from others. Most health care billing personnel have high school educations and are paid hourly wages. Hospitals usually have dedicated billing departments with billing managers, billing staffs, and clerical staffs. A majority of hospital patients have some type of health insurance, so it is necessary for hospitals to bill insurers. Those patients without health insurance must pay deposits for their hospital stays before they are admitted, unless they are emergency admissions. Billing managers may have high school educations or bachelor’s degrees, as well as billing experience. Managers are paid annual salaries. Billing staff and clerical staff have high school educations and possibly associate’s degrees. They are paid hourly wages. Billing occupations may include the following: ■ ■

Billing Manager Billing Specialist

■ ■ ■

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Accounts Receivable Clerk Office Manager Administrative Assistant

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be in decline in the United States. From 1997 through 2007, the use of CAM practitioners decreased by about 50 percent, although self-care CAM measures increased. CAM practitioner visits, among survey respondents in 2007, totaled 1,592 visits per 1,000 adults. One-third of out-of-pocket dollars spent on CAM services were for practitioner visits. Acupuncture did not follow this general downward trend: Acupuncturist office visits increased during the same period and reached a total of 17.6 million visits in 2007. This rise in the number of acupuncture treatments may be due to an increase in the number of acupuncturists, as well as increased media discussion of acupuncture and increased health insurance coverage for acupuncture. Several factors could affect the long-term outlook of the CAM industry. The U.S. population continues to age, and large numbers of baby boomers are turning 62 and becoming eligible to receive Social Security payments. The recession of 20072009 significantly decreased the retirement savings of many Americans. The Patient Protection and Affordable Care Act of 2010 (PPACA) is expected to lead to more than 30 million uninsured Americans gaining health insurance. More than 20 million Americans will still lack insurance, however. Because CAM treatments may be less expensive than conventional treatments but may also be ineligible for health insurance coverage or reimbursement, these events may have unpredictable and conflicting effects upon the CAM market. However, in general, health care utilization of all sorts is expected to increase after 2014 when the major provisions of the PPACA go into effect. Market analyses may also be distorted by a lack of data on nurse-midwives and nonnurse midwives. Nurse-midwives, who most often work within the realm of traditional medicine, may not be perceived as CAM practitioners. Surveys may also be distorted if they include only participants who are either middle- or upper class. Working-class Ameri-

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cans are less likely to respond to surveys, and they are more likely to use nonnurse midwives, than are members of other classes. Survey respondents may also be reluctant to admit to visiting CAM practitioners as a result of social stigmas against those practitioners in some groups. Nevertheless, it appears that the demand for treatment by CAM providers other than acupuncturists and possibly midwives is in decline. In other countries, the use of herbal medicines represents the highest percentage of CAM treatments. International data on CAM use, other than herbal treatments, is limited, particularly for less affluent countries. The World Health Organization reports that in countries other than the United States, traditional medicine is responsible for at least 80 percent of medical care. China embraces the practice of acupuncture. Great Britain and Australia provide some data on their use of CAM practitioners. Employment Advantages Americans’ consumption of acupuncture is increasing, and acupuncture is increasingly being covered by health insurers, as research is published demonstrating its effectiveness. Acupuncturists require significantly less training and less financial investment than do medical doctors, and they may be able to develop better relationships with their patients than many doctors are able to. Careers in midwifery may appeal to people who wish to support maternity patients who dislike conventional medical techniques for delivery. It can be very exciting to assist women in childbirth and witness one of the major events of life. Nurse-midwives may have significantly greater career options than nonnurse midwives, however, especially given that nonnurses are not allowed to practice midwifery in many states. While other CAM providers are less in demand, people who are able to succeed in such careers may find them rewarding. CAM providers help people with health problems who cannot or do not wish to seek conventional medical treatment. They often develop close relationships with their patients because they are committed to treating whole people rather than symptoms. Annual Earnings The demand for complementary and alternative care services, with the exception of midwifery,

is related to the availability of disposable income, since services must often be paid for in cash, and to the incidence of chronic health problems. Americans, particularly educated Americans, have a fair amount of disposable income. As the U.S. population ages and health reforms mandated by the PPACA are implemented, the demand for CAM services is likely to increase. With annual expenditures at $33.9 billion in the United States, there appears to be a continued demand for CAM providers. It is difficult to determine the demand for CAM services in the international health care market. There are few data on current expenditures on CAM services. Developing countries are unlikely to increase their use of CAM services. They are also unlikely to report the use of these services. Lack of education and scarcity of conventional medical care make it unlikely that interest in alternative medicine will increase. Countries such as Australia, Great Britain, Japan, and China may demonstrate increased interest in CAM services as their populations increase in wealth, education, and age.

RELATED RESOURCES FOR FURTHER RESEARCH American Holistic Medicine Association 23366 Commerce Park, Suite 101B Beachwood, OH 44122 Tel: (216) 292-6644 Fax: (216) 292-6688 http://www.holisticmedicine.org Global Institute for Alternative Medicine 3822 Lake Ave. Wilmette, IL 60091 Tel: (800) 410-0612 Fax: (888) 201-4186 http://www.gifam.org National Association for Integrative Health Care Practitioners 9201 Edeworth Dr. P.O. Box 5631 Capital Heights, MD 20791 Tel: (757) 292-7710 http://aihcp-norfolkva.org

Complementary and Alternative Health Care Industry National Center for Complementary and Alternative Medicine, National Institutes of Health 9000 Rockville Pike Bethesda, MD 20892 Tel: (888) 644-6226 Fax: (866) 464-3616 http://nccam.nih.gov

ABOUT

THE

AUTHOR

Christine M. Carroll has a diploma in nursing from Massachusetts General Hospital, a bachelor of science in nursing from Boston University, and master of business administration in health care administration from the University of Connecticut. She has experience in medical-surgical nursing, nursing education, and health insurance. She has published articles in nursing journals and has performed peer review for several nursing journals, as well as contributing to medical reference works, including Magill’s Medical Guide, Salem Health: Cancer, Salem Health: Psychology and Mental Health, and Salem Health: Genetics and Inherited Disorders.

FURTHER

READING

American Association of Professional Hypnotists. “How Profitable a Career Is Hypnotherapy?” http://www.aaph.org/node/166. Anath, Sita. “CAM: An Increasing Presence in U.S. Hospitals.” Hospitals and Health Networks, January 20, 2009. http://www.hhnmag.com/ hhnmag_app/jsp/articledisplay.jsp?dcrpath =HHNMAG/Article/data/01JAN2009/ 090120HHN_Online_Ananth&domain =HHNMAG. _______. “A Steady Growth in CAM Services.” Hospitals and Health Networks, March 31, 2009. http://www.hhnmag.com/hhnmag_app/jsp/ articledisplay.jsp?dcrpath=HHNMAG/Article/ data/03MAR2009/090331HHN_Online _Ananth&domain=HHNMAG. Brody, Jane E., et al. The New York Times Guide to Alternative Health. New York: Henry Holt and Company, 2001.

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Cohen, Michael H. Complementary and Alternative Medicine: Legal Boundaries and Regulatory Perspectives. Baltimore: The Johns Hopkins University Press, 1998. Ernst, Edzard, ed. Healing, Hype, or Harm? A Critical Analysis of Complementary or Alternative Medicine. Charlottesville, Va.: Societas Imprint Academic, 2008. FeldHusen, Adrian E. “The History of Midwifery and Childbirth in America: A Time Line.” http://www.midwiferytoday.com/articles/ timeline.asp. French, Nancy. Complementary and Alternative Medicine. Colleyville, Tex.: CAM, 2002. Hartford Hospital. Building Bridges Between Conventional and Complementary Medicine: A Manual. Hartford, Conn.: Hartford Hospital, 2003. Nahin, Richard L., et al. National Health Statistics Report: Cost of Complementary and Alternative Medicine (CAM) and Frequency of Visits to CAM Practitioners—U.S., 2007. Washington, D.C.: U.S. Department of Health and Human Services, 2009. Santa, Colleen F. “The Adoption of Complementary and Alternative Medicine by Hospitals: A Framework for Decision Making.” The Journal of Health Care Management 46 (July, 2001): 250-260. http://www.allbusiness.com/ management/3604702-1.html. Tierney, Gillian. Opportunities in Holistic Medical Careers. Rev. ed. New York: McGraw Hill, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Chiropractors.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos071.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Weil, Andrew. Health and Healing. Rev. ed. New York: Houghton Mifflin, 2004. White House Commission on Complementary

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and Alternative Medicine Policy. Final Report. Washington, D.C.: Government Printing Office, 2002. http://www.whccamp.hhs.gov/ finalreport.html. World Health Organization. National Policy on Traditional Medicine and Complementary/

Alternative Medicine. Geneva, Switzerland: Author, 2005. _______. National Policy on Traditional Medicine and Regulation of Herbal Medicines: Report of a WHO Global Survey. Geneva, Switzerland: Author, 2005.

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The computer hardware and peripherals industry affects nearly every aspect of modern life, from Web sites and e-commerce applications to medicine and telecommunications. The industry manufactures computers and their peripherals. (A peripheral is any computer part or device other than the central processing unit, or CPU, and the working memory. Common peripherals include printers, external storage devices, keyboards, and mice.) Companies active in the computer hardware and peripherals industry range from small start-ups offering just a few niche products to international corporations, such as International Business Machines (IBM) and Hewlett-Packard (HP), that have manufacturing and engineering operations across the globe and employ tens of thousands of people.

General Industry: Manufacturing Career Clusters: Manufacturing; Science, Technology, Engineering, and Math Subcategory Industries: Computer Display Manufacturing; Computer Printer Manufacturing; Computer Storage Device Manufacturing; Computer Workstation Manufacturing; Integrated Circuit Manufacturing; Mainframe Computer Manufacturing; Personal Computer Manufacturing; Semiconductor and Other Electronic Component Manufacturing Related Industries: Computer Software Industry; Computer Systems Industry; Internet and Cyber Communications Industry; Retail Trade and Service Industry; Telecommunications Equipment Industry; Video, Computer, and Virtual Reality Games Industry Annual Domestic Revenues: $110 billion USD (Research and Markets, 2009) Annual Global Revenues: $411 billion USD (Research and Markets, 2009) NAICS Numbers: 3341, 33441

History of the Industry The earliest counting device was the abacus, a tablet of stone, wood, or metal upon which stones were moved along grooves or painted lines. These were used perhaps as early as 3000 b.c.e. by ancient civilizations such as the Sumerians and the Babylonians. (Later versions consisted of framed devices using freely moving beads.) Similar counting tables were later created to simplify such specialized and diverse fields as navigation, astronomy, and 379

©Julia Burlachenko/Dreamstime.com

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Computer Hardware and Peripherals Industry

trigonometry. By the nineteenth century, the term “computer” referred to a person who performed complex calculations for a living using mechanical devices. The term applied particularly to astronomers and surveyors. In 1821, English inventor Charles Babbage grew frustrated with the inaccuracies in the mathematical tables then available. He began experimenting with automatic calculating machines. In 1834, Babbage designed the analytical engine, the first true forerunner to modern computing systems. Babbage’s device was to be steam-powered and capaA computer mainboard with a microprocessor. (©Dreamstime.com) ble of completing complex computations that went beyond numbers. Supporter Ada Lovelace wrote an article nearly eighteen thousand vacuum tubes. It relied about the analytical engine in 1843 that foreshadon removable plug boards to communicate inowed the era of modern computing. She imagined structions. Reprogramming the computer involved utilizing numbers to represent letters of the alpharewiring the entire system, a process that took days. bet, allowing the analytical engine to store many A team of engineers at Texas Instruments credifferent types of data. However, a working version ated the first integrated circuit, or computer chip, of the ambitious project never materialized. in 1959. This extremely advanced miniature elecJust a few decades later, United States Census tronic circuit revolutionized computer science. In Bureau employee Herman Hollerith developed 1968, Robert Noyce, Gordon Moore, and Andrew the punch-card system, which was used by the buGrove founded Intel Corporation with the intenreau to calculate population data as early as 1890. tion of developing an affordable silicon-based Hollerith further refined his punch-card system afmemory chip. Intel would become one of the largter 1896, when he founded the Tabulating Maest manufacturers of integrated circuits. By 1971, chine Company, the precursor to IBM. Punch-card the invention of the floppy disk allowed computer technology formed the basis for many early comprogrammers easily to store and transfer data. The puter models. earliest modern personal desktop computer was In 1937, physicists John V. Atanasoff and Clifthe Apple I, developed by Steve Wozniak in 1976. ford Berry created the first digital electronic comWozniak and his partner, Steve Jobs, sold the Apputer at Iowa State University. This breakthrough ple I as a complete unit. It was the first computer to was soon followed by a rapid expansion in technolfeature a full keyboard and could be plugged diogy during World War II, as governments poured rectly into a standard television. money into computer research. In 1946, this reIn 1981, IBM introduced the personal comsearch led to the creation of the Electronic Numerputer, or PC, which utilized the Microsoft Disk Opical Integrator and Computer (ENIAC), a generalerating System (MS-DOS) to run all of its applicapurpose computer that was developed to assist the tions. Every personal computer in the world can U.S. military in calculating weapon trajectories. trace its lineage directly to IBM’s first model. Just The project was led by John P. Eckert and John W. three years later, Apple launched the Macintosh, Mauchly at the University of Pennsylvania. The the first popular computer system to use a mouse enormous computer took up eighteen hundred to control an advanced graphical user interface square feet of space, weighed thirty tons, and used (GUI). Since then, computers have become a

Computer Hardware and Peripherals Industry ubiquitous part of modern life. Because of the constantly evolving nature of technology, the computer hardware and peripherals industry continues to offer creative entrepreneurs many opportunities to form successful new businesses. There are also many established companies that employ thousands of people, including engineers, scientists, production workers, and administrative staff. The Industry Today Computers are utilized in nearly every modern industry and have become a necessity for most households. The hardware and peripherals industry builds physical computer components in cooperation with the software industry, which develops programs that run on and control those components. In some instances, a single company may offer both hardware and software, either separately or as part of a single integrated computer system. The term “peripherals” refers to devices that either allow users to input information or allow computers to make information externally available to users. Common peripherals include keyboards, monitors, computer mice, external storage devices, cameras, microphones, speakers, headphones, and projectors. Modern computer components require such precision in their design and construction that computer modeling and automated manufacturing techniques are necessary to create them. The testing of finished components is also handled through automated processes. Because of this high level of automation, the hardware industry hires few production workers. Moreover, the physical

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Inputs Consumed by the Computer and Electronic Products Industry Input

Value

Energy Materials Purchased services Total

$2.3 billion $131.2 billion $63.9 billion $197.4 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

manufacturing process is increasingly being outsourced overseas. However, most research, design, and development of computers by American companies is still based in the United States. Some computer hardware and peripherals, such as the specialized servers utilized by schools or hospitals, can be offered only by midsize or large firms because developing new products requires high expenditures on both research and manufacturing. Hardware and peripheral manufacturers often work closely with companies in the information technology and cyber communications sectors to develop products for database systems, Web servers, and computer networks. Hardware manufacturers also commonly produce specialized components and integrated circuits for use in other products, including automobiles, aircraft, medical devices, toys, and personal electronics. The Computer and Electronic The largest firms manufacture the majority of all computer components, such Products Industry’s Contribution to as integrated circuits and hard drives. the U.S. Economy Components usually require “clean-room” manufacturing facilities. In such facilities, Value Added Amount employees are required to wear full-length Gross domestic product $195.2 billion coveralls and face masks and often pass Gross domestic product 1.4% through airlocks before entering. The Persons employed 1.25 million atmosphere in clean rooms is carefully Total employee compensation $129.8 billion controlled with air filtration systems and particulate monitors. Commonly manuSource: U.S. Bureau of Economic Analysis. Data are for factured components requiring clean2008. room facilities include integrated circuits and hard drives.

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Integrated circuits, also known as microchips, are created by blending multiple layers of semiconductor materials, such as silicon and germanium compounds, into a base structure. Transistors, which are capable of amplifying electrical signals and turning them on or off, are installed on the structure, and microscopic pathways are etched into the structure, connecting multiple transistors in the same manner that streets connect buildings in a city. Information is passed along these pathways as bursts of electrical impulses. Many different computer components rely on integrated circuits, including CPUs, motherboards, and video cards. Hard drives store digital data for long periods of time. These data can be easily and quickly accessed at any time. Inside a disk drive, an actuator arm locates and reads data stored on magnetic disks as binary ones and zeroes. The actuator arm also contains recording elements that can write data to the disk by turning the magnetic charge of a tiny segment of the disk on or off. This segment represents one binary digit, or bit.

In both large and small firms, employees from many different departments, including research and development, engineering, manufacturing, and sales and support, work together closely to develop and perfect new products. A company may sell its products directly to consumers, or it may sell them wholesale to electronics or big-box retailers. In the competitive computer marketplace, companies succeed based on their dedication to innovative design and manufacturing techniques. As computers continue to become fully integrated in people’s daily lives, the hardware and peripherals industry will play an increasingly important role in all sectors of the global business community.

INDUSTRY MARKET SEGMENTS The computer hardware and peripherals industry includes companies of all sizes. Most manufacturing activities are concentrated in midsize and

Inside a hard disk drive, an actuator arm locates and reads data stored on magnetic disks as binary ones and zeroes. (© JeanFrancois Vermette/iStockphoto.com)

Computer Hardware and Peripherals Industry

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large companies, while smaller companies may produce niche products or build and repair customized computer systems for a local community. Small Businesses There are many small computer firms based in the United States, although midsize and large firms employ a greater percentage of the workers in the hardware and peripherals manufacturing industry. Small firms sometimes employ just a single owner-operator. Many small companies focus on manufacturing a few peripheral Some small companies focus on manufacturing a few peripheral products, such as products, such as customizable customizable USB flash drives. (©Brian Jackson/iStockphoto.com) universal serial bus (USB) flash drives or game controllers. firms in high-tech hot spots such as San Francisco These niche products can be developed and manumay earn up to $160,000 per year. factured with a small staff and have low start-up Clientele Interaction. Many owners and emcosts. Other small companies purchase compoployees of companies in the computer hardware nents built by larger firms and use them to build and peripherals industry have direct contact with and repair computers for individuals or local small their clients. For small, Internet-based hardware businesses. Most established computer hardware and peripherals manufacturers, telecommunicamanufacturers were founded as small, niche comtions may be the only form this contact takes. On panies, and many small computer hardware and the other hand, employees at small computer firms peripherals companies are founded every year. with storefront locations frequently meet with cusPotential Annual Earnings Scale. For small tomers to give them hands-on demonstrations of computer hardware manufacturing and consultproducts or to train them to operate new products. ing firms, employee earnings may vary widely deCustomers may also visit storefront locations to pending on geographical location and technical drop off items for repair. In addition, many small expertise. Small start-up firms often run at a loss for computer firms offer on-site repair services, giving the first few years, but they stand to earn substantial employees the opportunity to visit clients at their profits if the company goes public or is bought by a homes or businesses. Employees of boutique comlarger firm. Other small computer hardware firms puter consulting firms often travel to the headmay hire few full-time employees, and part-time quarters of large clients and make business proposemployees are usually paid hourly wages. als in person. At small local retail and repair firms, full-time Amenities, Atmosphere, and Physical computer sales representatives or sales clerks, Grounds. Many computer hardware manufacturwhose main function is to obtain new accounts ers were formed by entrepreneurs working from for their company, can expect to earn between home. Some, including such well-known brands as $17,180 and $27,760 per year. Experienced techniDell and Apple, have gone on to dominate the incians tasked with repairing and building computer dustry, while others have remained small and focus systems may earn between $37,000 and $45,000 per on niche products, consulting services, or serving year, on average. According to 2009 data compiled the local community. Working from home reduces by Salary.com, highly experienced computer hardware engineers working at boutique consulting start-up costs but may also limit options for attract-

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ing customers. However, for companies that make the majority of their sales through the Internet, it is a viable strategy for optimizing financial stability during the early stages of development. A home office may also be a good starting option for owneroperators of small local firms that focus on hardware repair. Once a company has reached a certain stage, it is usually necessary to rent warehouse or office space. Small businesses focusing on Internet sales may need minimal rental space, only enough to store overflow retail products. Small companies usually outsource their production work to overseas facilities or purchase components directly from larger manufacturers and assemble them on site. Computer hardware firms that serve the local community often rent small storefront locations, where they offer repair services; sell an assortment of hardware, peripherals, and software; and custombuild computers to customer specifications. Small consulting firms and niche manufacturers that focus on attracting larger clients usually rent urban office space near industry hot spots. Typical Number of Employees. Most start-up computer hardware design and manufacturing firms are founded as very small companies, although some successful firms grow quite large over time. Small start-ups will begin with a minimal staff. Some consulting firms, manufacturers of niche products, and computer hardware companies with a local focus purposely maintain small staffs to keep their overhead low and retain flexibility. The staff may consist of a single owner-operator, but it is also common for small firms to hire part-time, fulltime, or contract workers as needed. Traditional Geographic Locations. Thanks to the growth of electronic commerce (or e-commerce) and the increased ability of companies to outsource production work overseas, computer hardware firms can be located throughout the world, in urban, suburban, or rural locations. Companies focused on Internet sales can be especially flexible, since most customers will never visit their facilities. Small computer firms catering to residents and local small businesses can likewise be founded in any location, though many are concentrated in urban and suburban areas. Small consulting firms catering to large clients in the computer and hardware industry are usually located near cities with high concentrations of high-tech compa-

nies, including San Francisco, Seattle, Boston, New York City, and Austin, Texas. Pros of Working for a Small ComputerManufacturing Firm. As major manufacturing and production activities continue to move overseas, it becomes easier to launch small computer start-ups with low overhead and a minimal staff. Some of these small start-ups will eventually become prominent in the industry, and early employees may reap great financial rewards. At start-ups, the atmosphere may feel more creative, exciting, and ambitious than at larger firms, particularly as small teams work closely together in the hope of achieving success. For consulting and manufacturing firms, a minimal staff offers greater flexibility and allows them to maintain much smaller profit margins while remaining viable. Owner-operators of small firms enjoy the freedom to determine their own schedule, select their own employees, and maintain direct control over their businesses. Employees at these companies usually enjoy the benefits of a much less rigid office hierarchy. They may also benefit from greater creative input in all stages of research, design, development, and testing for new products. This allows employees at small firms to gain substantial experience that may give them significant advantages when seeking future job opportunities. Cons of Working for a Small ComputerManufacturing Firm. While some computer hardware start-ups attain great success in the industry, the majority of small start-ups eventually fail. According to the U.S. Small Business Administration, an estimated seven out of ten new firms last at least two years, and about half of them survive for five years. Because of this, prospective employees at small start-ups need to take into serious consideration the lack of job security. Also, since many start-ups may have very limited funds at their inception, wages and employee benefits may be reduced. Employees at small local firms and niche computer manufacturing companies also face decreased wages, and part-time and contract workers rarely receive benefits such as health insurance. Owner-operators face unique challenges, since they often have very narrow profit margins. A serious slowdown in business for just a few months can put their company out of business. In addition, small local firms specializing in building customized computers and making hardware repairs face

Computer Hardware and Peripherals Industry severe competition from larger manufacturing firms and electronics retailers, which increasingly offer their own warranties and repair services. Costs Payroll and Benefits: Full-time employees at small companies usually receive benefits and a salary or hourly wages. Part-time employees are normally paid by the hour and usually do not receive benefits. Contract workers may be paid by the project or by the hour and rarely receive benefits. Supplies: Since small computer companies generally outsource production duties or utilize offthe-shelf components manufactured by larger firms, supply needs are minimal. If the company or consulting firm has offices or storefront space, requirements will include standard office and telecommunication supplies and equipment, repair equipment, and possibly cash registers and credit-card readers. For small owneroperator firms specializing in on-site hardware repairs or building customized computer systems, requirements may be as minimal as a personal computer or laptop, a portable computer repair kit, and a cellular phone. External Services: Small computer start-ups and hardware and peripherals firms usually outsource production duties to overseas manufacturing firms, focusing instead on creating innovative product designs. They may also establish wholesale retail arrangements with larger manufacturing firms, allowing them to purchase basic computer components at a reduced cost. In addition, they may hire Web site programmers and graphic designers on a contractual basis. Small firms are likely to hire external accountants or bookkeepers. Utilities: For owner-operators running home-based businesses, utilities costs are comparable with basic household utility costs, although they must include high-speed Internet access. Computer firms that rent offices and storefront locations require high-speed Internet and telephone service. Electricity, water, and sewer services are also required, but some or all of these utilities may be included in the rental agreement. Taxes: Tax rates vary widely for small firms, depending on many factors. Small manufacturing firms that outsource production duties overseas

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may pay high import taxes and tariffs. While most small businesses are required to pay local, state, and federal taxes, some states do not charge sales tax for Internet purchases. Rarely, small firms may own their own commercial property, while others are home-based businesses. In these cases, companies are required to pay all applicable property taxes. Midsize Businesses Most midsize computer-manufacturing firms are run in a manner similar to their larger counterparts. They have between 100 and 999 employees, and the midsize sector employs the majority of workers in the computer hardware and peripherals industry. However, midsize firms are less likely to own and operate their own international production facilities than are large firms. Instead, they frequently contract with overseas manufacturing companies or maintain their own domestic production facilities. Midsize firms are more likely to focus on manufacturing peripherals or specialized components than on complete computer systems, although some do manufacture niche computers, such as high-end computer gaming systems. Some midsize firms become large firms by overtaking their competitors. Successful midsize firms may also be taken over by larger companies interested in acquiring their product lines, design expertise, or other intellectual property or capabilities. Potential Annual Earnings Scale. Employees at successful midsize computer firms can earn wages comparable to those of their colleagues at larger companies. Wages are likely to vary internally between different job descriptions and levels of responsibility. According to the U.S. Bureau of Labor Statistics (BLS), production workers may earn $40,000 per year, while hardware engineers can expect to earn between $50,000 and $100,000 per year. Clientele Interaction. Some employees of midsize computer firms, such as technical support specialists or sales representatives, interact extensively with clients. Marketers and sales representatives may work closely with electronic retailers to offer their companies’ products at big-box retailers such as Best Buy or smaller chains such as Radio Shack. Other employees may interact with clients over the Internet, processing order forms and answering customer e-mails.

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tense, and prospective employees must have extensive experience and are often educated at Ivy League schools. Midsize firms offer employees a chance to gain valuable job experience in a more relaxed atmosphere, where competition is less intense and employers may be more likely to hire graduates from public colleges. Employees may choose to spend their entire careers working in midsize firms, which may often provide more opportunities for upward mobility. At midsize firms, employees may also be able to establish a more direct rapport with fellow employees in different diviTechnicians use probes to test a computer circuit board. (©Julia Burlachenko/ sions as they work together closely Dreamstime.com) to develop and market products. Most computer hardware and peripherals manufacturers provide their full-time Amenities, Atmosphere, and Physical employees with generous benefits, including health Grounds. Midsize computer firms normally have care, profit sharing, and retirement funds. headquarters housing executive and administraCons of Working for a Midsize Computertive offices. Headquarters may also house research Manufacturing Firm. Although wages at midsize and development labs and sales-and-marketing offirms may be comparable with those at larger firms, fices. Production and warehouse facilities may be they are normally, on average, at the lower end of located on site, or they may be located elsewhere, the pay scale. Midsize firms may only have one or a sometimes in different states or overseas. Customfew locations, so employees may not be able to ers will rarely visit the headquarters of midsize transfer to another position if they need to relocate firms, since they will most likely purchase products for personal reasons. They are also less likely to at retailers or over the Internet. The atmosphere in provide extensive research and development fundmidsize businesses is usually very professional, aling, so engineers and scientists hoping to work on though some companies may have a more relaxed the cutting edge of computer science may be more attitude and dress code. satisfied working at larger companies. Typical Number of Employees. Midsize computer hardware and peripherals manufacturers Costs usually employ between 100 and 999 people. The Payroll and Benefits: Full-time employees at majority are full-time employees, although midsize midsize companies usually receive generous firms also hire some workers, such as freelance benefits and a salary or hourly wages. Contract technical writers, on a temporary contract basis. workers may be paid by the project and rarely reTraditional Geographic Locations. Many midceive benefits. size firms are clustered in traditional industry hot Supplies: Midsize companies either have their spots near colleges and universities. These include own production facilities or outsource producSilicon Valley, Boston, Austin, Seattle, and the Retion duties, usually overseas. If companies have search Triangle area, comprising the cities of Ratheir own production facilities, they must purleigh, Durham, and Chapel Hill, North Carolina. chase manufacturing equipment, often includPros of Working for a Midsize Computering clean-room technology. Research and develManufacturing Firm. Job competition at large, esopment divisions usually require laboratory tablished hardware manufacturers may be very in-

Computer Hardware and Peripherals Industry facilities, as well as specialized computers used for computer-aided design applications. They must also provide standard office supplies for their workers. External Services: Midsize computer firms may outsource technical writing duties to freelancers. They may also outsource production duties and end-user technical support, often overseas. Sometimes they hire marketing firms and Web designers on a contractual basis. Utilities: Midsize companies may rent or own their production facilities and headquarters. They must normally pay for Internet services, electricity, water, and sewer services. Research and development departments may require special disposal services for semiconductor equipment or exotic compounds. Taxes: Tax rates vary for midsize firms, depending on their geographical location. Manufacturing firms that outsource production duties overseas may pay high import taxes and tariffs. They are also required to pay all applicable local, state,

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federal, and property taxes, although some states do not charge sales tax for Internet purchases. Large Businesses Large computer hardware and peripherals firms are usually established companies with long histories of developing many innovative products and providing customers with extensive technical support. Large companies such as IBM and Apple may inspire a loyal following of dedicated customers and electronic hobbyists. They may also host and participate in major computer technology conferences, such as EMC World and the MacWorld Expo, which are attended by thousands of industry insiders and devoted customers. They usually have very large research and development divisions and often take the lead in developing innovative new technologies that are implemented worldwide. Many large computer companies have elaborate, centralized corporate headquarters, as well as far-flung domestic and international locations, in-

A technician wires a computer mainboard. (©Farzin Salimi/Dreamstime.com)

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cluding training centers, multiple production facilities, and dedicated research and development laboratories. A few also have retail locations, where customers can purchase their products directly or drop off items for repair. The largest computer hardware firms have become very diversified, often offering not just hardware components, peripherals, and complete computer systems but also software, online data storage, installation services, and personal electronics such as MPEG-1 Audio Layer 3 (MP3) players and even cell phones. They can also form joint ventures with other large companies and may acquire smaller competitors and other businesses whose niche products they may want to add to their own product lines. Potential Annual Earnings Scale. Large computer hardware and peripherals companies pay the highest wages in the industry. It is common for employees in research and development, marketing, and sales departments to earn six-figure salaries, and high-powered executives earn even higher salaries. In addition, large firms often provide their employees with generous benefits, including health insurance, profit sharing, stock options, bonuses, and retirement benefits. Clientele Interaction. Many employees in large computer firms interact extensively with individual customers and corporate clients. Large computer hardware and peripherals manufacturers often have an extensive sales force that may form close professional relationships with business clients. Marketers and sales representatives also make arrangements with big-box retailers such as Target, Best Buy, and Walmart to sell their products in stores, sometimes exclusively. Their sales force may also sell products directly to customers via phone or through the Internet. In addition, technical support employees often directly assist customers over the phone or via e-mail. A handful of large computer hardware and peripherals manufacturers have opened their own retail locations. Apple, for example, owns and operates its chain of Apple Stores. In these instances, employees make recommendations directly to customers in person and may also provide on-site training and repair services. Amenities, Atmosphere, and Physical Grounds. Large computer firms often have luxurious campus headquarters, extensive research

and development labs, multiple production facilities, training centers, and sales offices. Individual customers rarely visit company headquarters, although a few iconic campuses, such as Apple’s headquarters in Cupertino, California, have become minor tourist attractions in their own right. Important clients may also visit the headquarters of large firms for business meetings. Large companies have multiple production facilities, including overseas production factories in countries such as Ireland and China. They may outsource individual components to various factories and then assemble the final product at a single location. The atmosphere at large firms varies widely. Large firms expect a high level of professionalism from their employees, but company standards and dress codes may be more relaxed in certain divisions. Many large companies also offer their employees on-site amenities, including day care, cafeterias, and even exercise facilities. Typical Number of Employees. Large computer firms usually employ thousands or tens of thousands of people, often at numerous facilities across the globe. Most are full-time employees. Traditional Geographic Locations. Large computer hardware and peripherals manufacturers often have multiple locations around the globe. Many have production facilities in China, Taiwan, Costa Rica, and Ireland. However, many have headquarters or facilities in high-tech hot spots near major universities, including Silicon Valley, Seattle, Boston, Austin, and the Research Triangle area in North Carolina. Pros of Working for a Large ComputerManufacturing Firm. Employees at large computer hardware and peripherals manufacturing companies are usually paid the highest wages in the industry, as well as receiving extremely generous benefits, stock options, retirement plans, vacation time, and on-site amenities. There is also a certain amount of prestige for employees of iconic firms. The possibility of developing groundbreaking technology is especially attractive to many employees interested in research and development. Large companies usually provide extensive funding to research and development departments, allowing scientists and engineers to experiment with many different types of technology and brainstorm new products that may completely change the way human beings interact with technology. Iconic

Computer Hardware and Peripherals Industry hardware firms such as Intel, IBM, and Apple attract the very top talent in the computer hardware and peripherals industry. Cons of Working for a Large ComputerManufacturing Firm. Competition for jobs at large computer hardware and peripherals manufacturers can be very intense. Prospective employees often have extensive experience in the field and advanced degrees from highly prestigious universities. Even once they are hired, employees feel intense pressure to succeed, and competition for internal promotions can be fierce. The work can be exhilarating but extremely stressful. Employees often work many hours of overtime per week, especially when preparing for new-product rollouts. They often have to work late nights and on weekends and may have to travel extensively for business. While some thrive on the constant pressure, burnout is very common among employees at large computer hardware firms. Costs Payroll and Benefits: Full-time employees at large companies are paid the most generous wages in the industry. They also receive generous benefits, including stock options, retirement funds, vacation time, health insurance, and possibly even on-site amenities, such as child-care and exercise facilities. Supplies: Large companies often have their own production facilities and must purchase and maintain expensive manufacturing equipment and facilities, often utilizing clean-room technology. Large firms have well-funded research and development divisions with extensive laboratories and high equipment costs. They must also provide standard office supplies for their workers. External Services: Large computer hardware and peripherals manufacturers may hire outside consulting firms and sometimes hire marketing firms to produce commercials and advertisements. They may also outsource some technical support duties or the manufacturing of certain components, often to overseas facilities. Utilities: Large companies usually own their own production facilities and headquarters. They are normally required to pay for Internet services, electricity, water, and sewer services. These costs can be quite high for firms with extensive

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campuses or multiple locations. Research and development departments may require special disposal services for semiconductor equipment or exotic compounds. Taxes: Since large firms may have far-flung domestic and overseas facilities, they often face very complicated tax structures. They may have to pay import and export tariffs and taxes in multiple countries. They are also required to pay all applicable local, state, federal, and property taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Midsize and large hardware and peripherals manufacturing firms often share a similar organizational structure. Large computer firms may have divisions specializing in research and development, quality control, customer support, sales, and marketing. By contrast, smaller firms may vary widely in their organizational structure and hierarchy. Small, local firms dedicated to building customizable computer systems and repairing hardware, as well as niche hardware and peripherals manufacturing firms, may have just a handful of employees, or even a single owner-operator. Owners and employees may need to work together to perform any necessary duties, regardless of hierarchy or official position. Start-up hardware manufacturers and small consulting firms face unique challenges. While consulting firms may remain small and still earn profits, ambitious start-up firms often lose money in their first few years but may grow very rapidly if they prove successful. In these instances, developing a stable organizational structure is a key to remaining viable in the rapidly evolving computer hardware and peripherals manufacturing industry. The following umbrella categories apply to the organizational structure of companies in the computer hardware and peripherals industry: ■ ■ ■ ■ ■

Executive Management Research and Development Technical Writing Staff Marketing Sales

390 ■ ■ ■ ■

Computer Hardware and Peripherals Industry Information Technology Technical Support Production Administrative Staff

Executive Management Executives in the computer hardware and peripherals industry usually have advanced degrees, training, and experience in the field. In small companies and start-ups, the executive team may consist of just the owner or founder. The founders may also run midsize and large firms, continuing to serve as lead executives until their retirement. Some executives have legal backgrounds, but most work their way up from the sales or engineering side of the business. Either way, successful executives must have a firm understanding of the technical aspects of the business in order to serve in any leadership role within their companies. In midsize or large firms, executives may work closely with a board of directors, especially in companies that are publicly traded. Executives normally earn very high salaries in comparison to other employees and are directly responsible for determining the future direction of their companies. They usually set goals and priorities, determine market segment focus, decide which products to release, and oversee other employees. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Board Chair Chief Financial Officer (CFO) Chief Technology Officer (CTO) Chief Information Officer (CIO) General Counsel Vice President General Manager/Managing Director

Research and Development A company’s research and development division creates new products. Normally, researchers bring new ideas to the table, while development teams refine, test, and implement these ideas. Both usually work closely together and in conjunction with marketing and sales departments to create and test prototypes that will ultimately be released as new products. They also improve existing technology, developing new models for existing prod-

uct lines. The original founders of small start-up companies often engage in their own independent research and development before launching their first products. Research and development departments usually look for experienced scientists and engineers with extensive training and master’s or doctoral degrees, although some entry-level positions may be available for experienced candidates with bachelor’s degrees. According to the BLS, in 2007, research and development workers, depending on their degrees and experience, earned an average of between $50,000 and $100,000. Companies and government organizations also fund theoretical research conducted in university settings that may have practical applications for consumers. Research and development occupations may include the following: ■ ■ ■ ■ ■ ■

Engineer Computer Scientist Physicist Engineering Technician Project Manager Development Manager

Technical Writing Staff Technical writers and editors play a vital role in the computer hardware and peripherals industry. They are responsible for documenting the features of the industry’s products and how to use them. Technical writers produce manuals both for end users, explaining the features of a computer or peripheral in plain language, and for technical specialists such as software engineers, explaining in specialized jargon how best to produce programs to control and utilize a company’s products. They also produce in-house manuals that centralize information needed by the rest of their company’s staff, providing all employees with standardized descriptions of both the company’s products and the tools used to create those products. Technical writers and editors need excellent writing skills and a firm understanding of complex computer technology and infrastructure. They usually have advanced degrees in English, technical writing, or journalism, as well as additional expertise, experience, and training in computer technology. While some industries produce products that

Computer Hardware and Peripherals Industry may be easy to identify, many computer hardware products seem very similar on the surface. Technical writers help explain the differences between various products and also develop user manuals and other documentation materials. They may work closely with sales and marketing departments to ensure accuracy in their companies’ written marketing materials. According to the BLS, computer hardware and peripherals companies are among the highest-paying employers of specialized technical writers and editors, with wages normally averaging between $45,130 and $73,750 per year. Technical writing occupations may include the following: ■ ■

Technical Writer Editor

Marketing Marketing employees are responsible for adver-

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tising their brands and attracting clients. They usually work closely with research and development departments, the sales force, and technical writers and editors to craft advertisements, brochures, and other related materials. Marketers in midsize and large firms may also suggest new products based on their marketing research. Some travel to conventions to interact with prospective clients and other firms in the computer industry. Employees working in the marketing divisions of midsize and large computer hardware and peripherals manufacturers usually hold degrees in marketing, advertising, or public relations. They must also have specific expertise and training in the computer sciences, since they must be able to explain detailed technical specifications in ways that make these details easy for prospective customers to understand. Companies in the computer industry pay high wages to marketing employees, with managers earning $119,000 per year, on average, according to 2009 figures from the BLS.

OCCUPATION

PROFILE

Computer Engineer Considerations

Qualifications

Description

Designs, researches, and develops computers and computer peripherals.

Career clusters

Finance; Information Technology; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Marketing occupations may include the following: ■ ■ ■ ■

Marketing Manager Advertising Copywriter Graphic Designer Public Relations Specialist

BLS, highly skilled IT workers can expect to earn between $79,000 and $129,000 per year. IT occupations may include the following: ■ ■ ■ ■

Sales Employees working in sales departments usually interact directly with clients and customers. In large and midsize firms, sales representatives may spend significant time traveling to visit clients and potential customers at their offices. Others may call or e-mail prospective clients. Sales representatives in midsize and large firms often work on commission, meaning their pay may vary widely depending on how successful they are at selling products. According to 2009 BLS figures, successful sales managers can expect to earn between $65,000 and $141,000 per year. Smaller firms with storefront locations may hire part-time retail sales clerks to interact with customers. However, they may instead depend on technicians to handle any sales needs. In the case of companies run by a single owneroperator, the owner usually handles all sales duties. Sales occupations may include the following: ■ ■ ■

Sales Representative Sales Manager Retail Sales Clerk

Information Technology Companies in the computer hardware and peripherals industry must have a highly skilled information technology (IT) staff. This staff is responsible for maintaining the extensive computer networks and Web sites utilized by companies to communicate both internally with their employees and externally with their customers. IT professionals are also responsible for securing computer networks and protecting against viruses and attacks by hackers. Other responsibilities may include updating computer hardware and software and providing technical support for other employees within an organization. IT employees usually possess advanced training and computer expertise, and midsize and large firms tend to prefer candidates with graduate-level degrees. According to the

■

Network Specialist Web Designer Computer Systems Analyst Information Technology Director Computer Security Specialist

Technical Support Technical support representatives are responsible for troubleshooting problems encountered by customers, either in person or over the phone. They may also install new products for customers, instruct customers on the proper use of their companies’ products, and diagnose hardware and software errors. They must closely document customer requests and complaints and ensure that products work as intended. Technical support representatives play an increasingly vital role in the computer hardware and peripherals industry; as computer products become more complex, customers place added value on receiving extra support from manufacturers. Training or preparation in technical support offers many opportunities for entry-level positions. Prospective employees often hold associate’s degrees, bachelor’s degrees, or technical certificates. According to 2007 BLS estimates, they can expect to earn an average of between $32,000 and $54,000 per year. Some manufacturers and retailers directly employ technical support representatives, while others outsource technical support duties to external companies, including overseas firms. For small, local computer hardware companies, technical support and computer repairs can make up a significant percentage of their overall earnings. Technical support occupations may include the following: ■ ■ ■

Technical Support Specialist Help Desk Specialist Computer Maintenance and Repair Technician

Production Production duties in the computer hardware and peripherals industry are increasingly being outsourced overseas. The opportunities available

Computer Hardware and Peripherals Industry for production work within in the United States are generally very specialized and may involve cleanroom facilities. Production workers usually receive extensive technical training on the job, but most firms also expect prospective employees to have obtained associate’s degrees or be certified in hightech manufacturing techniques. In small, local computer hardware companies, repair specialists may also serve as assembly workers, putting together new computers for customers from components purchased from larger manufacturers. Production workers in the computer hardware and peripherals industry can expect to earn approximately $40,000 per year, on average, which is more than most production workers earn in other sectors. Production occupations may include the following: ■ ■ ■ ■

Assembly Worker Quality Assurance Tester Production Supervisor Bench Technician

Administrative Staff The administrative staff is responsible for coordinating day-to-day schedules and appointments, greeting visitors, resolving personnel issues, and keeping financial records. Educational requirements vary widely, especially in larger firms. Receptionists, for example, may need only a high school degree, while accountants are usually expected to have at least an associate’s degree, and human resources (HR) professionals should have at least a bachelor’s degree. HR managers can expect to earn between $67,000 and $107,000 per year, while administrative assistants may earn $30,000 to $46,000 per year. In small firms, administrative duties may be contracted out. For example, accountants may be hired only on a temporary basis during tax time. Administrative occupations may include the following: ■ ■ ■ ■

Human Resources Manager Administrative Assistant Accountant Receptionist

INDUSTRY

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OUTLOOK

Overview The computer has revolutionized the world, allowing nearly instantaneous access to almost limitless amounts of information and becoming a necessary component of the operations of almost all businesses. Businesses all over the world must stay current with modern trends in the computer hardware and peripherals industry or face being left behind by their competitors. Many older products that were once the standard have been replaced by better, faster, more efficient technologies. For example, vacuum tubes were replaced by transistors, and floppy disk drives by hard drives and flash drives. Data once held in massive libraries of paper punch cards can now be stored at a fraction of the cost in much smaller storage devices, such as hard drives. While spending on computer hardware and peripherals tends to fall during recessions, the computer industry is very resilient and tends to bounce back as soon as the economy begins to turn around. The computer hardware and peripherals industry has continued to grow overall, despite slowdowns and the recession caused by the crash of the dot-com boom in 2000-2001. The 2001 recession following the dot-com crash proved especially punishing to the computer industry overall, since much of the rapid growth in that sector ultimately proved unsustainable. During the global recession of 2007-2009, most of the industry again suffered major slowdowns in hardware and peripherals sales. However, not every company was affected, and earnings at manufacturing firms such as Intel and EMC had already begun to rise by late 2009. For the foreseeable future, computer hardware will be necessary for the growth of almost any business, so the industry can be expected to grow with the economy. The first integrated circuit was created in 1959. In 1965, Intel cofounder Gordon Moore made a startling prediction. According to the so-called Moore’s law, the number of transistors on an integrated circuit (and thus the rough computing power of the chip) will double every two years. Surprisingly, what may have seemed to be an overly ambitious forecast has held true into the twentyfirst century.

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munication among soldiers utilizing computers and digital satellite technology. Computers are also used by the military to control unComputer and Electronic Products piloted aerial vehicles that perManufacturing form rescue and reconnaissance missions and launch attacks into Employment dangerous combat zones. Even 2009 Projected 2018 Occupation police officers increasingly carry computers in their squad cars, 27,150 23,000 Computer hardware engineers and specially designed heavy-duty 33,890 27,800 Computer software engineers, laptops have been created for use applications by police and military personnel in the line of duty. 50,850 45,900 Computer software engineers, If Moore’s law continues to systems software hold true, transistors will shrink to the size of an atom by 2020. 34,860 30,200 Electrical and electronic Research is currently being conengineering technicians ducted into new experimental 104,230 82,700 Electrical and electronic technologies, such as quantum equipment assemblers computing, that would make such transistors possible, and quantum 24,780 20,100 Semiconductor processors computers may one day be able to Source: U.S. Bureau of Labor Statistics, Industries at a Glance, store data on a subatomic scale. Occupational Employment Statistics and Employment Another experimental hardware Projections Program. technology that may one day revolutionize the field of computer science is the deoxyribonucleic acid (DNA) computer, which uses biomechanical genetic coding to store informaAs transistors have continued to shrink and intetion. While these technologies are still in the early grated circuits have become more powerful and stages of development, it is likely that if they come more compact, new devices have been developed to fruition they will become as firmly integrated that blur the boundaries between computers, teleinto modern life as is the personal computer. In adcommunications equipment, consumer electrondition, many computer hardware and peripherals ics, and even medical devices. For example, sofirms are researching new ways to minimize energy called smart phones have more in common with consumption and use environmentally sustainable computers than they do with Alexander Graham manufacturing techniques. Bell’s original telephone. Many devices, including Many of the computing innovations that are personal digital assistants (PDAs), touch-screen now taken for granted began as simple ideas of envideo gaming systems, satellite navigation devices, trepreneurs, researchers, scientists, and even amadigital video recorders (DVRs), and multitouch teur hobbyists. Because of the rapid, ceaseless intabletop computers (such as the Microsoft Surnovation that is the hallmark of this industry, there face), are becoming harder to categorize as comwill always be new opportunities for creative adputers, personal electronics, or household applivancement. Nobody can predict what the next ances. great technological leap forward in computer In addition, the U.S. military, which initially hardware and peripherals will be, but it is certain funded much of the research that led to the dethat the industry will continue to evolve dramativelopment of early computers such as ENIAC, is cally and its effect on daily life will continue to inincreasingly dependent on computer hardware crease. technology. Modern warfare involves constant comPROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Computer Hardware and Peripherals Industry Employment Advantages The amount of digitally encoded information will continue to increase exponentially for the foreseeable future, so demand for computer hardware and peripherals will continue to rise overall. In addition, computer usage is skyrocketing in many countries throughout the developing world, including China, India, and Brazil. This trend will further increase global demand for computer hardware and peripherals. Despite rising demands, 2009 projections by the BLS indicate that U.S. employment in the industry is expected to drop by 12 percent by 2016. This expected drop is mostly due to productivity gains and intense competition from international firms. Production workers, in particular, can expect steep drops in employment as manufacturing duties continue to move overseas. However, employment trends in research, design, sales, and marketing are expected to remain strong. In addition, new innovations on the horizon may further increase demand and provide new start-up companies with many opportunities for future growth. Annual Earnings With domestic revenues of $110 billion, the computer hardware and peripherals industry is extremely cyclical and is frequently affected by economic bubbles and downturns. Because computer hardware and peripherals represent a major investment for most companies, sales usually drop during recessions. However, as the economy improves, demand for hardware products rises dramatically. During the 2007-2009 global recession, computer hardware and peripherals manufacturing firms proved surprisingly resilient compared to other economic sectors. Both Intel and HewlettPackard forecast substantial revenue growth in the early 2010’s. The Denver Post has reported that Intel beat its own predictions for second-quarter growth in 2009, increasing its earnings by $879 million, the highest jump in twenty-one years.

RELATED RESOURCES FOR FURTHER RESEARCH Association for Computing Machinery 2 Penn Plaza, Suite 701 New York, NY 10121-0701

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Tel: (800) 342-6626 Fax: (212) 944-1318 http://www.acm.org CompTIA 1815 S Meyers Rd., Suite 300 Oakbrook Terrace, IL 60181-5228 Tel: (630) 678-8300 Fax: (630) 678-8384 http://www.comptia.org Computer Society Institute of Electrical and Electronics Engineers 2001 L St. NW, Suite 700 Washington, DC 20036 Tel: (202) 371-0101 Fax: (202) 728-9614 http://www.computer.org Information Technology Association of America 1401 Wilson Blvd., Suite 1100 Arlington, VA 22209 Tel: (703) 522-5055 Fax: (703) 525-2279 http://www.itaa.org Institute for Certification of Computing Professionals 2400 E Devon Ave., Suite 281 Des Plaines, IL 60018 Tel: (800) 843-8227 Fax: (847) 299-4280 http://www.iccp.org Society for Information Management 401 N Michigan Ave. Chicago, IL 60611 Tel: (312) 527-6734 http://www.simnet.org Society for Technical Communication 9401 Lee Hwy., Suite 300 Fairfax, VA 22031 Tel: (703) 522-4114 Fax: (703) 522-2075 http://www.stc.org

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USENIX, the Advanced Computing Systems Association 2560 9th St., Suite 215 Berkeley, CA 94710 Tel: (510) 528-8649 Fax: (510) 548-5738 http://www.usenix.org

ABOUT

THE

AUTHOR

Elizabeth Fernandez took apart her first computer when she was very young. As a result of her early fascination with technology, she began working in the computer industry in 2002, serving as a Webmaster and a hardware and software repair specialist. For the past ten years, she has also worked as a writer and editor specializing in computer science and technology trends. She has been published online, in newspapers, and in local magazines, and has edited several books focusing on the computer, aviation, and transportation industries. She graduated with a degree in journalism from the University of Central Florida.

FURTHER

READING

Allan, Roy A. A History of the Personal Computer: The People and the Technology. 2d ed. London, Ont.: Allan Publishing, 2001. Burns, Julie Kling. Opportunities in Computer Careers. Chicago: VGM Career Books, 2002. Campbell-Kelly, Martin, and William Aspray. Computer: A History of the Information Machine. 2d ed. Boulder, Colo.: Westview Press, 2004.

Computer History Museum. “Timeline.” http:// www.computerhistory.org/semiconductor/ timeline.html. Cortada, James W. The Digital Hand: How Computers Changed the Work of American Manufacturing, Transportation, and Retail Industries. New York: Oxford University Press, 2004. Eberts, Marjorie, and Margaret Gisler. Careers for Computer Buffs and Other Technological Types. 3d ed. New York: McGraw-Hill, 2006. Morley, Deborah. Understanding Computers in a Changing Society. Boston: Cengage Learning, 2009. Swade, Doron. “The Babbage Engine.” Computer History Museum, 2008. http:// www.computerhistory.org/babbage. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Computer and Information Systems Managers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos258.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Yost, Jeffrey R. The Computer Industry. Westport, Conn.: Greenwood Press, 2005.

Computer Software Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Information Technology Career Cluster: Information Technology Subcategory Industries: Computer Applications; Computer Gaming Software; Computer Operating Systems; Computer Programming Languages and Compilers; Computer Utility Software; Custom Computer Programming Services Related Industries: Computer Hardware and Peripherals Industry; Computer Systems Industry; Internet and Cyber Communications Industry; Video, Computer, and Virtual Reality Games Industry Annual Domestic Revenues: $180 billion USD (Computer Software Development, 2009) Annual Global Revenues: $303.8 billion USD (Software: Global Industry Guide, 2009) NAICS Numbers: 511210, 541511

INDUSTRY

trol electronic hardware components, Web browsers, and standalone programs called applications, such as Microsoft Word or Apple’s Garage Band. The software industry developed in parallel with the computer hardware industry. The two industries depend on each other to survive, and many companies offer both hardware and software products. With the development of cloud computing, Internet-based firms such as Google have begun to develop software that users can access online without downloading code permanently onto their own computers.

History of the Industry Throughout history, people have searched for more efficient ways of organizing useful information. By the early 1800’s, mathematical calculation tables had become standard tools adopted by many professions, including accountants, astronomers, sailors, and mathematicians. However, such tables were frequently inaccurate and difficult to use. This situation led inventor Charles Babbage to design several automatic calculating machines, culminating

DEFINITION

Summary In modern computing terms, software usually refers to nearly all aspects of a computer except for the physical hardware or components. Thus, software includes a computer’s operating systems and graphic user interfaces, firmware designed to con397

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in his design for the analytical engine in 1834. According to Babbage’s original designs, punch cards would have been used to program the analytical engine. Although the project was never completed, Babbage’s design inspired mathematician Ada Lovelace to write an extremely perceptive article describing how numbers could be used to represent other forms of data, such as musical notes or the letters of the alphabet. Lovelace also developed a rudimentary computer program for the analytical engine and is considered by many to be the world’s first computer programmer. Punch-card technology represents another forerunner that would lead to the development of modern software. In 1890, former United States Census Bureau employee Herman Hollerith started the Tabulating Machine Company, later known as International Business Machines (IBM). Hollerith had previously developed a punch-card system that allowed thin paper punch cards to store popula-

tion statistics. Early punch cards had been used to control automated looms in the textile industry, but Hollerith was the first person to perfect the use of punch cards to store many different types of data. As engineers, scientists, and physicists began experimenting with computer technology, they also developed new methods for storing and manipulating information. Early computers such as the Electronic Numerical Integrator and Computer (ENIAC), one of the world’s first electronic computers, used a mixture of vacuum tubes, plug boards, and punch cards to store and input computer instructions. Developed in 1937, the 1,800square-foot ENIAC was so large and complex that it weighed 30 tons and took days to reprogram. In 1944, IBM unveiled the Automatic Sequence Controlled Calculator (ASCC) at Harvard University, where it was known as the Harvard Mark 1. Early computer scientists such as Grace Murray

A Google employee drives through the streets of Palo Alto, California, shooting street views for its map software. (AP/Wide World Photos)

Computer Software Industry Hopper and Howard Aiken soon began creating programs for the Mark 1, working together to write complex mathematical codes that were input into the computer through a series of punch cards. These computer scientists are considered the first programmers in the United States. Throughout the 1950’s, early computer scientists frequently collaborated to develop a standard computer-programming language that would be compatible with specific computer hardware. For example, some groups focused on sharing common programming routines for IBM computers, while others concentrated on models manufactured by Digital Equipment Corporation (DEC). In 1959, Hopper led a team assembled by the U.S. Department of Defense in designing (the Common Business-Oriented Language (COBOL), one of the earliest universal programming languages. COBOL is still used by businesses, governments, and military organizations worldwide. In addition, elements of COBOL continue to be used commonly in computer operating systems such as Microsoft’s Windows and Unix. As computer hardware continued to evolve, software programming became more widespread, thanks in part to the development of the integrated circuit in 1959 and the invention of the floppy disk. These important milestones helped bring the computer widespread acceptance in the business world, and in 1976, Steve Wozniak began to market the Apple I, the world’s first personal desktop computer. As computers became fully integrated into homes and businesses, programmers simplified the graphic user interface (GUI), leading to the development of Microsoft Windows in 1983 and the Mac OS in 1984. Software has since become an increasingly important aspect of modern life, as specialized programs have been developed for every type of industry and electronic product, from household robotic devices such as the Roomba to smart phones such as the iPhone. Although the software industry suffered as a result of the collapse of the dot-com bubble during the late 1990’s and early 2000’s, as did most computer-based industries, the continued rise of the Internet has offered companies in the software industry many new opportunities to expand their business. Thanks to powerful new computers and low-cost, or even free, online distribution methods, new developers can sell their software directly

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to customers online, bypassing wholesalers and retail locations. Delivering software to customers through the Internet has dramatically reduced the costs incurred by software developers. This reduced cost has led to an explosion of low-cost shareware and free, open-source software projects such as Linux or the popular Firefox browser. Countless people are involved in the software industry, from software engineers and beta testers to hobbyists who create software for free in their spare time. The Industry Today As computers have become ubiquitous in modern life, so has software. Without software, computers would be practically unusable to the average consumer. Software allows consumers of any age and skill range, from children to the elderly, to have access to the Internet, play games, connect with other people for work or play, and even edit films and photos. Meanwhile, as advanced smart phones and netbook computers allow more people to access the Internet, software developers have gained many new platforms through which to offer their products. The growing and thriving software industry has evolved to meet the ever-changing requirements of a global society that is constantly utilizing such advanced technology. From handheld gaming systems and electronic appliances to cellular phones and personal computers, software is included in countless devices and utilized by practically every profession. The right software, for example, makes it much easier for architects to design buildings, for doctors to keep track of their patients’ medical records, for teachers to contact parents and students, and for investors to trade stocks. Because of software, businesses and individuals have become increasingly dependent on computers to store and manage information. On the Internet, software is what makes it possible for people to communicate online. Web designers use software to create Web sites and online content, and Web browsers allow users easy access to nearly unlimited amounts of information in a plethora of formats, including social networking sites, newspapers, online government records, and e-mail. However, the popularity of the Internet has also caused a skyrocketing number of dangerous computer viruses, malware, and spyware. Individu-

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als may hack into home networks, businesses intranets, and school and government records, often in an attempt to change records, defraud banks, or launch denial-of-service attacks, which have crippled numerous Web sites and led to many instances of identity theft. These malicious activities have led to the growth of many companies such as Norton, McAfee, and Trend Micro that specialize in antivirus software designed to block and remove malicious programs while repairing infected files. These companies also provide software designed to protect businesses and users from hacking Cloud computing makes available at any site with Internet access both users’ inforattacks that may disrupt commation and software capable of manipulating that information. (©Arrow/Dreamsputer systems or allow malitime.com) cious access to personal or confidential information. Software is sold in many different retail stores, including electronics, officeand modification. As a result, it is developed and supply, and video-game stores. Most new computimproved by an extended community of programers come with some software preinstalled, includmers that may include company employees, hobbying the operating system, Web browsers, and word ists, and professionals working in their spare time. processors, as well as trial versions of premium softEven profitable companies such as Google have deware products such as Microsoft Office. In addiveloped and released free open-source software, tion, countless software companies and individual such as Google’s Chromium project, which inentrepreneurs offer their products online. Some cludes much of the code behind the company’s individuals create software as a hobby in their spare free Chrome Web browser. Major corporations time. For example, the word-processing applicaalso make use of open-source software developed tion Scrivener was originally developed as a hobby elsewhere. For example, Mac OS X includes code by an aspiring writer. However, after founder Keith taken from FreeBSD, an open-source version of Blount released Scrivener as shareware (propriUnix. etary software that can be downloaded and tried The development of cloud computing (a model out for free—sometimes in a limited or trial verfor delivering hosted services over the Internet) sion), the application gained a strong following has also altered the software landscape. Compaamong novelists and screenwriters. By 2009, its nies such as Google and Microsoft have begun to publisher, Literature & Latte, had grown into a sucoffer users the ability to access software programs cessful two-person company, allowing Blount to directly through the Internet, including database work on his software full time. software and word processors. Users can also store The first decade of the twenty-first century has information in a fashion that makes it available also seen the growth of open-source software, inthrough the “cloud.” Thus, cloud computing makes cluding such popular programs as Linux and available, at any site with Internet access, both users’ information and software capable of manipuFirefox. Open-source software is software whose lating that information. This availability frees users source code is made freely available for use, study,

Computer Software Industry from needing to use a dedicated machine or to carry their data with them. For example, students writing essays can use Google Docs to write and edit their work, accessing their documents from computers at their local libraries, homes, or schools. They need not worry about whether these computers utilize particular software applications, nor must they carry data-storage devices to transport their files. As long as a computer is installed with a relatively current version of a common Web browser, it can access and modify the students’ files. Other companies have begun to offer cloud computing software for specialized applications and businesses, including human resources software and accounting programs. This software has made it much easier for employees and small-business owners to access their data at any time. A local contractor, for example, can access spreadsheets with account information from an office computer, a laptop, or even a smart phone while on a job site. Cloud computing as a technology is still in its inception, but it has already experienced wide adoption by many different types of users, and creative software programmers can take advantage of this evolving technology to create new and unique programs.

INDUSTRY MARKET SEGMENTS Computer software companies can be of any size. Most software companies are founded by very small groups of people. Microsoft, for example, was founded by just two people. In fact, more than half of all software companies have fewer than five employees, although more than 76 percent of software jobs are located in firms with more than fifty employees, according to the U.S. Bureau of Labor Statistics (BLS). Small Businesses Small businesses in the computer software industry usually employ fewer than fifty people, and many firms employ four or fewer. In addition, amateur programmers and hobbyists, as well as professionals in the field working in their spare time, create many software programs. Because of the low entry costs for software publishing, anybody with a good idea can enter the field and have a chance at

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lasting success. Even failed early attempts should not dissuade aspiring programmers, many of whom can eventually build portfolios of software programs that may help them obtain jobs at larger firms. Potential Annual Earnings Scale. Because of the varied nature of small software firms, potential earnings vary widely. Some software programmers work for free, while others may consider the earnings from their small software company a secondary income. On average, according to 2008 estimates by the BLS, the average annual salary for full-time software engineers can range from $52,000 to $122,720. Clientele Interaction. Small software companies usually release their products online, often as shareware or freeware through sites such as CNET .com or MacUploads.com. In addition, many smart phones such as the iPhone or the Motorola Droid have thriving online application stores that allow programmers to offer their software to prospective customers for a small fee. Since small firms mostly sell their products online, they usually have very little direct customer interaction. Instead, they normally handle most communication through e-mail, forums, chat rooms, and instant messages. In very small firms, such as those with fewer than five employees, nearly everybody helps provide customers with technical assistance. Small firms often have loyal niche followings, with many clients offering suggestions for future products and helping the companies identify bugs in their products. Amenities, Atmosphere, and Physical Grounds. Small computer software firms often have a single small office location, often rented, while many others are run from a home office. Employees often telecommute, working from their homes to answer customer queries or create new software programs and submitting their work online. The atmosphere at small firms is usually casual and laid back. Often, these companies are founded by friends, classmates, or relatives, with a very small and intimate staff. However, employees may be required to work extremely long hours under strict deadlines, whether they are working from home or from an office location, especially in the run-up before a new software release. Typical Number of Employees. Most small computer software firms have very few employees, typically less than fifty, with the majority of firms

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employing fewer than five people. However, most small firms, especially nonprofit firms, also employ a large army of volunteers willing to beta test their software free of charge. In the case of nonprofit firms, unpaid collaborators may actually do most of the programming. Mozilla, for example, allows unpaid collaborators to write the majority of the code, beta test the software for errors, and suggest new features, all within an interactive community forum. Working on free software can provide aspiring programmers with valuable experience that they can later use in launching their own businesses or pursuing employment at for-profit firms. Traditional Geographic Locations. Because small software firms are founded by people from all walks of life—often working from home and collaborating online—they exist throughout the United States. However, there are several high-tech hot spots where many software firms have their headquarters. These include Silicon Valley, in California’s San Francisco Bay Area; Los Angeles, California; Portland, Oregon; and Seattle, Washington. Often, once a small start-up software company has attained a certain level of success, it will relocate its headquarters to one of these high-tech hot spots in order to attract top employees and more easily obtain funding to expand. Microsoft, for example, was founded in Albuquerque, New Mexico, but moved to the Seattle suburb of Redmond, Washington, in 1979. Pros of Working for a Small Software Company. Many small software companies have been founded by amateur programmers who began developing software as a hobby. Others have been founded by full-time programmers during their off hours. Because these company founders often develop their original software programs as hobbyists, they may start their businesses with a sense of freedom. They may develop new software programs simply for themselves, to solve a dilemma or to entertain themselves and their friends. Many consider programming simply a lucrative hobby at the start of their careers. In addition, since many small software firms have fewer than five employees, they generate a very strong sense of camaraderie. These companies may have a more relaxed atmosphere than larger firms, and employees are usually encouraged to make new product suggestions or even to experiment with their own projects. Small firms

sometimes release successful “killer apps”—applications that alone justify the purchase of the platform on which they run. Such applications can create real paradigm shifts in the way people use computers. Early employees of these companies often receive substantial stock options and may reap great financial benefits if the small company is sold or becomes publicly traded. Cons of Working for a Small Software Company. Because most small software companies have very few employees, each member of the staff must take on multiple responsibilities. This is especially true of the many software firms with fewer than five employees, who may be required to work very long hours. Since small computer software firms are often founded by one or two people, sometimes simply as a hobby, their initial software offerings may need to achieve a certain level of success and develop a strong following before the founders can quit their day jobs and focus all their attention on their new business. Aspiring programmers launching their own products must often work long hours for months at a time, without pay. They reap financial rewards only if their software manages to gain a following. If a particular piece of software proves unpopular, then individual programmers must start from scratch on new programs or attempt to refine their products in the hope that new features will attract new customers. Software piracy is also a huge concern in the industry, and, since small companies and individual programmers usually have slim profit margins, they may feel the effects of piracy more strongly than do larger companies, which are more easily able to absorb such costs. Also, small software companies may be less stable to work for than larger companies, since the popularity of software can be quite cyclical. Smaller companies are usually less diversified, with much smaller software portfolios than those of larger companies. A company that relies on a single program for its income is in a more precarious position than a company that sells several different—or even different categories of— applications. Costs Payroll and Benefits: Many small software companies are founded by individuals working on projects in their spare time. In this scenario, benefits are most likely not available. However,

Computer Software Industry once established, even small software companies usually offer generous benefits in order to attract talented employees. Benefits often include stock options, health insurance, and paid sick days. Supplies: Small businesses and entrepreneurs in the software industry require up-to-date computer systems and software, as well as other standard office supplies. External Services: Small software companies, hobbyists, and entrepreneurs developing their own software via the Internet typically outsource their Web hosting and server needs. They may also hire accountants and other financial specialists on a contractual basis—during tax time, for example. Utilities: Small software companies with office locations must pay rent, which may include water and sewer service, as well as electricity, which may be a significant cost depending on the number of computers located on the property. They also must pay for high-speed Internet. Taxes: Individuals and small businesses must pay all applicable local, state, federal, and property taxes. Midsize Businesses Midsize computer software companies have between fifty and two hundred employees. These companies usually focus on specialized niches, such as converting (or “porting”) Windows games and software to run on Apple computers. Some companies offer only a single popular software title, while others offer a selection of related software titles that appeal to their specific customer base. Usually, midsize software firms start as small firms and grow as their software becomes more popular. However, entrepreneurs with strong and successful business records may be able to raise enough venture capital or invest enough of their own profits from previous ventures to launch midsize businesses. Potential Annual Earnings Scale. Midsize software firms usually pay good wages and offer generous benefits. The majority of employees in this industry work full time, though firms may employ part-time employees for software testing or customer support purposes. Earnings vary by position, experience, and education. General managers in this industry earn more than the average for other

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industries; the BLS estimates that their average annual salary is around $126,000. Clientele Interaction. Midsize software companies usually have separate divisions or departments related to sales and technical support. These are normally the departments that spend the most time interacting with clients. They typically answer customer queries via phone, e-mail, or live chat. In addition, sales associates and marketers often interact directly with large electronics retailers to offer their products to consumers. They also may negotiate deals with businesses, schools, or organizations that purchase software in bulk. Amenities, Atmosphere, and Physical Grounds. Midsize software companies normally have professional office locations, though some employees may telecommute from home, either for a portion of the workweek or full time. Unlike large software companies, they usually do not own large campus facilities, instead renting office space. In addition, they do not require extensive manufacturing facilities, since nearly all software is sold either online or on compact discs (CDs) or digital versatile discs (DVDs). They usually outsource the printing of their software and reference materials, as well as packaging. The atmosphere in midsize firms varies tremendously, often depending on the type of software they manufacture. Some firms have a casual atmosphere. For example, a company that manufactures computer games will usually have a laid-back office environment. However, a firm that develops accounting software, for example, will usually be more businesslike, with a more structured atmosphere and strict dress code. Typical Number of Employees. Nearly all employees in the computer software industry work full time. Most midsize firms have between 50 and 250 full-time employees. However, they may also utilize a strong task force of unpaid volunteers involved in beta testing software and offering suggestions for improvement. In addition, they may occasionally outsource technical support. Traditional Geographic Locations. Software firms can be located anywhere in the world, since much of the programming duties, and even software distribution, can take place easily via the Internet. However, there is a very strong concentration of midsize software firms on the West Coast, especially in Silicon Valley, Portland, and Seattle.

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Locating in one of these high-tech hot spots makes it easier for software companies to find the most talented and experienced employees. Pros of Working for a Midsize Software Company. Midsize software companies are usually more established than smaller companies, so employees may have more job security than those at smaller firms. They normally have more welldefined roles and duties than employees at smaller companies, where a very small staff must do a little bit of everything. As a result, midsize companies may be less stressful workplaces in some ways than smaller companies, allowing employees to focus more completely on the tasks at hand. They also usually offer more generous perks and benefits than do smaller companies and often provide generous stock options and higher salaries. Midsize software companies also offer more opportunities for career flexibility and advancement than smaller firms, while maintaining a more intimate environment than larger firms can offer. With less office hierarchy than at larger companies, workers at midsize firms can take their ideas directly to their superiors. Cons of Working for a Midsize Software Company. Midsize companies often make attractive takeover targets for larger companies interested in expanding or diversifying their software offerings; although employment in midsize firms is usually more stable than at smaller firms, employees in midsize firms may face job insecurity because of acquisitions. In addition, wages may be lower than at larger firms, and midsize companies are normally unable to provide as many opportunities for research and development as larger firms. Midsize firms may also lack the strong sense of intimate camaraderie and freedom found at smaller firms. Although employees may receive stock options or join in profit-sharing plans, they usually own a less significant share of the company than do their counterparts at smaller firms, so they may not benefit as much if the company is sold or goes public. Lastly, because midsize firms have narrower profit margins than larger firms, employees may also be more affected by downturns in the economy or the technology sector. Costs Payroll and Benefits: Midsize companies in the computer software industry typically offer em-

ployees generous salaries and full benefits, such as health and life insurance and stock options. They usually also offer perks, often including paid vacations. Supplies: Midsize software companies must purchase basic office equipment and supplies. They also require specialized, high-end computer systems and may occasionally host their own Web servers if they have a significant online presence. All computers must be up-to-date, especially computers used by programmers and software testers. External Services: Most employees at midsize firms work full time. However, the companies may occasionally hire external firms or consultants, often hiring financial consultants or marketing and advertising firms. They may also outsource technical support services and manufacturing duties, since midsize firms usually offer CDs or DVDs of their products in stores as well as online. Utilities: Midsize firms normally rent office locations, often in corporate office parks. They also require high-speed Internet service, often including dedicated fiber-optic data lines if they conduct much of their business online. Operations utilities include telephone services, electricity, and rent, which may include water and sewage. Taxes: Midsize companies must pay all usual taxes, including state, local, federal, and property taxes. Large Businesses The computer software industry includes few large companies, which have more than 250 employees. According to the BLS, large firms make up just 1.3 percent of all software firms. However, in 2008 they employed more than 49 percent of all workers in the industry. These few large and influential companies often attract a significant proportion of the most talented and experienced employees in the technology sector. They are usually diversified, with companies such as Apple and Google offering software, hardware, and Internet services such as cloud computing. Potential Annual Earnings Scale. Employees at large computer firms are often among the highest paid in the industry, especially at the executive level. For example, software giant Microsoft re-

Computer Software Industry ports that Steven Ballmer, the company’s chief executive officer (CEO), earned more than $1.3 million in 2008. In addition, large companies usually offer very lucrative benefits, including health benefits and paid vacations. They also often provide employees with perks such as gym memberships and child care, and will usually offer generous stock options. Clientele Interaction. As is the case in midsize software companies, most of large companies’ clientele interaction is limited to employees in the sales, marketing, and customer-support departments. These departments usually handle all customer queries and concerns and interact with representatives from large software and electronics vendors and retailers. They also arrange large software purchases with businesses, schools, and organizations. In addition, employees in the sales and marketing departments often work closely with hardware manufacturers to determine which software to include in new computers. Most hardware

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manufacturers, for example, must purchase their computers’ operating systems from large companies such as Microsoft, which makes Windows. However, a minority of hardware manufacturers may include free operating systems such as Linux with their computers, or they may not include any operating system at all, leaving it up to consumers to install their own software. Other companies, such as Apple, bundle their proprietary software with their own hardware, selling them together as a single unit. Apple acts as both a hardware and a software company, offering a proprietary operating system that works only on its hardware. The company employs a vast army of software programmers, software testers, and technical support staff who specialize in developing and supporting the company’s own line of popular software products. Some of these products are sold over the Internet, at Apple Store retail locations, and by big-box retailers. Others are free. Apple’s free products serve two functions. Some, such as

Apple Stores, like this one in New York , offer instructions, workshops, and assistance with software issues. (AP/Wide World Photos)

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the Safari Web browser, simply build the company’s brand. By exposing consumers to software that the company believes is superior in user experience, Apple hopes to motivate them to purchase Apple’s other products. Other free Apple applications drive sales more directly. For example, iTunes is a free program for managing audio and video content, as well as iPhone and iPad applications and electronic books (e-books). Through iTunes and the iTunes Store, Apple sells music, television programs, games, podcasts, e-books, and a plethora of other content. By making the program itself free, Apple maximizes the number of consumers who may purchase this content. Amenities, Atmosphere, and Physical Grounds. Large software companies usually have expansive campus headquarters and often have offices in multiple locations, both domestic and international. They may outsource their technical service needs or open satellite offices overseas or in multiple states. They also normally host their own Web servers and often have a significant online presence. Large software companies are also more likely to open overseas research and development facilities. If large firms also manufacture hardware products, they may have extensive manufacturing facilities as well. Typical Number of Employees. Large software companies usually have more than 250 employees, sometimes far more depending on how diversified the company’s operations are. Microsoft, for example, makes video-gaming systems and computer operating systems—as well as some of the most popular software titles in the world—and has more than ninety-three thousand employees in more than one hundred countries all over the globe. Traditional Geographic Locations. Large software companies usually have multiple offices in many different countries. However, many of the world’s largest software companies maintain central headquarters in high-tech hot spots such as Silicon Valley, Portland, and Seattle. Many also have a significant presence in countries such as China and India, often in the form of major centers employing thousands of programmers, software testers, and technical support specialists. Pros of Working for a Large Software Company. Compared to small and midsize software firms, large computer companies pay extremely competitive wages to most of their employees.

They also offer very generous benefits and stock options. In addition, workers frequently have much more flexibility and are often able to transfer to other facilities and to engage in business travel. Large companies usually offer their employees many opportunities for career advancement, and they are normally much more stable than their smaller counterparts. Large software companies also offer many more research and development opportunities for their employees, allowing them to create and test many new products in a diversified setting. Large companies usually attract the most talented workers in the industry, so employees are able to work with other extremely capable and creative people to craft software that will be used by hundreds of thousands, even millions, of people across the globe. Cons of Working for a Large Software Company. At large software companies, it can be very easy to get lost in the crowd. With such a large staff, much of the intimate camaraderie of smaller firms is lost. Most employees are not able to suggest new products or services directly to executives. The larger the operation, the more likely it is that bureaucratic hurdles will cause employees strife, simply because of the increased complexity of an organization with thousands or tens of thousands of workers scattered across the globe. At the same time, large software companies are extremely competitive in their hiring and promotion practices. It can be very difficult to find a job at a large company, with potentially thousands of applicants vying for positions at large firms such as Microsoft, and prospective employees usually have advanced degrees from prestigious schools. Most have already gained significant experience in the industry. Costs Payroll and Benefits: Employees at large companies in the software industry usually enjoy generous salaries and many benefits, such as health insurance, vacation time, and stock options, and even perks such as child care and gym memberships. Supplies: Large software companies usually have extensive on-site Web servers and many research and development facilities. They must maintain state-of-the-art computer systems for their employees, especially those involved in software development and engineering.

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A printout of a computer program, as seen by the developer. (©Dreamstime.com)

External Services: Most employees in large software companies work full time. However, these companies may hire external businesses to clean and maintain their facilities, and they may also hire external firms to handle advertising and sales efforts. For example, they may hire external firms to produce television commercials or full advertising campaigns for their products. They may also outsource technical support services, especially overseas. Utilities: Large businesses pay mortgages or rent for their facilities, as well as paying for water, sewage, and telephone services. They also usually require extensive dedicated fiber-optic Internet services and massive amounts of electricity. Indeed, Google has attempted to purchase electricity wholesale directly from power plants, bypassing public utilities in order to save money. Taxes: Large software companies pay all required local, state, and federal, and property taxes. In addition, since many large companies have a significant international presence, they may be required to pay additional taxes for their overseas operations.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Software companies vary widely in their organizational structure. For example, in smaller firms a single person may handle almost every task related to the company, while in larger firms there may be entire departments devoted to just a few software products in a vast portfolio. The following umbrella categories apply to the organizational structure of companies in the computer software industry: ■ ■ ■ ■ ■ ■ ■

Executive Management Software Development Marketing and Sales Information Technology Human Resources Technical Support Administrative Staff

Executive Management Most executives in the software industry have advanced degrees, although many individual pro-

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grammers without degrees have founded successful software companies. Bill Gates, for example, dropped out of college before founding Microsoft. The job of a company’s management team is to guide the overall direction and vision of the company, determining what products are developed, how they are developed, and how they and the company as a whole are branded. CEOs are usually the highest-paid employees in their companies, often earning between $58,230 and $128,580 per year, not including stock options, bonuses, or other perks, according to Top Executives. CEOs at a few top companies earn more than $1 million per year. Executive management occupations may include the following: ■ ■

Chief Executive Officer (CEO) Board Chair

OCCUPATION

■ ■ ■ ■ ■

Chief Financial Officer (CFO) Chief Technology Officer (CTO) Chief Information Officer (CIO) General Counsel Vice President

Software Development Software developers create a software company’s products. They plan, code, and test software, as well as build the architecture necessary for a program to run smoothly. They often engage in research and development, as well as in perfecting final products for release. They usually work closely with the technical support department to address customer concerns and fix bugs discovered by customers during testing and shortly after a product is released. According to the BLS, software engineers earn annual salaries averaging around $79,780.

PROFILE

Computer Programmer Considerations

Qualifications

Description

Writes step-by-step instructions for computers in special computer languages, telling the computers exactly what to do to perform specific tasks.

Career clusters

Architecture and Construction; Finance; Information Technology; Science, Technology, Engineering, and Math

Interests

Data

Working conditions

Work inside

Minimum education level

On-the-job training; junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; military service; part-time work

Licensure and certification

Recommended

Employment outlook

Decline expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Computer Software Industry OCCUPATION

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PROFILE

Software Designer Considerations

Qualifications

Description

Creates and designs computer software programs, outlining general formats, writing necessary code, and developing graphics, animation, and sound effects to enhance user experience and functionality.

Career cluster

Arts, A/V Technology, and Communications; Information Technology

Interests

Data; things

Working conditions

Work inside

Minimum education level

Junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

AES; IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Software development occupations may include the following: ■ ■ ■ ■

Software Engineer Software Programmer Computer Systems Analyst Software Tester

nate the campaign. On average, advertising managers earn approximately $73,060 per year, sales managers earn $91,560 per year, and public relations managers earn $82,180 per year. Sales and marketing occupations may include the following: ■

Marketing and Sales Sales and marketing departments publicize their companies’ products. They may develop advertisements and work directly with retailers and high-volume customers to increase their companies’ sales. Companies of all sizes, even the largest, frequently outsource major advertising campaigns to independent public relations firms. However, even when such campaigns are outsourced, the company’s marketing staff will liaise with the relevant team at the contracting company to help coordi-

■ ■ ■ ■ ■

Marketing Manager Sales Executive Sales Manager Account Manager Market Research Analyst Marketing Strategist

Information Technology Software companies depend on their information technology (IT) staff to keep their computer networks running smoothly and efficiently, especially if they run their own Web hosting servers. IT

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staff are also responsible for cyber security, which includes preventing hackers from accessing sensitive corporate information, protecting corporate systems against viruses, fighting back against denialof-service attacks, and securing both external and internal computer networks. They are very highly trained, often possessing bachelor’s or master’s degrees. IT specialists can earn between $79,240 and $129,250 per year on average. Information technology occupations may include the following: ■ ■ ■ ■ ■

Network Specialist Computer Systems Analyst Information Technology Director Support Specialist Computer Security Specialist

Human Resources Human resources (HR) managers recruit, train, and support employees. The size of HR departments varies widely depending on the scope of their companies, ranging from a single person to a staff of hundreds. HR managers earn an average of between $67,710 and $114,860 per year. Human resources positions may include the following: ■ ■ ■ ■

Human Resources Manager Human Resources Representative Training Specialist Recruitment Officer

Technical Support Technical support employees play a major role at software companies. At small firms, technical support duties may be shared among all employees, while larger companies usually organize technical support services into separate departments or outsource those duties to an external firm. Technical support staff usually interact with customers over the phone, on message boards and forums, and in chat rooms, and each worker may respond to hundreds of messages a day. Often, technical support positions are offered as entry-level positions. Depending on employees’ education and skill level, they may later be promoted to more prominent roles within the organization. Technical support representatives earn between $32,110 and $53,640 per year.

Technical support occupations may include the following: ■ ■ ■

Technical Support Specialist Help Desk Specialist Customer Service Representative

Administrative Staff The administrative staff is responsible for scheduling meetings and appointments, providing accounting services, keeping financial records, greeting visitors, and assisting executives. Education requirements for members of the administrative staff vary depending on the individual position. Income may vary depending on position and training. Receptionists for software companies have average salaries of between $18,800 and $28,100 per year. Administrative occupations may include the following: ■ ■ ■

Administrative Assistant Accountant Receptionist

INDUSTRY

OUTLOOK

Overview From the earliest computer program proposed by mathematician Ada Lovelace in the 1800’s, software has grown to control many aspects of the technology people use daily. The software industry plays a tremendous role in nearly every other industry, in schools and governments, and, increasingly, in daily life. As computer use continues to grow, software will remain necessary to allow users access to the information encoded within. Thus, computer software is closely tied to most economic activities in the Information Age, including both business and leisure. As a result, despite periodic alterations in revenue models that may cause temporary deviations, the software industry is expected to continue its rapid growth. Software offerings have become increasingly robust, and many new programs are being created for specialized purposes within specific industries. For example, architectural firms use computeraided design (CAD) software to design new homes; artists, photographers, and graphic designers use

Computer Software Industry image-editing software such as Photoshop; and filmmakers use programs such as Final Cut Pro to edit films. In addition, many businesses employ software programmers or hire external firms and consultants to develop specialized software to meet each company’s individual needs. This is especially true for Internet-based businesses and companies engaged in extensive e-commerce transactions. Ecommerce is becoming increasingly important for a growing number of businesses, and Standard and Poor’s estimated that online retail sales reached $141.3 billion in 2008. As e-commerce has grown, online criminal activity has grown alongside it. By 2009, such activity had skyrocketed, as online criminal enterprises accounted for up to $1 trillion in global revenues, surpassing the amount of money exchanged through drug trafficking. This development has led in turn to a robust $10.5-billion industry engaged in blocking hacker attacks, e-mail spam, and industrial espionage and in deleting or repairing infected computer files. The security software industry is expected to grow rapidly, with global revenues expected to reach $13.1 billion by 2012. Antivirus software is widely used by businesses, governments, schools, and individuals. Many new software firms are created every year, with up to ten thousand software companies established by 2006 according to the BLS. As the price of developing software has fallen for many firms, individual entrepreneurs, software publishers, and hardware manufacturers have continued to develop innovative new technologies. At the same time, however, major operating systems and professional-grade business suites have become extremely complex. A major new release of the Mac OS or Windows requires years of effort and untold millions of dollars in development costs. Thus, even as much of the software market has become more accessible to start-ups, one segment remains more dominated by large companies. Nevertheless, many computer hardware companies, software publishers, Internet firms, and even cellphone manufacturers release specialized software development kits to encourage software engineers to develop new products and services, since they know that a platform is only as good as the software that runs on it. New software products are increasingly being released through open-source platforms and non-

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profit organizations such as the Mozilla Foundation. These groups release free, open-source software online. They have very few paid employees— fewer than ten in the case of Mozilla. Instead, these organizations rely on an army of volunteer programmers, software engineers, and beta testers to perfect and refine their software offerings. Even without a focus on profits, many free software products have become extremely popular. Firefox, released by the nonprofit Mozilla Foundation, was used by 47 percent of Internet users as of late 2009, challenging Microsoft’s Internet Explorer for dominance and far surpassing Google’s Chrome and Apple’s Safari. Software has become a global enterprise. Many software companies, including large firms such as Microsoft, have opened overseas development, testing, and customer-support facilities. Other companies outsource duties such as beta testing and technical support to overseas firms. At the same time, as computer usage expands—especially in the developing world—many new overseas companies are being formed to meet the specific needs of their home countries. In fact, even when Japan is excluded, the Asia-Pacific region is expected to experience the fastest growth in global software revenues. The demand for software will undoubtedly continue to expand as people become more dependent on computer technology. Software is also increasingly used for educational purposes, with schools and universities offering many Web-based software options, as well as traditional software programs that help students learn important new skills. New growth in the software industry is also taking place in the field of video games and mobile phone services. Smart phones such as the Motorola Droid, which uses Google’s Android operating system, and Apple’s iPhone, which uses a modified operating system similar to Mac OS X, offer entrepreneurs new avenues to develop and market software. Such offerings frequently include mobile games, as well as music players, Web browsers, e-mail clients, and maps. They also include business tools such as the Transaction application by SkorpiosTech, which allows users to accept credit card payments directly from their iPhone. Mobile phones and digital music players are also increasingly used to distribute educational software. There are even applications that provide workers in the

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Computer Software Industry

health care industry with important information, including medical dictionaries, anatomy guides, and diagnosis codes. The software industry will continue to grow, with many opportunities for entrepreneurs to develop successful new software. As the barriers for entry into the lucrative industry continue to fall away, many new software companies will be founded by innovative programmers and even amateur hobbyists. In fact, as of 2006, more than half of all software firms employed five workers or fewer. By developing a niche following, even small software companies can become astounding successes. For example, just two people—Bill Gates and Paul Allen—founded Microsoft, which eventually produced the most popular operating system on the planet. Anybody with the right dedication and imagination can learn software programming and, with the right mix of innovative creativity, hard work, and a little luck, can prosper in the computer software industry. Employment Advantages The computer software industry is expected to experience exponential growth, even in the wake of the 2007-2009 global economic downturn. The BLS projects employment in the industry to grow by 32 percent between 2006 and 2016, with 52 percent of all employees in the industry working as computer specialists. In fact, the software industry is expected to grow three times faster than the economy as a whole. Prospective employees in the computer software industry are usually professionals with advanced degrees, although entrepreneurs of every educational background can find success by developing innovative software on their own. In either case, people working in this field need to pursue educational opportunities as part of their efforts to keep up with the constant evolvution of software technology. Because the modern development of software is such a recent phenomenon, most workers in the software industry are quite young: The average worker is between twenty-five and forty-five years old, according to the BLS. Annual Earnings The computer software industry is expected to continue its rapid growth, regardless of the economic climate. Growth projections for the industry

are very high, with 32 percent growth predicted by 2016; thus, it is expected that employment opportunities in the software industry will be higher than average. As a result, software companies frequently offer more generous benefits and salaries than do companies in other industries. According to the BLS, the average annual salary for nonsupervisory employees in the software industry is $75,000, much higher than the average of $29,000 for all other industries. Long-term prospects for the industry are very favorable, with projected revenues of $457 billion by 2013.

RELATED RESOURCES FOR FURTHER RESEARCH Computer Society Institute of Electrical and Electronics Engineers 2001 L St. NW, Suite 700 Washington, DC 20036 Tel: (202) 371-0101 Fax: (202) 728-9614 http://www.computer.org Institute for Certification of Computing Professionals 2400 E Devon Ave., Suite 281 Des Plaines, IL 60018 Tel: (800) 843-8227 Fax: (847) 299-4280 http://www.iccp.org National Workforce Center for Emerging Technologies Bellevue College 3000 Landerholm Circle SE, N211 Bellevue, WA 98007-6484 Tel: (425) 564-4229 Fax: (425) 564-6193 http://www.nwcet.org Software and Information Industry Association 1090 Vermont Ave. NW, 6th Floor Washington, DC 20005-4095 Tel: (202) 289-7442 Fax: (202) 289-7097 http://www.siia.net

Computer Software Industry ABOUT

THE

AUTHOR

Elizabeth Fernandez began working in the computer industry in 2002, serving as a Webmaster and a hardware and software repair specialist. For the past ten years, she has also worked as a writer and editor specializing in computer science and technology trends. She has been published online, in newspapers, and in local magazines, and she has edited several books focusing on the computer, aviation, and transportation industries. She graduated with a degree in journalism from the University of Central Florida.

FURTHER

READING

Arora, Ashish, and Alfonso Gambardella, eds. From Underdogs to Tigers: The Rise and Growth of the Software Industry in Brazil, China, India, Ireland, and Israel. New York: Oxford University Press, 2005. Convergence Plus Journal. “InfoSecurity: F-Secure, VSNL Offer Internet Security Solutions for SMEs.” January 22, 2007. http://www .convergenceplus.com/jan07%20infosec %2002.html. Dale, Nell, and John Lewis. Computer Science Illuminated. 3d ed. Sudbury, Mass.: Jones and Bartlett, 2007. D’Costa, Anthony P., and E. Sridharan, eds. India in the Global Software Industry: Innovation, Firm Strategies, and Development. New York: Palgrave Macmillan, 2004. Hall, Pat, and Juan Fernández-Ramil. Managing the Software Enterprise: Software Engineering and Information Systems in Context. London: Thomson Learning, 2007. Hoch, Detlev J., et al. Secrets of Software Success: Management Insights from One Hundred Software Firms Around the World. Boston: Harvard Business School Press, 2000.

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Johnston, Jessica. Technological Turf Wars: A Case Study of the Antivirus Industry. Philadelphia: Temple University Press, 2009. Lightstone, Sam. Making It Big in Software: Get the Job—Work the Org—Become Great. Upper Saddle River, N.J.: Prentice Hall, 2010. Lopp, Michael. Being Geek: The Software Developer’s Career Handbook. Sebastopol, Calif.: O’Reilly Media, 2010. Mozilla.org. “About Mozilla.” http://www.mozilla .org/about. Qing, Liau Yun. “APAC to See Fastest Software Revenue Growth.” ZDNet Asia, November 9, 2009. http://www.zdnetasia.com/news/ business/0,39044229,62059188,00.htm Robat, Cornelis, ed. The History of Computing Project. http://www.thocp.net/index.html. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Computer and Information Systems Managers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos258.htm. _______. “Computer Support Specialists and Systems Administrators.” In Occupational Outlook Handbook, 2010-2011 ed. http:// www.bls.gov/oco/ocos268.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Yu, Eileen. “Global Security Software Revenue to Hit US$10.5 billion.” ZDNet Asia, April 24, 2008. http://www.zdnetasia.com/news/ security/0,39044215,62040592,00.htm.

©Chromatika Multimedia/iStockphoto.com

Computer Systems Industry

single buildings or other limited areas, constituting local area networks (LANs), or may span much General Industry: Information Technology larger areas or connect disparate, Career Cluster: Information Technology widely separated locations in the Subcategory Industries: Computer Disaster Recovery world, constituting wide area netServices; Computer Facilities Management Services; works (WANs). In the vast majority Computer Software Installation Services; Computer of cases, the Internet provides the Systems Design Services; Custom Computer connection for these networks. The Programming Services Internet has rapidly evolved from Related Industries: Computer Hardware and Peripherals its beginnings in the late 1960’s as Industry; Computer Software Industry; Internet and a research project funded by the Cyber Communications Industry Department of Defense to become Annual Domestic Revenues: $285 billion USD (Research an indispensable tool for many and Markets, 2010) types of businesses involved in elecAnnual International Revenues: $293 billion USD tronic commerce (e-commerce). (Research and Markets, 2010) Along with this evolution of comAnnual Global Revenues: $578 billion USD (Research munication networks, there have and Markets, 2010) been countless technological adNAICS Number: 5415 vances involving the physical components of computers and communications, called hardware, and the written computer code in programming languages, called software. These deINDUSTRY DEFINITION vices drive and facilitate the storage and communication systems—such as databases, Web pages, and Summary other interactive Internet information portals— The computer systems industry provides goods that constitute computer systems. All these comand services designed to enhance the storage, maputer components are interrelated and compose nipulation, and transfer of digital data through the computer systems industry. computer networks. Such networks may exist within INDUSTRY

SNAPSHOT

414

Computer Systems Industry History of the Industry It was during World War II that computers such as the Electronic Numerical Integrator and Computer (ENIAC), developed by John P. Eckert and John W. Mauchly, began to be used to help decide which enemy targets to bomb. To decide on a location, many factors needed to be considered, including any differences in height between the bomb launcher and the intended target, wind speeds, and the shapes of the bombs, which required a complex mathematical calculation involving several equations. Calculators had not been invented yet. Although the ENIAC was huge by present-day standards, using over twenty thousand vacuum tubes and filling entire rooms, this was the birth of the computer systems industry. Throughout the 1940’s and 1950’s, computers continued to decrease in size while increasing in speed and capacity as a result of technological advances, such as the invention of the transistor in 1947 by John Bardeen, Walter Brattain, and Wil-

415

liam Shockley; magnetic ink character recognition (MICR), used by the banking industry to read checks; and the integrated circuit chip by Jack Kilby and Robert Noyce in 1958. During this time, the first useful high-level programming language, the IBM Mathematical Formula Translating System (or FORTRAN), was developed primarily for scientific applications. It was soon followed by the development of the second useful high-level programming language, the Common BusinessOriented Language (or COBOL), for business applications. The application of computers to the banking industry gained importance, and in 1962 the first computer game was invented by Steve Russell at the Massachusetts Institute of Technology. In the 1960’s, silicon microchips became available that allowed the large mainframe computers to decrease in size and led to their manufacture by many companies, including International Business Machines (IBM). The RAND Corporation developed a fully

A computer engineer working on a network data center server consults with a colleague by cell phone. (©Benis Arapovic/ Dreamstime.com)

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tics and Space Administration (NASA), the Massachusetts Institute of Technology (MIT), RAND Corporation, and Harvard. In 1973, Bob Metcalfe invented Ethernet, in order to allow multiple computers Value Added Amount to share digital information and comGross domestic product $169.7 billion puter resources, such as printers and files, Gross domestic product 1.2% while he was working at Xerox. Two years Persons employed 1.458 million later, Larry Roberts developed Telnet, Total employee compensation $149.1 billion which was the first commercial packetswitching network to link customers in Source: U.S. Bureau of Economic Analysis. Data are for seven cities. In 1979, Metcalfe left Xerox 2008. and persuaded the companies of Intel, Digital Equipment, and Xerox to promote Ethernet as an international standard for the computer industry, causing it to bedistributed, packet-switched network to facilitate come the most widely installed LAN. Metcalfe later military communication, and researchers at the went on to form 3Com Corporation. Numerous National Physical Laboratory developed hardware pieces of computer hardware were developed to fato physically connect computers so that they could cilitate Ethernet, and one of the most successful transmit digital information between them. Imcompanies producing such hardware, Cisco Sysprovements in the hardware of these microcomtems, shipped its first product in 1986. By 1990, puters throughout the 1970’s led to their mass proCisco achieved annual revenues of $69 million, duction, thus creating a rapid-growth segment of and by 1998, these revenues had reached $8.46 bilthe computer industry. lion. ARPANET had been the predecessor of toMeanwhile, the linking of computers became day’s Internet, and by 1993 the Internet was used to available in 1969 with the creation of the Advanced link WANs into a “network of networks,” which beResearch Project Agency Network, or ARPANET, came known as the World Wide Web and was facilideveloped by the U.S. Department of Defense. tated by the innovations of Tim Berners-Lee of ARPANET originally linked the Stanford Research MIT and Marc Andreessen of Netscape. Institute with the University of California at Santa Barbara, the University of Utah, and the University The Industry Today of California, Los Angeles. It expanded to establish Computer information systems generally comcommunication destinations, called nodes, at fifplete tasks by using computer systems that can range teen locations, including the National Aeronaufrom a single personal computer and its software to networks linking thousands of computers to share resources, including printers, Internet access, and Inputs Consumed by the databases. The computer systems industry has led the way in the establishment of the digital econComputer Systems Industry omy because it has developed into a facilitator of business via the growth of e-commerce and of comInput Value puter systems designed to support business obEnergy $0.9 billion jectives by facilitating communication and collabMaterials $6.2 billion oration. Modern businesses use databases and Purchased services $65.2 billion computational abilities to improve decision makTotal $72.3 billion ing and productivity, reduce costs, enhance customer relationships, and develop strategic applicaSource: U.S. Bureau of Economic Analysis. Data tions. These strategic applications include online are for 2008. services for health care, insurance, banking, auctions, electronic payments, travel, and even online

The Computer Systems Industry’s Contribution to the U.S. Economy

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In this Laurel, Maryland, grocery store, customers can use a handheld scanner as they shop to save time when they check out. (AP/Wide World Photos)

social networking Web sites and online dating sites that can earn money by selling advertising space. The digital economy allows the U.S. online population of approximately 250 million users to communicate and conduct transactions involving graphics (including photographs, maps, and X-ray images), audio recordings (including music, audio books, podcasts, and lectures for online classes), videos (including television programs, films, and original material), and many types of computer software applications. In addition, Internet users can purchase nondigital goods and services, from airline tickets to books to almost any other product, and they can participate in online auctions and gambling. The wealth of digital information available on the Internet and the vast array of goods and services available for purchase have caused search engines allowing users to find what they are looking for online to become increasingly important. The companies that develop these search engines have grown significantly, as have companies that

optimize Web sites’ code to ensure that they appear near the top of search engine results, a field known as search engine optimization, or SEO. Today, handheld devices allow workers to update inventory counts, print shelf-tags anywhere within a store, and enter order information for outof-stock items. Handheld devices are sometimes given to customers to provide information regarding price comparisons and recommended products. A cell-phone-sized portable device called a mobile manager facilitates communication and supervision of employees. Cart-mounted tablet personal computers (PCs) can allow customers to check prices while shopping, and employees can also use tablet PCs to communicate with one another and with managers wirelessly. Personal scanners are given to customers at Food Lion grocery stores. When a customer picks up an item, it is scanned before being placed into a shopping cart, and the final tally is downloaded to the cash register when the customer is ready to check out.

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An employee of Ernst & Young’s Advanced Security Center tries to hack into a Honolulu bank’s computer system to uncover possible weaknesses. (AP/Wide World Photos)

More than 50 million people in 2008 participated in social networking on Web sites such as Facebook, MySpace, YouTube, and LinkedIn, causing these companies, along with Google, Apple, and Yahoo!, to become major economic driving forces and making the computer systems industry one of the few growth industries today. These companies are leading the way in growth for health care, commerce, travel, politics, finance, and entertainment. Enterprise resource planning (ERP) and customer relationship management (CRM) combine business management tools with the technological tools of the computer systems industry to facilitate countless, routine daily transactions including banking, purchases of goods, and rental of films and other media. The explosive growth in Internet-based businesses resulted in approximately 1.5 million people being employed in the computer systems industry in 2008. Because the technology of the computer systems industry has continued to de-

velop and find an increasing number of applications in recent years, the workforce for the computer systems industry is considerably younger than those of other types of industries, with more than 60 percent of the workers in the computer systems industry being age forty-four or younger. Less than 50 percent of the workers in all other industries fall within this age demographic. Approximately 78 percent of companies within the computer systems industry employ fewer than five workers. Thus, small companies are a significant component of the industry. However, the majority of jobs can be found within companies that employ at least fifty employees. Many employees within the computer systems industry with job positions such as computer support specialists, programmers, consultants, and systems analysts are able to work from home by linking directly to computers at the location of the employer or client via the Internet. With so many e-commerce and social network-

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Switches, bridges, routers, and gateways are examing sites allowing users to share a great deal of perples of additional hardware devices that are manusonal information, there has been an increase in factured by companies within the computer sysidentity theft and the need for network security systems industry and are used to connect network tems to protect against hackers. Maintaining the segments. The Open Systems Interconnect (OSI) security of computer systems has become an immodel was developed as a guideline to describe the portant discipline, with several certificate proprotocols, or rules of communication, followed by grams available to train employees for this growing various hardware manufacturers to ensure that job market. These security certifications include their products will be compatible with the systems Security+, Red Hat, Network+, and Certified Netinto which they will be integrated. This model is work Associate (CNA) certifications. Some certifistill used today, and it makes it possible to replace cates are vendor-specific, such as Cisco’s CNA cerone piece of equipment made by one manufactification, while others are vendor-neutral, such as turer with a similar piece made by a different manthe Security+ and Network+ certificates. ufacturer. The model has greatly facilitated the Numerous other certificate programs exist for growth of the computer systems industry worldnetwork administrators, database administrators, wide. software engineers, and network engineers. The wireless transmission of data has become especially susceptible to theft by hackers. Many certificate INDUSTRY MARKET programs are offered by Microsoft to address this SEGMENTS problem. These certificate programs are so important and widespread that they have developed into Companies within the computer systems indusan industry of their own, with many opportunities try can be categorized as small, midsize, or large, for educators and trainers in various security, netbased on their net annual sales or number of emwork, database, and software applications. ployees. Their geographic scope can range from The computers systems industry could not funclocal to global, and the largest corporations have tion without specialized computer hardware that thousands of employees located in dozens of counenables computers to communicate. Manufacturtries. ing such hardware is another area within the industry that has seen explosive growth, providing numerous opportunities for employment to support the design, manufacture, and sales of constantly evolving computer hardware, as well as for electronic consumer gadgets to play music and videos and to share e-mail and photos between any geographic location. A network interface card (NIC) is a device that is inserted into a computer’s motherboard to provide the physical, electrical, and electronic connections to network media that allow various peripheral components to be attached electronically. Traditionally, coaxial cable has been used to connect several comA router and a network interface card, which is inserted into a computer’s mothputers or other network nodes, inerboard to provide the physical, electrical, and electronic connections to netcluding printers, to central comwork media. (©Dreamstime.com) munication devices called hubs.

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Computer Systems Industry

Small Businesses A small computer systems company is one with net annual sales of less than $950,000 or fewer than one hundred employees. Typically, these small businesses try to focus on a relatively limited number of products or services. The computer systems industry spans a range of products, including database software, servers, network hardware, and systems software. A small company might produce only network hardware, without offering any database or systems software products. Potential Annual Earnings Scale. The earnings potential in a small business is generally significantly less than the earnings potential within a large business, and the range from the lowest paid employee to the highest paid employee is not as wide as the range within a large company. According to the U.S. Bureau of Labor Statistics (BLS), sales representatives at service-oriented computer systems businesses earned an average of $79,830 in 2009, while their supervisors earned an average of $105,760. On average, computer support specialists earned $47,850, programmers earned $76,110, systems analysts earned $85,460, application software engineers earned $91,130, system software engineers earned $95,150, and computer and information system managers earned $130,000. Generally speaking, salaries for all these positions at small companies tend to be lower than these averages. Clientele Interaction. Small companies are dependent on a customer base of repeat, loyal customers, who have the potential within a relatively small, local area to either “make or break” a business based on word of mouth. Therefore, direct clientele interactions tend to be much more important than at larger companies. More emphasis is placed on ongoing, long-term customer relationships. Sales representatives might routinely call customers just to check on how they are doing and to see if they have any questions or are in need of any help. They attempt to maintain strong relationships with customers and may interact with them on a first-name basis. Technical support to customers could include visits to the customer’s home or business and may be available on weekends. Amenities, Atmosphere, and Physical Grounds. The atmosphere of a small company is often more casual than that of a larger company, with a more casual dress code. There is less paper-

work required for requests for vacation days and time off from work. Usually, the physical grounds are quite pleasant and personal in overall feeling. While amenities such as an on-site cafeteria for lunch may be available, the food selection and hours are likely to be less than those available in a larger company, and the extra benefits, such as an on-site fitness center, may not be available at all within a small company. These small companies are located within relatively small, new buildings that consist of only one or two stories and may not even have elevators. Typically, though, they are quite pleasant, having many windows with views of greenery and central air-conditioning, along with carpeted rooms containing cubicles. Often, the computer equipment must be securely stored in locked rooms that are temperature controlled, so they will not become warm enough to cause their wiring or electronic components to deteriorate. Typical Number of Employees. A small computer systems company has fewer than one hundred employees, and 78 percent of companies in the industry employee five persons or fewer. Traditional Geographic Locations. Because the computer systems industry is a relatively new industry, these small businesses are usually located in new buildings with modern plumbing and facilities. Often, they are located in suburban business parks, and many are within close proximity to malls convenient to customers. Because these small companies are often sole proprietorships or limited liability corporations with only a few partners, they are quite dispersed geographically, in all sizes of cities and small towns. However, a higher proportion of small computer systems companies are located within the United States than that of larger companies, which tend to have large facilities in other countries. The start-up costs for international facilities are prohibitive for small companies. Pros of Working for a Small Business. A somewhat more relaxed and personal atmosphere is considered by many to be a positive aspect of working in a small business. Because there are relatively few employees, opportunities exist for coworkers to get to know one another quite well and for the company to develop a family feeling. Workers’ families often know one another and interact outside work. Another potential benefit of a small business is the higher probability of being more

Computer Systems Industry “hands-on” with a larger number of products and the ability to have more knowledge of the activities of the entire business. Smaller businesses are sometimes willing to train new, inexperienced employees on the job in an informal manner. Also, the chain of command has less depth than that of a larger, more rigidly structured corporation. In other words, the overall management structure for a smaller company is flatter than the tiered management structure for a larger company. Cons of Working for a Small Business. Some of the unique characteristics that are often advantages of working in a small company can also have drawbacks. For example, although an individual may have a higher probability of being more “hands-on” in a small company and be able to participate in more projects, there is also more stress associated with the greater responsibility and visibility. Opportunities for advancement within a small company may be significantly limited by the flat management structure. Costs Payroll and Benefits: Payroll and benefits are often completed within a single office, with only a handful of employees who must be able to complete many different tasks. As a result, there is not always the level of expertise present with a larger company, where an individual worker can specialize in one area. Also, few benefit options are available to workers in small businesses. Opportunities for group insurance and investment plans may be available, but the options involved are fewer than at larger companies. Supplies: Depending on their specific products or services, computer systems companies may require computer workstations, software development environments, engineering and computer-assisted design (CAD) software, hardware construction and development laboratories, or production equipment. They all require office equipment and supplies. External Services: Computer systems companies may contract for the manufacture of products they design or the distribution of products they manufacture. They may also contract for such business support services as accounting and tax preparation, legal counsel, advertising, maintenance, and custodial services. Utilities: The typical utilities for a small company

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include water, sewage, electricity, gas or oil, telephone, cable television, and Internet access. Taxes: Small companies are required to pay local, state, and federal corporate and property taxes. If they are sole proprietorships or partnerships, they may report corporate income on personal returns, in which case owners or partners must also pay self-employment taxes. Midsize Businesses Midsize computer systems companies have net annual sales of between $950,000 and $7.5 million. Potential Annual Earnings Scale. The earnings potential at midsize companies is generally more than the earnings potential within small companies, and it may be comparable to that at large companies for some occupations, particularly for the job roles that require the most specific and technical training. However, managers usually earn significantly less at midsize companies than they do at large companies. Also, the range from the lowest paid employees to the highest paid employees is not as wide as the range within a large company. According to the BLS, sales representatives at service-oriented computer systems businesses earned an average of $79,830 in 2009, while their supervisors earned an average of $105,760. On average, computer support specialists earned $47,850, programmers earned $76,110, systems analysts earned $85,460, application software engineers earned $91,130, system software engineers earned $95,150, and computer and information system managers earned $130,000. Clientele Interaction. Midsize companies are less dependent on repeat customers than are small companies. Therefore, clientele interactions tend to be somewhat more limited, with a great deal more e-mail information exchange and less emphasis on visits to customers’ homes or businesses. Project managers assist with the assessment of customer and clientele interactions. Amenities, Atmosphere, and Physical Grounds. The atmosphere of a midsize company is somewhat more casual than that of a large company. There is less paperwork required for requests for vacation days and time off from work. Usually, the physical grounds are quite pleasant and personal in overall feeling. Extended work periods looking at a computer screen can lead to eye problems, and repetitive work while sitting at a com-

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Computer Systems Industry

puter can lead to carpal tunnel syndrome or other musculoskeletal strain issues. While amenities such as an on-site cafeteria for lunch may be available, the food selection and hours are likely less than those available in a larger company, and the extra benefits, such as an on-site fitness center, may be limited within a midsize company. These midsize companies are located within relatively small, new buildings that consist of only a few stories. There may be one centralized location that maintains constant contact via an intranet with branch locations, most within the same state or country. Typically, they are quite pleasant, containing windows with views of greenery and central air-conditioning for carpeted rooms containing cubicles. The offices are generally clean and quiet. Often, the computer equipment must be securely stored in locked rooms that are temperature controlled so as to not become warm enough to cause their wiring or electronic components to deteriorate. Typical Number of Employees. A midsize computer systems company has between 100 and 250 employees. Traditional Geographic Locations. Because the computer systems industry is a relatively new industry, midsize businesses are usually located in new buildings with modern plumbing and facilities. Often, they are located in suburban business parks. Because they are often limited liability corporations with only a few partners, they are quite dispersed geographically, in all sizes of cities and small towns. However, a higher proportion of these midsize companies are located within the United States than are large companies, which tend to have large facilities in other countries. Pros of Working for a Midsize Business. A somewhat more relaxed, while also structured, atmosphere is considered by many to be a positive aspect of working in a midsize business. Interactions with fellow employees are not as abundant as they are in many small businesses, so relationships among coworkers are often not as close. Interactions outside work may be more limited than for employees of a small company. An individual worker has less knowledge of the activities of the entire business, but instead focuses more attention on a more structured range of tasks. Because of the presence of some management structures within midsize companies, there are more

opportunities for advancement than there are at small companies. Cons of Working for a Midsize Business. Because there is greater pressure to compete for customers within a larger geographic area than at small businesses, there can be more pressure and an overall less personal feeling within a midsize company. Individuals do not have as much ownership of projects. Teams are often created to accomplish specific tasks rather than complete entire projects. This strategy can be efficient, but it can also alienate workers from those projects. It can also lead to so-called group-think, which may limit both creativity and productivity. Costs Payroll and Benefits: Payroll and benefits are often completed within a single office, but with a larger number of employees than present within a small company. Generally, there are more benefit options available than at small companies, and some midsize companies may offer retirement plans with matching contributions. There are still fewer benefit options available to workers in midsize businesses than are available to those working in large companies. Opportunities for group insurance and investment plans are available, with more options than present for employees of a small company. Supplies: Depending on their specific products or services, computer systems companies may require computer workstations, software development environments, engineering and computer-assisted design (CAD) software, hardware construction and development laboratories, or production equipment. They all require office equipment and supplies. External Services: Computer systems companies may contract for the manufacture of products they design or the distribution of products they manufacture. They may also contract for such business support services as accounting and tax preparation, legal counsel, advertising, maintenance, and custodial services. Utilities: The typical utilities for a midsize company include water, sewage, electricity, gas or oil, telephone, cable television, and Internet access. Taxes: Midsize companies are required to pay local, state, and federal corporate and property taxes.

Computer Systems Industry Large Businesses Large computer systems companies have net annual sales in excess of $7.5 million. They employ more than 250 persons, and some employ thousands. Potential Annual Earnings Scale. According to the BLS, sales representatives at service-oriented computer systems businesses earned an average of $79,830 in 2009, while their supervisors earned an average of $105,760. On average, computer support specialists earned $47,850, programmers earned $76,110, systems analysts earned $85,460, application software engineers earned $91,130, system software engineers earned $95,150, and computer and information system managers earned $130,000. Salaries at large companies are likely to be significantly higher than these averages. Clientele Interaction. Large companies can have dozens of locations in different countries. Therefore, interactions with clientele tend to be much more limited to specified channels dedicated to communication, such as a toll-free phone number to interact with help desk technicians or sales representatives. Interactions with clients via the Internet is generally much more important than the personal visits that can take place with clients in small companies. Each country and each department within a large company can have sales representatives dedicated to a particular product, and a great deal of formal paperwork is required for interactions with large companies. Amenities, Atmosphere, and Physical Grounds. Because the computer systems industry is a relatively new industry, these large businesses are usually located in new buildings with modern plumbing and facilities. Often, they are located in suburban business parks. Many employees work from home, or telecommute, especially in these larger companies where there is a great enough division of labor and segmentation of job responsibilities to make such telecommuting feasible. For example, programmers and consultants often can work either from home or from a client’s location. A computer support specialist could log into a client’s computer remotely to work with the client, and systems analysts often can work from home via an Internet connection. Large companies are located either in new, modern, high-rise buildings with many stories or, more often, in campuses of several buildings located in close proximity to

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one another, often with beautiful grounds with benches and sidewalks, to encourage employees to feel as if they are members of the corporate community and to spend more time at work. Typical Number of Employees. Large computer systems companies have more than 250 employees. The largest companies within the computer systems industry include hardware manufacturers Intel, Cisco, Hewlett-Packard, Dell, and Apple; database software producer Oracle; and systems-related software manufacturers Microsoft, Sun Microsystems, and (again) Apple. These companies each employ thousands of people in dozens of countries worldwide. Traditional Geographic Locations. Many of the large companies have global headquarters in the United States, with many of these located on the East Coast and on the West Coast. These global companies also have facilities located in dozens of countries throughout the world, especially in India, Germany, and Sweden. Pros of Working for a Large Business. Higher salaries and greater opportunities for advancement are significant advantages of working in a large business. Employees of large companies also enjoy much greater access to educational advancement programs than those of smaller companies. Large companies may provide training within the company, or they may pay for formal higher educational programs and other external training programs for employees. These programs make it possible for workers to gain technical expertise that can then be transferred to a new job role within the same company. Cons of Working for a Large Business. Employees of large companies may experience more stress associated with a less personal atmosphere and having less control over their projects than do employees of smaller companies. Large teams are much more common in large companies, and massive, corporation-wide layoffs are possible. For example, Cisco Systems has over twenty-five thousand employees worldwide and is the world’s leading manufacturer of computer systems, networking products, and services, with a product line that includes Internet services devices, networking management software, remote access devices, routers, and switches. It has had several cycles of layoffs worldwide because of fluctuations in the economy. Employees of a large business often have less free-

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dom in their work schedules than do employees at smaller companies. Costs Payroll and Benefits: Payroll and benefits are handled by several individuals who have specific, defined job responsibilities and therefore can provide a higher level of expertise. There are usually several choices for group insurance and investment plans for retirement, with some type of company matching plan to match employee contributions toward retirement, often 6 percent or higher. Benefit packages can include additional features, such as access to on-site gourmet cafeterias and fitness centers. Supplies: Depending on their specific products or services, computer systems companies may require computer workstations, software development environments, engineering and computer-assisted design (CAD) software, hardware construction and development laboratories, or production equipment. They all require office equipment and supplies. External Services: Computer systems companies may contract for the manufacture of products they design or the distribution of products they manufacture. They may also contract for such business support services as accounting and tax preparation, legal counsel, advertising, maintenance, and custodial services. Utilities: The typical utilities for a large company include water, sewage, electricity, gas or oil, telephone, cable television, and Internet access. Taxes: Large corporations are required to pay local, state, federal, and international corporate and property taxes, as well as all relevant tariffs and other import and export fees.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The computer systems industry contains the same general categories for organizational structure and job roles that are found in most other types of industries, as well as an additional emphasis on technology. In small businesses, a single individual may handle all or almost all of these job roles, while large departmentalized companies as-

sign a different role to each employee. The following umbrella categories apply to the organizational structure of businesses within the computer systems industry: ■ ■ ■ ■ ■

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Business/Executive Management Customer Service Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources Information Technology

Business/Executive Management A management information system (MIS) is a tool used by managers, and business intelligence (BI) is another technology tool used to acquire and analyze data to assist with development of budgets and to assist with investment analysis. Interorganizational information systems (IOSs) facilitate the sharing of data between two organizations that are business partners, and global information systems can connect IOSs in different countries. Most business and executive managers, as well as personnel within other functional areas such as customer service and human resources, use these computer systems technologies to enhance productivity. The role of an administrative assistant in the computer systems industry is very similar to this role in many other industries. Assistants spend approximately 60 percent of their work time providing administrative support to managers and other staff in their daily duties. Approximately 20 percent of their time may be spent on special projects, while another 20 percent may be spent on routine daily supportive tasks, including arrangement of interviews and relocation of prospective employees, scheduling of meetings and arranging of travel, and faxing, taking phone messages, and photocopying. This entry-level position may or may not require a bachelor’s degree but definitely requires skills using common office software packages such as Microsoft Word, Excel, PowerPoint, e-mail programs, and messaging tools. A senior administrative assistant typically spends less time on routine, supportive tasks and spends

Computer Systems Industry much more time on special projects, which can account for at least 8 percent of their work time. These special projects can include analysis of spreadsheet models, monitoring of projects, creation of administration manuals, training new hires on policies and procedures, acting as liaisons to human resources, and managing equipment. This position requires several years of experience and proficiency in software such as Microsoft Word, Excel, PowerPoint, and e-mail and messaging programs. An information technology business implementation analyst spends time on nonroutine and highly complex tasks and also configures settings for computer information systems and develops plans to solve business problems using automated computer systems. This position also provides consultation in the application of automated computer systems to users and serves as a cross-functional team leader to ensure that computer systems are developed to meet the business requirements for e-commerce applications. At least a bachelor’s degree is required. Often, a master’s degree is preferred. Business and executive management occupations may include the following:

zation and communicate information to external organizations via the World Wide Web. Often, network administrators work under the supervision of project managers. Routine duties for a network administrator include overseeing system backups to protect the company’s information and performing daily maintenance of computer networks and operating systems for customers. Additional job responsibilities include installation and configuration of new computer systems for customers. Appropriate preparation can include either two-year or four-year degrees, which can be enhanced by obtaining industry-recognized computer systems certification, such as through the Microsoft Certified Systems Engineer program. However, sometimes on-the-job training and hands-on experience may be sufficient preparation. Average salaries range from $56,829 to $71,254. Customer service occupations may include the following: ■ ■ ■ ■ ■ ■

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Administrative Assistant Information Technology Business Implementation Analyst Accountant/Auditor General Manager Management Analyst Controller Assistant Information Technology Officer Computer and Information Systems Manager Chief Financial Officer (CFO) Chief Executive Officer (CEO) Chief Technology Officer (CTO) Chief Operating Officer (COO)

Technical Support Representative Help Desk Specialist Technical Support Specialist Computer Support Specialist Network Administrator Project Manager

Sales and Marketing Sales and marketing personnel are responsible for creating demand for the product, often through the analysis of market requirements, creating technical programs to help customers with product definition and development, and developing communications with end users. Press relations and advertising are important tasks for this department. Sales and marketing occupations may include the following: ■ ■

Customer Service Customer service personnel, such as computer support specialists and help desk technicians, may have very little education or training. Others, with more specific product training and at least associate’s degrees, may serve as network administrators. A network administrator typically builds networks that can both communicate data within an organi-

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Corporate Sales Manager Marketing Director Sales Director District Sales Manager Senior Sales Manager Technical Sales Representative Administrative Assistant Services Sales Representative Wholesale and Manufacturing Sales Representative

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Facilities and Security Facilities and security personnel are often responsible for providing mechanical, electrical, and chemical infrastructure support in the areas of environmental health and safety, landscaping, ergonomic engineering, industrial hygiene, cafeteria services, and security. Security personnel are responsible not only for protecting a company’s physical property and employees but also for safeguarding its intellectual property. Thus, they must guard against both physical theft and electronic theft through computer networks. Occupations within this department may include the following: ■ ■ ■

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Chief Engineer Building Maintenance Manager Heating, Ventilation, and AirConditioning (HVAC) Specialist Custodian/Janitor

OCCUPATION

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Network Security Specialist Investigator

Technology, Research, Design, and Development Computer systems companies’ technical research and development staffs are generally among the most highly trained in technology and drive innovation for their companies. Computer systems analysts test and maintain computer systems in an organization. They coordinate the installation of computer programs and systems software to facilitate the sharing of information. Typical daily responsibilities include the analysis of all data processing problems in electronic data processing systems, which includes the analysis of user requirements and the design and modification of computer systems to improve workflow. These tasks often require the use of objectoriented programming languages, as well as client

PROFILE

Computer Systems Analyst Considerations

Qualifications

Description

Decides how data are collected, prepared for computers, processed, stored, and made available for users.

Career clusters

Business, Management, and Administration; Finance; Information Technology; Science, Technology, Engineering. and Math

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

IER

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Computer Systems Industry and server applications, multimedia, and Internet technology. To accomplish these tasks, knowledge of hardware, such as chips, circuit boards, and processors, is required, as is knowledge of software, including applications and programming. Database administrators design, create, modify, and maintain databases by implementing various relational database tools. Maintenance of the databases involves planning for backup, recovery, and allocation of system storage to plan for future storage of data. These database administrators often are required to write short computer programs and scripts using Structured Query Language (SQL), develop database objects, design interfaces, and implement other relational database tools. Technology, research, design, and development occupations may include the following: ■ ■

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Computer Systems Analyst Product Life Cycle Management (PLM) Consultant/Analyst Applications Computer Software Engineer Systems Software Computer Engineer Computer Programmer Network System Analyst Data Analyst System Programmer Project Manager Research Director

Production and Operations Production and operations personnel are involved with the manufacture of hardware components such as circuit boards, routers, modems, hubs, switches, and various types of cables. The number of job positions within production, operations, and manufacturing has been declining and is predicted to continue to decline through 2018, according to the BLS. Production and operations occupations may include the following: ■ ■ ■ ■ ■

Project Manager Chief Operating Officer (COO) Manufacturing Technician Laboratory Technician Facility Technician

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Distribution Distribution personnel manage supplier relations and assist with the optimization of inventory and supply lines through the use of statistics, information systems, and supply-chain management. Distribution occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Distribution Planner Delivery Technician Supply Chain Analyst Warehouse Manager Truck Driver Shipping and Receiving Clerk Freight Loader/Unloader

Human Resources Human resources personnel include consultants and specialists who assist employees with benefits and compensation paperwork, as well as managers and senior managers who supervise variable numbers of employees within the human resources department, depending on the size of the company. Typically, these managers may be required to travel often and may be involved with leading and implementing various training programs. The collection of applications that facilitate work within human resources is called the human resources information system (HRIS), and many of the job roles within the human resources functional area use it. A human resources senior manager develops company-wide programs, such as programs dealing with performance management, training assessment, benefits, and reviews of salaries and bonuses. This manager is a member of the line management staff that specifically manages employee relations issues and is responsible for conducting any investigations related to corporate ethics and values. The human resources senior manager is also responsible for following government specifications related to staffing needs. This position typically requires at least five years of experience as a general human resources manager and a bachelor’s degree. A recruitment representative needs to have strong project management and communication skills along with experience using spreadsheet software and HRIS computer systems to assess employees and maintain employee information within

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database software, such as Oracle’s Web tool called i-Recruitment that is specifically designed to assist with recruitment activities. Individuals in this position must be independent self-starters who enjoy travel. This position also requires a bachelor’s degree or a master’s degree. A compensation and benefits consultant assists with the design and implementation of policies, procedures, and programs pertaining to various compensation programs and may also participate in salary administration, data analysis, and job evaluations. This position typically requires a bachelor’s degree, several years of experience with compensation and benefits, and sometimes a Certified Computing Professional designation. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Administrative Assistant Compensation and Benefits Specialist Recruitment Specialist Administrative Assistant Human Resources Specialist Human Resources Coordinator Human Resources General Manager Human Resources Director Human Resources Senior Manager

Information Technology Computer and information systems managers coordinate and direct activities in information systems, systems analysis, programming, and electronic data processing. Their routine tasks include management of the backup of data, security, and

user help systems. They develop computer information resources, provide for data security, and provide for strategic computing and disaster recovery, as well as providing users with technical support. They are also responsible for the evaluation of data processing proposals to assess project feasibility and requirements. Computer software engineers for systems software are responsible for the design and testing of compilers, operating systems, and network distribution of software for medical, industrial, military, communications, aerospace, scientific, business, or general computing applications. A system administrator controls the system configurations from a network hub, using hardware and software, local area and wide area networking, information system security, disk space traffic load monitoring, data backup, and allocation of resources. Webmasters and Web developers develop and maintain Web servers and hosted Web pages at Web sites. Their tasks often include server installation and maintenance, Internet applications of information systems security, computer systems and networks, design and editing of Web pages, Web policy, Web procedures, and usability of user interfaces. Information technology occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Information Technology Director Database Administrator Web Developer Webmaster Computer Software Engineer Computer Programmer Network System Analyst System Programmer System Administrator

INDUSTRY

Computer backup tapes. (©Amy Walters/Dreamstime.com)

OUTLOOK

Overview The outlook for this industry shows it to be dramatically on the rise. According to the BLS, the computer systems industry is one of the twenty-five fastest-growing industries in the United States, and employment within this industry is projected to increase by 45 percent between 2008 and 2018, more than four times the 11 percent growth rate of the

Computer Systems Industry overall job market during that time. Electronic commerce grew from $75 billion in 2002 to more than $204 billion in 2008 and is projected to reach $335 billion in 2012. High-speed Internet connections in the United States increased from 5 million connections in 2002 to more than 80 million connections in 2008, increasing the demand for the many peripherals and Internet connectivity devices that make use of such connections. Wireless Internet connectivity is also increasing dramatically, driven by the proliferation of handheld computers and smart phones. These new devices continuously lead to increases in both available positions and salaries within the computer systems industry. As the Internet and its use for e-commerce become even more important, businesses will continue to increase their application of computer systems, including the most recent technological advances that can be affordably purchased. Thus, the integration of new hardware, software, and communications tools will drive the industry and will also increase the need for experts in network security and support services. E-commerce is becoming increasingly dependent on the use of wireless technology to operate. Devices developed by an increasing number of computer systems technology companies such as wireless personal digital assistants (PDAs) and smart phones continue to transform the way that companies and individuals communicate. These wireless devices pose additional security problems, and much research and development is aimed at making wireless communications more secure. The cost of wireless devices to consumers is expected to continue to decrease, and this decrease will lead to increasing availability and sales. Wireless devices will find increasing applications in all kinds of industries, ranging from the health care industry to real estate to education. Online Webinar training is gaining in popularity, and many computer systems consulting jobs will assist the implementation of wireless devices into education, health care, and real estate. Thus, the demand for computer and information systems managers, computer systems programmers, computer systems software engineers, computer systems analysts, computer scientists, computer systems support specialists, and computer systems administrators is expected to remain higher than average, according to the BLS.

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Employment Advantages Because all industries are becoming more dependent on computer information systems, employment opportunities within the computer systems industry are expected to continue to be excellent, especially for those with specialist certifications and higher levels of training. For example, the BLS projects that job opportunities for computer systems analysts will grow much faster than the average for all occupations through 2018. Also according to the BLS, the computer systems industry will add approximately 656,400 new jobs between 2008 and 2018, which makes this industry one of the top five industries in terms of growth. Because of the high demand for skilled workers, employees in this industry experience less gender and age bias, tend to have more lucrative benefit packages along with salaries, and have more potential for advancement. Typically, entry into the industry is less restrictive than it is in many other industries. Although most employees have either bachelor’s or associate’s degrees in computer science, information technology, or information systems, it is possible for job seekers to enter the computer systems industry with a degree in an entirely different field, as long as they have the required job skills. There are many certification programs representative of these job skills that can substitute for a specific computer science degree. Thus, careers within the industry are potentially ideal for those who want to make a career change. Annual Earnings According to Research & Markets, the U.S. computer systems industry earned revenues of $285 billion in 2009, while the global industry earned revenues of $578 billion. The average annual earnings for computer systems analysts were $78,830 in 2008, according to the BLS. The top 10 percent of computer systems analysts in the United States earned more than $99,180 in 2004, while 50 percent earned between $52,400 and $82,980, and the lowest 10 percent earned less than $41,730. Earnings for various project managers with certifications tend to be higher, with managers who have the Project Management Professional certification earning $101,695 annually and managers with the Certified Associate in Project Management designation earning $101,103 annually. Earnings for other certifications within the com-

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puter systems industry are also quite high, with the average annual earnings for the Certified Information Systems Security Professional being $94,018, the Microsoft Certified Solution Developer being $84,522 annually, the Cisco Certified Network Professional being $84,161 annually, and the Red Hat Certified Engineer being $83,692. Earnings for additional certifications for professionals within the computer systems industry are $82,941 for a Microsoft Certified IT Professional, $80,000 for a Cisco Certified Security Professional, $79,444 for a Microsoft Certified Applications Developer, $77,000 for a Microsoft Certified IT Database Professional, and $76,960 for a Microsoft Certified Database Administrator. Salaries for those without certifications are approximately 20 percent lower than these annual earnings but are still higher than salaries in most other industries. In 2008, the average earnings of all production or nonsupervisory employees in the computer systems industry was $72,852, compared to the average of $31,616 for all industries combined.

RELATED RESOURCES FOR FURTHER RESEARCH Association for Computing Machinery 2 Penn Plaza, Suite 701 New York, NY 10121-0701 Tel: (800) 342-6626 Fax: (212) 944-1318 http://www.acm.org Computer Society Institute of Electrical and Electronics Engineers 2001 L St. NW, Suite 700 Washington, DC 20036 Tel: (202) 371-0101 Fax: (202) 728-9614 http://www.computer.org National Center for Women and Information Technology, University of Colorado Campus Box 322 Boulder, CO 80309-0322 Tel: (303) 735-6671 Fax: (303) 735-6606 http://www.ncwit.org

National Workforce Center for Emerging Technologies Bellevue College 3000 Landerholm Circle SE, N211 Bellevue, WA 98007-6484 Tel: (425) 564-4229 Fax: (425) 564-6193 http://www.nwcet.org University of Washington Computer Science and Engineering Department AC101 Paul G. Allen Center Box 352350, 185 Stevens Way Seattle, WA 98195-2350 Tel: (206) 543-1695 Fax: (206) 543-2969 http://www.cs.washington.edu/WhyCSE

ABOUT

THE

AUTHOR

Jeanne L. Kuhler has more than fifty-five publications and eight years of industrial experience within the areas of pharmaceutical chemistry research, cheminformatics, computer programming, and data management, including four years at American Home Products and over three years at General Electric. She fell in love with teaching while teaching part time and has been sharing her enthusiasm for technology with students for the past seven years. She was awarded the Auburn Montgomery School of Sciences Teaching Award for 2008-2009. She earned a Ph.D. from Texas Tech University, an M.S. from Yale University, and an Honors B.S. from Indiana University.

FURTHER

READING

Bayles, D. L. E-Commerce Logistics and Fulfillment. Upper Saddle River, N.J.: Prentice Hall, 2001. Chesbrough, H. W. Open Business Models. Boston: Harvard Business School Press, 2006. Conference Board of Canada. Canada’s Computer Systems Design Industry: Industrial Outlook, Spring, 2010. Ottawa, Ont.: Author, 2010. Cowhey, Peter F., Jonathan David Aronson, and Donald Abelson. Transforming Global Information and Communication Markets: The

Computer Systems Industry Political Economy of Innovation. Cambridge, Mass.: MIT Press, 2009. Fisher, Eran. Media and New Capitalism in the Digital Age: The Spirit of Networks. New York: Palgrave Macmillan, 2010. Forrester Business Data Services. Enterprise Network and Telecommunications Survey. Boston: Author, 2007. Gronstedt, A. Training in Virtual Worlds. New York: ASTD Press, 2008. Hunter, R. World Without Secrets: Business, Crime, and Privacy in the Age of Ubiquitous Computing. New York: Wiley, 2002. Kalakota, R., and M. Robinson. E-Business 2.2 Roadmap for Success. Boston: Addison Wesley, 2001. Khosrow-Pour, M., ed. Encyclopedia of E-Commerce, E-Government, and Mobile Commerce. Hershey, Pa.: Idea Group Reference, 2006. Prahalad, C. K., and M. S. Krishnan. The New Age of Innovation. New York: McGraw-Hill, 2008.

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Sadeh, N. M-Commerce. New York: Wiley, 2002. SalaryList.com. “Manager of Information Technology Jobs Salary, Ranked by Salary.” http://xxx.salarylist.com/all-managerof-information-technology-real-jobs-salary .htm. Turban, E., et al. Decision Support Systems and Intelligent Systems. 8th ed. Upper Saddle River, N.J.: Prentice Hall, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

©James Steidl/Dreamstime.com

Construction Equipment Industry

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Bulldozer Manufacturing; Crane Manufacturing; Crushing Machinery Manufacturing; Dredging Machinery Manufacturing; Excavator Manufacturing; Grader, Roller, and Compactor Manufacturing; Mixer and Paver Manufacturing; Pile Driver Manufacturing, Front Loader Manufacturing, Tractor Manufacturing Related Industries: Heavy Machines Industry; Highway, Road, and Bridge Construction Industry Annual Domestic Revenues: $36 billion USD (Hoovers, 2009) Annual International Revenues: $45 billion USD (Freedonia, 2009) Annual Global Revenues: $81 billion USD (Freedonia, 2009) NAICS Number: 333120

INDUSTRY

The power plant is usually an integral part of the machine; however, it is sometimes a separate piece of equipment, such as a towed grader or cement mixer. Construction equipment is classified by its function: drilling, excavating, grading, hauling, hoisting, paving, or pile driving. No new categories have evolved since the middle of the twentieth century. Present-day design emphasis is on modifications that increase speed, efficiency, and accuracy. In addition, new machines have reduced emissions, lower noise levels, and increased operator comfort and safety. Virtually every industrialized nation on the planet has a significant construction equipment industry, employing individuals in a wide variety of career paths.

History of the Industry The use of construction equipment began as early as ancient times, in Rome. In De architectura (c. 27 b.c.e.; The Architecture, 1771), the Roman engineer Marcus Vitruvius Pollio provided detailed descriptions of construction equipment, cranes, and hoists, as well as war machines such as catapults and siege engines. He also described the aeolipile, which was the precursor of the steam engine.

DEFINITION

Summary Construction equipment comprises a large variety of powered, heavy machines, which perform specific construction (or demolition) functions. 432

Construction Equipment Industry The modern industry, however, can be traced back to the nineteenth century. Various sectors of the construction equipment appeared or expanded following the Industrial Revolution, which had its onset in the eighteenth century in Europe. The industry then spread throughout Europe, North America, and the rest of the globe. It was marked by major changes in agriculture, mining, manufacturing, and transport; this phenomenon had a profound impact on socioeconomic and cultural conditions, as much of the world’s population began to migrate from the country to urban areas for industrial occupations. In 1836, John Deere manufactured a polishedsteel plow for use by pioneer farmers in the American Midwest. By 1870, his company was producing plows, cultivators, harrows, drills, planters, wagons, and buggies. In the 1880’s, steam tractors appeared; they were replaced thirty years later by gasoline-powered tractors. In 1931, the first dieselpowered tractor rolled off the assembly line at Deere & Company in East Peoria, Illinois. By 1940, the Caterpillar Tractor Company produced mo-

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tor graders, generators, and a special tank engine used by the United States during World War II. In 1963, Caterpillar and Mitsubishi Heavy Industries formed one of the first joint ventures in Japan, Caterpillar Mitsubishi. The company, later known as Shin Caterpillar Mitsubishi, is the second largest producer of construction and mining equipment in Japan. In the 1960’s, Deere & Company also took steps to become multinational, establishing small tractor plants in Mexico, France, Argentina, and South Africa. A basic piece of earth-moving equipment is the bulldozer. It is not known for certain who invented the first bulldozer; however, the bulldozer blade antedates any form of earth mover. Before the Industrial Revolution, two mules were harnessed to a frame with a blade attached to the front. The mules pushed the blade into a pile of dirt, which was dumped from a cart. The dirt was spread over a depression in the earth to fill it. In 1904, American inventor Benjamin Holt patented and manufactured the first crawler type of tread tractor, which was powered by a steam engine. The continuous tread

Excavators, like this backhoe, dig up earth and rock and place it in a dump truck or other device for transportation to another location. (©Eti Swinford/Dreamstime.com)

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spread the weight of heavy earth-moving equipment over a large area, thus preventing it from sinking into the ground. Richard Hornsby, an English inventor, improved on the design. In 1914, the Hornsby Company manufactured its powered tractor, known as a “chain track,” which was steered by controlling the speed of each track. This was a marked improvement over Holt’s machine, which was steered by a tiller wheel located in front of the treads. Hornsby’s steering method is used by modern bulldozers and military tanks. One of the key developments in the production of all machines was the assembly line, which made it possible to produce equipment more efficiently. Before 1900, machinery was produced at one location, one unit at a time. Although the origin of the assembly line is often linked with Henry Ford, Ransom Olds patented an assembly line concept, which he implemented in his Olds Motor Vehicle Company factory in 1901. The concept was, however, vastly improved on

by Ford. His improvement of the assembly line involved moving work, via conveyor belts, from one worker to another while the worker remained stationary; each worker had a particular task to complete on the building of a unit, or part, of an automobile, and he became expert at that task and would perform it repeatedly. As the work moved forward, each task was completed by its expert worker or workers, until the unit was completely assembled. These units were then moved, at the right time and the right place, to a final assembly line, which produced the finished product. As a result of Ford’s assembly line improvements, an automobile came off the line every three minutes. Previous assembly lines had produced vehicles at a rate of about two per hour and required significantly more manpower. Ford also implemented safety procedures, which involved assigning each worker to a specific location rather than allowing him to roam about the work area; this dramatically reduced the rate of injuries.

Front-end loaders (also known as skip loaders) are a motorized device with a digging/carrying bucket on the front end. (©Dreamstime.com)

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Graders are vehicles with a leveling blade mounted between large front and rear wheels. (©Vladimir Bryzgin/ Dreamstime.com)

The Industry Today The construction equipment industry is dominated by large, multinational companies that produce a wide range of products. More than 80 percent of the industry’s revenue is generated by these large companies. In the early 1900’s, construction equipment was primarily produced in the United States and Western Europe; however, much of this production has shifted to Asia, including India. The industry is highly susceptible to the state of the economy and rates of economic growth. Inasmuch as the equipment is designed for construction, when new construction experiences a slowdown, these companies are affected. Strong export sales are essential for the survival and growth of companies in the industry, and hence the market is extremely competitive. However, many companies that manufacture construction equipment also manufacture agricultural equipment. Equipment produced for farm use is affected to a lesser degree because of the ongoing need for agricultural products worldwide.

Technology has markedly affected the industry, which is emphasizing manufacturing high-quality machinery. Machines being introduced to the marketplace feature modifications that make them more efficient and faster than older models. Operator comfort and safety are stressed, harmful emissions are being reduced, and the machines are quieter. Many of these machines are expensive and can cost from $100,000 to well in excess of $1 million. Thus, selection of a piece of construction equipment is affected by economics. Price, efficiency, and the ability of a machine to accomplish a needed task have to be considered before purchase. Availability can be a major factor for larger and more specialized pieces of equipment. Transportation costs can be more than $1 million if the product must travel a significant distance from manufacturer to purchaser. Major subindustries supported by the construction equipment industry are maintenance and repair, sales, leasing, engine manufacturing, and tire manufacturing. Some products (such as tractors)

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Construction Equipment Industry

source of revenue for the subindustry of tire manufacturing. Selecting the proper tire for the lifetime use of the equipment is important, because it can have a major impact on per-unit production costs. Construction equipment is often categorized by its function: drilling, excavating, grading, hauling, hoisting, paving, or pile driving. Drilling equipment bores holes into the earth’s surface. It includes augers, bore-tunneling machines, compactors, and pile hammers. Drills are classified according to how they Dump trucks, a type of hauling equipment, can move materials over large distances penetrate: rotary, percussion, and are designed for road and off-road use. (©Billy Gadbury/Dreamstime.com) or rotary percussion. These machines range in size from small, portable equipment that can can be used for a variety of tasks; others (such as be operated by a single person to massive strucpipe layers) are designed for specific tasks. As of tures containing drilling equipment that can bore 2010, the top ten construction equipment compaa passageway for the extraction of water, oil, or natnies were Caterpillar (Peoria, Illinois); Komatsu ural gas. This equipment can be used for sampling (Tokyo, Japan); Terex (Westport, Connecticut); mineral deposits as well as installing underground Case New Holland (CNH; Amsterdam, the Netherutilities. lands); Volvo Construction Equipment (GötenWhen drilling rigs first appeared in the nineburg, Sweden); Deere & Company (Moline, Illiteenth century, they were often left in place after nois); Doosan Group (Bobcat Company; Seoul, the completion of drilling. In modern times, the South Korea); Hitachi Construction Machinery equipment is frequently moved from one work site (Tokyo, Japan); Bell Equipment (Rochester, New to the next. The smaller machines are mobile and York); and Hitachi Construction Machinery Europe moved intact from one location to the next. The (Oosterhout, the Netherlands). These companies larger rigs must be disassembled for relocation. primarily produce earth-moving, construction, and The process often takes weeks. A life-saving use of farming equipment. Many of these companies drilling equipment received international attenmanufacture their own engines, which are primartion on August 15, 2010, when thirty-three Chilean ily diesel. Some, like Caterpillar, market their enminers were trapped 700 meters (2,300 feet) below gines as a separate product. Although the mention the earth’s surface. Initially, holes were bored to of Caterpillar brings to mind earth-moving equipprovide food and water to the miners; a larger hole ment, the company has a large presence in the mawas bored to allow extraction of the miners on Ocrine engine industry as well. tober 13, 2010. Construction equipment manufactured by these Excavating equipment is manufactured for eicompanies requires either continuous tracks or ther land or marine use. Land excavation involves specialized tires. The equipment with more severe the use of machines that dig up earth and rock and service requirements uses continuous tracks; howplace it in a dump truck or other device for transever, tires are preferable when greater speed and portation to another location. Types of excavators mobility are required. Because of this need, the include backhoes, cranes with attached buckets, construction equipment industry is a significant continuous bucket excavators, draglines, excavat-

Construction Equipment Industry

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and compact them. Paving material is usually fed to ing belt loaders, power shovels, and trenchers. them from a dump truck. Concrete pavers use a viSome equipment involves both excavation and rebrator to level the surface. Asphalt pavers contain location of rocks and earth. Examples are bulldoztamping pads to compress the applied material. Afers, scrapers, and front-end loaders (also known as ter asphalt is laid, a separate machine, the roller, is skip loaders, motorized devices with a digging/carused to further smooth the surface. rying bucket located on the front end). Dump Pile-driving equipment drive piles into the earth; trucks can move materials over large distances and they include both land- and water-based machines. are designed for road and off-road use. Some The three main types of pile drivers are the diesel dump trucks have a bottom dump, which allows for hammer, the hydraulic hammer, and the vibratory the slow release of material so that it is dispersed pile driver. The diesel hammer is a very large twoover an area. Conveyer belts are sometimes used to cycle diesel engine, which transfers the combusmove materials between areas too small to permit tion energy to the pile head. The hydraulic hamthe passage of even a small truck. mer elevates water, which then falls in an enclosed Marine excavators are commonly referred to as cylinder; the force drives the pile downward. The dredges. They are mounted on a barge or a boat. Clamshell and bucket excavators are similar to their land counterparts. Some dredges employ a movable suction pipe, which is lowered to the bottom. The pipe usually contains a sharp cutting head, which dislodges material for suction as the dredge is propelled forward. Graders are vehicles with a leveling blade mounted between large front and rear wheels. They are commonly used for the fine grading of an area. They can also produce an inclined surface and a V-shaped channel for drainage. Another use of graders is for snow removal. Hauling equipment includes dump trucks, which transport loads of materials, and excavating equipment, which also transports the material it dislodges from the earth. Examples include skip loaders, backhoe loaders, and skid steer loaders. Hoisting equipment raises or lowers objects from one elevation to another or moves materials from one location to another over an obstruction. The main types of hoisting equipment are cableways, cranes, conveyors, derricks, and elevators. Hoisting devices range in size from small cranes for lifting an automobile engine out of a vehicle to large devices that can lift very heavy loads for construction of ships and large buildings. Some of these devices are fixed to one location; however, most are mobile (on tracks or wheels). An extreme example of a mobile Hoisting equipment, such as a crane, raises or lowers objects from crane is the aerial crane, which is a specialized type of helicopter. one elevation to another or moves materials from one location to Pavers apply paving materials, then smooth another over an obstruction. (©Martijn Mulder/Dreamstime.com)

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Construction Equipment Industry

vibratory pile driver consists of an electric motor, which turns unbalanced weights that produce a vibratory, downward force.

INDUSTRY MARKET SEGMENTS Although some smaller companies with fewer than one thousand employees compete in the marketplace, this industry is dominated by large companies with a global presence. Their products are large and complicated; thus, large facilities are necessary for their production. Small Construction Equipment Businesses Small businesses in this industry are concentrated in the subindustry of maintenance and repair, sales, and leasing. However, some produce components for large companies and some produce complete machines. Those that produce complete machines are in direct competition with midsize and large companies. An example of a small equipment sales company is Eberhard Equipment, located in Santa Ana, California. The company occupies a two-acre site, has nineteen employees, and generates annual sales of approximately $7 million. Upper-level employees include the owner, an office manager, a parts manager, a service manager, and a sales/ rental manager. The company is a dealer for equipment manufactured by Kubota, Terex, Walker Equipment, Deere & Company, Massey Ferguson, and Mustang Skid Steer. The company leases the equipment and also services construction equipment. The company distributes about one-third of its profits to its employees. Potential Annual Earnings Scale. The average earnings for a small construction equipment business owner vary from region to region but usually are usually less than $100,000 annually. Clientele Interaction. Small businesses tend to favor more interaction with customers, and the personal touch can foster consumer satisfaction. However, clientele interaction can vary widely. The owner might have direct contact with his or her customers or market the product over the Internet with contact limited to telephone and e-mail. A Web site is essential to a small business. A welldesigned site can successfully compete with that of

a large company. For example, a small company’s Web site can mimic the appearance or style of a much larger company’s site; it can not only market the product but also offer technical advice and serve as a vehicle for customer feedback. Amenities, Atmosphere, and Physical Grounds. Amenities of small businesses are often limited. Inasmuch as the owner has extensive control over the business, the working environment can be tailored to personal taste and budget. An owner interested in a favorable working environment might have a facility with extremely pleasant working conditions; however, most facilities are utilitarian, no-frills structures. Typical Number of Employees. The number of employees can range from one to several dozen. Traditional Geographic Locations. Small construction businesses are usually located near the owner’s home. Pros of Working for a Small Construction Equipment Business. The owner is often responsible for all operational decisions. The owner might consult with staff members regarding these decisions or have the option of complete autonomy. A staff member usually has a closer working relationship with the owner than would be the case in a larger company. Part-time employment and flexible hours are usually easier to arrange than they would be in a larger company. A small-business owner can control waste and unnecessary expenditures to a greater degree than the manager of a larger company, because all expenditures are subject to his or her approval; furthermore, less bureaucracy exists in these small businesses. If the company fosters teamwork and group decision making, the employee can be more involved in the company’s growth. In some cases, partnership opportunities exist for an exceptional employee. If the company flourishes, the company might grow in both size and profit margin; this could lead to expansion or purchase by a larger company. If either occurs, the financial return could be significant. Some small-business owners have sold their company at a large profit and have generated enough income to retire with an extremely comfortable lifestyle. This large profit might be shared among key or long-term employees. Cons of Working for a Small Construction Equipment Business. The construction equipment industry is extremely competitive. Even if the

Construction Equipment Industry company produces a good product (or products), it may not be able to compete successfully with a large company that can produce a comparable product at a lower price. A small business is less resilient if an unexpected major expense—such as major equipment failure or a worker’s compensation lawsuit—arises. Such situations can bankrupt a small business. The owner and staff generally will not have the variety of skills that the staff and management of a larger company will possess. For example, the staff may have technical expertise but lack marketing skills. Furthermore, with a small staff, the owner and employees will be responsible for a wide range of duties. For example, a technician might be asked to sweep the floor or clean the restroom. Interemployee relationships can become strained, and small companies rarely have dedicated human resources departments to handle such matters. In a large company, if two employees do not get along, one can be relocated to another area. This is not possible in a small company, confined to a small area. Finally, loss of a key employee can slow or even halt production until a suitable replacement is found. Costs Payroll and Benefits: Small companies often place all employees on an hourly wage and usually do not provide the same level of benefits as a large company; these benefits can be at the discretion of the owner. However, most small companies offer sick pay, health insurance, and paid vacation time. Supplies: Supplies will usually cost a small business more than a large business, which has the clout to negotiate lower prices with large bulk purchases. Both supplies directly related to the construction of the machinery and office supplies necessary for the business will be more expensive. External Services: Costs for external services for a small business are typically minimal and might include such things as Web site development and maintenance or billing services. If a small business becomes involved in a legal dispute, an attorney usually must be retained. In this situation, the small-business owner might incur significant costs. Utilities: Utility usage may be comparable to that of a residence; however, the manufacturing of

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some equipment might involve significantly more use of electricity or natural gas. Taxes: Small businesses are obligated to pay local, state, and federal taxes. If the business is a sole proprietorship, these taxes may be similar to those of an individual taxpayer. If the business is incorporated, state corporate taxes must also be paid. In addition, small businesses must pay federal and state payroll taxes and social security contributions for their employees. Midsize Construction Equipment Businesses Midsize businesses tend to favor smaller types of equipment; they often serve niche markets with a limited product line. These products may compete with products produced by large businesses. Some produce products that complement the product lines of large businesses. Midsize companies are also involved in maintenance and repair, leasing, and sales. An example of a midsize construction business is Klein Products, which maintains facilities in Ontario, California, and Jacksonville, Texas. The company was founded in the 1950’s by Richard Klein, who transitioned from a store manager for JCPenney to a welder and truck mechanic. He then went on to found his company. Klein Products employs more than one hundred individuals and manufactures small to midsize construction and water-distributing machinery. The products are marketed worldwide. Potential Annual Earnings Scale. Salaries vary from region to region; however, the pay for a mechanical engineer is about $32 per hour; sales representatives earn about $28 per hour and may receive commissions for sales; first-line supervisors or managers of production and operating workers earn about $26 per hour; tool and die makers earn about $21 per hour; machinists earn about $18 per hour; computer-controlled machine tool operators (for metals and plastics) earn about $17 per hour; inspectors, testers, sorters, samplers, and weighers earn about $17 per hour; welders, cutters, solderers, and brazers earn about $16 per hour; cutting, punching, and press machine setters, operators, and tenders (metals and plastics) earn about $14 per hour; and team assemblers earn about $14 per hour. Incomes for managers in the manufacturing arm vary widely, from less than $50,000 to more than $100,000 annually.

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Clientele Interaction. Vendors can foster longterm relationships, which can generate repeat business. All midsize businesses will have a Web site for both marketing and clientele interaction. The site will offer customer service, provide technical support, and often supply downloadable Adobe PDF copies of user’s manuals. Amenities, Atmosphere, and Physical Grounds. Manufacturing facilities are typical of factories and are customarily spartan and utilitarian. Typical Number of Employees. A manufacturing facility consists of a management staff, assembly supervisors, and assemblers. Traditional Geographic Locations. Manufacturers are typically in the industrial area of a city and are commonly located in areas near rail or ocean cargo service. Pros of Working for a Midsize Construction Equipment Industry. The owner of a midsize manufacturing business often has more control over operational decisions than he or she would in a large company. Employee-management interaction is often at a higher level than a large company. Midsize manufacturing businesses can employ individuals with a variety of skills; these employees include technicians, assemblers, and marketing personnel. Employees of a midsize company may have

OCCUPATION

closer relationships with management than employees in a larger firm and may have a greater sense of being part of a team. Midsize companies may have one or only a few locations; thus, an employee who prefers to remain in one location usually will not be confronted with the threat of a transfer to another location, as he or she would in a large, global company. Cons of Working for a Midsize Construction Equipment Industry. Many midsize businesses produce a limited product line or specialty products. In times of economic downturn, these companies are more susceptible to failure. The limited number of management positions in a midsize company decreases opportunities for advancement, particularly to positions commanding a high salary. Costs Payroll and Benefits: Midsize companies can usually offer benefits comparable to those of a large company; these benefits include sick pay, health insurance, and paid vacations. Supplies: Midsize companies can often negotiate discounts from suppliers; however, the unit production cost may be higher than for a comparable product produced by a large company.

SPECIALTIES

Computer-Controlled Machine Tool Operators Specialty

Responsibilities

Drill-press operators

Set up and operate numerically controlled drill presses that automatically perform machining operations such as drilling, reaming, counter-sinking, spot-facing, and tapping of holes in metal workpieces.

Jig-boring machine operators

Set up and operate numerically controlled jig-boring machines to perform such jigging operations as boring, drilling, and countersinking holes in metal workpieces.

Milling-machine operators

Set up and operate multiaxis, numerically controlled milling machines to mill surfaces on metallic and nonmetallic workpieces.

Router set-up operators

Set up and operate multiaxis, numerically controlled routing machines to cut and shape metallic and nonmetallic workpieces.

Construction Equipment Industry External Services: Manufacturing companies often use accounting services and billing services; however, they might also maintain employees that can perform these services. They also often use outside legal services rather than in-house services. Utilities: Manufacturing of construction equipment often entails major costs for utilities, particularly gas and electricity. Taxes: Midsize businesses must pay local, state, and federal income taxes as well as applicable property taxes. Almost all businesses in the United States are incorporated; thus, they pay state and federal taxes at the corporate level. They must also collect state sales taxes for retail sales. Midsize businesses must pay federal and state payroll taxes and social security contributions for their employees. Large Construction Equipment Businesses Large manufacturing businesses market their products internationally. The large companies in the United States compete directly with companies whose headquarters are in other nations. For example Deere & Company, headquartered in Moline, Illinois, maintains facilities in Canada, Europe, China, Australia, South America, and Russia. These companies often market a variety of products, including light equipment and products in other market segments (such as televisions or even life insurance). They profit from brand recognition. Most consumers recognize these brand names when considering a purchase and will often favor a product that they deem to have a good reputation for reliability and features. Some equipment manufactured by non-U.S. companies, specifically Asian companies, may have less brand recognition in the United States; however, brand recognition is increasing for these products as well. An example of a large, global construction equipment industry is Mitsubishi Heavy Industries (Tokyo), which is one of the core companies of the Mitsubishi Group. The Mitsubishi Group markets an extensive variety of products, including automobiles, televisions, Nikon cameras, beer breweries, and life insurance. A division of Mitsubishi Heavy Industries is located in the United States. Products marketed by Mitsubishi Heavy Industries include airplanes, ships and other marine structures, steel structures and construction, power

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systems, turbochargers, forklifts, military combat tanks, wind turbines, air-conditioning and refrigeration systems, industrial machinery, paper and printing machinery, machine tools, and light rail vehicles. An example of a large construction equipment industry with a narrower, but still impressive, product range is Caterpillar, which manufactures equipment for construction and farming, including trucks, compacters, harvesters, graders, bulldozers, excavators, pipe layers, front loaders, and pavers. Both Mitsubishi and Caterpillar began as small companies in the nineteenth century. Caterpillar was founded in 1890 by Benjamin Holt and Daniel Best in the United States. Mitsubishi was founded in 1837 by Yataro Iwasaki in Japan. Caterpillar’s first product was a steam tractor for farm use. Mitsubishi began on a grander scale, as a shipbuilder. Potential Annual Earnings Scale. Salaries vary from region to region. The salaries for top management positions, such as a chief executive officer, can be well over $1 million per year. On average, the pay for a mechanical engineer is $32 per hour; sales representatives earn about $28 per hour and may receive commissions for sales; first-line supervisors or managers of production and operating workers earn about $26 per hour; tool and die makers earn about $21 per hour; machinists earn about $18 per hour; computer-controlled machine tool operators (metals and plastics) earn about $17 per hour; inspectors, testers, sorters, samplers, and weighers earn about $17 per hour; welders, cutters, solderers, and brazers earn about $16 per hour; cutting, punching, and press machine setters, operators, and tenders (metals and plastics) earn about $14 per hour; and team assemblers earn about $14 per hour. Many large companies offer dealership franchises. A motivated individual with capital to invest has an opportunity to develop a dealership into a multimillion-dollar business providing tremendous personal financial benefits. These dealerships can operate with a high degree of autonomy, provided that they generate adequate revenues for the parent company. Clientele Interaction. Vendors can foster longterm relationships, which can generate repeat business. All large businesses will have a Web site for both marketing and clientele interaction. The site will offer customer service, provide technical support, and often supply downloadable Adobe PDF files of operator’s manuals.

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PROFILE

Computer-Controlled Tool Programmer Considerations

Qualifications

Description

Develops programs to control computer numerically controlled machines that precisely cut metal, plastic, or glass.

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma/technical training; junior/technical college; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service

Licensure and certification

Recommended

Employment outlook

Decline expected

Holland interest score

IRC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Amenities, Atmosphere, and Physical Grounds. Manufacturing facilities are customarily spartan and utilitarian. Dealerships, however, can range from utilitarian to luxurious. Corporate headquarters are luxurious and state of the art. The headquarters may have a large area devoted to displaying examples of the company’s product line. For example, Deere & Company’s world headquarters is located on fourteen hundred acres of manicured land, which is home to a variety of wildlife, including white-tailed deer, ducks, geese, and swans. Visitors can view displays of John Deere equipment, ranging from antiques to the company’s latest offerings. Typical Number of Employees. The number of individuals employed by many companies in this industry had dropped as of 2010 as a result of the impact of the widespread economic downturn. Deere & Company reported 56,653 employees for 2008, for example, but only 51,262 employees in 2009—a 10 percent drop. Mitsubishi Heavy Indus-

tries states that the company initiated a plan in 2008 to reduce the average number of employees in Japan from 3,500 to 2,000 over the following two years. However, over that same period, the company planned to increase the workforce in overseas companies, particularly in growth businesses, from 8,450 to 15,000 employees. The company predicted that its consolidated workforce would number 72,000 by March, 2015. Traditional Geographic Locations. Corporate headquarters can be located in virtually any large or small city; large retail outlets also can be located in any area with a reasonable population density. Manufacturing facilities are typically in the industrial areas of large cities and located in areas near rail or ocean cargo services. Pros of Working for a Large Construction Equipment Business. A wealth of career opportunities exists within large manufacturing companies as well as their dealerships. Positions include highpaying management jobs, as well as engineering

Construction Equipment Industry and other technical opportunities, and positions in information technology, marketing, and sales. Upper-management positions can be extremely lucrative in regard to salaries, bonuses, and retirement benefits. Even lower-level employees may be entitled to generous bonuses, retirement, and profitsharing benefits. Large corporations can also offer summer internships for college students and training for those employees wishing to advance in their position or career. Lateral transfers are possible. For example, a marketing employee could transfer to a management position in human resources. Large corporations promote a “we are a big, closeknit family” approach to foster good employeemanagement relationships. Moreover, large manufacturers offer a wide range of products; thus, they are more likely to survive an economic downturn than a small or midsize company. Also, a large company often can offer a wider range of price points for specific products,

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ranging from full-featured to economy; thus, during economic downturns, the company’s businesses may continue to generate revenues from its economy lines. Cons of Working for a Large Construction Equipment Business. Large businesses are profit driven and must answer to a board of directors and, if they are public companies, shareholders. Despite a company’s attempt to foster good employee-employee and employee-management relationships, an employee in a large corporation with thousands of employees might have a sense that his or her opinion does not matter and that his or her position could be readily filled by another individual. Upper-management personnel might be urged to relocate to another state or even another country at regular intervals to ensure a promotion. For some individuals, a relocation might not be seen as a negative; some might welcome living in different areas. However, others might feel

PROFILE

Computer-Controlled Machine Tool Operator Considerations

Qualifications

Description

Sets up and operates computer numerically controlled machines that precisely cut metal, plastic, or glass.

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; junior/technical college; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; part-time work

Licensure and certification

Recommended

Employment outlook

Slower-than-average growth expected

Holland interest score

REI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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that it is disruptive to their families. Spouses can be forced to move to a new home and, if employed outside the home, to seek a new position; children may have to change schools and form new friendships. Performance goals sometimes imposed on employees, even those in lower positions, might be extremely stressful to the individual. If a company loses market share or profitability, the chief executive officer might be terminated. The same holds true of the manager of one of the company’s departments if revenue for that department drops.

thus, they pay state and federal taxes at the corporate level. They must also collect state sales taxes for retail sales. In addition, large businesses must pay federal and state payroll taxes and social security contributions for their employees.

Costs Payroll and Benefits: Large companies usually offer many benefits; these benefits include sick pay, health insurance, vacations, and family leave. In the United States, for example, some of these benefits are mandated by law for companies of a particular size. Minimum compensation and benefits also can be mandated by state laws for large companies. Supplies: Large companies can achieve economies of scale because they purchase large quantities of supplies and can benefit from reduced per-unit prices for volume sales. Large companies often strive for just-in-time delivery of supplies (with supplies arriving just before they are needed) to avoid maintaining a large inventory. This just-in-time concept, however, can pose problems, since a breakdown in the supply chain (caused by weather, natural disasters, or strikes) can slow or halt production. For example, the 2010 volcanic eruption in Iceland halted air shipments of many products when concerns over the effect of particulates disbursed by the volcano on aircraft passing through the area required a temporary cessation of flights to ensure safety. External Services: Large companies usually have in-house departments for most services, which include accounting, payroll, legal, and even urgent-care medical services; therefore, the use of external services is often much less than it is with small or midsize companies. Utilities: Manufacturing of construction equipment often entails major costs for utilities, particularly gas and electricity. Taxes: Large businesses, both manufacturing plants and dealerships, must pay local, state, and federal income taxes as well as applicable property taxes. These businesses are incorporated;

Although responsibilities for different functions are often shared in small businesses, large businesses have departments for each division of their organization, and midsize companies will often have a department or at least an individual focused on each division. The following umbrella categories apply to the organizational structure of businesses in the construction equipment industry:

ORGANIZATIONAL STRUCTURE AND JOB ROLES

■ ■ ■ ■ ■ ■ ■ ■

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Business Management Customer Service Legal Services Medical Services Sales and Marketing Information Technology Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources Accounting and Finance

Business Management Management of a heavy equipment company usually consists of hundreds of top-level individuals; however, some midsize companies might have a few dozen top positions. A large company will consist of a hierarchy headed by the chief executive officer; under the chief executive officer will be upper-management personnel who are in charge of operations for a facility in another country or a region of the United States. Below these uppermanagement positions are middle-management positions, which in turn are followed by low-level managers. A large dealership may have a similar hierarchy. Individuals in the upper-management positions

Construction Equipment Industry command high salaries ranging from several hundred thousand to well over a million dollars a year. These individuals have a college degree and usually have majored in a business-related curriculum. Most also have a master of business administration degree (M.B.A.). These high positions are usually held by motivated individuals who work their way up the corporate ladder. In some cases, after achieving a high level in one company, a manager will be recruited to work for a rival company or a company with another but related focus, such as the automobile industry. Included in management are assistants such as secretaries and clerks. Occupations in this area of the business may include the following: ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Controller Administrative Assistant Secretary

Customer Service Customer service is an essential element for both manufacturing companies and dealerships. Individuals working in this capacity must possess excellent people skills. When a customer issues a complaint, customer service personnel must handle it in a competent and cheerful manner. The customer may be an individual or a representative of another company that may purchase thousands of units annually. A large company may employ managers, assistant managers, and representatives who communicate with customers through the telephone or Internet. Customer service is usually augmented by automated telephone messages as well as Web-based services to handle common questions. It is imperative that such services be well designed and capable of handling many common customer issues. These automated services can result in extreme customer frustration if the customer must invest significant time without getting an answer or being able to talk to a human. Customer service is a link between the customers and the company; thus, the division obtains invaluable information regarding a product such as likes, dislikes, and suggestions for improvement. Occupations in this area of the business may include the following:

■ ■ ■ ■ ■

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General Manager Director Administrative Assistant Customer Service Representative Webmaster

Legal Services Large companies incur significant expenses for legal services. Legal issues can arise with companies of any size and can include product liability issues (issues arising from injury related to a product defect), patent infringement (an accusation that an innovative idea was stolen from another company), employee issues (such as job discrimination, wrongful termination, or sexual harassment), and illegal business practices. Large companies have more vulnerability to large settlements because of their financial standing. However, lawsuits ranging from the frivolous to multimillion-dollar cases must all be handled. Small and some midsize businesses must retain an outside attorney in these instances. Larger companies will maintain inhouse counsel (a full-time attorney employee) or a team of attorneys. The attorneys must be specialists in or have some expertise in the following areas: mergers and acquisitions; patents; contracts; and labor law. When a company is exploring a merger with another company or dissolution of a business segment, the in-house consul is involved in the negotiations. These teams will also consist of other legal assistants, such as legal secretaries and paralegals. Even large companies may be required to obtain outside legal services in the event of a highprofile case. Lawsuits have the potential to financially devastate even the largest corporations. Occupations in this area of the business may include the following: ■ ■ ■ ■

General Counsel Paralegal Legal Secretary Administrative Assistant

Medical Services Large companies might maintain in-house health care professionals, who can handle urgent care issues such as job injuries and health care issues that arise during the workday. When physicians are employed, they usually are family practitioners, emergency medicine specialists, or doctors with

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specialized training in industrial medicine. This department might also promote preventive health care, including weight loss and smoking cessation programs. These measures may result in reduced health insurance costs for the company as well as decreased employee sick days. Occupations in this area of the business may include the following: ■ ■ ■ ■ ■ ■

Physician Nurse Practitioner Registered Nurse Physician Assistant Medical Assistant Administrative Assistant

Sales and Marketing Manufacturing companies maintain a staff of vendors: salespeople who call on businesses or individuals to promote their product line. These vendors often invite customers to lunches or dinners to explain and promote the company’s product line; other incentives (that comply with federal and state relations) may also be offered. Dealerships maintain a staff of in-house salespeople. Marketing is conducted by advertising in trade magazines, newspapers, television, and radio. The Internet is a common vehicle for promoting products. Potential customers can obtain product specifications, compare products (including those of rival manufacturers), and purchase products (either through the Web site or by referral to dealerships in their area). The marketing department includes graphic designers who can develop illustrations for a Web site, brochure, or magazine display. This department includes photographers and videographers. The photographers take pictures for sales brochures, magazines, and newspapers. The videographers prepare video clips for television and the company’s Web site. Writers are also employed to prepare text for publications. The marketing department also employs public relations (PR) specialists. These personnel prepare press releases of new products; these press releases are supplied to newspaper, magazine, television, and radio media. Large companies will employ specialists in the aforementioned areas. Smaller companies will outsource that work. Occupations in this area of the business may include the following:

■ ■ ■ ■ ■ ■ ■

Sales Manager Assistant Sales Manager Sales Representative Administrative Assistant Webmaster Photographer Videographer

Information Technology Computer networks are present in all businesses, and hence all businesses have individuals familiar with computer maintenance and operation. Computers are involved in many aspects of a business, including inventory, payroll, sales, and production. A breakdown in a computer network can bring production or sales to a halt. The information technology (IT) department consists of information system technicians who maintain the computer network and communication systems within a company at one or more locations (locations may be global). They usually have a bachelor’s degree in computer science or management information systems. The department may also include IT assistants who usually receive their training at a vocational school or a city college. These lower-level positions include installation, wiring, and maintenance of computer equipment (hardware), whereas higher-level positions include the design and management of networks, operating systems, and other software, including recommendations for upgrades. Occupations in this area of the business may include the following: ■ ■ ■ ■ ■

Information Technology Manager Information Technology Director Information Technology Technician Information Technology Assistant Data Entry Clerk

Facilities and Security Maintenance of larger facilities requires housekeeping personnel, painters, and repair workers. A large manufacturing corporation may often have a large security department headed by one or more managers. Security personnel are responsible for preventing unwanted entry to areas where research and development is being conducted. They are also responsible for the safety of workers by guarding against entry by individuals who could

Construction Equipment Industry pose a threat. Identification tags are almost universally a requirement for all personnel, from top management down to janitorial personnel. Entries into many portions of the building are restricted by a variety of devices, including card slots, key pads, and a guard posted at a desk. Video surveillance is often present, with a central location from which portions of the building can be viewed by security personnel and recorded on tape. Dealerships also often have video monitoring. Theft is a much greater problem for mobile equipment than it is for fixed equipment. The size and weight of these products limits theft; however, their per-unit value is high. Theft can also be perpetrated by employees. Larger establishments will maintain an on-site security force during nonbusiness hours. Occupations in this area of the business may include the following:

ees usually perform these functions. If a construction defect surfaces after a product is released, the company might incur a major expense in product recall. Electrical and electronics engineers are required for the development of machines with complicated electric or electronic systems; these engineers also assist in the design and testing process. The responsibility of industrial engineers is to optimize production of the product; they determine how to best allocate the factory’s resources, both workers and equipment. Once the design process and testing are completed, draftsmen prepare the plans that production workers use for assembly of the machine. For each part, draftsmen provide specifications and diagrams; they also produce assembly instructions for the final product. Occupations in this area of the business may include the following: ■

■ ■ ■ ■ ■

Security Supervisor Housekeeping Manager Housekeeper Security Guard Custodian/Janitor

■ ■ ■ ■ ■ ■

Technology, Research, Design, and Development Ongoing research and development are vital to a construction equipment company. Even midsize businesses must devote time in this arena to remain competitive. Although engineers and technicians are responsible primarily for the development of a new product, this department also includes a large number of support personnel. Before a new machine is ready for the production line, an extensive process of development and testing must be completed. For complicated equipment, this process can take several years. Engineers with a variety of specialties are employed by this department. Mechanical engineers design the machine’s moving parts (such as its hydraulics, gears, levers, and engine pistons). They also oversee the work of technicians, who run tests on materials and parts before they are assembled into the final product. After assembly, this department tests products before they are released to the marketplace. Equipment is run through repeated duty cycles, knobs are twisted, buttons are pushed, and doors are slammed. Mechanical devices rather than employ-

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■

Research and Development Director Engineering Manager Electrical Engineer Mechanical Engineer Industrial Engineer Mechanical Drafter Production Worker Assembly Worker

Production and Operations Production is overseen by managers, assistant managers, and supervisors. The bulk of the workforce consists of a hierarchy ranging from experienced workers with expertise in one or more production areas to inexperienced new hires. Large companies offer training programs to help workers advance to the next level. Large and many midsize companies assemble their products on a production line similar to that of an automobile company. Robots are increasingly being employed in heavy equipment manufacturing in place of human workers, although workers are still required to control these devices. The use of robots reduces operational costs and lowers the number of injuries. However, conflicts have arisen between management, which is interested in improving production with robotics, and labor unions, which are focused on preserving jobs. Employee safety is a major concern; the production line is equipped with features to ensure safety. Specialized clothing and goggles may be re-

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quired for workers. The primary responsibility of some of a large company’s supervisors is to ensure employee safety. Small companies often have fewer than a dozen workers responsible for the entire production process. However, large companies often have a multistage production process consisting of separate teams of workers for design and testing, parts manufacturing, and product assembly. Despite this segmentation, considerable interaction takes place between the teams. For example, to promote worker interaction, the design offices are often located near the assembly line. Occupations in this area of the business may include the following: ■ ■ ■ ■ ■ ■ ■

Chief Operating Officer (COO) Assistant Chief Operations Manager Administrative Assistant Assembly Line Supervisor Assembly Worker Wireman Assembly Line Maintenance Worker

Human Resources The human resources department of a construction equipment company or retail outlet is responsible for all personnel. It handles the employee hiring and dismissal, employee relations (handling employee disputes or grievances), employee benefits (such as health care insurance, retirement plans, profit-sharing plans, interdepartment or interfacility transfer requests), and on-thejob-training. The human resources department is involved with recruiting employees via the Internet or personal contact and interviews at college campuses or job fairs. This department often interacts with the legal department for such matters as alleged sexual harassment or an accusation of wrongful termination. Human resources managers are typically college graduates. Clerical personnel and assistants with less educational experience are also employed in this department. Occupations in this area of the business may include the following: ■ ■

Distribution Construction equipment companies own or lease distribution centers to warehouse and distribute products. Because many companies are global in nature, they will have distribution centers located in various areas around the globe. These centers are often located near rail lines, ports, and the interstate highway system. Distribution centers are overseen by managers who are in charge of a workforce consisting primarily of warehouse workers who move products in and out of the facility. Managers must also ensure that the inventory remains at an appropriate level. The distribution center may employ truck drivers or contract with a trucking company for transporting items. Occupations in this area of the business may include the following: ■ ■ ■ ■ ■ ■

Supply Chain Manager Warehouse Supervisor Dispatcher Warehouse Worker Truck Driver Freight Loader/Unloader

■ ■ ■ ■

Human Resources Manager Administrative Assistant Employee Counselor Legal Liaison Employee Training Director Interviewer

Accounting and Finance The accounting and finance department is often overseen by a certified public accountant (CPA) with management experience. Other CPAs, clerical personnel, and assistants are also employed. The financial department keeps track of a company’s cash flow and participates in company decisions such as equipment purchase, business expansion, and mergers/acquisitions. A function of this department is payroll, which often is a major expenditure. Large companies have a computerized, automated system to generate paychecks; however, some human intervention on a daily basis is required. Occupations in this area of the business may include the following: ■ ■ ■ ■

Chief Financial Officer (CFO) Assistant Financial Officer Payroll Director Accounts Payable Director

Construction Equipment Industry ■ ■ ■

Accounts Receivable Director Administrative Assistant Data Entry Clerk

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be in decline both in the United States and globally. However, in September 2010, The Wall Street Journal reported that the Institute for Supply Management, which surveys U.S. purchasing managers, noted that its manufacturing index rose from 55.5 in July, 2010, to 56.3 in August, 2010. The Wall Street Journal also reported that new orders for factory goods rose in July, 2010, and the number of unemployment claims dropped in the last two weeks of August, 2010. Another positive sign reported by the newspaper in July was a decrease in the U.S. trade deficit. In that month, exports increased by $2.8 billion and imports decreased by $4.2 billion. As a result, the trade deficit shrank from $49.8 billion to $42.8 billion. It was believed that, if this trend continued, hiring would increase. Many companies reduced their number of employees between 2008 and 2010. This was accomplished by hiring freezes, layoffs, and incentives for early retirement. Augmenting this process was increased efficiency of operation through robotics and other technologies that reduced the demand for labor. Even if the upsurge noted in September, 2010, did not continue, many openings were expected to occur because of the need to replace workers retiring or moving to other industries. Production workers accounted for more than 50 percent of the workers in this industry; those with greater technical skills were expected to have a significant advantage in obtaining and maintaining a position over those who did not. Training beyond high school is often necessary for these positions. The presence of midsize and small businesses will most likely decrease, particularly with a prolonged economic downturn leading to insolvencies. In such a scenario, these companies will either disappear or be acquired by other companies. Furthermore, mergers and acquisitions will result in an increase in size of the dominant companies. Large companies are increasing not only in size but also in level of globalization. A symptom of this

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growth is the typical requirement of Japanese businesses that their personnel become fluent in English, which is prevalent around the globe, so that they can compete more successfully in the international marketplace. One sector of the industry will profit if an economic downturn continues: the repair sector. In this economic situation, consumers will be much more likely to have existing equipment repaired rather than to replace it with a new device sporting state-of-the-art features. Robotics will increasingly be used for manufacturing, although their use will most likely be opposed by labor unions, which will fight to preserve jobs. A number of companies outside the United States that use robotics heavily have an improved profit margin, and their products have a competitive advantage over those manufactured in the United States. Technology features will also increase with the design of new products. Energy efficiency will be stressed, and new equipment may combine diesel, electrical, or natural gas usage with renewable energy sources such as solar panels incorporating photovoltaic cells, which can convert solar energy into electricity. Considerable research is focused on increasing energy efficiency and reducing emissions. As greener products are released on the market, end users ranging from companies to individuals will be motivated to purchase them if they have an interest in using a machine that is both more efficient and less polluting. An example of a machine that is undergoing modification to be more ecologically beneficial is the diesel engine. Many products are diesel-powered. Diesel engines are powerful and reliable, and they can yield a significantly higher number of miles per gallon than gasoline engines; however, they release high levels of greenhouse gases (including carbon dioxide, methane, and nitrous oxide) as well as particulate matter into the atmosphere. Engines are being designed to run on cleaner diesel fuel; emission-reducing techniques, such as removing pollutants with urea before they exit the exhaust system, have been developed. Employment Advantages According to the U.S. Bureau of Labor Statistics, “machinery manufacturing has some of the most highly skilled—and highly paid—production jobs in manufacturing.” Even though this industry is in

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a decline, it can be a good career choice. Heavy equipment is an essential component of any industrialized nation, and a demand for construction equipment will always exist. These machines are subject to heavy use, and over time, components will need to be replaced or a new unit purchased. Most of these companies are large, global, and produce a wide variety of products; thus, they offer a degree of stability not found in smaller companies and those that do not produce essential products. The industry can support workers in a wide variety of careers, including managerial, technical, and sales professionals as well as skilled laborers. In addition, this large industry allows employees to make lateral transfers within a company, should they desire an alternative career path. An employee of a company may also derive satisfaction when he or she passes a construction site and can point to a piece of heavy equipment and say, “My company builds those.” Annual Earnings Whether annual earnings will continue to decline or experience growth remains, as of 2010, uncertain. Most companies reported a decline in net sales between 2008 and 2009. For example, net sales declined for Deere & Company from $25.8 million in 2008 to $20.8 million in 2009, a 26 percent decrease. Komatsu also reported a decline, from $22.4 million in 2008 to $20.4 million in 2009, a 9 percent decrease. The Doosan Group (Seoul) bucked the trend and reported a small increase in net sales, from $18.1 million in 2008 to $18.4 million in 2009, a 2 percent increase. The decline for most companies was attributed to a slowdown in both the U.S. and the global economy, as well as a concomitant slowdown in the U.S. construction, housing, and home improvement markets. Of greatest effect on the construction equipment industry is the dearth of new home construction, which began in 2009. Some building resumed in the first quarter of 2010; however, that resurgence did not continue through the next two quarters. The economy improved to a degree during the first quarter of 2010, but consumer spending for all products in the United States fell 1.2 percent from April to May, 2010. The relative stability of the U.S. and European economies will benefit this industry, and the U.S. construction equipment industry will no doubt sur-

vive and perhaps grow. However, both U.S. and European companies continue to face ever-increasing competition from Asian manufacturers. A significant portion of the construction equipment industry is already based in Asia, and these companies market their products throughout the globe and hold significant market share in the United States. China—which exports light machines and manufactures components for construction equipment—is likely to join Japan and South Korea as a leading manufacturer as the twenty-first century progresses.

RELATED RESOURCES FOR FURTHER RESEARCH Caterpillar 100 NE Adams St. Peoria, IL 61629 Tel: (309) 675-1000 Fax: (309) 675-4332 http://www.cat.com Deere & Company Deere & Company World Headquarters 1 John Deere Place Moline, IL 61265 Tel: (309) 765-8000 Fax: (309) 765-7283 http://www.deere.com EQUIPMENT WORLD 3200 Rice Mine Rd. Tuscaloosa, AL 35406 Tel: (800) 633-5953 Fax: (205) 349-3765 http://www.equipmentworld.com Freedonia 767 Beta Dr. Cleveland, OH 44143 Tel: (440) 684-9600 Fax: (440) 646-0484 http://www.freedoniagroup.com Institute for Supply Management P.O. Box 22160 Tempe, AZ 85285 Tel: (480) 752-6275, (800) 888-6276

Construction Equipment Industry Fax: (480) 752-7890 http://www.ism.ws Komatsu 2-3-6 Akasaka, Minato-ku Tokyo 107-8414 Japan Tel: 81-3-5561-2616 http://www.komatsu.com

lytic reports on major corporations and industries and has analyzed hospital systems and medical device manufacturers. He is familiar with the heavy machines industry in the United States, Europe, and Asia. For the past fifteen years, he has closely followed the business sector in the United States and abroad.

FURTHER MarketResearch.com 11200 Rockville Pike, Suite 504 Rockville, MD 20852 Tel: (240) 747-3000 Fax: (240) 747-3004 http://www.marketresearch.com Mitsubishi Heavy Industries 16-5 Konan 2-chome Minato-ku Tokyo 108-8215 Japan Tel: 81-3-6716-3111 Fax: 81-3-6716-5800 http://www.mhi.co.jp/en Technik Manufacturing 1005 17th St. Columbus, NE 68601 Tel: (800) 795-8251 Fax: (402) 564-0406 http://www.technikmfg.com

ABOUT

THE

AUTHOR

Robin L. Wulffson, M.D., is a board-certified specialist in obstetrics and gynecology. In 1997, he transitioned to a writing career. He has written ana-

451

READING

Harris, Frank. Modern Construction and Ground Engineering Equipment and Methods. 2d ed. New York: Longman, 1994. Huzij, Robert, Angelo Spano, and Sean Bennett. Modern Diesel Technology: Heavy Equipment Systems. Detroit: Delmar Cengage Learning, 2008. Levy, Sidney M. Construction Databook: Construction Materials and Equipment. 2d ed. New York: McGraw-Hill, 2010. Stearns, Peter. The Industrial Revolution in World History. 3d ed. Boulder, Colo.: Westview Press, 2007. Stonehouse, Tom, and Eldon Brumbaugh. J. I. Case: Agricultural and Construction Equipment, 1956-1994. St. Joseph, Mich.: American Society of Agricultural Engineers, 1996. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Construction Trades and Related Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ oco1009.htm. Vorster, Michael C. Construction Equipment Economics. Christiansburg, Va.: Pen, 2009.

©Dreamstime.com

Corporate Education Services

importance that companies place on internal training and education. In fact, according to a 2004 General Industry: Education and Training study from Accenture, a global Career Cluster: Education and Training management consulting and outSubcategory Industries: Computer Training; Management sourcing company, many execuDevelopment Training; Professional Development tives list training and developTraining; Quality Assurance Training ment as one of the three most Related Industries: Business Services; Private Education important initiatives within their Industry respective organizations. Annual Domestic Revenues: $56.2 billion USD (Bersin and Corporate training programs Associates, 2008) and staff have a high level of acAnnual Global Revenues: Between $110 billion and $130 countability toward their employbillion USD (BME Global, 2008) ers and clients. Companies exNAICS Numbers: 611420, 611430 pect that investments in training and corporate education will contribute to their overall growth and profitability. The success of a training initiative, in fact, is no longer measured by INDUSTRY DEFINITION the number of employees who receive training in a given time period. Instead, executive management Summary teams evaluate training programs based on their Corporate education services are provided by quantifiable contributions to their organizations’ external firms or internal corporate divisions to success. provide workers with knowledge and skills that are Measuring the financial return on corporate helpful or necessary in fulfilling their tasks. An estitraining (return on investment, or ROI) is the most mated two thousand corporate training programs common way of measuring a training program’s efare currently housed within larger companies in fectiveness. Corporate education providers may the United States—an approximate figure nearly themselves be tasked with measuring the long-term equal to the number of the nation’s colleges and benefits of the training they provide. Training and universities. This number alone is indicative of the INDUSTRY

SNAPSHOT

452

Corporate Education Services development (T&D) groups find that measuring the ongoing effectiveness of training demonstrates the contribution of corporate education to their organizations over time. As employees apply new skills gained through corporate education to their work, continued education will further increase their skill level and cumulative knowledge, advance their organization, and elevate individual employees within a company. Corporate training, therefore, adds to the comprehensive institutional knowledge of companies, as well as to the career advancement of individual employees. The more a corporation invests in growing the knowledge and skills of its employees, the greater an interest the employer has in retaining those employees, both to maximize its ROI and to capitalize on the knowledge and skills the employees have acquired. History of the Industry The concept of learning and the organized teaching and acquisition of skills from one individ-

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ual to another dates back to antiquity. Before reading and writing were ubiquitous skills, people acquired skills by watching others perform a task. After an individual achieved a certain level of competency, it was possible for that individual to train a less-skilled person. Training was thus accomplished through demonstration. It evolved into the practice of apprenticing, in which individuals observed others until their competency increased to the point of independence. Children often followed in the same profession as their parents, who trained their offspring in a particular trade or craft from an early age. Each generation took responsibility to pass along the necessary skills to the next generation so that the family could sustain itself. For centuries, apprenticeship was, by and large, the sole means by which skills were passed on. As the printed word became more widely used and the literacy of whole populations increased, it became possible to supplement visual, verbal, and tactile training with written instructions. Much of

Corporate education, as an industry, is represented both by training specialists within larger organizations and by third-party consulting firms. (©Dmitriy Shironosov/Dreamstime.com)

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modern training still involves demonstration combined with oral and written instruction. The advent of print also made it easier for one teacher to train multiple students. Instead of relying on pure demonstration, the teacher could provide supplemental printed materials to convey lessons to a group too large to conveniently train through demonstration alone. In time, particularly after the advent of industrialism, the search for prosperity superseded subsistence living, and populations shifted from rural to urban areas. Large numbers of people left agricultural jobs and agrarian lifestyles to settle in urban areas and labor in mass, mechanized manufacturing industries. In contrast to a craft-based, artisan business or a traditional farm, an industrial factory employed far more people but gave each one a far less complex, often repetitive task. As the nature of labor changed, the nature of training changed as

well. Lengthy apprenticeships were unnecessary to impart the limited skills required to work on a factory assembly line, and one-on-one training was insufficient to instruct the number of workers needing basic instruction. Thus, it became apparent that large groups of workers required more skilled managers to train and oversee them. The managers themselves required a certain level of training, both in manufacturing skills and in management. Much of modern-day corporate education emphasizes the need to train future organizational leaders, a trend that largely began during the Industrial Revolution of the eighteenth and nineteenth centuries. Vocational education was introduced during the era that followed the American Civil War (1861-1865) and preceded World War I (19141918). It was during this time that the term “working class” emerged, as men and women alike joined

A trainer with the Disney Institute conducts a training session with Miami International Airport employees in 2007. The airport hoped to improve customer service. (AP/Wide World Photos)

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the urban, mechanized workforce in increasing numbers. Vocational training, which combined classroom and on-site training, was largely employed as a means to impart job-specific skills. Vocational education continues to be widely used as a means to train tradespeople such as plumbers and electricians. The Great Depression of the 1930’s—the first great economic downturn of the twentieth century—created a surplus of workers. With too few jobs and too many workers, job-specific training became unnecessary and was largely abandoned. However, the lack of workforce preparedness after the Great Depression left many American workers ill-equipped to The Second City improvisational troupe performs a routine for IntraNet employparticipate in the next economic ees in 2004. The troupe uses improvisation to polish the skills of business peoboom. The larger the gap in preple. (AP/Wide World Photos) paredness, the longer it takes to train workers to appropriate levels the end of the twentieth century that manufacturof competency. Training is most effective when it is ing jobs started to shift offshore, where labor costs incremental and continuous, and employees benewere much lower. Much of America’s economic fit from using new skills immediately after they prosperity was built on high-paying manufacturing learn them. These lessons became apparent with jobs, such as those offered by the automobile inthe onset of World War II (1939-1945), which dustry. These jobs required extensive employee helped end the Great Depression. training at all levels—and increasingly to a whiteAmerica’s entry into World War II in 1941 recollar workforce. quired a great deal of training. New military recruits underwent so-called basic training, while the The Industry Today manufacturers supporting the war effort with maThe twenty-first century has ushered in a new teriel had to train a great many people to work in kind of economy—the knowledge economy. It is their factories—including the women who entered an economy that is fueled as much by the transmisthe workforce to replace male draftees. The desion of knowledge and data as it is by the manufaccrease in training caused by the Great Depression ture of goods and services. Workers no longer perwas felt acutely by industries that suddenly needed form the same task on a daily basis, as they did on skilled line workers and the managers to supervise assembly lines. Instead, a typical worker is likely to them. As more workers joined companies and prosundertake work that requires learning and applyperity reigned in the latter half of the twentieth ing new skills on an almost daily basis. It is often the century, training became commonplace at many responsibility of the worker to learn new skills indecompanies. Manufacturing workers required trainpendently. Problem solving and knowledge creing in new production processes, and much of this ation are the mainstays of knowledge jobs. training was classroom-based. In the knowledge economy, the training of emAfter World War II, America and many other ployees requires a broad-level approach. It emphacountries entered a period of unprecedented ecosizes skills that help employees improve workplace nomic growth and prosperity. It was only toward

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relationships and manage projects and time lines. Additionally, the global marketplace requires that employees be more culturally aware, as their colleagues are just as likely to live in another country or region as they are to be situated down the hall. Often, companies employ labor forces in emerging markets such as India and China, where communication is paramount. This changing corporate landscape, in which projects and people are managed around the globe, is driving a new model of corporate education. The delivery of corporate education services has been transformed radically in the early twentyfirst century. As manufacturing continues to shift to countries where labor costs are much lower, such as India and China, the United States and other mature economies will focus on the creation of knowledge rather than the creation of goods. Corporate education will be essential to support this new type of economy. The advent of the Internet and the ability to deliver information quickly and inexpensively through a digital medium has redefined many aspects of corporate education and helped meet this growing need for education. While many companies still offer inhouse or on-site classroom training, the training room now extends to a virtual space that is often accessible twenty-four hours a day, seven days a week. Corporate educators face the challenge of determining how to train a very diverse workforce. The baby-boom generation has already begun to retire, and the pace of retirements will continue to increase into the second decade of the twenty-first century. Moreover, the generations following the baby boomers are far less likely to have the same occupation throughout their lives. As they continue to change jobs, they will need to acquire new skills sets to work effectively in new occupations. Thus, as skilled workers and workers experienced in a given industry retire, companies will need to rely on corporate education services to train their replacements. Without such training, there would be a skills void that could be detrimental to many industries. When compared to the production-line-based structure of the manufacturing economy, the current knowledge economy is much more complex. Time-to-market pressure and competition among businesses to be first to release new products to

market require a highly trained and motivated workforce. As a result, corporate education and continuous job training are no longer considered to be merely an employee benefit. Rather, they are seen as having a large impact on a company’s financial health. Because many employees now work with ideas and knowledge rather than with tangible products, employees are in a state of constant learning. Processes and practices change rapidly, so employees must continuously develop their skills and maintain the agility to multitask and move rapidly from one project to another.

INDUSTRY MARKET SEGMENTS Corporate education, as an industry, is represented both by training specialists within larger organizations and by third-party consulting firms. Some companies have corporate education or T&D departments, while others employ trainers within broader departments, usually human resources. Third-party consulting firms often offer a broad range of corporate training and management consulting services, often contracting with other organizations to use an off-the-shelf product or a customized training solution. The following sections discuss the internal training programs of small, midsize, and large businesses, followed by a general assessment of third-party firms. Small Businesses Definitions of a small business vary in different industries. In general, a small business employs fewer than one hundred persons, generates revenue of less than $1 million annually, and serves relatively local markets. Consequently, because of limited staff and revenue, individual small businesses typically have less of an impact on the marketplace than do larger firms. Small organizations also generally have limited financial resources available for formal training. As a result, they may lack a dedicated staff responsible for training new employees. That task is generally handled by the owner or another experienced employee. This training is mostly accomplished through demonstration and passed along from peer to peer. While many small and midsize enterprises hire a third-party provider to perform corporate train-

Corporate Education Services ing, they are becoming increasingly aware of the impact that corporate education can have on a business’s success. Many small companies are therefore beginning to designate in-house staff as trainers, some in a part-time capacity. These corporate education employees and trainers in the small business sector are responsible for providing employee education, but they often have other responsibilities as well. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary for T&D specialists in 2006 was $47,830, while the median for T&D managers was $80,250. The average salary for human resources managers, who are sometimes tasked with corporate education and job training, was $88,510. According to Salary.com, the starting salary for a corporate trainer in 2009 ranged from $32,000 to $57,500. Clientele Interaction. In-house trainers’ clients are also their colleagues. Thus, in a business with relatively few employees, trainers are likely to know all of their trainees. Part-time trainers with additional duties may work alongside their fellows to accomplish other tasks, which may create a sense of camaraderie between trainers and trainees but which may also diminish the trainers’ authority within educational settings. In a small business, it is unlikely that an employee would be tasked solely with preparing materials for training to be conducted by others. Thus, all in-house trainers in a small business are likely to interact directly with their trainees. If it becomes necessary for the business to contract additional external training services, in-house trainers are responsible for coordinating and administering that supplemental training with the third-party company. Amenities, Atmosphere, and Physical Grounds. As a way to keep costs low, small businesses refrain from renting more space than is necessary. Most space is taken up by employees who are directly involved in operations, though there may be a cafeteria or other small common areas. Training space at small businesses is also limited. Training is likely to take place in a conference room or cafeteria, or even at an employee’s workstation. Typical Number of Employees. The typical number of employed trainers at a small organization is relatively low, perhaps as few as one person.

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Traditional Geographic Locations. Small businesses can be found anywhere, depending on the industry and the customer base. Those businesses dealing heavily in goods usually need inexpensive space in low-cost areas to house goods and facilitate access to major roadways. Other small businesses rely on a steady flow of customers and locate themselves where they are easily accessible. The success of companies that sell their goods online is less dependent on location than is that of traditional storefront companies. Most training for small businesses takes place on site at a company’s primary location. Pros of Working for a Small Company. Trainers at small companies have a significant influence on the design and delivery of their curricula. They often have the opportunity to create content from whole cloth—which may be a pro or a con, depending on the aptitudes and attitudes of particular trainers. Trainers also enjoy high levels of interaction with their fellow employees and have a direct impact on building skills and knowledge within their organizations. While advancement opportunities may be limited, working in a small business as an educator may help prepare a trainer for a related role in a larger organization. Cons of Working for a Small Company. At small organizations, training budgets are limited, and most training personnel have responsibilities beyond their training duties. As the people responsible for providing company education, trainers must create and deliver all or most content on their own—possibly including content that is outside their areas of expertise. Training staff at small companies do not have the benefit of working with other professional trainers and gaining from their mentorship. Moreover, the lack of a formal training division or dedicated staff makes it less likely that a company will maintain an archive of training materials from which newer trainers may draw when planning curricula. In small organizations, where employees often have multiple responsibilities, training is also often not given a high priority on the business agenda. Resources, including a part-time trainer’s time, may be reallocated to accomplish higher-priority goals. Training budgets are often among the first to be cut, and small companies may attempt to compensate for lack of resources by transferring or redistributing training duties among available staff.

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Costs Payroll and Benefits: Trainers employed by small businesses are paid hourly wages or salaries, depending on the extent of their work. Benefits such as vacation and sick days, health insurance, and 401(k) plans are offered at employers’ discretion. Supplies: Trainers generally need computers and training or presentation software, as well as standard supplies such as office consumables, telephones, and office furniture. External Services: In-house training may be supplemented with third-party corporate education providers. Such providers may provide fulltime or part-time service, or they may be called on to produce content that is then used by inhouse training personnel. Outsourced training may be conducted at a third-party training facility, at a public facility such as a nearby hotel’s conference room, on site at the contracting company’s premises, or via the Internet. Utilities: Typical utilities for a small business include electricity, air-conditioning and heating, water, telephone, and Internet access. Specialist resources and utilities depend on the type of organization and its activities. Taxes: State and federal taxes are payable according to business revenue. Midsize Businesses Midsize businesses are defined as those having between one hundred and one thousand employees. Operations at most midsize organizations are divided into different functional areas and may include sales, marketing, human resources, and operations. Some midsize firms may be managed by an owner or company founder, but they more often have an executive team to manage operations. Midsize businesses can have significant local, regional, or global influence in the marketplace but are generally limited in market reach. Many midsize companies employ T&D staff to enhance communications, as well as to deliver specialized education offerings. At midsize companies, training is an important initiative for company executives who understand that effective learning contributes to increased revenue and profitability. While the training needs of specific departments may differ, companies often have common training needs across an entire organiza-

tion. The cost of recruiting and hiring employees is significant, and most employers therefore wish to hold onto employees and their institutional knowledge as long as possible. Effective corporate training helps retain employees, in addition to increasing their value. Potential Annual Earnings Scale. According to the BLS, the average annual salary for T&D specialists in 2006 was $47,830, while the median for T&D managers was $80,250. The average salary for human resources managers, who are sometimes tasked with corporate education and job training, was $88,510. According to Salary.com, the starting salary for a corporate trainer in 2009 ranged from $32,000 to $57,500. Clientele Interaction. In-house trainers’ clients are also their colleagues. In a midsize business, trainers are likely to know many of their trainees. Some midsize businesses may have employees in training departments or in human resources departments who are tasked solely with researching and producing content for training that will be conducted by others or conducted primarily online. Such content providers interact with trainees far less than trainers do, but they may conduct surveys or otherwise communicate with trainees in order to evaluate and improve their training materials. Amenities, Atmosphere, and Physical Grounds. Most midsize companies rent or own office space that can accommodate the majority of employees at one location. While some employees (such as sales personnel) may work remotely, the majority of employees work out of a central office. Employees at midsize companies can enjoy a collaborative work environment where it is possible to know many of their colleagues personally. Employees are usually grouped on the floor by functional area. Amenities at midsize companies may include a company cafeteria, fitness center, or day-care center. These amenities are perks that midsize companies offer to attract and retain employees. Midsize organizations also generally offer employee training as a benefit. Often, this training is marketed as a way to advance career options. Midsize companies generally have dedicated training spaces that include computer workstations. Projectors and sound systems may also be used to improve the classroom learning experience.

Corporate Education Services Typical Number of Employees. The number of training staff at midsize companies is generally between four and seven trainers per one thousand employees. Traditional Geographic Locations. Midsize companies can be located in any geographic area but are generally located near urban areas. Many midsize companies are headquartered near regional or national airports and position their operational centers near interstate highways. Corporate education at most midsize companies takes place on site and within dedicated training areas. However, it is also common for organizations to send employees off site for training. Pros of Working for a Midsize Company. Training services at midsize organizations often entail much more than general employee training, providing opportunities for those who seek fulltime employment as trainers. Typically, operations are diverse, and different functional areas have specific training requirements. For example, employees who deal directly with customers may need training in customer satisfaction and retention, while employees who develop software applications may need training in using a new coding environment. Thus, the breadth of curricula that need to be developed is likely to be significantly greater than at small businesses. The diversity of a midsize company’s training needs may require training managers to enlist subject-matter experts from specific areas of the company or to hire third-party vendors with the necessary expertise. Such experts may be called on to conduct training, but they may also be asked to train the trainers, enhancing the knowledge of training specialists who will use their expertise in educational techniques to pass it on to other workers. While training materials may be drawn from different sources, training managers or coordinators usually oversee all aspects of company training, functioning as the point of contact for all division managers within the organization who need training for themselves or their staffs. Midsize organizations offer better opportunities for career advancement for corporate educators. Cons of Working for a Midsize Company. While midsize companies offer more opportunities for those in the corporate education field than do small companies, the scope of training may still be limiting for those who seek executive-

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level positions. In addition, trainers are most often responsible for training at local or regional offices, so they may not have the opportunity to work with particularly diverse or international constituents. Corporate educators who seek to work at global or international levels or who seek executive-level positions will probably find greater opportunities in larger companies. Costs Payroll and Benefits: Depending on the extent of their work, trainers employed by midsize businesses are paid either hourly wages or salaries. Benefits such as vacation and sick days, health insurance, and 401(k) plans are offered at employers’ discretion. Supplies: Trainers generally need computers and training or presentation software, as well as standard supplies such as office consumables, telephones, and office furniture. External Services: In-house training may be supplemented with third-party corporate education providers. Such providers may provide fulltime or part-time service, or they may be called on to produce content that is then used by inhouse training personnel. Outsourced training may be conducted at a third-party training facility, at a public facility such as a nearby hotel’s conference room, on site at the contracting company’s premises, or via the Internet. Utilities: Typical utilities for a midsize business include electricity, air-conditioning and heating, water, telephone, and Internet access. Specialist resources and utilities will depend on the type of organization and its activities. Taxes: State and federal taxes are payable according to business revenue. Large Businesses Large organizations employ more than one thousand people, many of whom may work at locations other than the corporate headquarters. Large organizations may also have several levels of executive management, including department and line managers. Corporate education plays a significant role in most large organizations, and it is generally well funded in strong economic times. There is ample evidence that corporate education yields a significant return on investment; organizations that are committed to top-notch training, develop-

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ment, and education benefit from increased market share and profitability. In addition, organizations that support employees through corporate education services are more likely to attract and retain top talent. During lean economic times, companies often cut funding to corporate education budgets but not necessarily more than from other functional areas. In fact, large companies often see training as more important in tough economic times, especially if they must lay off some workers and crosstrain their remaining employees to take on multiple new responsibilities. Companies must also position themselves strategically during a recession so they will be prepared to ramp up production when the economic outlook improves. Potential Annual Earnings Scale. According to the BLS, the average annual salary for T&D specialists in 2006 was $47,830, while the median for T&D managers was $80,250. The average salary for human resources managers, who are sometimes tasked with corporate education and job training, was $88,510. According to Salary.com, the starting salary for a corporate trainer in 2009 ranged from $32,000 to $57,500. Clientele Interaction. Large organizations typically have a significant impact in the marketplace, generally at a global level, and may employ tens of thousands of employees. Providing support and education for such a large and diverse group can be challenging. Within a large organization, the corporate education department is likely to oversee training of the global workforce, and it is very likely to administer training for customers as well. In such an organization, the T&D group may be dispersed geographically and may spend significant time traveling to other locations to provide training. Because the needs of large organizations are so diverse, trainers are likely to be assigned to functional areas in which they have high levels of interaction with specific groups of employees. Amenities, Atmosphere, and Physical Grounds. Larger organizations can provide many amenities for employees that are not available at smaller organizations. They are also generally able to provide in-house corporate education services at a reduced per capita cost. Often, a large company will have its own on-site headquartered training facility, and it may choose to send employees to a central location or to provide in-house classroom

training. Global companies, however, may find it useful to bring trainees to a third-party location, such as a hotel, to conduct training weeks or weekends—particularly if they need to find a central location in a region far removed from the corporate headquarters. In addition, larger companies also handle some corporate training online, although online training is more commonplace for smaller companies. Typical Number of Employees. For large organizations, the number of trainers averages between three and five per one thousand employees, which is slightly less than the ratio at midsize organizations. Traditional Geographic Locations. Large businesses are usually located near large urban or metropolitan areas where there is access to a larger number of skilled workers. Large organizations are likely to have operations run from several locations, with partners or divisions outside domestic borders. As the globalization of business increases, larger organizations will continue to move production operations offshore, where labor costs are lower and corporate training is necessary to train new employees. Pros of Working for a Large Company. Since the beginning of the twenty-first century, large organizations have enjoyed robust training budgets and ample personnel to plan, create, and conduct educational initiatives. Learning departments at large organizations offer substantial opportunities for advancement in the corporate education industry. New graduates entering the field can gain extensive experience while being mentored by more experienced and professional staff. Likewise, trainers can advance to more senior positions as higher-level trainers, curriculum or content specialists, or training managers. Staff at large organizations are also likely to have access to professional development through conferences and professional associations. Many companies have created executive-level positions to oversee corporate learning. For example, positions such as chief learning officer (CLO) or chief knowledge officer (CKO) focus on the strategic value of corporate learning. Positions at this senior level require ten or more years of experience within corporate learning, as well as an advanced degree in human resources, business, or a related field. Cons of Working for a Large Company. Large companies may respond to tight budgets by

Corporate Education Services outsourcing repetitive administrative tasks, eliminating staff positions, and refocusing in-house training staff to concentrate on more key initiatives. Economies of scale make this course of action more attractive to large companies than it would be to a small firm, for which an employee whose multiple duties include training is much more affordable than a third-party solution. Many large companies are comfortable outsourcing generic training to vendors but retain industry-specific training within their organizations. Companies with highly proprietary knowledge or processes benefit less from outsourcing than do companies with more generic processes. Costs Payroll and Benefits: Corporate educators employed by large businesses will generally be paid salaries. Benefits such as vacation and sick days, health insurance, and 401(k) plans are typical. Supplies: Trainers generally need computers and training or presentation software, as well as standard supplies such as office consumables, telephones, and office furniture. External Services: In-house training may be supplemented with third-party corporate education providers. Such providers may provide fulltime or part-time service, or they may be called on to produce content that is then used by inhouse training personnel. Outsourced training may be conducted at a third-party training facility, at a public facility such as a nearby hotel’s conference room, on site at the contracting company’s premises, or via the Internet. Large businesses in particular may elect to hire thirdparty specialist trainers, including technology experts to develop training delivery methods, educational consultants, and skills assessment professionals. Utilities: Typical utilities for a large business include electricity, air-conditioning and heating, water, telephone, and Internet. Specialist resources and utilities will depend on the type of organization and its activities. Taxes: State and federal taxes are payable according to business revenue. Third-Party Training Vendors Third-party T&D firms gained ground in the last decades of the twentieth century. These firms offer

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a broad range of services and largely market themselves as knowledge management firms, offering documentation of organizational processes, policies, and products, as well as training for internal and external clients. Third-party firms may be given fairly extensive responsibilities. For example, if an external T&D firm is contracted to develop a training program for an in-house system (for instance, a new point-of-sale product), the firm may first be asked to work with the product’s developers to ensure that it meets the needs of the organization. If the product is determined to be satisfactory, the firm may then work with its designers and engineers to document its operation, develop a training program to teach employees to use it, and plan a roll-out schedule for transitioning the contracting company to the new system. Some companies outsource software training regularly, to ensure that their software engineers and technology staff are well versed in the latest software on the market. Alternatively, a training company may be contracted by an organization to develop similar programs for a new product line. In that case, it may have some input into functionality and develop documentation and training for the product after its release—which may necessitate multiple forms of training (online, paper-based, classroom, and interactive) depending on the customer base. In this case, the T&D firm has a vested interest in making sure that the product functions as the company intended and that the customers are aware of the full range of its capabilities. T&D vendors that offer corporate education services claim that it is possible for companies to save up to 30 percent by outsourcing their in-house training functions. A company that outsources its training does not necessarily have to maintain floor space for training facilities, computers, or software. Vendors, moreover, can offer savings by charging for training on a pay-per-use basis. Potential Annual Earnings Scale. According to the BLS, the average annual salary for T&D specialists in 2006 was $47,830, while the median for T&D managers was $80,250. According to Salary .com, the starting salary for a corporate trainer in 2009 ranged from $32,000 to $57,500. Clientele Interaction. Unlike the T&D divisions of larger companies, in which almost all employees are likely to interact directly with clients, third-party training vendors are often organized into divisions

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or departments with disparate levels of client interaction. Thus, trainers spend much of their time interacting with trainees, but content developers, executives, human resources managers, and other staff members may seldom or never interact directly with a company’s clients. Additionally, sales and marketing personnel do not often interact with trainees, but they have a high level of interaction with the decision makers at client companies who determine whether to engage third-party vendors. Amenities, Atmosphere, and Physical Grounds. Third-party training vendors come in all sizes. A self-employed consultant may work out of his or her home and conduct all training at clients’ facilities or rent public space when necessary. Large training companies have offices similar to those of other large companies, but they may make a point of featuring state-of-the-art on-site training facilities, including high-tech classrooms and auditoriums. Some vendors that specialize in executive development expend a great deal of money and energy developing their physical grounds, as executives may well plan their training retreats based as much on on amenities and location as on services offered. Some executive-training vendors, for example, locate their training facilities in the south of France or on Lake Como, Italy. Typical Number of Employees. A third-party vendor may be a sole practitioner or may employ hundreds of trainers, curriculum developers, and support staff. Traditional Geographic Locations. A thirdparty vendor may be located anywhere, but the choice of location must take into account the company’s business model. A consulting firm that sends trainers to clients need not be physically accessible to those clients, whereas a company that conducts its training on site must locate itself either near potential clients or in a location that is attractive or is a desirable travel destination, such as a retreat facility or an urban center of national or international business. Pros of Working for a Corporate Education Company. Corporate education companies are virtually guaranteed to understand the value of corporate education—a feature that is not always true of other companies with corporate education departments or positions. Workers in this field may appreciate being employed at a firm wholly dedicated to the mission of their job description. Ven-

dors may also have significantly more resources to devote to developing trainers and curricula than even large companies’ training divisions can muster. They are also able to repurpose materials they have already generated to meet the needs of new clients, thereby decreasing costs and increasing profitability. T&D personnel who work for learning vendors can expect to command salaries similar to those at larger organizations. These salaries pay 10 to 20 percent more than do similar positions at midsize companies. In the past, companies have relied on experienced managers to train employees, but trainers are now increasingly required to have classroom experience. They must also be knowledgeable or experienced in teaching adults. Creating and maintaining a training program takes a lot of time, and relying on employees with a broader set of responsibilities, such as department or human resources managers, can be problematic. Often, managers are too busy managing outcomes to take the time to thoroughly train their staff. A dedicated or fulltime training staff can build momentum and refine training based on past experiences, both successful and not. Trainers also have the time and expertise to evaluate existing training programs to build knowledge. Trainers with a particular interest or expertise in executive development may find opportunities at third-party vendors that do not exist elsewhere. It may not be in the best interests of a company for its executive-level employees to participate in onsite training delivered by the people they manage. Thus, these executives often join other executives at off-site training facilities to further develop their executive management skills. These opportunities allow executives to speak freely about what they are learning, share ideas and strategies with their peers, and network with other executives. Cons of Working for a Corporate Education Company. It is not unusual for a training vendor to recruit personnel from an organization with which they have a training agreement. In such cases, the intellectual capital held by former trainers can be invaluable to the vendor to foster a successful outsourcing relationship. However, the vendor may be seen as a threat to in-house training departments, coloring trainers’ relationships with their clients, who sometimes view them as “hired guns” within the corporate education space.

Corporate Education Services Costs Payroll and Benefits: Corporate educators may be self-employed or may be employed by businesses that pay them hourly wages or salaries, depending on the size and business model of the company. They may receive standard benefits such as vacation and sick days, health insurance, and 401(k) plans. Supplies: Trainers generally need computers and training or presentation software, as well as standard supplies such as office consumables, telephones, and office furniture. High-quality office consumables are necessary to produce professional-quality materials such as booklets and training packets. External Services: Learning vendors may work with independent contractors to assemble and deliver training solutions. Subcontracting allows these companies more flexibility and access to the latest technology for content creation and delivery without requiring them to purchase that technology or maintain all relevant skills among their full-time staff. In addition, third-party training firms may choose to outsource such services as printing, accounting, advertising and marketing, information technology, technical support, or building maintenance and security. Utilities: Corporate education firms require electricity, air-conditioning and heating, water, telephone, and Internet service. Taxes: State and federal taxes are payable according to business revenue.

ORGANIZATIONAL STRUCTURE AND JOB ROLES There are many differences between a corporate education company, a dedicated department within a larger company, and a small group of employees with education responsibilities in addition to their other duties. However, the process of education and the core requirements for effectiveness are largely the same in each case. All trainers must determine or be told the needs of the client, acquire or create content to meet those needs, impart that content to trainees, and assess the effectiveness of their training.

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The following umbrella categories apply to the organizational structure of businesses and departments within the corporate education services industry: ■ ■ ■ ■

Training Personnel Content Creation Training Administration Training Strategy and Development

Training Personnel The front lines of corporate education services are staffed by an organization’s trainers. Of all positions within corporate education, trainers have the highest level of contact with trainees. There can be several levels of trainers within an organization, each with an increasing amount of requisite experience. Trainers at small companies may have on-thejob experience, as opposed to previous experience with training or teaching in a classroom. Larger organizations recruit trainers with backgrounds in education or human resources. Companies, both large and small, need to hire outside subject-matter experts from time to time. It is nearly impossible for a company to have in-house staff with knowledge in every area for which it requires training. In addition to other types of training, businesses need educators who can teach their employees about working with diverse populations and different cultures. In one example, a North American software firm planning to provide professional services to customers in Japan hired a “culturalist” to provide insights on doing business with Japanese customers. Heightening cultural awareness is one of the best ways to ensure that customer expectations are met and that staff are sensitive to the many cultural differences that exist in the global business world. Another common role in many businesses is that of a deployment trainer, who is responsible for training a company’s customers or partners, typically in the use of software or services. For example, a company that manufactures high-end graphics workstations for use in the motion picture industry may have a deployment training department whose job is to teach special effects crews to use the company’s hardware and software. While this type of training position is not found at every organization, it is becoming more common as companies sell knowledge to their customers.

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Training personnel occupations may include the following: ■ ■ ■ ■ ■

Trainer Senior Trainer Training Consultant Deployment Training Specialist Subject Matter Expert

Content Creation Depending on the size and scope of a company’s corporate education program, one or more individuals may be made responsible for developing training materials. Many small organizations may choose to purchase ready-made materials if they lack the staff or budget to create their own content, while a larger organization is likely to employ experienced content developers or instructional designers on staff. Instructional designers have expertise in creat-

OCCUPATION

ing training materials for adult learners and other specialized populations. They propose new and innovative training methods by studying and analyzing existing educational models and relating them to particular audiences and instructional content. In any size organization, it may be more cost-effective to purchase ready-made content than to create it from scratch. For example, if a company needs to train employees to use a common software package, purchasing standard training from a vendor could save considerable time and money. Similarly, some content will require input if a company does not have the requisite skills within its organization. Content-creation occupations may include the following: ■ ■ ■

Content Developer Instructional Designer Instructional Content Consultant

PROFILE

Career/Technology Education Teacher Considerations

Qualifications

Description

Instructs students in vocational or occupational subjects such as how to operate industrial machinery and communications, transportation, or medical equipment.

Career cluster

Education and Training

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; military service; part-time work

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

SEC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Corporate Education Services Training Administration The administration, scheduling, and tracking of training initiatives can require significant work, depending on the number of employees at an organization and the number of educational offerings available. In many cases, employees need to complete a number of required training sessions, either as a condition of employment, to meet job-specific requirements, or to gain professional certification. At a small company, the same individual who delivers training may also be responsible for tracking training offerings and completion targets. Alternatively, the task of tracking employee training may be handled by an administrative assistant. At a large company with thousands of employees, scheduling and tracking training is a substantial job. Beyond logistics, it is also necessary for a company to manage its training staff. This role may fall to a more experienced manager who will ensure that trainers are meeting their own professional requirements for continuing education and performance standards. Training administration occupations may include the following: ■ ■ ■

Training Coordinator Training Manager Training Administrator

Training Strategy and Development Every organization, regardless of size, that offers training to employees does so with a goal in mind. Training is a benefit to employees because it teaches them new skills, thus helping them advance their careers. To the company, training helps with employee retention, increases productivity, and—if executed correctly—helps increase a company’s market share and profitability. Within every company that offers corporate education services, at least one individual is responsible for approving the budget for training. That same individual or others are also responsible for the overall vision for training. At a small organization, the owner or founder is likely to decide what training is needed to support the organization. While the owner of a small company is accountable only to himself for the success of the education program, at larger companies, the chief learning officer or a similar executive must report to the executive team or board of directors.

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Training strategy and development occupations may include the following: ■ ■ ■ ■

Chief Learning Officer Vice President of Human Resources Training Director Management Consultant

INDUSTRY

OUTLOOK

Overview According to the BLS, training and development positions are expected to grow by 17 percent between 2006 and 2016. This figure represents a higher than average rate of growth. The projections for growth include mixed projections in the near term, as T&D adapts to cyclical and technological developments. Computerized information applications for tracking administrative functions in human resources are expanding to encompass T&D and will eliminate some of the more administrative T&D positions. Mergers and acquisitions will also cause a number of redundant positions to disappear. However, an increased need for specialized training and trainers will increase jobs within the industry. As the general complexity of jobs increases across the national and global workforce, so does the need for job-specific training. The rapid pace at which technology and computer applications have developed has also increased the need to keep employees abreast of emerging technologies. Without continuous training, employees are often easily and quickly left behind, especially in terms of technology. The increased demand for specialized training is not the only factor increasing the proportion of such training offered by the industry. In addition to this increase, more general training tends to be outsourced or eliminated when company budgets are cut, decreasing not only the percentage but also the absolute amount of generalized corporate education. Companies learned a hard lesson during the recession of 2001, when many training budgets were slashed. During the 2000 downturn, companies abandoned training as a nonessential function. However, when the recession ended, the cuts left a tremendous amount of training ground to recover. Based on this experience, most contemporary

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companies believe that the preferred course of action in tough economic periods is to reevaluate their training needs and to retrench. This strategy is likely to be superior in the long run to cutting training completely. Nevertheless, training budgets were again slashed in the recession of 20072009. On average, two to three positions per one thousand employees were eliminated. In the wake of the recession, however, many companies are identifying training best practices to maximize the value of their continued investments in corporate education. These best practices include retaining skilled high performers and taking advantage of mentoring and informal coaching from one employee to another. In the future, core competencies for T&D personnel will include an understanding of how adults from different generations learn, as well as an indepth knowledge of technology and learning applications across generations and cultures. Teaching to a group with diverse social, cultural, and technological experiences will continue to be an exciting challenge for corporate educators. Employment Advantages Corporate training offers better pay than traditional teaching positions, but it is also more competitive. Corporate trainers, like any good teachers, must be engaging, entertaining, and knowledgeable of their subject matter. Individuals who are interested in a teaching career, but prefer to teach adults, may enjoy careers as corporate trainers. The BLS projects that college graduates with certification in human resources will be the most in demand to meet corporate education challenges. Course work in technology and business will also provide students with skills that are sought after by companies hiring training staff. Trainers must be comfortable with technology and constant interaction, specifically through video and chat. The learning experience exists on a continuum and is no longer necessarily an event that takes place in a classroom on a given day. A discussion may start prior to training and continue long after the formal training ends. Despite this rise in technology and the fact that many companies are taking advantage of outsourced and online training, surveys indicate that 67 percent of training was instructor-led in 2008. Reliance on e-learning, in fact, decreased from 30 percent to 24 percent

in 2008. This change indicates that many companies may have leveraged all they can from available e-learning content. The future of corporate education will possibly leverage traditional classroom instruction, where it is most effective, and supplement employee knowledge with online training when that is the best option. Annual Earnings According to the Corporate Learning Factbook, the amount spent by U.S. companies for training fell by the largest margin in a decade between 2007 and 2008—from $58.5 billion to $56.2 billion. During lean times and tight budgets, companies seek opportunities to cut costs in all functional areas, and T&D is no exception. Efficiency in the delivery of training is nearly unanimously accepted as a cost-saving measure. Many organizations report that off-site training and conferences and any travel related to training have been curtailed as a result of budget constraints. Decreases in training budgets have taken the form of cuts not only in the money allotted for training itself but also in the payroll costs associated with training staff. Trends in growth and earnings figures across the globe are similar to those seen in the American market. In mature markets, such as Europe and Japan, trends in corporate learning are following those in the United States. Companies are cutting back on in-house training as a way to weather the declining global economy, and nearly all developed countries are taking advantage of inexpensive labor in emerging markets. India, for example, has a large, inexpensive workforce with many English speakers. Companies that can take advantage of outsourcing some training functions are generally doing so. However, while many manufacturing jobs have moved to places where labor costs are low, this is not expected to happen in the corporate learning industry to the same extent. Nonetheless, outsourcing has become a reality for the corporate education services industry. In recent years, government funds have been made available for training state, federal, and private-sector workers. State and federal training has gotten a boost of nearly $5 billion as part of the American Recovery and Reinvestment Act (2009). This money is earmarked for training and retraining to aid in the economic recovery. The enormous loss of jobs in specific sectors such as financial ser-

Corporate Education Services vices and the automobile industry is likely to require millions of Americans to be trained or retrained in new jobs or even new occupations. It is now acknowledged that many of the jobs lost in 2007-2009 are unlikely to return, so many who lost jobs will find themselves working in vastly different industries and jobs in the future. Many predict that the domestic and global workforce will look very different at the end of the next decade, as manufacturing jobs continue to move overseas and some once-stable jobs diminish in number or cease to exist entirely. If this is indeed the case, then the need for trainers within private industry and the government may grow even faster than predicted.

RELATED RESOURCES FOR FURTHER RESEARCH American Society of Training and Development 1640 King St., Box 1443 Alexandria, VA 22313-1443 Tel: (703) 683-8100 http://www.astd.org

World at Work 1100 13th St. NW, Suite 800 Washington, DC 20005 Tel: (202) 315-5500 http://www.worldatwork.org

ABOUT

THE

Human Capital Institute 1250 Connecticut Ave. NW, Suite 200 Washington, DC 20036 Tel: (866) 538-1909 http://www.humancapitalinstitute.org International Society for Performance Improvement 1400 Spring St., Suite 400 Silver Spring, MD 20910-2753 Tel: (301) 587-8570 http://www.ispi.org Society for Human Resource Management 1800 Duke St. Alexandria, VA 22314 Tel: (800) 283-7476 http://www.shrm.org

AUTHOR

Carolyn Sprague holds a bachelor of arts degree from the University of New Hampshire and a master’s degree in library science from Simmons College. She has worked in numerous library and information settings within the academic, corporate, and consulting worlds. Her operational experience as a manager at a global high-tech firm and work as a Web content researcher have afforded her insights into today’s quickly changing business climate and the ways that companies and individuals access and utilize information. Sprague has written on numerous topics in the areas of business, human capital, and social networking and related technologies.

FURTHER Conference Board 845 3d Ave. New York, NY 10022-6679 Tel: (212) 759-0900 http://www.conference-board.org

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READING

Analoui, Farhad. The Changing Patterns of Human Resource Management. Burlington, Vt.: Ashgate, 2002. Brakeley, Harry H., and Jeanne C. Meister. “Greater Expectations: How Corporate Education Can Boost Company Performance.” Outlook, February, 2005. http://www .accenture.com/Global/Research_and _Insights/Outlook/By_Issue/Y2005/ ToAdvantage.htm. Craig, Robert L., ed. The ASTD Training and Development Handbook: A Guide to Human Resource Development. 4th ed. New York: McGraw-Hill, 1996. Greeno, Nathan J. Corporate Learning Strategies. Alexandria, Va.: American Society for Training and Development, 2006. Haskell, Robert E. Reengineering Corporate Training: Intellectual Capital and Transfer of Learning. Westport, Conn.: Quorum Books, 1998. Noe, Raymond A. Employee Training and Development. 4th ed. New York: McGraw-Hill/ Irwin, 2008.

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Paradise, Andrew. “Learning Remains Steady During the Downturn.” American Society for Training and Development, State of the Industry Report, November, 2009. http:// www.astd.org/TD/Archives/2009/Nov/Free/ 0911_SOIR.htm. Rothwell, William J., John E. Lindholm, and William G. Wallick. What CEOs Expect from Corporate Training: Building Workplace Learning and Performance Initiatives That Advance Organizational Goals. New York: AMACOM, 2003. Tyler, Kathryn. “Carve Out Training? Outsourcing the Entire Training Function Is a Huge Change That—When Handled Properly—Can Yield Improved Services and Decreased Costs.” HR Magazine, February, 2004.

U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Human Resources, Training, and Labor Relations Managers and Specialists.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos021.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Counseling Services ©Alexander Raths/Dreamstime.com

lenges and find opportunities to help themselves to wellness. The fundamental goal of the industry General Industry: Personal Services is to enable people to function at Career Clusters: Health Science; Human Services their highest level of capability Subcategory Industries: Individual and Family Services; and desire. There are many areas Offices of Mental Health Physicians; Offices of of specialization in counseling. Nonphysician Mental Health Practitioners; Outpatient Some professions that fall under Mental Health and Substance Abuse Centers; Psychiatric the umbrella of counseling inand Substance Abuse Hospitals clude mental health and subRelated Industries: Medicine and Health Care Industry; stance abuse counselors, behavPersonal Services; Pharmaceuticals and Medications ioral disorder counselors, family Industry; Residential Medical Care Industry counselors, marriage counselors, Annual Domestic Revenues: $33 billion (IBISWorld, 2009) rehabilitation counselors, social Annual Global Revenues: $4.5 trillion (total health care workers, clinical psychologists, expenditures; The Medica) and grief counselors. All counNAICS Numbers: 6222, 6241, 62133, 621112, 621420 seling professions exist in both the private and the public sectors, and some counselors are employed by corporations and universities to serve their populations’ counseling INDUSTRY DEFINITION needs. Summary History of the Industry Counseling services are health care services that Early in the twentieth century, Austrian neurolare essentially nonmedical, compared to physicianogist Sigmund Freud helped found psychoanalytic driven medical treatment. In contrast to historical psychology, believing that behavior therapy was a Western medical practice, which treats patients means to interpersonal connectedness between through medical, procedural, and pharmaceutical counselor and patient. Talking and listening were means, counseling services typically assess and primary modalities of psychoanalysis, and Freud treat by helping clients understand their own chalINDUSTRY

SNAPSHOT

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Counseling services typically assess and treat by helping clients understand their own challenges and find opportunities to help themselves to wellness. (©Alexander Raths/Dreamstime.com)

documented much success in this noninvasive communication-based form of therapy. In the early 1940’s, psychiatrist Carl Jung founded analytical psychology, which focuses on the exploration of the human unconscious as a means of understanding behavior. Closer in design to the modern-day dominant treatment models, Jung’s inclusive, patient-centered approach was successful because it pulled deep emotion from patients and appeared to lead to recovery more rapidly than had earlier practices based on long, drawnout counseling sessions. Following World War II, veterans faced an unprecedented need for personal mental health services to deal with the psychological stress of combat. The need to bring the U.S. workforce back to optimal productivity presented a challenge to the business sector, while society’s understanding of veterans’ postwar mental health needs was lacking. President Harry Truman signed the Mental Health Act in 1946, which provided funding for psychiat-

ric research and education in the United States. The National Institute of Mental Health (NIMH) was founded in 1949. By the 1950’s, in recognition of the growing counseling industry, many organizations dedicated to research, education, and standards in applied psychology had been created. These included the American Psychological Association (APA), the American Association of Applied Psychology, and the American Association of Clinical Psychologists (AACP). Because the postwar need for psychology and mental health support was so great, the federal government, through its Veterans Administration hospitals and clinics, began to fund training for clinical counselors to better serve the needs of veterans, as well as to reduce costs. It was clear that quality behavioral rehabilitation needed to be available for veterans so that they could return to being productive contributors to society and the economy. In the 1950’s, the terms “counselor” and “psychologist” became more closely linked. The roles and pa-

Counseling Services rameters of each were increasingly formalized, and people seeking those positions required and received greater professional training than they had earlier. Moreover, the formalization and professionalization of counseling occupations enhanced counselors’ abilities to leverage resources and operate cost-effectively, while simultaneously increas-

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ing access to counseling for the people who needed it. In 1963, the Community Mental Health Act was passed. This law provided funding for community mental health centers. It also provided training programs to encourage and support the counseling profession, as well as financial support for those

SPECIALTIES

Psychologists Specialty

Responsibilities

Clinical psychologists

Help mentally and emotionally disturbed people adjust to life.

Counseling psychologists

Use such techniques as interviewing and testing to advise people on how to deal with problems of everyday living—personal, educational, vocational, and social.

Educational psychologists

Design, develop, and evaluate psychological programs that are applicable to educational problems.

Engineering psychologists

Research, develop, apply, and evaluate psychological principles relating human behavior to characteristics, design, and the use of environments and systems within which human beings work and live.

Experimental psychologists

Conduct experiments with human beings and animals, such as rats, monkeys, and pigeons, in the prominent areas of experimental research that include motivation, thinking, learning and retention, sensory and perceptual processes, and genetic and neurological factors in behavior.

Industrial organizational psychologists

Develop and apply psychological techniques to solve administration, management, and marketing problems. They are involved in policy planning, applicant screening, training and development, psychological test research, counseling, and organizational development.

Psychometrists

Administer, score, and interpret tests to measure intelligence, aptitude, achievement, and other psychological characteristics.

School psychologists

Evaluate children within an educational system and plan and implement corrective programs. They work with teachers, parents, and administrators to resolve students’ learning and behavioral problems.

Social psychologists

Investigate the psychological aspects of human interrelationships to gain understanding of individual and group thought, feeling, and behavior, using observation, experimentation, and survey techniques.

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interested in pursuing postgraduate counseling degrees. The Industry Today When managed care insurance companies joined traditional payers such as Medicare and Medicaid, focus was placed on cost-conscious, expeditious care. As this managed model of care grew in popularity, so did its focus on cost and time. This model continues to be favored. Counselors commonly provide several sessions, limited to an hour or less, that constitute a baseline therapy that generally incorporates plans for closure and discharge from the practice. Counseling has become socially accepted; most employed workers with health insurance have mental health coverage, which they value alongside medical coverage. As social acceptance of counseling has increased, so has the amount of money spent on it. The road to recovery is not necessarily mechanical or pharmaceutical but behavioral, cost-effective, and delivered by caring professionals.

INDUSTRY MARKET SEGMENTS In the counseling services industry, service can be delivered by individual practitioners in small private practices or by one or more clinicians in midsize ambulatory (outpatient) centers. Counseling practitioners are also employed by schools; long-term care facilities (nursing homes); large academic, nonprofit hospitals and clinics; large forprofit hospitals and clinics; school guidance offices; college career planning offices; prisons; and corporate businesses. Small Businesses A growing number of counselors are working in their own private practices, providing services from their homes or offices. Some contract with schools or employers as consultants to supplement their private-practice income, especially in more rural areas where individuals’ demand may be insufficient to sustain private practices. Because licensed professional counselors can enroll with mental health insurance plans and be paid for their services, the private-practice model is attractive to

many. In contrast to working in a salaried position for someone else, private practice offers more autonomy, the ability to work for oneself, and the potential to enhance earnings by simply providing more services to more customers. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the mean annual salary of all nonphysician mental health care providers in 2009 was $77,300. Counselors who work in their own private practices generally receive the highest salaries in the industry. Clientele Interaction. Client interaction constitutes the central activity of a counselor. Privatepractice clinicians see clients for sessions lasting between fifty and sixty minutes. Documentation and followup work for each client can take as long as the session itself. Private clinicians must also deal directly with insurance companies for billing and must discuss billing and insurance information with their clients, unless they employ administrative assistants. Counselors must be trained and alert not only to creating a comfortable environment for their clients but also to modulating their own body language: Intonation and verbal cues that minimize patients’ anxiety and maximize their ability to engage in their own assessment and treatment will lead to better outcomes. Maintaining a client base is critical to keeping a counseling business solvent. Amenities, Atmosphere, and Physical Grounds. Private clinicians may practice within offices within their own residences, or they may rent or purchase separate office space. Privacy during counseling sessions, as well as assurance of anonymity in patient receiving areas, must be guaranteed. A quiet and relaxed atmosphere without telephones, pagers, or other potential interruptions is essential for clients’ comfort and for the reputation of providers’ practices. Typical Number of Employees. Many private clinicians have no employees, attending themselves to all business operations, including billing, collections, scheduling, and client communication. Some are able to employ one or more support staff, and joint practices of a few clinicians are more likely to be able to afford such staff, since the clinicians can pool their resources and share expenses. Traditional Geographic Locations. Behavioral health counseling is equally in demand across socioeconomic and ethnic groups, and practices ex-

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PROFILE

Marriage Counselor Considerations

Qualifications

Description

Diagnoses and treats mental and emotional problems within the context of a marriage.

Career cluster

Human Services

Interests

Data; people

Working conditions

Work inside

Minimum education level

Master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; military service

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

SEC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

ist in all areas. Rural areas, however, may not have sufficient population density to sustain practices, so they are rarer in such areas than in suburban and urban centers. Pros of Working for a Private Practice. A small operation such as a counseling practice may not require a large start-up investment. Small business grants and financial aid are available from federal government sources, and even loans may be attained through government support. While a business remains small, the accounting and management functions tend to be fairly manageable; a home computer and basic accounting software can usually offer what is needed to maintain sufficient record keeping. Private clinicians usually have full control over their schedules and workloads, and they have the freedom to limit their practice to paying customers. They may pick and choose which insurers they wish to deal with, and they may seek to negotiate better reimbursement rates without having to ask someone else’s permission. (There are no guarantees, though, that private practitioners

will be in a position strong enough to negotiate better rates.) Cons of Working for a Private Practice. Health care reimbursement structures and mechanisms are vast and complex bureaucratic systems. It is not by coincidence that major medical practices have full-time staff devoted to wrangling with insurance companies. Private clinicians operating without support staffs must expend a serious proportion of their time and energy negotiating payments with insurance companies seeking to deny or minimize every claim they receive. Each hour spent dealing with insurance companies over payments is an hour not spent treating patients and earning income. Private clinicians, moreover, may find it challenging to maintain relations with their colleagues, to meet continuing professional development requirements, and to take advantage of peer- and case-review opportunities in order to maintain their clinical proficiency and currency. It is therefore important for them to belong to relevant profes-

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sional organizations and to make a point of devoting time and resources to continuing education. Professional and personal growth for counselors can come from expanding practices with individual clients to include group or family therapy or contracting privately with high schools. Solid relationships with referring physicians form an important cornerstone of a stable counseling business. Counselors may need to advertise and visit referring providers to keep their services visible, but doing so costs time and money. Private clinicians must develop business plans, as well as finance (or arrange financing for) their start-up costs. Those who have employees have no human resources department, so clinicians must hire, fire, and manage their own staffs. As business owners, they are responsible for paying any employees first before they pay themselves. They must also take responsibility for conducting, contracting, or purchasing all marketing; payroll administration; accounting, tax withholding, and payments; legal services; and health, property, liability, and malpractice insurance required by their practices. Private clinicians are self-employed, so they have no guaranteed salary, and their costs stand to be greater than those of large firms because they have little bargaining power. Clinicians must be available on call for their patients, depending on the contracts in place with mental health insurance companies. Medical record documentation is a core function of counseling work; its safe storage and retention are significant obligations for private clinicians. Liability and even lawsuits can ensue from negligence in these areas. Patients are often very concerned about the safety of their medical information, and private clinicians are responsible for any breach of confidentiality regarding their clients’ behavioral and mental health records. Costs Payroll and Benefits: Private practitioners do not earn specific salaries. Rather, they draw their incomes from the revenues generated by their businesses. Taking such paychecks requires that there be monies left in a practice’s account after all other obligations have been paid. Once these obligations are paid, however, all profits of the practice are available as income for its owner. Supplies: Private clinicians require pagers, com-

puters, medical record-keeping software, and business and financial software, as well as all other standard office supplies, such as paper, pens, a copier and fax machines, and so forth. It is still relatively common for small practices to keep paper medical records. Such practices must have secure, locking cabinets or other storage facilities to maintain these files. External Services: Clinicians may contract cleaning, maintenance, and landscaping services as necessary to maintain a professional atmosphere. They may also hire accountants, lawyers, answering services, or marketing consultants. Utilities: Clinicians must pay for electricity, water, heat, air-conditioning, telephone service, and Internet access. Taxes: Clinicians must pay income taxes, including self-employment taxes where appropriate, as well as property taxes. Those who maintain office space at home are able to deduct a percentage of their home expenses from their taxes, subject to applicable laws and regulations. Midsize Businesses Midsize counseling businesses include large private practices and small specialized mental health clinics and hospitals. These may be public facilities, or they may operate within the confines of a larger institution and serve only that institution’s population. An example of the latter arrangement would be a college’s mental health center. Midsize counseling businesses may employ anywhere from ten to over one hundred persons. Potential Annual Earnings Scale. Average earnings for counselors (including behavioral psychologists) working in midsize facilities fall between $45,000 and $65,000 per year, depending on education level and geography. The revenues generated by such facilities vary, depending on the number of clients and employees. When considering counseling work in a midsize facility, it is important to look closely at the terms of employment and to be well informed about any financial risk sharing, productivity expectations, and malpractice coverage. Clientele Interaction. Counselors are both employees and ambassadors of their home organizations. They must display professional attire, attitudes, and attention to detail. Patient satisfaction information may be collected regularly, and clini-

Counseling Services cians are evaluated by their employers based on such information. Being accessible to both new and current patients will encourage referrals from other providers. A solid referral base is key to a counselor’s success at a midsize facility. Productivity data for a clinician’s practice are likely to be monitored, and sometimes salary may be affected either positively or negatively by these data, depending on the terms of a clinician’s contract. Amenities, Atmosphere and Physical Grounds. Mental health centers and clinics cultivate both professional and calm atmospheres in order to attract and reassure patients. Reception areas and counselors’ offices may resemble those of medical doctors, although counselors often eschew overly clinical settings for more reassuring surroundings. Facilities must include secure storage for medical records, privacy in waiting areas, and white noise or other sound protection in order to maintain the privacy of counseling conversations. Typical Number of Employees. The number of employees in a midsize health care facility varies by facility size and the service lines offered. In a community-based mental health facility, there might be a nurse for client care management, a receptionist, and other support staff. In small hospitals, the number of employees could be in the hundreds. Billing staff are critical to a facility’s success, as they handle claims submission and reimbursement. They should be approachable and ready to instruct counselors on policies for documentation, billing, and claims-filing requirements. Traditional Geographic Locations. Midsize counseling facilities include small ambulatory centers, residential facilities, and counseling center offices that are typically located near populated areas, often in professional districts near hospitals, labs, or outpatient clinics. Referrals from other providers are the lifeblood of these organizations. Counselors must engage professionally with hospitals’ physician staff and private-practice physicians. Socioeconomic aspects of a facility’s location should be considered, as areas with low unemployment will attract more insured clients and therefore entail less hassle collecting direct payments from patients. Pros of Working for a Midsize Counseling Facility. Well-established organizations provide employment security and more freedom from finan-

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cial constraints than private practice ownership can. They provide the infrastructure for efficient scheduling, human resources oversight, contracting, billing, and day-to-day facility operations, as well as management of financial performance. Employees in this setting generally have access to group health insurance for themselves and their families. Investments in capital and facilities are made by the facility rather than the individual provider. Pay incentives may be available, usually based on productivity and expense controls. Billing and collections are the concerns primarily of the employer and less of the individual provider. Clinicians can focus their energy on client care and not on pursuing clients or insurance companies for payment. Additionally, responsibility for being on call at night and on weekends is more likely to be shared among professionals than to be borne entirely by one individual. Cons of Working for a Midsize Counseling Facility. Employees of counseling facilities, including clinicians, may have their hours and workload determined by their employers. Autonomy is compromised to a degree. Counselors must also compete with colleagues and other units for limited resources, such as medical record systems, staffing, and capital. Employed professionals need to be strong advocates for themselves and for their patients, particularly in times of economic challenge. Pressures to see more clients and to increase productivity will likely wax and wane, also depending on the economy and the financial state of a given organization. At the same time, midsize facilities may share some of the potential risks of private practices, including lack of feedback on performance, few colleagues with whom to collaborate, long hours, and even emotional fatigue. Costs Payroll and Benefits: Counselors working in community hospitals or ambulatory midsize facilities are usually salaried, meaning their paychecks and benefits (if any) are guaranteed. There may also be incentive salary available for meeting certain workload benchmarks. Benefits may include employer-sponsored malpractice insurance coverage and reimbursement for professional membership dues and travel. Supplies: Midsize counseling facilities require paper or electronic medical records, office sup-

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plies, computers, telephones, décor conducive to a health care setting, billing software, fax machines, and current billing and coding manuals for compliance and maximum reimbursement. External Services: Midsize counseling facilities may contract such services as answering services, office cleaning and maintenance, and security. Utilities: Mental health facilities must pay for electricity, gas or oil, water, sewage, telephone, and Internet access. Taxes: Nonprofit facilities are often exempt from many taxes. For-profit facilities must pay corporate and property taxes. All facilities must pay payroll taxes and withhold applicable taxes from employee paychecks. Large Businesses Large counseling businesses include mental hospitals and clinics located in densely populated areas that have sufficient referral bases to support varied services. Such facilities can be for-profit or not-for-profit and can see annual revenue in the millions of dollars, depending on size. Typically, such businesses employ hundreds or even thousand of people, including physicians and nurses, administrators, support staff, security personnel, and housekeeping personnel. Because of their size and centralized locations, large mental health facilities draw business from a large area, depending on competition and patient willingness to travel for services. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the mean annual salary of all nonphysician mental health care providers in 2009 was $77,300. Clientele Interaction. Large facilities offer more diversity and opportunity for professionals than do their smaller counterparts. Inpatient (hospital) care, long-term care, ambulatory care, or contract work for schools and others may be options for professionals operating in large facilities. An example of a large counseling or mental health facility is an academic medical center with an imbedded psychiatry department that offers both inpatient and outpatient services to adults, children, and employees. Counselors at large facilities work as members of teams or groups of similar professionals. It can be challenging to coordinate schedules among the members of such groups, especially at times of holidays or school vacations. Professionals represent

their organizations and their colleagues, and they are expected to be available and responsive when they are on call. Amenities, Atmosphere, and Physical Grounds. Large organizations are typically freestanding and feature sizeable grounds. As large facilities employ many people, parking can be an issue, particularly for facilities located in cities. Some may even charge employees for parking on site, thereby encouraging them to use public transit or form car pools. An aesthetically pleasing, well laid out, and safe environment will help ensure a facility’s success. Counselors should be alert to these amenities when considering joining large organizations. Typical Number of Employees. Large health care facilities can employ thousands of staff, although behavioral counseling staff have historically been only a small percentage of the total employed. Mental health services, though immeasurably valuable, are often not reimbursed well by insurance companies, making them less profitable for organizations with high overhead. That said, behavioral health services are being integrated with primary care medical services as a means to demonstrate improved outcomes in physical and cognitive function. Traditional Geographic Locations. Large health care facilities with integrated behavioral services divisions are generally located in densely populated areas. A sufficient population base with potential for growth is critical to the livelihood of a large medical facility. Unlike a business that relies on product sales through the Internet, for example, a health care facility provides a face-to-face service to its clientele. Counselors are one of the best representations of this service model. Pros of Working for a Large Counseling Facility. Generally, large health care facilities offer more opportunities for advancement than do smaller facilities. Throughout their careers, counselors can develop leadership skills and move into partial or total administrative roles, such as teaching, mentoring, overseeing quality improvement, or conducting research. Large organizations tend to have the financial capacity to promote these activities, particularly if their mission includes academics alongside clinical care. The counseling industry, embedded in the huge health care industry, offers job security and a steady state of work.

Counseling Services Cons of Working for a Large Counseling Facility. Internal politics can be an issue in large facilities. Clinicians at such facilities may encounter increased bureaucracy, and they may sometimes feel they have to fight for resources. Money does play a role, and because behavioral health services produce less revenue than other services, they are often understaffed and allocated fewer resources than are more lucrative units. Counselors at these facilities are therefore under pressure to see more clients in order to bring in more money. Costs Payroll and Benefits: Large organizations hire counselors under salary structures, ideally one designed to accommodate the peaks and valleys of a variable workload and to pay a fair, consistent rate. Benefits may include health and dental insurance, disability coverage, Family Medi-

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cal Leave Act (FMLA) protection, retirement plans, malpractice coverage, continuing medical education (covering expenses related to travel, time, and registration for courses), and even tuition reimbursement for additional degree work. Supplies: Mental health facilities require paper or electronic medical records, office supplies, computers, telephones, décor conducive to a health care setting, billing software, fax machines, and current billing and coding manuals for compliance and maximizing reimbursement. External Services: Large facilities may hire internal staff to handle support functions, but many contract external vendors to provide janitorial, maintenance, or security services. They may also contract cafeteria service and independent auditors. While larger organizations may have public relations staff, they often contract dedicated firms when launching major advertising campaigns. Utilities: Mental health facilities must pay for electricity, gas or oil, water, sewage, telephone, and Internet access. Taxes: Nonprofit facilities are often exempt from many taxes. For-profit facilities must pay corporate and property taxes. All facilities must pay payroll taxes and withhold applicable taxes from employee paychecks.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Mental health practitioners must fill a variety of job roles. Sole practitioners must perform most of these tasks themselves or must contract external support for any they cannot handle. Large organizations, by contrast, are segmented and organized hierarchically to ensure that each task is handled by a specialist in the relevant field. The following umbrella categories apply to the organizational structure of businesses in the counseling industry: The National Health and Nutrition Examination Survey, 2005-2006, found that in any two-week period, 5.4 percent of Americans twelve years of age and older experienced depression. (©Stephanie Swartz/Dreamstime.com)

■ ■ ■

Counseling Staff Business and Operations Management Contracting and Reimbursement

478 ■ ■ ■ ■

Counseling Services Human Resources Customer Service Marketing and Public Affairs Facilities and Security

Counseling Staff Counselors work in a variety of diverse settings, in both the public and private sectors, depending on their specialization, preference, education level, and licensure. The type and number of positions within a counseling staff varies depending on the size, focus, and structure of the parent organization. A psychiatric hospital, a drug rehabilitation center, a university, and an elementary school will each have different counseling staff needs. There are several predominant counseling specializations. Social workers, for example, serve counseling needs within communities such as nursing homes, schools, and hospitals. They earned an average of between $35,000 and $55,000 per year in 2009, according to the BLS. Mental health coun-

OCCUPATION

selors help clients deal with mental and emotional issues such as depression, and they also work with couples and families who need counseling. In 2008, the median annual salary for mental health counselors was $36,810. School counselors work in elementary and high schools and colleges, counseling students about issues such as vocation, continuing education, and mental health issues such as depression. In 2008, the median wage of school counselors was around $51,000. Counselors specializing in substance abuse and behavioral disorders help clients with issues such as eating disorders and addiction. In 2008, they earned a median annual salary of around $37,000. Counseling occupations may include the following: ■ ■ ■ ■

Social Worker Mental Health Counselor School Counselor Vocational Counselor

PROFILE

Medical Social Worker Considerations

Qualifications

Description

Provides people with psychosocial support needed to cope with sudden, terminal, or chronic illness; educates patients and caregivers; and refers patients to other social services as needed.

Career clusters

Health Science; Human Services

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Volunteer work; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

ESA

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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zations that disseminate information about changes in regulations and the tax codes. In larger organizations, operations management is usually centralized and accomplished by accountants, front-line operations managers, and other white-collar professionals whose work is intellectual in nature. Such professionals are experts in finance, operations, and strategy and develop relationships with key stakeholders. Particularly large organizations are directed by chief operating officers (COOs), who set their organizational vision, strategy, and goals. The salary of top executives and management varies depending on the size, focus, and structure of the organization; however, according to the BLS, the median annual salary for operations managers was $91,000 in 2008. Business and operations management occupations may include the following: ■

The American School Counselor Association says a studentcounselor ratio of 250:1 is optimal, but the national average is closer to 460:1. (©Chris Schmidt/iStockphoto.com)

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Chief Operating Officer (COO) Operations Manager Office Manager Logistics Manager Purchasing Manager Facility Coordinator

Grief Counselor Substance Abuse Counselor Rehabilitation Counselor Art Therapist Music Therapist

Business and Operations Management Day-to-day operational managers support clinicians, so they may focus on treating clients. They provide financial management and budgeting for revenues, expenses, and capital investments. Private-practice clinicians must become adept in areas of operational management until they are able to hire support staff to assume some of these duties. Operations managers of smaller practices, often called office managers, generally have business degrees and belong to professional organi-

A six year old whose father died in the World Trade Center attacks on September 11, 2001, works with an art therapist in 2004. (AP/Wide World Photos)

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PROFILE

Music Therapist Considerations

Qualifications

Description

Plans, organizes, and directs instrumental and vocal music activities and experiences to help patients with their communication, social, daily living, or problem-solving skills.

Career cluster

Health Science

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Volunteer work; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

ESI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Contracting and Reimbursement Reimbursement in the counseling industry varies by insurance carrier and by geography. Generally, reimbursement for these services is executed through a contracted fee schedule. Often, if not always, prior authorization through insurance carriers is required. Often, documentation must be presented, and limits on the number of covered sessions are set by carriers. Counseling businesses must devote significant time and resources to negotiating, claiming, and coordinating payments from these carriers. This role may be filled by individual providers or by support staff, and in either case it is a crucial function in keeping a business financially solvent. Actions such as running afoul of contractual obligations or providing services when coverage is not approved or has run out can devastate a business’s bottom line. Contracting and reimbursement staff should be

strong negotiators with the ability to understand billing processes and documentation requirements. Larger organizations centralize this function because of its need for highly specialized expertise. Medical and health care contracts and reimbursement mechanisms are highly complex and changeable. They must be monitored and kept current at all times to protect businesses’ livelihood. Moreover, not all services rendered are covered by insurance. Some clients pay for services out of pocket, while others receive work-related service. The former can be particularly challenging, as clinicians and billing staffs become the collectors of debt from their clients. Contracting and reimbursement occupations may include the following: ■ ■

Billing Manager Contract Reimbursement Specialist

Counseling Services ■ ■ ■

Medical Coding Specialist Medical Billing Assistant Administrative Assistant

Customer service occupations may include the following: ■

Human Resources Human resources staff recruit, hire, manage, pay, and fire employees. They also handle employee training and development, as well as employee performance appraisals. They administer payrolls and benefits, as well as responding to employee grievances. At small practices, owners are responsible for all these tasks. At large facilities, the human resources function is generally centralized, with some autonomy within individual departments or business units. Entry-level salaries within human resources average around $45,000 per year for those with bachelor’s degrees, according to the National Association of Colleges and Employers, while human resources managers earn between around $85,000 and $100,000 per year. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Human Resources Director Payroll Manager Benefits Manager Diversity Coordinator Benefits Specialist Recruitment Specialist Human Resources Administrator

Customer Service Customer service personnel address customer concerns and needs professionally, promptly, and thoroughly. Patients concerned with the care they receive from private clinicians may express these concerns directly to their counselors or through their attorneys. In larger organizations, clientrelations professionals provide service recovery and resolutions to customer issues. Risk management and patient relations professionals are available to support clinicians and customers. In all counseling services, a strong customer service ethic is mandatory. Customer service personnel address customer inquiries, complaints about billing practices, confidentiality concerns, and legal issues. Specialized skill sets, including strong emotional intelligence, are required in this role. Customer service representatives are generally paid by the hour; the 2008 median hourly wage of a representative was $14.36.

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Customer Service Director Customer Service Representative

Marketing and Public Affairs Advertising for a small private practice can be relatively inexpensive and take the form of newspaper or other print advertisements. Private clinicians can also utilize professional groups as referral sources. Larger organizations advertise broadly, particularly if the referral base for their clients is in a competitive environment. Competition for any kind of clients, but particularly for those who are insured or can pay out of pocket, is a challenge in virtually every geographic location. Liaisons to outside physician practices and businesses can play a substantial role in growing clinicians’ referrals. Sometimes individual counselors make outreach visits to referring providers because face-to-face interactions increase the likelihood of referrals. When advertising and outreach become priorities, professional marketing and public affairs staff, holding a minimum of undergraduate or advanced degrees, target market share and determine where best to spend valuable resources in order to gain the most return on advertising investments. According to the BLS, marketing managers in 2008 earned a median annual salary of around $108,000, while the 2008 median annual salary of market research analysts was $61,000. Marketing and public affairs occupations may include the following: ■ ■ ■ ■ ■

Marketing Manager Physician Liaison Market Research Analyst Business Analyst Marketing Administrator

Facilities and Security Individual clinicians operating out of homes or private offices must recognize that their clients may have behavioral, relationship, or social issues. They must plan their office environments with this in mind and include mechanisms for getting prompt help when necessary. Precautions might be as simple as having a second staff person on site

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at all times or housing a practice within a professional building in a populated area. In larger organizations, centralized security is provided. Service hours should be well defined, and client interaction outside of the normal business day must be routinely reported to security personnel. Most of the time, the need for security is minimal, but its proximity and availability should always be a strong consideration for the clinician. Training for security staff is centralized in midsize and large organizations. Some security personnel have backgrounds in law enforcement. According to the BLS, the mean annual wage for security guards was around $26,000 in 2008. Facilities and security occupations may include the following: ■ ■ ■

Security Director Hospital Security Analyst Security Guard

INDUSTRY

OUTLOOK

Overview The outlook for the counseling services industry shows it to be on the rise. Researchers have projected long-term growth (through 2018) in the demand for counseling professions, including mental health and substance abuse counselors, behavioral disorder counselors, rehabilitation counselors, and marriage and family counselors. According to the Substance Abuse and Mental Health Services Administration, over 24 million Americans reported suffering from “serious psychological distress” in 2008. According to the BLS, the demand for counselors of most specializations will increase since the number of available jobs exceeded the national enrollment in counseling degree programs as of 2009. Revenue from the family counseling and social services industry in the United States grew by 4.3 percent in 2009 according to IBISWorld. There are many indications that the counseling services industry will continue to grow. As the babyboomer population ages, demand for counselors is likely to increase. Aged populations face issues such as disease, pain, and loss of independence, and the counseling services industry will grow to meet the rising mental health needs of this group. Another key client base of the counseling industry

is people struggling with substance abuse and addiction. Research from the U.S. Substance Abuse and Mental Health Services Administration has found that illicit drug use is increasing, a trend that strengthens the need for substance abuse and addiction counseling. Employment Advantages Health care services professions are vast and disparate. In an industry of increasing federal oversight and legal compliance regulations, specialization in counseling careers is inevitable. In fact, counselors are increasingly focusing on specific patient populations, strengthening fields such as geriatric counseling, adolescent counseling, substance abuse counseling, and marriage counseling. Despite such specialization, the fundamental basis of counseling services remains the same: helping people. Professional evaluations, teaching, and professional research in academic settings are all intriguing opportunities that counselors can explore and enjoy in most any area of specialization. People who are strong communicators, who like helping others, and who are emotionally competent enough to offer quality counsel are ideally suited for counseling careers. Counselors may work in a variety of settings, such as medical facilities and hospitals, elementary and high schools, colleges and universities, and private practices. This career path provides great satisfaction to professionals who enjoy working face-to-face with customers. The pleasures of working with adults, children, couples, and groups are but a few of the advantages to this vocation. Counselors also find work within the academic realm, performing research and publishing on topics of interest to them. Annual Earnings In 2008 in the United States, the counseling services industry generated around $33 billion in revenue. Generally, health care and social assistance industries are experiencing growth. From 2006 to 2007, for instance, the industry grew by 6.8 percent. Parsing out earnings in the counseling field, nationally or globally, is difficult since counseling is delivered in so many settings. Because billing data are the primary means by which revenue data are collected, it is best to look at the health care industry in aggregate. According to the BLS, counselors can generally earn between around $30,000

Counseling Services and $60,000, depending on specialization, level of education, preference, and employer. This salary range presents a challenge in recruiting candidates to the industry. However, in part because of relatively low salaries, there is no glut of providers and demand from clients has historically exceeded supply. That trend, combined with the growth of populations who will seek out counseling services, ensures job security in the counseling field.

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policy from the Dartmouth Institute, Dartmouth College. She is a member of the National Medical Group Managers’ Association, the Healthcare Financial Management Association, and the American College of Healthcare Executives. She is also a fellow in the American College of Healthcare Executives, a registered nurse, and a health care operations consultant. Sprague has spent her career in medical practice and hospital operations, both in private practice and in a large academic tertiary hospital setting.

RELATED RESOURCES FOR FURTHER RESEARCH FURTHER American College of Medical Practice Management Crossville Commons 560 W Crossville Rd., Suite 103 Roswell, GA 30075 Tel: (770) 649-7150 Fax: (770) 649-7552 http://www.epracticemanagement.org American Counseling Association 5999 Stevenson Ave. Alexandria, VA 22304 Tel: (703) 823-9800 Fax: (800) 473-2329 http://www.counseling.org Healthcare Financial Management Association 2 Westbrook Corporate Center, Suite 700 Westchester, IL 60154 Tel: (800) 252-4362 Fax: (708) 531-0032 http://www.hfma.org Medical Group Management Association 104 Inverness Terrace East Englewood, CO 80112-5306 Tel: (303) 799-1111 http://www.mgma.com

ABOUT

THE

AUTHOR

Nancy Sprague holds a bachelor’s degree from Granite State College of the University System of New Hampshire and a master’s degree in health

READING

Broskowski, Anthony, and Shelagh Smith. Estimating the Cost of Preventive Services in Mental Health and Substance Abuse Under Managed Care. Rockville, Md.: U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Center for Mental Health Services, Office of Managed Care, 2001. Cummings, Nicholas A., William T. O’Donohue, and Michael A. Cucciare. Universal Healthcare: Readings for Mental Health Professionals. Reno, Nev.: Context Press, 2005. Levin, Bruce Lubotsky, Kevin D. Hennessy, and John Petrila. Mental Health Services: A Public Health Perspective. New York: Oxford University Press, 2010. Mark, Tami, et al. National Expenditures for Mental Health Services and Substance Abuse Treatment, 1993-2003. Rockville, Md.: U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, 2007. Munley, Patrick H., et al. “Counseling Psychology in the United States of America.” Wes Counselling Psychology Quarterly 17, no. 3 (2004): 247-271. Pedrini, Laura, et al. “Burnout in Nonhospital Psychiatric Residential Facilities.” Psychiatric Services 60 (November, 2009): 1547-1551. Pistole, M. Carole. “Mental Health Counseling: Identity and Distinctiveness.” ERIC Digest. http://www.ericdigests.org/2002-4/mentalhealth.html. Reinhardt, Uwe E., et al. “U.S. Health Care Spending in an International Context.” Health

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Affairs: The Policy Journal of the Health Sphere 23, no. 3 (2004): 10-25. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and

Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Walfish, Steven, and Jeffrey E. Barnett. Financial Success in Mental Health Practice: Essential Tools and Strategies for Practitioners. Washington, D.C.: American Psychological Association, 2009. Williams, Ruth F. G., and D. P. Doessel. The Economics of Mental Health Care: Industry, Government, and Community Issues. Burlington, Vt.: Ashgate, 2001.

History of the Industry Prisons constitute one subsection of the criminal justice system, which General Industry: Law, Public Safety, and Security is made up of three major parts: poCareer Cluster: Law, Public Safety, and Security lice, courts, and corrections. The act Subcategory Industries: Correctional Institutions; of imprisoning individuals is based Courts; Parole Offices and Probation Offices on the notion of incapacitation, or Related Industries: Civil Services: Public Safety; Federal making one physically unable to comPublic Administration; Local Public Administration mit a crime. Imprisonment throughAnnual Domestic Revenues: Private prisons: $2.7 out history has been used to confine billion USD (Correctional Corporation of America criminals, who would be subject to and GEO Group, 2009); annual expenditures by U.S. corporal punishment or even death. Department of Justice: $25.7 billion (U.S. Department Prisons were established in Lonof Justice, 2009) don under the ideas of Jeremy BenNAICS Numbers: 92211, 92214-92215 tham, who was a classical theorist. He believed, along with Cessare Beccaria, that crime could be deterred if the punishment for violations of the law were swift, certain, and severe. They both believed INDUSTRY DEFINITION that punishment could prevent persons from committing crime if the consequences outweighed the Summary benefits. During the nineteenth century, prison Prisons are places where persons convicted of became a form of punishment, rather than a place crimes are held in order to meet the goals of punto hold a criminal until he was punished. ishment or rehabilitation. Persons are physically The first prison in the early nineteenth century confined, so they cannot harm others, and they are was based on the penitentiary movement. Individudeprived of freedom, so they will be deterred from als were supposed to reflect upon their behavior, future crime. The prison industry has also become and do penance for their crimes. The term “prison” a business where prisoners are used for work. is often used interchangeably with “jail.” However, Prison-run programs for inmates can be public or they really are different terms, associated with the private and bring in revenue for the industry. INDUSTRY

SNAPSHOT

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©Sergiy/Rudenko/Dreamstime.com

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Criminal Justice and Prison Industry panies that use them, and prisons earn money by lending out their inmates as laborers. In addition, the work helps inmates feel they are accomplishing something during the course of their day, and sometimes they learn usable skills. Even if they are performing tedious labor, the more they work, the lower the likelihood they will be involved in criminal behavior.

The Industry Today Prisons and jails continue to hold those awaiting trial and those convicted criminals serving time as part of their sentences. Some facilities have thousands of beds, Keys hang on the belt of a guard at California’s San Quentin State Prison for while others have only two cells. men, which has three levels of security, from minimum to maximum, including Many have education, vocational, death row. (AP/Wide World Photos) and treatment programs that help meet the special needs of inmates. Since jails hold prisoners for relatively short peseverity of the crime and the length of time for riods of time, the therapeutic and recreational prowhich one is incarcerated. A prison can be run by grams offered in such facilities are minimal. Jails the state or federal government and is a place must still provide care and treatment in a safe enviwhere criminals are held for more than a year. ronment, however. Thus, they need employees, State prisons are reserved for serious criminals, food service, laundry service, attorneys, therapists, and federal prisons are reserved for those who vioand other workers, as well as security personnel late federal laws, such as white-collar criminals. and managers. The physical environment ranges Jails are run by municipalities or counties and are in size from small, one-to-two-cell local jails to masreserved for individuals who have been convicted sive prisons run like hotels at the state and federal of less serious crimes or for those awaiting trial. level. Prisons may operate through public or priThe longest amount of time spent in jail is one year. vate funding. While incarcerated, prisoners are required to Some jails are found in small towns and municiwork and exercise. They also have the option of palities and offer few services. They typically have participating in recreational activities. This not relatively small staffs, comprising local police offionly keeps them busy and out of trouble but also cers. These locations are used only to hold offendgives them skills they can use on release. In addiers for twenty-four to forty-eight hours. In midtion, they can obtain high school equivalency cred2009, local jails held 767,620 persons awaiting trail its and get the therapy and treatment necessary for or serving sentences, according to the Bureau of success outside the prison walls. Prisoners have to Justice Statistics (BJS). earn the right to work in the more desirable areas Midsize prisons might be found in larger counof the prison and are paid (very little) for their ties and smaller states. They must provide for all of work. They can use their earnings to buy items for the basic needs of offenders, although they may themselves at the commissary. not be able to offer all of the services of a large The prison industry has become an important prison. For example, larger prisons might offer revenue stream for prisons. Often, inmates are drug treatment and counseling, as well as vocahired out to work in factories, where they produce tional training in many areas. Midsize prisons goods to be sold to the federal government. They might not have the room or the budget for such are cheap labor, so profit margins increase at com-

Criminal Justice and Prison Industry services. Facilities for women only, tend to offer even fewer services. Although food, security, and medical services are imperative, treatment opportunities and useful vocational training might be lacking. Large institutions, especially those located in states with a high number of inmates, such as California, are run as big businesses. They have all the necessary housekeeping services, as well as administrative, educational, and vocational programs. These prisons can house serious violent offenders in separate locations on the prison grounds and offer opportunities for offenders to work on-site or have inmates hired out by private companies to produce goods to be sold or services to be offered outside the prison walls. Prisons have undergone a significant evolution since the 1700’s. They operate more like businesses and even earn profits by selling products made by inmates. Prisons are now focused on rehabilitation and deterrence, in addition to retribution and punishment. Today’s prisons have better criminal record keeping, forensic analysis, fingerprint analysis, quicker access to records, and auto-

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mation of records, as well as decreased delays in processing information. At midyear 2008, state and federal prison authorities had over 1.6 million prisoners under their jurisdiction. Today, there are more than 2.3 million people behind bars. Those numbers are expected to go up as the penalties for certain crimes, especially drug offenses, go up. In addition, tougher state and federal sentencing laws have increased the population of minority offenders in particular. Another major change has been the use of private prisons. Today, about 10 percent of U.S. prisons and jails have been privatized. They have become for-profit businesses that reduce essential services within the prison. The private contracting of prisoners for work is a booming business because it allows prison workers to supply the market with goods that are cheap to produce. Federal prison industry workers produce almost all U.S. military and war supplies and assemble many products and appliances. The three major private firms in the United States that offer security services to private corporations are the Corrections Corporation of America, Wackenhut, and Esmor. There

This minimum-security federal correctional facility for women is located in Bryan, Texas. (AP/Wide World Photos)

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are a few others that operate correctional or detention facilities, and the big three also have facilities in Australia, England, and Puerto Rico. Interestingly, private prisons were common over one hundred years ago. Prisoners were hired out as slave labor and were exposed to horrible conditions. They were worked to death, and there was no concern for their physical safety. Today, legislation regulates private contractors running correctional facilities. Most of those run by private firms are lowto medium-security level. The number of private prisons is likely to increase in the near future. According to the BLS Occupational Outlook Handbook, employment of correctional officers is expected to grow by 9 percent between 2008 and 2018. There will be an increased demand for officers as the prison population grows as a result of “get tough” policies and mandatory minimum sentences. Employment opportunities are expected to increase even more in the private sector, as public authorities contract with private companies to staff correctional facilities and offer services to those facilities. Further, there will be an increase in not only state corrections agencies but also federal corrections agencies, using private prisons. Changes in the programs offered to inmates have occurred during the early twenty-first century. Faith-based programs have been added, and restorative justice efforts are being incorporated into the prison mentality. Programs that promote positive behavior, as opposed to punishing deviant behavior, are projected to be a new focus. In addition, technological changes will play a major role in communication and offender tracking, detection, and monitoring. Biometrics—the identification or verification of identities via measurable physiological and behavior traits—will be used more. Examples could include retinal and facial recognition, voice- and fingerprint identification, and thermal imagery. Global Positioning System devices will begin to be used with more regularity as well.

INDUSTRY MARKET SEGMENTS Prisons can be designated as minimum-security, medium-security, and maximum-security facilities. Sometimes, a prison has sections devoted to one or another security level, but these designations

are used to protect offenders from one another and to make management of the prison run more smoothly. Minimum-Security Facilities Minimum-security prisons are reserved for the least serious offenders. They are often set up like small camps and might be located in or near military bases. The prisoners live in less secure dormitories, and they are usually surrounded by a single fence. The facilities are most often located in rural areas, and the offenders are usually nonviolent. Inmates usually participate in community-based work assignments and in prerelease transition programs. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average salary for probation officers and correctional treatment specialists in 2009 was $51,100. Correctional officers and jailers earned an average of $43,150, while their supervisors earned an average of $60,160. Clientele Interaction. Small and local facilities have high rates of turnover. Often, local jails hold offenders for only twenty-four to forty-eight hours, and the longest they can be held is for seventy-two hours. In minimum-security locations, the staff-toinmate ratio is low, and inmates live in dormitory housing or private rooms. Because minimum-security institutions allow for more freedom of movement, correctional officers might be able to interact on a bit more of a personal level with inmates. Amenities, Atmosphere, and Physical Grounds. Minimum-security facilities offer more privileges but not more amenities. Because many offenders are nonviolent, the focus is less on security and violence prevention and more on treatment and education. Many inmates are assigned to private rooms, and the atmosphere is less restrictive than it is at medium- and maximum-security facilities. The atmosphere in minimum-security facilities is a bit more relaxed. The facility is usually located in a rural area, with lots of grass and trees. Activities are often planned for outside, and services might include educational programs, counseling, recreational activities, and work details. Staff are responsible for inmate accountability, including their conduct, personal hygiene, and noise level. The physical grounds are often set up like a college. There is an area where classes are held, an

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An inmate at Blackburn Correctional Complex, a minimum security prison in Lexington, Kentucky, works with a thoroughbred that he trained during a prison program. (AP/Wide World Photos)

area where there is counseling, an area where the inmates eat, and an area where they sleep. There is laundry service, medical staff, and administrative staff. Sometimes, inmates are sent to programs in the community for treatment. Typical Number of Employees. There are approximately 370 minimum-security prisons in the United States, and about 17 percent of the prison population is confined at this level. One of the largest issues facing minimum-security facilities is expenses. Because they are small and located in rural areas, they are often expensive to run. In addition, they often offer fewer services and activities. Staff would include a warden or director, staff for security, educational and vocational staff, counselors, and service staff. Traditional Geographic Locations. Minimumsecurity facilities tend to be located in rural areas, often on or near military bases. Although they are not as stringent, and might be located in a picturesque community, they offer fewer opportunities for visitation because the locations are often very far from home. Pros of Working for a Minimum-Security Facility. Because they operate under less secure conditions, one of the positive aspects of minimum-

security facilities is more freedom of movement. There could be no fence or only one fence around the facility, and inmates are often free to roam about the facilities, as long as they behave as instructed. Correctional officers therefore work in conditions that are a bit less restrictive than at other facilities. There is less risk of violence or attack because the inmates they are watching are low risk and nonviolent. In addition, they are not cooped up in an institution for the course of their day because the facilities are more open in nature. Staffs are usually smaller than at higher-security facilities because open institutions have less need for officers to enforce the more stringent rules and confinement protocols of medium- and maximum-security facilities. Inmates need to participate in educational, recreational, and vocational activities as part of the requirements of their sentences, and the correctional officers need to make sure they arrive at their destination safely. Higher job satisfaction has been found among correctional officers at lower-security facilities than among those at higher-security facilities. Cons of Working for a Minimum-Security Facility. Since there are only a few correctional officers on staff, only a small number of persons are re-

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sponsible for most operational duties. Any neglect of duties could lead to security breaches and direct accountability. Correctional officers might also experience stress because they are working with criminals, sleep disturbances because they are working odd hours, and alienation because they might be seen as adversaries by inmates. Further, because minimum-security facilities are located in rural areas, many employees have long commutes to and from work. Costs Payroll and Benefits: The mean average wage for correctional officers is $20.49 per hour, but hourly wages can range from $12.48 to $21.18 depending on the region. In September of 2007, a 5 percent annual salary increase for officers became effective. Health benefits cover officers and their eligible dependents. Supplies: Minimum-security prisons require medical supplies, cleaning supplies, food, linens, hardware (for maintenance), office supplies, information technology (telephones and computers), outdoor supplies (such as lawn mowers and snow shovels), bedding, and toiletries. External Services: Prisons may contract some of the staff who work with prisoners, such as teachers or counselors, as well as food services. Private prisons may contract accounting services or lobbying services as necessary. Utilities: Typical utilities for a minimum-security institution include water, sewage, electricity, gas or oil, telephone, cable television, and Internet access. Many states allow inmates in minimumsecurity facilities access to the Internet. Medium-Security Facilities Medium-security prisons house offenders who require more secure facilities than those housed in minimum-security facilities. They are often set up like maximum-security facilities but have fewer controls over the freedom of the inmates. The prisoners live in secure, barred cells within fortified perimeters. The rooms can be set up in dormitories or bunk beds, with communal showers, toilets, and sinks. Medium-security facilities often house fifty inmates per officer, and some might be designed with “dry cells,” with no toilet fixtures in the dormitory. There is a single cell unit set aside for punishment of inmates. The facilities are most of-

ten located in rural areas, and the offenders are less violent than maximum-security inmates. Inmates usually participate in work assignments, education, and vocational training, as well as faithbased programs and prison industry. There is less supervision in regard to internal movement of prisoners, but the dormitories are locked at night (and are thus more secure than minimum-security facilities). Potential Annual Earnings Scale. According to the BLS, the average salary for probation officers and correctional treatment specialists in 2009 was $51,100. Correctional officers and jailers earned an average of $43,150, while their supervisors earned an average of $60,160. Clientele Interaction. Staff-to-inmate ratios are lower than at maximum-security facilities but higher than at minimum-security facilities, and inmates live in dormitory housing or private rooms. Because medium-security institutions allow for some freedom of movement, correctional officers might be able to interact on a bit more of a personal level with inmates. Amenities, Atmosphere, and Physical Grounds. Medium-security facilities offer more privileges than maximum-security facilities and more amenities than minimum-security facilities. The focus is less on security and more on treatment and work programs. However, the layout is similar to that of a maximum-security facility. The atmosphere in medium-security facilities is a bit more relaxed than in maximum-security facilities. The facility is usually located in a rural area, and activities might include educational programs, counseling, recreational activities, and work details. The physical grounds are set up like maximumsecurity facilities. There is an area where classes are held, an area where there is counseling, an area where the inmates eat, and then an area where they sleep. There are laundry service, medical staff, and administrative staff. Sometimes, inmates work in prison industry while incarcerated. Typical Number of Employees. There are approximately 506 medium-security prisons in the United States, and about 48 percent of the prison population is confined at this level. One of the largest issues facing medium-security facilities is balancing security with treatment and education. Staff include a warden or director, staff for security, educational and vocational staff, counselors, and ser-

Criminal Justice and Prison Industry vice staff. Perimeter security and yard officers are necessary. Traditional Geographic Locations. Mediumsecurity facilities tend to be located in rural areas. They are more stringent than minimum-security facilities and offer fewer opportunities for visitation because the locations are often far from home. Pros of Working for a Medium-security Facility. Because they operate under more secure conditions, one of the positive aspects of a mediumsecurity facility is more freedom of movement than at maximum-security facilities. Correctional officers therefore work in conditions that are a bit less confining and a bit more safe. There is less risk of violence or attack because the inmates they are watching are lower risk than maximum-security inmates. In addition, staff-to-inmate ratio is low. Inmates participate in educational, recreational, and vocational activities as part of the requirements of their sentences, and the correctional officers make sure they arrive at their destination safely. Industrial and shop security are necessary, as well as yard and perimeter security. Cons of Working for a Medium-Security Facility. Because the inmates prison employees supervise are more dangerous than minimum-security inmates, any neglect of duties could lead to security breaches and direct accountability. Guards need to keep the perimeter and yard safe via regular patrol. Satisfaction with the job may be decreased by the risks employees face. Studies find that correctional officers are happier in minimumsecurity facilities, where they have more control or influence regarding the policies of the facilities. Further, because medium-security facilities are located in rural areas, correctional officers often commute long distances to work. The amenities at the medium-security level tend more plentiful than at minimum-security facilities, but the inmates might be more violent and more dangerous to work with. Correctional officers might also experience stress because they are working with criminals, sleep disturbances because they are working odd hours, and alienation because they might be seen as adversaries by inmates. Costs Payroll and Benefits: The mean average wage for correctional officers is $20.49 per hour, but hourly wages can range from $12.48 to $21.18

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depending on the region. Health benefits cover officers and their eligible dependents. Supplies: Medium-security prisons still need medical supplies, cleaning supplies, food, linens, hardware (for maintenance), office supplies, information technology (telephones and computers), outdoor supplies (such as lawn mowers and snow shovels), bedding, and toiletries. External Services: Prisons may contract some of the staff who work with prisoners, such as teachers or counselors, as well as food services. Private prisons may contract accounting services or lobbying services as necessary. Utilities: Typical utilities for a medium-security institution include water, sewage, electricity, gas or oil, telephone, and cable television. Maximum-Security Facilities Maximum-security prisons are reserved for the most serious offenders. They are often set up to confine the most dangerous offenders, for long periods. Thus they need to have a highly secure perimeter. The facilities are most often located in rural areas, and the offenders are usually violent. Inmates have strict controls placed on them, and routines are highly regimented. Potential Annual Earnings Scale. According to the BLS, the average salary for probation officers and correctional treatment specialists in 2009 was $51,100. Correctional officers and jailers earned an average of $43,150, while their supervisors earned an average of $60,160. Clientele Interaction. In maximum-security locations, the staff-to-inmate ratio is high, and inmates live in single- or multiple-occupancy barred cells. Because maximum-security institutions are most concerned about security, correctional officers might have to interact on an impersonal level with inmates. Amenities, Atmosphere, and Physical Grounds. Maximum-security facilities offer fewer privileges than lower-security facilities and fewer amenities. Because many offenders are violent, the focus is on security and violence prevention. Inmates are usually required to remain in their cells for twenty-three hours per day. A shower and some exercise for a short time are allowed. The atmosphere in maximum-security facilities is very structured and regimented. The facility is usually located in a rural area. Services might in-

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clude educational programs and counseling, but there are constant custody and security concerns. When out of their cells, prisoners must remain in the exterior part of the institution (still part of the cell block). Any movement outside of the cell block is severely restricted. The physical grounds are often set up like a fortress. There is a highly secure perimeter with watchtowers and high walls. There are laundry service, medical staff, and administrative staff. Security needs to be maintained in the yard and the perimeter. The cells are operated from a remotecontrol station, so there is little contact between the inmates and the correctional officers. Because the inmates are high risk, each cell has its own toilet and sink, so there are fewer reasons for them to leave their cells. Inmates may leave for work assignments or programs, so there needs to be supervision at the work detail area, and block officers are necessary in the housing areas. Typical Number of Employees. There are approximately 332 maximum-security prisons in the United States, and about 36 percent of the prison population is confined at this level. One of the largest issues facing maximum-security facilities is safety. Because they are large and because the inmates are dangerous, they are often expensive to run. In addition, they often offer fewer services and activities. Staff include a warden or director, staff for security, educational and vocational staff, counselors, and service staff. Traditional Geographic Locations. Maximumsecurity facilities tend to be located in rural areas. They are very stringent and regimented, and offer fewer opportunities for visitation because the inmates are so dangerous. The inmates pose a risk to others, as well as to the guards, so the facilities need watch towers. Pros of Working for a Maximum-Security Facility. Because they operate under very secure conditions, one of the positive aspects of a maximumsecurity facility is its lock-down capabilities. There are high walls and watchtowers, and inmates cannot roam about the facilities. Correctional officers therefore work in conditions where there is a constant watch over the inmates. Staff numbers are usually higher because of the risk level associated with maximum-security inmates. Thus, correctional officers always have backup. Some inmates are not allowed access to activities because of their risk

level. Others are allowed to participate in activities but need direct supervision. Cons of Working for a Maximum-Security Facility. Since the inmates are high risk, correctional officers have to be on high alert at all times. Any neglect of duties could lead to security breaches and direct accountability. Further, because maximum-security facilities are located in rural areas, most correctional officers work far from home. Amenities at the maximum-security level tend to be lacking, as are privileges. Thus, there might be disgruntled inmates that the officers have to deal with. Correctional officers might also experience stress because they are working with criminals, sleep disturbances because they are working odd hours, and alienation because they might be seen as adversaries by inmates. Costs Payroll and Benefits: The mean average wage for correctional officers is $20.49 per hour, but hourly wages can range from $12.48 to $21.18 depending on the region. Health benefits cover officers and their eligible dependents. Supplies: Maximum-security prisons require medical supplies, cleaning supplies, food, linens, hardware (for maintenance), office supplies, information technology (telephones and computers), outdoor supplies (such as lawn mowers and snow shovels), bedding, and toiletries. External Services: Prisons may contract some of the staff who work with prisoners, such as teachers or counselors, as well as food services. Private prisons may contract accounting services or lobbying services as necessary. Utilities: Typical utilities for a maximum-security institution include water, sewage, electricity, gas or oil, telephone, and cable television.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure within a prison is typically based on law and policy. Wardens are likely to handle most of the major decision making because they are prisons’ administrators. Wardens make arrangements for prisoners to be placed in certain positions, based on trust, qualifications,

Criminal Justice and Prison Industry and need. They delegate to assistant wardens and to correctional officers the coordination of moving prisoners. Correctional officers keep their sites safe. In addition, there are companies that provide private correctional and detention management. The following umbrella categories apply to the organizational structure of institutions in the criminal justice and prison industry: ■ ■ ■ ■ ■ ■ ■

Administration Correctional Officers Clerical Support Program Staff Maintenance Food, Beverage, and Laundry Groundskeeping

Administration Administrators handle the general operations of prisons. Wardens run their institutions, and assistant wardens assist them. These individuals oversee major operations, goal-setting, and the implementation of plans for the institution. They also manage the administration and business aspect of the institution (or, in the case of the warden, oversee all departments). Many wardens have advanced degrees; they must possess leadership qualities and

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be able to implement public policy. Wardens and assistant wardens generally earn higher salaries than correctional officers and support staff. Their job is to manage the overall functions of prisons, address systemic issues, and ensure that all departments are functioning smoothly and safely. Prison administrators must respond to emergencies, supervise and direct the work of correctional officers to ensure the institution is run in a safe manner— they must ensure that inmates are held in secure conditions and that correctional officers are working in secure conditions. Administrators are responsible for planning, developing, implementing, supervising, and coordinating programs. They might need to review and sign reports, make referrals, determine visitation and phone privileges, and conduct disciplinary action. Administrative occupations may include the following: ■ ■

Warden Assistant Warden

Correctional Officers Correctional officers are responsible for individual contact with inmates in their institutions. They can be assigned to different locations depending on the security level and size of the institution. They are responsible for the safety of OCCUPATION SPECIALTIES the institution from the front lines and report to upper-level Correctional Officers management. They do not establish the rules, but they enSpecialty Responsibilities force them. Immigration guards Guard aliens held by the immigration Block officers supervise in the service pending further investigation housing areas of a prison, and that may lead to the release or safety is their main concern. deportation of prisoners. They are also responsible for inspecting property and conductJailers Guard prisoners in precinct station ing head counts. They interact houses or municipal jails, assuming directly with inmates and hold responsibility for all prisoner needs significant power because they during detention. can give rewards or punishment for behavior they observe. Work Patrol conductors Guard prisoners being transported in detail officers supervise crews in correctional vans between jails, their institutions as they go back courthouses, prisons, mental and forth and while they are institutions, and other institutions. working inside prisons. They also supervise work details out-

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side prisons and keep track of supplies. They may also supervise laundry, kitchen, and maintenance work performed by inmates. Industrial shop or school detail officers ensure efficient use of equipment in these areas. They protect and work with instructors to ensure that they are safe and that inmates are attending their assigned classes. Yard officers supervise the yard and the movement of inmates to and from it. Perimeter officers supervise the walls and towers in order to prevent escape from and intrusions into the prison. Tower officers review information about inmate movement and are responsible for opening and closing gates. Relief officers replace officers who are out sick or on vacation. Some officers are responsible for transporting inmates from one area to the next. Others are responsible for making sure that those who are in need of protective custody get it and that those who pose a danger to the rest of the institution get their needs met

OCCUPATION

from their cells (such as by having food brought to them). Regardless of their details, correctional officers must maintain order and follow the rules and regulations of the prison administration. They may need to restrain and control offenders and occasionally use force to gain compliance. Only a high school diploma is required for this position, as onthe-job training is expected to be of more use than formal education. Those expecting to move on to managerial or administrative positions should probably obtain advanced degrees. All correctional officers need to conduct searches. In the housing areas, they need to search the showers for contraband and make sure cells are cleaned. In the cafeteria, they must inspect all food carts and trays. Outside, the gates, fences, radios, cameras, and other areas and devices must be monitored. In the visiting areas, visitors and inmates need to be searched and monitored. Disciplinary

PROFILE

Correctional Officer Considerations

Qualifications

Description

Guards inmates in prisons, jails, and other correctional institutions; also may guard prisoners during transfers between jails, courts, prisons, and other institutions.

Career cluster

Law, Public Safety, and Security

Interests

People

Working conditions

Work inside; work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Light work; medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

SER

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Criminal Justice and Prison Industry OCCUPATION

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PROFILE

Parole and Probation Officer Considerations

Qualifications

Description

Supervises probationer or parolee during period specified by the terms of probation or parole.

Career cluster

Law, Public Safety, and Security

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; volunteer work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest score

SEC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

officers are responsible for fact-finding hearings regarding the legal issues surrounding an inmate’s incarceration. Morning-shift workers are responsible for cleaning the visiting room, assisting unit officers in screening mail, monitoring phone calls, conducting fire and security checks, and providing training to new officers. Correctional officer occupations may include the following: ■ ■ ■ ■ ■ ■

Shift Manager Block Officer Work Detail Officer Industrial Shop/School Officer Yard Officer Perimeter Officer

Clerical Support Although clerical support staff do not work hand-in-hand with inmates, their jobs are very important for the smooth running of prisons. They answer phones, manage keys, schedule and log vis-

its, type, and make contact with the public. They are responsible for record keeping, human resources, scheduling program staff, room assignments, and paperwork. The average pay for clerical support workers is low, and an advanced degree is not required. Personnel must be able to use computer programs and have good communication skills. They might need to make photocopies, send faxes, and provide support to the warden and assistant warden through scheduling, data entry, word processing, managing files, keeping records, and conducting stenography and transcription. Administrative personnel manifest a wide range of backgrounds and professional training experience. Many are temporary employees, while others are brought in as entry-level staff for managers and other personnel. The business office oversees accounting, budgeting, purchasing, accounts payable, credit-card processing, outside contracting, purchasing, travel expenses, inventory management, fiscal operations, payroll, salary expenditures, and projections.

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Clerical support occupations may include the following: ■ ■ ■ ■ ■

Administrative Assistant Secretary Records Clerk Business Clerk Accountant

Program Staff Program staff in prisons are responsible for encouraging prisoners to participate in educational, vocational, and recreational opportunities. Advanced degrees are required for teachers and counselors, who generally have teaching certificates, and possibly master’s or Ph.D. degrees. Teachers need to have knowledge of curriculum design, and if they are teaching English as a second language (ESL), they need knowledge of the English language, including grammar and spelling. Inmates can also be taught the skills necessary to run a business, how to apply for jobs, or how to improve parenting skills. Teachers must be able assess learning styles and work with the resources available in prisons. They also need to keep the environment safe by monitoring the inmates’ behavior. Therapists and counselors need to have doctoral degrees in their areas of expertise. They have to understand human behavior, and they must be able to assess personality and treat behavioral and affective disorders. Psychologists must examine inmates for suicide risks and assist in treating inmates with mental illnesses or mental retardation or other developmental disabilities. They review records and hold crisis-intervention sessions as needed. As with prison teachers, psychologists need to know how to keep the environment safe, so they may be trained in how to handcuff and transport inmates. Therapists and correctional counselors develop and implement programs to meet the needs of individual inmates. They perform intake, interviewing newly admitted inmates, and plan for counseling sessions. Sometimes there is a need for immediate counseling or guidance, and other times there can be sessions for self-improvement. Health services are extremely important in prison. Legally, inmates have the right to adequate medical care, so the staff must make sure inmates get medical, dental, and psychiatric care in a safe environment. The prison must make every effort to

prevent the spread of contagious diseases and reduce on-site injuries. Medical supplies and equipment must be available, and guards must know cardiopulmonary resuscitation (CPR) techniques. Practitioners provide primary care for inmates, and they are useful in promoting good health, disease prevention, medical evaluation, and treatment of inmates and staff in a safe and secure environment. Medical staff need medical or nursing degrees. Those providing religious education need to be trained as clerics. Religious services can be utilized to enhance spirituality and rehabilitate criminals. Chaplains can organize programs and offer counseling, emergency interventions, and worship services. Those who provide recreation need to be trained in their field. Most such personnel have training and certification in physical fitness. They also have first-aid and CPR training or certification. They are usually paid hourly wages. Recreation offers a way to reduce idleness. Recreational instructors can offer programs that improve the physical and emotional well-being of inmates. They might need to purchase equipment and develop special programs that meet the needs of the inmate population. They must also make sure conditions are secure by performing searches and making sure inmates play fair so as not to incite altercations. All program staff members offer opportunities for inmates to learn skills they can apply upon release. Correctional officers are responsible for keeping the staff safe. Clerical staff make sure that program staff members have proper credentials. Inmates can earn general education diplomas (GEDs) and college credits by taking classes from program staff. They can get the drug treatment and mental health counseling they need to be healthy and emotionally secure. Depending on the security level of their facilities, inmates can also obtain vocational skills in construction, heating, airconditioning, landscaping, or even painting in the community. Programs are offered in small-appliance repair, culinary arts, forklift operations, floor care, pest control, typing, and even certification in alcohol and substance abuse counseling. In addition, inmates can participate in prison industry, making goods to be used by the government. Program staff occupations may include the following:

Criminal Justice and Prison Industry ■ ■ ■ ■ ■ ■ ■ ■

Psychologist Psychiatrist Physician Nurse Teacher Counselor Recreational Instructor Religious Counselor/Chaplain

Maintenance Maintenance and building engineering staff repair malfunctioning building systems such as airconditioning, plumbing, electrical hardware, and similar devices. They may also play an important role in renovation planning and implementation. Building maintenance personnel are alternately called engineers, environmental services personnel, and facilities managers. Salaries are commensurate with experience. Most personnel in this department have vocational education and training, if not advanced degrees in engineering or related fields. Facilities personnel provide management oversight, planning, maintenance, and construction programs that ensure maximum efficiency of physical plants and compliance with all appropriate codes and standards. Facilities staff supervise all institutional utilities, existing and new construction projects, and repair and improvement projects. A foreman is responsible for maintenance and repairs of buildings, vehicles, roads, and grounds. There might be a foreman for other services such as heating, ventilation, and air-conditioning (HVAC) repair and maintenance. Maintenance occupations may include the following: ■

■ ■ ■

Heating, Ventilation, and AirConditioning (HVAC) Technician Plumber Chief Engineer General Maintenance and Repair Worker

Food, Beverage, and Laundry Food and beverage personnel must meet the meal and beverage needs of inmates, although inmates often earn the work detail of serving and preparing meals. Some prisons have gardens where they grow fresh produce for the prisoners to eat, although this is much more rare now than it once was. In such institutions, food personnel include

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master gardeners who instruct inmates in tending the garden. Food and beverage personnel oversee the setting up and cleaning up of eating areas. This is a job of considerable responsibility because eating areas can be extremely dangerous if inmates are not properly screened and supervised. Almost any eating utensil can be fashioned into a lethal weapon. Although inmates assist the food service staff in preparing and serving food, a supervisory crew is necessary to ensure that the prison food meets health and safety standards, as well as religious, dietary, and medical needs. The quality of prison food is very important to the contentment of inmates. Thus, a food service supervisor plans, controls, and evaluates the food service. Supervisors need to make sure supplies are available and manage food distribution. The inmates are assigned laundry detail, but again coordination is necessary with support staff and correctional officers. Support staff need to make sure the proper supplies are available: safe working conditions, with a heavy-duty washer and dryer, laundry detergent and baskets. In addition, correctional officers need to make sure the most trusted inmates are assigned this duty, since they could attempt to smuggle goods in this way, or damage a fellow inmate’s property if a grudge is being held against someone. Even if laundry service is privatized, and sent out for cleaning, persons would need to be assigned to collecting and loading the soiled clothing, as well as labeling and distributing it upon return. Guards need to make sure inmates are following all the rules, and inmates need to know they must be responsible for cleaning, folding, and storing all bed and bathroom laundry, as well as any laundry from the kitchen and vocational programs. Laundry personnel do not have advanced educations, but they need to be knowledgeable enough to understand the prison rules and comply with them (for example detergent usage, folding techniques, and other tasks). Food, beverage, and laundry occupations may include the following: ■ ■ ■ ■

Food Service Supervisor Chief Cook Master Gardener Laundry Supervisor

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Groundskeeping The maintenance of the property surrounding a prison falls to the institution’s groundskeeping crew. Groundskeepers maintain the area and other outdoor amenities. They must be familiar with the equipment necessary to maintain the prison’s horticultural features. They may not have advanced educations, but they generally have solid gardening experience, some ability to maintain sprinkler and other mechanical systems, and an eye for the aesthetic quality of the prison’s natural resources. Although they need not possess a postsecondary education, groundskeepers are expected to be familiar with the property’s external real estate. They may also be called upon to clear debris, snow, and other seasonal elements that may hinder the operations of the prison. Groundskeepers are usually paid hourly, at a rate commensurate with their experience and skills. They work closely with those in the maintenance and engineering departments in order to

ensure that they have the proper resources to tend to the prison’s grounds. Some of this work can be privatized, and some can be performed by inmates doing work details. Groundskeeping occupations may include the following: ■ ■ ■

Head Groundskeeper Landscaping Worker Assistant Groundskeeper

INDUSTRY

OUTLOOK

Overview The performance of the prison industry has long been an indicator of economic conditions in the United States and around the globe. There is a close link between the number of jail and prison facilities, as well as the number of inmates held in those facilities, and the strength of the economy.

Inmates walk through the Tent City Jail in Phoenix, Arizona, created by Maricopa County Sheriff Joe Arpaio. (AP/Wide World Photos)

Criminal Justice and Prison Industry High rates of incarceration also reflect the political and government demand for punishment of criminals. Following the terrorist attacks of September 11, 2001, the economic downturn harmed the prison industry. Virtually every type of business establishment saw significant losses during the 2001 recession, and crime rates rose. Some prison staff positions were cut, and new prison construction stagnated. By 2007, the industry had largely returned to its pre-September 11 growth rate, as the number of prisons and the number of inmates both surged. This resurgence was largely because of more stringent penal policies and changes in criminal laws. Determinate sentencing, tougher drug laws, and truth in sentencing have led to overcrowded prisons and poor conditions. With the 2007-2009 global economic crisis, concern over the prison industry returned. Prisons saw drops in revenues, leading to hiring freezes, layoffs, and a slowdown in the construction of new prisons. Several factors will contribute to the continued growth of the prison industry over the long term. The first is changes in legislation, such as mandatory minimum sentences. When legislators push for stricter and longer sentences, the need for prison space increases. Second, the focus on drug offenders and offenses will lead to the need for better security and more correctional officers to supervise those inmates. Alleviating the overcrowding problem will strengthen the prison industry. Overcrowded conditions lead to safety concerns. If there are too few staff, there will be gaps in security. Fewer cell checks and counts can be conducted. This situation can snowball into a dilemma for the prison industry. To control overcrowding, accreditation to mandate acceptable staff-inmate ratios would be of great assistance. Increased attention needs to be paid to victim rights and inmate rights. Specifically, better management of the death penalty, more programs, and better management and treatment of juveniles are necessary. One of the most important keys to the recovery of the prison industry is the government. The government needs to focus on meeting the needs of elderly inmates, the mentally ill, the drug addicted, and other inmates in need of assistance. Those who have acquired immunodeficiency syndrome (AIDS) and those who are in need of therapeutic

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community-based residential treatment programs within the prison, must have their needs met. In addition, correctional officers need to be prepared to manage gangs and assaults. One helpful way to improve the prison industry would be better classification of inmates in the first place. Maybe some criminals (those who are less dangerous), would benefit from community sentences. Then, more prisons would not need to be built. Instead, better use of those facilities is a way to more efficiently manage the prison industry. In fact, there are doubts about the effectiveness of mandatory sentencing. Thus, an evaluation of the most successful management techniques is needed yearly. Also invaluable to the prison industry is the hiring of well-qualified staff. Administratively, there needs to be well-qualified, fair, and knowledgeable upper management. On the front lines, correctional officers need to be knowledgeable and capable as well. Fair wages and proper conditions within the institutions go a long way. Much of the success of the prison industry relies on the ability to manage costs. The widespread impact of the global economic crisis has kept energy costs largely in check. However, the lack of federal aid to states—and, in turn, the lack of state aid to municipalities—has led governments on all levels to look into other options to fund their facilities. Further, the privatization of the prison industry could be another route to examine. Many analysts say a cost-effective technique is to contract out to private bidders who perform government activities. A private entity could take over full-scale management of the jails and prisons or be utilized for some services. However, it needs to be well-managed so that the services are not sub-par. Additionally, the pursuit of additional revenues has led officials to seek taxes on inmates. They can be charged for some services and programs they receive while incarcerated, and afterward for some aftercare. Medicine, food, housing, telephone, haircuts, drug testing, program participation, and work release are all examples of inmate fees that can be assigned. The punitive nature of our society is the main element driving the continued growth of the prison industry, even in times of recession. To be sure, the significant drop in financing during the economic recession of 2007-2009 had a severe impact on industry at large. However, there is always a need for a

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place to hold prisoners. In addition, there will always be a need for correctional officers to oversee the prisoners. Even if some leave the industry, or are transferred, those officers will need to be replaced, especially those who retire. The prison industry will most likely continue to see growth in both the short and long terms.

Additionally, those in the service sectors of the prison industry, such as housekeepers, food servers, and custodial staff, may see personal development in light of an ever-changing industry. For example, better benefits for employees have been offered to entice them to work in a stressful environment.

Employment Advantages According to the BLS, the prison industry will continue to grow well into the 2010’s. Wages and salaries are expected to grow at about the economy-wide average rate of 7 to 13 percent, and industry-wide construction growth is also anticipated to continue. Employment opportunities for correctional officers are expected to be favorable, and growth is expected to be as fast as the average for all occupations. There will be rising employment demand and thus more job openings. Projections from the National Employment Matrix indicate that employment of correctional officers, first-line supervisors, managers of correctional officers, bailiffs, and jailers, should see a 9 percent increase from 2008 to 2018. The median wage was $38,380 in May, 2008, and ranged from $29,660 to $51,000. For those employed in privately operated prisons, the median annual wage was $28,790. Bailiffs earned $37,820 on average. Interestingly, it is estimated that one in nine state government employees works in the field of corrections. The industry may experience difficulty finding and keeping qualified employees, since the salaries for correctional officers are not very high. In addition, most prisons are located in rural areas, far from where most of the potential workforce lives or wishes to live. Further, few people want to work in a prison all day or perform shift work. The work can be stressful and hazardous, and correctional officers have one of the highest rates of nonfatal onthe-job injuries. The diversity of the industry in terms of the broad range of career paths continues to be a great benefit to those seeking advancement. Most employees begin at a basic, entry-level position in a correctional institution, moving upward either within the prison itself or at prisons in other states. Prisons offer management training, certification, and other programs designed to give employees the opportunity to thrive in their current positions and advance in the future.

Annual Earnings The prison industry is strongly influenced by politics. If the political environment supports controlling crime, more severe sanctions will be assigned to crimes (such as mandatory minimum sentences and “three strikes” legislation), and the prison population will rise. More prisons would need to be built to hold the greater inmate population. Thus, there would be a larger need for correctional officers to staff the prisons. If the trend is to decrease the number of persons in prison by enhancing community sanctions, there would be a smaller need for correctional officers. In 2011, state spending on prisons is projected to reach $40 billion. Spending was $35.6 billion in 2006. Taxes for prison construction are around $6 billion a year, and $2 billion a year for payroll. According to the U.S. Department of Justice, $3.314 billion was earned in revenue in 2009, and the net cost of operations was $27.959 billion. The most expensive jail budget is found in New York ($1.1 billion), and the lowest is found in North Dakota ($3.5 million). The compound annual growth rate of the industry in the period 2008-2013 is predicted to be 7-13 percent. The median wage for 2009 was $27.74 an hour, or $57,690 annually, and 19,400 job openings are projected from 2008-2018. There were 44,000 employees in 2008. Overall, the jail and prison population changes constantly. Some prisoners are released, some are convicted and transferred to prison, and new offenders are arrested and enter the system. Thus, there will always be a need for correctional officer oversight.

RELATED RESOURCES FOR FURTHER RESEARCH American Correctional Association 206 N Washington St., Suite 200 Alexandria, VA 22314 Tel: (703) 224-0000

Criminal Justice and Prison Industry Fax: (703) 224-0179 http://www.aca.org American Jail Association 1135 Professional Ct. Hagerstown, MD 21740 Tel: (301) 790-3939, ext. 24 http://www.corrections.com/aja Federal Bureau of Prisons 320 1st St. NW Washington, DC 20534 Tel: (202) 307-3198 http://www.bop.gov U.S. Bureau of Justice Statistics 810 7th St. NW Washington, DC 20531 Tel: (202) 307-0765 http://bjs.ojp.usdoj.gov U.S. Department of Justice 950 Pennsylvania Ave. NW Washington, DC 20530-0001 http://www.justice.gov

ABOUT

THE

AUTHOR

Gina M. Robertiello has more than fifteen years of professional experience in the education industry. She is a 1991 graduate of Rutgers University and a 1993 graduate of the School of Criminal Justice-Rutgers University, from which she received a Ph.D. in criminal justice in 2000. She has been associated with criminal justice education in New Jersey since 1993, publishing extensively in the areas of police, domestic violence, research methods, victimology, and criminology. She teaches courses at the introductory and advanced levels in the Criminal Justice Department and the Sociology Department at Felician College, in Lodi, New Jersey, where she is a professor and chair of the Criminal Justice Department.

FURTHER

READING

ASIS International. Career Opportunities in Security. Alexandria, Va.: Author, 2005. Available at

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http://www.asisonline.org/careercenter/ careers2005.pdf. Barlow, Hugh D., and Scott H. Decker. Criminology and Public Policy: Putting Theory to Work. Philadelphia: Temple University Press, 2010. Culp, Richard F. “The Rise and Stall of Prison Privatization: An Integration of Policy Analysis Perspectives.” Criminal Justice Policy Review 16, no. 4 (December, 2005): 412-442. Federal Bureau of Prisons. Employment Information Handbook. Washington, D.C.: Author, 2010. Kerle, Ken E. Exploring Jail Operations. Hagerstown, Md.: American Jail Association, 2003. Lamont, Christopher K. International Criminal Justice and the Politics of Compliance. Burlington, Vt.: Ashgate, 2010. Maguire, Mary, and Dan Okada. Critical Issues in Crime and Justice: Thought, Policy, and Practice. Los Angeles: Sage, 2011. Pelaez, Vicky. The Prison Industry in the United States: Big Business or a New Form of Slavery. New York: El Diario-La Prensa, 2005. Pew Charitable Trusts. Public Safety, Public Spending: Forecasting America’s Prison Population, 2007-2011. Philadelphia: Author, 2007. Shoham, S. Giora, Paul Knepper, and Martin Kett. International Handbook of Criminology. Boca Raton, Fla.: CRC Press, 2010. Spivak, Andrew L., and Susan F. Sharp. “Inmate Recidivism as a Measure of Private Prison Performance.” Crime and Delinquency 54, no. 3 (July, 2008): 482-508. Sumpter, Melvina. “Faith-Based Prison Programs.” Criminology and Public Policy 5, no. 3 (August, 2006): 523-528. Tewksbury, Richard, and Elizabeth Ehrhardt Mustaine. “Insiders’ View of Prison Amenities: Beliefs and Perceptions of Correctional Staff Members.” Criminal Justice Review 30, no. 2 (September, 2005): 174-188. U.S. Bureau of Justice Statistics. Jail Inmates at Midyear. Washington, D.C.: Author, 2009. _______. Prison Inmates at Midyear. Washington, D.C.: Author, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://

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Criminal Justice and Prison Industry

www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data

and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Walmsley, Roy. World Prison Population List. London: International Center for Prison Studies, 2009.

Day-Care Services ©Orangeline/Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The day-care industry provides care and supervision to persons who require such services for less than twenty-four hours a day. Care receivers include children, adults with physical or mental disabilities, and seniors. The child day-care industry comprises establishments that offer paid care mainly for infants, toddlers, and preschoolers, as well as independent before- and afterschool programs for older children. Adult day care provides assistance with the tasks of daily living for a portion of each day. It represents a viable alternative to placement in residential institutions.

General Industry: Education and Training Career Clusters: Education and Training; Human Services Subcategory Industries: Activity Centers and Day-Care Centers for Disabled Persons, Elderly Persons, and Persons Diagnosed with Mental Retardation; Adult Community Centers (Except Recreational Only); Adult Day Health Care Centers; Adult Day-Care Centers; Babysitting Services; Child Day-Care Centers; Child Day-Care Services; Group Day-Care Centers; Head Start Programs, Separate from Schools; Infant Day-Care Centers; Infant Day-Care Services; Nursery Schools and Preschools; Senior Citizens Centers Related Industries: Hospital Care and Services; Personal Services; Private Education Industry; Public Elementary and Secondary Education Industry; Residential Medical Care Industry Annual Domestic Revenues: Child day-care services: $31 billion USD (Research and Markets, 2009); adult day-care services: $25 billion USD (U.S. Census Bureau, 2007) NAICS Numbers: 6244, 624120

History of the Industry Caring for children outside the home was not viewed as a significant occupation until the midseventeenth century, when John Amos Comenius outlined his vision of early childhood education in Didactica magna (1633-1638; The Great Didactic of John Amos Comenius: Now for the First Time Englished, 1896; better known as The Great Didactic). Facilities that cared for children outside their parents’ homes emerged in Europe in the late eighteenth and early nineteenth centuries. These precursors of modern day care were mainly charitable institutions, known as “day nurseries.” or 503

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“crèches.” The Société des Crèches was recognized by the French government in 1869. Some debate surrounds the timing of the first American day care’s establishment. A Quaker day nursery existed in Philadelphia in 1795, and a Boston infant school is mentioned in a document from 1828. One of the earliest facilities, the New York Day Nursery, was established in 1854. Founded by charitable institutions, early day-care facilities had primarily custodial characters and served working mothers. Supervision was emphasized over education. Historical circumstances and new research in education and psychology brought an expansion of the child-care system in the twentieth century. The Great Depression sent more mothers into the workforce and changed the prevailing attitude toward day care. Nursery schools became involved in education. At the time, large-scale institutionalized day care was employed in the Soviet Union. In the United States, the Lanham Act of 1941 provided funds for the construction and operation of daycare centers serving the children of female defense workers. World War II had turned child day care into a public issue. The postwar years saw a greater involvement of the day-care system in the intellectual development of children. In the mid-1960’s, Head Start was introduced and began subsidizing day care for underprivileged children. The program further strengthened the association between day care and education. Between 1970 and 1995, the proportion of U.S. women who had children and participated in the workforce grew from 30 percent to over 60 percent and the need for child day-care arrangements increased. The end of the twentieth century and the beginning of the twenty-first brought several scientific studies emphasizing the need for high-quality care that supports children’s development. Adequate regulation and supervision of day-care operations became a priority. In the 1990’s, the National Association for Family Child Care was formed. Together with similar associations abroad, this organization helped move family day care toward better standards of care and professionalism. Adult day care originated in Europe and initially took the form of daily hospitalization. Doctor Lionel Cosin pioneered this form of care, both in Great Britain and in the United States, in the

1960’s. A therapeutic day program at the Cherry Hospital in Goldsboro, North Carolina, prepared patients for discharge and taught them independent living skills. The system expanded and gained adherents, mainly through grassroots efforts to obtain recognition and funding. In California, adult day-care establishments emerged in the 1970’s. In 1985, the state began requiring such facilities to acquire specialized licenses, distinct from those required by child day-care facilities. Adult day-care program managers recognized the need to establish national, standardized criteria that would allow caregivers to rate and better describe the services they provide. The National Adult Day Services Association (NADSA) was founded in 1979. Since then, these services have become valuable, community-based care options for seniors and people with disabilities. The Industry Today The number of families with two working parents has increased dramatically during the late twentieth and early twenty-first centuries. A major concern for these working parents is identifying quality child care, especially for children under the age of five. The child day-care industry fills this growing need for nonrelative care through several types of services. Children too young to attend school can be cared for in dedicated child day-care centers or in providers’ homes (known as “family day care”). Older children may receive day-care services when they are not in school, attending before- or after-school programs or private summer school programs. Formal child day-care centers include preschools (part- and full-day), child-care centers, school- and community-based prekindergartens, and Head Start and Early Head Start centers. Family child-care services are provided in private homes, for a fee, and include most of the self-employed workers in this industry. (Unpaid care providers, such as friends and relatives, are not part of the industry. Child-care providers working in their charges’ homes, such as nannies, are part of the personal services industry.) The rapidly growing for-profit sector of the daycare industry includes independent centers that function as parts of local or national companies. Nonprofit child day-care establishments may function within religious institutions, colleges, public schools, the Ys (formerly Young Men’s Christian

Day-Care Services Associations, or YMCAs), other social and recreation centers, social service agencies, or various worksites. The federally funded Head Start and Early Head Start programs are strong nonprofit programs that provide underprivileged children with educational, social, and health services. Before- and after-school programs may be operated by public school systems, local community centers, or private organizations. According to the U.S. Bureau of Labor Statistics (BLS), preschool teachers, teacher assistants, and child-care workers represented almost 78 percent of wage and salary jobs in the day-care industry in 2008. Approximately 44 percent of workers in the industry had high school diplomas or less education, reflecting the minimal training requirements for most jobs in this field. About 29 percent of all employees worked part time in 2008. Dissatisfaction with pay, minimal benefits, and stressful working conditions cause many workers to leave the industry, leading to a high turnover rate and the

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need constantly to recruit new workers into the industry. Over twenty federal funding and regulatory avenues for early childhood education exist, and every state has one of a spectrum of differently funded and coordinated programs. There are no structures similar to school districts for early childhood education programs, no federal laws that set uniform expectations for teacher qualifications, and no uniform accountability or reporting systems. The quality of American child care represents a significant problem. Several European countries set high standards of training for early childhood education personnel, such as requiring the majority of caregivers to have college degrees, and strongly emphasize family child care. The United States, by contrast, struggles with a short supply of high-quality programs, as well as limited state requirements and monitoring. Close monitoring of this sector— which has such a profound impact on children’s cognitive, social, and emotional development—is acutely necessary but lacking. Given the high rate of turnover in the U.S. industry, a lack of continuity of care—which can have profound psychological repercussions for young children— has become a particularly serious problem. Improving wages, benefits, and education opportunities for caregivers is critical for improving staff retention and increasing continuity of care. At present, working parents are the main funders of child care, but their budgets are often stretched thin. The question of how to ensure their children grow up in stable, competent, well-paid daycare environments has no easy answer. In general, three main types of adult day centers exist: social centers (providing meals, recreation, and minimal or no health-related services), medical or health centers (providing social activities, as well as more A woman at an adult day-care center in Chino, California, hugs a therapy dog. intensive health and therapeu(AP/Wide World Photos) tic services), and specialized cen-

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ters (dedicated to specific adult populations, such as those with dementias or developmental disabilities). The National Adult Day Services Association (NADSA) has identified over forty-six hundred day programs operating in the United States. According to a study conducted by the Wake Forest University School of Medicine, adult day centers provide care for 150,000 recipients each day. Even so, there is a shortage of such centers in most parts of the United States. The demand for them is expected to increase as the baby boomers age and more of them require care. Approximately 78 percent of adult day centers are operated on a nonprofit or public basis; the remaining 22 percent are for-profit facilities. Adult day programs provide their charges with structured schedules in safe, supportive environments; they help functionally impaired seniors and disabled adults remain in their communities, retain a degree of independence, and maintain selfworth. They also provide respite for caregivers, in addition to the possibility of maintaining employment. Adult day services that are organized according to a medical model provide medical and rehabilitation day treatment—including physician visits; nursing care; podiatric exams; and physical, occupational, and speech therapy—in a secure environment. The recipients of these services are often individuals with dementia (including Alzheimer’s), diabetes, cardiovascular conditions, Down syndrome, and mental illnesses, as well as those who have suffered strokes. Frail elderly people and people recovering from traumatic injuries can also benefit from these services. The social model offers supervised activities, group support, and companionship. Participants in this model generally require some assistance with daily activities (such as dressing, eating, or bathing), but they do not need skilled nursing care. These social programs also provide transportation, meals, caregiver support groups, referral services, and community outreach programs. If participants require medication during the day, it is usually self-administered. Approximately thirty-five states license adult day programs, of which twenty require all such programs to be licensed. A center may be licensed as a social or a medical center, or both. Each program determines which level of licensure is most appropriate.

INDUSTRY MARKET SEGMENTS Child day-care establishments are found across the United States, mirroring the distribution of the population. However, they are less common in rural areas, where there are fewer children to support distinct facilities. Child day-care operations vary in size, from self-employed persons each caring for a few children in private homes to large corporatesponsored centers with numerous employees and children. Almost 86 percent of all wage and salary jobs in 2008 were located in establishments with fewer than fifty employees. Adult day-care facilities have variable enrollment numbers but on average host twenty-five to thirty participants each day. Such programs may be provided in family homes, freestanding centers, or multiuse facilities such as churches, schools, and senior centers. Small Businesses According to the BLS, opportunities for selfemployment in the day-care industry are among the best in the economy. Approximately 430,000 persons are self-employed or unpaid family day-care workers. This number reflects the ease of entering the child day-care business. Small businesses are generally single-establishment companies that meet specified minimum annual sales (usually $1,000). This segment of the industry comprises mainly family day-care operations caring for up to ten or fifteen clients. Most family child-care establishments are small, one-person operations that care for one to six children. These providers are selfemployed and account for approximately 33 percent of child-care workers. Some hire a small number of additional workers, such as drivers, aides, and substitute caregivers. All states and many municipalities have their own regulations governing the maximum number of children and the number of children of a specific age that a home facility can host. In New York City, for example, a maximum of six children are allowed in a family daycare establishment—five if any of the children are under the age of two. Many home day-care facilities are licensed and proven to meet certain standards with respect to caregiver-to-child ratio, space (for example, minimum square footage and the presence of fences), sanitation, and so on. Some states do not require

Day-Care Services these facilities to be licensed, and, in consequence, some facilities do not apply for licenses. Each state publishes minimum standards for health and safety at licensed centers. These include medical information that must be on file, as well as rules involving communicable diseases, hygienic practices, and storage of chemicals, among other factors. States also issue guidelines for serving balanced meals and nutritional snacks to children or adults at day-care facilities. Licensing is often required for family-care establishments accommodating more than six children. An adult day-care home is a program operating in a single-family dwelling that is lived in by its owner. Such programs provide care, services, and supervision to at least three but not more than eight to fifteen elderly or disabled adults (depending on the state). Small adult commercial day-care centers with similar capacities also exist; they are either private, for-profit, or part of organizations. The demand for these facilities is very high, and their number is insufficient. Emergency medical care can be provided in these home-based facilities, but routine medical care is usually not available. Depending on their model of operation, commercial and organizationbased facilities may hire nurses and therapists. Many medical day-care centers are small businesses. They are licensed to administer medications, make medical assessments, and provide various forms of therapy. While home health care may be appropriate for some seniors, adult day health care is often preferable for a variety of reasons, including the fact that it allows primary caretakers to work or get a break. Potential Annual Earnings Scale. According to the BLS, the average annual income of a child day-care provider in 2009 was $18,900, and the average annual income of an adult care provider was $20,560. Clientele Interaction. In family child-care homes, children are cared for by the same persons and share the premises with one or two other children of similar age and perhaps three or four others in different age groups. Family child-care and adult day-care providers need to have excellent social and leadership skills. Children’s relationships with their parents or caregivers are inherently close. Caring for children and disabled adults involves a high level of responsibility and dedication.

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A genuine love of children is often described as an obligatory trait for family child day-care operators. Interacting with clients requires friendliness and tolerance, in addition to tact and discipline in following the established rules of one’s facility. A pleasant and professional demeanor is a valuable asset. Workers have the unique opportunity to influence children’s development and become important, memorable parts of their lives. Lasting relationships are often forged with adult charges and their families. Care providers often describe their professional lives as combining business relationships with parents or caregivers and family-like connections with the children or adults in their care. However, court cases highlight the need for day-care providers to have substantial knowledge of relevant laws. Providers can ask parents to sign consent forms that outline their policies and the procedures to be followed in special situations and emergencies. In addition, the responsibilities and expectations of both parties should be clearly outlined. Amenities, Atmosphere, and Physical Grounds. Because home day-care facilities may or may not be licensed or meet state and local standards, their physical grounds and atmosphere vary widely. Some homes are minimally modified to accommodate a large number of children, while others undergo extensive changes that turn them into miniature versions of formal commercial day-care centers. More extensive remodeling is usually needed in houses for children with special needs. Multiple beds are required to accommodate clients of night-care facilities. Providers are responsible for purchasing furnishings such as high chairs, infant seats, booster chairs, child-sized tables and chairs, shelves, cribs, cots, and mats, blankets, sheets, pillows, diaper-changing tables, swings, sand boxes, and diaper pails. The homelike, less institutional atmosphere of small home day-care facilities is sought by many parents and caregivers. Their grounds most resemble those of family residences, often with renovations or added amenities. A provider’s home generally reflects the age of the charges it serves. Children respond well to brightly lit, stimulating, colorful environments that are stocked with a variety of age-appropriate toys and games. Outdoor play areas are often available. Childproofing is a priority, as are amenities designed to ensure senior

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safety. Some owners make their entire homes available to their charges, while others use only specific areas, maintaining a separation between business areas and dwelling space. This decision depends on state regulations, as well as an owner’s preference. Designated activity, eating, bathing, and changing or toilet-training areas should exist. Small offices are usually also needed. Owners may or may not provide transportation for their clients. Keeping educated and abreast of new developments in the day-care field is important, both for clients and for providers. Providers should be certified in first aid and cardiopulmonary resuscitation (CPR). Facilities are usually wheelchair accessible. In small adult day-care facilities, meals are prepared according to each participant’s individual needs and served in special dining rooms. Medications are supervised. A garden or outdoor patio usually exists. Typical Number of Employees. Most small day-care businesses employ from one to four peo-

ple. Usually, one adult can supervise up to six children. If a business has more than six charges, it requires additional staff. Traditional Geographic Locations. Small daycare facilities for children or adults are present in most locations, although they are more common in cities and towns than in rural areas. Pros of Working for a Small Day-Care Facility. Day-care owner-operators have the freedom to decide on many parameters of their businesses, such as the age and number of their charges, fees, hours of operation, and amenities. They can establish their reputations with different categories of working parents or caregivers. Many caregivers, for example, may not work traditional nine-to-five jobs, so they may have distinct day-care needs that small flexible facilities are well equipped to serve. Researching the market in a particular area can help a business owner decide what type of program to implement. For example, facilities may operate full time during weekday hours, after school, regu-

The limited number of children served by small facilities ensures that each will receive more individualized attention. (©Dreamstime.com)

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The workday for those caring for preschoolers and infants is often longer than ten hours. (©Christopher Futcher/iStockphoto.com)

lar but nontraditional hours, or on demand. Small day-care facilities may also offer more freedom in terms of curricula and lesson plans than do some larger facilities, in which curricula may be already in place. Start-up costs for day-care businesses are generally modest (as low as a few hundred dollars), unless a provider’s home requires substantial remodeling. Providers may care for their own children or relatives alongside their paying customers, generating a comfortable income and filling a need in the community. Some providers enjoy integrating their work with domestic activities such as cooking and gardening, which can also be beneficial for their charges. The limited number of children or adult charges served by small facilities ensures that each will receive more individualized attention and makes it easier for workers to respond to specific care needs than at larger facilities. The likelihood of contamination and sickness may also be lower in a small facility.

Cons of Working for a Small Day-Care Facility. According to the BLS, self-employed day-care workers tend to work longer hours than their salaried counterparts. For those caring for preschoolers and infants, the normal workday is longer than ten hours. Because the start-up costs in this industry are low, qualifying for a bank loan can prove difficult. In addition to providing quality care for children, family care providers must often concern themselves with the financial, administrative, and marketing aspects of their businesses. In small adult day-care businesses, center directors often function as social workers and nurses, in addition to their management duties. Businesses need solid financial record-keeping systems, which may require them to hire consultants or accountants. In addition, day-care providers who work out of their homes must purchase their own supplies and provide (or commission) their own advertising. They may have little time to devote to educating their charges or developing curricula.

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The income of family day-care facilities is limited by state laws that cap the number of individuals for whom they can care. For this reason, many small day-care operators ultimately decide to open additional facilities, thus expanding their client bases and incomes. Providers must make sure their immediate families are supportive and understand the time and energy commitment their businesses require. Young children may have difficulty sharing their parents’ attention with others. Care must be taken so that neighbors are not inconvenienced by the arrival and departure of clients. In addition, they should be made aware of the possibility of increased noise levels during activity times and informed of the steps taken to reduce them. While this type of business fosters a close interaction between providers and clients, it may be difficult to maintain a balance between business and friendship. Costs Payroll and Benefits: Small day-care facilities with more than one employee usually pay hourly wages. These vary according to employees’ expertise and the type of work involved, but they are generally minimal, and workers receive few if any benefits. Some owners, however, do offer medical and dental plans, training allowances, and subsidized child care. Owner-operators of day-care facilities receive their facilities’ profits as income. Supplies: Depending on the age of their charges, small day-care facilities may need toys, books, games, musical instruments, art and craft items, food, bedding, office supplies, medical supplies, and information technology. Fuel is needed for field trips or daily transportation, if provided. External Services: Day-care businesses may contract legal, accounting, maintenance, or advertising services. They must also pay for insurance against lawsuits, accidents, and other unexpected liabilities. Utilities: Day-care businesses typically pay for water, sewage, electricity, gas, telephone, cable television, and Internet services. Taxes: Small facilities often pay few taxes directly. Instead, their owners may report the businesses’ income as personal income and pay businessrelated taxes (including self-employment taxes) on their personal returns. Owners of home-

based businesses may also be able to write off a portion of their rent or mortgage payments and other home expenses, including utilities, as business expenses. Midsize Businesses Midsize facilities include child day-care centers, school- and community-based prekindergarten establishments, and Head Start and Early Head Start centers. Many adult day-care centers operate at this level, on a for-profit, nonprofit, or public basis. Some of them are affiliated with multiservice entities such as home care, assisted living, or nursing facilities or hospitals. These entities may offer elder care as an outpatient service to the neighboring population on a daily basis. They also provide respite care for the duration of a week or weekend. Senior centers may also offer senior day care as one of their services. Potential Annual Earnings Scale. According to the BLS, the average annual income of a child day-care provider in 2009 was $18,900, and the average annual income of an adult care provider was $20,560. Supervisors of adult care staff earned an average of $34,680, while preschool day-care teachers earned an average of $24,560. Median annual wages for most occupations in the child day-care industry range between $17,000 and $38,000. With the possible exception of public school-based and prekindergarten programs and some unionized centers, early childhood education teachers usually work for much lower wages than do teachers in grades K-12, and formal pay scales are infrequent. Their compensation comes from various funding sources and often includes no provision for professional development. Adult day-care providers are similarly relatively poorly compensated, although registered nurses in the field earned an average of $60,740 in 2009. The median expected salary for a typical adult day-care director in the United States is $73,852. Clientele Interaction. Early childhood education teachers have an important and rewarding mission: to help children grow and learn. Their work is oftentimes both routine and challenging. They must continuously stand, bend, stoop, lift, and walk, while trying to divide their attention equitably among several children; their only real respite is naptime. Workplace injuries are not uncommon. Interactions with parents are somewhat

Day-Care Services more formal than in small family day-care establishments. One mission of an adult day-care program is to promote social and personal interaction. Each client’s schedule is outlined in an individual plan of care. By interacting with participants and staff, functionally or mentally disabled clients can develop new skills and improve their self-esteem. In such programs, personal service, a supportive atmosphere, and strong community spirit are the norm. Staff emphasize forming enduring friendships and integrating clients into their centers’ communities. Nursing, various forms of therapy, activities, counseling, socialization, nutritious meals, and transportation to and from such centers are designed to help adult charges retain the maximum possible degree of independence. Amenities, Atmosphere, and Physical Grounds. Early childhood education facilities can function as freestanding centers or as parts of other organizations. They often occupy a portion of a larger building, including a different room for each age group, and they may also include separate play and dining spaces, bathrooms, changing areas, activity areas, fenced-in playgrounds, offices, and kitchens. All spaces should be child-safe, bright, clean, and decorated in engaging colors. A variety of age-appropriate toys, books, and games is typically provided. Adult day-care programs are offered in many types of settings, including stand-alone facilities, storefront properties in shopping centers and strip malls, senior centers, nursing facilities, churches, hospitals, and schools. Regardless of the location, all must be accessible for persons with disabilities, well-lit, and barrier-free. They should include dining spaces, activity areas, staff offices, libraries, bathrooms (a minimum of one toilet for every ten participants, according to NADSA), therapy and nursing rooms, bathtub or shower rooms, kitchens, and laundry areas. NADSA recommends a minimum of sixty square feet of space per participant. Provisions for participants’ independence and privacy should be made. Activity spaces comprise areas for both big and small groups and are generally supplied with games and craft items that support mental acuity. Outdoor areas facilitate gardening and relaxation. The overall goal is to achieve a noninstitutional feel, while minimizing client risk.

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Typical Number of Employees. Midsize daycare businesses employ approximately five to twenty workers and care for fifteen to sixty charges. States have specific guidelines governing the ratio of caregivers to children in each age group; usually, the desirable ratio varies between one to three for infants and one to eight for four-year-olds (the lower, the better). Staff turnover rates in early childhood education facilities are often very high, mainly because those facilities pay low wages. In adult day care, a minimum staff-to-participant ratio of one to six is recommended by NADSA. This ratio is likely to be smaller (for example, one to four) for participants with more severe impairments, such as dementia. Traditional Geographic Locations. Midsize day-care facilities can be found in a variety of locations, including cities, suburbs, and small towns. They are less common in rural areas, because those areas have smaller pools of potential participants. Studies indicate that rural areas tend to be disadvantaged with respect to community-based health services, but few rigorous reports are available on adult day care. Using data from a national survey of 822 adult day-care centers, one study found significant differences between urban and rural centers in structure, process, and client measures. Rural adult day-care centers tend to have lower enrollment rates and a significantly less impaired client population that requires fewer clinical services. Rural centers also reported less involvement of the family and community in various activities. Pros of Working for a Midsize Day-Care Facility. Part-time jobs are often available at midsize facilities, expanding the options for those seeking flexible employment. In fact, according to the BLS, approximately 29 percent of day-care workers are employed part time. In addition, midsize facilities may provide opportunities for workers to concentrate on particular age groups, in well-defined agespecific classrooms. Many private and public preschool programs operate during the usual school year, that is, for nine or ten months out of each year. Family child-care providers, by contrast, may have more flexible hours and daily routines, but they may work long or unusual hours and need to make special provisions in order to take vacations. At midsize facilities, it is often easier than it is at small facilities for workers to take breaks during

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the day, as they are more likely to have colleagues that can cover for them. Staffs at such facilities are relatively small, but they generally have at least one dedicated director or administrator. Thus, caregivers can focus on providing care and teaching and can leave their facilities’ administrative duties to their administrative staffs. Cons of Working for a Midsize Day-Care Facility. In a formal day-care center, the children are divided by age into “groups” or “rooms.” A staff member and one or two other caregivers attend to the needs of five to fifteen children in each room. (The number of children in a room varies, depending on the children’s age group.) If they are not self-employed, workers may not be able to adjust their working hours or make significant decisions regarding wages, program activities, and amenities. Salaries are generally low. Curricula for each age group at a facility may be approved and implemented by administrators or by previous employees, so individual teachers and caregivers have less freedom to implement their own ideas. There are no opportunities to integrate domestic and curricular activities. The high staff turnover rate at most facilities can prove stressful for workers and children alike. Obstacles cited by adult day-care providers include inadequate funding, difficulty recruiting and retaining staff, and problems maintaining enrollment and attendance at the levels needed to cover operating costs. Costs Payroll and Benefits: Day-care facilities often pay hourly wages, although some pay annual salaries, especially to administrators. Salaries are generally quite low in this field, and benefits are usually not provided—particularly given the high percentage of part-time employees in the industry. Nonprofit and religiously affiliated centers generally pay higher wages and offer more generous benefits than do for-profit establishments. Supplies: Day-care facilities require a multitude of items, including toys, books, games, paper products, musical instruments, art and craft items, newspaper and magazine subscriptions, food, linens, medical supplies, cleaning supplies, office supplies, personal care accessories, and information technology products. Fuel is needed for field trips and daily transportation. The

Child and Adult Care Food Program (CACFP) reimburses public, nonprofit, and for-profit nonresidential child-care centers; Head Start and Early Head Start centers; preschool programs; before- and after-school hours programs; and after-school programs in low income areas at free, reduced-price, or paid rates for eligible meals and snacks served to enrolled children. External Services: Day-care businesses may contract legal, accounting, laundry, maintenance, transportation, catering, or advertising services. Specialists such as podiatrists, therapists, and personal grooming personnel are periodically present in some adult day-care facilities. Insurance is needed to cover the potential costs of lawsuits, accidents, and other unexpected liabilities. Utilities: Utilities typically include water and sewage, electricity, gas, telephone, cable television, and Internet access. Taxes: For-profit facilities pay local, state, and federal income taxes, as well as applicable property taxes. Large Businesses Large day-care centers may operate independently or as part of business chains. According to the U.S. Business Administration, some of the leading day-care chains are KinderCare, founded in 1969, with more than 850 locations in forty states and Canada; LaPetite Academy, started in 1970, with 358 centers in twenty states; ARA Services, with 142 schools in eleven states; and Gerber Products with 57 Gerber Children’s Centers in six states. Employer-operated day-care facilities may also feature sizable staffs. Fewer adult day cares are large enterprises, however some do accommodate one hundred to two hundred participants. Most states require licensing processes to operate adult day health care businesses, as well as a state licensing process to be approved for Medicare or Medicaid reimbursement. Potential Annual Earnings Scale. According to the BLS, the average annual income of a child day-care provider in 2009 was $18,900, and the average annual income of an adult care provider was $20,560. Supervisors of adult care staff earned an average of $34,680, while preschool day-care teachers earned an average of $24,560. Median annual wages for most occupations in the child day-care in-

Day-Care Services dustry range between $17,000 and $38,000. With the possible exception of public school-based and prekindergarten programs and some unionized centers, early childhood education teachers usually work for much lower wages than do teachers in grades K-12, and formal pay scales are infrequent. Their compensation comes from various funding sources and often includes no provision for professional development. Adult day-care providers are similarly relatively poorly compensated, although registered nurses in the field earned an average of $60,740 in 2009. The median expected salary for a typical adult day-care director in the United States is $73,852. Clientele Interaction. Caregivers and teachers have a duty to respond to their charges’ needs promptly and efficiently. A group of workers cares for a number of children, according to highly variable state regulations governing adult-to-child ratio. Typically, younger children are cared for in smaller groups, with higher ratios. One worker may be responsible for three or four infants, or even more toddlers, preschoolers, or school-aged children. Policies and rules regarding operating hours are strictly enforced. Parents receive daily reports of their children’s activities, food intake, and sleep. Adult day-care programs facilitate age-appropriate activities for their charges, designed to promote mental acuity through stimulating challenges coupled with social interaction. Seniors and other categories of participants have access to puzzles, board games, bingo, indoor golfing, arts and crafts projects, book clubs, holiday celebrations, intergenerational programs, lectures, and other cultural events. Program assistants and nurses focus on preserving and enhancing the functional status of their charges, while improving their social interactions and self-esteem. Caregiver groups and seminars support family members. Programs are available up to eight hours per day, usually five days per week. Some facilities may offer half-day services on Saturdays. Amenities, Atmosphere, and Physical Grounds. Large facilities often operate in multilevel buildings and feature separate classrooms for various age groups, miniature art centers, reading centers, sensory play areas, kitchens, and staff offices. All indoor spaces should be child-safe, bright,

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clean, and decorated in engaging colors. Various age-appropriate toys, books, and games are provided. Outdoor areas are equipped with safety barriers, soft materials (rubber, sand, or mulch) to cushion falls, and a variety of play stations. Regularly scheduled activities or curricula are in place. Work environments and their inherent difficulties are analogous to those present in midsize businesses. Adult day-care centers also have many characteristics in common with midsize facilities. Their goal is to provide warm, homelike environments for their charges. These centers may occupy standalone buildings or be part of multibusiness developments. They usually feature enclosed courtyards or gardens, dining rooms, big and small activity rooms, libraries, therapy rooms, kitchens, bathrooms, shower rooms, laundry areas, and staff offices. Some centers include special areas for individuals with memory loss. Most spaces are accessible for persons with disabilities. Gift, beauty, and barber shops may be present on their premises. Typical Number of Employees. Most large day-care businesses employ between twenty and sixty people, although few child-care facilities employ more than fifty. The typical number of charges cared for by such facilities is greater than sixty. Traditional Geographic Locations. Large child day-care facilities are located in urban and suburban areas. Adult day-care facilities have a similar distribution, with a relatively small number of centers operating in rural settings. Pros of Working for a Large Day-Care Facility. Large facilities offer staff members more opportunities for part-time work. Curricula, supplies, and materials are provided. Workers can concentrate their efforts on specific age groups, and they generally have few or no administrative duties to fulfill. Employers often offer incentives for their employees to participate in college courses, seminars, or workshops. Although the general day-care industry profit margin averages only 5 percent, the profit margin potential is actually much higher for large organizations; these have a cost advantage and can take advantage of economies of scale. Cons of Working for a Large Day-Care Facility. Large child day-care facilities have very high staff turnover rates, which can hinder collaboration among staff members and add to the stress levels inherent in their jobs. Bonuses and raises are in-

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frequent. Many large adult day-care programs have difficulty ensuring adequate funding and attendance, as well as recruiting and retaining staff. Maintaining a homelike feel in a large facility may be difficult. Costs Payroll and Benefits: Day-care facilities often pay hourly wages, although some pay annual salaries, especially to administrators. Salaries are generally quite low in child day-care facilities, and benefits are usually not provided—particularly given the high percentage of part-time employees in the industry. Some businesses offer free or discounted child care to their employees, others provide funds for college courses or seminars. Employees of adult day-care facilities generally receive somewhat higher compensation, especially registered nurses. Benefits are often offered to full-time staff. Employers may also provide training opportunities. Supplies: Day-care facilities require a multitude of items, including toys, books, games, paper products, musical instruments, art and craft items, newspaper and magazine subscriptions, food, linens, medical supplies, cleaning supplies, office supplies, personal care accessories, and information technology products. Fuel is needed for field trips and daily transportation. The CACFP reimburses public, nonprofit, and forprofit nonresidential child-care centers; Head Start and Early Head Start centers; preschool programs; before- and after-school hours programs; and after-school programs in low-income areas at free, reduced-price, or paid rates for eligible meals and snacks served to enrolled children. External Services: Day-care businesses may contract legal, accounting, laundry, maintenance, transportation, catering, or advertising services. Specialists such as podiatrists, therapists, and personal grooming personnel are periodically present in some adult day-care facilities. Insurance is needed to cover the potential costs of lawsuits, accidents, and other unexpected liabilities. Utilities: Utilities typically include water and sewage, electricity, gas, telephone, cable television, and Internet access.

Taxes: For-profit facilities pay local, state, and federal income taxes, as well as applicable property taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and distribution of tasks in a day-care facility depend on several factors, such as the size of the establishment, age of the participants, and model of operation. Small facilities are frequently operated by their owners, who may or may not employ a small number of aides. At the other end of the spectrum, large adult centers are staffed by multidisciplinary teams that include nurses, therapists, social workers, and caregivers. The following umbrella categories apply to businesses in the day-care industry: ■ ■ ■ ■ ■ ■ ■ ■

Business Management Caregiving and Health Services Education and Activities Social Assistance Facilities and Security Food Services Transportation Services Marketing

Business Management Child day-care directors fulfill administrative duties, such as processing enrollments, keeping attendance, maintaining health and safety records, ordering supplies, and keeping billing records. In some centers, directors create snack and meal menus in accordance with federal guidelines. In addition, they manage staff, create work schedules, ensure that the proper child-to-caregiver ratios are maintained, and communicate with parents. Directors may have advanced degrees in education. In some instances, experience can compensate for the absence of a pertinent degree. According to the Center for the Study of Child Care Employment, only twenty states have some type of director credential requirement, and many set few or no preservice training or education requirements. Large day-care centers also employ support personnel such as assistant directors, administrative assistants (book-

Day-Care Services keepers), and receptionists. Assistants and bookkeepers, who usually hold at least an associate’s degree, help directors maintain center records. Some of the overseeing duties for adult day-care directors are similar to those of child day-care directors. They often have degrees in nonprofit management, health care, social work, or geriatric care, which enable them to hire nurses experienced in working with seniors or disabled clients and to keep their facilities safe and secure. Managers or the activities directors develop program activities and tailor them to the needs of individual participants. In large adult heath day-care facilities, it is the responsibility of the health services coordinator (usually a registered nurse) to manage the array of health services provided, including internal or external medical staff and caregivers. The average annual compensation for these positions is approximately $60,000. Business management occupations may include the following:

■ ■ ■ ■ ■

■ ■ ■ ■

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Owner-operator Child Day-Care Director Adult Day-Care Director Adult Day-Care Activity Coordinator Adult Day-Care Health Services Coordinator Marketing Coordinator Assistant Director Administrative Assistant Bookkeeper

Caregiving and Health Services Each state regulates adult day-care centers differently, but NADSA provides overall directions in its Standards and Guidelines for Adult Day Care. Health day-care centers employ or arrange for the participation of a full range of licensed, reliable health care professionals who care for elderly and disabled individuals. These establishments often employ experienced full-time registered nurses with degrees from reputable universities, who pro-

OCCUPATION

PROFILE

Occupational Therapist Considerations

Qualifications

Description

Assesses disabled or injured people and creates and implements rehabilitation plan to restore independence and ability to work and function.

Career cluster

Health Science

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; volunteer work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

SRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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vide and supervise the necessary nursing services for each charge, review service plans, keep patient records, educate clients, conduct assessments, and attend to emergencies. They often supervise licensed practical nurses. Day-care nurses administer medications, change wound dressings, and monitor overall health. Many nurses concentrate on mental or physical health care services for certain patient categories, such as Alzheimer’s care. Some nurses and aides help provide transportation services to and from their facilities. Others work with nutritionists and cooks to ensure that participants receive adequate meals and snacks throughout the day. Registered nurses in the industry earned mean annual salaries of $60,740 in 2009, while licensed practical and vocational nurses earned $40,210 on average. Hands-on help with bathing, changing, and eating is provided by certified nursing assistants and other program assistants. Such health care support staff earned an average of $21,000 in 2009. Additional caregivers and companions may have minimal training but play important roles in assisting program participants at all times. Ideally, therapists who participate in adult daycare programs have degrees from accredited programs and are certified in their respective fields through national certifying programs. Physical therapists develop programs, games, and activities for elderly clients. Mental health therapists use music and art to communicate with participants and encourage them to socialize. Speech therapists work on improving communication skills through vocal exercises and cognitive methods. Occupational therapists use multiple methods to support and teach participants to lead more independent, productive lives. Mean annual wages for these professionals range from $42,780 for occupational therapists to $62,700 for speech-language pathologists. Some child day-care programs also have inhouse nurses, but this is not common. Caregiving and health services occupations may include the following: ■

■ ■ ■ ■

Adult Day-Care Health Services Coordinator Registered Nurse Licensed Practical Nurse Physical Therapist Speech-Language Therapist

■ ■ ■ ■

Mental Health Therapist Occupational Therapist Program Assistant Nursing Assistant

Education and Activities Teaching is considered an important mission of child day-care centers. Usually, a group of adults coteaches a number of children. Depending on the age of the children in a particular classroom, the duties of child-care workers and teachers may include the following: ■

Keeping daily records on each child’s meals, activities, sleep, and medications ■ Directing and monitoring children’s play activities ■ Reading to children and providing basic painting, drawing, crafts, and music instruction ■ Introducing mathematical and scientific concepts ■ Teaching personal hygiene and habits such as dressing, eating, resting, and toilet use ■ Changing diapers ■ Helping prepare food (including formula) and serve meals ■ Coordinating rest periods ■ Organizing, storing, and sanitizing toys and other play materials ■ Helping children with homework ■ Supporting children’s social and emotional development ■ Employing discipline methods ■ Identifying signs of emotional or developmental problems in children and informing parents Workers in before- and after-school programs help students with their homework or engage them in extracurricular activities, including field trips, sports, computer learning, and art projects. Some child-care workers take children to school in the morning and pick them up from school in the afternoon. Standards for early childhood education teacher qualifications vary widely among different geographic areas, program types, and funding situations. Each state sets its own early childhood edu-

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cation teacher standards, but federal programs such as Head Start are governed by their own, national standards. Some facilities require only a high school diploma and little preservice preparation, while others recommend at least a bachelor’s degree. Early childhood education is generally characterized by an emphasis on inservice training. Instructors without bachelor’s degrees are encouraged to attend college part time while teaching, in order to earn such degrees. Community colleges and community-based training organizations play important roles in teacher preparation. Many Activities such as painting are an important part of both child and adult day care. workers enroll in formal pro(©Orangeline/Dreamstime.com) grams to receive training in education, nutrition, and psyEducation and activities occupations may inchology. Some two-year colleges offer associate’s clude the following: degrees in preschool or early childhood education. Teaching certification is often required to at■ Early Childhood Education Teacher tain higher-level positions. Average wages for early ■ Teacher Assistant childhood education workers vary between $9 and ■ Child-Care Worker $13 per hour, depending on training and facility. ■ Activity Director Both models of adult day care provide therapeu■ Activity Assistant tic activities. Many facilities employ activity coordi■ Recreational Therapist nators and staff. Their mission is to lead, teach, and ■ Physical Therapist encourage clients to participate in games, crafts, ■ Program Assistant cooking, gardening, exercise, field trips, films, community projects, intergenerational programs, Social Assistance and other mentally or physically stimulating activiSome day-care centers employ child or family ties. Ideally, activity directors have associate’s or social workers. These professionals handle a varibachelor’s degrees in therapeutic recreation or ety of child- and family-related situations, includgerontology. Working closely with their program ing different cultures and congenital disabilities. managers, they evaluate the needs of program They aim to improve the social and emotional members, develop appropriate activity plans, help functioning of children and their families. train and evaluate program assistants and drivers, Adult day-care centers generally have licensed supervise the program assistants, develop driver social workers on site. Director-managers and assisschedules, oversee client transportation, and sutant managers may fulfill social work roles, if they pervise volunteers. Program assistants help with all have the necessary degrees in social work or nursactivities. Their qualifications are set by each cening. They may visit new clients at home, assess their ter and not specified by regulations. Some are cerneeds, and facilitate their access to services, such as tified nurse assistants (CNAs). Their compensation varies according to training and level of counseling and care plans. Specialized counselors expertise. are also available. Rehabilitation counselors help

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Day-Care Services OCCUPATION

PROFILE

Child-care Worker Considerations

Qualifications

Description

Dresses, feeds, bathes, and supervises children at schools, businesses, and child-care facilities.

Career clusters

Education and Training; Human Services

Interests

People; things

Working conditions

Work inside

Minimum education level

No high school diploma; on-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest scores

RES; SCR; SEC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

patients cope with the social and personal effects of health conditions. They assist with adjustment to disabilities caused by injury, illness, or developmental conditions. Mental health counselors work with individuals and families to treat mental disorders, through individual or group therapy. Geriatric social workers help elderly persons live healthier, more productive lives. They assess the needs of their clients, coordinate their medical care, and help them deal with end-of-life issues and other age-related concerns. These professionals generally have bachelor’s degrees in social work, and some hold master’s degrees. Their salary depends on education level and experience. Many adult day-care facilities provide counseling for family members caring for elderly or disabled individuals. Additional personnel, such as gerontology and mental health social work assistants (or aides), usually work under the direction of social workers and nurses. Their education level var-

ies, as does the amount of responsibility they receive. Social assistance occupations may include the following: ■ ■ ■ ■ ■ ■

Child-Care Social Worker Gerontology Social Worker Rehabilitation Counselor Mental Health Counselor Social Work Assistant Gerontology Aide

Facilities and Security Large facilities often employ security personnel. Their duties include making sure that patients with dementia or developmental disorders do not leave the facilities unaccompanied. With a minimum of formal training required, experience and reliability are emphasized. Midsize and large day-care facilities also employ full- or part-time housekeeping

Day-Care Services personnel, who clean classrooms, day rooms, bathrooms, hallways, and kitchen areas; maintain supplies; report repairs needed and perform minor repairs themselves; and help sanitize furniture, appliances, and toys. Housekeepers and janitors are usually trained according to their facilities’ standards and often work at minimum wage. Maintenance personnel, if present, repair plumbing, air-conditioning, electrical hardware, and various devices. Large establishments may employ groundskeepers, who perform landscaping activities, control insects and pests, trim grass, and maintain dumpsters and recycling areas. They usually have vocational training and are paid according to their experience. Facilities and security occupations may include the following: ■ ■ ■ ■ ■

Security Guard Housekeeper Custodian/Janitor Maintenance and Repair Technician Groundskeeper

Food Services Many facilities rely on food provided by caterers or by parents. In medium and large child day-care centers, though, food service personnel prepare meals and snacks, order and maintain food supplies, ensure kitchen cleanliness, and store ingredients. They should be familiar with nutritional principles, including the correct food portions for children of various ages, and potential allergies. Experience in the food services industry, whether as a cook, waiter, or counter attendant, is the most common background for food service employees. Child day-care cooks may be required to have experience working with children. Both adult day-care and adult day health care centers provide meals and snacks, making special dietary accommodations as necessary for charges with diabetes, renal problems, or other conditions. Licensing is required for any employee who prepares food for clients, feeds them, assists them in eating, or administers oral medications to them. A food manager and a dietician are often employed by large facilities. The mean annual income of salaried food service managers in this industry was $41,040 in 2009. Such managers have course work in food safety and have demonstrated their knowl-

519

edge by passing exams. Most food service managers have less than a bachelor’s degree; however, some postsecondary education, including a college degree, is increasingly preferred for many such positions. Food services occupations may include the following: ■ ■ ■ ■

Food Service Manager Dietician Cook Kitchen Aide

Transportation Services Some adult day-care programs arrange for transportation through external agencies; others employ drivers to provide door-to-door transportation in vans. If a program arranges its own transportation system, a transportation coordinator is often employed to supervise its operations by working with families, drivers, and other personnel. For driver positions, holders of high school diplomas are often preferred. Familiarity with operating lifts, CPR training, and sensitivity to the needs of seniors are recommended. An attendant or aide should be present in each vehicle. Drivers and aides plan routes together with coordinators, walk participants to and from vehicles, assist them on and off vans, and ensure their safety during transport. Personnel are often paid hourly wages. Some child day-care centers may also provide transportation to and from their facilities. Transportation services occupations may include the following: ■ ■ ■

Transportation Coordinator Driver Transportation Attendant

Marketing Activity directors and marketing coordinators facilitate community awareness of their programs via informal interaction with community members, as well as structured outreach. They must choose niches or other target audiences, position their facilities to appeal to such targets, advertise, organize open houses, obtain “earned” (or free) media coverage, develop promotional tools, and plan events. When enrollment is not at full capacity, marketing personnel and program managers

520

Day-Care Services

plan and implement strategies to increase awareness and enrollment figures. Marketing personnel usually require bachelor’s degrees. Marketing occupations may include the following: ■ ■ ■ ■

Marketing Coordinator Marketing Communications Director Activity Coordinator Program Manager

INDUSTRY

OUTLOOK

result in more children being enrolled in formal centers. Over 40 percent employment growth is expected in the overall family and personal services sector. The adult day-care industry is growing at a 5 to 15 percent pace, depending on location; its revenues in the United States were expected to reach $26 billion in 2011. As health care evolves and the longevity of the population increases, the role played by adult day-care facilities will become more and more prominent. An increasing number of local governments are investing in adult day-care centers. Colleges offer degrees in senior recreation and leisure management, to fuel the need for qualified staff. Job openings in social assistance should be abundant as a result both of workers leaving the industry and of a growing demand stemming from the aging of the American population. As baby boomers age, they will require adult day-care services. Facilities that allow them to lead more productive, independent lives outside of nursing homes or hospitals will expand. This growth will depend on the amount of governmental and managed care funding available. More growth in the

Overview Demand for child care is growing, both in North America and in Europe, as more mothers of young children work full time. A 2006 report by ThirdWave Research estimated the total potential market for U.S. day-care centers and preschools to be more than $24 billion. By 2009, industry revenues had risen to $31 billion. Key Note estimates that in the United Kingdom the total child-care market (comprising formal and family establishments) grew by 30.1 percent between 2004 and PROJECTED EMPLOYMENT 2008, to £4.79 billion. The U.S. FOR SELECTED OCCUPATIONS Department of Labor outlook for the day-care industry shows Social Assistance it to be on the rise. Many opportunities for emEmployment ployment in the industry are 2009 Projected 2018 Occupation expected: Increased demand will create new jobs, and exist269,000 312,100 Child care workers ing jobs will also need to be 76,740 92,500 Child, family, and school social filled as experienced workers workers leave their positions to continue their education or join 313,030 515,300 Personal and home care aides other industries. Demand for 41,670 51,300 Social and community service child-care facilities could inmanagers crease further if more states implement preschool programs 120,830 181,100 Social and human service for three- and four-year-old assistants children. Subsidies for children from low-income families, legSource: U.S. Bureau of Labor Statistics, Industries at a Glance, islation requiring welfare reOccupational Employment Statistics and Employment Projections cipients to work, and an inProgram. creasing number of employerfunded day-care centers could

Day-Care Services private segment might occur if state and local government agencies contract out some of their social services operations. According to a MetLife Mature Market Institute national survey, the national average daily rate for adult day-care services is $64—far less than the cost of hiring a home health nurse or moving to a nursing facility. Medicare does not usually cover the costs associated with adult day care, but if a center is a licensed medical or Alzheimer’s facility and a care recipient meets state qualifications, some of the expenses may be covered by Medicaid. Longterm care insurance may cover some of the costs if medical providers are involved.

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culties, despite growing steadily in the first decade of the twenty-first century. Experts predict that formal day-care centers will expand in the coming years. Family care operations, however, will continue to thrive slowly and steadily domestically and abroad and will be preferred by many parents for the more personal attention they provide. Despite substantial demand and growing personnel-replacement needs, recession woes— such as parental or caregiver unemployment—will probably cause the short-term expansion of the industry to be modest. After several boom years, with possibly five thousand new day-care centers established annually (as estimated by the National Child Care Association), an increase in child-care center vacancies has been noted across the United States. A 2008 study by the National Association of Child Care Resource and Referral Agencies reported decreased enrollment in 65 percent of child-care centers in forty states. Over 74 percent of these facilities reported that most of their clients had difficulty making payments on time or were not making payments at all. As the U.S. economy recovers, this trend is expected to reverse. The industry is still fragmented: large players with the highest earning potential represent only a small percentage of the market; tremendous growth potential exists.

Employment Advantages The mission of early childhood educators and caregivers is difficult to achieve but crucial to the health of a society. Patience and strength are required, in addition to a genuine love for children. A moderate increase in the number of child daycare jobs is expected, as well as increases in wages and salaries. Salary and wage jobs are expected to grow by approximately 15 percent during the 20082018 period. Adult day-care providers help the elderly and disabled stay in their homes longer; prevent or delay institutionalization; provide respite to caregivers; decrease emergency-room visits and hospitalization; and offer medical monitoring, care, food service, therapeutic activities, social services, and transportation. As projected by the BLS, the number of social and human service assistants is expected to grow by almost 23 percent between 2008 and 2018. This is a higher rate than the average for all occupations. More social and human service assistants, who are involved in providing day services for the elderly and mentally ill, will be needed to meet an ever-increasing demand. The competition will be more significant for jobs in urban areas, but qualified workers (especially those with postsecondary education) will probably obtain jobs with relative ease.

Center for the Study of Child Care Employment, Institute for Research on Labor and Employment 2521 Channing Way, Suite 5555 Berkeley, CA 94720-5555 Tel: (510) 643-8293 Fax: (510) 642-6432 http://www.irle.berkeley.edu/cscce/ index.html

Annual Earnings Global day-care industry trends are difficult to predict because of high variability in economic and cultural conditions. As funding is reduced in the wake of the economic crisis of 2007-2009, many U.S. adult day-care programs will experience diffi-

National Adult Day Services Association 85 S Washington, Suite 316 Seattle, WA 98104 Tel: (877) 745-1440 Fax: (206) 461-3218 http://www.nadsa.org

RELATED RESOURCES FOR FURTHER RESEARCH

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National Association for the Education of Young Children 1313 L St. NW, Suite 500 Washington, DC 20005 Tel: (866) 623-9248 Fax: (202) 328-1846 http://www.naeyc.org National Association of Child Care Resource and Referral Agencies 3101 Wilson Blvd., Suite 350 Arlington, VA 22201 Tel: (703) 341-4100 Fax: (703) 341-4101 http://www.naccrra.org National Child Care Association 1325 G St. NW, Suite 500 Washington, DC 20005 Tel: (800) 543-7161 http://www.nccanet.org National Resource Center for Health and Safety in Child Care and Early Education, University of Colorado Health and Sciences Center at Fitzsimons UCD-CON Campus Mail Stop F541 Education 2 North 13120 E 19th Ave. P.O. Box 6511 Aurora, CO 80045 Tel: (800) 598-5437 Fax: (303) 724-0960 http://nrckids.org

ABOUT

THE

AUTHOR

Mihaela Avramut trained at the University of Pittsburgh Medical School and the University of California, San Francisco. Her research focused on neurodegenerative disorders, including Alzheimer’s disease and Parkinson’s disease. As a physician, she has observed firsthand the beneficial effects of skilled adult day-care programs on various categories of patients. She is the president of Verlan Medical Communications and, since 1995, has lectured and written on a variety of medical, sci-

entific, and public health topics. As a mother, she has researched child day care extensively.

FURTHER

READING

Gestwicki, Carol, and Jane Bertrand. Essentials of Early Childhood Education. Toronto: Thomson Nelson, 2008. Goldsmith, Seth M. Long-Term Care Administration Handbook. New York: Aspen, 1994. Hearron, Patricia F., and Verna Hildebrand. Management of Child Development Centers. 7th ed. Boston: Pearson, 2011. Institute for Career Research. A Career as a Teacher: Early Childhood Education, Nursery Schools—Daycare. Chicago: Author, 2004. Leach, P. Day Care Today: Getting It Right for Everyone. New York: Random House, 2010. Lynn, Jacquelyn, and Charlene Davis. Start Your Own Senior Services Business. 2d ed. Irvine, Calif.: Entrepreneur Press, 2010. Moore, Keith Diaz, Lyn Dally Geboy, and Gerald D. Weisman. Designing a Better Day: Guidelines for Adult and Dementia Day Services Centers. Baltimore: The Johns Hopkins University Press, 2006. Pruissen, Catherine A. Start and Run a Home Daycare. 3d ed. North Vancouver, B.C.: Self Counsel Press, 2002. Schmitt, E. M., et al. “Adult Day Health Center Participation and Health-Related Quality of Life.” Gerontologist, February 10, 2010. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Child Care Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http:// www.bls.gov/oco/ocos170.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Defense Industry Department of Defense

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Clusters: Manufacturing; Science, Technology, Engineering, and Math Subcategory Industries: Combat Logistics; Combat Simulators; Defense Contractors; Military Manufacturing; Military Procurement; Missile Systems Design and Manufacturing; Naval Engineering; Radars and Sensors; Satellite Technology; Systems Engineering Related Industries: Airline Industry; Computer Hardware and Peripherals Industry; Computer Systems Industry; Federal Public Administration; Heavy Machines Industry; National and International Security Industry; Nuclear Power Industry; Political Advocacy Industry; Telecommunications Infrastructure Industry Annual Domestic Revenues: $214 billion USD (combined aerospace and defense industry; Hoovers, 2002) Annual Global Revenues: $674.6 billion USD (Datamonitor, 2008) NAICS Number: 333-336

INDUSTRY

organizations around the world. The industry builds airborne weapons, such as military planes and helicopters; naval vessels; land-based vehicles; and the integrated systems and weaponry on board such craft. The primary clients for such hardware and vehicles are governments, which may purchase defense systems from either native or foreign manufacturers.

History of the Industry Throughout human history, civilizations, nations, and states have relied on military technology to defend their interests. In ancient Egypt, for example, the introduction of the chariot represented an important turning point in battles, providing soldiers with an advantage in speed, mobility, and armor over their enemies. During the thirteenth century, the Chinese first used gunpowder in battle (although they had invented it hundreds of years prior), defeating the Mongols with “fire arrows.” In the fourteenth century, gunpowder and ordnance (military supplies such as guns and bullets) became dangerous partners. The first such weap-

DEFINITION

Summary The defense industry designs and manufactures the vehicles, systems, and weapons used by military 523

524

Defense Industry

Defense contractors produce navigational equipment, including Global Positioning System devices, compasses, maps, and two-way radios and other communications equipment. (©Urszula Sawicka/Dreamstime.com)

ons were cannons, but it was not long before weapons producers began to make lighter cannons, first for the battlefield and later for individual soldiers to use. In the seventeenth century, the introduction of the flintlock musket helped bring in a new era of battlefield weaponry. Rifles and, ultimately, revolvers and rapid-fire guns (such as the Gatling gun) further changed the landscape of military technology. The evolution of military technology was not limited to individual weapons. In 1862, during the American Civil War, the USS Monitor engaged the CSS Merrimack at Hampton Roads, off the coast of Virginia. The two ships represented a major development in military history—both were cloaked in thick armor (all other ships at that point were made with wood) and able to withstand a considerable

amount of enemy firepower. After that battle (in which there was no clear winner), both the Union and the Confederate governments turned their attention to constructing “ironclad” ships. Wooden combat ships had been rendered obsolete. In 1905, the success of Orville and Wilbur Wright’s airplane prompted entrepreneurs and military leaders alike to develop aircraft of their own. Commercial airlines were born of this technology, as was the notion of aerial warfare. At first, the military used planes solely for reconnaissance, although some strategists envisioned using them to deliver bombs. In 1915, French pilot Roland Garros mounted a machine gun to his plane and, more important, steel deflectors to his propellers, turning the plane into an offensive weapon. The Germans quickly countered with a Dutch-made “interrupter,” which made firing through propellers even easier. These developments added the skies over Europe to the many other battlefields of World War I. World War I also witnessed the birth of a new naval weapon: The German U-boat, capable of operating underwater and attacking its targets clandestinely by firing torpedoes instead of guns, gave the Germans a considerable advantage. The defeat of the Germans in 1918 temporarily halted the development of submarines, but other countries worked quickly to develop their own versions of the U-boat, and at the dawn of World War II Adolph Hitler’s Germany restarted its program. World War II represented another pivotal period of evolution for military technology. In addition to improvements to naval vessels and aircraft, radar (which uses radio waves to detect the presence of such craft) became a critical piece of land-, sea-, and air-based military technology. Sonar had already been introduced during World War I, and it was also used commonly to detect submerged enemy submarines and torpedoes. At the end of World War II, the most devastating weapon in history was deployed. The atomic bomb brought the war to a close and simultaneously began a new era of military history. It—and its successor, the hydrogen bomb—became the focal point of the Cold War, which continued until the early 1990’s. Upon the close of the Cold War, the focus among the world’s major military powers turned away from nuclear technologies. Much attention

Defense Industry was instead paid to communications, such as computer networks and satellite technologies. The rise of the Internet (which was itself the product of military research in the mid-twentieth century) added to this pursuit, fueled by perceived and real threats to countries’ information resources. The terrorist attacks launched on the World Trade Center and the Pentagon on September 11, 2001, further challenged the perception that an enemy must be met on a battlefield—a perception that had defined almost all previous conflicts. Technology needed for surveillance and intelligence-gathering became a very high priority for the military policy makers responsible for assigning defense contracts. Many modern military weapons and technologies have been designed and built, not by the military itself but by private corporations contracted by governments. The German Fokker, the fighter plane used in World War I, was built by a Dutch aircraft manufacturer, Anthony Fokker. Private contractors have worked with governments to develop

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the systems and weapons they need. The driving force behind this development remains market demand. As the need to create or counter new military technologies has become manifest, the industry’s growth has been spurred. During the Cold War, the defense industry received consistent infusions of government money, not just in the United States and the Soviet Union but in other industrialized countries as well. In the United States, this tremendous investment in military manufacturing created what President Dwight D. Eisenhower famously dubbed “the militaryindustrial complex,” an intricate and highly connected collective of military agencies, political leadership, and private enterprise. The militaryindustrial complex declined somewhat after the fall of the Soviet Union, but it was so significant during its apex that its roots still run deep in the post-Cold War era, giving the current defense industry a strong foundation and durability in the twenty-first century.

The Humvee, or high mobility multipurpose wheeled vehicle, is a four-wheel-drive motor vehicle created for the military by AM Genera, a subsidiary of American Motors. (©Kiraly Istvan Daniel/Dreamstime.com)

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The Industry Today The defense industry today is a vast, diverse, and complex collection of military contractors spanning three general fields: aviation, naval systems, and land-based weaponry. Generating hundreds of billions of dollars in the United States and the international marketplace, the defense industry is one of the world’s largest industries, and it sustains millions of jobs around the globe. The industry manufactures and sells military technologies, not just ordnance and weaponry but computer and communications systems as well. The defense industry is multifarious, spanning a number of areas. The first of these is land-based weaponry, including small arms such as rifles and similar, individually operated weapons. In addition to small arms, this subsector produces field artillery, mines, ground-based radar, troop transport vehicles, tanks, and other hardware. The individual soldier is an important beneficiary of military contracts. Helmets, night-vision goggles, travel packs, footwear, and other personal equipment are all manufactured by military contractors for soldiers’ comfort and utility. Additionally, defense contractors produce integrated systems for land-based weaponry, including Global Positioning System (GPS) devices, cellular tech-

nology, radios, and other communications equipment. Finally, armored personnel vehicles (APVs), smaller utility vehicles, tanks, and other vehicles are all produced under military contracts with private companies. Naval warfare and operations have evolved steadily over recent decades, and the defense industry has played a central role in their evolution. Beyond merely designing and constructing ships, the industry produces integrated ship-defense systems that combine guns, missiles, electronic countermeasures and radar. It also manufactures battlegroup communications devices and vehicles (such as helicopters, smaller watercraft, and shipboard vehicles). The third important industry sector is aviation. The defense industry has consistently developed and strengthened aircraft technologies. In addition to jets, transport planes, helicopters, and bombers, the industry develops each craft’s onboard computer and communications system. It has also worked to strengthen the links between ground systems and air systems, and contractors continue to modify radar and similar systems in response to the post-Cold War era’s technological transformation. In fact, many of the twenty-first century’s most well-used air vehicles are unpiloted. These so-called drones are increasingly popular for reconnaissance, intelligence gathering, and even automated bomb and missile delivery over remote locations in Afghanistan, for example. Furthermore, the defense industry develops satellite technology that helps military and civilian users track developments around the world. Satellites enable military personnel to monitor and track enemy elements. Airborne and orbiting military systems are better able to assess battlefield actions and environments, as well as track terrorists’ movements and activities. This field, in particular, General Dynamics Land Systems has produced many M1A1/2 Abrams main bathas developed rapidly in retle tanks for the U.S. Army: 3,273 of the M1, 4, 796 of the M1A1, and 77 of the cent years. M1A2. (©Anita Patterson Peppers/Dreamstime.com) Central to the defense in-

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The defense industry has consistently developed and strengthened aircraft technologies, such as those used in the CH-53 Super Stallion transport helicopter. (©Dreamstime.com)

dustry is the system of government contracts. Governments determine their areas of need and seek out solutions from defense companies, using a request for proposal (RFP) or similar statement. Companies are awarded contracts based on their responses to such solicitations. Government contracts are the lifeblood of the defense industry, and contactors stand to earn millions of dollars on many different types of projects, providing jobs to a diverse and often large workforce. Defense projects vary in size and scope. Some contractors work on large-scale projects, incorporating a number of integrated systems into one major piece of technology, while other companies work on much narrower, more tightly focused projects. Competition among defense contractors is intense, and many companies expend significant resources on their proposal teams, which win contracts based on their ability to combine high quality with cost-effectiveness. In the twenty-first century,

cost is one of the most important factors in winning contracts. Employment at defense contractors is subject to overall fluctuations in government spending, as well as to the ability of employers to attract that spending. If contracts expire or are awarded to competitors, a given company may lose millions of dollars in potential revenues, and many of its employees may lose their jobs. It is for this reason that proposal teams (and the project teams they propose) are so important to a company’s success. In many cases, a military agency will give more credence to a proposed project team that has familiar faces, such as former military officers and prominent engineers. Thus, the defense industry is very difficult to break into unless a new company is able to hire such familiar and experienced personnel. The industry’s dependence on winning a limited number of contracts, moreover, makes it vulnerable to both economic and political fluctuations.

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Defense Industry INDUSTRY MARKET SEGMENTS

The defense industry includes contractors of various sizes. The largest contractors are often diversified multinational corporations that produce both military and civilian equipment and have annual budgets in the billions of dollars. Small firms, by contrast, may work on only a single contract at a time. Such firms must be sure to dedicate resources to constantly seeking their next contracts, as they often cannot afford to have down time between the end of one project and the beginning of the next. Small Defense Contractors Small defense contractors generally employ one hundred people or fewer. They tend to be tightly focused operations, working on a limited number of projects at any given time. Because of the importance of connections and established expertise in the defense industry, small contractors are often run by either retired military officers or well-known engineers, and an entire small company may trade on the reputation of its senior management team, as well as its success in delivering contracted projects on time and on budget. Potential Annual Earnings Scale. Defense project managers and directors may earn as much as $110,000 per year. The lower end of the pay scale includes administrators and hourly employees, some of whom work only part time and therefore do not receive benefits. Clientele Interaction. Smaller, more specialized defense contractors have varying degrees of client contact, based on the type of position held. Manufacturing engineers, for example, may not have as much interaction with clients as do program managers and customer-service representatives. Still, by virtue of the business’s size, most small contractors take great pains to communicate their attention to customer service and interaction. Amenities, Atmosphere, and Physical Grounds. Small defense contractors operate within professional environments with open work spaces. Such companies may not necessarily be located in a sprawling complex of buildings; in fact, some contractors may be found in relatively small office spaces just large enough to conduct the work at hand. The small number of employees may foster an atmosphere of camaraderie and informality

among workers. However, the company’s size and minimal number of project employees may require each employee to work longer hours and handle multiple tasks. Defense companies often operate in high-security environments, requiring identification badges, key cards to access sensitive areas, and other standard security protocols. Typical Number of Employees. Some small defense contractors have fewer than one hundred employees, who focus their energy on production and distribution rather than administrative management and other services. The small number of personnel enables the company to work on a given project without significant overhead costs for salaries. Traditional Geographic Locations. Small defense contractors are located in a wide range of geographic venues. Many are located in or near capital cities, where they may work closely with a country’s military leadership (such as the Pentagon). Others are located on or near military bases, thereby facilitating quick testing and application of the product being manufactured and providing the high security of the base without the contractor itself needing to pay for extensive security measures. Smaller contractors have a wider range of locations to choose from, as they take up less space than larger corporations. Pros of Working for a Small Defense Contractor. Employees of small defense companies enjoy the benefit of working in small teams in what is often a friendlier, more relaxed environment than may be found in a larger contractor. The companies’ projects may be smaller in scope, enabling employees to focus more on their completion rather than take into consideration their application in larger systems under production. Paperwork and payments may also move more quickly through smaller contractors, allowing employees to receive compensation and reimbursement checks in a timely fashion. Cons of Working for a Small Defense Contractor. Small defense contractors are often limited in resources when compared with much larger, international firms. They are thus always at risk of losing bids for contracts to those larger companies. Employees at small firms may have larger workloads and work longer hours than do members of larger organizations. Furthermore, small contractors may be somewhat obscure, so employ-

Defense Industry ees may be less able to advance in their careers than are employees of large firms with much greater reputations, both within and beyond the industry. Finally, small companies may have limited budgets or self-imposed budgeting limitations designed to reduce overhead. These limitations may preclude them from occupying work space in areas with high rents, taxes, or utility costs, even if such spaces would be the most conducive to conducting their business. If small contractors cannot afford to locate near major military centers, their employees will have to travel further to visit clients and work on off-site projects. Costs Payroll and Benefits: Defense contractors pay employees on an hourly, annual, or contract basis. Small contractors in particular may pay by the project, as their operating budgets may be tied more closely to the vagaries of individual contracts than are those of larger firms that handle a greater number of projects simultaneously. Most employees of even small firms receive standard benefits. Supplies: Small defense companies require a number of different types of supplies, including heavy and light manufacturing machinery and parts, as well as computer systems, office supplies, audiovisual equipment, and presentation software. External Services: Defense contractors with fewer than one hundred employees often require the support of external vendors. They contract such services as accounting, legal counsel, marketing, and public relations. In many cases, these companies hire consultants, both to advise them on the general conduct of business and to provide technical expertise necessary to complete specific projects. Utilities: Small defense contractors must pay for electricity and other energy utilities, as well as land-based and cellular telephones and Internet access. Taxes: Defense contractors must pay state, regional, and national corporate income taxes and withhold the taxes of full-time employees. Additionally, they may pay real estate taxes if they own their own manufacturing facilities. Some of these taxes may be lower than those paid by other industries in the same jurisdiction as a result of tax incentive programs designed to

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attract defense contractors to a given geographic area. Midsize Defense Contractors Midsize defense contractors generally employ between one hundred and one thousand workers, although this figure is somewhat variable. Midsize contractors may operate at more locations than do small contractors, but they usually remain within one country rather than positioning themselves as multinational entities. Potential Annual Earnings Scale. Defense project managers and directors may earn as much as $110,000 per year. The lower end of the pay scale includes administrators and hourly employees, some of whom work only part time and therefore do not receive benefits. Clientele Interaction. At midsize defense contractors, senior-level project managers and business development managers are likely to have high degrees of client interaction, while engineers and project administrators are more likely to spend their time in production. However, in the light of the importance of reporting and accounting, some of these latter individuals make client presentations and give periodic reports on goals met and test results. Amenities, Atmosphere, and Physical Grounds. Midsize defense companies tend to operate in two types of interconnected environments. The first of these is an office environment, in which administrative functions and client presentations take place. The second is a production facility, where all research, development, and construction take place. Each of these environments is professional in nature. Because the projects taken up by midsize contractors are larger than single components, a team dynamic is expected among workers who are developing different parts of this larger system. Defense companies often operate in high-security environments, requiring identification badges, key cards to access sensitive areas, and other standard security protocols. Typical Number of Employees. Some midsize companies employ between one hundred and one thousand people; others employ fewer than that (and therefore are considered midsize based on their annual revenues). Traditional Geographic Locations. Midsize defense contractors are often located either in or

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near cities that house military headquarters, such as national capital cities. Many are also located near or on military bases, giving them easy access to key client personnel and to testing and demonstration facilities, as well as providing them with a free source of added security and access control. Because the projects on which they typically work require more personnel or resources than do small contractors’ programs, midsize contractors may offset their costs by locating in suburban or lessexpensive urban areas that have lower rents or utility fees. Pros of Working for a Midsize Defense Contractor. Employees of midsize defense contractors are able to enjoy many of the resources accessible to larger companies without experiencing those companies’ high operating costs. Similarly, potential clients may be drawn to midsize contractors by their low overhead and a customer-serviceoriented reputation that distinguishes smaller companies from industry giants. The relatively small volume of contracts acquired by midsize companies may enable workers to focus more closely on each project than they can at large corporations. Cons of Working for a Midsize Defense Contractor. One of the most daunting aspects of a midsize defense contractor is the fact that it is difficult to define and therefore to support with government funding. Small businesses receive some government support, and large companies are usually self-sufficient, but midsize contractors are considered to be squeezed between the other two layers. They may encounter difficulty winning contracts as a result, and they are often targeted by larger companies for acquisition. Costs Payroll and Benefits: Pay and benefits for employees of midsize defense contractors depend largely on the monetary size of the contract on which employees are working. Some employees may be paid by the contract, whereas others receive annual salaries or hourly wages. Most fulltime employees of midsize defense firms receive full benefits. Supplies: Midsize defense manufacturers require a number of key supplies. On the production floor and in research facilities, heavy machinery and parts, as well as safety equipment and computer modeling hardware and software are necessary.

In the corporate environment, basic office supplies, as well as personal computers, portable phones, personal digital assistants (PDAs), and laptop computers are also vital for meeting the needs of potential and current clients. External Services: Midsize contractors require a number of external services during the course of their operations. They may contract public relations, accounting, and general counsel services, as well as custodial and security services. They may also use government agencies to conduct background checks of candidates for positions with access to sensitive materials. Utilities: Midsize contractors require a great deal of electricity for their operations, as well as water, heating, telephone service, and Internet access. They may also pay for wastewater treatment, trash removal, and sewage fees. Taxes: Midsize defense and aerospace contractors withhold, report, and collect personal income taxes from full-time employees. They may also be required to pay regional and national unemployment insurance taxes, along with corporate income taxes and property taxes. Some of these taxes may be lower than those paid by other industries in the same jurisdiction as a result of tax incentive programs designed to attract defense contractors to a given geographic area. Large Defense Contractors Large defense contractors are massive multinational operations employing as many as tens of thousands of people. Many, including the world’s largest aircraft manufacturers, produce a wide range of equipment and vehicles for both military and civilian purposes and sell their products to multiple governments and private corporations throughout the world. It was these large and politically powerful corporations that President Eisenhower had in mind when he devoted his farewell speech to the dangers posed by the military-industrial complex. Potential Annual Earnings Scale. The executive managers of large defense corporations may earn salaries in the millions of dollars per year, while production-floor workers—while well compensated relative to other manufacturing personnel—often earn hourly wages. According to the U.S. Bureau of Labor Statistics (BLS), the mean annual salary of a production manager overseeing an

Defense Industry aerospace defense production project, for example, was $66,610 in 2009, whereas an aircraft assembler earned an average of $44,890. Aerospace engineers earned an average of $87,730, and general managers earned an average of $130,000. Clientele Interaction. Client interaction between large defense contractors and the government is usually limited to the senior managers who oversee programs and other executive-level employees. Mid-level professionals may be called upon to meet with and present to clients about specific technical developments concerning their projects. Administrative personnel may also be in contact with their client counterparts, scheduling meetings and transmitting important information. Amenities, Atmosphere, and Physical Grounds. Large-scale defense contractors operate on sprawling, high-security industrial campuses that manufacture equipment of all sizes, from side arms to aircraft carriers. They may also maintain separate corporate headquarters where business executives and design staff work from traditional offices, or such offices may be located in separate buildings on industrial campuses. Contractors must maintain a considerable degree of professionalism, particularly in the light of the large number of military clients who are often on site for meetings and reviews. The environment is usually compartmentalized by program or by technical area, with a strong sense of teamwork within each department. Typical Number of Employees. The employee populations of large defense manufacturers vary based on the number of contracts in operation and the companies’ respective budget status. The U.S.based Raytheon Company, for example, has more than 66,500 employees at its six major facilities. BAE Systems, based in the United Kingdom, has more than 106,400 employees worldwide. Traditional Geographic Locations. Large defense contractors are found throughout the world, occupying a number of different geographic locations. Many are located in or near major capital cities, enabling better access to military and government leaders. Others are located in large facilities and campuses in remote or open-space locations that allow for discreet or private testing and demonstrations of missiles and explosive weaponry. Still others are located on or near military bases, again offering close access to military clients who operate at those facilities.

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Pros of Working for a Large Defense Contractor. Because of their reputations and longstanding relationships with military establishments, the large defense contractors tend to win and retain many major government contracts. As a result, employees of these corporations enjoy both a degree of job security and a level of prestige (along with higher salaries) that they may not experience in smaller companies. Additionally, opportunities for upward mobility are more readily available within large companies. Furthermore, the opportunity to work on an entire integrated system or weapon (such as a fighter jet or submarine) instead of a smaller, localized system or device, is enticing for many engineers and project workers. Cons of Working for a Large Defense Contractor. Some individuals may not like the atmosphere at large defense firms with thousands of employees, preferring smaller settings where it is easier to develop personal relationships with coworkers. Additionally, some companies are located in remote locations to maximize opportunities for weapons testing and capitalize on cheap and plentiful real estate. Workers at such sites have limited access to cultural and social centers. Furthermore, like other defense contractors, large companies are beholden to government contracts. If legislatures or executive agencies cease development of a major program, even the largest companies may be forced to lay off workers. Costs Payroll and Benefits: Large defense corporations generally pay full benefits to all full-time employees, who may work for hourly, annual, or contract-based wages. Supplies: Large defense contractors require a great deal of supplies, including industrial manufacturing machinery and parts, as well as all manner of office supplies, including computers, computer servers, and communications devices such as smart phones. In some cases, large companies require food and beverage supplies to support staff and visiting dignitaries, as well as vehicles for travel within the company’s campus. External Services: Large defense companies are often self-sufficient, but they may call upon external vendors for certain services. Some contract lobbyists and legal teams form major

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firms for government-relations activities. They may also contract transportation companies, such as private air charters and limousines, for local and long-distance employee travel. Many contract security, and some may even contract on-site public safety companies, such as fire departments and emergency medical technicians. Those companies that produce significant volumes of toxic materials may contract an external hazardous material disposal company. Utilities: Large defense companies use a great deal of energy, including electricity and water, and a great deal of telephone and Internet services. They may also pay for wastewater treatment, particularly at those facilities that have large numbers of people working under one roof. Taxes: Large defense contractors pay taxes on property and corporate income, as well as withholding income taxes from full-time employees’ salaries. They may also be required to pay corporate taxes to cover unemployment insurance pools and health care funding.

ORGANIZATIONAL STRUCTURE AND JOB ROLES

Executive Management At the top of a defense company is its executive team, which manages its overall operations and endeavors. This group develops the company’s mission and goals, as well as ensuring that all activities of the company are running smoothly. Executive managers are broken down in terms of the various departments within a company, including certain projects and proposals, as well as day-to-day operations such as human resources and accounting. Executive managers set corporate goals and strategies; assess, approve, or pass on requests for proposals; and develop and implement budgets. They occasionally assist in high-profile proposals, lending their own experience to the success of a given proposal. They are generally highly experienced, with strong educational backgrounds as well. In many cases, defense executives have military backgrounds, having retired prior to entering the private sector. They are well-educated, either through the military academies or in colleges and universities after their active service. Others received their schooling via on-the-job training or by familiarizing themselves with relevant systems. Executive management occupations may include the following: ■

The defense industry is compartmentalized, based on both contracted projects and the arena in which the manufacturing takes place. For example, multiple radar systems projects may be found in development within the same section of the industry. However, there are several general areas that are common to nearly all defense companies. The following umbrella categories apply to the organizational structure of businesses within the defense industry: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Business Development Research and Development Manufacturing Public Relations Legal Counsel Marketing Human Resources Accounting Administrative Support

■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) Chief Information Officer (CIO) Vice President of Government Relations Vice President of Marketing

Business Development The business development department pursues government and military contracts. It monitors government outlets for requests for proposals relevant to its company’s expertise, and, once those opportunities arise, it organizes proposal teams to pursue them. The proposal teams then create responses and proposals tailored to the specifications outlined in the requests for proposals, including scope of work, timetables for project completion, and personnel to be assigned. Business development staff have considerable experience in their companies’ areas of capability. They must be well-organized, capable of assembling and managing strong proposal teams and of putting together complex proposals. Business de-

Defense Industry velopment personnel are usually college educated, although some are former military personnel with strong and relevant experience. Business development occupations may include the following: ■ ■

■ ■ ■

Vice President of Business Development Business Development Manager/ Coordinator Team Leader Analyst Recruiter

engineers in the aerospace industry earned a median hourly wage of $44.27 in 2008; mechanical engineers earned $39.01 per hour, and industrial engineers earned $36.79 per hour. Computer programmers earned a median hourly wage of $44.41 for the same year. Research and development occupations may include the following: ■ ■ ■ ■

Research and Development Research and development personnel analyze the applications and capabilities of their companies’ products. They create computer models and run diagnostic assessments and tests of product operations prior to final distribution. They are primarily concerned with testing products during development and final production. Personnel in this field must carefully assess their products’ design effectiveness, as well as any adverse elements created by the products (such as health or environmental risk factors). They must be detail-oriented in their ability to conduct their assessments. Research and development personnel are typically engineers and have advanced degrees in engineering, environmental science, or other mechanical sciences. According to the BLS,

OCCUPATION

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■

Research Director Quality Assurance Manager Engineer Programmer Clinical Trial Manager

Manufacturing Defense manufacturing personnel are responsible for building the products sought by military agencies. Following the designs of architectural engineers and the client, manufacturing personnel integrate the necessary systems, assemble parts, and produce final products. They strictly follow established time lines and benchmarks set forth by military clients, working with research and development, systems designers, and senior personnel to complete projects on time. Manufacturing requires a broad range of mechanically oriented staff. From engineers, to assembly line workers, to painters, members of manufacturing departments work as teams, adhering to clear

SPECIALTIES

Inspectors and Testers Specialty

Responsibilities

Airplane inspectors

Examine aircraft to see that repairs match specifications and certify airworthiness.

Assemblies and installations inspectors

Inspect assemblies, major structures, and complete aircraft for safety and correct detail.

Electronics inspectors

Examine parts, subassemblies, and assemblies for conformance to specifications.

Exhaust emissions inspectors

Inspect and test automobile emission control systems.

Metal fabricating inspectors

Check materials for conformance with work orders and specifications.

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production phases. Some of them have advanced or vocational degrees. Others are less educated, hired to assemble or paint parts on an assembly line following specific instructions from department management. According to the BLS, machinists in the aerospace industry earned a median hourly wage of $19.49 in 2008. Production workers, in the same year, earned an average $1,305 per week. Manufacturing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Project Director Project Manager Engineer Systems Operator Machinist Painter Assembly Line Worker

Public Relations The management of all external communications, press statements, interviews, promotions, and other forms of information dissemination falls to a defense company’s public relations department. Public relations personnel promote the interests and activities of their companies to the general public, as well as targeted media outlets. They are the primary vehicle through which a company’s official positions and its responses to emergency situations, political issues, and other timesensitive matters are transmitted to the public. In

OCCUPATION

the light of this fact, they must be effective communicators and able to react quickly to sensitive or controversial events in an even-handed, diplomatic manner. In many cases, a defense company’s political endeavors, such as lobbying and government relations, are conducted through the public relations department. Public relations personnel are typically college educated, and many have advanced degrees in such fields as public relations, communications, public affairs, law, and public policy. They must be professionally experienced in the defense industry, demonstrating a strong understanding of relevant issues and the relationship of those issues to their companies’ stated goals and activities. They are compensated on the high end of the scale for workers in their field. Public relations occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Public Relations Director External Affairs Coordinator Government Relations Manager Lobbyist Event Planner Marketing Manager Administrative Assistant

Legal Counsel Defense companies (particularly midsize and large corporations) often employ teams of legal

SPECIALTIES

Precision Assemblers Specialty

Responsibilities

Aircraft power plant assemblers

Analyze blueprints and other materials to put together and install parts of airplanes such as wings or landing gear.

Electromechanical assemblers

Prepare and test devices such as tape drives and magnetic drums. They also examine parts for surface defects.

Electronics assemblers

Assemble electronics equipment, such as missile control systems, radio and test equipment, and computers.

Machine builders

Analyze blueprint assembly instructions and manuals to construct, assemble, or rebuild engines and turbines.

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PROFILE

Precision Assembler Considerations

Qualifications

Description

Analyzes blueprints and assembles equipment or parts.

Career cluster

Manufacturing

Interests

Things

Working conditions

Work inside

Minimum education level

No high school diploma; on-the-job training; high school diploma or GED; high school diploma/technical college

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Decline expected

Holland interest scores

CRE; CRS; CSR; RCE; RCI; RCS; REC; REI; RES; RIC; RIE; RSE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

experts to advise them. One of the most important roles legal counsel plays is reviewing government contracts to ensure that they meet their companies’ best interests. Additionally, legal counsel are frequently called on to review any local, state, regional, and national regulatory or statutory changes that may affect company operations or obligations. Furthermore, legal counsel may respond to internal employee complaints or external civil suits. Legal counsel must be fully versed in the law. They must know and understand all federal laws pertaining to the defense field, and they must also carefully observe local ordinances that may apply to the work performed in a given area by their companies. In the light of the complexities of legal statutes and regulations, legal counsel must pay an extraordinary amount of attention to detail. Legal counsel team members must have advanced degrees in law. Many are also former military personnel, with insights into military protocols. They must also have extensive understanding

of how the laws in a given region affect corporate activities in that region. Legal occupations may include the following: ■ ■ ■ ■ ■

Chief Counsel Staff Attorney Associate Attorney Paralegal Administrative Assistant

Marketing A defense contractor always needs to advertise itself in relevant media and in the proper venues in order to generate potential business. For smaller and midsize companies, such efforts may enable them to compete with better-established and better-known companies. The responsibility for this area of operations falls to the company’s marketing department. Marketing personnel put together promotional brochures, create advertising campaigns and strategies, and even establish partnerships with other

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companies and trade associations in order to generate the maximum amount of visibility. They must therefore be very well educated, not only in marketing but also in defense manufacturing and the overall functioning of the military-industrial complex. This knowledge helps them ensure that marketing materials go to the right groups and individuals. Marketing personnel tend to have undergraduate and advanced degrees in such fields as marketing, advertising, communications, and business management. Marketing occupations may include the following: ■ ■ ■ ■ ■

Marketing Director Marketing Manager Marketing Coordinator Communications Manager Administrative Assistant

Human Resources Defense contractors, like other government contract companies, must recruit two types of employees: full-time employees who manage the dayto-day operations of the company and consultants who work on specific contractual projects. To this end, defense contractors maintain active human resources and recruitment departments. Human resources personnel recruit, hire, and terminate employees. They administer employee benefits packages, insurance programs, and training programs for full-time employees. They may also be involved in conducting background checks or coordinating with law enforcement investigators to ensure that potential employees have no criminal backgrounds and are otherwise assigned proper security clearances. They play active roles on proposal teams, reviewing the best internal and external personnel for contract positions and, if a proposal is accepted, applying the specified personnel to their proposed positions. Human resources professionals must be highly conversant in issues pertaining to federal and state employment practices, as well as protocols for hiring and terminating employees. They are typically college educated, and many have advanced training or degrees in business management, human resources, and similar fields. Human resources occupations may include the following:

■ ■ ■ ■

Human Resources Director Human Resources Coordinator Recruitment Manager Administrative Assistant

Accounting The responsibility of overseeing the financial operations, including accounts payable (money that is owed by a company) and accounts receivable (money that is owed to a company) falls to a defense contractor’s accounting department. This area of the company must carefully review and record employee expenses within the context of a given project, as well as in terms of overall company operations. Accounting departments are extremely vital elements of defense contractors, particularly in light of the fact that their customers, military agencies, are constantly concerned with budget constraints. Accounting personnel must be extremely organized and pay strong attention to detail. Many have military experience, which is useful for managing military contracts and projects. In fact, accountants are oftem asked to join proposal teams. Accountants are typically college educated, while some have advanced degrees in related fields. In the United States, most of them are licensed as certified public accountants (CPAs) as well. Accounting occupations may include the following: ■ ■ ■ ■

Accounting Director Accounts Payable Manager Accounts Receivable Manager Office Manager

Administrative Support Defense contractors employ administrative assistants to handle a wide variety of administrative tasks in various departments. Administrative personnel answer phones and direct calls, organize accounting records, take meeting minutes, and coordinate visitor protocols. They must have strong organizational skills, as well as an ability to communicate effectively with internal and external personnel. They must also become quickly familiar with office computer, telephone, and filing systems. Many have high school diplomas, although some administrative support personnel are relatively new to the workforce, having recently gradu-

Defense Industry ated from undergraduate programs. Administrative support occupations may include the following: ■ ■ ■ ■ ■

Receptionist File Clerk Administrative Assistant Executive Assistant Paid Intern

INDUSTRY

OUTLOOK

Overview The defense industry has long been subject to the demands of the consumer. In this case, the consumer is the global military community and its perceived need for new systems, technology, weapons, and vehicles. The modern military-industrial complex took shape as the Cold War began to intensify. Over the next several decades, the United States and its allies worked to develop military technologies that could theoretically counter threats from the Soviet Union (which was in turn developing its own weaponry). When those threats ended with the Soviets’ collapse, this intense pursuit of military

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buildup lessened, as policy makers believed taxpayer money should be directed elsewhere. The decline in military expenditures during the 1990’s reversed dramatically with the September 11 attacks. The threat from international terrorists gave rise to new security systems, as well as military weaponry to use in the wars in Afghanistan and Iraq. The military-industrial complex in the United States saw renewed interest thereafter. Although American troops are stationed in Iraq and Afghanistan, it is believed that the administration of President Barack Obama will usher in another period of evolution for the defense industry. Because the president has extended the U.S. engagement in Afghanistan and the commitment to Iraq still requires the presence of U.S. troops at some level, the future of defense industry spending is uncertain. Certainly, the anticipated decline in military investment will not be across the entire industry. Rather, it is predicted that manufacturers that produced large-scale weaponry and vehicles during the Cold War, such as state-of-the-art fighter jets, advanced missile defense systems, and heavy battlefield vehicles, may see a decline in such programs. These weapons systems, useful for battles of nation against nation, will be replaced by systems

A U.S. Air Force RQ-1 Predator unmanned aerial vehicle takes off. (Department of Defense)

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that are more useful in fighting nationless threats, including more versatile multipurpose aircraft, automated drones, and so on. Thus, defense contractors already building such devices or well positioned to repurpose their assembly lines will be best positioned to receive the most lucrative contracts of the coming decade. The demise of the Soviet Union and the 2001 terrorist attacks did not signal the end of the military-industrial complex, nor does it appear that the industry will suffer significantly over the long term. Rather, the industry merely needs to shift its focus to support technologies rather than traditional, battlefield-oriented weaponry. In many cases, military organizations are eschewing the development of new weapons in favor of upgrades to existing technologies. Such shifts in policy are causing many contractors to shift accordingly. Even the largest of contractors are faced with the reality of needing to cut personnel and programs that have long been the cornerstones of their business. This trend has already begun. Aerospace giant Lockheed Martin had been working on a long-term contract to produce a special helicopter known as the VH-71. In 2009, the Pentagon terminated its contract, citing its exorbitant costs and eliminating the six hundred jobs that accompanied it. Another industry icon, Boeing, cut one thousand jobs that were attached to its missile defense program. While these cuts were occurring, these companies were succeeding in other areas. In November of 2009, Lockheed Martin won a major military contract to develop a new electronic warfare system for U.S. naval ships (such systems are defensive in nature, protecting a ship from long- and shortdistance attacks). Boeing, meanwhile, won a major contract to upgrade the U.S. Air Force’s B-1 bomber avionics software, giving a reliable weapon new, cutting-edge technology, rather than expensively developing entirely new planes. Fallout from the global economic crisis of 20072009 is expected to continue to cause declines in revenues within the defense industry in the short term, and this fall in profits is likely to be exacerbated by the winding down of military operations in Iraq and Afghanistan. These two major factors are driving some studies to suggest that total government investment in military procurement could decline by as much as 40 percent over three years.

The United States is not the only country to undergo this shift in its defense industry. In 2010, France cut fifty-four thousand positions within its own industry. The money saved from these layoffs was redirected toward an integrated European security system. In early 2009, South Africa canceled its order for eight A400M military transport planes, which were to be produced by British contractor Airbus. That cancellation placed a project that was already experiencing significant cost overruns in even further jeopardy. The reduction of large-scale programs poses great opportunities for small companies and the more relevant technologies they offer to the twentyfirst century world. Demand for more cost-effective weapons systems, many of which are integrated and interchangeable with other systems, is steadily increasing. In addition, governments around the world are seeking delivery on such systems with greater speed in order to avoid cost overruns in a down economy. As a result, they look for greater communications, computer modeling, and other systems that help expedite production and better facilitate client-manufacturer interaction. Smaller companies are becoming important partners in this pursuit, producing such systems and technologies. Although smaller companies that produce new technologies have become increasingly popular in the pursuit of expedited and more efficient systems, it is likely that the trend of larger companies acquiring midsize and small companies will continue. This trend may cause jobs in the overall defense industry to remain competitive. Employment Advantages The defense industry offers a great number of opportunities for those who seek to help develop the systems and weapons that protect a nation’s security and interests. Most of these technologies are state-of-the-art, giving those who work on them a sense of pride and discovery. In fact, many of the nonweapons technologies developed in the defense industry—such as radar, sonar, communications, satellite systems, and computer software— have potential applications in the nondefense world. This point represents a great advantage for employees. In addition, this industry represents an ideal arena for former military personnel to enter upon

Defense Industry retirement from service. A great many former officers and personnel from every branch of a country’s military are now part of the defense industry, adding a significant presence to contract teams and giving themselves a boost in income. Finally, there is an element of stability in the defense industry, bolstered by the fact that the industry’s primary client is the government. While the current environment necessitates both cost-effective and less traditional weaponry and technology, the defense industry continues to adapt to that environment. Employees and potential employees may need to expand their knowledge of the systems of the twenty-first century in order to compete for jobs. Annual Earnings Overall, the defense industry generates hundreds of billions of dollars in revenue around the world. The United States is the largest contributor to this number, as the American military-industrial complex comprises about 45 percent of the global industry. Hoovers’ analysis of U.S. Census Bureau data indicates that in 2002, the U.S. defense and aerospace industries earned $214 billion. In 2008, according to Datamonitor, the global industry was worth $674.6 billion. The 2007-2009 worldwide recession had a significant impact on the defense industry in virtually every country. However, the recession only slowed the industry’s growth rather than causing bankruptcies. Although faced with weaker revenues brought about by changes in governments’ defense priorities and the economic realities of the twenty-first century, the industry still shows signs of growth. In the United States, the industry generated a mild increase in revenues of about 3.9 percent in 2008, after growing by 9 percent and 10 percent in 2007 and 2006, respectively. The growth areas of the defense industry are likely to be those that have applications wider than simply to homeland defense. For example, it is believed that the cyber security arena will see a $50 billion increase in U.S. government contract spending. Similar growth in earnings may be seen in other areas. In general, the defense industry is expected to falter in terms of earnings, but it is likely to grow nonetheless, as demand from governments seeking to bolster their national security interests remains consistent.

RELATED RESOURCES FOR FURTHER RESEARCH AeroSpace and Defence Industries Association of Europe 270 Ave. de Tervuren B-1150 Brussels Belgium Tel: 32-2-775-8110 Fax: 32-2-775-8112 http://www.asd-europe.org Aerospace Industries Association 1000 Wilson Blvd., Suite 1700 Arlington, VA 22209-3928 Tel: (703) 358-1000 Fax: (703) 358-1151 http://www.aia-aerospace.org American Institute of Aeronautics and Astronautics 1801 Alexander Bell Dr., Suite 500 Reston, VA 20191-4344 Tel: (703) 264-7500 Fax: (703) 264-7551 http://www.aiaa.org BAE Systems 6 Carlton Gardens London SW1Y 5AD United Kingdom Tel: 44-1252-37-3232 http://www.baesystems.com Defence Manufacturers Association Marlborough House Headley Rd. Greyshot, Hindhead, Surrey GU26 61G United Kingdom Tel: 44-1428-60-7788 Fax: 44-1428-60-4567 http://www.the-dma.org.uk Lockheed Martin 1725 Jefferson Davis Hwy., Suite 403 Arlington, VA 22202-4127 Tel: (301) 897-6000 http://www.lockheedmartin.com

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National Defense Industry Association 2111 Wilson Blvd., Suite 400 Arlington, VA 22201 Tel: (703) 522-1820 http://www.ndia.org

ABOUT

THE

AUTHOR

Michael P. Auerbach has over sixteen years of experience in government, defense, and public policy. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He is a former analyst for the U.S. Navy’s international cooperation programs and has written a number of papers on international security, defense, and military policy, including an in-depth study of NATO’s Partnership for Peace program. He is a veteran of state and federal government, having worked for seven years in the Massachusetts legislature and four years as a federal government contractor.

FURTHER

READING

Anderson, Guy, and Keri Wagstaff-Smith. “Analysis: Can the Defence Industry Re-ignite the Economy.” Jane’s Information Group, November 26, 2008. http://www.janes.com/ news/defence/business/jdi/jdi081126_1_n .shtml. Ben-Ari, Guy, and Pierre A. Chao. Organizing for a Complex World: Developing Tomorrow’s Defense and Net-Centric Systems. Washington, D.C.: Center for Strategic and International Studies, 2009. Bialos, Jeffrey P., et al. Fortresses and Icebergs: The Evolution of the Transatlantic Defense Market and the Implications for U.S. National Security Policy. Washington, D.C.: Center for Transatlantic Relations, 2009. Bitzinger, Richard. The Modern Defense Industry: Political, Economic, and Technological Issues. Santa Barbara, Calif.: Praeger Security International/ABC-CLIO, 2009. “Boeing Wins $84 Million Contract from U.S. Air Force for B-1 Bomber’s Avionics Software Upgradation.” Defense World, October 30, 2009. http://www.defenseworld.net/go/defense

news.jsp?gcatid=2&id=3767&h=Boeing %20wins%20$84%20million%20contract %20from%20US%20Force%20B-1%20Bomber %20avionics%20’software%20upgradation. Finnegan, Philip. “U.S. Defense and Aerospace Industry Weakens During Worldwide Recession.” Teal Group Corporation, October 14, 2009. http://www.tealgroup.com/ index.php?option=com_content&view=article &id=59:us-aerospace-and-defense-industryweakens-in-face-of-worldwide-recession&catid=8:blogmain&Itemid=100004. Lasou, Damien. “Five Key Trends Impacting the Aerospace and Defense Industry Amid Challenging Economic Times.” Aviation Spectator, June 9, 2009. http:// www.aviationspectator.com/blogs/admin/ guest-post-five-key-trends-impacting-theaerospace-and-defense-industry-amidchallenging. Markowski, Stefan, Peter Hall, and Robert Wylie. Defence Procurement and Industry Policy: A Small Country Perspective. London: Routledge, 2010. PayScale.com. “Salary Survey for Industry: Aerospace and Defense.” http:// www.payscale.com/research/US/ Industry%3DAerospace_and_Defense/Salary. Simply Hired. “Average Defense Industry Salaries.” http://www.simplyhired.com/a/ salary/search/q-Defense+Industry. Smith, Ron. Military Economics: The Interaction of Power and Money. New York: Palgrave Macmillan, 2009. Sorenson, David S. The Process and Politics of Defense Acquisition: A Reference Handbook. Westport, Conn.: Praeger Security International, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

INDUSTRY

SNAPSHOT

General Industry: Health Science Career Cluster: Health Science Subcategory Industries: Dental Hygienists’ Offices; Dental Laboratories; Denturists’ Offices; Offices of Dental Surgeons and Doctors of Dental Medicine; Offices of Dentists; Offices of Oral Pathologists; Offices of Orthodontists; Offices of Periodontists; Offices of Prosthodontists; Orthodontic Appliance Makers Related Industries: Medicine and Health Care Industry; Pharmaceuticals and Medications Industry; Public Health Services; Scientific, Medical, and Health Equipment and Supplies Industry; Veterinary Industry Annual Domestic Revenues: $94.18 billion USD (U.S. Census Bureau, 2007 Economic Census) NAICS Numbers: 6212, 339166, 621399

INDUSTRY

human body. It is a branch of medicine that addresses oral health, including the appearance and function of the teeth, gums, tongue, palate, and jaws. Dental professionals treat oral infections, cancers, malformations, malfunctions, and traumatic injuries that may affect a person’s ability to eat, drink, talk, breathe, and sleep, thus affecting overall health.

History of the Industry Perhaps the earliest known written dental text is a Sumerian cuneiform document from 5000 b.c.e. that attributes tooth decay to “tooth worms.” Egyptians described dentistry in the Ebers Papyrus (wr. about 1550 b.c.e., found 1872). This papyrus listed toothache remedies made from common ingredients such as incense, cloves, and fennel. In the fifth century b.c.e., the Greeks Hippocrates and Aristotle wrote about dentistry in a more scientific fashion, noting the eruption pattern of teeth, the extraction of teeth with forceps, and the use of wires to stabilize loose teeth and broken jaws. Also about this time, the Greek physician Diocles instructed people to rub their teeth and gums with crushed mint leaves to remove food remains and freshen breath.

DEFINITION

Summary Dentistry is defined by the American Dental Association as the evaluation, diagnosis, prevention, and surgical or nonsurgical treatment of diseases, disorders, and conditions of the oral cavity, maxillofacial area, and the adjacent and associated structures and of the effects of those conditions on the 541

©Dmitriy Shironosov/iStockphoto.com

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Dental and Orthodontics Industry

In the tenth century c.e., the Islamic Moor surgeon Abulcasis of Cordova provided illustrations of numerous crude dental instruments, including scalers, elevators, and forceps. In 1530, the anonymous German book Artzney Buchlein der kreutter (also known as The Little Medicinal Book for All Kinds of Diseases and Infirmities of the Teeth) devoted its forty-four pages exclusively to dentistry. It was written for barbers and surgeons and covered such topics as oral hygiene and methods for filling dental cavities. In 1563, Italian anatomist Bertolomeo Eustachi published Libellus de dentibus (A Little Treatise on the Teeth, 1999), the first accurate dental anatomy textbook. In 1575, French barber-surgeon Ambroise Paré, known as the father of modern surgery, published Les Oeuvres de M. Ambroise Paré, conseiller et premier chirurgien du roy (26 vols.), a practical handbook written in French vernacular. It explained his surgical techniques, including extracting teeth and repairing jaw fractures. Paré was interested in providing artificial body parts to soldiers and designed individual gold and silver replacement teeth. In the seventeenth century, a new profession arose, known as “operators for the teeth.” Members of this professonion did more than extract teeth; they built artificial teeth and concocted dentifrices for keeping teeth clean and white. One such operator in London, Charles Allen, wrote the first dental book in English, The Operator for the Teeth (1685). In 1728, French physician Pierre Fauchard, known as the father of modern dentistry, published Le Chirurgien dentiste (The Surgeon Dentist: Or, Treatise on the Teeth, 1946), a two-volume treatise on dentistry. In it, he described pyorrhea and tartar, an extraction instrument called a pelican, replacing missing teeth with dental prostheses, and straightening teeth with tension using linen, silk, or fine gold-wire threads. In 1780, in England, William Addis began massproducing toothbrushes fashioned from pig or badger bristles glued into small holes drilled into animal bone. Within sixty years, toothbrushes were being produced in England, France, Germany, and Japan. Mass production in the United States began in 1885. In the nineteenth century, dental chairs that reclined and could be otherwise adjusted were designed by James Snell in London in 1832 and

Dentists are trained to identify pathological conditions such as tooth decay, gum disease, and oral cancers, using diagnostic tools such as X rays. (©Andrey Kiselev/Dreamstime.com)

American dentist James Beall Morrison in 1867. Morrison also invented the foot-treadle drill, which allowed dentists to remove dental caries more efficiently. Anaesthetics were developed from nitrous oxide, ether, and cocaine; their use in dentistry was controversial. In 1839, American inventor Charles Goodyear discovered a process for hardening rubber with sulphur and heat, called vulcanization. The resulting product, called vulcanite, became popular as a moldable, durable, and inexpensive base for dentures. The twentieth century brought more advancements in the dental industry, such as the use of dental X rays, novocaine as a local anaesthetic, highspeed handpieces, and amalgam fillings. Daily tooth brushing came into practice during World War II, first with toothbrushes made from synthetic

Dental and Orthodontics Industry bristles (which were more hygienic than animal bristles) and then, decades later, with electric toothbrushes. Public health services studied the effects of fluoride on tooth decay, and by 1960, most public drinking-water supplies in the United States were fluoridated, and many toothpastes contained fluoride.

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day’s dentists typically spend four years in college and then four years in dental school. Once they graduate, they must pass a board exam to receive a license to practice. While most begin to practice general dentistry, some choose to pursue a dental specialty, such as endodontics (diseases of the dental pulp), periodontics (diseases of the gums), orthodontics (the straightening of teeth), and The Industry Today prosthodontics (the replacement of teeth). Such Dentists are no longer barbers or trade apprenpursuits require several more years of specialized tices. Their present profession has evolved as an actraining. Dentists work in private practices, hospicredited, independent specialty of surgery and tals, public health clinics, and universities. Other medicine. Modern dental schools confer the dethan caring for patients, some dentists teach, conduct research, or promote the profession. grees of doctor of dental surgery (D.D.S.) and docDentists look after the oral health of their pator of dental medicine (D.D.M.). The first dental tients. This begins with a thorough examination of school anywhere was the Baltimore College of Denthe oral cavity, including the teeth, gums, and tal Surgery, established in November, 1840. Totongue. Dentists are trained to identify pathological conditions such as dental caries (tooth decay), gum disease, and oral cancers. They use diagnostic tools such as radiographs, disclosing solutions, and articulating paper. They probe the relationship between the teeth and gums, the surfaces of the teeth, and the conditions of the oral mucosa. To maintain a patient’s oral and overall health, along with the abilities to eat, swallow, talk, and breathe, dentists treat the appearance and function of the teeth, gums, tongue, palate, and jaws. They practice preventive dentistry by methods including fluoride treatments, placing sealants over vulnerable areas of teeth, conducting regular oral exams, and recommending professional cleanings every six months. They practice ameliorative dentistry by prescribing antibiotics and analgesics for painful conditions, extracting badly decayed or impacted teeth, and performing root canal procedures to remove exposed nerves. They practice restorative dentistry by placing fillings, crowns, and bridges after removing compromising tooth decay and in A technician checks the alignment of a dental prosthesis. (©Vadim Kozlovpatients without teeth, they fit densky/Dreamstime.com) tures. Dentists also adjust occlusion

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so that the teeth and jaws meet in proper alignment. Orthodontics, a dental specialty, is the practice of straightening teeth, reshaping the palate, and realigning the jaws using tension appliances to create a more functional oral cavity as well as a more attractive smile. Cosmetic dentistry, another specialty, compensates for unattractive and misshapen teeth and gums with procedures such as bleaching, gum surgery, and bonding or veneers. As dental procedures became more complex and time-sensitive, dentists began training dental assistants to work with them, passing instruments to the dentist and keeping the patient’s oral field dry and free from debris with water, air, and suction lines. This teamwork is often referred to as “four-handed dentistry.” Dental assistants may also set up procedure trays, prepare immediate-use dental materials, and sterilize instruments. A subprofession of dentistry arose in the late 1800’s: Dental hygienists (once called dental nurses) were trained in oral health and the prevention of oral disease. Health care providers had

Dental hygienists work under the supervision of a dentist to professionally clean and polish patients’ teeth. (©Viktor Levi/Dreamstime.com)

come to realize that dental pain and destruction could be avoided by maintaining a clean mouth. Dental hygienists work under the supervision of a dentist to professionally clean and polish patients’ teeth, examine and chart the depth of the pockets between the gums and the teeth and bring to the dentist’s attention any unusual conditions that may require further treatment, such as cavities, broken teeth, bleeding gums, or sores. They also provide patient education on the techniques and importance of brushing and flossing. The twentieth century saw an increased understanding of infectious diseases, especially viral diseases such as hepatitis and human immunodeficiency virus (HIV). Because such diseases may be transmitted in bodily fluids such as blood and saliva and because such fluids are present and even aerosolized during dental procedures, dental personnel now wear eye shields, as well as disposable masks and gloves. Many wear uniforms that are made to withstand tough washing, and those uniforms often remain in the office to avoid introducing potential pathogens into the car and home. Stringent health precautions, such as hand-washing, disinfecting countertops, sterilizing instruments, and using disposable supplies for each patient are followed to protect patients and dental personnel alike. Dentists work in conjunction with physicians and pharmacists. Dentists have learned the importance of taking a complete medical history, not only to learn about any patient conditions that may potentially complicate dental treatment and results but also to find out what medications a patient is taking or is allergic to and thus avoid negative interactions. Patients with joint or heart-valve replacements may be told to take penicillin before and after dental treatment because such treatment releases bacteria from the mouth into the bloodstream and these patients are more susceptible to infections. Resistance to antibiotics is increasing in the population, so prescribers must be conscious of which antibiotic is appropriate and how long the course of treatment must be to be effective without encouraging resistance. Bisphosphonates used in cancer therapy and the treatment of osteoporosis have been linked to impaired wound healing after tooth extraction or periodontal surgery due to bone death. Dentists began reporting cases of this complication in the professional literature, and in

Dental and Orthodontics Industry 2005 the U.S. Food and Drug Administration (FDA) issued a statement that osteonecrosis of the jaw was a recognized complication of bisphosphonate treatment. Dentists also work closely with dental laboratories, which manufacture crowns, bridges, dental implants, dentures, and other custom oral appliances in accordance with dentists’ models and specifications. These products are regulated by the FDA as medical devices and thus must meet federal manufacturing and quality standards. The communication of specifications has become more timely with the use of digital photography and radiography that may be transmitted online and has become more precise with the use of three-dimensional imaging technology.

INDUSTRY MARKET SEGMENTS Dental practices range in size from single-dentist operations in niche practices to community dental health centers employing multiple practitioners and hygienists. The following sections provide a comprehensive breakdown of three different segments. Small Businesses Dentists who operate niche or boutique practices deliver high-quality elective procedures and excellent customer service in return for high fees. They limit the services they offer and refer dental hygiene, emergency care, and simple restoration cases to other offices. Insurance companies do not pay for such elective procedures, so these boutique practices require payment in full from patients. Potential Annual Earnings Scale. Boutique practices command the highest fees of any private practice in general dentistry. While no exact figures are available because of the exclusive nature of these practices, the top 25 percent of general dentists earned more than $166,400 in 2009, according to the U.S. Bureau of Labor Statistics (BLS). The top 10 percent of dental hygienists, who may assist in such practices, earned more than $92,860. Clientele Interaction. Patients are greeted warmly by receptionists at boutique practices and are immediately made to feel that their care and

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comfort are important upon their arrival. Many have been referred by friends and come with preconceived notions of the caliber of service they will receive. In some offices, the same dental assistant is assigned to a given patient at every visit to provide continuity of care. This person becomes a familiar and comforting presence and remains readily available to answer questions and to escort the patient through the office. With the patient comfortably seated, the dentist engages in conversation and listens carefully for the patient’s desired outcome of dental treatment. The dentist’s goal is not merely to meet but to exceed the patient’s expectations for both results and experience. A patient’s dignity and privacy are carefully guarded, and financial discussions with an administrator are conducted discreetly. Amenities, Atmosphere, and Physical Grounds. Dental boutique practices strive to create a spalike atmosphere because patients are paying for personal attention in addition to highquality dental care. The reception area frequently contains large, fresh flower arrangements and attractive art. Soothing instrumental music may be played throughout the office. Patients may be treated to specialty coffees and other beverages; some offices even offer fresh baked goods, which also provide an inviting aroma. Because these dentists see fewer patients in a day, they are less likely to be running behind schedule and keeping patients waiting. Staff members are trained to pay attention to details that ensure patient comfort and ease. The atmosphere is one of stress-free pampering, which provides relief from the noise and impersonal crowds of a city. Some practices provide patients with thank-you gift baskets containing premium dental products such as toothpaste, a toothbrush, floss, mouthwash, and lip balm, along with a handwritten note of appreciation. This type of practice is found in an urban setting, typically in a building with other professional offices or in a small converted house. The office must have appropriate electrical and water supplies to meet dental purposes, and it must be accessible to people with special needs, in compliance with the Americans with Disabilities Act. Boutique practices typically employ state-of-the-art equipment and have exquisite interior designs and décor. Some office designs include a patient check-

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out station, where patients can freshen themselves (reapply makeup, clean eyeglasses) after treatment and admire their newly completed dental work. Typical Number of Employees. To provide personal attention and expert service, boutique practices require at least one dentist, one chairside assistant, and one receptionist who also oversees billing. There may be additional dental assistants and administrative assistants to ensure attention to customer service. Traditional Geographic Locations. Niche practices survive only in metropolitan areas in which large numbers of people have discretionary income to spend on high-quality dentistry. With the need for only one or two treatment rooms, these dental offices fit well in city buildings and converted houses. Pros of Working for a Niche Practice. Patients pay top dollar for top-quality service, so employees of niche dental practices earn high incomes while working comfortable schedules and seeing select patients. Dentists who choose to run boutique practices enjoy the reputation of being exclusive and having patients seek out their dental skill and expertise. They are able to pursue their full potential, work in an elegant environment, work with their hands to produce both art and science, and serve appreciative patients. Cons of Working for a Niche Practice. Niche practices require sufficient populations of patients with sufficient discretionary income and the willingness to spend it on dentistry in order to be viable businesses. Their high fees must be justified by high-quality dentistry because anything less would compromise the practice’s reputation. The customer service they provide must impress patients enough to motivate them to refer new patients to the practice. Overhead expenses may rise with the acquisition of the latest equipment and best materials. Staff-related expenses and location costs (such as rent and renovation) may also be relatively high. As business owners, dentists in such practices bear the responsibility of keeping abreast of applicable federal, state, and local regulations, in addition to developments in dentistry. Costs Payroll and Benefits: Staff members in niche practices are typically paid higher-than-average

Advancements in dental chairs and other tools have made a visit to the dentist a more comfortable experience. (©Vitaliy Hrabar/Dreamstime.com)

salaries. Dental assistants may also have higher continuing-education allowances than at other practices to fund training in the use of state-ofthe-art materials, equipment, and technology. Benefits may include medical insurance and dental care. Supplies: Fixtures include an adjustable dental chair, adequate adjustable lighting for illuminating the oral cavity, an instrument-tray delivery system, and a system of retractable air, water, and suction lines. Equipment pieces include a sterilization system (autoclave), a high-speed handpiece, a curing light, and assorted dental instruments. The radiography system is commonly digital. Computer hardware and software may be used for both clinical and administrative functions. Many supplies are disposable, such as masks, gloves, patient bibs, cotton rolls, and

Dental and Orthodontics Industry gauze. Others are consumable, such as dental materials, bleaching reagents, and anaesthetics. External Services: Outsourced services typically include housekeeping and janitorial services, facilities maintenance, and dental laboratory services. Dentists may also contract marketing, information technology support, and financial services such as billing, bookkeeping, and tax planning. Biohazardous waste disposal, including surgical sharps and bloody gauze, must be handled by licensed contractors. Building owners may contract yard care (lawn mowing, landscaping, and snow removal). Boutique practices aim to create a spalike atmosphere and may contract external services such as florists, beverage suppliers, and bakeries. Some even bring in massage therapists to relax patients before tedious procedures and reduce patient anxiety during injections. Utilities: Dental practices depend on reliable electrical and water supplies and appropriate wastewater drains. Other utilities include telephone and Internet access lines. Taxes: Dental practices are required to pay local, state, and federal income and property taxes. Some municipalities also collect annual personal property taxes on dental equipment, computers, compressors, and other assets. Others may impose business privilege taxes based on gross receipts. Some states impose an occupations tax on persons holding professional licenses or registrations to practice dentistry. Licenses and Continuing Education: Dentists must pay for their licenses and the continuing education credits necessary to maintain those licenses. Midsize Businesses In 2008, of all dentists in general private practice, 83.1 percent worked in solo practices or twodentist practices. Most accept payment from private dental benefits plans, with the balance due from the patients. Potential Annual Earnings Scale. According to the BLS, the average salary for a general dentist employed by a dental office in 2009 was $159,350. Orthodontists earned an average of $208,910, oral and maxillofacial surgeons earned an average of $212,680, and dental hygienists earned an average of $68,160. These wages are dependent on geo-

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graphic location, number of hours worked, and years of experience. Clientele Interaction. Receptionists greet each patient upon arrival for an appointment. Dental assistants escort patients into the operatory and make them comfortable before treatment begins. For prophylaxis appointments, dental hygienists often perform the cleaning, scaling, and polishing, take X rays, and offer patient education. Dentists then perform oral examinations. For diagnostic, ameliorative, and restorative appointments, dentists review patients’ medical histories and ask about present dental concerns before beginning their examinations and treatment. At an appointment’s conclusion, a patient checks out with a receptionist or financial secretary to make payment arrangements and schedule the next appointment. Amenities, Atmosphere, and Physical Grounds. Midsize dental offices are clean and comfortably decorated. Music may be playing to create a calm atmosphere and mask the sounds of the handpieces. A water cooler or bottles of drinking water may be available in the reception area. Patients may be given toothbrushes and spools of floss at the end of their visits. These offices make an effort to remain on a firm schedule so that their patients do not have to wait and will not grow more anxious. Also, practitioners perform better without time pressures. General dentistry practices serve patients of all ages and often have a subsection of the reception area with toys for younger children to keep them busy. Reception areas typically provide appropriate reading materials (such as magazines, newspapers, and brochures) to entertain visitors. Depending on the number of operatories, these practices may be found in buildings with other professional offices or in dedicated buildings. The offices must be in compliance with the Americans with Disabilities Act, providing such things as wide doorways and handicapped-accessible bathrooms. Typical Number of Employees. A practice run by one or two dentists typically employs at least two full- or part-time hygienists, at least two full- or parttime assistants, and at least two full- or part-time receptionists. It may also employ an office manager to assume business management and human resources duties and a financial secretary to oversee billing, insurance claims, and other financial arrangements.

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Dental and Orthodontics Industry

Traditional Geographic Locations. These practices are found in urban, suburban, and rural areas of every state. The national average density of dental practices is 60.4 dentists per 100,000 population; Washington, D.C., at the far end of the spectrum, has 144.7 dentists per 100,000 population, while Nevada, at the other, has only 39.2 dentists per 100,000 population. Pros of Working for a Midsize Practice. General practice dentists perform a variety of procedures that employ their artistic and mechanical talents as well as their problem-solving skills. They enjoy the benefits of self-employment, including control of their time and the freedom to set fees. They have flexibility, especially in two-dentist practices, to balance work and family life. Similarly, partners and associates share the responsibilities for administering emergency care outside of regular business hours. They have the satisfaction of diagnosing diseases and enhancing the oral health of their patients. They have opportunities to pursue professional development, learn and apply advanced technologies, and determine the direction of their practices. Cons of Working for a Midsize Practice. To reach a target income and minimize overhead expenses, dentists must balance fees with patient volume; to keep fees reasonable, dentists must attract and retain new patients. To do so, they must provide an appreciable level of customer service that may include offering emergency care after regular hours, accepting interruptions of their nights, weekends, and holidays. Dentists must also attract and retain competent dental hygienists and dental assistants by offering reasonable pay and benefits and maintaining sufficient patient loads to keep these staff members productive. Dentists must be proficient in a wide range of skills and keep up with advancements in their field. As business owners, they must also keep abreast of applicable federal, state, and local regulations. Costs Payroll and Benefits: Dental hygienists receive an hourly wage, typically between $26.74 and $38.46, with a median of $32.38. In some offices, they may also earn bonuses for exceeding production goals. Dental assistants receive an hourly wage, typically between $13.23 and $19.12, with a median of $15.98. Benefits may include medical

insurance and dental care. Some offices provide vacation time, retirement plans, uniform allowances, and continuing education allowances. Supplies: Required fixtures include an adjustable dental chair, adequate adjustable lighting for illuminating the oral cavity, an instrument-tray delivery system, and a system of retractable air, water, and suction lines in each operatory. Required equipment includes a sterilization system (autoclave), a high-speed handpiece, an ultrasonic cleaning unit, an electrosurgical unit, a curing light, and assorted dental instruments. Radiography systems are commonly automated and take panoramic as well as focal bite-wing X rays. Computer hardware and software may be used for both clinical and administrative functions. Most dental practices have discontinued placing silver amalgam fillings in favor of toothcolored composite fillings and no longer have a need for amalgam separator systems. Fewer than half of midsize practices use lasers, computer-aided design and computer-aided manufacturing (CAD/CAM) technology, digital radiography, or nitrous oxide anaesthesia. Many supplies are disposable, such as masks, gloves, patient bibs, cotton rolls, and gauze. Others are consumable, such as dental restoration materials, prophy paste, and anaesthetics. External Services: Outsourced services typically include housekeeping and janitorial services, facilities maintenance, and dental laboratory services. They may also include marketing, information technology, and financial services such as billing, bookkeeping, and tax planning. Biohazardous waste disposal, including surgical sharps, bloody gauze, and extracted teeth, must be handled by licensed contractors. Building owners may contract yard care (lawn mowing, landscaping, and snow removal) or may perform these duties themselves. Utilities: Dental practices depend on reliable electrical, water, and air supplies and appropriate wastewater drains. Other utilities include telephone and Internet access lines. Taxes: Dental practices are required to pay local, state, and federal income and property taxes. Some municipalities also collect annual personal property taxes on dental equipment, computers, compressors, and other assets. Others may impose business privilege taxes based on

Dental and Orthodontics Industry gross receipts. Some states impose occupations taxes on persons holding professional licenses or registrations to practice dentistry. Licenses and Continuing Education: Dentists must pay for their licenses and the continuing education credits necessary to maintain those licenses. Large Businesses Practices with multiple dentists and hygienists may include per diem specialists to establish one location, a community dental health center, in which a patient may have all dental needs met. They typically operate under health-maintenanceorganization (HMO) or preferred-provider-organization (PPO) plans, which means that the dental care providers have signed contracts with plan providers to provide treatment and services to members enrolled in their plans in exchange for fees paid from fee schedules determined by the plan providers. These plans are commonly part of benefits packages offered by employers. Dental practitioners in community centers may also treat adults with special needs and children on Medicaid. In some practices, individuals who qualify may be eligible to pay for services on a sliding fee scale. Practitioners deliver preventive services such as X rays, cleanings, fluoride treatments, and sealants, as well as simple restorations. Per diem specialists may provide extractions, stainless steel crowns, space maintainers, and dentures. Some centers do not offer emergency dental care. Potential Annual Earnings Scale. Large community practices usually receive lower fees than other private practices in general dentistry. While no exact figures are available because of the charitable nature of these practices, the bottom 25 percent of general dentists (in which community health practitioners may be assumed to be) earned an hourly wage below $48.23 and an annual wage below $100,330 in 2009, according to the BLS. The average annual income of a dentist employed at an outpatient care center was $138,750, and the average annual income of a dentist employed at a general hospital was $109,560. Older dentists who do not want to retire completely may choose to work part time in community practices. New dentists who want to increase their skills, experience, and confidence may also choose to work at such facilities.

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Clientele Interaction. Community dental health centers serve children, adolescents, adults, and individuals with special needs. Patients seeking dental treatment are often asked to make initial appointments in person so they can fill out paperwork with a receptionist without taking time away from their treatment. Depending on the population being served, centers may have translators available to facilitate communication in languages such as Spanish or Korean. Dentists are available to perform initial examinations and treatment planning and, later, to provide restorations, but patients spend most of their visits with hygienists, who perform preventive treatment and then teach patients and their families how to maintain a clean mouth. Dental assistants may work chairside with hygienists, as well as with dentists. Amenities, Atmosphere, and Physical Grounds. Because community dental health centers operate on a tight budget, they offer basic services to as many patients as they can and forego unnecessary expenses. Their offices are clean but not fancy, and they are typically bustling and noisy. They are equipped to accommodate young children, as well as individuals with special needs. Depending on the population being served, patient education literature may be offered in multiple languages and may be written for readers with low levels of literacy. Each patient may receive a basic toothbrush at the end of each visit to encourage proper oral hygiene. Centers commonly have ample reception areas to accommodate large families and adequate parking lots to accommodate transport vans and staff vehicles. Their buildings may be simple, new construction to ensure adequate electrical and water conduits and meet the measurements, such as doorway widths and ramp angles, specified in the Americans with Disabilities Act. Retrofitting an existing building is difficult and often more costly than renting or purchasing one that already satisfies such requirements. Typical Number of Employees. The number of employees is dependent upon what a given area can support. There are typically more hygienists than dentists and more assistants than hygienists. There are often many support staff members to handle the paperwork of patient records and service claim forms. Traditional Geographic Locations. Community health centers are commonly found in under-

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served areas. The national average density is 60.4 dentists per 100,000 population, but many states are below this average. States in the east south central and west south central regions have fewer than 50 dentists per 100,000 residents, and Mississippi and Nevada have fewer than 40 dentists per 100,000 residents. Community dental health centers typically serve large geographical areas, such as entire counties. In some instances, dental screenings, referrals, and education are presented in mobile dental vans that travel to schools and churches. Pros of Working for a Large Community Practice. Dental care providers can take great satisfaction in knowing that they are caring for underserved patients by improving their oral health and thus their quality of life. The dental education they offer their patients often has a significant effect. The need for community dental care in the United States is unlikely to decrease. Dentists whose centers do not provide emergency dental care are able to work regular hours, without interruptions of nights, weekends, and holidays. Cons of Working for a Large Community Practice. Practitioners do not have great earning potential and cannot raise fees of their own volition. Therefore, they must see a larger number of patients to balance income and expenses. They perform a reduced range of services, depending on what HMOs and PPOs will cover, so the work may become monotonous. They have fewer opportunities to learn and incorporate advanced dental techniques because of the expense. As business owners, they must keep abreast of applicable federal, state, and local regulations. Costs Payroll and Benefits: Dental hygienists and assistants in community practices are typically paid lower-than-average salaries because of the fixed and sliding fees charged to patients. Employees are frequently part time, with few if any benefits. Supplies: Required fixtures include an adjustable dental chair, adequate adjustable lighting for illuminating the oral cavity, an instrument-tray delivery system, and a system of retractable air, water, and suction lines in each operatory. Required equipment includes a sterilization system (autoclave), a high-speed handpiece, a curing light, and assorted dental instruments. The radiography system may be wet process or digi-

tal. Patient records are often kept as paper charts. Many supplies are disposable, such as masks, gloves, patient bibs, cotton rolls, and gauze. Others are consumable, such as prophy paste, sealant materials, and anaesthetics. External Services: Outsourced services typically include housekeeping and janitorial services, facilities maintenance, and dental laboratory services. Biohazardous waste disposal, including extracted teeth, bloody gauze, and filters from an amalgam separator system, must be handled by licensed contractors. If a community center includes an on-site pharmacy, additional security services may be hired. Building owners may contract yard care (such as lawn mowing and snow removal) or may perform these duties themselves. Utilities: Dental practices depend upon reliable electrical and water supplies and appropriate wastewater drains. Another utility cost is telephone lines. Taxes: Dental practices are required to pay local, state, and federal income and property taxes. Some municipalities also collect annual personal property taxes on dental equipment, computers, compressors, and other assets. Others may impose business privilege taxes based on gross receipts. Some states impose occupations taxes on persons holding professional licenses or registrations to practice dentistry. Licenses and Continuing Education: Dentists must pay for their licenses and the continuing education credits necessary to maintain those licenses.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Three out of four dentists are solo practitioners. In a typical dental office, one dentist operates with one or more dental hygienists, one or more dental assistants, and one or more administrative support personnel. The dentist, as the business owner, often assumes many of the operating responsibilities. Larger, group practices have larger staffs and may employ people to perform more specialized functions, such as an appointment secretary, a billing clerk, or a treatment coordinator. Other functions

Dental and Orthodontics Industry are outsourced to specialists, such as tax planners, dental laboratory technicians, and information technology experts. Additional jobs may be found in peripheral fields, such as sales and marketing (to dentists, not just for dentists), continuing education, research, and promotion of the profession. While professions such as dentist and dental hygienist require formal education and state licensure, other employment positions do not, although a college degree in science may be necessary. For positions such as receptionist and dental assistant, dental practices may prefer to train a motivated employee on the job rather than seeking someone with previous training and experience. The following umbrella categories apply to the organizational structure of businesses in the dental and orthodontics industry:

and manage the insurance plans. Dental offices must comply with federal regulations, particularly regarding privacy issues and chemical and biohazard waste containment and disposal, so manuals of safety procedures and policies must be written and maintained in compliance. A dentist who is an employee of a hospital or other health agency must support good business practices but frequently does not have administrative responsibilities. However, the dentist may be responsible for maintaining a related budget. Business management occupations may include the following: ■ ■ ■ ■ ■

■ ■ ■ ■

■ ■

Business Management Customer Service Sales and Marketing Technology, Research, Design, and Development Dental Care Human Resources

Business Management A dental practice is a business like other businesses and must keep accurate financial records, send bills and insurance claims, record and deposit payments, pay taxes, and manage employee payrolls and benefits. Dental schools by their nature teach many more classes in dental science than in business management, so dentists often feel unprepared to run a private practice in which they must take on corporate duties in addition to performing dentistry. Dentists have been trained to be specialized technicians rather than managers or business owners. Therefore, many of them hire employees and consultants who have the appropriate skills and experience to run the practice as a sound and profitable business. Services such as bookkeeping, accounting, billing, and payroll may be outsourced or they may be handled in-house by a business manager or office manager. An employee or contractor in this role may also track income versus expenses to monitor an annual budget, make quarterly income tax payments, make employee retirement contributions,

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Owner/Partner Business Manager Office Manager Safety Officer Billing Clerk Payroll and Benefits Manager Bookkeeper Accountant Tax Manager

Customer Service Customer service is extremely important in a dental office because patients often feel vulnerable, whether because they have a fear of dental treatment, they are embarrassed about the state of their oral hygiene, they are embarrassed about their financial situation, or they are in pain. Patients judge an office by how they are treated before, during, and after their visits. Dental offices typically have at least one receptionist at a front desk to greet patients as they walk in and to answer telephone calls. Receptionists may schedule new and follow-up appointments, although some practices employ a dedicated secretary for managing the appointment schedule, especially for multiple providers. Dentists are not responsible for their own schedules, although they must specify how much time should be allotted for each procedure. Staff members who make every effort to keep the dentist seeing patients on time show respect to each patient as well as the dentist. Dental assistants provide customer service by escorting patients into the operatory, seating them comfortably, and preparing the room for the dentist, facilitating efficient treatment. Dental assistants may also review and update the patient’s medical

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history and take current vital signs, showing concern for the whole person, not just the mouth. They are frequently social and may converse with patients to put them at ease before treatment begins. After treatment is complete and a dental assistant has escorted the patient back to the front desk, a receptionist may accept a patient’s payment for services. Some practices may have a billing clerk or financial secretary who assists patients with making payment arrangements and submitting insurance claims. A patient’s privacy and dignity should be protected in both the administrative and clinical areas of the dental office. Customer service occupations may include the following: ■ ■ ■

Receptionist Dental Assistant Financial Secretary

Sales and Marketing In the past, health care professionals were discouraged from advertising. It was seen as contrary to the medical and dental fields’ value of altruism. However, in the present-day competitive market, dentists must promote their services to attract a sufficient patient base to sustain their practice. Dental offices may have Web sites on which they present their hours, office policies, directions for finding their location, and services offered. These Web sites frequently contain photos of dental personnel at work, so prospective patients have a sense of what to expect in that office. Dentists may even regularly post educational articles to draw return traffic to their Web sites. While the Internet is an effective marketing tool, if the Web site is set up to be interactive, such as to accept appointments or payments made online, there must also be stringent safeguards on the server to protect confidential patient information from computer hackers. Some dental offices choose to sell dental products directly to their patients as a convenience. However, in general, direct sales are not part of a dental practice. Sales and marketing occupations may include the following: ■ ■ ■

Dental Products Salesperson Dental Supplies Salesperson Information Technology Specialist

Technology, Research, Design, and Development Significant advancements in dentistry include lasers, three-dimensional imaging systems, and novel adhesives and restoration materials. Dentists are becoming increasingly able to provide more effective treatments more efficiently. However, they must become aware of the latest information and learn to apply it in their practices to offer competitive services in a competent and ethical manner. Dentists must earn a minimum number of continuing education credits annually as part of their licensing requirements, which vary from state to state. Large continuing education forums are often held in conjunction with trade shows or sponsored by dental product companies so that attendees are exposed to new commercially available products and methods for their use. Dentists who belong to national organizations receive professional journals and other dental magazines that keep them apprised of state-of-the-art materials, techniques, and equipment. State dental associations and local study groups are other networks of information. The National Institute of Dental and Craniofacial Research (NIDCR), a branch of the National Institutes of Health, oversees scientific research on oral, dental, and craniofacial diseases and disorders. Created in 1948 as the National Institute of Dental Research, it has since supported numerous scientific contributions with significant public health benefits, including the fluoridation of drinking water supplies and the recognition of dental caries and periodontal disease as infectious diseases. Ongoing research projects funded by NIDCR grants are aimed at not only continuing to improve oral health but also detecting abnormal conditions throughout the body by monitoring biomarkers in the saliva. New biomaterials are being developed, such as bone and tissue regeneration matrices for implant systems, artificial saliva to relieve xerostomia that results from medications and autoimmune diseases, and rinses that prevent the formation of biofilm and thus prevent dental caries. Imaging devices will continue to improve for even earlier identification and treatment of head, neck, and oral cancers. Technology, research, design, and development occupations may include the following:

Dental and Orthodontics Industry ■ ■ ■ ■ ■

■ ■

Dental Researcher Dental Technology Engineer/Inventor Dental Biomaterials Developer Dental Appliance Designer Dental Appliance Manufacturing Technician Technical Writer/Editor Instructor

Dental Care In a dental office, the dentists, dental hygienists, and dental assistants perform billable services. Administrative support staff are auxiliary, meaning that they do not actively generate revenue for the practice.

OCCUPATION

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Dental procedures are coded for documenting, billing, and insurance purposes. The standard coding system is the American Dental Association’s Current Dental Terminology (CDT) system. Dental procedure codes are grouped into categories of service: diagnostic, preventive, restorative, endodontics, periodontics, prosthodontics (removable), maxillofacial prosthetics, prosthodontics (fixed), oral surgery, orthodontics, and adjunctive general services. Dental assistants perform diagnostic and information-gathering procedures, as well as reversible procedures. For example, they can manufacture temporary crowns, clean and polish removable appliances, and place and later remove orthodontic brackets and bands.

SPECIALTIES

Dentists Specialty

Responsibilities

Endodontists

Examine diseases of the teeth and gums and perform root canals.

Oral and maxillofacial surgeons

Perform surgical operations on the mouth and jaws to remove teeth, tumors, and other abnormal growths or to correct abnormalities in the jaw.

Oral pathologists

Study the nature and causes of diseases of the mouth and determine the best plan of treatment.

Orthodontists

Diagnose and correct or prevent irregularities and deviations in the position of teeth and the development of the jaws, as well as design and fabricate appliances.

Pedodontists

Specialize in treating infants, children, and adolescents; treat primary and secondary teeth and construct suitable appliances for growing mouths.

Periodonists

Treat diseased tissues that support the teeth by cleaning and polishing teeth, eliminating the irritating margins of fillings, and correcting occlusions.

Prosthodontists

Specialize in making artificial teeth or dentures to correct deformations of the mouth and jaws.

Public health dentists

Concern themselves with community dental health; plan, organize, and maintain dental health programs of public health agencies and analyze the dental needs of a community to determine necessary changes.

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Orthodontics is the practice of straightening teeth, reshaping the palate, and realigning the jaws using tension appliances to create a more functional oral cavity as well as a more attractive smile. (©Dreamstime.com)

periodontal scaling, and administration of anaesthetics. Dental hygienists must be licensed to practice, and the licensing state’s regulations determine the range of services that may be performed. Only dentists are allowed to perform irreversible procedures that involve tissue cutting with a high-speed handpiece. Dentists may surgically remove tooth and bone when performing extractions, root canal therapy, and even placing fillings because the preliminary removal of dental caries and the preparation of the tooth to receive restorative material involve the removal of tooth. Dentists may also surgically biopsy lesions. They are responsible for clinical diagnosis and treatment planning and are licensed to write prescriptions. Dental care occupations may include the following:

In addition to tooth cleaning and periodontal probing, dental hygienists may perform limited irreversible procedures, such as gingival curettage,

OCCUPATION

■ ■ ■

Dentist Oral/Maxillofacial Surgeon Orthodontist

PROFILE

Dental Hygienist Considerations

Qualifications

Description

Cleans teeth and examines mouth, head, and neck for signs of disease; may also educate patient on oral hygiene and take X rays.

Career cluster

Health Science

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

Junior/technical college

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

SAI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Dental and Orthodontics Industry OCCUPATION

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SPECIALTIES

Dental Laboratory Technicians Specialty

Responsibilities

Crown and bridge technicians

Make crowns, inlays, and teeth for fixed bridges according to a dentist’s prescription.

Dental ceramists

Apply layers of porcelain paste or acrylic resins over metal framework to form crowns, bridges, and tooth facings.

Metal dental technicians

Lay out designs of metal framework and clasps for partial dentures on plastic models.

Orthodontic technicians

Construct and repair appliances for straightening teeth according to an orthodontist’s prescription; shape, carve, and assemble metal and plastic appliances, such as retainers, tooth bands, and positioners using special equipment.

■ ■ ■

Dental Hygienist Dental Assistant Dental Laboratory Technician

Human Resources Larger dental offices may have office managers who provide human resources services such as administering benefits, hiring and firing, and arranging for employee training. In smaller offices, these duties fall to the dentist. The person responsible for human resources management must maintain the morale of the staff, address performance issues, and ensure that policies and regulations are being upheld in the workplace. The dentist and the office manager may conduct employee appraisals together and budget for appropriate bonuses or additional training opportunities. As business owners, dentists determine which benefits to offer to employees. These may include complimentary dental treatment, health insurance enrollment, paid vacation time, retirement plan contributions, a uniform allowance, and continuing education funding. Continuing education is available for clinical and administrative personnel on a wide variety of topics, from infection control, radiology, and tobacco cessation to practice management, communication skills, and serving patients with special needs. Courses may be available online, at local

venues, or as part of regional and national dental conventions. Professional organizations are often the leading source of information regarding professional development. Dentists may join the American Dental Association, founded in 1859. Dental hygienists may belong to the American Dental Hygienists’ Association, which held its first annual meeting in 1923. Dental assistants may join the American Dental Assistants Association, established more than 80 years ago. Human resources occupations may include the following: ■ ■ ■

Office Manager Payroll and Benefits Manager Professional Organization Staff Member

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise. The BLS projects that the number of dental positions will grow by 16 percent between 2008 and 2018, faster than the average growth rate of 11 percent for all occupations combined. The number of positions for dental hygienists is projected to increase by 36 percent during the same period; the

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same is true for dental assistants, making these among the fastest-growing occupations. Employment opportunities should continue to be readily available, as a large number of dentists reach retirement age. Older dentists who do not leave the profession are reducing their work hours and no longer accepting new patients, so they are also creating opportunities for new dentists. In 2010, there were fifty-eight dental schools in the United States, and they produced just over five thousand graduates. This was the highest number in nearly twenty years; the most recent low was less than four thousand graduates in 1993. However, even this high number of graduates is not enough to keep up with the growing demand for dental services. The need for dental care is continuing to grow because people are living longer, taking better care of themselves, recognizing the importance of dental care, and keeping their teeth longer. Because people are living longer, there are more patients to serve. As people take better care of themselves, they often improve their diets, which not only strengthens teeth but also increases the importance of oral function for chewing whole, unprocessed foods. People have begun to appreciate the value of dental care and are no longer requesting dentures for their convenience. They are choosing to invest in their mouths and spending discretionary funds. Because they want to keep their teeth longer, they are considering restorative procedures rather than settling for extractions without further treatment. Although water fluoridation and fluoride toothpastes have reduced the incidence of dental caries, teeth still break, gums still recede, and jaws may not align properly. People still care about the appearance of their smiles; increasing numbers of adults are getting braces and bleaching their teeth. New intraoral appliances have been designed to reduce sleep apnea and relieve jaw pain from bruxism (tooth grinding). The need for dentistry is not waning. As dentists become busier, more responsibilities and expanded skills will fall to dental hygienists and dental assistants. Colleges and universities are beginning to train dental personnel to become “expanded function dental auxiliaries,” licensed positions based on education rather than years of experience. This license allows someone other

than a dentist to apply sealants; take impressions; place temporary fillings, crowns, and bridges; and place and carve direct restoration materials. In addition, workforce studies have recommended that dental hygienists have expanded responsibilities with less direct supervision to care for underprivileged children and underserved populations away from a traditional dental office. Medicine and dentistry are continuing to overlap. An emerging field of common interest is called neuromuscular dentistry, which studies the nerves and muscles of the head and neck to determine their relationship to migraines, neuropathic pain (persistent overstimulation of nerves in response to a medical condition, with a burning or electric sensation), and nociceptive pain (time-limited, localized, and constant pain in response to irritation or injury). Dentists are seeking to find and treat the underlying causes of headaches, temporomandibular joint pain, and myofascial pain and are developing new injection techniques to deliver nerve blocks as well as intraoral appliances to balance muscle stress and bring relief. Dentists are also studying the relationship between jaw position and sleep apnea and fabricating intraoral devices to open airways and avert snoring. Such novel scientific pursuits and treatments will give patients new reasons to seek dental care. Employment Advantages In a 2008 survey of graduating dentists, five important reasons for going into dentistry as a profession were listed: control of time, service to others, self-employment, income potential, and working with one’s hands. Additional reasons reported by practicing dentists were the flexibility to balance family and career, the satisfaction of patient education and fostering change, the significance of disease detection, opportunities for using creativity and problem-solving skills, and the respect accorded the profession. New dentists are able to begin generating meaningful income directly after graduation and licensing and thus may begin to pay back student loans more quickly than new physicians, who must complete internships and residencies at minimal pay before establishing medical practices. As a profession, dentists earn more income than physicians, with more independence and less bureaucracy. However, because dental fees are often paid directly by patients, in some

Dental and Orthodontics Industry cases assisted by private insurance companies, in times of economic difficulty, the demand for dental services may be reduced. Dental assistants and dental hygienists may work full time or part time, allowing them to balance work with home and children. They often report satisfaction from working closely with patients, especially in the areas of oral health education and reducing anxiety about dental treatment. Annual Earnings According to the U.S. Census Bureau, the dental and orthodontics industry earned revenues of $94.18 billion in 2007. The economic recession of 2007-2009 affected the industry, however. A quarterly survey of economic confidence conducted by the American Dental Association in January, 2010, found that the net income of dentists surveyed had decreased by 5 percent from 2008 to 2009. However, the last quarter of 2009 showed some upturn in dental economic indicators such as net income, gross billings, collections, treatment acceptance rates, and numbers of new patients. Dentists who had been practicing less than ten years were the only ones to report that their net income had increased from 2008 to 2009. These data suggest that the natural increase in income that comes with increasing experience is outpacing the economic decline. In addition, younger dentists may work more hours on average than older, more experienced dentists, thereby generating more income. The survey also reported decreases in adjustments and write-offs, open appointment times, and average days of accounts receivable.

RELATED RESOURCES FOR FURTHER RESEARCH Academy of General Dentistry 211 E Chicago Ave., Suite 900 Chicago, IL 60611-1999 Tel: (888) 243-3368 Fax: (312) 444-0559 http://www.agd.org American Association of Orthodontists 401 N Lindbergh Blvd. St. Louis, MO 63141-7816 Tel: (800) 424-2841

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Fax: (314) 997-1745 http://www.braces.org American Dental Association 211 E Chicago Ave. Chicago, IL 60611-2678 Tel: (312) 440-2500 http://www.ada.org http://jada.ada.org American Dental Hygienists’ Association 444 N Michigan Ave., Suite 3400 Chicago, IL 60611 Tel: (312) 440-8900 http://www.adha.org National Institute of Dental and Craniofacial Research National Institutes of Health 9000 Rockville Pike Bethesda, MD 20892-2190 Tel: (301) 496-4261 http://www.nidcr.nih.gov

ABOUT

THE

AUTHOR

Bethany Thivierge is a biomedical technical writer and editor with a B.S. in biology from the University of Michigan and an M.P.H. in health promotion and education from the Loma Linda University School of Public Health. She began her career in dental research at the University of Michigan Dental School and the Dental Research Institute; her work was published in Infection and Immunity. She has written numerous dental education articles for publications such as The Gale Encyclopedia of Medicine and Magill’s Medical Guide.

FURTHER

READING

American Dental Association. Two Thousand Seven Survey of Dental Practices: Characteristics of Dentists in Private Practice and Their Patients. Chicago: Author, 2007. American Dental Education Association. Trends in Dentistry and Dental Education. Washington, D.C.: Author, 2008. Bremner, M. D. K. The Story of Dentistry. 3d ed.

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Dental and Orthodontics Industry

Brooklyn, N.Y.: Dental Items of Interest, 1954. Gelbier, S. “125 Years of Developments in Dentistry, 1880-2005.” British Dental Journal 199 (2005): 470-473. Hoffmann-Axthelm, Walter. The History of Dentistry. Berlin: Quintessential Books, 1990. Levin, Roger P. “The Boutique Dental Practice.” Dental Angle, July, 1996. http://www .dentalangle.com/07.96/levin-archived .html. National Institute of Dental and Craniofacial Research. “Oral Health: Past, Present, and Future.” http://www.nidcr.nih.gov/Research/ ResearchPriorities/StrategicPlan/ pastPresentFuture.htm. Ring, Malvin E., and Neal Hurley. “James Beall Morrison: The Visionary Who Revolutionized the Practice of Dentistry.” Journal of the American Dental Association 131, no. 8 (2000): 1161-1167. Spielman, Andrew I., et al. “Dentistry, Nursing, and Medicine: A Comparison on Core Competencies.” Journal of Dental Education 69, no. 11 (2005): 1257-1271.

U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Dentists.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos 072.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Health and Human Services. Bureau of Health Professions. National Center for Health Workforce Analysis. U.S. Health Workforce Personnel Factbook, 2002. http:// bhpr.hrsa.gov/healthworkforce/reports/ factbook.htm. World Salaries. “Dentist Salaries: International Comparison.” http://www.worldsalaries.org/ dentist.shtml.

Electrical and Gas Appliances Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Audio and Video Equipment Manufacturing; Electric Housewares and Household Fan Manufacturing; Household Cooking Appliance Manufacturing; Household Hot Water Heater Manufacturing; Household Laundry Equipment Manufacturing; Household Refrigerator and Home Freezer Manufacturing; Household Vacuum Cleaner Manufacturing; Kitchen Appliance Manufacturing; Major Appliance Manufacturing; Radio Receiving Set Manufacturing; Small Electrical Appliance Manufacturing; Television Set Manufacturing; Trash and Garbage Compactor Manufacturing Related Industries: Batteries and Fuel Cells Industry; Broadcast Industry; Electrical Power Industry; Home Maintenance Services; Household and Personal Products Industry; Light Machinery Industry; Motion Picture and Television Industry; Music Industry; Petroleum and Natural Gas Industry; Retail Trade and Service Industry; Telecommunications Equipment Industry; Video, Computer, and Virtual Reality Games Industry; Water Supply Industry Annual Domestic Revenues: $25 billion USD (Hoover’s, 2009) Annual International Revenues: $143.2 billion USD (Research and Markets, 2008) Annual Global Revenues: $168.2 billion USD (Research and Markets, 2008) NAICS Numbers: 3343, 3352

INDUSTRY

DEFINITION

hold about 95 percent of the market share. The three largest companies are Whirlpool, General Electric, and Electrolux. Globally, the two market leaders are Whirlpool and Electrolux. Major products are refrigerators, freezers, ovens, stoves, laundry equipment, and vacuum cleaners. Manufactur-

Summary The electrical and gas appliance industry is dominated by large companies. For example, in the United States, the twenty largest companies 559

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The modern American kitchen is filled with small electric appliances like these. (©Carolyn Woodcock/iStockphoto.com)

ers often produce several models of a particular product that are tailored to specific market segments. For example, a manufacturer might market a basic model, a full-featured model, and a commercial model. Virtually every industrialized nation on the planet has a significant appliance industry, employing individuals in a wide variety of career paths. History of the Industry The history of appliance manufacturing is inextricably linked to, and arose precipitously after, the harnessing of energy from natural gas and electricity. Natural gas was first discovered and used in ancient China around 600 b.c.e. The first recorded use of natural gas in the home was in 100 b.c.e. in Persia (now Iran). The first gas utility, the Londonbased Gas Light and Coke Company, was incorporated by royal charter in 1812. Subsequently, other gas utilities were formed in England, the rest of Europe, and the United States. These utilities sold gas that was manufactured, not extracted from natural sources, and that was used primarily for street lighting. Manufactured gas was produced by gasifica-

tion of a combustible substance, usually coal but sometimes wood or oil. The combustible substances were gasified by heating them in enclosed ovens in an atmosphere low in oxygen. They emitted gases—including hydrogen, methane, and ethylene—that could be burnt for heating and lighting purposes. In the second half of the nineteenth century, the primary application of gas transitioned from lighting to heating and cooking. This transition was propelled by the development of electric lighting. As the nineteenth century drew to a close, pipelines from oil fields in Texas and Oklahoma were built; these lines supplied gas to distant cities such as Chicago. Natural gas initially supplemented, and eventually completely replaced, manufactured gas. The gas oven was invented by James Sharp, a British inventor, in 1826. By the 1920’s, most households in the United States contained a gas appliance consisting of top burners and an interior oven. Benjamin Franklin’s investigations into the properties of electricity in the mid-eighteenth century served as a foundation for the accomplishments of

Electrical and Gas Appliances Industry his successor, Thomas Alva Edison. Edison invented the electric lightbulb in 1879; in 1892, he established the first electric plant in New York City. Precursors of today’s batteries were also developed in that century. In 1859, the lead-acid battery was produced; this type of rechargeable battery is currently used in today’s automobiles. In the early 1890’s, the Reverend Marcel Audiffren, a French monk, constructed a refrigerator. Refrigerators were subsequently manufactured in the United States by the General Electric Company. In 1902, Willis Carrier invented the electric airconditioner, which in essence is an application of the refrigerator for cooling a room or building. In 1905, Earl Richardson manufactured the Hotpoint electric iron. In 1908, the Hoover Company manufactured the first vacuum cleaner, which had attachments and a cloth filter bag. In 1912, the U.S.based Electrolux Company manufactured vacuum cleaners. In 1910, William Hadaway designed the first toaster, which was manufactured by Westinghouse. Electric ovens were first produced in the 1890’s; by the 1920’s, they became competitive with their gas counterparts. In 1911, the Upton Machine Company in St. Joseph, Missouri, began producing electric motordriven wringer washers. In 1922, the Maytag Company introduced the first modern washing machine. The device used an agitator to force water through the clothes; previous machines merely dragged the clothes through water. In 1947, the Upton Machine Company introduced the top-

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loading washing machine. In 1989, the Hoover Company was acquired by Maytag. In 1946, Percy Spencer, an engineer with the Raytheon Company, noted that a new vacuum tube used for radarrelated research melted a candy bar in his pocket. He then tried other experiments: He popped popcorn and exploded an egg. In 1947, Raytheon manufactured the first microwave oven for restaurant use; it weighed about 750 pounds, stood 5.5 feet tall, and cost $5,000. Homes in the mid-twentieth century contained many labor-saving appliances, such as refrigerators, washers, dryers, and stoves; however, before the early 1950’s, they did not contain a popular entertainment appliance: the television set. Crude devices that could transmit still images over wires were developed in the latter half of the nineteenth century. In 1929, a Russian inventor, Vladimir Zworykin, developed the kinescope, which was a precursor of the modern picture tube. In 1927, Philo Farnsworth transmitted a television image that comprised sixty horizontal lines. The first commercial television broadcast in the United States aired on December 17, 1953.

The Industry Today The bulk of the gas and electric appliance industry produces refrigerators, laundry equipment, ovens, ranges, vacuum cleaners, and electronic products such as televisions and radios. The vast majority of the U.S. market is held by large companies, such as Whirlpool, General Electric, and Electrolux. For decades, the market was dominated by large U.S. and European companies; however, since the 1980’s, The Electrical Equipment, Japanese and Korean companies such as Sony, Sanyo, and Samsung have gained Appliances, and Components significant market shares. A wide range Industry’s Contribution to the U.S. of large and small appliances is proEconomy duced by Asian companies. Sony televisions and other electronic devices are Value Added Amount popular worldwide. Samsung washers Gross domestic product $50.3 billion and dryers compete with those of U.S.Gross domestic product 0.3% based Whirlpool and German-based RobPersons employed 422,000 ert Bosch LLC. Total employee compensation $30.6 billion Smaller companies produce specialty products that fall outside the spectrum of Source: U.S. Bureau of Economic Analysis. Data are for popular consumer products. These in2008. clude massage devices, coffee roasters, and espresso machines. These products

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may compete with similar products produced by large manufacturers. The industry is highly competitive, and profit margins are often narrow. One exception is products produced for the medical and dental industry; these appliances are usually built to exacting standards and are typically sold at a high markup. A number of these products retail for more than $1 million per unit. Most appliance manufacturers buy components—such as heating elements, electric motors, and electronics—from suppliers and assemble these components in metal or plastic housings. Many of today’s appliances incorporate computer technology. For example, a dryer may contain a computer-controlled sensor to ensure proper drying. The addition of computer technology to appliances increases the likelihood that they will require servicing. Appliance repair companies constitute a major subindustry within the electrical and gas appliance industry, and they generate considerable income. When an appliance fails, its owner is confronted with the choice of paying for repairs or replacing the appliance. In a number of cases, it is more cost-effective to replace the item than to repair it, particularly if the appliance is inexpensive (so that the cost of repair might exceed the purchase price of a new appliance) or older (so that replacement parts may be difficult to acquire). Driving the replacement-versus-repair issue is the industry’s promotion of new features. In the early twenty-first century, dryer manufacturers began offering a steam feature, which has been pur-

Inputs Consumed by the Electrical Equipment, Appliances, and Components Industry Input

Value

Energy Materials Purchased services Total

$1.0 billion $53.2 billion $13.3 billion $67.5 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

The Energy Star is a trusted, government-backed symbol for energy efficiency to help Americans save money and protect the environment. (AP/Wide World Photos)

ported to remove stains and reduce wrinkling. In the past, appliances were usually painted white, but they have come to be marketed in a variety of colors. Many appliances are also available with stainless-steel or wood-paneled exteriors to match home décor. Tankless water heaters are available in which water is heated upon demand, thus eliminating the need to maintain a large tank of hot water. In the realm of electronics (such as television sets), new model lines are introduced frequently. Modern appliances are also geared for efficiency. Newer washers are designated as high efficiency (HE). HE appliances must meet strict industry guidelines and use less water, less energy, and less detergent. Many contemporary appliances are designed to comply with the international Energy Star standard for energy efficiency. This standard for consumer products was created as a U.S. government program by the Bill Clinton administration. Subsequently, the European Union, Australia, Canada, Japan, New Zealand, and Taiwan adopted the program. Noncompliant appliances have waned in popularity. For example, purchases of plasma televisions have decreased because they consume much more electricity than liquid crystal

Electrical and Gas Appliances Industry displays (LCDs) or light-emitting diode (LED) units. The appliance industry is consumer driven; when unemployment increases and wages decrease, the industry suffers. New home sales also affect the industry; decreases in home sales decrease the demand for new appliances. For a company to succeed and remain competitive, it must be efficient in production, marketing, and distribution of its products. Innovations that attract consumer interest help gain market share. When one company develops a new feature, competitors usually add similar features to their product lines. Many appliances are produced on automated assembly lines. Small companies tend to be less automated than midsize or large companies. In many cases, the manufacturing process involves shaping metal (usually steel) into a framework, then assembling the components. Aluminum and plastic are also molded into housings and components for appliances. Some appliances, such as water heaters

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and refrigerators, have insulation added. Painting is often part of the assembly process. Manufacturing plants for large appliances are often located near rail lines or harbors to facilitate shipping. Retail outlets that offer appliances often offer a variety of brands and types of appliances. Some offer a range of items, including refrigerators, freezers, stoves, ovens, washers, dryers, barbecues, and televisions; some focus on a specific product category, such as gas barbecues; and most focus on only some of the many available brands. Although today’s consumers often visit appliance stores after conducting their own research (by searching on the Internet or soliciting the advice of friends), they are often receptive of knowledgeable salespeople who can help them select the right product. Appliance stores often offer delivery and installation of new appliances, as well as removal of old appliances. These services may be included in the purchase price or offered at additional cost. Consumers can also buy products via the Inter-

Appliance stores can carry only a fraction of the many models of washers, dryers, and stoves created to meet the specific needs of customers. (©Serghei Starus/Dreamstime.com)

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net. Appliances are sold through the Web sites of manufacturers (such as Whirlpool or Sony), of brick-and-mortar retailers (such as Sears or Best Buy), and of Internet-only vendors (such as Amazon). Web sites often offer product reviews and ratings from experts and from other consumers. Some consumers visit appliance stores to research products in person, then purchase their selected items online if they are offered by Web sites at lower prices than they are by physical stores. Therefore, savvy appliance salespeople must promote the benefits of in-store purchasing over those of e-commerce. Many appliances are purchased by people other than consumers. In the case of new home or commercial construction, for example, they may be purchased by home builders, contractors, electrical services, or plumbing services. These items include water heaters, stoves, ovens, and refrigerators. A home purchaser becomes involved in the purchase of these items only when a replacement is

needed. Plumbing, heating, and air-conditioning companies often recommend specific product lines. Vendors affiliated with an appliance manufacturer call on such companies to promote the vendors’ product lines. They also call on appliance stores. Appliance repair is a major subindustry of appliance manufacturing and sales. Small appliances can be shipped back to their manufacturers for repairs or taken to appliance repair shops. In some cases, these repairs are covered by warranties. Some companies offer extended warranties for onetime fees. Large appliances also usually have warranties with specific time limits, and the consumer can purchase extended warranties from manufacturers or third parties. Because of their weight and semipermanent installation, large appliances must be repaired where they are installed. Large-appliance repair technicians must be knowledgeable about a variety of appliances and carry common replacement items in their service vans.

These old, discarded vacuum cleaners hint at the vast variety, even among upright models. (©Brad Wieland/iStockphoto.com)

Electrical and Gas Appliances Industry Repair costs for large appliances are higher than those of smaller items because technicians must spend much of their time traveling among repair locations. Some appliances require consumables to operate, and these consumables may be manufactured by third parties. Washing machines and dishwashers, for example, use detergents, stain-removing agents, and fabric softeners. Often, appliance manufacturers recommend certain products or types of products for use with their appliances. For example, some laundry detergents are designed specifically for use in HE washers, and manufacturers encourage owners of HE washers to use that class of detergent. Although many gas appliances are designed to be attached to city gas lines and many electrical appliances are designed to be attached to the power grid, some are designed for portable use or for use in locations where city gas and electrical power are not available. Examples include portable gas barbecues, which use liquid propane gas (LPG), and battery-powered radios. These products not only support various subindustries, such as those that refill LPG tanks and those that produce batteries, but also expand appliance companies’ product lines.

INDUSTRY MARKET SEGMENTS The electrical and gas appliance industry is dominated by large companies. In the United States, the twenty largest companies hold about 95 percent of the market share. Although small and midsize companies have limited market share, they still provide career opportunities that can generate good economic returns and job satisfaction. Small Businesses Small businesses usually offer specialty products designed for niche markets. They may offer a single product or a product line of several related products. These products are primarily small appliances. Examples of small business products are beauty aids, massage devices, and personal hygiene items. Some small businesses produce unique products, while others produce products similar to those of larger companies.

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Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary of an industrial engineer in the household appliance industry was $75,210 in 2009, while the average salary of a mechanical engineer was $73,260. Industrial engineering technicians earned an average of $48,140, and mechanical engineering technicians earned an average of $42,900. Clientele Interaction. Small businesses tend to favor more interaction with customers, and the personal touch can foster consumer satisfaction. Owners often are the developers of their products; thus, they are completely familiar with those products. However, clientele interaction can vary widely. Owners may have direct contact with their customers, or they may market their products over the Internet, with contact limited to telephone and e-mail. A Web site is essential to a small appliance business. A well-designed site can successfully compete with that of a large company. A small company’s Web site can mimic the appearance of a much larger company’s site. Thus, it can give the impression of representing a larger company. The Web site can not only market products but also offer technical advice and serve as a vehicle for customer feedback. Amenities, Atmosphere, and Physical Grounds. Amenities of small businesses are often limited. Owners may operate their businesses out of their homes or from small rental spaces. Working environments can be tailored to personal taste and budget. An owner interested in a favorable working environment might have a facility with extremely pleasant working conditions; others may house their businesses in spartan, no-frills buildings. Typical Number of Employees. The number of employees can range from one to several dozen. A small business could consist solely of an owner and family members. Traditional Geographic Locations. Geographic locations of small businesses are unlimited. They are usually located near or even in their owners’ homes. Pros of Working for a Small Appliance Company. The owner is often responsible for all operational decisions. If there is a staff, the owner might consult with them regarding these decisions or retain complete autonomy. Staff members of small

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businesses usually have closer working relationships with owners than they do at larger companies. Part-time employment and flexible hours are usually easier to arrange than they are in larger companies. Small-business owners can control waste and unnecessary expenditures to a greater degree than can owners or managers of larger companies because all expenditures at small businesses are subject to owners’ approval. If a company fosters teamwork and group decision making, its employees can be more involved in the company’s growth. In some cases, partnership opportunities exist for exceptional employees. If a company flourishes, it can grow in size and profits, expanding into (or being purchased by) a larger company. If either occurs, the financial return could be significant. Some small-business owners have sold their companies at large profits and generated enough income to retire with extremely comfortable lifestyles. Such large profits might be shared among key or long-term employees. Cons of Working for a Small Appliance Company. The electrical and gas appliance industry is extremely competitive. Even if a company produces good products, it may not be able to compete successfully with large companies that can sell comparable products for lower prices. Small businesses are less resilient to unexpected major expenses, such as lawsuits or major equipment replacement costs, which can bankrupt them. Owners and staffs of small businesses generally do not have the variety of skills that the staffs and management of larger companies possess. For example, a given staff may have technical expertise but lack marketing skills. Furthermore, because there are fewer employees, each worker is typically responsible for a wide range of duties. A technician might be asked to sweep the floor or clean a restroom. Relationships among coworkers can become strained. In a large company, if two employees do not get along, one can be relocated to another area. This is not possible in a small company that is confined to a small area. Loss of a key employee could slow or even halt production until a suitable replacement is found. Costs Payroll and Benefits: Small companies often pay all employees hourly and often do not provide the same level of benefits as large companies.

Benefits are at the discretion of the owner and could include sick pay, health insurance, and vacations. Supplies: Small appliance companies may require raw materials and component parts, industrial machinery, tools, laboratory equipment, and office equipment and supplies. Supplies usually cost small businesses more than they cost large businesses, which have the clout to negotiate lower prices for large bulk purchases. External Services: Small appliance manufacturers often outsource appliance housing construction—either custom-designed or ready-made— from external manufacturers. They may also contract Web design, accounting or billing services, legal counsel, cleaning, and maintenance. Utilities: Small companies must pay for electricity, water, sewage, gas or oil, telephone, and Internet access. Taxes: Small businesses must pay local, state, and federal income and property taxes, as well as payroll taxes. Partners and owners—especially owners of home businesses—may report income from their businesses on their personal tax returns, in which case they must also pay selfemployment taxes. Home businesses can also claim a portion of their home expenses, such as utilities and mortgage, as business deductions. Midsize Businesses Midsize manufacturing businesses are often former small businesses that have expanded. On occasion, they may be former large businesses that have fragmented or simply shrunk. Like small businesses, they tend to favor small appliances tailored for niche markets. Some products manufactured by midsize businesses include gas barbecues, ceiling fans, saunas, and coffeemakers. These products often compete with products produced by large businesses. Potential Annual Earnings Scale. According to the BLS, the average annual salary of an industrial engineer in the household appliance industry was $75,210 in 2009, while the average salary of a mechanical engineer was $73,260. Industrial engineering technicians earned an average of $48,140, and mechanical engineering technicians earned an average of $42,900. Engineering managers earned an average of $107,150. The average income of all production workers combined was $32,110, while pro-

Electrical and Gas Appliances Industry duction supervisors earned an average of $50,760 and production managers earned an average of $93,040. Sales managers earned an average of $119,140, while sales representatives earned an average of $70,880. General and operations managers earned an average of $125,650, and chief executives earned an average of $191,360. Clientele Interaction. Appliance salespeople usually have short-term but intense relationships with customers. Vendors serving homebuilders can foster long-term relationships that can generate repeat business. All midsize businesses have Web sites for both marketing and clientele interaction. Such sites offer customer service and technical support, and they often provide downloadable electronic copies of product user’s manuals. Amenities, Atmosphere, and Physical Grounds. Appliance manufacturing facilities are customarily spartan and utilitarian. Retail facilities often lack frills. One notable exception is the home theater area of a retail outlet. These areas usually have dim lighting and comfortable seating where customers can view large-screen televisions and listen to high-end sound systems. The areas help sell not only the products but also the lifestyle those products are meant to symbolize and help consumers attain. Typical Number of Employees. A manufacturing facility may consist of a management staff and assemblers. Retail outlets usually consist of a manager and several salespeople. Traditional Geographic Locations. Manufacturers of small appliances can be situated in a wide range of locations, but they are typically located in urban industrial areas. Manufacturers of large appliances are commonly located in areas near rail or ocean cargo service. Retail outlets are located in areas with sufficient populations to generate adequate sales. Pros of Working for a Midsize Appliance Company. Owners of midsize manufacturing businesses often have more control over operational decisions than do owners of large companies. Employee-management interaction is often at a higher level at midsize companies than it is at large companies. Unlike a small business, a midsize manufacturing business can employ individuals with a variety of skills. These employees include technicians, assemblers, and marketing personnel.

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Cons of Working for a Midsize Appliance Company. Many midsize businesses produce specialty or luxury products. In times of economic downturn, these items are more likely to experience decreased sales than are more essential items. For example, if a refrigerator fails, its owner is likely to purchase a replacement. However, a nonessential item such as a ceiling fan is less likely to be purchased during an economic downturn. Also, midsize companies often produce a narrower range of products than do large companies, so their success is more closely tied to specific market segments. The limited number of management positions in midsize companies decreases employees’ opportunities for advancement. Costs Payroll and Benefits: Midsize companies generally pay some staff hourly, while others receive annual salaries. They can usually offer benefits comparable to those of large companies. These benefits include sick pay, health insurance, and vacations. Supplies: Midsize appliance companies may require raw materials and component parts, industrial machinery, tools, laboratory equipment, and office equipment and supplies. They are likely to produce more component parts than do small companies, so their need for raw materials is likely to be greater. They can often negotiate discounts from suppliers, enjoying lower per-unit costs than small appliance manufacturers. However, these costs are usually higher than those of comparable products produced by large companies. External Services: Midsize companies often contract accounting services and billing services, although some perform these services in-house. They also often use outside legal services. They may commission external manufacturers to create component parts for their products, especially parts far outside their area of expertise (such as computer chips incorporated into rice cookers). Utilities: Midsize companies must pay for electricity, water, sewage, gas or oil, telephone, and Internet access. Taxes: Midsize businesses must pay local, state, and federal corporate taxes, as well as applicable property taxes.

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Large Businesses Large manufacturing businesses market their appliances internationally. The twenty largest appliance companies in the United States are in direct competition with companies whose headquarters are in other nations. These companies often manufacture both small and large appliances. They profit from brand recognition. Consumers often favor products whose brands they associate with reliability, features, or other desirable qualities. Some foreign companies, specifically Asian companies, have less brand recognition, but such recognition is increasing for these manufacturers as well. In some market segments, such as televisions and electronics, Asian manufacturers such as Sony enjoy extremely strong branding and reputations. Large appliance companies market a range of products, from bargain to full-featured models. They may market a number of brands. For example, the Whirlpool Corporation markets Whirlpool, Maytag, Kitchen-Aid, Jenn-Air, Amana, Brastemp, Consul, Baknecht, and Gladiator appliances. Whirlpool, Maytag, Kitchen-Aid, Jenn-Air, and Amana are familiar appliance products in the United States and abroad. Brastemp and Consul appliances are marketed in Brazil. Baknecht appliances are marketed in Germany. Gladiator appliances are designed for garages and include workbenches, tool storage units, and cabinets. Whirlpool maintains headquarters in Michigan; São Paulo, Brazil; Comerio, Italy; and Shanghai, China. It produces many different models of its products. For example, it offers twenty different models of home washing machine. Potential Annual Earnings Scale. According to the BLS, the average annual salary of an industrial engineer in the household appliance industry was $75,210 in 2009, while the average salary of a mechanical engineer was $73,260. Industrial engineering technicians earned an average of $48,140, and mechanical engineering technicians earned an average of $42,900. Engineering managers earned an average of $107,150. The average income of all production workers combined was $32,110, while production supervisors earned an average of $50,760 and production managers earned an average of $93,040. Sales managers earned an average of $119,140, while sales representatives earned an average of $70,880. General and opera-

tions managers earned an average of $125,650, and chief executives earned an average of $191,360. The salaries for top management positions at the largest firms can be well over $1 million per year. Clientele Interaction. Appliance salespeople have short-term but intense relationships with customers. Vendors serving homebuilders can foster long-term relationships that can generate repeat business. All large businesses have Web sites for both marketing and clientele interaction. These sites offer customer service and technical support, and they often provide downloadable digital copies of product user’s manuals. Amenities, Atmosphere, and Physical Grounds. Large appliance manufacturing facilities are customarily spartan and utilitarian. Retail facilities usually are large warehouse-like structures. Corporate headquarters, on the other hand, often are luxurious and state of the art. Typical Number of Employees. Whirlpool reported 66,900 employees in 2009, down from 69,600 in 2008. Large appliance corporations offer a wide range of career opportunities, including sales, marketing, engineering, and management at the store as well as the corporate level. Traditional Geographic Locations. Corporate headquarters can be located in virtually any large or small city; large retail outlets also can be located in any area with a reasonable population density. Manufacturing facilities are typically in urban industrial areas and located near rail or ocean cargo service. Pros of Working for a Large Appliance Company. A wealth of career opportunities exists within large appliance-manufacturing corporations. Positions include high-paying management positions, as well as technical, engineering, information technology, marketing, and sales positions. Upper management positions can be extremely lucrative in terms of salaries, bonuses, and retirement benefits. Even lower-level employees may be entitled to generous bonuses and retirement benefits. Large corporations offer summer internships for college students and training for employees wishing to advance their positions. Lateral transfers are possible. For example, a marketing employee could transfer to a management position in human resources. Large corporations encourage employees to think of themselves as members of large, closeknit corporate families in order to foster good employee-management relationships.

Electrical and Gas Appliances Industry Large manufacturers generally offer a wide range of products. Thus, they are more likely to survive an economic downturn than are smaller companies, as they do not depend on a single market segment for success. They are generally diversified both in the class of products they offer (such as refrigerators, ovens, and small appliances) and the target demographic for those products (such as bargain-seeker, middle-class family, or luxury consumer). Cons of Working for a Large Appliance Company. Despite large companies’ attempts to foster good employee-employee and employee-management relationships, their employees may feel anonymous or insignificant within operations of such great size. They may feel that their opinions are not valued or that they are easy to replace. Upper-management personnel may be urged to relocate to another state or even another country at regular intervals to ensure promotion. While some might welcome the opportunity to relocate, others may feel that moving would be disruptive to their lives and those of their family members. Performance goals sometimes imposed on employees, even those in lower positions, can cause significant stress. Large businesses are profit-driven and managers must answer to boards of directors and shareholders. If a company loses market share or profitability, the chief executive might be terminated. The same holds true of the manager of an underperforming department.

firms to work with their internal staffs to help launch major advertising campaigns. Utilities: Large companies must pay for electricity, water, sewage, gas or oil, telephone, and Internet access. Taxes: Large businesses must pay local, state, federal, and international corporate and property taxes, as well as applicable tariffs and other import and export fees.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Large businesses have departments for each division of their organization. Midsize companies often have a department or at least an individual focused on each division. In small companies, one individual may handle several and sometimes all of the different business segments. The following umbrella categories apply to the organizational structure of businesses in the electric and gas appliance industry: ■ ■ ■ ■ ■ ■ ■

Costs Payroll and Benefits: Large companies pay annual salaries and hourly wages depending on the position. They usually offer many benefits, including sick pay, health insurance, vacations, and maternity leave (even for a husband). Supplies: Large appliance companies may require raw materials and component parts, industrial machinery, tools, laboratory equipment, trucks and maintenance supplies, and office equipment and supplies. They are likely to create the majority of their components internally. External Services: Large companies usually have in-house departments for most services, which include accounting, payroll, legal, and even urgent-care medical services. They may contract external auditors when necessary, and they often contract advertising and public relations

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■ ■ ■ ■

Business Management Customer Service Legal Services Sales and Marketing Information Technology Facilities and Security Technology, Research, Design, and Development Production Distribution Human Resources Payroll

Business Management Management of an appliance company can consist of a single individual at a small company or hundreds of top-level executives at a large company. Large companies are organized into hierarchies headed by chief executive officers (CEOs). Under a CEO are upper-management personnel who are in charge of operations for a given facility. Below these upper-management positions are middle-management positions, which in turn are followed by low-level managers. Individuals in the upper-management positions command high sala-

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ries, ranging from several hundred thousand to well over a million dollars a year. These individuals have college degrees, usually in business-related fields. Most also have master of business administration (M.B.A.) degrees. These high positions are usually achieved by motivated individuals who work their way up the corporate ladder. In some cases, after achieving a high level in one company, a manager will be recruited to work for a rival company or a company with another focus, such as automobile manufacturing. Included in management are assistants such as secretaries and clerks. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Owner/Partner Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Controller General Counsel Vice President of Sales and Marketing Vice President of Business Development Executive Assistant Administrative Assistant Secretary

Customer Service Customer service is an essential element for both manufacturing companies and retail outlets. Individuals working in this capacity must possess excellent people skills. When a customer issues a complaint, customer service personnel must handle it in a competent and cheerful manner. The customer may be an individual or a representative of another company that may purchase thousands of units annually. A large company may employ managers, assistant managers, and representatives who communicate with customers via the telephone or Internet. Customer services are usually augmented by automated telephone messages as well as Web-based services to handle common questions. It is imperative that these services be well designed and capable of handling many common customer service issues. These automated services can result in extreme customer frustration if the customer must invest significant time without getting an answer or being able to talk to a human. Customer services are a link between the customers and the company; thus, these personnel obtain

invaluable information regarding an appliance such as likes, dislikes, and suggestions for improvement. Customer service occupations may include the following: ■ ■ ■ ■ ■

Customer Service Manager Customer Service Assistant Manager Customer Service Supervisor Customer Service Representative Technical Writer

Legal Services Large companies incur significant expense for legal services. Legal issues can arise with companies of any size and can include product liability, copyright infringement, illegal business practices, and employee issues such as job discrimination, wrongful termination, or sexual harassment. Large companies have more vulnerability to large settlements because of their financial standing. However, lawsuits ranging from the frivolous to multimillion-dollar cases must all be handled. Small and some midsize businesses must retain outside counsel in these instances. The larger companies maintain in-house counsel. These attorneys must be specialists in or have some expertise in mergers and acquisitions, patents and intellectual property, contracts, and labor law. When a company is exploring a merger with another company or dissolution of a business segment, in-house counsel are involved in the negotiations. These teams also consist of legal assistants, such as legal secretaries and paralegals. Even large companies may be required to obtain additional legal services in the event of a high-profile case. Lawsuits have the potential to devastate even the largest corporations. Legal services occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

General Counsel Staff Attorney Contracts Attorney Intellectual Property Attorney Litigator Lobbyist Paralegal Legal Secretary Administrative Assistant

Electrical and Gas Appliances Industry Sales and Marketing Manufacturing companies maintain staffs of salespeople who call on businesses or individuals to promote their product lines. They often invite customers to lunch or dinner to explain and promote their companies’ products. Other incentives that comply with federal and state regulations may also be offered. Marketing is conducted by newspaper, magazine, television, and radio advertising. The Internet is a common vehicle for promoting products. Potential customers can go online to obtain product specifications, compare products (including those of rival manufacturers), and purchase products (either on a company’s Web site or by referral to retailers in the consumer’s area). Marketing departments include graphic designers who develop illustrations for Web sites, brochures, magazine displays, and other materials. Photographers take pictures for sales brochures, magazines, and newspapers. Videographers prepare video clips for television and company Web sites. Writers prepare text for publications. Marketing departments also employ public relations specialists. These personnel prepare press releases about new products and supply them to newspapers, magazines, and television and radio stations. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Sales Director Marketing Director Public Relations Director Sales Manager Marketing Manager Sales Representative Market Research Analyst Graphic Designer Copywriter Photographer Videographer Spokesperson Press Representative

Information Technology Information Technology (IT) personnel design, install, and maintain computer systems. Computer networks are present in all midsize and large businesses. Computers are involved in many aspects of a business, including inventory, payroll, sales, and production. A breakdown in a computer

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network can bring production or sales to a halt. The IT department of a large company consists of individuals with college degrees in computer science, as well as technicians trained in vocational schools or community colleges. The lower-level positions include installation, wiring, and maintenance of computer equipment. IT occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

■ ■

Chief Information Officer (CIO) Information Technology Manager Network and Systems Administrator Database Designer Database Administrator Help Desk Staff Web Designer Software Engineer/Computer Programmer Information Technology Technician Network Security Specialist

Facilities and Security Maintenance of larger facilities requires housekeeping personnel, painters, and repair personnel. A large manufacturing corporation may often have a large security department headed by one or more managers. Security personnel are responsible for preventing unwanted entry to areas where research and development is conducted. They are also responsible for ensuring the safety of other employees by guarding against entry by individuals who could pose a threat. Identification tags are almost universally required for all personnel, from top management to janitors. Entry into many portions of buildings may be restricted by a variety of devices, including card slots, key pads, and posted guards. Video surveillance is often present in a central location, where portions of the building can be viewed by security personnel and recorded on tape. Facilities and security occupations may include the following: ■ ■ ■ ■ ■ ■

Security Manager Security Guard Maintenance Director Machinery Maintenance Worker Mechanic Heating, Ventilation, and AirConditioning (HVAC) Specialist

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Electrical and Gas Appliances Industry OCCUPATION

PROFILE

Electrical and Electronics Engineer Considerations

Qualifications

Description

Researches, designs, and develops electrical and electronic devices and equipment.

Career clusters

Architecture and Construction; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

■ ■

General Maintenance and Repair Worker Custodian/Janitor

Technology, Research, Design, and Development Ongoing research and development is a vital element of an appliance company. Even small and midsize businesses must devote time in this arena to remain competitive. The research team comprises engineers, scientists, and laboratory assistants. This department not only designs products but also designs the equipment that manufactures those products, and it tests them before they are released to the marketplace. Appliances are run through repeated duty cycles, knobs are twisted, buttons are pushed, and doors are slammed. If a construction defect surfaces after a product is released, the company might incur a major expense in product recall. Research often focuses on increasing energy efficiency and producing new features that will attract consumer interest.

Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■

Research and Development Director Engineering Manager Industrial Engineer Electrical Engineer Mechanical Engineer Industrial/Electrical/Mechanical Engineering Technician

Production Production is overseen by managers, assistant managers, and supervisors. The bulk of the workforce operates within a hierarchy ranging from experienced workers with expertise in one or more production areas to inexperienced new hires. Large companies offer training programs to help workers advance to the next level. Their production personnel assemble products on production lines. Robots are increasingly being employed in

Electrical and Gas Appliances Industry appliance manufacturing. These devices replace workers; however, personnel are still required to control them. A conflict often arises between management, which is interested in improving production with robotics, and labor unions, which are focused on preserving jobs. Employee safety is a major concern in appliance production, and the production line is equipped with features to ensure safety. Specialized clothing and goggles may be required for workers. The primary responsibility of some of a large company’s supervisors is to ensure employee safety. Production occupations may include the following: ■ ■ ■ ■ ■

Production Manager Production Line Supervisor Team Assembler Machine Operator Welding, Cutting, Soldering, and Brazing Worker

■

■

573

Inspector, Tester, Sorter, Sampler, and Weigher Production Worker

Distribution Appliance companies own or lease distribution centers to warehouse and distribute products. These centers are often located near rail lines, ports, and the interstate highway system. Distribution centers are overseen by managers who are in charge of a workforce consisting primarily of warehouse workers who move appliances in and out of the facility. Managers must also ensure that the inventory remains at an appropriate level. The distribution center may employ truck drivers or contract with a trucking company to transport items. Distribution occupations may include the following:

OCCUPATION

■ ■

Distribution Manager Warehouse Manager

PROFILE

Electromechanical Equipment Assembler Considerations

Qualifications

Description

Assembles or modifies electromechanical equipment.

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training

Physical exertion

Light work; medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; part-time work

Licensure and certification

Usually not required

Employment outlook

Decline expected

Holland interest score

RIE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

574 ■ ■ ■ ■

Electrical and Gas Appliances Industry Dispatcher Shipping and Receiving Clerk Truck Driver Freight Loader/Unloader

Human Resources The human resources department of an appliance company is responsible for all personnel. It hires and dismisses employees, responds to employee grievances, administers benefits (such as health insurance, retirement plans, and profitsharing plans) responds to interdepartment or interfacility transfer requests, and oversees employee training. The department recruits employees, advertising positions via classified ads and the Internet and making personal contacts at college campuses and job fairs. Managers are typically college graduates. Clerical personnel and assistants with less educational experience are also employed in this department. Human resources occupations may include the following:

■ ■

Administrative Assistant Recruiter/Interviewer

Payroll A dedicated payroll department is often overseen by a certified public accountant (CPA) with management experience. Other CPAs, clerical personnel, and assistants are also employed. Large companies have computerized, automated systems to generate paychecks; however, some human intervention on a daily basis is required. Payroll occupations may include the following: ■ ■ ■ ■

Payroll Manager Payroll Clerk Accountant/Auditor Administrative Assistant

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be in de■ Human Resources Director cline both in the United States and globally. Ex■ Human Resources Manager perts in the field disagree as to whether this trend ■ Human Resources Generalist will continue. In June, 2010, James Campbell, pres■ Benefits Specialist ident and CEO of General Electric’s appliances ■ Payroll Clerk unit, told The Wall Street Journal that he foresaw rising revenues and profits for 2010 and 2011 for the appliance industry. However, he attributed this projected growth to government stimulus programs rather than direct private-sector recovery. He added that the consumer appliance sector was probably “behind the curve” in terms of the broad economic recovery. Campbell and other experts are cognizant that the home appliance industry is strongly tied to the housing market. If home prices rise, homeowners are likely to invest in appliances. Until the housing market recovers, the market for large appliances is likely to remain somewhat unstable. One sector of the industry will profit from continued According to the California Energy Commission, a gas stove with an electronic economic weakness: the repair ignition costs half as much to operate as an electric stove. (©Dreamstime.com) sector. During economic down-

Electrical and Gas Appliances Industry

575

turns, consumers are likely to rePROJECTED EMPLOYMENT pair existing appliances rather than FOR SELECTED OCCUPATIONS purchase new ones. The dominance of large busiElectrical Equipment, Appliance, and nesses is expected to continue. Component Manufacturing They may even grow to control more than 95 percent of the marEmployment ket. Despite the supremacy of large 2009 Projected 2018 Occupation businesses, however, the industry will always contain small and mid8,750 7,900 Coil winders, tapers, and size segments. Small-business ownfinishers ers who can design innovative 8,440 8,000 Cutting, punching, and press products or improve existing prodmachine setters, operators, and ucts are likely to find success in the tenders, metal and plastic appliance industry. Consumer awareness of energy38,470 36,400 Electrical and electronic efficient appliances is increasing equipment assemblers via a variety of sources. Appliance 12,740 12,400 First-line supervisors/managers manufacturers and sales personof production and operating nel are promoting their Energy workers Star lines of products, the Federal Government is promoting green 11,410 11,200 Inspectors, testers, sorters, products, and utilities companies samplers, and weighers are encouraging energy-efficient 54,290 51,800 Team assemblers appliances as well. As energy costs increase, consumers are motivated Source: U.S. Bureau of Labor Statistics, Industries at a Glance, to replace inefficient appliances Occupational Employment Statistics and Employment with ones of greater efficiency. Projections Program. Available at http://www.bls.gov. This trend supports sales of newer, energy-efficient products. Robotics will be used increasingly in manufacturing. This inthe present large profit margin enjoyed by manucrease may be hampered by labor unions, which facturers of medical and dental appliances. will fight to preserve jobs. Currently, a number of manufacturing plants outside the United States Employment Advantages utilize robotics to a great degree. Many appliances Even though the appliance industry is in deare produced with narrow profit margins, so robotcline, the industry may be a good career choice for ics can increase a company’s bottom line. Highsome candidates. Appliances have become essentechnology features will also increase with the intial components for both home and commercial troduction of new products. The addition of such use. A demand for them will always exist, and over features to appliances is expected to decrease. Entime components will fail. Even during times of ergy efficiency will be stressed with new products; economic slowdown, consumers will consider purfurthermore, new appliances may combine electrichase or replacement of essential appliances such cal or natural gas usage with renewable energy as washing machines or refrigerators over a less essources such as solar. Solar panels can heat water; sential items such as entertainment or dining out. thus, they can reduce the usage of natural gas by a The industry can support a wide variety of careers, water heater. Photovoltaic panels are also availincluding managerial, technical, and sales posiable, which convert solar energy into electricity. tions. In addition, this large industry allows one to Government regulation of the health care inmake lateral transfers within a company should a dustry is expanding. This may cause a decrease in

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Electrical and Gas Appliances Industry

change in interest occur. An employee of a company may also derive satisfaction when he or she visits a friend’s or relative’s home and can point to an appliance and say, “My company builds those.” Annual Earnings According to Hoover’s, the U.S. appliance industry earned revenues of $25 billion in 2009. Global industry revenues were $168.2 billion in 2008, according to Research and Markets. Sales have been declining since 2007. This decline is attributable to the recession of 2007-2009, particularly to the downturn in the housing, construction, and home improvement markets. Those markets began to experience modest improvements in 2010. The relative stability of the U.S. and European economies will affect the appliance industry. The U.S. economy has fared somewhat better than the European economy during the global financial crisis. If this trend continues, the U.S. appliance industry will grow. Even if the U.S. industry perseveres over the European economy, however, it faces increasing competition from Asian manufacturers. Many of the components in today’s appliances are built with parts manufactured in Asia. The companies that make those components have begun assembling them into finished products. Japanese and Korean manufacturers hold a significant market share in the United States; however, a greater threat is that of China, which exports small appliances. The large appliance industry in the United States is likely to face major competition from China.

RELATED RESOURCES FOR FURTHER RESEARCH Air-Conditioning, Heating and Refrigeration Institute 2111 Wilson Blvd., Suite 500 Arlington, VA 22201-3042 Tel: (703) 524-8800 Fax: (703) 528-3816 http://www.ahrinet.org APPLIANCE DESIGN 2401 Big Beaver Rd., Suite 700 Troy, MI 48084

Tel: (440) 886-1210 http://www.appliancedesign.com APPLIANCE MAGAZINE 11444 W Olympic Blvd. Los Angeles, CA 90064 Tel: (310) 445-4200 Fax: (310) 445-4299 http://www.appliancemagazine.com APPLIANCE SERVICE NEWS P.O. Box 809 St. Charles, IL 60174 Tel: (630) 845-9481 http://www.asnews.com Association of Home Appliance Manufacturers 1111 19th St. NW, Suite 402 Washington, DC 20036 Tel: (202) 872-5955 http://www.aham.org BROOM, BRUSH, AND MOP 204 E Main St. Arcola, IL 61910 Tel: (217) 268-4950 http://www.rankinpublishing.com Energy Star, U.S. Environmental Protection Agency 1200 Pennsylvania Ave. NW Washington, DC 20460 Tel: (888) 782-7937 http://www.energystar.gov KITCHENWARE NEWS & HOUSEWARES REVIEW 15 Runnell St. Portland, ME 04103 Tel: (207) 780-8656 http://www.kitchenwarenews.com National Electrical Manufacturers Association 1300 N 17th St., Suite 1752 Rosslyn, VA 22209 Tel: (703) 841-3200 Fax: (703) 841-5900 http://www.nema.org

Electrical and Gas Appliances Industry ABOUT

THE

AUTHOR

Robin L. Wulffson is a medical doctor and a board-certified specialist in obstetrics and gynecology. In 1997, he transitioned to a writing career. He has written analytic reports on major corporations and industries. He has analyzed hospital systems and medical device manufacturers. He is familiar with appliance markets in the United States, Europe, and Asia. For the past fifteen years, he has closely followed the business sector both in the United States and globally.

FURTHER

READING

Barnes Reports. U.S. Major Appliance Manufacturing Industry Report. Woolwich, Maine: Author, 2008. _______.Worldwide Household Appliance Stores Industry Report. Woolwich, Maine: Author, 2009. _______. Worldwide Small Electrical Appliances Manufacturing Industry Report. Woolwich, Maine: Author, 2009. Bell, Sandra. International Brand Management of Chinese Companies: Case Studies on the Chinese Household Appliances and Consumer Electronics

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Industry Entering US and Western European Markets. Heidelberg, Germany: Physica-Verlag, 2008. Castaneda, Christopher James. Invisible Fuel: Manufactured and Natural Gas in America, 18002000. New York: Twayne, 1999. Harris InfoSource. Consumer Appliances Industry Report. Twinsburg, Ohio: Author, 2002. Reis, Ronald A. Becoming an Electronics Technician: Securing Your High-Tech Future. 4th ed. Upper Saddle River, N.J.: Prentice Hall, 2000. Snyder, Nancy T., and Deborah Duarte. Unleashing Innovation: How Whirlpool Transformed an Industry. San Francisco, Calif.: Jossey-Bass, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

©Alvera/Dreamstime.com

Electrical Power Industry

INDUSTRY

SNAPSHOT

General Industry: Energy Career Cluster: Science, Technology, Engineering, and Math Subcategory Industries: Electric Power Transmission, Control, and Distribution; Electric Utilities Related Industries: Alternative Power Industry; Batteries and Fuel Cells Industry; Biofuels Industry; Coal Mining Industry; Electrical and Gas Appliances Industry; Nuclear Power Industry; Petroleum and Natural Gas Industry; Scientific and Technical Services Annual Domestic Revenues: $399.5 billion USD (U.S. Census Bureau, 2007) NAICS Number: 2211

INDUSTRY

holds and companies, billing customers for each kilowatt hour used. Although electric utilities encourage conservation, they must also plan for expanded demand caused by increased use of electric vehicles.

History of the Industry The electrical power industry originated in the electromagnetic discoveries of nineteenth century physics. In 1800, the Italian count Alessandro Volta developed the voltaic pile or battery, the first device to reliably produce a steady electric current. Volta’s discovery was almost immediately seized on by physicists and chemists. In 1800, the English chemist William Nicholson used the voltaic pile to separate water into hydrogen and oxygen. In 1807, British chemist Sir Humphry Davy isolated sodium and potassium by electrolysis. The use of electrical power to isolate elements from their compounds was one of the earliest and continuing industrial uses of electricity. The connection between electricity and magnetism was established in 1821 by Danish physicist and chemist Hans Christian Ørsted, who showed

DEFINITION

Summary The electrical power industry uses generators fueled by coal, oil, or nuclear fuel or powered by falling water or wind to produce electrical power, which it then distributes to users. In the United States and Canada, the majority of electrical utilities are connected to a continent-wide grid that allows companies to sell excess power or to purchase power when local demand is high. Utilities distribute electrical power to individual house578

Electrical Power Industry that a magnetic field surrounds a current-carrying wire. In 1831, English chemist and physicist Michael Faraday demonstrated electromagnetic induction—the production of voltage when the magnetic flux through a loop of wire changes. This discovery made it possible to generate electrical energy whenever mechanical energy could be used to turn the coil of a generator. The first rudimentary telegraph was developed by the American physicist Joseph Henry in 1831. It was rendered commercially viable by American artist and inventor Samuel Morse and found immediate application in the coordination of railroad applications. It was natural, therefore, that the first intercity telegraph lines would follow the railroad tracks between cities and that the existing system of telegraph poles would also carry telephone lines and electrical power. The first major effort at providing electric lighting to an urban area was the Pearl Street station built by Thomas Alva Edison in 1882. After the demonstration of a working elec-

579

tric lighting system, the demand for electricity boomed. By the 1880’s, the small community of electricity producers was split between those who favored direct current (DC) distribution and those who favored alternating current (AC). Because electrical energy must generally be produced as it is needed, there was strong incentive for standardization so that excess power could be traded between generating systems. The most vocal advocate of direct current was Edison, who was distrustful of the complicated mathematics needed to design alternating current circuits. Alternating current was advocated by George Westinghouse, who in 1886 had set up an alternating current lighting plant in Great Barrington, Massachusetts. Unlike direct current, alternating current could be transformed to a high voltage for transmission over long distances and then “stepped down” to a lower, safer voltage for local use. Direct current electricity lost a great deal of energy in transmission. Had Edison’s direct cur-

A power plant operator monitors the steam turbine in an electric power plant using a control panel like this. (AP/Wide World Photos)

580

Electrical Power Industry

rent scheme been adopted, generating plants would have had to be stationed a few city blocks apart, and tremendous amounts of copper would have been needed for the transmission lines. A satisfactory alternating current motor was developed by Serbian engineer Nikola Tesla in 1887, setting the stage for the eventual use of alternating current nationwide. With the widespread acceptance of alternating current transmission, electrical generators were constructed in places such as Niagara Falls, New York, where the energy of falling water could be used to turn the generators. The energy produced was then transmitted at very high voltage to industry and population centers. Soon, generators were placed at dam sites, and electrical power Electrical power is transported at very high voltage over long distances to generation joined water management substations. (©Alvera/Dreamstime.com) as the rational for dam construction. As utility companies grew, they found the need to burn coal, petroleum, and natural gas to vided into three stages. The first stage is the produce steam to turn the turbines that powered generation of electrical energy from some other additional generators. Nuclear power plant conform of stored or motion energy. These energy struction began in the 1950’s. Environmental consources include falling water, wind, the tides, comcerns have encouraged electricity generation by bustion of fossil fuels (coal, oil, or natural gas), and windmills and sparked research in using tidal enernuclear reactors. Almost all forms of generation ingies to produce electricity. volve applications of electromagnetic induction, in which a set of coils is rotated in a magnetic field. The Industry Today The second stage is the transmission of electrical The overall process of generating electrical enpower at very high voltage over possibly long disergy and distributing it to consumers can be ditances to substations, where transformers reduce the voltage to a safer level. The third stage is the retail distribution of electrical energy to homes and businesses. Generally, The Utilities Industries’ electrical power is distributed by a 220volt three-phase system. Individual houseContribution to the U.S. Economy holds and businesses are served by electricity retailers, who meter the amount of Value Added Amount electrical energy consumed and bill acGross domestic product $255.2 billion cordingly. Gross domestic product 1.8% The electrical power industry consists Persons employed 559,000 of more than 3,200 electric utility compaTotal employee compensation $64.5 billion nies that produce and distribute electrical energy across the country, together with Source: U.S. Bureau of Economic Analysis. Data are for about 1,700 nonutility companies that sell 2008. electrical power to industrial concerns and smaller utilities that do not market to

Electrical Power Industry individual consumers. The corporate structure of the electrical power industry is quite complex. Many of the companies are owned by local governments, and others are investor-owned (stock) companies operating as regulated monopolies with their rate structures subject to review and approval by the government. Some operate as cooperatives, in which case the customers are the owners. There are nine federal electric utilities operated by government agencies, including the U.S. Army Corps of Engineers, the Department of the Interior, and the Tennessee Valley Authority. Government agencies such as the Tennessee Valley Authority have had an important role in making electrical power available to less-populated areas. Nonutility producers of electricity include qualifying facilities, as defined by the Public Utilities Regulatory Act of 1987; independent power producers; and some combined heat and power plants located near industrial sites and not covered by the 1987 act. Qualifying facilities include combined heat and power plants that produce steam for industrial use and, as a by-product, electrical energy, which can be sold to utilities, and small power producers, companies that use renewable resources to produce electrical power not exceeding 80 megawatts. The consumers of electrical power are conveniently divided into four sectors: residential, com-

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Inputs Consumed by the Utilities Industries Input

Value

Energy Materials Purchased services Total

$43.1 billion $116.0 billion $27.7 billion $186.8 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

mercial, industrial, and transportation. The residential sector consists of individuals and families who use electricity for lighting and powering electrical appliances, as well as for heating and cooling their homes. The commercial sector includes retail stores, restaurants, hotels and motels, churches and synagogues, schools, and hospitals. The industrial sector consists of companies that use electricity in manufacturing and construction. A small percentage of the electrical energy produced in the United States is used for the electrolytic production of aluminum, chlorine, lye, and other important chemicals, as well as for chrome plating and galvanizing of iron. The transportation sector includes electric trains and trolleys. The electricity distribution system in the United States and Canada consists of three large-scale power grids: the Eastern Interconnected System, the Western Interconnected System, and the Texas Interconnected System. There are limited interconnections between the Eastern and Western systems, and the Texas system is connected to the other systems by only a few direct-current lines. The largescale grids allow utility companies to sell excess capacity to other producers and to purchase electricity as necessary. As a result, the At substations, transformers reduce the voltage to a safer level. (©Romica/ electricity purchased by an individual household or business can Dreamstime.com)

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Electrical Power Industry

be a mix of hydroelectric, coal-generated, and nuclear power. According to the U.S. Energy Information Administration, in 2007, coal-fired plants accounted for 52 percent of the electricity generated in the United States, natural gas for 21 percent, nuclear power for 19 percent, and hydroelectric power for about 3.5 percent. The percentages are sometimes quite different in other countries. France, for instance, gets more than half of its electricity from nuclear power, while in the oil-rich Arab states, oil is the major energy source.

INDUSTRY MARKET SEGMENTS Roughly five thousand companies generate and distribute electrical power in the United States. Because the United States and international economies are so dependent on electrical power, it is not surprising to find that employees of the electrical power industry represent a broad spectrum of occupations. These employees include not only engineers, technicians, accountants, and customer service agents but also lawyers and economists who must deal with the complex regulatory environment and plan for the projected growth of the industry. Small Businesses Small businesses in the electrical power industry include small power producers and the smaller publicly owned or cooperative utilities. Potential Annual Earnings Scale. A small power producer is likely to generate less annual revenue than a large municipal facility and may pay somewhat less, although depending on the position, salaries can range from $20,000 to $60,000 and beyond. Clientele Interaction. Small power producers generally sell power to established utilities. Small utilities generally sell to individual households and businesses. Typically only one utility is given a franchise to sell electrical power to users in a given area, so people and businesses who are located in the area must purchase their power from that company. Customer service for a utility includes starting and stopping service, billing customers and receiving payments, maintaining a good public image for the

company, and encouraging conservation so that the cost of delivering services is contained. Amenities, Atmosphere, and Physical Grounds. Customer service personnel generally work out of offices accessible to the public. Because utilities are regulated as to the prices they can charge and the profit they can earn, office space will generally be as economical as possible. Technical employees may have a locker and a limited gathering space for use between calls. Typical Number of Employees. The typical number of employees can range from one to a dozen at a small power producer and several dozen to hundreds at a small utility. Traditional Geographic Locations. Small utilities typically have franchise areas with limited populations. They generally can be found in less-populated areas. Pros of Working for a Small Utility. Because small utilities generally service a small area, their employees typically can work close to home. Customer service personnel will often find themselves working with their neighbors. Cons of Working for a Small Utility. Workers at a small utility or power producer will generally have fewer benefits. Technical personnel and management must be on call during weather-related emergencies. Utility service to hospitals and police and fire departments must be maintained or restored as quickly as possible; therefore, personnel must be prepared to deal with emergencies as they occur, regardless of the weather or time of day. Costs Payroll and Benefits: Salaries for experienced professional power engineers can exceed $60,000 per year. Salaries for those providing other services range from $20,000 to $40,000 per year. An increasing number of small utilities and power producers outsource their payroll functions. Supplies: In addition to the usual business supplies, power companies require computer systems, accounting software, power-monitoring equipment, and an inventory of spare parts, including power transformers. Generally, they must maintain a fleet of service vehicles. External Services: Power companies may own some of the buildings they use and rent space in others. They may maintain cleaning and

Electrical Power Industry groundskeeping staff or outsource these functions. Utilities: In addition to paying for gas, oil, and telephone and Internet access, small utility companies purchase electricity from larger utilities or nonutility providers for resale to customers. Taxes: Electrical power firms pay business taxes to federal, state, and local governments. Some tax credits and incentives have been offered at the state and federal level to producers of renewable energy. Midsize Businesses Midsize electrical power companies include midsize utilities and some combined heat and power producers. Potential Annual Earnings Scale. Salaries vary considerably, depending on the individual’s position, but are generally somewhat higher than those offered at a small producer or utility. Clientele Interaction. Midsize electrical power companies may serve an area of one or more counties and a variety of individual, business, and institutional clients. Effectively dealing with larger clients requires a technically educated customer relations team. Amenities, Atmosphere, and Physical Grounds. Midsize utilities may have a more pleasant headquarters building than that of a small utility and will generally have bill payment locations in banks or supermarkets. Typical Number of Employees. A midsize utility employs from one hundred to one thousand or more workers. Traditional Geographic Locations. Midsize utilities are usually located in urban or suburban areas. Pros of Working for a Midsize Utility. A midsize utility can provide better fringe benefits, such as health insurance and educational subsidies, than a small utility can. Cons of Working for a Midsize Utility. Because a midsize utility has a larger service area, workers may be dispatched far from their home bases. Some employees must regularly be on call for emergencies. Costs Payroll and Benefits: Midsize electrical power companies have a professional staff of engi-

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neers, a technical staff with bachelor’s or associate’s degrees, a cadre of licensed electricians, and a number of unskilled workers who receive on-the-job training. Salaries range from $20,000 to more than $100,000 per year, depending on education and experience. Supplies: In addition to the usual business supplies, midsize utilities generally must make a substantial investment in the equipment needed to maintain electrical service as well as in an inventory of spare parts. Computers are needed for record keeping. External Services: Midsize utilities may hire contractors for janitorial services and groundskeeping. Utilities: Midsize utilities pay for utilities such as gas, oil, and telephone and Internet access, and also pay for electricity to be resold to consumers. Taxes: Midsize firms pay business taxes to federal, state, and local governments. Some tax credits and incentives have been offered at the state and federal level to producers of renewable energy. Large Businesses Large electrical power companies are primarily large-scale utilities, including those that provide nuclear power. They have revenues ranging from tens of millions of dollars to tens of billions of dollars. They may own several production facilities, for example, both a nuclear and a coal-burning plant. Some large companies do not provide electricity directly to individuals but sell only to utilities or major industries. Potential Annual Earnings Scale. Pay varies greatly in large electrical power companies, depending on a person’s position and experience, but it is generally better than in a smaller utility. Clientele Interaction. Large utilities may own power-generating plants as well as directly service franchise areas. A staff of customer relations specialists must be maintained to handle customer complaints and work out rate schedules for largescale users of electricity. Customer relations personnel may work with local governments to attract new businesses to the area and to project the growth of electrical demand in their service area. Amenities, Atmosphere, and Physical Grounds. Generation facilities, particularly nuclear plants, are generally remote from major pop-

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ulation centers. Hydroelectric facilities such as those at Niagara Falls and Hoover Dam offer an opportunity to work amid spectacular scenery. Because concern for safety is paramount at generating facilities, work spaces are generally clean, and on-site minor medical care may be provided. Generation facilities involve turbines driven by steam or falling water as well as the generators themselves, with high-tension wires to carry off the power produced. Typical Number of Employees. A large utility generally employs more than two thousand workers. Traditional Geographic Locations. Large utilities are often headquartered in cities, although the generating plants are located in more remote areas. Pros of Working for a Large Utility. Large utilities are able to offer job stability with some opportunity for advancement. In addition, they typically offer good benefits, including quality health insurance and pension plans as well as subsidized education. Cons of Working for a Large Utility. Large utilities, like many large companies, have impersonal work sites and often the competition for promotion can be fierce. Costs Payroll and Benefits: Large utilities and power plants have a professional staff composed of engineers, a technical staff with bachelor’s or associate’s degrees, and a number of unskilled workers who receive on-the-job training. Salaries range from $20,000 to more than $100,000 per year, depending on education and experience, with executives earning more. They also employ accountants, financial planners, and other business and administrative workers. Supplies: In addition to the usual supplies needed by businesses and smaller utilities, large-scale utilities need electrical monitoring equipment. Those with nuclear plants need radiological monitoring equipment and waste storage and removal equipment. External Services: Large utilities may hire contractors for instrument calibration and shortterm construction jobs, or they may rely on inhouse staff. Utilities: Power-generating facilities pay for gas, oil, telephone and Internet access. They also

buy electricity from other facilities as needed to supply their customers. To make energy, utilities must use energy. Electrical power plants may get their energy from falling water, coal, natural gas, or uranium. Hydroelectric plants generally do not have to pay for fuel, but coalburning plants accept coal delivery from coal mining companies, usually by railroad, and natural gas plants must be connected through pipelines to petroleum refineries. Nuclear power plants purchase nuclear fuel rods as aluminum tubes containing purified uranium extracted from uranium ore. Taxes: Large utilities pay business taxes to federal, state, and local governments. Some tax credits and incentives have been offered at the state and federal level to producers of renewable energy.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The electrical power industry is an important component of the energy industry, which includes producers of petroleum fuels, natural gas, and coal. It is vital to the prosperity of the nation. Although some energy conservation measures may reduce the overall need for energy, the rate of growth of demand for electricity is unlikely to contract in the foreseeable future. With the introduction of fully electric vehicles into the U.S. market, it is quite possible that the demand for electrical power will increase. The organizational structure is highly variable, as power-producing companies may be publicly or privately owned or function as cooperatives. The rates charged for electrical power must be approved by the appropriate local, state, or federal governing body. Interstate sales of electricity are regulated by the Federal Energy Regulatory Commission. This commission also must approve the construction of hydroelectric plants on navigable waterways. Nuclear plants are regulated by the U.S. Nuclear Regulatory Commission. Investor-owned utilities are generally answerable to state public service commissions. Environmental impact statements must be filed for any major increase in generating capacity. Large utilities may have a significant engineering and legal staff to deal with compliance issues as they arise.

Electrical Power Industry The following umbrella categories apply to the organizational structure of the electrical power industry: ■ ■ ■ ■

Executive Management Engineers and Scientists Technical Operations Retail Operations

Executive Management As in most industries, executive managers in the private sector of electrical power industry command the highest salaries and make the decisions that determine the long-term profitability of their companies. Executive managers in governmentowned or cooperative utilities may earn somewhat less but enjoy greater job security. Executive managers generally have completed graduate degrees in management and may have academic backgrounds in engineering or economics. They have generally worked in various aspects of electrical power production before moving to senior executive positions. Executive management handles the general operations of the utility. Executive managers help establish rate schedules for customers and plan for corporate expansion. In the event of major storms or other interruptions of the power supply, executive managers have the responsibility of calling on crews to work overtime or to help out utilities in neighboring areas. As businesses, electrical power companies have financial and accounting divisions, human resources departments, and groundskeeping and building maintenance departments. Many employ attorneys and other legal professionals to deal with regulatory issues. One area of particular concern to companies with power-generating facilities is security. All major power production facilities must be patrolled for possible sabotage. Nuclear plants must be constantly on guard against theft of nuclear material, sabotage, and terrorist activity. Electrical power companies must hire, train, and equip a substantial security force. Executive management occupations may include the following: ■ ■ ■ ■

Chief Financial Officer (CFO) Controller Chief of Engineering Station Manager

■ ■ ■

■ ■

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Legal Counsel Security Manager Groundskeeping and Building Maintenance Manager Human Resources Manager Administrative Support Manager

Engineers and Scientists All electrical power plants convert some nonelectrical form of energy to electrical energy. With the exception of hydroelectric facilities and wind farms, this means generating heat by burning fuel and using the heat to produce steam, which turns the blades of a turbine, producing rotational motion to turn the coils of a generator or dynamo. The electrical power industry encompasses both generating facilities and transmission lines that take electrical energy to the substations, which subsequently deliver it to the ultimate consumer. The industry also includes combined heat and power generators that produce steam for industrial use and electricity as a by-product. The electrical power industry offers employment opportunities for engineers in most specialties as well as support staff of technicians and craftspeople. For the most part, engineers working in the power industry have passed the professional engineer examination for their field and state. Engineer salaries range from about $40,000 to more than $100,000. Successful engineers can move to top management positions or become private consultants, commanding somewhat higher incomes. Civil engineers are involved in the design of power generation facilities as well as the company’s commercial offices. Hydroelectric power plants have particular need for civil engineers to monitor water flows along rivers and water levels in dams. Materials engineers are needed to ensure the integrity of the turbine blades and of the other moving parts in the generator. They play an especially important role in nuclear power plants, where radiation shielding is a critical concern. Mechanical engineers monitor the function of the generator and the turbine blades. The power industry employs several specialties within mechanical engineering. Hydraulic engineers deal with issues of fluid flow, including the flow of moving water through a hydroelectric plant or of steam generated in a boiler to turn turbine blades. Combustion engineers are needed in diesel-fueled, gas-

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burning, and coal-fired power plants. They are concerned with maintaining the heat-generating process within safe limits and with the discharge of the combustion products. Chemical engineers ensure the controlled flow of fuel to the combustion facility and the safe removal of the combustion products. Environmental engineers are needed to make sure that plant operations and waste disposal are in compliance with applicable environmental regulations. Electrical engineers ensure that the power distribution system, particularly the all-important connection to the regional grid, is functioning properly. Electrical engineers monitor the output of the generator powered by the turbine and the system of conductors leading electrical energy out of the plant. Performance engineers are electrical or mechanical engineers who specialize in the tests and inspections needed to ensure that the power production and distribution systems are functioning properly. Nuclear engineers are responsible for the reactor design and for making sure that it is operating within safe limits. They design and oversee the construction of new reactors and the modification of existing power plants. They also develop procedures for the handling of radioactive materials. Computer engineers maintain or develop computer systems for generator operation as well as for normal business purposes, ranging from accounting to inventory control. Simulation engineers design simulators that allow power plant personnel to prepare for emergencies. To be prepared for any eventuality, power plant technical staff members must undergo extensive training on computer simulations. Writing the control software for electrical power plants requires knowledge of generator operations as well as programming skill and familiarity with the field of human factors psychology. The employment of scientists by the electrical power industry is concentrated in the nuclear power component. The boundary between science and engineering is not sharp, and some individuals with degrees in physics, chemistry, computer science, or applied mathematics may be found working as engineers or engineer’s assistants in the power industry. Engineering occupations may include the following:

■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Civil Engineer Materials Engineer Mechanical Engineer Environmental Engineer Hydraulic Engineer Combustion Engineer Electrical Engineer Computer Engineer Simulation Engineer Chemical Engineer

Technical Operations The day-to-day operation of electrical power companies involves a host of technically educated professionals. These include power plant operators, distributors and dispatchers, maintenance supervisors, electrical and electronics installers, and line installers and repairers. Power plant operators control the electricitygenerating equipment at the power plant. In general, the power plant operator monitors a control board that displays the status of the boilers, turbines, and generators in the plant. Operators distribute the power demand among generators and follow the customer demand. With the aid of computers, they may increase the output of generators or take generators offline. There is very stiff competition for jobs as power plant operators, which pay between $40,000 and $65,000 per year. Power plant operators generally must go through several years of training before becoming fully qualified. A high school diploma is essential, and many power plant operators have appreciable college education. Some have bachelor’s degrees. Because boilers, turbines, and generators are working machines subject to the stress and strain of constant use, a cycle of inspection and scheduled maintenance must be established and followed. Special problems associated with nuclear power plants include shutdowns of the reactor for refueling, storage of reactor waste, and constant radiological monitoring to protect operating personnel and the environment. Maintenance supervisors manage the electrical and mechanical equipment of the power plant. They oversee the installation, maintenance, and repair of the equipment in the plant and its control systems. They are responsible for setting up maintenance and replacement schedules and seeing that they are followed. They bear considerable responsibility for the safety of the

Electrical Power Industry power plant as a workplace. They must have a working knowledge of electrical instrumentation as well as the ability to manage lower-level mechanics and technicians. Generally a bachelor’s degree in electrical or mechanical engineering is required, along with five to ten years of power plant experience and at least two years of supervisory experience at a lower level. The power distributor or dispatcher controls the flow of electricity through the transmission lines that lead from the generator to the substation. Power distributors have the responsibility of matching the power supply, bringing additional boilers into action when needed, and routing

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around generating units that may be shut down for repair. According to the U.S. Department of Labor, their salaries ranged between $38,000 and $83,000 in 2007. Although a bachelor’s degree is not required for this position, power distributors must complete years of training as an apprentice and may need to achieve certification as a systems operator. Power distributors often belong to the International Brotherhood of Electrical Workers or the Utility Workers Union of America, both parts of the AFL-CIO. Every utility company needs installers and repairers to maintain the electrical and electronic equipment essential to its operation. Installers and

SPECIALTIES

Power Plant Operators Specialty

Responsibilities

Generator switchboard operators

Control central electric generating plant switchboards to distribute and regulate power.

Hydroelectric-station operators

Control electrical generating units and mechanical and hydraulic equipment at hydroelectric generating stations.

Load dispatchers

Coordinate personnel in generating stations, substations, and lines of electric power stations.

Motor-room controllers

Control generation and distribution of electrical power from power station to plant facilities and maintain equipment.

Power-reactor operators

Control nuclear reactors that produce steam to generate electricity and coordinate auxiliary equipment operation.

Substation operators

Control current convertors, voltage transformers, and circuit breakers to regulate electricity flow through substations and over distribution lines.

Switchboard operator assistants

Compile gauge readings and perform other tasks as directed by the switchboard operator in an electric-generating plant. They clean and oil mechanical and electrical equipment and report malfunctions, and they may assist in tests to diagnose the cause of equipment malfunction.

Switchboard operators

Control converters, rectifiers, transformers, and generators to direct, distribute, and maintain power to chemical processing equipment.

Turbine operators

Control steam-driven turbogenerators in electric or nuclear power generating stations.

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repairers generally have graduated high school and attended a vocational school or community college program in electrical technology. Electrical equipment provides the power for a device, while electronic equipment generally controls device performance. According to the Bureau of Labor Statistics, installers and repairers earn between $38,000 and $70,000, depending on experience and location. Linemen install and repair the vast network of cables over which electrical power is carried from the generating plant to the customer. In many A lineman installs power lines. (©John Sartin/Dreamstime.com) communities, the cables are carried over utility poles that may also carry telephone wires. Be■ Electrical and Electronics Installer/ coming a lineman generally requires on-the-job Repairer training after completing a vocational or technical ■ Lineman program. Linemen must be agile, not afraid of heights, and willing to work in all types of weather. Retail Operations Linemen earn from $27,000 to $67,000 per year for The vast majority of electric utilities sell electrifull-time work. cal power to their customers, monitor the conTechnical operations occupations may include sumption, and bill monthly for the power conthe following: sumed in kilowatt hours. Some utilities combine ■ Power Plant Operator the delivery of water and natural gas with their elec■ Maintenance Supervisor trical business. They may also be responsible for ■ Maintenance Worker collecting certain fees, such as for trash collection ■ Power Distributor/Dispatcher and sewer services. Like other retail businesses, they maintain staff for accounting and billing, payment processing, and general customer OCCUPATION SPECIALTIES service. In general, electric utilities Electrical Line Installers and Repairers monitor power consumption at the customer’s site, maintaining Specialty Responsibilities a staff of meter readers to record Cable installers-repairers Install and repair underground monthly usage, and billing resiconduit and cable systems. dential and business customers accordingly. Meter readers must Line repairers Repair and replace power lines be familiar with their territories between generating stations, and able to drive themselves substations, and consumers. from site to site. Although extenTower erectors Erect transmission towers and sive technical training is not reinstall electric cables. quired to be a meter reader, readers should be able to spot

Electrical Power Industry meters in need of repair and those that may have been tampered with or vandalized. Utilities must issue bills to each customer and accept payment. In many communities, utility bill payments may be made at specified banks and retail stores as well as by mail or, increasingly, by computer over secure Web sites. The accounting function is highly automated, with payments entered as they are received. Because no one likes to pay utility bills, utility companies must generally maintain a staff of customer relations agents to receive complaints and work out payment arrangements for customers unable to pay in full. Customer service agents also are involved in setting up accounts as people move to a new address and discontinuing service at the previous address. Most utilities offer one or more cost-averaging plans for customers who prefer to pay the same amount each month, rather than face very high bills in summer or winter. Most utility companies encourage conservation. Although this cuts into company revenue, it also eliminates the cost of expanding production, and in the case of nuclear or fuel-burning plants, the cost of complying with environmental regulations. Utilities advise their customers as to the cost advantage of compact fluorescent lightbulbs and the newer light emitting diodes (LEDs) over the oldstyle incandescent bulbs. They may also advise on

Smart meters report electric consumption on an hourly basis, allowing utilities to charge differently for peak and off-peak usage. (©Richard Abplanalp/Dreamstime.com)

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home insulation and on the coordinated use of illumination and heating and air-conditioning systems in big buildings to reduce costs overall. Retail operations occupations may include the following: ■ ■ ■ ■

Meter Reader Billing Clerk Customer Relations Specialist Customer Service Agent

INDUSTRY

OUTLOOK

Overview The outlook for the electrical power industry shows it to be on the rise. The demand for energy in the United States is unlikely to decrease in the foreseeable future, and demand in the emerging nations of Asia is certain to increase. The electrical power industry is in growth mode, although there is some uncertainty as to the distribution of energy sources. A further uncertainty is attached to the deregulation or reregulation of the industry, which depends on legislative action. With more competition for the purchase of fossil fuels, an increased dependence on nuclear power seems inevitable. Nuclear power plants are scheduled for construction, but the problem of long-term storage of highlevel nuclear waste persists, as does the problem of carbon emissions from conventional power plants. Another question is the extent to which electricpowered or hybrid vehicles will supplant gasolineand diesel-powered vehicles. The possible emergence of new technologies may also affect the electrical power industry. Solar energy can supplant electricity from fossil fuels for home heating and cooling to some extent, but conversion of solar energy to electricity remains inefficient. The electrical power industry is particularly sensitive to the electoral process. For example, in the 2008 presidential election, the advocates of expanded drilling for oil were pitted against environmental groups. Varying estimates have been made of the time that will be needed for more environmentally friendly technologies, such as wind farms and solar plants, to become a significant part of production capacity. Although nuclear power advocates point to the lower environmental impact of properly run nuclear plants, fear of possible nu-

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Electrical Power Industry PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

ments in the use of tidal energy are also under way.

Employment Advantages The electrical power industry overall is in a controlled growth Employment mode. Although the 2011 nu2009 Projected 2018 Occupation clear accident in Fukushima, Japan, may temporarily halt ex18,130 16,700 Control and valve installers and pansion in the nuclear power repairers, except mechanical door industry, many planned plants 14,140 11,600 Electrical engineers are likely to be built, if somewhat later than initially scheduled. As 54,070 44,700 Electrical power-line installers and the demand for electrical enrepairers ergy grows, new power plants of 15,840 13,200 First-line supervisors/managers of all types will be constructed, and mechanics, installers, and repairers new technologies implemented. Significant new employment op19,460 14,300 Meter readers, utilities portunities are likely to occur as the baby-boomer generation Source: U.S. Bureau of Labor Statistics, Industries at a Glance, begins to retire. Highly skilled Occupational Employment Statistics and Employment Projections workers will find their skills transProgram. ferable to new technologies as, for instance, solar or wind power stations come on line. Scientific and technical staff in the electrical clear accidents remains, along with still unresolved power industry therefore are likely to have many issues concerning the disposal of high-level radiojobs open to them, even outside the traditional active waste. area of energy production. Students who prepare The electrical power industry requires a technofor engineering or science degrees or receive adlogically educated workforce. This is particularly vanced technical training at a community college true in the nuclear industry, where educational or in the military should be able to select from a standards for reactor operators were significantly number of attractive positions. Workers in all asincreased in the wake of the 1979 accident at the pects of the electrical power industry can expect to Three Mile Island Nuclear Generating Station. Alparticipate in continuing education throughout though security issues may be of greatest importheir lifetimes. tance in the nuclear side of the industry, any significant loss of electrical power-generating capacity Annual Earnings could be damaging to the economy; therefore, all Electrical power companies have generally funcpower generation facilities require security persontioned as regulated monopolies, which means that nel. A number of types of power plants not yet in their profitability is unlikely to increase or decrease commercial operation may become practicable as dramatically. However, as the industry became the demand for electrical power grows. These insomewhat deregulated, the profit potential has beclude breeder reactors, which actually produce adcome more uncertain. It is likely that power indusditional radioactive fuel as they generate electrictry revenues will grow over time and that the fracity, and liquid metal reactors, in which a liquid tion of electrical energy produced by nuclear metal such as sodium is used as the heat exchange power will increase, following the example of Euromedium instead of water. Uses of wind energy and pean countries. The cost of fossil fuels will almost solar energy are expanding. Solar energy for direct certainly increase as industrialization and the stanhome heating may reduce the need for electrical dard of living rises in China, India, and other power in many parts of the United States. Experi-

Utilities Industry

Electrical Power Industry emerging nations. A marked increase in demand is possible as fully electric and hybrid electric vehicles capture more of the automotive market. The cost of hazardous reactor waste disposal or reprocessing is another economic variable. As spent nuclear fuel accumulates on site, there will be a push both for disposal at geologically safe sites and for reprocessing spent nuclear fuel. Transportation costs and security costs associated with transport of highlevel waste by rail or truck must be considered. In addition to their domestic operations, American companies have become involved in exporting electrical power technology, including nuclear technology, to other countries, particularly those in Asia and the Middle East. Technical workers may have interesting travel opportunities as plants are constructed in other countries or as equipment is designed for export.

Tel: (212) 752-6800 Fax: (212) 752-4929 http://www.ieee.org U.S. Energy Information Administration 1000 Independence Ave. SW Washington, DC 20505 Tel: (202) 586-8800 http://www.eia.gov Utility Workers Union of America 815 16th St. NW Washington, DC 20006 Tel: (202) 974-8200 Fax: (202) 974-8201 http://uwua.net

ABOUT RELATED RESOURCES FOR FURTHER RESEARCH American Public Power Association 1875 Connecticut Ave. NW, Suite 1200 Washington, DC 20009-5715 Tel: (202) 467-2900 Fax: (202) 467-2910 http://www.publicpower.org International Brotherhood of Electrical Workers 900 7th St. NW Washington, DC Tel: (202) 833-7000 Fax: (202) 728-7676 http://www.ibew.org Nuclear Energy Institute 1776 I St. NW, Box 400 Washington, DC 20006-3708 Tel: (202) 739-8000 Fax: (202) 785-4019 http://www.nei.org Power and Energy Society Institute of Electrical and Electronics Engineers 345 E 47th St. New York, NY 10017-2394

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THE

AUTHOR

Don Franceschetti has been a member of the physics faculty at the University of Memphis for more than thirty years. He received his bachelor of science degree from Brooklyn College in 1969 and his doctoral degree in physical chemistry from Princeton University in 1974. He came to the University of Memphis following research appointments in physics and materials science at the Universities of Illinois, North Carolina, and Utrecht (the Netherlands). He is a Dunavant University Professor. He has taught a wide range of physics courses and courses for physics teachers and has written extensively about the physical sciences and their history.

FURTHER

READING

Baigrie, Brian S. Electricity and Magnetism: A Historical Perspective. Westport, Conn.: Greenwood Press, 2007. Bodanis, David. Electric Universe: How Electricity Switched on the Modern World. New York: Three Rivers Press, 2005. CareerBuilder.com. Salary Calculator and Wage Finder. http://www.cbsalary.com/salarycalculator. Careers.org. Occupation Profiles: Descriptions, Earnings, Outlook. http://occupations .careers.org.

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Friedel, Robert, Paul Israel, and Bernard S. Finn. Edison’s Electric Light. Rev. ed. Baltimore: The Johns Hopkins University Press, 2010. Galvin, Robert W., Kurt E. Yeager, and Jay Stuller. Perfect Power: How the Microgrid Revolution Will Unleash Cleaner, Greener, and More Abundant Energy. New York: McGraw-Hill, 2009. Heppenheimer, T. A. “Nuclear Power: What Went Wrong?” American Heritage of Invention and Technology 18, no. 2 (2002): 46-56. Jonnes, Jill. Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World. New York: Random House, 2003. Kaplan, Stan. Power Plant Characteristics and Costs. New York: Nova Science Publishers, 2010. Levy, Salomon. Fifty Years in Nuclear Power: A Retrospective. La Grange Park, Ill.: American Nuclear Society, 2007. Newton, David E. Nuclear Power. New York: Infobase, 2005.

PayScale.com. “Salary Snapshot for Nuclear Power Reactor Operator Jobs.” January 29, 2010. http://www.payscale.com/research/ US/Job=Nuclear_Power_Reactor_Operator/ Salary. Taylor, Allan, and James Robert Parish. Career Opportunities in the Energy Industry. New York: Ferguson, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Environmental Engineering and Consultation Services ©Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary Environmental engineering is considered as a subset of civil engineering. Environmental engineering and consultation services design, plan, assess, or perform engineering duties and gather information on the environmental consequences of proposed actions, in order to prevent, control, and remediate environmental hazards. Environmental engineers provide communities and policy makers with project management, permit acquisition, and other specialized environmental technology and services. Environmental consultants help businesses and municipalities prepare environmental impact statements and otherwise comply with environmental regulations. Environmental engineering is equivalent to sanitary engineering and is also called environmental health engineering or public health engineering.

General Industry: Science, Technology, Engineering, and Math Career Clusters: Business, Management, and Administration; Science, Technology, Engineering, and Math Subcategory Industries: Consulting Engineer’s Offices and Private Practices; Environmental Consulting Services; Environmental Engineering Services; Remediation Services; Sanitation Consulting Services; Site Remediation Consulting Services Related Industries: Building Architecture Industry; Building Construction Industry; Business Services; Landscaping Services; Scientific and Technical Services; Waste Management Industry Annual Domestic Revenues: $140.6 billion USD (Smith Travel Research, 2009) Annual International Revenues: $344 billion USD (Research and Markets, 2009) Annual Global Revenues: $484.3 billion USD (Research and Markets, 2009) NAICS Numbers: 56291, 541330, 541620

History of the Industry The earliest known practice of civil engineering is thought to have occurred in the period between 4000 and 2000 b.c.e. in ancient Egypt and Mesopotamia. During that period, humans departed from a nomadic lifestyle of mobile hunting and gathering and settled in constructed shelters. They still required transportation, however, and created wheelbased land vehicles, as well as sail-based water vessels. 593

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Environmental Engineering and Consultation Services

Historians attribute the origins of large environmental construction initiatives to the construction of pyramids in Egypt between about 2700 and 2500 b.c.e. Other historic civil engineering constructions were the Parthenon in Ancient Greece (447438 b.c.e.), the Appian Way of the Romans (about 312 b.c.e.), and the Great Wall of China (about 220 b.c.e.). The inventions of Archimedes in the third century b.c.e. constitute some of the first applications of mathematics and physics to problems of civil and environmental engineering. Environmental engineering began to develop in its own right with the construction and use of aqueducts, bridges, roads, dams, and harbors throughout the Roman Empire. The roots of the discipline grew with the architectural designs and construction expertise of artisans such as the carpenters and stonemasons of ancient and medieval times. No clear distinction was originally made between civil engineering and architecture until the modern era. Civil engineering became a scientific term in the eighteenth century and rose to promi-

nence when the Institution of Civil Engineers was founded in London in 1818 and received a royal charter in 1828. Civil engineering thus became formally recognized as a profession. Attention came to be focused on what today would be recognized as several environmental activities pertaining to the construction of bridges, aqueducts, harbors, lighthouses, drainage systems, and river transport, as well as the manufacture of machinery for construction. The first private college to teach civil engineering (including environmental engineering) in the United States was Norwich University, founded in 1819 by Captain Alden Partridge. The first degree in civil engineering in the United States was awarded by Rensselaer Polytechnic Institute in 1835. The first environmental engineering and consultation service in the United States was Tyree Organization, which was founded in Farmingdale, New York, in 1930. (It is still functional today, serving customers in the retail petroleum industry, with specializations in the excavation of contami-

Environmental engineers use technology to help companies reduce air pollution. (©Dreamstime.com)

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nated soils, environmental testing, service station maintenance, and pump tank construction. The company also provides emergency response services, as well as engineering and compliance services for petroleum bulk storage, and operates from offices in California, Connecticut, Massachusetts, New Jersey, and New York.) Environmental engineering services progressed steadily thereafter, with the founding and establishment of several categories of small, midsize, and large environmental engineering and consulting companies. The Industry Today Environmental engineers focus today on the use of the principles of biolAn aerial view of a water treatment plant. (©Dijkmans Phillippe/ ogy and chemistry to develop solutions Dreamstime.com) to modern environmental problems. Information technology (IT) and automation with high-technology electronic near and even to have discussions and conduct innovations have become integral components of seminars by videoconferencing. twenty-first century environmental engineering The industry now has computers, engineering and consultation servcies. These technologies unsoftware, mechanical and electrical tools, modern derlie diagnostics, operations, and environmental GIS instruments (for mapping lands) that did not services generally. Companies are more actively inexist in the past, storage tanks, centrifuges, elecvolved in water and air pollution control, recycling, tron and research microscopes, spectrophotomwaste disposal, and public health issues than they eters, different recorders, chromatography equipwere in the past. ment, monitoring and testing systems, varieties of Since 2003, a broad range of engineering and laboratory equipment, and a host of other supplies consultation services have emerged, tailored to in line with various companies’ specialties. These electrical and telecommunication utilities and the tools make the modern environmental industry mining industry. Services include design, electrical more useful, competitive, efficient, challenging, system studies, environmental permitting, testing, and exciting. For additional innovations, many encommissioning, and geographic information servironmental engineering businesses are now minivices (GIS), which are popular tools for environmizing cost and environmental damage by adoptmental services and projects pertaining to surveying green IT policies that save energy. The U.S. ing, construction, and transportation. Small Business Administration also conducts ethics The environmental industry has advanced in Webinars over the Internet, teaching business ownthe use of modern equipment, some of which imers about environmental ethics. proves on older versions. Engineers use such Environmental engineers conduct hazardousequipment to facilitate assessments and provide waste-management studies, in which they evaluate services several times faster and better than they the significance of hazards, advise on their treatcould in the past and to enable environmental ment and containment, and develop regulations to workers to undertake more challenging tasks. prevent mishaps. They design municipal-waterWorkers in the field and those in laboratories and supply and industrial-wastewater treatment systems, offices can easily and quickly communicate by mobile electronic devices, and staff can use computers conduct research on the environmental impact to exchange information with other offices far and of proposed construction projects, analyze scien-

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Environmental Engineering and Consultation Services

The smoke and ash released by the eruption of a volcano in southern Iceland in April, 2010, caused the cancellation of many aircraft flights. (AP/Wide World Photos)

tific data, and perform quality-control checks. Several environmental engineers and consultants have expanded their businesses to deal with local and worldwide environmental issues. Some companies study and attempt to minimize the effects of acid rain, global warming, automobile emissions, and ozone depletion, which are among the hottest environmental topics in the twenty-first century. They also become involved in the protection and preservation of wildlife. Many twenty-first century environmental engineers also work as consultants, helping their clients comply with regulations, prevent environmental damage, and clean up hazardous sites. Major modern environmental companies include CH2M HILL, Ecology and Environment, and environmental engineering and consulting divisions of large engineering and construction firms, such as Fluor and Bechtel. Several small environmental engineering and consultation companies have been developed to provide a wide variety of environmental manage-

ment services for local communities and small establishments, such as food services, health care clinics, small bakeries, furniture and finishing factories, hotels, landscaping services, marinas, machine shops, retail stores, and service stations. Some small environmental businesses are independent subsidiaries of larger environmental engineering companies, and they serve as domestic firms with services to consumers. Many also provide a wide variety of assessments and solutions in construction, manufacturing, emergency response, remediation, risks to human health, and hazardous waste operations. The environmental engineering industry today undergoes more scrutiny for compliance because of the growth in the number of businesses in operation. The tendency is to focus more on products and monetary gains, while relaxing important environmental laws that should be more strictly enforced because of increased manufacturing, excessive use of chemicals, more pollution, and too

Environmental Engineering and Consultation Services many disposables dumped as waste. Small environmental engineering businesses operating in the United States, for example, are advised to seek help from the Small Business Ombudsman (SBO) to learn how environmental protection laws work. The SBO is an office of the Environmental Protection Agency (EPA) with the mission of helping small businesses comply and cope with environmental laws. As environmental businesses grow, they require more plans and skills to handle all their employees. Several companies that had few workers years ago now have to adjust their working conditions and plans to accommodate more qualified college graduates and other skilled workers who seek employment in the environmental field. The external assistance of the EPA and other experts in environmental assessment, consulting, and law is sought by several companies that provide seminars and training for their staffs. These environmental engineering organizations face the daunting task of ensuring all their employees receive adequate in-house training and refresher courses. Some early environmental engineering companies, for example, those founded in the 1950’s or 1960’s, that have remained small or midsize and have always occupied the same buildings are renovating or moving into new buildings. These firms have felt the need to equip themselves with modern facilities and tools that conform to contemporary environmental standards. They must do so to demonstrate that, by improving their own situations, they can also supply clients with greater efficiency, better working conditions, more customer attraction, and higher business development commensurate with twenty-first century industrial progress. Mandated taxation for environmental engineering and consultation industries is strictly adhered to by law, and voluntary incentives for workers have become essential to boost their morale and increase job satisfaction. Declaring a net loss has important tax consequences, because an environmental or other business can only declare a loss in two out of every five years. If a company declares a business loss more frequently than that, the Internal Revenue Service may review the business and reclassify it as a hobby, disqualifying it from writing off expenses of previous and future years. As the world population increases and busi-

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nesses grow larger, good stewardship of the environment by real estate and business concerns becomes important. Environmental engineers and consultants can thus expect to receive more business in the years ahead. Environmental professionals will teach clients the best recycling techniques and how to manage water, noise, and air quality. Unexpected environmental upheavals in the form of wide-scale brush fires, hurricanes, tornadoes, earthquakes, volcanoes, and tsunamis pose greater challenges to the environmental industry. Some of these environmental problems defy all the known solutions. The April, 2010, volcanic ash that spewed into the atmosphere from Iceland virtually paralyzed air travel to and from Europe for a few days and adversely affected the entire world economy. All affected businesses could do was wait for winds to blow the ash out of their region. The explosion on the Deepwater Horizon and the resulting oil spill in the Gulf of Mexico during that same year demonstrated the limits of engineering technology to respond to deepwater oil drilling disasters.

Oil mars the beauty of this beach along the Gulf of Mexico after the April, 2010, explosion on an offshore drilling rig. (AP/Wide World Photos)

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These types of events challenge experts to design and engineer appropriate twenty-first century solutions for large-scale environmental catastrophes.

INDUSTRY MARKET SEGMENTS The environmental engineering and consultation industry comprises small companies that usually deal with environmental issues in smaller communities and on local levels, as well as larger companies that operate regionally, nationally, and internationally for a broad spectrum of clients. Most environmental firms are unlikely to remain permanently at only one end of the spectrum, since they often combine aspects of multidomestic operations with other aspects of global operations, depending on opportunities and national and global environmental needs. Small Businesses The Annual Council of Engineering Companies defined a small engineering firm in April, 2010, as one with one to thirty employees. Smaller firms tend to lack management information systems

Oil spill workers lay oil retention booms in Bay St. Louis, Mississippi, in May, 2010. (AP/Wide World Photos)

and thus have lower levels of resource availability for information-gathering. Some small businesses receive their environmental information from government organizations, literature, and in-house expertise. Small-business owners and marketers are always in search of high-impact, cost-effective methods of increasing revenue and gaining new customers. For strategic growth, some are marketing their services through mobile phones to grow business and reduce the high cost of advertising. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary of an environmental engineer employed in the management, scientific, and technical consulting services industry was $81,690 in 2009. The top 10 percent of environmental engineers earned more than $115,750 in that year, while the bottom 10 percent earned less than $47,660. For environmental engineering technicians, the industry average annual salary was $41,550. The top 10 percent of earners earned more than $70,840, and the bottom 10 percent earned less than $27,160. Clientele Interaction. Environmental engineering and consultation businesses emphasize personal relationships and client satisfaction. They must demonstrate professionalism during all phases of clientele interaction. Small companies assist private, public, and corporate clients to provide solutions to their development needs in local communities. Small environmental engineering and consultation companies vary in the level of services they can provide, depending on the size, scope, facilities, and objectives of each business. Some environmental management consultants are small businesses that serve only a piece of the industry in a given state or undertake specific, limited contracts in specified locations for clients. Amenities, Atmosphere, and Physical Grounds. Small environmental engineering businesses provide the usual amenities and corresponding working conditions to ensure the quality of staff activities and interaction with customers. They are typically housed in small or midsize buildings that have adequate parking lots and equipped offices. They often include small research and testing laboratories. In addition to the necessary office furniture and storage facilities, technological amenities such as high-speed Internet access and fax, photocopying, printing, and scanning services are usually provided.

Environmental Engineering and Consultation Services Typical Number of Employees. Small environmental consultancies may employ anywhere from one to thirty people. Traditional Geographic Locations. Small environmental engineering companies are located in urban business or commercial districts. The majority do not have branches in other states, although some may have one or two separate offices at different locations in a city or in a nearby town, performing different functions for the same company. A few are located in isolated neighborhoods, either to take advantage of newly built facilities or to isolate operations involving hazardous materials. Pros of Working for a Small Environmental Services Firm. Small environmental engineering and consultation businesses have relatively few workers, enhancing closer interactions and cooperative efforts. Opportunities for training, promotions, pay increases, and bonuses are more available to their small staffs than they might be to larger ones. Managers of small businesses frequently organize on-site training sessions involving air quality and health issues in the workplace, as well as certification programs through which staff can obtain credentials in indoor air quality and environmental business services. Online training solutions can also be obtained where on-site training is not possible. Cons of Working for a Small Environmental Services Firm. Many small environmental business owners cannot afford to hire additional staff for considerable periods, especially when the economy is weak. In such instances, the existing staff may be stretched thin and experience stress. Workers must study more and be trained in additional skills in order to perform tasks in which a firm lacks the resources to hire specialists. Budget cuts and low profits could also adversely affect worker income. Costs Payroll and Benefits: Small consultancies often pay salaries on a per-project basis, though they often bill clients based on workers’ billable hours. Owners and partners draw income from the businesses’ profits. If there are no profits, they will not be paid. Benefits may be offered at the discretion of the employer. Supplies: Small environmental engineering companies require a wide range of supplies, includ-

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ing office supplies, tools and hardware for installation and maintenance, varieties of chemicals, IT equipment (telephones, fax machines, and computers), and field supplies such as vehicles, cranes, excavators, spraying machines, surveying apparatus, sampling equipment (for soil, water, and air), testing kits, protective gear, and a host of other equipment and necessities for wide varieties of environmental services. External Services: Small consultancies may contract other environmental consultants to provide expertise in a subfield their own employees lack. They may also contract Web design, advertising, public relations, accounting and tax preparation, and maintenance services. They may rent some equipment rather than purchasing it, and most businesses require insurance, including liability insurance. Utilities: Common utilities for small environmental engineering and consultation properties include telephone, electricity, water, sewage, Internet access, cable television, and gas or oil. Taxes: Small environmental engineering and consultation services must pay payroll taxes, as well as local, state, and federal corporate and property taxes. Partners and owners may report business income on their personal returns, in which case they must also pay self-employement taxes. Midsize Businesses The Annual Council of Engineering Companies in April, 2010, defined a midsize engineering firm as one with 31 to 250 employees. (This designation is further broken down into medium firms, with 31 to 100 employees, and medium-large firms, with 101 to 250 employees.) Several midsize environmental consulting firms have experience in specific areas. Midsize companies such as Amory Engineers offer experience and expertise in a full range of engineering services, including system evaluation, master planning, facilities design, construction administration, and resident inspection. Their services also include land-use review and inspection services for municipal planning boards, zoning boards, and conservation commissions. Potential Annual Earnings Scale. According to the BLS, the average annual salary of an environmental engineer employed in the management, scientific, and technical consulting services indus-

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try was $81,690 in 2009. The top 10 percent of environmental engineers earned more than $115,750 in that year, while the bottom 10 percent earned less than $47,660. For environmental engineering technicians, the industry average annual salary was $41,550. The top 10 percent of earners earned more than $70,840, and the bottom 10 percent earned less than $27,160. Clientele Interaction. Midsize environmental engineering and consultation firms take on many or all aspects of projects, including delivering research, products, and services to clients in several states. They even undertake some overseas contracts. The commitment of the ideal midsize environmental engineering business is facilitated by emphasizing personal relationships along with quality and satisfaction of clients, and professionalism during all phases of clientele interactions. Each company must work closely with individual as well as corporate clients, locally, nationally, and internationally, across the environmental spectrum, including buildings, energy, air, water, land, and transportation sectors. Amenities, Atmosphere, and Physical Grounds. The building facilities of midsize environmental engineering and consultation firms are larger than those of smaller businesses and are usually surrounded by more spacious physical grounds, and more parking spaces. Some businesses house their offices in multistory buildings located in busy urban areas or in isolated industrial facilities—especially if they have elaborate research and testing laboratories. Midsize businesses require more facilities and amenities than small firms, corresponding with the greater volume of clients they serve and services they offer. Similar to large businesses, most midsize environmental engineering companies have a main headquarters in or near a big city for easier access and increased public patronage, as well as branches housed in smaller buildings in the same or different states, depending on the number of employees, types of projects, and nature of consultation services. A number of firms are also international in their operations, sometimes having building facilities overseas. Many midsize businesses have grown and evolved into more technological environmental companies with improved amenities and advanced techniques for engineering and consultation services.

Typical Number of Employees. Midsize environmental consultancies employ from 31 to 250 people. They tend to have more full-time specialized employees than do small environmental companies. Traditional Geographic Locations. Since midsize environmental facilities serve larger communities, they are sited in urban areas, in or within the vicinity of large towns or big cities, where customers and environmental contracts are easier to obtain. As environmental companies expand their scientific and social services and engage in more research, testing, and construction, they become situated in isolated areas on the outskirts of cities or demarcated industrial locations in order to reduce or prevent harm to neighbors and passersby. Pros of Working for a Midsize Environmental Services Firm. Midsize environmental firms’ employees have greater chances of receiving more contracts, more customers, greater marketing opportunities, and consequently higher salaries than their counterparts at small environmental businesses. They enjoy greater job stability, since their employers have higher budgets and available facilities, plus higher volumes of clients. They also have better chances of gaining higher levels of environmental engineering experience and sharpened consultation capabilities in the process of exposure to more assignments and training sessions. Many midsize companies have grown from small companies and desire continued growth. As a result, midsize companies invest significant funds in infrastructure that as small companies they could not afford and as large companies they will require to compete. The expansion process teaches employees to control costs, which becomes a strong factor that drives their engineering and consultation initiatives. Better plans are then made to undertake environmentally friendly projects that go along with decreased resource consumption and less cost. Cons of Working for a Midsize Environmental Services Firm. Midsize environmental businesses strive to maintain growth and industry position, fearing that they could shrink as easily as they grew. Maintaining momentum can be a challenge for both partners and employees. The need to compete in an uncertain niche against both small and large firms can be difficult, requiring midsize firms frequently to redefine their roles and services

Environmental Engineering and Consultation Services in ways that small and large firms do not. Employees seeking to reach the height of their profession may not be satisfied at midsize firms. Costs Payroll and Benefits: Managers, administrators, and senior personnel at midsize firms receive annual salaries, while lower ranks such as janitors and grounds crews receive hourly wages. Supplies: Midsize environmental engineering and consultancy companies need varieties of operational equipment and supplies for testing, research, installations, removals, construction, cleanup, and other services. Computers, engineering software, telephones, electrical generators, printers, fax machines, scanners, hardware for repairs and maintenance, engineering appliances, grounds and field supplies (such as excavators, wheelbarrows, loppers, chain saws, lawn mowers, and trimmers), chemicals, and office supplies are among the several essential supplies for functional activities. Appropriate vehicles (sometimes including helicopters) are needed to transport workers, equipment, and other supplies to the field and project locations. External Services: The services of data analyzers, other laboratories, and environmental or scientific companies are often used to support operations, assessments, projects, and research at midsize firms. Other external services could include equipment, instrumentation, or machinery rental, installation, or maintenance. Landscaping contractors are hired to create and maintain appropriate and attractive grounds plus desirable horticulture. Companies may also contract staff seminar and training instructors, as well as tax experts, accountants, and auditors. Utilities: Typical utilities for a midsize environmental company include electricity, water, sewage, gas or oil, telephone, cable, and Internet access. Several midsize environmental companies have their own gas or oil stations on the compound to meet demands of high gas and oil consumption. Taxes: Midsize environmental engineering and consultation services must pay payroll taxes, as well as local, state, and federal corporate and property taxes.

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Large Businesses The majority of large environmental engineering and consultation businesses are located in multiple states and are national or international in their operations. The Annual Council of Engineering Companies in April, 2010, categorized large companies as those with more than 250 employees. The council recognizes a “very large” category of companies with more than 500 employees. Potential Annual Earnings Scale. Large environmental businesses have annual earnings that run into the billions of dollars. Financial profits are dependent upon geographical location of the company and the extent of its operations, plus the variety of services offered nationally and even internationally. Earth Tech, for example, a leading environmental service provider with headquarters in Long Beach, California, is estimated to earn about $18 billion in U.S. revenues. According to the BLS, the average annual salary of an environmental engineer employed in the management, scientific, and technical consulting services industry was $81,690 in 2009. The top 10 percent of environmental engineers earned more than $115,750 in that year, while the bottom 10 percent earned less than $47,660. For environmental engineering technicians, the industry average annual salary was $41,550. The top 10 percent of earners earned more than $70,840, and the bottom 10 percent earned less than $27,160. Clientele Interaction. Large environmental engineering and consultation firms take on the entire scope of research, implementation, production, and services for clients in many states and even internationally, sometimes serving the U.S. federal government. They offer a wider variety of services than smaller firms, enabling clients to minimize or avoid time-consuming searches for the right services and consequently to give the company more patronage as a “one-stop shop.” Commitment to excellence in all aspects of business and professional rapport with clients leads to repeat engagements, strong referrals from clients, and a successful track record of solving problems. Amenities, Atmosphere, and Physical Grounds. Many large environmental engineering and consultation firms have a main headquarters for command and control, as well as branches at multiple locations, usually in more than one state or even overseas, for research, training, inspec-

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tions, operations, and consultation services. Their buildings frequently resemble typical industrial facilities and are strategically located in urban or suburban areas. They are sometimes isolated from commercial areas or surrounded by other businesses, but many are situated on picturesque grounds on the outskirts of cities, with adequate free parking and smoke-free offices. The buildings have accessible, friendly working environments with attractive surroundings, waiting areas, offices, conference rooms, research and design laboratories, and sometimes cafeterias and recreational facilities. These companies exhibit versatility by offering a wide variety of amenities that are often dependent on the varieties of engineering focus and consultation goals, as well as particular customers they seek to attract. Most workers work in offices, laboratories, or in the field. The place and hours of work vary greatly, depending on the requirements of each project. Workers in product development may spend much time building prototypes in workshops or laboratories, while research design typically takes place in offices. Typical Number of Employees. Large environmental engineering and consulting corporations employ at least 251 people. Some employ many more than that. Houston-based Waste Management, an example of a very large environmental company, has thirteen hundred employees in its Los Angeles branch alone. Traditional Geographic Locations. Large environmental facilities are sited in urban areas, in or near large cities that serve large populations. Many of their large buildings are closer to major roads and highways for easy access and are often situated in industrial areas, where they are accessible to manufacturers and other industrial businesses that require their services. Some firms have large headquarters facilities, as well as many smaller branch facilities across many states and overseas. Others have only a few branches in a few states but are equipped with enough staff to render services nationwide and internationally. Pros of Working for a Large Environmental Services Firm. Large environmental engineering firms have the advantage of providing a wide range of environmental expertise and can thus offer jobs more quickly to applicants. Most large environmental companies are stable and in good financial

standing to offer more full-time and assured, lasting employment at high pay and good benefits. Workers at large businesses have the opportunity to specialize, but they also have access to a wide range of tools, training, and environmental management services, which sharpen their skills and open career doors. Firms tend to increase their service offerings with higher pay scales, since they can afford to hire a wide variety of highly skilled and unskilled workers. Firms are large enough to provide a wide range of services using their enormous staffs and pool of expertise, tools, and technology. Moreover, their staffs are generally free to give projects the close attention they deserve. Cons of Working for a Large Environmental Services Firm. Large firms are complicated bureaucracies. It can be difficult to feel noticed working at such a firm. At the same time, it can be easy to feel all too noticed when a superior requires help, or when several require help on conflicting projects simultaneously. The constantly changing methods and improving, innovative technologies that drive the environmental engineering industry can become overwhelming when one has to deal with them on a very large scale. Technology, science, and business advancements make the responsibility to help maintain clean air, water, and soils enormous for the staffs of large firms. There is generally little risk of injury or illness due to strict precautionary measures for workers, but certain fields require working with potentially dangerous materials. Large contracts cannot escape the media, environmental groups, occasional lawsuits, and the limelight, which can be intimidating. Observing and enforcing regulations for all the tiny details of environmental operations on a large scale could be wearisome. Satisfying every client among hundreds could also be a daunting task. Promotion can be slow, since many qualified and diligent employees may compete for the same position. Costs Payroll and Benefits: Compensation and benefits managers of large environmental organizations plan, direct, and coordinate compensation and benefits. Large companies determine compensation levels based on job analysis and position descriptions. They often have complex salary structures to match their varied positions and required services. Managers, administrators, and

Environmental Engineering and Consultation Services senior personnel receive annual salaries, while lower ranks such as janitors and grounds crews receive hourly wages. Benefits are common at large firms, including retirement plans, health insurance, vacation time, sick time, and life insurance. Supplies: Large environmental engineering and consultancy companies require operational equipment and accessories, laboratory equipment and supplies for indoor and outdoor research, numerous varieties of heavy and light equipment, computers, engineering software, monitoring and testing machines, instruments, and other materials. Appropriate strong vehicles are needed to carry people to near and remote locations and for transporting equipment to the field. Even helicopters in some instances are used to airlift staff, equipment, and supplies to remote locations or in emergency situations. External Services: The services of data analyzers, other laboratories, and environmental or scientific companies are often used to support operations, assessments, projects, and research at large firms. Other external services could include equipment, instrumentation, or machinery rental, installation, or maintenance. Landscaping contractors are hired to create and maintain appropriate and attractive grounds plus desirable horticulture. Companies may also contract staff seminar and training instructors, as well as tax experts, accountants, and auditors. Utilities: Typical utilities for a large environmental company include electricity, water, sewage, gas or oil, telephone, cable, and Internet access. Several large environmental companies have their own gas or oil stations on the compound to meet demands of high gas and oil consumption. Taxes: Large environmental engineering and consultation services must pay payroll taxes, as well as local, state, federal, and international corporate and property taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Environmental engineering and consultant services companies may be very small or very large, but they have the same core functions. At small firms,

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all functions may be handled by an owner and partners plus a small support staff. Large firms may be highly compartmentalized and specialized, assigning a single task to each worker. All companies must develop the insight to recognize service opportunities driven by environmental needs and compliance with existing or anticipated environmental laws and regulations. The following umbrella categories apply to the organizational structure of businesses in the environmental engineering and consultant services industry: ■ ■ ■ ■ ■

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Executive Management Customer Service Sales and Marketing Administrative and Office Support Technology, Research, Design, and Development Production and Operations Maintenance, Facilities, and Security Inspection Human Resources

Executive Management Executive management personnel are responsible for planning, directing, and coordinating activities, research, and development in their organizations. They manage the overall functions of the organization, address systemic issues, and supervise the smooth and effective functioning of all departments. They handle the general operations of the company and ensure that all plans and regulations are duly carried out. They oversee the duties of various department heads. As an organization, the crucial step of combining approaches to sustainability and corporate social responsibility (CSR) into a unified strategy is essential for good executive management. Executive managers generally earn the highest salaries in the establishment. The mean annual salary for an engineering manager at a technical services and consulting firm in 2009 was $125,260, according to the BLS. Chief executives earned an average of $196,100. Executive management occupations may include the following: ■ ■

Owner/Partner Executive Director

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Environmental Engineering and Consultation Services Administration/Office Manager Environmental and Permitting Manager Managing Environmental Consultant Program Manager Engineering Manager General or Operations Manager Project Manager Compensation and Benefits Manager Information Project Manager for Environmental Compliance Human Resources Manager Public Relations Manager Training Manager

Customer Service Customer service personnel (or public relations personnel) plan and direct customer service and public relations programs designed to attract desirable customers and to create and maintain good customer relations and a favorable public image for employers or clients. They can also be engaged in fundraising aimed at planning and directing activities to solicit and maintain funds for special projects and charitable contributions. They work in partnership with clients to find creative, costeffective solutions to environmental problems, leading to successful planning and solutions with minimal risk to budget and programs. They work with both public and private sector clients to assess the environmental impacts of strategic plans and programs. Being able to work with clients through the whole life cycle of an environmental project is key to effective production and operations. The mean annual salary of a customer service representative in the industry was $33,890 in 2009. Customer service occupations may include the following: ■ ■ ■ ■ ■

Customer Service Manager Customer Service Representative Customer Service Director Public Relations Manager Director of Environmental Operations

Sales and Marketing Sales managers direct the distribution or movement of products and services to customers. Sometimes, the sales and marketing unit includes financial managers who plan and coordinate accounting, banking, securities, investing, insurance, and other

financial activities. Sales and marketing personnel coordinate sales distribution by establishing sales territories, quotas, and goals and establish training programs for sales representatives. They analyze sales statistics gathered by staff, to determine sales potential and inventory requirements, and monitor the preferences of customers. Sales and marketing personnel employ their skills to deliver the best environmental practices and expert advice to their clients through sustainable design, solicitation, publicity, Web sites, special events, and community outreach. They usually have at least undergraduate degrees in business management, marketing, or related disciplines. The average salary of a sales manager in the industry was $124,690 in 2009. Financial managers earned an average of $131,220. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■

Corporate Sales Manager Sales Director Senior Sales Manager Environmental Sales Manager Director of Environmental Operations Financial Controller

Administrative and Office Support Office and administrative support supervisors and managers oversee the detailed activities of the support staff of an environmental engineering company in order to ensure on-time completion of scheduled work that meets the established quality standards of the organization. These managers plan and allocate work assignments to support staff working under them. They also issue deadlines to the support staff and promote their efficient performance with good supervision. Secretaries and administrative assistants, who are vital components of the support staff, perform a variety of administrative and clerical duties necessary to run environmental organizations efficiently. They manage projects, plan and schedule meetings and appointments, and serve as information and communication managers for an office. They also handle travel and guest arrangements, conduct research pertaining to the environmental engineering industry, organize and maintain paper and electronic files, and disseminate information by using telephones, Web sites, e-mail, and mail services.

Environmental Engineering and Consultation Services Although the core responsibilities for secretaries and administrative assistants have remained relatively unchanged, technological advances have introduced office automation and consequent organizational restructuring that have caused secretaries and administrative assistants to assume more of the responsibilities that were once reserved for managerial and professional staff. Secretaries and administrative assistants who work as support staff under office and administrative managers perform and coordinate the activities of office administrators. They also store data, retrieve data from various sources, manage databases, create spreadsheets, create presentations and reports, provide training and orientation for new staff, and integrate information for dissemination to staff and clients. They sometimes purchase supplies, negotiate with vendors, examine and maintain leased equipment, and manage areas of the business such as stockrooms. Office or administrative support staff also include receptionists who are often the first business contacts encountered by visitors to consultancies. They sit in waiting areas or at front office desks to receive visitors and clients, answer telephone calls, answer visitors’ inquiries about a company and its products or services, direct visitors to their destinations, sort and hand out mail, make appointments, file, keep records, enter data, and perform a variety of other office tasks such as faxing or e-mailing. Secretaries and administrative assistants use a variety of office equipment, such as computers, photocopiers, fax machines, scanners, telephone systems, and videoconferencing equipment. Many environmental companies require office and administrative support supervisors and managers to have postsecondary training and, in some cases, associate’s or even bachelor’s degrees. A degree related to the environmental engineering industry may provide the jobseeker with an advantage in the application process. High school graduates who have basic office skills may qualify for entry-level secretarial positions through vocational education programs that teach office skills and typing or through one-year or two-year programs in office administration offered by business and vocational-technical schools, as well as community colleges. Many temporary-placement agencies also provide formal training in computer and office skills. Assistant training programs are available at many community colleges in bookkeeping,

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project management, transcription, Web design, and computer technology, alongside online training and coaching programs. Word processing, writing, and communication skills are essential for all secretaries and administrative assistants. Many environmental employers increasingly require extensive working knowledge of computer software applications, such as desktop publishing, spreadsheets, project management, and database management. Employers also look for good interpersonal and customer service skills, since secretaries and administrative assistants need to be tactful in their dealings with people. Discretion, good judgment, initiative, organizational or management ability, and the ability to work independently are especially important for higher-level administrative support positions. Secretaries and administrative assistants generally advance by being promoted to other administrative positions with more responsibilities in the environmental engineering organization. Qualified administrative assistants who broaden their knowledge of the environmental engineering operations, and enhance their engineering or consultation skills may be promoted to senior or executive secretary or administrative assistant, clerical supervisor, or office manager. The mean annual salary of secretaries at environmental firms was $32,080 in 2009. Executive secretaries and administrative assistants earned an average of $47,110, while receptionists and information clerks earned an average of $29,590. Supervisors earned an average of $58,030. Administrative and office support occupations may include the following: ■ ■

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Administrative Support Manager Office and Administrative Support Supervisor Education Administrator General Office Clerk Secretary Executive Secretary Computer Operator Data Entry Clerk Information Clerk Bookkeeping, Accounting, and Auditing Clerk Administrative Assistant Receptionist

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Technology, Research, Design, and Development The technology, research, design, and development managers of an environmental engineering and consultancy company research current environmental problems and devise workable solutions involving current and innovative technology. They plan, direct, or coordinate the training and development activities of the staff and the organization in a manner that will give the business a competitive edge. Workers in research and design typically work in offices, examine a client’s needs, and specifically design practical and innovative solutions that protect environmental quality, enhance environmental awareness and responsibility, and make a valued contribution to business performance. Highly qualified environmental experts who are well versed in the development of imaginative and intelligent design are employed to strive for and achieve innovative, sustainable, and economical solutions while

OCCUPATION

working at the cutting edge of technology. Science and engineering technicians may enter the industry without a bachelor’s degree, but some bachelor’s degree holders begin as technicians before advancing to become researchers or pursuing additional education. Ph.D. graduates with postdoctoral experience are increasingly preferred by employers. Wage and salary employment in environmental engineering research and development services in the United States is projected to increase by 25 percent between 2008 and 2018, according to Plunkett Research. Environmental scientists in the industry earned an average of $73,470 in 2009, while environmental science technicians earned an average of $42,980. Technology, research, design, and development occupations may include the following: ■ ■

Head of Research and Development Senior Software Engineer

PROFILE

Environmental Engineer Considerations

Qualifications

Description

Uses engineering techniques to prevent, control, and remediate environmental problems.

Career clusters

Agriculture, Food, and Natural Resources; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

IRC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Environmental Engineering and Consultation Services OCCUPATION

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PROFILE

Energy Conservation and Use Technician Considerations

Qualifications

Description

Provides technical assistance in efforts to conserve energy, usually by conducting tests and compiling data.

Career clusters

Agriculture, Food, and Natural Resources; Architecture and Construction; Manufacturing

Interests

Data; things

Working conditions

Work inside; work both inside and outside

Minimum education level

Junior/technical/community college

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

RIE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Senior Technical Project Manager Senior Director Training Engineer Technology Sourcing Specialist Firmware Developing Engineer Information Technology Project Manager Development Software Engineer Environmental Engineer Environmental Engineering Technician Environmental Scientist Environmental Science Technician Environmental Consultant Information Technology Technician Mechanical Engineer Geographic Information System (GIS) Analyst Engineering Intern Postdoctoral Researcher Web Developer Webmaster Research Assistant

Production and Operations Environmental industrial production managers plan, direct, or coordinate the work activities and resources necessary to manufacture products of their companies in accordance with cost, quality, and quantity specifications. The operations management in an environmental organization is engaged in managing the processes that convert inputs of materials, labor, and energy into outputs of goods and services. General and operations managers plan and coordinate the operations of their organizations. Duties include formulating policies, managing daily operations, and planning the use of materials and human resources. They ensure that business operations are efficient in terms of using as few resources as needed and effectively meeting customer requirements. Production and operations workers integrate diverse technologies, expertise, and deployment capabilities to create practical, superior products and services for clients. Opera-

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Environmental Engineering and Consultation Services OCCUPATION

SPECIALTIES

Energy Conservation and Use Technicians Specialty

Responsibilities

Calibration laboratory technicians

Test, calibrate, and repair electrical, mechanical, electromechanical, and electronic measuring, recording, and indicating instruments and equipment to conform to set standards.

Electromechanical technicians

Build, test, analyze, and adjust precision electromechanical instruments.

Electronics mechanics

Test faulty equipment, diagnose problems, and maintain records of repairs, calibrations, and tests.

Test technicians

Conduct tests and record results using engineering principles and test technology.

tions directors steer their companies to undertake productive, exciting, and challenging projects. General and operations managers earned an average of $145,470 in 2009. Industrial production managers earned an average of $103,690. Production and operations occupations may include the following: ■ ■ ■ ■ ■

Industrial Production Manager Project Manager Training Manager General or Operations Manager Construction Operations Manager

Maintenance, Facilities, and Security Maintenance and building engineering staff are charged with repairing malfunctioning building systems such as air-conditioning, plumbing, electrical hardware, and similar devices. They may also play an important role in renovation planning and implementation. Building maintenance personnel are alternately called engineers, environmental services personnel, and facilities managers. Most personnel in this department have vocational education and training, if not advanced degrees in engineering or related fields. Security personnel oversee both physical security and the security of a firm’s intellectual prop-

erty. Building inspectors ensure that facilities are physically safe. Security officers are employed to ensure the security of employees and equipment, watch out for intruders or incidence of fires and other malfunctions and system failures, monitor surveillance cameras, conduct periodic inspections, and respond appropriately to emergency situations and important calls for assistance. Security personnel receive training in environmental and public safety through vocational schools, undergraduate education, or other security certification programs. Some companies require them to obtain certification in cardiopulmonary resuscitation (CPR) and other first-aid techniques. The average salary for a security guard in the industry was $31,740 in 2009. Maintenance, facilities, and security occupations may include the following: ■ ■

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Chief Maintenance Engineer Heating, Ventilation, and AirConditioning (HVAC) Specialist Plumber Electrician Security Officer Investigator Building Inspector Network Security Specialist

Environmental Engineering and Consultation Services Inspection Environmental engineering inspection can be broadly classified into home, commercial, or environmental inspections, depending on the facility or place being inspected. In all cases, environmental inspection experts take a critical look to ensure that a customer is fully aware of any health and safety dangers and knows how to find solutions to existing problems and ensure compliance with environmental regulations. They are often called in by persons about to purchase, rent, or use buildings, land, or other relevant facilities. The World Health Organization suggested in 2009 that up to 30 percent of new and remodeled buildings worldwide may be subject to excessive complaints related to indoor air quality (IAQ). When a consumer is buying any property, an environmental site assessment (ESA) expert will determine the potential for prior or current contamination of the site and determine whether soil sampling or other sampling is required to fully assess any potential contamination. A written analysis of the findings of interviews and recorded searches and field inspections will be provided in a way that allows informed decisions to be made by developers, lenders, and other interested parties. Examples of typical building health hazards that require prompt inspection for detection and removal are asbestos (for homes built before 1980), low-quality water, lead (for homes built before 1978), radon (a radioactive gas that comes from the natural decay of uranium in the soil, and is present in all homes to some extent), and molds (especially for mold-prone and hidden or inaccessible environments). Construction and building inspectors earned an average of $61,260 in 2009. Inspection occupations may include the following:

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Junior Inspector Materials Professional Engineering Technician Environmental Project Manager Environmental Engineering Inspector Environmental Science Technician Groundwater Technician Environmental Consultant Health and Safety Professional Remediation Cleanup Personnel Biologist

Radiographer Construction Materials Technician (CMT) Soil Technician/Tester Environmental Health and Safety Consultant Water Quality Analyst Environmental Scientist Air Quality Engineer/Scientist Marine Naturalist Environmental Geologist Attorney Natural Resources Engineer Wastewater Engineer Laboratory Technician

Human Resources The human resources department focuses on hiring environmental engineers who can design, plan, or perform engineering duties in the prevention, control, and remediation of environmental health hazards utilizing various engineering disciplines. They also hire environmental specialists for other projects such as waste treatment, site remediation, or pollution control technology. Human resources directors and managers are well trained in the field of human resources organization and management, through college-level education, special training, and work experience. To cut costs and save time, some small businesses outsource human resources functions including payroll, taxes, unemployment, insurance, benefits, health and productivity, and accounting. Industry human resources managers earned an average of $102,900 in 2009. Human resources occupations may include the following: ■

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Human Resources Director Human Resources Manager Compensation and Benefits Manager Human Resources Coordinator Administrative Assistant

INDUSTRY

OUTLOOK

Overview A 2009 IBS industry report stated that, as environmental legislation tightens, most businesses

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(and even households) are increasing their efforts to become green, backed by incentives and government funding. The greater public interest in the environment promotes significant growth opportunities for environmental businesses. According to PayScale, the most popular U.S. cities for environmental engineering jobs in 2009 were: Houston, New York, Atlanta, Dallas, Denver, Chicago, and Philadelphia. The largest U.S. employers of environmental engineers are URS Corporation, CH2M HILL, Camp Dresser and McKee, and Arcadia. Some 10 percent of employees had less than one year of work experience; 42 percent had one to four years of experience; 21 percent had five to nine years of experience; 17 percent had ten to nineteen years of experience; and 10 percent had twenty or more years of work experience. This report implies that the retention rate for employed environmental engineers has increased in the last ten years. The remediation market was flat in 2009, as federal projects and backlog held off the effects of the recession for a number of remediation contractors. Projects and practices are turning green, with growing consciousness regarding energy costs and sustainability in the market. In a world that is increasingly being modernized by technology and innovation, many systems and activities are becoming automated, drastically affecting environmental and other industries by reducing human labor. Jobs with the federal and state governments, and with organizations dependent on federal funds for support, will experience little growth over the next decade, unless budgets increase significantly. The federal government is expected increasingly to outsource environmental services to private consulting firms. This lack of funding will affect mostly scientists performing basic research. The continual creation of congested urban communities and artificial environments, the accompanying myriad disposables, and the solid, chemical, and gas pollution will expand the scope and operations of the environmental industry. Environmental scientists who speak foreign languages and who are willing to work abroad enjoy the best opportunities for foreign employment. Environmental engineering jobs are projected by the BLS to grow by 31 percent between 2008 and 2018, much faster than the average of 11 percent growth across all occupations. More environmental engi-

neers will be needed to help companies comply with environmental regulations and to develop methods of cleaning up environmental hazards. Energy and climate change have emerged as global risks and have significant future implications for business. Successful companies will minimize these risks through proactive strategies and innovative solutions of environmental consulting. Employment Advantages Environmental management and environmental consulting are broad fields that offer many advantages to employees seeking to diversify their skills. Additional sharpening of skills for employees is obtained through diligent, innovative, and special solutions to challenging environmental tasks, as well as on-site training or seminars in environmental issues in the workplace that could also enhance one’s domestic environmental preparedness. The diversity of the environmental industry in terms of the broad range of career paths offered continues to be a great benefit to those seeking professional advancement. The need to replace workers who retire will result in many job openings over the next decade. The increasing need for companies to comply with environmental laws and regulations is expected to contribute to the demand for environmental engineers and scientists. Issues of asbestos and other building and construction-related hazards, water conservation, groundwater contamination and flood control, deteriorating coastal environments, and rising sea levels will also promote hiring and stimulate employment growth of environmental engineers and consultants. As populations increase, development progresses, and people move to more environmentally sensitive locations, environmental engineers and consultants will be needed to assess building sites, new highways, factories, and farms for potential hazards and to address issues of pollution control and waste disposal. Annual Earnings According to the BLS, the U.S. environmental engineering and consulting industry includes about nine thousand companies, ranging in size from one-person businesses to global corporations. The industry is highly fragmented: The fifty largest

Environmental Engineering and Consultation Services firms account for less than 30 percent of industry revenue. Smith Travel Research estimates domestic revenues in the industry at $140.6 billion. Management Solutions International projects that U.S. real expenditures will increase to $398 billion in 2015 and to $442 billion in 2020.

RELATED RESOURCES FOR FURTHER RESEARCH Air and Waste Management Association 1 Gateway Center, 3d Floor 420 Fort Duquesne Blvd. Pittsburgh, PA 15222-1435 Tel: (800) 270-3444 Fax: (412) 232-3450 http://www.awma.org American Academy of Environmental Engineers 30 Holiday Ct., Suite 100 Annapolis, MD 21401 Tel: (410) 266-3311 Fax: (410) 266-7653 http://www.aaee.net Entec UK Northumbria House, Regent Centre Gosforth, Newcastle upon Tyne NE3 3PX United Kingdom Tel: 44-191-272-6100 Fax: 44-191-272-6592 http://www.entecuk.com Keystone Environmental 4400 Dominion St., Suite 320 Burnaby, BC V5G 4G3 Canada Tel: (604) 430-0671 Fax: (604) 430-0672 http://www.keystoneenviro.com Water Environment Federation 601 Wythe St. Alexandria, VA 22314-1994 Tel: (800) 666-0206 Fax: (703) 684-2492 http://www.wef.org

ABOUT

THE

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AUTHOR

Samuel V. Kisseadoo is a chartered biologist and professor of biology with more than thirtythree years of teaching and research experience in biology, ecology, plant sciences, and environmental science, in Africa, Europe, and the United States. He received a bachelor’s degree from Kwame Nkrumah University of Science and Technology, Kumasi, Ghana, in 1977 and a master’s degree from the same institution in 1982. In 1984, he received a second master’s degree from the International Institute for Hydraulic and Environmental Engineering, Delft, the Netherlands, and in 1985, he received a third from the University of Aberdeen, Scotland. The City University of New York awarded him a master of philosophy degree in 1992 and a Ph.D. in 1993. Kisseadoo is one of the directors of the Hampton Land Conservancy (the first conservation organization for the city of Hampton, Virginia). He has written ten articles for Salem Press publications since 2004. His memberships include the Chesapeake Bay Foundation, the Society of Biology (United Kingdom), the Smithsonian Institution, the Ecological Society of America, the National Geographic Society, the New York Botanical Garden, the Botanical Society of America, and the Virginia Natural History Society.

FURTHER

READING

Ausubel, J. H., and H. E. Sladovich. Technology and Environment. Washington, D.C.: National Academy of Engineering, 1989. Committee on Industrial Competitiveness and Environmental Protection. Fostering IndustryInitiated Environmental Protection Efforts. Washington, D.C.: National Academies Press, 1997. Davis, M., and S. Masten. Principles of Environmental Engineering and Science. 2d ed. New York: McGraw-Hill, 2008. Hoover’s. “Environmental Consulting.” http:// www.hoovers.com/environmental-consulting/ —ID__385—/free-ind-fr-profile-basic.xhtml. IBS Year-End Report, December, 2009. http:// www.cisionwire.com/ibs/ibs-year-end-reportjanuary—december-2009.

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Jackson, S. A., et al. Envisioning a Twenty-first Century Science and Engineering Workforce for the United States: Tasks for University, Industry, and Government. Washington, D.C.: National Academies Press, 2003. Masters, G. M., and W. P. Ela. Introduction to Environmental Engineering and Science. 3d ed. London: Prentice Hall, 2007. National Academy of Engineering. Frontiers of Engineering: Reports on Leading-Edge Engineering from the 2006 Symposium. Washington, D.C.: National Academies Press, 2007. PayScale.com. “Salary Survey for Industry: Environmental Consulting (United States).” April, 2010. http://www.payscale.com/ research/US/Industry=Environmental _Consulting/Salary. Plunkett, Jack W. Plunkett’s Consulting Industry. Houston, Tex.: Plunkett Research, 2010. Richards, D. J., ed. The Industrial Green Game: Implications for Environmental Design and Management. Washington, D.C.: National Academies Press, 1997. Richards, D. J., and G. Pearson, eds. The Ecology of Industry: Sectors and Linkages. Washington, D.C.: National Academies Press, 1998.

Sam, P. A. International Environmental Consulting Practice: How and Where to Take Advantage of Global Opportunities. New York: Wiley, 1998. Schulze, P. C. Measures of Environmental Performance and Ecosystem Condition. Washington, D.C.: National Academies Press, 1999. Smith, D. W., and D. S. Mavinic, eds. Journal of Environmental Engineering and Science 7, no. 6 (November, 2008). U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. _______. The 2009 Statistical Abstract. Geography and Environment. http://www .census.gov/compendia/statab/2009/cats/ geography_environment.html. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Farming Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Agriculture and Food Career Cluster: Agriculture, Food, and Natural Resources Subcategory Industries: Cotton Farming; Fruit and Tree Nut Farming; Greenhouse, Nursery, and Floriculture Production; Hay Farming; Oilseed and Grain Farming; Peanut Farming; Sugarcane and Sugar Beet Farming; Tobacco Farming; Vegetable and Melon Farming Related Industries: Beverage and Tobacco Industry; Biofuels Industry; Food Manufacturing and Wholesaling Industry; Food Retail Industry; Food Services; Livestock and Animal Products Industry; Logging Industry; Natural Resources Management; Restaurant Industry; Textile and Fabrics Industry Annual Domestic Revenues: $175 billion USD (Economic Research Service, 2002) Annual Global Revenues: $403 billion USD (Global Agricultural Trade and Developing Countries, 2005) NAICS Numbers: 111, 1151

INDUSTRY

Some of the major industrial crops include grain, oilseeds, tobacco, dry beans, potatoes, vegetables, melons, fruits, and nuts. In the United States, the five most significant crops are the five that are heavily subsidized by the federal government: corn, rice, soy, wheat, and cotton. The industry encompasses many additional areas of labor beyond simply working the fields, such as agricultural science, engineering, business, and economics.

History of the Industry The American farming industry dates back to European agricultural practices that were brought to the New World during colonial times. The southern colonies planted tobacco and cotton and used slave labor to grow them. This slave-based agriculture was central to the southern economy through the founding of the United States and lasted until the American Civil War brought an end to slavery in the 1860’s. The mid-to-late 1800’s saw the introduction of more scientific agricultural practices that increased

DEFINITION

Summary The farming industry plants, grows, harvests, transports, and markets crops to be used for food, animal feed, biofuel, textiles, and other purposes. 613

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They expanded the size of the market any given farm could reach by making longdistance shipping of produce affordable. This in turn made it possible for farmers to increase their profits by producing Value Added Amount more food than their local regions could Gross domestic product $132.1 billion purchase, providing a motive to increase Gross domestic product 0.9% productivity beyond the scope of local dePersons employed 732,000 mand. Total employee compensation $24.4 billion Even with long-distance shipping, however, in the later twentieth century, agriculSource: U.S. Bureau of Economic Analysis. Data are for tural productivity exceeded demand na2008. tionally, creating a surplus of agricultural commodities. The government sought to reduce this surplus, instituting policies designed simultaneously to increase demand and reduce supply. Surplus food, for example, was productivity and helped drive U.S. economic purchased by the government for use in school growth. The advancement of the farming industry lunch programs to feed impoverished children. was facilitated in 1887 by the establishment of state In the late twentieth and early twenty-first cenland-grant universities. These educational institutury, agriculture has become an increasingly global tions taught and studied agriculture and estabindustry. Exports continue to account for 20 to 30 lished a federally funded system of agricultural expercent of U.S. farm income, but American farm periment stations and networks in each state. In operators face new challenges, including the emeraddition, as the Industrial Revolution progressed, gence of new foreign competitors, trade tensions the farming industry was rapidly mechanized durover new technologies, and food safety issues. ing the late nineteenth and early twentieth centuIncreased use of machines and the introduction ries. Farmers employing such machines as tractors of government price supports during the past cenand combine harvesters could complete tasks at a tury allowed farm operators to increase the size of speed and on a scale previously considered impostheir farms and gain efficiencies. Such advances in sible. Mechanized agricultural production thus reproductivity through mechanization, plant develplaced manual labor wherever possible. opments, and new chemical fertilizers and pestiIn the early 1930’s, the farming industry was cides led to fewer, larger, more specialized farms struggling in the face of economic and environand a massive migration out of the farming industry. mental hardships. The Dust Bowl ruined many farms, driving farmers off their land, during a time when the Great Depression had already caused a wave of farm foreclosures. In response, the U.S. Inputs Consumed by the Congress passed the Agricultural Adjustment Act of 1933, instituting an emergency program to aid Farming Industry farmers by protecting their equity and increasing the prices paid for farm products. Programs were Input Value also instituted to teach farm operators techniques Energy $30.6 billion to help protect soil resources. Materials $134.8 billion Renewed demand for the industry was generPurchased services $37.8 billion ated by World War II, and farm prices improved. By Total $203.2 billion the mid-1940’s, U.S. agriculture entered a sustained period of productivity gains. The developSource: U.S. Bureau of Economic Analysis. Data ment of railroad and highway networks and the are for 2008. increasing use of container shipping also were essential to the growth of mechanized agriculture.

The Farming Industry’s Contribution to the U.S. Economy

Farming Industry Also in recent decades, the farming industry has seen consumers becoming increasingly concerned about food safety, nutrition, quality, variety, and prices. Environmental interests have established relationships to help bring environmentally friendly production methods to agriculture. Government expenditures on food and nutrition programs and natural resource conservation have increased and become more integrated within the industry. The Industry Today The farming industry today is driven by demand from federal agricultural policy programs, food consumption trends, and the crop export market. The profitability of individual farm operators or companies depends on their ability to maximize crop yield, minimize input costs, and minimize risk. Larger farms and companies have the advantage of highly automated technologies and have access to the latest in seed and crop technologies.

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However, more data indicate that small operations can compete effectively by producing specialty products. U.S. farms that produce and market crops are becoming larger and more concentrated. There has been an increase in the number of farm operators contracting with large business operations called agribusinesses. These businesses purchase crops from many farms to achieve vast economies of scale. They allow contractors to reduce their risk levels, because the contractors are guaranteed a buyer and a set price for their crops. Other operators sell their products themselves, either to local distributors and suppliers or on commodities exchanges, where prices often are determined by worldwide supply and demand. The farming industry increasingly encompasses and partners with highly technological businesses that are integral in the production and sales of farm products. These include companies developing farm machinery, fertilizer, pesticides, and her-

Farmers plow a field. Modern tractor cabs allow farmers to work in air-conditioned comfort and insulate them from the noise of the engine. (©Tommy Schultz/Dreamstime.com)

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Farming Industry

Sensors on this equipment monitor yields, providing operators with even more information to determine where extra nutrients may be needed or which crops are ready for harvest. Bioengineers modify the genetic code of plants to provide them with desirable characteristics or remove undesirable characteristics. Some crops are engineered to resist certain pests, tolerate drought, or contain additional nutrients. A growing number of farm operations, however, avoid the use of synthetic pesticides and herbicides and bioengineered crops altogether. These organic farms take advantage of the higher prices they can charge for certified organic grains, fruits, and vegetables. Since 1990, sales of organic products have grown 20 percent per year, and they are expected to continue climbing. The organic market has allowed some small farms to remain profitable. Organic farmers often need to know more than conventional farmers about the science of agriculture: They must know how plants grow and what helps them thrive. Most organic operators (and some conventional operators) adopt techniques that raise soil quality to naturally resist diseases, weeds, and insects. They might increase soil quality by planting high-nutrient crops in the off-season, for example, or by using conservation tillage practices, such as leaving remains of a crop to decompose in the soil after harvesting. Advances in the farm industry have created many other disciplines related to agriculture. Agricultural scientists for example, advise farm operators regarding the optimal techniques to control weeds, apply pesticides, conserve water, or prevent soil erosion. Agricultural sales involves selling farm-related products, which requires knowledge of agriculture. There are many avenues one can take if one is interested in the farm industry in the twenty-first century. Opportunities exist, from owning or managing a large, capital-intensive farm to providing the technology to This field of corn may be bioengineered corn rather than the “traditional” hybrid discover a specialty product that corn, and the kernels may be destined for an ethanol-producing plant. is in high demand. Whatever sec(©Dreamstime.com) tor of the twenty-first century bicides. Some farmers, however, engage in pest management without the use of pesticides. For example, they may use natural predators, such as insects that eat other insects rather than crops, or introduce bacteria that only harm insects or substances that interfere with pests’ reproductive cycles. Such techniques are often referred to as “organic” and are seen as aspects of the larger umbrella practice of organic farming. In addition to organic farming, the industry employs a host of new and renewed methods of raising crops, including precision farming and bioengineering. Precision farming utilizes technology and data to make efficient decisions about raising crops. For example, precision farmers make detailed maps of their land and use electronic devices to monitor and manage crop conditions. Monitoring devices measure the amounts of water, weeds, and nutrients in the soil and overlay those data on maps created from satellite and aerial photographs. The Global Positioning System (GPS) is used to pinpoint the exact locations of land and nutrients. This information is used to determine where additional fertilizer, herbicides, and water may be required. By reducing unnecessary applications of chemicals, operators reduce their production costs. GPS technology also helps operators navigate equipment accurately through their fields.

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A traditional family farm, with a red barn and silos. About 91 percent of American farms are small farms, but they account for only 23 percent of U.S. agricultural production. (©Pat Bogusz/Dreamstime.com)

farming industry one embarks upon, one will need to possess a strong business aptitude and the ability to make money in an industry that is expensive to enter and that involves substantial risk.

INDUSTRY MARKET SEGMENTS Contemporary farming operations are complex businesses that vary in size. Although this variance in acreage exists, the trend of small farms being combined into bigger farms continues. Some farm operations may comprise a few acres with a single owner-operator. Such farmers almost always need subsidiary income sources, and inded the average farmer earns only 10 percent of his or her annual income from farming. Large farms of several thousand acres may support twenty-five to one hundred workers. Small Farms Small farms generally have gross revenues of between $10,000 and $250,000 per year (although there are some reports that categorize small farms as those with less than $2,500 in annual earnings).

About 91 percent of American farms are small farms, but they account for only 23 percent of U.S. agricultural production. Many small farms are being combined into larger operations. Often, smallfarm operators train for other occupations in conjunction with the small farming business, and small commercial farms tend to grow commodities that do not necessarily require a full-time commitment of labor, so their operators will have an opportunity to find other sources of income. Potential Annual Earnings Scale. The average earnings for a small farming operation vary depending on the region where the farm is located, type of crops produced, weather patterns, and marketing trends. As is true of larger operations, a small farm may realize a profit one year and lose money the next. According to the U.S. Bureau of Labor Statistics (BLS), crop workers earned an average of $9.23 per hour, or $19,200 per year. Agricultural equipment operators earned $11.36 per hour, or $23,620 per year. Farmers and ranchers earned an average of $52,050 per year. Generally speaking, farmworkers and owners on small farms earn less than these averages. Clientele Interaction. Almost all small farmers have some degree of direct interaction with their

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clients. Those who are contractors of large agribusiness concerns receive instructions and coordinate details of delivery with corporate representatives. Those who sell on commodity exchanges are usually involved in at least some aspects of the sales, and they may handle details with purchasers. In addition, many small farmers sell at farmers markets, where they spend hours each week interacting with individual consumers who attend markets not only to obtain quality produce but also to cultivate relationships with the people who grow their food. Amenities, Atmosphere, and Physical Grounds. Working conditions for agricultural laborers and other farm employees vary. Much direct farm labor is physically strenuous and takes place outdoors in all kinds of weather. Harvesting fruits and vegetables, for example, may require much bending, stooping, and lifting. Farmers may enjoy the variety of the work, the rural setting, and the satisfaction of working the land. In the case of smaller farms, the amount of labor and time spent in these types of conditions is usually less than in larger operations. Other farm employees, such as soil agronomists or machinery engineers, may work more regular hours. Work on a farm does not lend itself to a regular forty-hour workweek. Work cannot be delayed when crops must be planted or harvested. Long hours and weekend work are common. For example, farmers and agricultural equipment operators may work six or seven days a week during planting and harvesting seasons. Typical Number of Employees. It is not uncommon for all the labor on a small farm to be provided by members of the family associated with the operation. This labor pool can be anywhere from a single person to six or more people, including a spouse and children or even extended family. Some small farms do employ hired hands, however. In many areas, small farms employ custom services, which allows them to avoid the capital costs of buying specialized machinery. Traditional Geographic Locations. While most farms are located in rural areas, urban farms also exist, so small farms may be located almost anywhere, from the countryside to plots of land adjacent to major metropolitan freeway systems to rooftops. The top five states for agricultural production are California, Texas, Iowa, Nebraska, and Kansas. Each state and region of the United States varies in crop type and variety, which are affected by the

length of the growing season and the climate. The Midwest typically produces small grains, such as wheat, oats, and barley. California is a major producer of vegetables and melons, but the industry is very concentrated, as the top 10 percent of farms generate almost 90 percent of industry revenue. Of all U.S. farms, 15 percent produce grain or oilseed, accounting for two-thirds of all cropland revenue and 40 percent of all farm earnings. Because statistics of production are concentrated for fruits and melons and more fragmented for other crops, nearly every state has some form of small farm operations. However, the overall trend in all areas is toward consolidation of the industry in large farms. Pros of Working on a Small Farm. On many small farms, family members work alongside one another, enjoying familial cohesiveness—especially when younger ages are involved. Farmers work outdoors and make a (partial) living off the land. Also, most farm operators work for themselves and value the independence of being self-employed. Most farmers got into farming because their parents and grandparents farmed, and they simply entered the family business. Many farm employees value the same things that farm owners do: the rural lifestyle, independence, and working outdoors. Cons of Working on a Small Farm. Maintaining a small farm often requires long hours, as well as weekend work. Because there is relatively little income from the business, small farms often lack the resources to outsource labor needs, so farmers and their families and friends must do everything that needs to be done. Work cannot be delayed when crops must be planted or harvested, so farm operators must do what it takes to complete these tasks. For example, farmers, agricultural equipment operators, and farm mechanics may work six or seven days a week during planting and harvesting seasons. The purchase of farm inputs, such as machinery, requires an increasing amount of capital and has resulted in fewer individuals being willing or able to take on the debt necessary to farm. Large cash outlays for farm equipment, increased specialization, and operators needing to produce larger quantities of a limited number of products have become far too stressful for many. Farmers also risk exposure to pesticides and other hazardous chemicals sprayed on crops or plants. However, exposure can be minimal if safety procedures are followed.

Farming Industry Costs Payroll and Benefits: Most small-farm operators work for themselves with little or no staff overhead. Small-farm households depend heavily on off-farm income, so the nonfarm economy and job availability is important to them. Because of their off-farm income, median household income for small-farm households is comparable with the median income for all U.S. households. Farm households, regardless of the size of their farms, usually tend to have a high net worth, with their farms accounting for most of that value. It is not surprising that 94 percent of farm households in 2007 had a net worth equal to or greater than the median for all U.S. households. Supplies: Farms require seed, fertilizer, herbicides, specialized equipment, maintenance tools, and fuel. External Services: Small farmers may employ occasional contract laborers, but they tend to handle all general labor themselves. Contracted vendors may perform custom tasks, such as fertilizer and herbicide application, as well as custom harvesting. Farmers may also require the services of accountants or tax preparation experts. Utilities: Farms must pay utility costs for homes and offices located on the property, as well as additional farm buildings and shops. These include electricity, gas, water, sewage, telephone, and Internet access. Taxes: Farmers must pay income taxes, which vary year to year based on fluctuations in income and the depreciation of equipment, buildings, and other items used in the operation. They must also pay property taxes and possibly self-employment taxes. Rent: Land that is rented from another party varies in cost depending on the region, and rent is often paid yearly or in two payments during the year, once before planting and once at the end of harvest. Some farmers receive loans from private financial institutions in order to pay rent during the planting season and repay the loans each year after harvest. Loans also are available from federal organizations; the U.S. Department of Agriculture’s (USDA’s) Farm Service Agency, for example, specifically earmarks funds for beginning farmers. Some farmers prefer not to own the land they farm. Instead, they lease

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land from absentee or older farm owners. Land leasing fees vary from region to region but can be anywhere from $30 per acre to several thousands per acre, depending on the soil value and the value of the specific crops grown in the region. Midsize Farms Midsize farms have traditionally been referred to as the heart of American agriculture. These farms, which tend to be independent family farms, generally have revenues of between $100,000 and $500,000. They make up the largest share of working farms, yet they are the most vulnerable economically. According to the USDA, the number of midsize farms decreased by approximately 20 percent between the early 1980’s and 2001. Potential Annual Earnings Scale. According to the BLS, crop workers earned an average of $9.23 per hour, or $19,200 per year. Agricultural equipment operators earned $11.36 per hour, or $23,620 per year. Farmers and ranchers earned an average of $52,050 per year; agricultural managers earned an average of $63,140; and farm labor contractors earned an average of $36,260. Clientele Interaction. Farmers or farm managers must maintain good relations with purchasing agents, distributors, and other clients to ensure their continued business. Workers for midsize farms may sell some of the farms’ produce at farmers markets or roadside stands, where they will have the opportunity to interact directly with consumers. Amenities, Atmosphere, and Physical Grounds. Working conditions for agricultural workers on a midsize operation and other professions within the same scale of the farming industry vary. Much farm labor is physically strenuous—involving bending, stooping, and lifting—and takes place outdoors in all kinds of weather. In the case of midsize farms, the amount of labor and time spent in these conditions is usually greater than is the case for smaller operations—and sometimes even than is the case for the larger operations: Midsize farms compete with their larger competitors by keeping overhead costs to a minimum, so they may employ fewer workers and require more work of each. Operating machinery on a midsize farm can require long hours of tedious work. However, those who work directly with the soil may en-

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Farming is capital intensive. A used 2010 John Deere 9770 series combine harvester was for sale on eBay for $280,000. (©Stephen Mcsweeny/Dreamstime.com)

joy the variety of the work, the rural setting, and the satisfaction of working the land. Conditions for other farm industry workers, such as soil agronomists and agriculture machinery engineers, often involve more structured atmospheres and work schedules. Work on a farm does not lend itself to a regular forty-hour workweek. Work cannot be delayed on the farm when crops must be planted or harvested. During these busier times of the year, many sectors in the farm industry experience long hours and weekend work. For example, farmers, agricultural equipment operators and mechanics, and farm insurance agents may work six or seven days a week during planting and harvesting seasons. Typical Number of Employees. Even on some midsize farms, it is not uncommon for all necessary labor to be provided by family members associated with the operation. Most midsize-farm operators enter the business because their parents and grandparents operated midsize farms, and they simply wish to continue the family business. Most enjoy the rural lifestyle, the independence, and working outdoors and would not trade their job for

any other. However, even in midsize farm operations, many of today’s farmers work part time and train for or labor in other occupations. Many midsize farms use hired labor at times, even if they only pay a neighbor for a day or two when a family member is away or someone is sick. Midsize-farm operators are more likely to use custom services than are smaller farms, as this approach avoids the capital costs of buying specialized machinery. Labor needs are also very different among farms, depending on the type of crops being grown. Traditional Geographic Locations. Midsize farms are found in practically all agricultural states, especially the top five: California, Texas, Iowa, Nebraska, and Kansas. The crops they produce vary by growing season and climate. The Midwest typically produces small grains, such as wheat, oats, and barley. California is a major producer of vegetables and melons, but the industry is very concentrated, as the top 10 percent of farms generate almost 90 percent of industry revenue. Of all U.S. farms, 15 percent produce grain or oilseed, accounting for two-thirds of all cropland revenue and 40 percent of all farm earnings. Because statistics of produc-

Farming Industry tion are concentrated for fruits and melons and more fragmented for other crops, nearly every state has some form of midsize farm operations. However, the overall trend in all areas is toward consolidation of the industry in large farms. Pros of Working on a Midsize Farm. Many midsize-farm operators have family ties to the industry and to their own farms. They have the opportunity to work alongside family members, encouraging family cohesiveness—especially when younger ages are involved. They like working outdoors and making a living from the land. Also, most farmers work for themselves and value the independence of being self-employed. Cons of Working on a Midsize Farm. Farming often requires working long hours, including weekends. Midsize farms attempt to limit labor outsourcing, so farmers and their families and friends must do everything that needs to be done. Work cannot be delayed when crops must be planted or harvested, so farm operators must do what it takes to complete these tasks. The purchase of farm inputs, such as machinery, requires an increasing amount of capital, and fewer individuals are willing or able to take on the debt necessary to farm. The extent of the cash outlays required for farm equipment increase with size and specialization of a farm, and operators find themselves needing to produce larger quantities of a limited number of products to realize a profit. As the size of the operation increases, so does the size of the machinery and the risk of injury. Exposure to pesticides and other hazardous chemicals sprayed on crops or plants places individuals at risk as well, and agriculture ranks among the most hazardous industries. Farmers are at high risk for fatal and nonfatal injuries, work-related lung diseases, noise-induced hearing loss, skin diseases, and certain cancers associated with chemical use and prolonged sun exposure. Farming is one of the few industries in which the family (who often share the work and live on the premises) is also at risk for injuries, illness, and death. Costs Payroll and Benefits: Most midsize-farm operators work for themselves with little or no staff overhead. Midsize-farm households often depend heavily on off-farm income, so the nonfarm economy is important to their bottom line.

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Because of their off-farm income, median household income for midsize-farm households is comparable with the median income for all U.S. households. Farm households, regardless of the size of their farms, tend to have a high net worth, with their farms accounting for most of that value. Some 94 percent of farm households in 2007 had a net worth equal to or greater than the median for all U.S. households. Supplies: Crop production supplies include seed, fertilizer, herbicides, equipment, maintenance tools, and fuel. External Services: Farms may contract custom fertilizer applications, herbicide spraying, and custom harvesting, as well as accounting or tax preparation services. Utilities: Farms must pay utility costs for homes and offices located on the property, as well as additional farm buildings and shops. These include electricity, gas, water, sewage, telephone, and Internet access. Taxes: Farmers must pay income taxes, which vary year to year based on fluctuations in income and the depreciation of equipment, buildings, and other items used in the operation. They must also pay property taxes and possibly self-employment taxes. Rent: Land that is rented from another party varies in cost depending on the region, and rent is often paid yearly or in two payments during the year, once before planting and once at the end of harvest. Some farmers receive loans from private financial institutions in order to pay rent during the planting season and repay the loans each year after harvest. Loans also are available from federal organizations; the USDA’s Farm Service Agency, for example, specifically earmarks funds for beginning farmers. Some farmers prefer not to own the land they farm. Instead, they lease land from absentee or older farm owners. Land leasing fees vary from region to region but can be anywhere from $30 per acre to several thousands per acre, depending on the soil value and the value of the specific crops grown in the region. Large Farms Large farms generally have annual sales of more than $500,000, although, when using the gross cash farm income (GCFI) method of calculation,

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Farming Industry

annual sales of greater than $250,000 place a farm in the large category. Some large farms still employ very few workers, while others may have one hundred employees or more. Potential Annual Earnings Scale. According to the BLS, crop workers earned an average of $9.23 per hour, or $19,200 per year. Agricultural equipment operators earned $11.36 per hour, or $23,620 per year. Farmers and ranchers earned an average of $52,050 per year; agricultural managers earned an average of $63,140; and farm labor contractors earned an average of $36,260. Chief executives of agricultural companies earned an average of $161,700, while general and operations managers earned $94,130. Clientele Interaction. The technical knowledge that a modern large-farm manager must possess is frequently considered far greater than that required of most businessmen with equal investment. The capital required to operate such a farm is beyond the reach of many owners. Operators and employees of large farms and related businesses need good communication and business skills. They are more likely to require some outsourcing of services and may interact with farm credit agencies, bankers, and accountants for their operation needs. As with any size operation, being able to manage people and resolve conflict is also important. Amenities, Atmosphere, and Physical Grounds. Within a large farming business, the division of labor increases. Conditions for agricultural workers on a large operation vary. The operator-manager may spend more time managing and less time performing physical labor. The nature of the physical labor on the farm, though, remains largely the same as on smaller farms. It is physically strenuous and takes place outdoors in all kinds of weather. There is often much bending, stooping, and lifting. Moreover, more labor is required on large farms than on smaller farms. In addition, operating machinery on a large farm can mean long hours of tedious work, but those who work directly with the soil may still enjoy the variety of the work, the rural setting, and the satisfaction of working the land. Conditions for other farm industry workers, such as soil agronomists and agriculture machinery engineers, often involve more structured atmospheres and work schedules. Work on a large farm

does not lend itself to a regular forty-hour workweek. On large farms, there are many acres to cover, and work cannot be delayed when crops must be planted or harvested. During these busier times of the year, many sectors in the farm industry may need to work longer hours and weekends. For example, farm employees, agricultural equipment operators, and farm insurance agents may work six or seven days a week during planting and harvesting seasons. Large farms are still predominantly family operations. Nonfamily farms include those organized as nonfamily corporations. Typical Number of Employees. The trend of substituting capital for labor is becoming more common among large farms, where large machines do the work of several people using smaller implements. Large farms are more likely than smaller farms to use custom services in order to ensure that work is completed in a timely manner, as many more acres are farmed within the growing season. Large American farms vary from a couple of individuals to over one hundred employees. Because of the amount of capital investment, management, and decision making required, operators are much less likely to work elsewhere part time. Large family farms are often organized as family corporations, and these account for a growing share of farm sales. Traditional Geographic Locations. The top five states for agricultural production are California, Texas, Iowa, Nebraska, and Kansas. Nearly every state has some form of large farming operation. However, California is a major producer of vegetables and melons, and the top 10 percent of its farms reportedly generate almost 90 percent of industry revenue. Thus, the state houses a large concentration of large farm operations. Of all U.S. farms, 15 percent produce grain or oilseed, accounting for two-thirds of all cropland revenue and 40 percent of all farm earnings. Because production statistics are concentrated for fruits and melons and more fragmented for other crops, nearly every state has some large farm, but some states and particular crops involve a greater number of large farms than others. The overall trend in all areas of farming is toward consolidation of the industry in large farms. Pros of Working on a Large Farm. Research has shown that large farms produce goods more efficiently than small farms. Large farms can reduce

Farming Industry costs by taking advantage of volume discounts on their purchases. They can negotiate prices on fertilizer, seed, crop chemicals, petroleum products, machinery, and repair services. Large-farm operators also have an advantage in selling their products. Managers of large corn farms, for example, can contract directly with large processors for an entire year’s production of a given quantity and quality for a specific date in the future, thus commanding a higher price. The middleman is eliminated, and production, handling, and processing can be prescheduled for greater efficiency. Large farms require a smaller investment in machinery and buildings per crop acre. Cons of Working on a Large Farm. Farming often requires long hours, including weekend work. Work cannot be delayed when crops must be planted or harvested. For example, farm employees and agricultural equipment operators may work six or seven days a week during planting and harvesting seasons. The purchase of farm inputs, such as machinery, requires an increasing amount of capital, and fewer individuals are willing or able to take on the debt necessary to farm. Large cash outlays for farm equipment increase with size and specialization. Operators need to produce larger quantities of a limited number of products. As the size of the operation increases, the size of the machinery does as well, as does the risk of injury. Exposure to pesticides and other hazardous chemicals sprayed on crops or plants place individuals at risk, and agriculture ranks among the most hazardous industries. Farmers are at high risk for fatal and nonfatal injuries, work-related lung diseases, noise-induced hearing loss, skin diseases, and certain cancers associated with chemical use and prolonged sun exposure. Farming is one of the few industries in which workers’ families (who often share the work and live on the premises) are also at risk for injuries, illness, and death. While large-scale industrial farming is the most efficient in terms of yield per dollar spent, taking advantage of this efficiency requires farmers to develop monocultures: That is, they must plant large quantities of the same crop, reducing biodiversity and reducing yield per acre. Nonindustrial, more personal farming is more efficient in terms of yield per acre because farmers can plant complementary crops on the same plot of land, yielding more food than any single type of crop planting can.

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Costs Payroll and Benefits: Sales attributed to large farms increased steadily from 51 percent in 1982 to 72 percent in 1997. According to the USDA’s Economic Research Service, the largest share of this increase occurred in the classes of farms with sales between $1 million and $5 million. Most large-farm operators work for themselves with some staff overhead. On large farms, farmworkers can earn $50,000 to $60,000 per year. Benefits paid to these employees varies among farms. Farming households, regardless of the size of their farms, tend to have high net worths, with their farms accounting for most of that value. Some 94 percent of farm households in 2007 had a net worth equal to or greater than the median for all U.S. households. Supplies: Crop production supplies include seed, fertilizer, herbicides, equipment, maintenance tools, and fuel. External Services: Farms may contract custom services such as fertilizer application, herbicide spraying, and custom harvesting. Large farms may also contract advertising, legal, or accounting services as necessary. Utilities: Farms must pay utility costs for homes and offices located on the property, as well as additional farm buildings and shops. These include electricity, gas, water, sewage, telephone, and Internet access. Taxes: Farmers must pay income taxes, which vary year to year based on fluctuations in income and the depreciation of equipment, buildings, and other items used in the operation. They must also pay property taxes and possibly self-employment taxes. Rent: Land that is rented from another party varies in cost depending on the region, and rent is often paid yearly or in two payments during the year, once before planting and once at the end of harvest. Some farmers receive loans from private financial institutions in order to pay rent during the planting season and repay the loans each year after harvest. Loans also are available from federal organizations; the USDA’s Farm Service Agency, for example, specifically earmarks funds for beginning farmers. Some farmers prefer not to own the land they farm. Instead, they lease land from absentee or older farm owners. Land leasing fees vary from region

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to region but can be anywhere from $30 per acre to several thousands per acre, depending on the soil value and the value of the specific crops grown in the region.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and distribution of tasks on an individual farm is typically based on the size and geographic location of the operation. However, each particular farm within the industry is dependent upon various organizations and associated businesses for its success and viability. Job roles are largely the same on all farms, but on small farms all roles may be performed by only a handful of people, whereas larger farms may distribute tasks among more than one hundred people. The following umbrella categories apply to the organizational structure of businesses in the farming industry:

ever, business managers on larger farms may oversee only nonlaborious facets of the business, such as selling crops, helping determine which crops to plant, developing planting and harvesting schedules, and deciding when temporary workers will be needed. Agricultural economy is another sector within farm management. Utilizing modern analytical management skills and tools, agricultural economists conduct financial analysis, develop marketing plans, and set up optimal production schedules in food and fiber firms. Careers in this form of business management often have their origins in management or production operations or sales representative positions. These employees are then progressively assigned increased responsibilities for decision making. Business management occupations may include the following: ■ ■ ■ ■

■ ■ ■ ■

Business Management Farm Labor Sales and Marketing Technology, Research, Design, and Development

Business Management In most farm operations, the owner-operator or partners (often a spouse, children, and sometimes employees) carry out the responsibilities of business management. Regardless of farm size, business management requires knowledge and experience to identify problems and recognize opportunities. For example, being able to recognize which alternative crop variety is best suited for a particular growing season is a constant endeavor in today’s market. Business management also includes the development of short- and long-term planning through identifying goals, assessing needs, and developing strategic plans for farm operation. In some cases, especially with large operations, operators may hire or consult with outside managers who are knowledgeable in the industry. In such cases, operations are coordinated by farm management firms. Such managers may supervise small farms and even perform some of the manual labor. How-

■ ■ ■

■

Farmer/Farm Owner Farm/Operations Manager Consulting Manager Agricultural Economist Accountant Crop Insurance Agent Farm Credit and Banking Service Specialist Purchasing Manager

Farm Labor The majority of the work in the farming industry is performed in the fields. Farmers and workers plow fields, test and prepare soil, plant crops, tend crops (addressing irrigation and nutrient needs and combating pests and diseases), harvest crops and deliver them to market, and perform land management tasks (such as overseeing fallow fields, ensuring crop rotation, guarding against erosion, and so on) as necessary. They often must fit these tasks in with the other nonfarm labor necessary to support themselves, as farm income alone is commonly not enough for a farming family to live on. In addition, many farmworkers are migrants, traveling from region to region to follow the planting and harvesting seasons, or coming to an agricultural area only during seasons when work is available. These workers often endure extreme conditions for low pay, and they make modern farming possible.

Farming Industry Farm labor occupations may include the following: ■ ■ ■ ■ ■

Farmer Farmhand Farm Labor Contractor Migrant Farmworker Agricultural Equipment Operator

Sales and Marketing In most farm operations, the owner-operator or partners carry out the responsibilities of sales and marketing. Most food moves from farms to consumers through an efficient system that utilizes size and specialization of product. For example,

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grain-handling terminals, called grain elevators, are located along major railways and have continued to increase in size to help keep distribution costs to a minimum. Some of these massive concrete structures in the Midwest can fill hundreds of large railroad cars with grain. Most operators of mid-to-large operations devote their time to what they know best—planting, growing, and harvesting food—leaving the processing and marketing to agribusinesses. A large wheat operation in the Dakotas or Kansas may contract tens of thousands of bushels of wheat at a specific price per bushel at a local grain elevator terminal. Selling directly to consumers and specialty markets is growing in popularity with small and midsize

SPECIALTIES

Farmers/Farm Managers Specialty

Responsibilities

Farm general managers

Operate farms for corporations, cooperatives, or other owners.

Fish farmers

Spawn and raise fish for commercial purposes.

Fur farmers

Feed and raise mink, fox, chinchilla, rabbits, and other furbearing animals for sale on the fur market.

Horse trainers

Train horses for riding or harness.

Livestock ranchers

Breed and raise livestock such as beef cattle, dairy cattle, goats, horses, sheep, and swine to sell meat, dairy products, wool, and hair.

Nursery managers

Supervise plant nurseries, which produce plants for sale to wholesale or retail customers.

Organic farmers/farm managers

Grow crops, control pests, and maintain soil health without the use, or with only limited use, of synthetic fertilizers and pesticides.

Poultry farmers

Raise chickens, turkeys, or other fowl for meat or egg production.

Shellfish growers

Cultivate and harvest beds of shellfish, such as clams and oysters.

Tree-fruit-and-nut crop farmers

Plant and cultivate fruit-producing trees.

Vegetable farmers

Plan and plant vegetables according to weather, type of soil, and the size and location of their farms.

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operations. Farmers markets are an example of this type of marketing and are a growing resource for farms and food processors. Farmers markets provide large customer bases for farm products, as well as opportunities for farmers to develop their marketing skills and learn about customer preferences. They also allow farmers to network for other types of direct marketing, which, in turn, can increase profits. Farmers may also increase their profits and distribution opportunities by selling directly to institutional cafeterias, such as those at schools, senior centers, hospitals, and correctional facilities. Food processing engineers are important contacts for farm sales and marketing staffs, as they research and develop products and processes using ingredients purchased from farms. They also devise processing, handling, and packaging equipment for farm industry sales and marketing. When assuming the role of project engineers, they supervise the design, construction, installation, and start-up of processes. As plant engineers, they keep factories running efficiently and well maintained. Some manage other workers, and others who work in technical sales and service often provide consultation. Sales and marketing occupations may include the following:

■ ■ ■ ■ ■ ■ ■

Farm Stand Cashier Farmers Market Worker Crop Storage Manager Seed Salesperson Crop Transporter Commodity Broker Export Sales Manager

Technology, Research, Design, and Development Technological advances in plant breeding have resulted in a greater ability for farmers to choose crops with desirable traits, such as disease resistance and drought tolerance. Such traits can have enormous effects on the viability of crops and can ultimately increase yields. Investing in technology and research begins at the operator level and advances to services provided by large agricultural science research firms. New members of a farm operation should be prepared with college or vocational school degrees. Farm operators should be in the practice of reading farm publications and reports about new technology. On a yearly basis, and at every state and county level, a variety of workshops, field days, and conferences are held to update producers on the latest in plant technology and other issues in agricultural science. Agronomists often interact with farm operators to meet their field-crop and soil-management ■ Farmer needs. Through a good understanding of the in■ Sales Manager dustry’s technology and research, agronomists study and help develop new varieties of crops, analyze soil structure, investigate soil chemistry, and study the interaction between water and soil. Agronomists are concerned about not only the economics of the farming industry but also the preservation of the environment. Agronomists can be involved with teaching at various levels, interacting with state departments of agriculture, and providing research throughout the country and the world. Technology, research, design, and development occupations may include the folThese storage grain bins await the soybeans ripening in the field. (©Linda lowing: Johnsonbaugh/Dreamstime.com)

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SPECIALTIES

Agricultural Scientists Specialty

Responsibilities

Agronomists

Study how field crops such as corn, wheat, and cotton grow. They improve their quality and yield by developing new growth methods and by controlling diseases, pests, and weeds.

Animal and plant breeders

Breed animals and plants to develop and improve their potential.

Animal scientists

Conduct research on the selection, breeding, feeding, management, and health of domestic farm animals.

Dairy and poultry scientists

Conduct research on the selection, breeding, feeding, and management of dairy cattle and poultry.

Entomologists

Study insects and their relationship to plant and animal life.

Food technologists

Study the chemical, physical, and biological nature of food to learn how to safely process, preserve, package, distribute, and store it.

Horticulturists

Work with fruit, vegetable, greenhouse, and nursery crops and ornamental plants. They seek improved quality, yield, and methods to resist crop diseases.

■ ■ ■ ■ ■ ■

Agricultural Scientist Agriculture Mechanical Engineer Biochemist Entomologist Geneticist Soil and Plant Scientist

INDUSTRY

OUTLOOK

Overview The outlook for the farming industry shows it to be somewhat stable. This outlook stands in contrast to many years of decline in small farms and in farmrelated employment. Despite the expectation that the number of self-employed farmers is expected to decline by 8 percent by 2018, agricultural manager jobs are projected to grow by about 6 percent—still slower than the average growth rate of all industries combined. Managers will be needed as owners of large tracts of land, who often do not live on their property, increasingly seek the expertise of agricultural managers to run their farms for them.

Market pressures on small and midsize family farms will continue to drive consolidation in the farm industry. The more prosperous farms are likely to grow in size in order to achieve greater economic returns on their investments. Larger farms may also continue to receive a greater portion of farm subsidies to help offset losses beyond the operators’ control, such as drought, disease, and depressed markets. Despite this ongoing shift to larger farms, most farms continue to be organized as sole proprietorships, partnerships, or family corporations. Any direct ownership of large farms by publicly held corporations is likely to remain small. Through advances in technology, productivity will continue to improve and also result in less farm labor being required to produce crops. Low prices for many agricultural goods have not kept up with the increasing costs of farming. If these conditions continue, it will be difficult for many small farmers to survive. The difficulty of making a living exclusively from farming may continue to require farmers to seek other means of employment in addition to their farms. There are factors on the horizon that are influ-

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Farming Industry PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Agriculture Employment 2008

Projected 2018

Occupation

2,300

2,600

Agricultural and food scientists

2,000

2,000

Agricultural inspectors

699,800

673,400

17,100

18,300

8,300

8,300

246,500

260,700

Agricultural workers Animal care and service workers Graders and sorters, agricultural products Farm, ranch, and other agricultural managers

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

encing the changes taking place in agriculture. More domestic consumers are purchasing agricultural products from farmers markets, community supported agriculture (CSA), and other local food distribution systems. Consumers are becoming increasingly health conscious, and the demand continues for organic produce. Such produce is grown mostly on small to midsize farms that can use nonchemical methods of pest control effectively. This type of production within the industry allows farms of small acreage to remain economically viable. Federal, state, and local government programs are increasingly available to provide assistance targeted at small to midsize farms. Exports for agricultural products also are rising, reflecting international demand. Rising incomes in countries such as China, India, Indonesia, and Brazil have increased the demand for diversified diets in those countries, leading them to seek products beyond their traditional foods. An increased global consumption of biofuels and related research and technology for the development of en-

ergy self-sufficiency has added further strains to agriculture. This type of pressure on supply and price is strongly shown by the case of corn. This farm commodity dramatically affects the broader structure of global food markets, and at one point 25 percent of the corn crop was found to be used for ethanol production. In the future, whether corn will be used that intensely for fuel is critically dependent on the price of oil and also on the politics of biofuels. Cereals and oilseeds can also be used in multiple ways, and the competition for these commodities is expected to rise among businesses. Climate change also threatens the productivity of the entire global food system. Some food supply and world economics experts foresee a looming food crisis that will first affect those populations that are already food-insecure and that may then spread to other populations. This could place a high demand on the farming industry in countries where high-efficiency agriculture continues to exist and thrive. Employment Advantages Those who work in the farming industry directly or indirectly enjoy the variety of the work. Many are exposed to rural settings and the satisfaction of being self-employed and working the land. Many small-farm operators work alongside family members, strengthening their families’ cohesiveness. Food policy and sustainable agriculture are rapidly gaining traction as fields of great concern to many people, and many young people are passionately committed to finding ways to make sustainable farming pay. It remains unclear how many will succeed, but resources to help them are increasing. These include programs to develop cohesive local food production, processing, and distribution systems called foodsheds, as well as resources to enable small and midsize farms to compete with large farms. If these programs succeed, small-scale farming is poised to be an extremely exciting and fulfilling, albeit difficult, career choice. Annual Earnings The farming industry is ever changing and depends on several factors, including market pressures, alternative-fuel consumption, and politics.

Farming Industry In 2002, the U.S. industry realized gross revenues of $175 billion, according to the USDA’s Economic Research Service. Renewed economic growth following the global recession of 2007-2009 may help farmers. This growth is expected to be slightly above the historical average long-term growth rate, so many markets, including agricultural markets, have the potential to expand, and such expansion may provide a foundation for gains in world demand for and trade in agricultural products. Longterm global demand for agricultural products in combination with the continued presence of U.S. ethanol could hold prices for corn, oilseeds, and many other crops at historically high levels. U.S. farm crop income is expected to increase from a net cash income of $76.3 billion in 2010 to a net cash income of $81.6 billion in 2019.

RELATED RESOURCES FOR FURTHER RESEARCH National Plant Data Center 2901 E Lee St., Suite 2100 Greensboro, NC 27401 Tel: (336) 370-3337 Fax: (336) 370-336 http://npdc.usda.gov National Soil Survey Center 100 Centennial Mall North, Room 152 Lincoln, NE 68508-3866 Tel: (402) 437-5499 Fax: (402) 437-5336 http://soils.usda.gov North Dakota State University Extension Service NDSU Dept. 7000 315 Morrill Hall P.O. Box 6050 Fargo, ND 58108-6050 Tel: (701) 231-8944 http://www.ag.ndsu.edu/extension U.S. Department of Agriculture 1400 Independence Ave. SW Washington, DC 20250 http://www.usda.gov

ABOUT

THE

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AUTHOR

Jeffrey Larson is the director of physical therapy at the Tioga Medical Center in Tioga, North Dakota. He is a graduate of North Dakota State University and the University of Utah. He holds degrees in both athletic training and physical therapy. Larson has been evaluating and treating the rehabilitative needs of athletes of all ages and sports for more than twenty years. He is also a medical writer and founder of Northern Medical Informatics, a medical communications business that he operates with a focus on continuing education for allied health care professions, as well as consumer health education. Larson is a member of the American Physical Therapy Association and the American Medical Writers Association. In addition to his medical profession, he owns and operates a sixteen-hundred-acre wheat farm and ranch in northwestern North Dakota. FURTHER

READING

Crowell, Susan. “2007 Census of Agriculture: Agriculture’s ‘Middle’ Slipping Away.” Farm and Dairy, February 9, 2009. http:// www.farmanddairy.com/uncategorized/2007census-of-agriculture-agricultures-middleslipping-away/11165.html. Hoag, Dana L. Applied Risk Management in Agriculture. Boca Raton, Fla.: CRC Press, 2010. Hoppe, Robert A., and Penni Korb. “Large and Small Farms: Trends and Characteristics.” Chapter 1 in Structural and Financial Characteristics of U.S. Farms. Washington, D.C.: USDA Economic Research Service, 2004. http://www.ers.usda.gov/publications/ aib797/aib797c.pdf. “Hungry Planet.” Commonweal 135, no. 10 (May 23, 2008): 5. http://commonwealmagazine .org/hungry-planet-0. Jurena, Remy. Agriculture in the U.S. Free Trade Agreements: Trade with Current and Prospective Partners, Impact and Issues. New York: Nova Science, 2008. Leval, Kim, et al. The Impact and Benefits of USDA Research and Grant Programs to Enhance Midsize Farm Profitability and Rural Community Success. Lyons, Nebr.: Center for Rural Affairs, 2006.

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Mapes, Kathleen. Sweet Tyranny: Migrant Labor, Industrial Agriculture, and Imperial Politics. Urbana: University of Illinois Press, 2009. Ricketts, Cliff, and Kristina Ricketts. Agribusiness: Fundamentals and Applications. 2d ed. Clifton Park, N.Y.: Delmar Cengage Learning, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Agriculture. Economic Research Service. “Special Feature: The Shift

to Large Farms.” In Structure and Finances of U.S. Farms: Family Farm Report, 2007 ed. Washington, D.C.: Author, 2007. http:// www.ers.usda.gov/publications/eib24/ eib24g.pdf. U.S. Department of Agriculture. World Agricultural Outlook Board and U.S. Interagency Agricultural Projections Committee. USDA Agricultural Projections to 2019. Washington, D.C.: Author, 2010. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Federal Public Administration ©Dreamstime.com

mentation or enactment of a new law or policy, and when the U.S. Congress passes that act General Industry: Government and Public Administration into law and the federal court Career Cluster: Government and Public Administration system rules on the constitutionOccupations ality or validity of that law, most Subcategory Industries: Executive Office of the President; citizens fail to comprehend the Federal Judiciary; Federal Legal Counsel and Prosecution; enormity of what has just ocGeneral Federal Government Support; Independent curred. Rather, they only read a Administrative Agencies; Internal Revenue Service; U.S. short article or are presented Cabinet Departments; U.S. Congress with a short briefing of the proRelated Industries: Civil Services: Planning; Civil Services: cess or newly enacted legislaPublic Safety; Defense Industry; Local Public tion. The human and other reAdministration; National and International Security sources necessary to propose, Industry; Political Advocacy Industry; Public Health implement, and analyze the laws Services; Space Exploration and Space Science Industry and the policies of the United Annual Domestic Revenues: $2.6 trillion USD (United States are, however, quite stagStates Treasury, 2007) gering. NAICS Numbers: 92119, 92211, 92213, 923-926, 92111-92113 The three branches of the federal government—executive, legislative, and judicial—employ nearly 2 million people whose duties make the day-to-day operation of governINDUSTRY DEFINITION ment programs possible. Careers in federal public administration may include, for example, monitorSummary ing and implementing budgets, drafting and anaThe federal public administration industry imlyzing legislation, collecting and analyzing statisplements the policies and programs instituted by tics, developing and implementing public policy, the federal government of the United States. When and running or managing federal government the president of the United States makes a broad agencies. The objectives of sound federal public proclamation concerning, for example, the impleINDUSTRY

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Federal Public Administration

Nearly 2 million people are employed in the implementation of the policies and programs instituted by the federal government of the United States. (©Maria Dryfhout/Dreamstime.com)

administration include ensuring justice, liberty, and prosperity for the country, as well as improving the efficiency and efficacy of the federal government. Because federal government programs and objectives are funded primarily by tax dollars paid by citizens and businesses, a primary goal of federal public administration is to provide the best services at the lowest cost to taxpayers, thus maximizing efficiency and minimizing fiscal waste. Employees of the government are often referred to as public servants or civil servants, terms that describe civilian, rather than military, government employees. Additionally, it is important to note that public administration is an academic field of advanced study. One can also work or teach in related fields, studying, for example, political science, public policy, or governance in general. History of the Industry Ancient cultures such as those of Egypt and Greece were among the first to categorize public

affairs by office. The Roman Empire used a more detailed approach, establishing specific offices to collect taxes, conduct military and foreign affairs, and administer justice, among other functions. These ancient civilizations, however, did not have a specific field of study for those seeking to enter public service. By the beginning of the nineteenth century in England, those seeking careers in public administration were required to study, among other subjects, history and law. They were also required to pass entry examinations for their desired fields of service. In the United States, most federal public servants were initially selected on the basis of the socalled spoils system, or patronage. Through this informal system, many federal civilian positions were filled as a way of rewarding those who had supported a winning political candidate. The United States was far from the first country to have such a system, as the patronage system was drawn from selection processes that had been prevalent in many

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countries, including England. Naturally, such a sysor by cabinet secretaries.) Consequently, although tem was highly susceptible to corruption. It was a form of the spoils system may still be in effect for also inefficient, as those best qualified for a certain certain positions, the voice of the people, through position were not likely to be hired unless they actheir elected representatives, is still heard. tively had supported or contributed to a winning candidate’s election. Moreover, those hired under The Industry Today the patronage system did not last long, as they The federal public administration industry emquickly lost their positions after the next election ploys approximately 1.8 million people in the in which their candidate was replaced. United States, making it the nation’s largest emAs both the population and the size of the govployer. In fact, federal workers account for approxernment increased, so, too, did the number of fedimately 3 percent of U.S. civilian employment. Aleral government positions needed to help administhough most federal agencies and offices are trate and regulate the growing business of the headquartered in Washington, D.C., 90 percent of country and its citizens. In 1883, to remedy the federal public administration jobs are located outdeeply entrenched spoils system, the United States side the nation’s capital. Excluding military service Civil Service Commission (USCSC) was established. and other forms of classified work, almost every asThis commission was designed to control entry pect of the business of the federal government is into federal government employment through a carried out by civil service employees. Simply merit-based selection process. Initially, the comstated, federal public administration employees mission only achieved success with respect to the make the workings of the government possible. Inlower ranks of government employment. Not undividuals are employed by the federal government til the early 1900’s did the commission achieve not only in Washington, D.C., but also in every maenough power to regulate employment for approxjor U.S. city, as well as in small satellite offices in imately half of the positions in federal government. smaller cities and in towns throughout the counOver the next several decades, the USCSC gradtry. Additionally, according to the U.S. Bureau of ually grew in power, until it controlled most low, Labor Statistics (BLS), approximately ninety-two middle, and management-level positions in the thousand federal employees work outside the federal government. In 1978, the commission’s United States. power was split between two offices, the Office of Careers in public administration offer interestPersonnel Management and the Merit Systems ing and challenging work, a steady work schedule Protection Board. Notably, many U.S. states have for most employees, competitive salaries, and benadopted merit systems similar to the federal system efits packages that are equivalent with, or better to regulate positions in state service. Approxithan, most benefits packages in the private sector. mately two thousand positions remain outside the Specific career functions within federal public adjurisdiction of these two governmental bodies. The president of the United States The Federal Government’s has the duty of appointing individuals to certain key positions, such as the direcContribution to the U.S. Economy tors of federal agencies, federal judges, and other key employees. Pursuant to Value Added Amount the U.S. Constitution, the U.S. Senate Gross domestic product $578.5 billion has the duty to give “advice and consent” Gross domestic product 4.0% on the president’s nominees and must Persons employed 5.174 million vote on each nomination over which Total employee compensation $466.8 billion they retain that power. (Congress has the authority to establish by statute which Source: U.S. Bureau of Economic Analysis. Data are for appointees require senatorial consent 2008. and which appointees may be chosen solely by the president, by the judiciary,

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ministration include, for example, working in the Census Bureau, compiling and analyzing statistics concerning the population; analyzing soil for the Forestry Department; assisting immigrants in obtaining citizenship; implementing federal tax policy for the Internal Revenue Service; researching or drafting legislation for Congress; prosecuting federal crimes; and working as an economist for the Department of Commerce. There are hundreds of distinct federal departments, agencies, and organizations spread across all three branches of the federal government. The executive branch, however, is by far the primary employer, accounting for about 98 percent of the nation’s federal public administration employees. This government branch includes the Executive Office of the President, ninety independent agencies, and the following fifteen cabinet departments: Defense, which manages the branches of the armed forces; Veterans Affairs, which operates programs for veterans and their families and administers the hospital system and national cemeteries for veterans and military personnel; Homeland Security, which seeks to prevent terrorist attacks and implements immigration policy; Treasury, which prints currency and regulates financial institutions; Justice, which enforces federal laws and ensures public safety; Agriculture, which promotes agriculture and monitors the safety of domestic meat and poultry; Interior, which manages national parks and promotes conservation of natural resources; Health and Human Services, which regulates the Medicare and Medicaid health programs and ensures the safety of drugs and some

Inputs Consumed by the Federal Government Input

Value

Energy Materials Purchased services Total

$18.0 billion $87.4 billion $360.0 billion $465.4 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

foods; Transportation, which plans and constructs highways, railways, and mass transit systems; Commerce, which conducts the census, compiles statistics, and regulates patents and trademarks; State, which represents national interests abroad, issues passports, and oversees the country’s embassies and consulates; Labor, which enforces federal laws concerning wages, equal opportunity, and workplace safety, as well as regulating pension funds; Energy, which manages the use and development of energy and plans for future energy needs; Housing and Urban Development, which enforces equal housing laws and administers public housing projects; and Education, which distributes financial aid to students and schools and enforces the prohibition against discrimination in education. Most of the government’s independent agencies are charged with duties that fall within the jurisdiction of more than one government branch. Although most independent agencies are small, employing one hundred or fewer people, some are much larger and employ several thousand. Some of the best-known independent federal agencies include the Social Security Administration, which employs approximately sixty-two thousand people and which is charged with administering old age, disability, and survivor insurance programs; the National Aeronautics and Space Administration (NASA), which employs approximately eighteen thousand people and is responsible for space research and exploration; the Environmental Protection Agency (EPA), which employs approximately eighteen thousand people and is charged with reducing air, water, and land pollution; and the Office of Personnel Management (OPM), which employs five thousand people and functions as the federal government’s human resources division. These agencies alone employ tens of thousands of Americans, both domestically and abroad. There are, however, dozens of other agencies performing important services for the public that do not receive the press or notoriety of, for example, the Department of Defense. The Federal Housing Finance Agency (FHFA), the Election Assistance Commission (EAC), the Government Accountability Office (GAO), and the Library of Congress, for example, are all federal agencies charged with important duties. Federal agencies employ a wide variety of individuals with diverse backgrounds. From mainte-

Federal Public Administration nance workers to high-level executives, anyone can seek a career in civil service. The federal government is prohibited from discriminating on the basis of race, color, religion, sex, national origin, disability, or age and seeks to attract minority candidates and individuals with disabilities. Moreover, the majority of public administration positions are career positions, as opposed to temporary positions. The retirement package offered by the federal government is competitive with those offered by many private companies.

INDUSTRY MARKET SEGMENTS Unlike private businesses, there is no ownership element associated with employment in the field of federal public administration. The government owns and controls the resources, the terms and conditions of employment, the pay scales, and the benefit and retirement packages—all of which are funded in large part through taxes. Accordingly, one individual or a private organizational entity cannot own a federal agency. Notwithstanding this caveat, there are noteworthy differences that distinguish careers in small, medium, and large federal public entities. Small Agencies and Offices Small agencies are generally subagencies within large cabinet departments or independent agencies that operate semiautonomously. Some cabinet departments are themselves small, relative to the overall size of the federal government. Potential Annual Earnings Scale. Employees of the federal government are paid according to the tables established by law. Most employees are paid according to the general schedule, a system of fifteen pay grades and ten steps per grade. Each position is assigned a grade, based on a combination of job duties and the education and experience levels of an entering employee. This grade determines base pay, which is then modified by a locality bonus based on the location of the position. As of 2010, the lowest based salary on the general schedule, GS-1, step 1, was $17,803, and the highest, GS15, step 10, was $129,517. Including the locality bonus for the Washington, D.C., area, general schedule federal employees working in the nation’s

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capital earned between $22,115 (GS-1, step 1) and $155,500 (GS-15, step 10). In addition, separate tables establish the pay of government executives, judges, and senior scientists and professionals. Executives, such as cabinet secretaries and other high-ranking managers, earned up to $199,700 in 2010. Clientele Interaction. Clientele interaction varies depending on the nature of the employment. For example, a geological surveyor in Montana may have significantly less clientele interaction than a physician employed in a veterans’ hospital. Generally speaking, however, the smaller the agency or office, the larger the opportunity for interaction. If there are only fifteen employees in a satellite or regional office of a larger agency, each employee may perform more duties, and there may be fewer layers of bureaucracy between the agency and members of the public that it serves. Amenities, Atmosphere, and Physical Grounds. Buildings owned by the federal government are generally designed for efficiency, not ambiance. Often, the same federal buildings house workers from different agencies. Many federal buildings are also of an advanced age, since it takes budgetary space and significant tax dollars to permit the construction of a new federal building. The amenities in federal buildings are standard for the workplace. For example, these structures are capable of meeting the needs of the disabled and comply with all federal and state laws relating to safety and health. Furthermore, any supplies necessary to perform a job function, such as telecommunication equipment and office furniture, are supplied by the government and are periodically replaced or updated as needed. Because the resources are owned by the government, however, there often is a request period before supplies or resources may be replaced. Money must be secured from an agency’s budget to fund such expenditures. In addition, ambiance is sometimes lacking when compared with that of private businesses. The physical grounds of a small administrative agency, or of a satellite office of a larger agency, also vary on the basis of the location and the type of work that is to be performed at the office. A rural office that acts as a call center employing ten individuals likely will need significantly less space than a veterans’ medical center staffing the same number of federal employees. The physical grounds oc-

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The 2010 Annual Report to Congress on the White House staff lists the name and salary of every White House employee. (©Dreamstime.com)

cupied by the agency could consist of a freestanding building or simply a single floor of a large government-owned or -leased building. Typical Number of Employees. The typical number of employees depends on the needs of a particular agency and the number of citizens it serves in the relevant geographic area. For example, a small federal department such as the Department of Education employs only four thousand individuals, approximately three thousand of whom work in or near Washington, D.C. A small independent federal agency such as the Office of Personnel Management employs six thousand people, only one thousand of whom are located in the capital. Traditional Geographic Locations. Whether small or large, the agencies of the federal government must be open and accessible to all citizens. Consequently, offices are located in cities, both large and small, in every state in the country. Satellite offices may also be found in small cities and even suburbs. For instance, it is common to find

passport agencies, which fall under the jurisdiction of the Department of State, in suburban towns. Additionally, the federal government has offices, known as embassies or consulates, in foreign countries that are staffed by federal employees who have chosen to live and serve abroad. Pros of Working for a Small Federal Office or Agency. There are numerous advantages associated with working in the federal public administration industry. First, as with most federal jobs, both the salary and opportunity for advancement are well defined. Employees are aware of when they are scheduled for raises (assuming they perform their duties well) and, because salaries are listed on a pay scale that is widely publicized, employees are aware of the specific amount of the raise they can expect to receive. Compensation usually is competitive with private sector employment. Additionally, benefits and retirement packages are extremely competitive and are often superior to those offered by many private companies. Career federal public

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administration jobs are secure and offer a great willing to relocate for another job opportunity, life-to-work balance. they may find that their future employment prosA particular advantage of federal public adminpects and opportunities for advancement at satelistration employment in a small office is that the lite offices are limited. opportunity for career advancement in that particular office may occur faster than it would in a larger Costs office with more employees and, accordingly, Payroll and Benefits: The federal government more competition. Some job openings are filled inpays salaries and generous benefits to most emternally. That is, postings for a vacancy are never ployees, according to schedules determined by advertised to the general public because there are law and modified by congressional action. Conqualified employees already employed at the hirgress generally passes cost-of-living adjustments ing agency. Current employees likely need less for all employees that increase base salaries and training and assistance than new employees. Conmodify locality bonuses. sequently, working at a small office can be very benSupplies: Federal agencies require extensive tradieficial in terms of compensation, job duties, salary, tional office supplies and equipment, but they promotions, advancement, and the opportunity to often do not require or obtain up-to-date equipaccess internal job postings within that office. ment. Computer systems and software, for exCons of Working for a Small Federal Office ample, while required by all agencies, may be or Agency. Although there are many advantages relatively old and even seem obsolete by the to employment in the federal public administrastandards of private industry. In addition to tion industry, there are also some disadvantages. these general requirements, specialized federal First, the opportunity for financial success and proagencies may require highly specialized equipfessional advancement can be finite. Most public adment, such as scientific testing supplies or seministration positions in the federal government cure communications devices. do not offer year-end bonuses that might be found External Services: The government employs alin private sector employment. Similarly, managers most every conceivable job description, but it do not always have the discretion to promote emalso hires external contractors as necessary to ployees or to award raises simply based on an emfulfill its functions and maintain budgets. For ployee’s performance; because of funding restrictions and bureaucratic issues, raises and other promotions are not always given when they are deserved. Consequently, some employees may feel undervalued or underpaid. A particular disadvantage associated with working at a satellite or rural office is that employees may feel disconnected from their agencies. Because most agencies are headquartered in Washington, D.C., employees working in the main office are likely to hear information and news first and to feel much more connected to the business of the agency, unlike employees geographically sepaThe public can view millions of dollars being printed during tours of the U.S. rated from the headquarters of Bureau of Engraving and Printing in Fort Worth, Texas, and Washington, D.C. the agency and its key employees. (©Dreamstime.com) Moreover, unless employees are

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Federal Public Administration

example, the Federal Protective Service, which is responsible for safeguarding more than nine thousand buildings, directly employs only 1,225 personnel. To fulfill its mandate, the service contracts more than 15,000 additional security guards. Utilities: The federal government is a major consumer of utilities, including electricity, gas, telephone service, and Internet access. Taxes: Federal agencies are generally exempt from taxation.

capital earned between $22,115 (GS-1, step 1) and $155,500 (GS-15, step 10). In addition, separate tables establish the pay of government executives, judges, and senior scientists and professionals. Executives, such as cabinet secretaries and other high-ranking managers, earned up to $199,700 in 2010. Clientele Interaction. Because of the diverse nature of civil service positions, it is difficult accurately to gauge the degree of clientele interaction one may expect in a midsize agency or office. However, there are positions and classifications that opMidsize Agencies and Offices erate solely on the basis of direct client interaction, Midsize agencies include larger independent such as physicians’ assistants at the Department of agencies, as well as midsize cabinet departments. Veterans Affairs and call center employees working Potential Annual Earnings Scale. Employees at the Department of Labor, who assist individuals of the federal government are paid according to seeking their pension. the tables established by law. Most employees are Amenities, Atmosphere, and Physical paid according to the general schedule, a system of Grounds. The nature of employment in the fedfifteen pay grades and ten steps per grade. Each poeral public administration industry places employsition is assigned a grade, based on a combination ees generally on equal playing fields with respect to of job duties and the education and experience levamenities and atmosphere. Although some federal els of an entering employee. This grade deterbuildings may be newer than others and, accordmines base pay, which is then modified by a locality ingly, may be more aesthetically pleasing, the amebonus based on the location of the position. As of nities from one office to another are substantially 2010, the lowest based salary on the general schedsimilar. Physicians working at veterans’ hospitals ule, GS-1, step 1, was $17,803, and the highest, GSare generally accorded the same medical equip15, step 10, was $129,517. Including the locality ment and amenities whether they are based in Minbonus for the Washington, D.C., area, general nesota or Virginia. The services that must be proschedule federal employees working in the nation’s vided to the public, regardless of the geographic location of a specific office, require that employees be similarly situated across the country with respect to amenities. As the size of a federal agency or office increases, so do its attendant needs regarding physical space and room to accommodate many employees. In addition to headquarters, traditionally located in Washington, D.C., midsize agencies have satellite offices throughout the country, and even internationally, in order to meet the needs of both the agencies and the public. Entire federal buildings may be devoted to a specific, large agency. Midsize The U.S. Bureau of Engraving stopped printing postage stamps in 2005, agencies may share office space when this function was assumed by private enterprises. (©Gale Verhague/ with one another. For example, Dreamstime.com) most midsize and large cities have

Federal Public Administration federal courthouses, which staff not only judicial branch staff but also federal prosecutors employed by the Department of Justice. Typical Numbers of Employees. A midsize federal department, such as the Department of Health and Human Services, employs around sixty thousand people, with twenty-eight thousand of those employees working in the Washington, D.C., area, leaving slightly over half spread across the country. A midsize independent agency, such as the EPA, employs approximately eighteen thousand people, but only five thousand are located in the nation’s capital. By way of example, the EPA has ten regional offices in the country, most of which are housed in federal office buildings. Traditional Geographic Locations. The EPA is a good example of a midsize independent agency. By its nature, the agency must be spread out nationally to ensure the protection and conservation of natural resources. As a result, the EPA has regional offices in Seattle, San Francisco, Denver, Kansas City, Dallas, Chicago, Atlanta, Philadelphia, New York, and Boston. It also has smaller offices for specific purposes, such as conducting laboratory and field work, in smaller cities across the United States. Other midsize federal agencies have similar structures and distributions. Pros of Working for a Midsize Federal Agency. As with most federal agencies, midsize agencies offer competitive hours, wages, and benefits that provide employees with high standards of living. The opportunity to access internal job postings can also be extremely beneficial. They also have more offices, employees, job classifications, and opportunities for advancement than do small agencies. Regional offices are numerous and often are located in some of the most desirable cities in the United States. Another benefit of federal administrative employment, especially in situations in which the U.S. economy is experiencing an economic crisis or recession, is the retirement incentive package, sometimes referred to as the “golden handshake.” Believing that phasing out older, higher-paid employees will save the government money in the short run, government officials occasionally offer incentive packages to eligible employees, including giving them the equivalent of more years of civil service, so that their monthly retirement paychecks will be higher than they otherwise would

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have been. Although incentive packages exist in the private sector, they are more prevalent in the federal government and have a direct impact on more employees. Cons of Working for a Midsize Federal Agency. Midsize federal agencies may be more likely than others to require more resources than they are allocated. Funding for new positions or promotion opportunities may suddenly become limited if funds are allocated elsewhere. Because the federal government operates under a fixed budget, a dramatic increase in the costs of running a particular agency—and especially the creation of an entirely new agency—will result in financial cuts elsewhere. Costs Payroll and Benefits: The federal government pays salaries and generous benefits to most employees, according to schedules determined by law and modified by congressional action. Congress generally passes cost-of-living adjustments for all employees that increase base salaries and modify locality bonuses. Supplies: Federal agencies require extensive traditional office supplies and equipment, but they often do not require or obtain up-to-date equipment. Computer systems and software, for example, while required by all agencies, may be relatively old and even seem obsolete by the standards of private industry. In addition to these general requirements, specialized federal agencies may require highly specialized equipment, such as scientific testing supplies or secure communications devices. External Services: The government employs almost every conceivable job description, but it also hires external contractors as necessary to fulfill its functions and maintain budgets. For example, the Federal Protective Service, which is responsible for safeguarding more than nine thousand buildings, directly employs only 1,225 personnel. To fulfill its mandate, the service contracts more than 15,000 additional security guards. Utilities: The federal government is a major consumer of utilities, including electricity, gas, telephone service, and Internet access. Taxes: Federal agencies are generally exempt from taxation.

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Federal Public Administration

Large Agencies and Offices Large federal agencies represent immense employers and immense bureaucracies. They include major cabinet departments, as well as the entire legislative and judicial branches of the federal government. Potential Annual Earnings Scale. Employees of the federal government are paid according to the tables established by law. Most employees are paid according to the general schedule, a system of fifteen pay grades and ten steps per grade. Each position is assigned a grade, based on a combination of job duties and the education and experience levels of an entering employee. This grade determines base pay, which is then modified by a locality bonus based on the location of the position. As of 2010, the lowest based salary on the general schedule, GS-1, step 1, was $17,803, and the highest, GS-15, step 10, was $129,517. Including the locality bonus for the Washington, D.C., area, general schedule federal employees working in the nation’s capital earned between $22,115 (GS-1, step 1) and $155,500 (GS-15, step 10). In addition, separate tables establish the pay of government executives, judges, and senior scientists and professionals. Executives, such as cabinet secretaries and other highranking managers, earned up to $199,700 in 2010. Clientele Interaction. As both the size of an agency and the size of a particular office increase, so, too, does the distance between most employees and the public they serve. At the headquarters of an executive department in Washington, D.C., much more resources are devoted to discussions of key issues, as well as politics and policy concerns, than at smaller satellite offices. Consequently, key employees in these large offices may find that they do not work with the public as much as they work with members of their own agency and in conjunction with other agencies. Amenities, Atmosphere, and Physical Grounds. Many federal agencies are headquartered in historic government buildings in Washington, D.C. The main office of the Department of State, for instance, is housed in the Harry S. Truman federal building, only a few blocks from the palatial White House. The Ronald Reagan Building and International Trade Center, which houses the U.S. Agency for International Development (USAID), among other organizations, is one of the most beautiful federal buildings, visited by over

1 million tourists annually. The atmosphere in the largest offices is typically steeped in tradition, with American flags flying and pictures of national heads of state adorning the walls. Individual work spaces for average employees, however, likely are very similar with respect to atmosphere and amenities as those contained in other federal buildings, both large and small. Because agency headquarters and other large federal buildings also serve as tourist destinations for those wishing to see the inner workings of government, the physical grounds surrounding the properties are very well cared for. Unlike smaller, satellite offices, many of these larger buildings are on display and photographed year-round, and they host events and functions related to the government. Typical Numbers of Employees. The newly formed Department of Homeland Security, a large federal department, employs approximately 149,000 employees, 20,000 of whom are located in Washington, D.C. Similarly, the slightly smaller Treasury Department employs 109,000 individuals, 14,000 of them in Washington. Even though these agencies are headquartered in Washington, the small size of the city makes it impossible to staff a large percentage of an agency’s employees there. Rather, between 10 and 20 percent of an agency’s staff is commonly housed in the nation’s capital. Traditional Geographic Locations. Most federal administrative agencies have their headquarters in Washington, D.C. It is advantageous for nearly all major government agencies—and their respective heads—to work within blocks of one another. Because much of these leaders’ time is spent in meetings—not only within their own agencies but also among agencies and the different branches of government—both the financial savings and the increased efficiency of proximity are significant. In addition to their Washington, D.C., headquarters, the largest agencies have several offices spread throughout the country, and even internationally when necessary, as in the case of the Department of Homeland Security and the Department of State, for example. Pros of Working for a Large Federal Agency. Employees fortunate enough to work at the headquarters of major federal agencies work in the heart of the government. Important policy decisions and directives are made there, and they work

Federal Public Administration in the same buildings with the most important employees in their agencies. These offices are extremely large, affording many opportunities for promotion and even access to newly created positions. Cons of Working for a Large Federal Agency. Large agencies have even higher levels of bureaucracy than smaller agencies, and employees must face significant amounts of red tape. Their size also presents increased opportunities for corruption and inefficiency. Also, jobs, pay raises, and individual work assignments may be based not solely on competence, but also on individual relationships within the agency. Additionally, it is easy to get lost in the shuffle—it certainly would be difficult for individuals to stand out and make names for themselves among the fourteen thousand Treasury Department employees working in Washington, D.C., as opposed to among only a few dozen employees working in a smaller office. Costs Payroll and Benefits: The federal government pays salaries and generous benefits to most employees, according to schedules determined by law and modified by congressional action. Congress generally passes cost-of-living adjustments for all employees that increase base salaries and modify locality bonuses. Supplies: Federal agencies require extensive traditional office supplies and equipment, but they often do not require or obtain up-to-date equipment. Computer systems and software, for example, while required by all agencies, may be relatively old and even seem obsolete by the standards of private industry. In addition to these general requirements, specialized federal agencies may require highly specialized equipment, such as scientific testing supplies or secure communications devices. External Services: The government employs almost every conceivable job description, but it also hires external contractors as necessary to fulfill its functions and maintain budgets. For example, the Federal Protective Service, which is responsible for safeguarding more than nine thousand buildings, directly employs only 1,225 personnel. To fulfill its mandate, the service contracts more than 15,000 additional security guards.

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Utilities: The federal government is a major consumer of utilities, including electricity, gas, telephone service, and Internet access. Taxes: Federal agencies are generally exempt from taxation.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Any size agency or office of the federal public government needs to account for activities in the following areas. In smaller offices, one person may fulfill more than one role. In larger agencies, specialists fulfill unique requirements in specific groups. Regardless of size and scope, all functions must be fulfilled in order for an agency to operate efficiently. The following umbrella categories apply to the organizational structure of federal administrative agencies: ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Legal/Legislative Affairs Information Resource Management Public Affairs Human Resources Facilities Security Budget General Administrative Employment

Executive Management The majority of executive managers of federal public administrative agencies are presidential appointees rather than career employees. They consult with the president to help form administration policy and implement the policies of their particular administration. When administrations change, they are replaced with other workers loyal to the administration. This sets such employees apart from the vast majority of federal civil servants, whose careers span multiple administrations and who do not make policy-level decisions. Each cabinet department is headed by a secretary, while other executive managers may have titles such as administrator or director. These executives are supported by a host of other executive employees, some of whom hold career positions.

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Combined, these executives bear ultimate responsibility, both for a department’s successes and for its failures. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

President of the United States Cabinet Secretary Deputy Secretary Undersecretary Chief of Staff Administrator Director Deputy Director White House Liaison

Legal/Legislative Affairs Legislative affairs employees and other attorneys advise department and agency heads on all legal affairs, including negotiating and drafting contracts and drafting and interpreting statutes and pending legislation. They work closely with other departments when issues arise that may directly affect both departments. For these positions, experience “on the Hill,” or working with Congress in some capacity, is generally required, since employees must understand not only the rule of law but also the political realities of the legislative process. Positions in this category are very competitive. For example, the Department of State reportedly receives over one thousand applications for the position of attorney, with only twelve to fourteen positions to fill. Legal and legislative affairs occupations may include the following:

such transparency in contemporary society requires electronic reporting of relevant data over the Internet. Thus, information and communication technologies are crucially important to the efficiency and success of any federal agency. Chief information officers and chief technology officers provide the information technology services necessary for departments to carry out their missions. In addition to installing, repairing, and maintaining many different forms of technology, such experts also ensure the security of that technology. Among several important duties, information resource managment staff help design and install telecommunications and computer systems, provide technical assistance, and perform site surveys to determine structural and technical requirements. Information resource management occupations may include the following: ■ ■ ■

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Legal Adviser General Counsel Attorney Legislative Analyst Paralegal Administrative Assistant

Information Resource Management Federal agencies, though mostly headquartered in Washington, D.C., must have both a national presence throughout the states and an international presence globally. In addition, because the government is accountable to the people, transparency is important to government operations, and

Chief Information Officer (CIO) Chief Technology Officer (CTO) Deputy Chief Information Officer for Business, Planning, and Customer Service Deputy Chief Information Officer for Information Assurance Principal Deputy Chief Information Officer for Operations Policy and Planning Analyst Security Analyst Systems Analyst Applications Software Analyst Systems Administrator Customer Support Representative Data Manager

Public Affairs Public affairs staff oversee communications between their departments and the public. They write and disseminate statements, speeches, reports, communiques, documents, Web content, and other materials to inform the public of departmental operations. They also solicit, consolidate, analyze, summarize, and respond to comments from the public. They conduct press conferences; manage department Web sites; respond to letters, telephone calls, and e-mail from the public; arrange meetings between department employees and the public; and produce and coordinate au-

Federal Public Administration diovisual products for use by the public and the press. Public affairs occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

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Assistant Secretary for Public Affairs Spokesperson Press Secretary Deputy Spokesperson Press Assistant Speechwriter Communications Director Deputy Communications Director Electronic Information and Publications Officer Public Liaison and Intergovernmental Affairs Officer

Human Resources A federal department, much like a private corporation, seeks to hire the best candidates to implement its mission. Thus, dedicated human resources departments are vital to the efficiency of any administrative agency. These departments recruit, evaluate, promote, discipline, train, and dismiss employees. They administer payrolls and benefits and set retirement policies as well. Many of these functions are administered in part by the federal government’s overarching human resources entity, the Office of Personnel Management, but other functions and subfunctions are handled by individual departments’ human resources employees. Human resources occupations may include the following:

contract monitoring (ensuring that services the government has contracted for are being performed). They help manage and maintain the real property owned and leased by their departments, both in the United States and abroad, and are charged with maintaining all buildings in accordance with U.S. law. Facilities occupations may include the following: ■ ■ ■ ■ ■ ■

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Human Resources Director Program Specialist Human Resources Specialist

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Facilities Each department must take account of its real estate, as well as maintain and manage the construction and repair of its buildings. Accordingly, it is necessary to have a dedicated team of employees to manage facilities. Facilities employees may be involved in general maintenance, space planning (evaluating usage patterns and projecting future requirements), engineering, strategic planning (forecasting facility needs years in advance), and

Building Operations Director Overseas Building Operations Director Management Consultant Management Officer Facility Manager Contracting Officer

Security Of paramount importance to any agency is security, as it relates not only to safeguarding important and sensitive information but also to protecting department employees who may work in dangerous situations. Agency heads must travel to foreign countries, some of which are not considered safe for civilian travel. Their schedules must be carefully coordinated to ensure that there is no possibility of danger or surprise. Additionally, the federal buildings in the United States that house most civilian employees must be guarded against terrorist attacks, both domestic and foreign. It is necessary to staff a dedicated security department to guarantee the safe, uninterrupted operation of each agency. Security occupations may include the following: ■

■

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Special Agent Security Engineering Officer Civil Security Specialist Diplomatic Courier Uniformed Officer/Guard

Budget Each department must operate within a prescribed budget. Budget specialists manage the finances of their departments, collecting fees, appropriating funds, securing reimbursements from other federal agencies, planning and presenting annual budgets, and effectively managing finite resources in order to achieve important policy and political goals. Because budget concerns affect all

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facets of a department’s operations, this is an especially important area. Chief financial officers and several other employees plan, formulate, present, and execute all budgetary matters. Notably, each agency does not set its own budget; rather, executive agencies submit prospective budgets to the Office of Management and Budget, and Congress has the ultimate authority over all budgetary appropriations (often referred to as “the power of the purse”). Accordingly, higher-level budget positions may be very political in nature. The complex interplay among different departments, as well as between the Executive Office of the President and the legislative branch of government, makes these positions very interesting and the work very challenging. Budget occupations may include the following: ■

■ ■

■ ■ ■ ■ ■

Assistant Secretary of Resource Management Chief Financial Officer (CFO) Director for Program and Financial Control Budget Analyst Accountant Budget Officer Financial Specialist Auditor

General Administrative Employment Although each department is charged with carrying out different policies and, as a result, employs individuals with different talents and skill sets, there are certain categories of employees that are necessary to staff almost every office nationally and abroad. Administrative employees, such as secretaries, administrative assistants, and receptionists, work actively, both with fellow employees and with members of the general public who are in need of assistance. General administrative occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Secretary Administrative Assistant Paralegal Receptionist Telephone Representative Customer Service Manager Customer Service Representative

INDUSTRY

OUTLOOK

Overview The outlook for the federal public administration industry is consistently stable. Like many private businesses, however, the federal government is not immune from global economic troubles. In fact, in 2009, President Barack Obama called for lowering the annual pay raise for most federal workers to 2 percent for 2010, down from the 3.9 percent raise that federal employees received in 2009. When the entire private sector of employment, as well as millions of homeowners, are having difficulty making ends meet, such difficulties will eventually trickle down to generally stable civil service positions. Notwithstanding any temporary concerns with federal public administrative employment, there is statistical evidence to support the contention that the industry in general will remain stable. First, and perhaps most important, many federal workers are set to retire in the near future. The Office of Policy and Management, using employment statistics from 2004, estimated that by the end of 2010, 58 percent of supervisory employees and 42 percent of nonsupervisory employees would be eligible to retire. Not all employees will retire as soon as they reach the age of eligibility, but these statistics are encouraging because they represent the end of employment for millions born in the first part of the babyboom generation. These positions will need to be filled by younger employees in the near future. In total, the number of both wage and salary workers in the federal government is projected to decrease by 4.6 percent during the years 20062016. However, the number of positions in human resources and conservation, as well as positions for registered nurses, for example, all are expected to increase through 2016. Classifications such as “word processors and typists,” which are expected to decrease significantly—by 24.4 percent—are likely representative of a trend that exists both internal and external to the federal government; that is, there simply may not be a need for as many employees in such professions anymore, regardless of whether their employment is in the public or private sector. The BLS projects that—because of increases in office automation, as well as the fact that the federal government has begun hiring and contracting

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Not all federal jobs are in buildings as impressive as the one that houses the U.S. Supreme Court. (©Ken Cole/ Dreamstime.com)

with private businesses to perform office and administrative support functions—the future need for federal government employees in that specific career sector will dwindle gradually. The forecasts cannot, however, take into account exactly what the future may hold. Few would have fathomed that the United States would have the need in late 2001 to create a new agency, the Department of Homeland Security, which would quickly become the third-largest federal agency. The BLS predicts nationwide growth across five major job categories: security, enforcement, and compliance (positions such as police officers and airport screeners); medicine and public health (physicians and similar positions); engineering and science (scientists, chemists, and veterinarians); program management and administration (positions focused on agency efficiency and performance); and business (revenue agents and tax examiners for the Internal Revenue Service). As these fields grow in the private sector, they are likely to grow in the public sector as well.

Employment Advantages Even though specific industries within the realm of federal public administration may be declining over the long term, and despite the fact that federal jobs as a whole are projected to decrease slightly, individuals seeking rewarding careers, the opportunity for advancement, and excellent health care and other important benefits should consider a career in federal public administration. Federal jobs exist in every city in every state, in a variety of agencies. A job in federal public administration can represent either a permanent career or a source of valuable experience that functions as a stepping stone to other work. Because of the size of the federal government and the fact that many current employees will be retiring in the foreseeable future, it is certain that there will be many job openings across the country in every agency, even in career areas that are anticipated to decrease in importance over time. Especially in times of economic uncertainty, federal public administrative employment provides a high

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degree of job security, largely because the federal government is not as affected by economic fluctuations as is the private sector. Annual Earnings The federal government does not earn money in the sense that a private company, or an individual employee, earns money. The government operates primarily through the collection of taxes from individuals and businesses. For example, in fiscal year 2007, the federal government collected $2.6 trillion in revenue. As of 2007, there were approximately 1.8 million federal civilian employees. This statistic excludes employees of the U.S. Postal Service, as well as military employees. The average annual wage earned by a federal civilian employee in March, 2007, was $65,463. Accordingly, the federal government appropriated approximately $1.17 trillion, or about 45 percent of its 2007 revenue, to pay wages for federal civilian employees. The 1.8 million federal civilian positions comprise thirty-two aggregate job categories, which differ significantly in their respective salary expectations. For instance, the highest-earning category— attorneys—earned an average of $111,304 annually, while the lowest-earning category—nursing assistants—earned an average of $33,134. Notwithstanding any economic difficulties that may persist beyond 2010, it is expected that federal public administrative employment will continue to be stable. Whereas many workers in the private sector have been laid off, or have had their hours, benefits, or pay reduced, federal workers received pay raises in 2010 and no significant reduction in force is anticipated.

RELATED RESOURCES FOR FURTHER RESEARCH Office of Citizen Services and Communications 1800 F St. NW Washington, DC 20405 Tel: (202) 501-0705 http://www.usa.gov Office of Personnel Management 1900 E St. NW Washington, DC 20415

Tel: (202) 606-1800 http://www.opm.gov U.S. Department of Homeland Security 245 Murray Ln. SW Washington, DC 20528 Tel: (202) 282-8000 http://www.dhs.gov U.S. Equal Opportunity Employment Commission 121 M St. NE Washington, DC 20507 Tel: (202) 663-4900 http://www.eeoc.gov

ABOUT

THE

AUTHOR

Andrew Walter is an attorney licensed to practice in the state of Connecticut. He received a bachelor of arts degree in international management, with a minor in English, from Gustavus Adolphus College in St. Peter, Minnesota, and a juris doctorate degree from Roger Williams University School of Law in Bristol, Rhode Island. He served as a law clerk for the judges of the Connecticut Superior Court, and he is currently employed as an attorney at the Connecticut Supreme Court, dealing with a variety of civil and criminal matters.

FURTHER

READING

Frederickson, H. George, and Kevin B. Smith. The Public Administration Theory Primer. Boulder, Colo.: Westview Press, 2003. Goldsmith, Stephen, and William D. Eggers. Governing by Network: The New Shape of the Public Sector. Washington, D.C.: Brookings Institution Press, 2004. Lane, Jan-Erik. Public Administration and Public Management: The Principal-Agent Perspective. New York: Routledge, 2005. Morgan, Douglas F., et al. Foundations of Public Service. Armonk, N.Y.: M. E. Sharpe, 2008. Office of Policy and Management. “Key Events: Ninety-six Premerit Years, 1789-1883.” http:// www.opm.gov/BiographyofAnIdeal/ PUevents1789p01.htm.

Federal Public Administration O’Leary, Rosemary, and Lisa Bingham, eds. The Collaborative Public Manager: New Ideas for the Twenty-first Century. Washington, D.C.: Georgetown University Press, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Federal Government.” In Career Guide to Industries, 2010-2011 ed. http:// www.bls.gov/oco/cg/cgs041.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

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U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of State. “Department Organizational Chart: May, 2009.” http:// www.state.gov/r/pa/ei/rls/dos/99494.htm Wiarda, Howard J., ed. Policy Passages: Career Choices for Policy Wonks. Westport, Conn.: Praeger, 2002.

AP/Wide World Photos

Financial Services Industry

INDUSTRY

SNAPSHOT

General Industry: Finance Career Clusters: Finance; Marketing, Sales, and Service Subcategory Industries: Credit Intermediation; Financial Planning and Consulting; Securities, Commodities, and Other Financial Investment Activities; Tax Preparation Services Related Industries: Banking Industry; Insurance Industry Annual Domestic Revenues: $342.6 billion USD (Fedstats.com, 2007) Annual International Revenues: $858 billion USD (Fedstats.com, 2007) Annual Global Revenues: $961 billion USD (Fedstats.com, 2007) NAICS Numbers: 5223, 523, 541850

INDUSTRY

on issues such as portfolio management and retirement planning. Specialists offer personalized advice for clients who need it or simply execute transactions for those who choose their own products. Online trading and discount brokerages have made it easier than ever for clients to act as their own brokers. Other businesses in the financial services industry include credit counseling, tax preparation, and financial planning. Banking is a major component of financial services as a whole, but is covered in depth as a separate industry. Closely related but also treated separately is the insurance industry.

History of the Industry A rudimentary stock market existed in France in the early fifteenth century, but the earliest organized stock market dates to 1605 in Amsterdam in the Netherlands. Wall Street, the legendary seat of the American financial services industry, was built in Manhattan in 1685 and was so named because it was constructed along a twelve-foot wall erected in 1653 to protect Dutch settlers from the invading British and the local Indians. By 1790, two dozen brokers and wealthy merchants formed the Buttonwood Agree-

DEFINITION

Summary The financial services industry provides financial planning, investment strategies, tax preparation, and credit consultation services to businesses and individuals. This includes the selling and trading of stocks, bonds, securities, annuities, and other financial products, as well as consultations 648

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ment for the purpose of trading government secuinvestors to manage their own portfolios. However, while computerized trading was beneficial, it also rities on a commissioned sales basis. The Buttonhad the potential for disaster: The marker plunged wood Agreement evolved into the New York Stock more than five hundred points on October 19, Exchange. 1987, in part because of flaws in computer proAfter the War of 1812, financial offerings grew grams that managed trades. Safeguards have been to include bank and insurance company stocks. put in place to prevent a recurrence of that magniRailroad stocks later became available, followed by tude. stock in corporations opting to raise capital by goAs the United States tax code became increasing public. ingly complicated, more people turned to profesA major turning point in the history of this insionals to prepare their returns. The industry giant dustry was the stock market crash of 1929 and the H & R Block was founded in 1955 by brothers Great Depression, events that shaped that generaHenry and Richard Bloch. The company first oftion’s conservative financial mind-set. Their chilfered bookkeeping services to small-business owndren and grandchildren too often took the other ers but soon realized there was an untapped marpath, relying on credit to live above their means. In ket for income tax preparation for individuals as doing so, they set themselves up for financial disaswell. H & R Block has grown to include nearly fifter during the inevitable economic slowdowns. teen thousand outlets worldwide, more than twelve This was borne out in record numbers of bankruptthousand of which are in the United States. cies and foreclosures in the late 2000’s. Early industry leaders such as Merrill Lynch, The Industry Today E. F. Hutton, Abbot, and Proctor and Paine offered The financial services industry was harder hit a full range of brokerage services that included trathan most by the 2007-2009 recession. People ditional stocks and bonds, mutual funds, futures, struggling to pay their mortgages had little or no commodities, and annuities. Charles Schwab dramoney to invest. High unemployment rates in matically altered the industry when he opened his some states, including Michigan, Ohio, Louisiana, first discount brokerage house. and Mississippi, led to unprecedented numbers of Deregulation of the financial industry opened personal bankruptcies and foreclosures. the door to new business opportunities, and Schwab The industry was further damaged by the unethbecame an industry legend. He realized that not all investors required intensive assistance in making their purchases. Many already were choosing their investments and were required to pay brokers large fees simply for executing those buys. Schwab was among the first to see the potential of that untapped market and has consistently held the lion’s share of the discount brokerage market. By the 1980’s, franchise brokerage companies such as Edward Jones Investments had emerged as Schwab’s competitors in that market and established a presence in small towns across the country. Technology further changed the stock and bond industry in Wall Street in New York is the symbolic head of the financial industry. (©Dreamsthe 1980’s. Online trading betime.com) came another way for individual

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Financial Services Industry

ical and sometimes illegal practices of a few of the major players. In Wall Street jargon, a “bucket shop” is a brokerage business engaged in scams and fraudulent practices. “Turning accounts” refers to the unethical practice of making unnecessary transactions on a client’s behalf for the sole purpose of generating commission income for the broker. Disclosures of insider trading also tarnished the industry. Additionally, companies such as General Motors filed bankruptcy to reorganize, making their stock certificates worthless. In doing so, the company caused unrecoverable losses to shareholders. The Enron scandal and con artist Bernie Madoff’s Ponzi scheme are infamous examples of financial malfeasance, but there also have been lesserknown abuses on a smaller scale. Combined, these factors have caused an erosion of trust in the industry that will take time to overcome. However, despite its tarnished reputation, the industry as a whole is poised for average to above average growth in the years to come. When the economy stabilizes, investors again will look for places to put their money, and stocks, bonds, mutual funds, commodities, and other financial products again will become attractive vehicles. Shareholders will continue to buy and sell, while perhaps more closely monitoring the actions of their brokers and the companies in which they own stock. The industry will survive and thrive again because it

Inputs Consumed by Securities, Commodity Contracts, and Investments Input

Value

Energy Materials Purchased services Total

$1.0 billion $5.0 billion $169.1 billion $175.1 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

performs a necessary service. The only way to achieve significant financial growth is through shrewd investments, and those who were hurt in the recession will want to protect themselves in the event it happens again. In inflationary times, investing wisely is a way to keep from losing financial ground. Included among the industries fueling the financial services industry today are energy, particularly alternative energy; health care; and technology. Educational and religious organizations frequently update their facilities and issue bonds to finance the process. This creates new investment opportunities. Meanwhile, investors are shying away from former blue-chip companies that needed government bailouts to weather The Contribution of Securities, the economic downturn. Investors also are leery of banks for the same reasons. Commodity Contracts, and As investors have become more savvy, Investments to the U.S. Economy online trading has greatly expanded, as has the use of discount brokerage houses. Value Added Amount While this cuts into the employment opGross domestic product $196.1 billion portunities in traditional brokerage busiGross domestic product 1.4% nesses, it creates sales service jobs in the Persons employed 871,000 call centers where orders are taken and Total employee compensation $199.1 billion executed. Despite the smaller client pool, a knowledgeable full-service broker alNote: Employee compensation is greater than total value ways will be able to find and retain clients. added, because this sector experienced a net loss in The ones who will be hurt most are those gross operating budget in 2008. who lack elite sales skills. Source: U.S. Bureau of Economic Analysis. Data are for To succeed in today’s leaner industry, 2008. one needs at least a bachelor’s degree. A higher degree is even more beneficial in

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kets and the economy in general. Financial planners or advisers who do not sell securities always will find clients among those seeking sound advice on retirement planning, for example, or setting up trusts to ensure the security of their spouses or Value Added Amount children. Gross domestic product $53.6 billion Companies and individuals doing tax Gross domestic product 0.4% preparation have not been hurt by the Persons employed 89,000 downturn. When money becomes tight, Total employee compensation $14.6 billion people turn to tax preparers more than ever for help in navigating the everSource: U.S. Bureau of Economic Analysis. Data are for changing tax code and making sure they 2008. take advantage of all possible credits and deductions. These professionals provide a needed service and will continue to flourish in both good times and bad. Along this highly competitive field. Education alone is with the tax preparation, these companies often ofnot enough, however. The financial services indusfer financial planning and financial consulting sertry requires workers who have self-confidence, a vices. Those employees work year-round, as oppositive attitude, and the ability to persevere when posed to the seasonal nature of the income tax times are tough. The markets always will have bull portion of the business. (high) and bear (low) cycles, and are not for the Credit counseling professionals actually can faint of heart. The broker must plan ahead to get benefit from a down cycle, as more people are through the tough times. Also required is the kind overextended, and often need professional help to of personal integrity that demands knowing a clidevise a debt repayment plan while working toward ent’s threshold for risk and not exceeding it. Tradfuture financial solvency. ing in financial products always is a gamble, and the broker needs to be ever mindful that he or she is gambling with the client’s money. INDUSTRY MARKET Occupations within the industry not directly inSEGMENTS volved with the buying and selling of financial products are less subject to fluctuations in the marSmall Businesses A small financial services industry business can be a local independent business, a franchisee, or a small branch office of a corporate giant. This can Inputs Consumed by Funds, include an independent financial planning service provider, a discount brokerage, a tax preparation Trusts, and Other Financial office, or a branch office of a full-service brokerage. Vehicles A small-business owner draws clientele through a visible storefront location, word of mouth, local adInput Value vertising, and involvement in community organizaEnergy $0.1 billion tions. It is important that the businessperson is Materials $0.1 billion seen as rooted in the community. He or she also Purchased services $67.1 billion will rely heavily on referrals from other satisfied cliTotal $67.3 billion ents, and may offer free lunch events or seminars to market products and services. Source: U.S. Bureau of Economic Analysis. Data Potential Annual Earnings Scale. Most of a fiare for 2008. nancial services company’s employees are in sales and thus work at least partly on commission; it is

The Contribution of Funds, Trusts, and Other Financial Vehicles to the U.S. Economy

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Financial Services Industry

A stockbroker watches stock prices falling. (©Dreamstime.com)

difficult to estimate earnings, but they can easily exceed $100,000 per year with experience. Many earn significantly more. Support personnel can earn an hourly wage of $12 to $15 per hour or an annual salary of $20,000 to $40,000, depending on responsibilities and experience. Clientele Interaction. In a small company or small branch of a large company, clientele interaction is high, as the only employees are those who sell financial products and a few administrative staff who also frequently interact with clients. The successful employee will be a people person, a good communicator, and able to make a good impression for the company. Amenities, Atmosphere, and Physical Grounds. A small financial services business usually is located in a storefront building or leased office space in a professional office building or complex. Either way, it is comfortable and attractively

furnished to suggest to clients or prospective clients that the business is profitable. Because the job itself can be stressful, the serene environment also is essential for the employees. A discount brokerage office will be more austere, to make a visual statement that the company is not getting rich at the expense of the client. By necessity, all offices will be equipped with the latest technology, as brokers need instant access to everchanging prices and data. Desktop computers have replaced the old-fashioned ticker tape machines. Typical Number of Employees. Usually from two to twenty-five people work in the small business, including the owner or franchisee, an office manager, sales brokers, and support staff. The smaller the office, the more these functions will overlap. Some of the administrative staff may be part time. The staff can be as small as a broker and assistant, with all the support functions handled at a corporate headquarters located elsewhere, a scenario not possible before the age of technology. Traditional Geographic Locations. These businesses are found everywhere, from the largest cities and their outlying suburbs to the smallest towns. Financial services are needed everywhere. Businesses can be located in downtown financial district offices, small-town main streets, and suburban strip malls. Some, like H & R Block, rely on walk-in traffic and thus open offices in highly visible locations, like indoor malls and storefronts along busy streets. Companies that do most of their business by telephone often lease offices in professional buildings. Pros of Working for a Small Financial Services Business. A small financial services company is a good fit for the highly motivated self-starter who works well without supervision. The owner of a small business has complete responsibility for its success or failure. Employees of smaller companies are able to learn all aspects of the business and gain valuable experience that can help them move on to jobs in larger, more competitive companies. Those who do best are happy to be in the thick of the action and not restricted by a narrow job description. Employers are closer to their employees in small businesses, and employees might be able to more easily negotiate flexible hours. Cons of Working for a Small Financial Services Business. A small business, especially in the financial services industry, can be a high-stress working environment. The business in general is

Financial Services Industry fiercely competitive, and economic fluctuations can wreak havoc on the industry. A small-business owner or manager works long hours and also may feel obligated to join civic organizations and volunteer in the community to create a positive image. Not everyone enjoys those activities. There is no specialization, so the person in charge must be knowledgeable about all the products offered. Employees in a small financial services business have little chance for advancement within the company, and in time they may feel stifled. They also are likely to receive fewer benefits and earn lower salaries than workers in similar positions at larger companies. Costs Payroll and Benefits: Employees may be paid commissions, salaries, or an hourly wage. Bonuses often are another effective way to motivate

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sales employees. Benefits may include profit sharing, savings and investment plans, health insurance, vacation, and sick leave. At the owner’s discretion, part-time employees may receive limited benefits. Supplies: Supplies typically are limited to routine office supplies; computer, printer, and copier items; basic cleaning supplies; and break room supplies such as coffee for employees and clients. External Services: These can include accounting and bookkeeping, advertising, legal, security, landscaping and lawn care, janitorial, snow removal, and the handling of routine or emergency maintenance issues. If the business is located in leased space in an office building or complex, the landlord may provide some of these services, particularly snow removal, lawn care, and security.

The Wall Street Bull is a 7,100-pound bronze sculpture in Bowling Green Park, near Wall Street. (AP/Wide World Photos)

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Utilities: Small businesses in this industry need the basic utilities used by any similarly sized enterprise: electricity, gas, water, heat and air-conditioning, and telephone and electronic hookups. Taxes: The business owner pays Social Security taxes on all employees, as well as the usual federal, state, and local income taxes. These are paid quarterly and based on projected earnings. There also may be local business or property taxes, and the owner pays personal income tax and any property taxes that are required locally. Midsize Businesses A midsize business, like a smaller one, is a single business, a franchise, or a branch office of a larger business. It can be a corporation, a partnership, or a sole proprietorship. These businesses are run by the owner or president, the franchisee, or the local branch manager. In large companies, managing a branch office often is a step toward further promotion and greater responsibilities in the corporate headquarters. This applies more to management than sales, as top sales producers need to stay geographically close to their clients. Potential Annual Earnings Scale. The earnings potential at a midsize company depends on whether an employee is a commissioned sales representative or a salaried worker. Experienced sales brokers can easily earn $100,000 per year or more. Employees earn $25,000 to $65,000, depending on experience and responsibilities. Part-time clerical workers generally earn $15 to $20 per hour. Clientele Interaction. Jobs in these companies require medium to high levels of clientele interaction. While many of the jobs require direct public contact, there are behind-the-scenes opportunities as well. Anyone involved in sales, whether directly or indirectly, needs excellent people skills. Selling intangible products requires superior sales and service skills, as well as the ability to foster the confidence of the customer. Amenities, Atmosphere, and Physical Grounds. As in all financial product companies, the ambience should project wealth and stability and suggest the possibility of wealth for those who align themselves with the company. Tasteful decor is mandatory, and the building and grounds should be kept in immaculate condition. Employees work in comfortable, sometimes plush, surroundings, especially when clients visit regularly, as opposed

to doing business by telephone or over the Internet. Here, too, the exception is the discount brokerage office, where it would be counterproductive to flaunt wealth. Typical Number of Employees. Typically, midsize companies employ twenty-five to four hundred people in various duties involving management, sales, and administrative support. Other jobs specific to the industry include analysts who study a corporation’s financial statements to determine whether it is sound for investors. Traditional Geographic Locations. Midsize companies are found in large metropolitan areas and their suburbs, and in smaller towns as well. Financial services providers tend to gravitate toward visible locations, especially if they want to attract drop-in clients. When visibility is not an issue, wellkept office buildings are a good choice. Pros of Working for a Midsize Financial Services Business. Employees have a greater opportunity to advance within the company than at smaller companies where there is no corporate ladder to climb. For example, brokers’ assistants often are encouraged to take the classes necessary to become registered brokers so that they can legally execute transactions in a broker’s absence. Some go on to become full-time brokers. A midsize business is a good arena in which to gain experience before joining a larger enterprise. There are more categories of jobs available as midsize companies typically employ larger clerical staffs, accounting, grounds and maintenance workers, and need analysts and other workers specific to the industry. Those in salaried positions generally work normal business hours, with no need for overtime. Cons of Working for a Midsize Financial Services Business. Those in sales positions tend to work long hours and are sometimes expected to entertain clients. They also might be expected to become active in civic and volunteer organizations in an effort to widen their pool of prospective customers. This is done on their own time. The work can be stressful in the extreme and requires persevering through hard times while dealing with disappointed or angry clients. Jobs are more structured than in a smaller business, making it more difficult to gain knowledge of the business as a whole. Salaries tend to be lower than in larger companies, and, unless the midsize

Financial Services Industry business is a branch office of a well-known company, not as prestigious. Costs Payroll and Benefits: Payroll and benefits usually compose the largest part of a midsize company’s budget. Sales employees are commissioned, so their earnings justify the cost, as without them there would be no business. They may earn bonuses for achieving goals or exceeding quotas. Most of the workforce is on salary. Benefits usually include health insurance, vacation and sick leave, continuing education, profit sharing, and/or employer-matched savings and investment plans for all full-time employees. Part-time workers also might be eligible for limited or prorated benefits. Supplies: Financial services businesses need all the usual office supplies and electronic equipment. They also need to stock routine cleaning and maintenance supplies. External Services: Some services can be performed by outside contractors more cheaply than by employees. Purchased services can include legal, auditing, advertising, janitorial, snow removal, landscaping, and security. It is often more cost-effective for a midsize business to hire workers such as plumbers and electricians on an as-needed basis than to staff a maintenance department. Utilities: Midsize businesses in the financial services industry require basic utilities such as telephone, Internet and electronic hookups, electricity, water, gas, and heat and air-conditioning. Taxes: Owners must pay Social Security and payroll taxes on employees and submit all required quarterly statements. In addition to federal, state, and local income taxes, they must file and pay business income and any other relevant taxes. If the business is a branch office of a larger corporation, this is likely to be done by the tax and accounting specialists in the corporate headquarters, but the branch must maintain and submit accurate records. Large Businesses Large businesses—the industry giants—can be corporations such as Merrill Lynch, H & R Block, or Charles Schwab, or they can be a sizeable local or regional entities such as the New York Stock Ex-

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change or the Chicago Board of Trade. These entities have instant name recognition, and their reputations make potential clients and/or investors feel confident about doing business with them. Potential Annual Earnings Scale. Annual earnings for an experienced broker with a talent for sales are virtually unlimited. To reach this level, the individual must first earn the trust of investors with large portfolios and deliver services with complete integrity. Salaried employees from management down to the lowest-paid clerical worker enjoy earnings above the average in the industry. Top management usually receives an annual salary well over $100,000 or more, not including performance bonuses or stock options that make that figure significantly higher. At the other end of the spectrum, clerical workers can expect to be paid a minimum of $27,000 to $35,000 annually, a few thousand more than the industry average. Clientele Interaction. This is an industry providing services to customers, so it follows that clientele interaction is high, especially for those in sales or sales support positions. Long-term success depends on personal integrity, excellent people skills, and solid product knowledge. But unlike small and midsize companies, the larger ones also provide numerous opportunities for those who prefer working behind the scenes. Amenities, Atmosphere, and Physical Grounds. Corporate headquarters tend to be modern, with cutting-edge technology, and an ambience of wealth. They often are located in companyowned buildings, including big-city skyscrapers. Common areas, including lobbies and conference rooms, and offices visited by clientele are plush and kept in immaculate condition. Often there are no grounds to consider, but when the company is located in a campus-style setting, the landscaping also has to be flawless. Typical Number of Employees. Large companies can employ several hundred to several thousand people in multiple locations. H & R Block, for example, operates more than 15,000 tax preparation offices, more than 12,000 of which are in the United States, although most of the jobs are seasonal. Edward Jones Investments has more than 12,000 broker offices, each of which has 200 to 300 employees. Merrill Lynch has more than 12,500 employees, while the Charles Schwab Corporation employs nearly 10,000, some in the San Francisco

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sight-out-of-mind problem and be overlooked for headquarters, others in branch offices both in the promotions. United States and abroad. The New York Stock Exchange has about 1,500 employees, and nearly Costs 1,000 people work for the Chicago Board of Trade. Payroll and Benefits: Salaries, bonuses, and benTraditional Geographic Locations. Large comefits are by far the largest budgetary item. Suppanies traditionally maintain a big-city presence, plementing the usual benefits expected in any with satellite locations in smaller cities and in subsize operation, larger companies usually offer urbs. Top sales producers usually do most of their employer-paid educational benefits, and may work via telephone, so today’s computer technolpay for the individual broker’s licenses required ogy allows some to work in home offices with perito do business. Company matching investment odic visits to the office to meet with clients or manprograms or profit sharing also is the norm, as agement. are company-subsidized employee cafeterias. By Pros of Working for a Large Financial Seroffering better benefits and higher salaries, they vices Business. As in any industry, large compacan attract the higher-caliber workforce needed nies attract those looking for upward mobility. An to maintain their stature. ambitious employee can work his or her way up Supplies: These companies use the same supplies through the ranks. The larger companies are more as the smaller ones, but in larger quantities. Inlikely to provide company-paid continuing educacluded are office supplies, printer and copier tion opportunities that enable employees to climb ink and toner cartridges, routine cleaning and the corporate ladder. There also is prestige in maintenance supplies, restroom products, and working for an industry leader. Salaries and benecafeteria and break room supplies. fits tend to be better. Should an employee need to External Services: Large corporations might conmake a geographic move for personal reasons, it tract for services including legal, janitorial, landoften is possible to remain with the company and scaping, snow removal, trash removal, security, transfer to another office. pest control, and cafeteria management. HowCons of Working for a Large Financial Serever, the larger the company, the more likely it is vices Business. Because this is a highly competitive—even cutthroat—industry, the pressures are greater in larger companies. Those who are the most successful are likely to work fifty hours or more a week. The business also is very vulnerable to fluctuations in the economy. At a large company, management rarely takes a personal interest in employees. With a large pool of applicants eager to work for the company, marginal employees are more likely to be replaced than nurtured to reach their potential. It is easy to get lost in the large number of employees, especially for those working in satellite locations far from the corporate headquarters, and far from the eyes of management. Top sales producers do not have this problem because their numbers give them visibility. Some financial products, such as mortgage-based securities, or derivatives, Employees in other than sales positions may suffer from the out-ofproved to be problematic for the financial industry. (©Dreamstime.com)

Financial Services Industry to employ people to handle the services that smaller companies choose to contract out. Utilities: While large companies use proportionately larger quantities of electricity, gas, water, telephone, and Internet service, they essentially require the same utilities as their small and midsize counterparts. Taxes: These companies pay Social Security, unemployment, and any other federal, state, or local taxes, along with quarterly federal, state, and local business income taxes. In addition, they pay taxes on company-owned properties and any other local taxes required to conduct business.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Every company, regardless of size, must perform some basic tasks to make sure the enterprise runs smoothly and complies with all industry regulations. In a small financial services operation the manager or franchisee will handle all or most of the responsibilities, acting as chief executive officer (CEO), securities broker, accountant, and janitor over the course of an average week. Midsize companies have employees charged with various, often overlapping duties. There is some flexibility here as the job descriptions are not as rigid as in larger corporations. Large companies have whole departments devoted to a single function, such as sales support, financial product analysis, accounts payable, or maintenance. In these companies the job descriptions tend to be exact and sometimes frustrating for an employee who enjoys a variety of tasks and new challenges. The larger the company, the more diverse job opportunities it can provide. The following umbrella categories apply to the organizational structure of businesses in the financial services industry: ■ ■ ■ ■ ■ ■

Business Management Customer Services Sales and Marketing Facilities and Security Technology Occupations Specific to Financial Services

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Business Management A company’s top management is charged with determining the direction a company will take, identifying its mission, and making the crucial decisions that support that mission. It establishes measurable goals and periodically tracks progress made toward achieving them. The larger the company, the more layers of management it requires to keep on track. It can be as simple as a single franchisee who does it all or as complicated as a board of directors to which a chief executive officer and/ or president must answer. In that scenario, the CEO oversees the vice presidents, who oversee department managers in various areas of specialization. A vice president of finance would be responsible for the accounting, accounts payable, and payroll departments, for example. Those who aspire to top management positions should have a graduate degree in their chosen area of specialization, such as a master’s degree in finance or economics. Sometimes managers are hired from outside, but often they are promoted from within. In brokerage houses, top sales producers often are given the title of vice president, especially if they also manage a branch office. This is more than a courtesy title, as it demonstrates their value to the company and increases their credibility with clients. Occupations in management include the following: ■ ■ ■ ■ ■ ■ ■

Director Chief Executive Officer (CEO) President Vice President Sales and Marketing Manager Controller Human Resources Manager

Customer Services If sales is the pulse of a financial services industry, customer services is its backbone. No financial services business could function without this department. These important members of the team hold the jobs that support the sales and marketing departments by interacting with clients and handling routine questions and problems. In the securities business, customer service employees perform the clerical duties, answer customer questions, and track sales. They serve the customer in any way that

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does not legally require the attention of a registered broker. In financial planning, tax preparation, and other similar companies, customer service is second only to sales and marketing as the department with the most clientele interaction. Jobs in this field require excellent communication skills, along with problem solving and attention to detail. It also is helpful to be able to multitask and perform well under pressure, as the customer service specialist often must placate disappointed or even disgruntled clients. To obtain employment in customer services at a financial services company, one should have at least an associate’s and preferably a bachelor’s degree, although that is not always required. It is sometimes possible, particularly in a smaller company, to gain an entry-level position, then work up the ranks through on-the-job training or companysponsored continuing education. A customer service manager in this industry is typically paid $50,000 to $75,000 annually, while customer service representatives receive from $28,000 to $35,000. The larger the company, the higher the salaries are likely to be, but the higher salaries inevitably come with higher levels of stress. Occupations within the customer services department include the following: ■ ■ ■ ■

Customer Service Manager Customer Service Representative Order Writer Order Processor

Sales and Marketing Sales and marketing are the lifeblood of the financial services industry and include multiple layers of employees, from the corporate marketing director to branch managers where appropriate, to sales representatives. Depending on the business, sales personnel also can be called stockbrokers, commodities brokers, or securities brokers. Some financial planners actually sell products such as trusts. Also included in this category are employees who sell their company’s services to other businesses and individuals, including bookkeeping services, tax preparers, and credit counseling specialists. Entry-level positions require a bachelor’s degree, but those aspiring to managerial positions should also consider obtaining a master of business

administration or other graduate degree. Along with at least a bachelor’s degree, a broker must pass a six-hour exam to become registered to legally buy and sell securities. While formal education is the beginning, learning never stops. The markets are constantly changing, and only brokers who thoroughly understand the financial products offered and their attendant risks can successfully serve clients. Occupations within the sales and marketing department include the following: ■ ■ ■ ■ ■ ■ ■

Marketing Director Sales Manager Stockbroker Securities Broker Commodity Broker Sales Associate Administrative Assistant

Facilities and Security A financial services company’s offices must be maintained in a manner that suggests wealth and security. This means everything must be in good repair and immaculate. In a corporate headquarters building, a facilities manager oversees various departments, including maintenance, janitorial, security, landscaping, and in some cases even an employee cafeteria. The mail room also typically falls under the facilities umbrella. The largest companies will employ staff to cover all related needs, including licensed tradespeople. Departmental responsibilities can overlap. In most industries, security means protecting the building, its contents, and the grounds. In a financial services business, security also means making sure sensitive data and client information are safeguarded. Although the threat of theft usually comes from outside the company, there also is the possibility of employee wrongdoing. The security officer may work in tandem with the technical staff to make sure the computer systems are not compromised. In smaller companies, some security services may be provided by outside contractors, but someone in the company still needs to purchase those services and make sure they are performed satisfactorily. The smallest businesses will lease space in an office building that bears the responsibility for all but the office furnishings.

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and in working order. Brokers must be able to depend on their computers for instant access to the often rapidly fluctuating financial data that once was transmitted via ticker tape. Computer technicians also may work with the security department to ensure that the company’s computers are not compromised. Any company that deals in sensitive financial information is a target for hackers or other illegal activity. Because computer technology is ever-changing, this department also is involved in the selection, purchase, and installation of new equipment. It is responsible, too, for training employees in the operation of the The complexity of the United States tax code causes many people to turn to proupgrades. In this and every infessionals to prepare their income tax returns. (©Bruce Works/Dreamstime.com) dustry there always will be jobs available for workers to create and maintain databases and for technicians to take An engineering degree is useful for a managecare of the inevitable glitches. ment position in facilities, and other workers such Occupations within the technology department as electricians need to be licensed. Facilities maninclude the following: agers earn, on average, $75,000 to $85,000 per year, while department heads under them earn ■ Information Technology Director less. The maintenance people earn the prevailing ■ Computer Operator rate in their geographic location. When work is ■ Computer Technician performed by an external provider, that company determines the pay scale. Occupations within the facilities and security Occupations Specific to Financial Services department include the following: Motion pictures portray the trading floor of a stock or other exchange as a chaotic mix of hand ■ Facility Manager signals, shouting, and general pandemonium. The ■ Maintenance Manager reality looks pretty much the same. Everyone has a ■ Custodian/Janitor specific job and a responsibility to the clients he or ■ Groundskeeper she represents. Timing is key in an environment of ■ Skilled Tradesman wildly fluctuating prices. ■ Chief Security Officer In the financial services industry, researchers ■ Investigative Personnel are used to study a corporation’s financial state■ Mail Room Supervisor ments and the stocks and bonds they offer. They ■ Mail Clerk calculate the risk factors, then make the results of ■ Cafeteria Worker those studies available to sellers of those products to enable them to make informed decisions for Technology their clients. They also research companies going These are the people who make sure all technipublic and rate their financial products. When a cal equipment and applications are state-of-the-art company goes public, a brokerage house under-

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writes the initial public offering, and that decision is made only after extensive research. All this research helps the broker advise clients on whether to buy, sell, or hold a particular financial product. Credit intermediation specialists invest in financial products to generate earnings, and are not to be confused with credit consultants and credit counselors. A manager can earn $100,000 to $125,000 annually, while specialists start in the $40,000 to $50,000 range. Income tax preparers who work seasonally for companies like H & R Block earn on average $20,000 to $30,000. Independent tax specialists can earn up to $50,000. Income tax preparers should not be confused with certified public accountants (CPAs), who might do taxes in addition to their other work. They work full time year-round and earn considerably more. Occupations specific to the financial markets industry include the following: ■ ■ ■ ■ ■ ■

Brokers’ Assistant Trader Runner Product Researcher Credit Intermediation Specialist Tax Preparer

INDUSTRY

OUTLOOK

Overview The financial services industry was hard hit by the recession of 2007-2009. Multiple factors caused the industry to falter. Job losses left many people without discretionary income to invest. The stock market suffered major losses that greatly reduced investor trust. Whole industries, such as the banking and automotive industries in the United States, had to resort to federal bailouts, at great losses to shareholders. An economic turnaround will help, but it will take time to restore investor confidence. This instability was not limited to the United States; the late 2000’s saw a slump affect the worldwide economy. Despite these major setbacks, the industry as a whole is expected to experience average to aboveaverage growth in the years 2010 to 2018. Investors still need to send their children to college, to plan for a comfortable retirement, and to strive to improve their financial situation. They will continue

seeking advice from industry professionals to accomplish those goals. However, while jobs will continue to become available in financial services, there will be intense competition for every one of them. One way for a prospective employee to gain an advantage over other candidates is to work as a summer intern at a major financial services company. Familiarity with the company and its personnel can greatly improve hiring prospects, and at the very least, the intern will gain valuable experience to take to another firm. The 2010-2011 Occupational Outlook Handbook, published by the United States Bureau of Labor, predicts 8 percent growth in the job market for financial managers from 2010 to 2018. A securities and commodity contracts or brokerage manager can expect $125,000 to $150,000 annually, not including significant potential performance bonuses. These jobs require postgraduate degrees. Over that period, more than 20 percent growth is expected in the field of financial analysis. Analysts and researchers will be in great demand and under great pressure to ensure that the products they recommend for sale are worthwhile. A postgraduate degree is a must, and salaries can range from $73,000 to $141,000, often with performance bonuses. Sales agents in the field of securities (stocks and bonds), commodities, and other financial services are expected to see 9 percent growth in the job market, although some of this is attributed to unusually high turnover. Many would-be brokers fail to understand the market fluctuations and give up during the inevitable bear markets; others might not be willing to invest the amount of time it takes to become successful. A broker with a postgraduate degree can expect to earn $48,000 to $95,000 in the early years of his or her career. With experience, those earnings will increase substantially and are virtually unlimited. However, the work typically requires fifty- to sixty-hour workweeks. Brokerage clerks represent one job category in the industry that is expected to slowly decline. They currently write orders, distribute dividends, deliver securities, and perform myriad duties that require close attention to detail. On average, brokerage clerks earn in the $38,000 range. As technology becomes more pervasive, there will be less need for the human touch in processing securities transactions.

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Employment Advantages PROJECTED EMPLOYMENT The financial services indusFOR SELECTED OCCUPATIONS try is poised for growth. In the sales sector, significantly higher Securities, Commodity Contracts, and than average earnings are possiRelated Activities ble. Despite unfavorable publicity and cases of malfeasance, Employment the vast majority who work in this field maintain high stan2009 Projected 2018 Occupation dards of integrity and foster 49,490 50,800 Brokerage clerks trust in those with whom they do business. There still is pres62,700 74,900 Financial analysts tige in working in the industry 36,370 45,000 Financial managers as well. However, these positions demand long hours, high 91,530 114,500 Personal financial advisors stress tolerance, and the pa154,540 168,200 Securities, commodities, and tience to build a solid client financial services sales agents base over time. Jobs in financial services are Source: U.S. Bureau of Labor Statistics, Industries at a Glance, diverse. Nonprofits and compaOccupational Employment Statistics and Employment nies in nearly every industry Projections Program. need financial experts. Brokerage houses employ researchers and other professionals in addition to those working in sales. Those who do those jobs enjoy high salaries, excelAs stated elsewhere, when the market is good, lent benefits, and a comfortable working environthe industry as a whole offers somewhat higher ment. The competition for jobs is fierce, so only earnings at all levels, and substantially higher for those applicants who are best prepared will be those selling stocks and other securities. Earnings hired. Internships and other work experience are in specific categories are addressed above, but in crucial advantages for prospective employees. Angeneral industry personnel earn from around other advantage for some is the income tax prepa$25,000 at the lowest levels to virtually unlimited at ration field. Tax professionals can work from Januthe top. Remember, the market is cyclical, and alary through April and have the rest of the year to ways will be. There will also be lean years. Those on pursue their education or other career interests. the lower rungs will not see their salaries reduced, but companies may be forced to lay off workers. Annual Earnings Sales personnel need to put some money away to The financial services industry is greatly influsee them through the slow times. enced by the state of the economy, both in the United States and worldwide. Because this is out of RELATED RESOURCES FOR the control of the industry professionals, earnings FURTHER RESEARCH can fluctuate greatly from one year to next, as clients and prospects can lose their jobs and have less ADVISORONE money to invest. Some brokers and other industry 5081 Olympic Blvd. workers are less affected by recessions and bear marErlanger, KY 41018 kets than others. They are the ones who specialize Tel: (859) 692-2100 in clients who are retired, or are at a stage in life Fax: (859) 692-2000 where they are not buying homes and other bighttp://www.advisorone.com ticket items, and are thus better able to ride out the storm without changing their financial patterns.

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ADVISOR’S EDGE 1 Mount Pleasant Rd. Toronto, ON M4Y 2Y5 Canada Tel: (416) 764-3859 Fax: (416) 764-3943 http://www.advisor.ca Association for Financial Professionals 7315 Wisconsin Ave., Suite 600 West Bethesda, MD 20814 Tel: (301) 907-2862 Fax: (301) 907-2864 http://www.afponline.org Bond Market Association 360 Madison Ave. New York, NY 10017-7111 Tel: (646) 637-9200 Fax: (646) 637-9126 http://www.bondmarkets.com BROKER WORLD Magazine 9404 Reeds Rd. Overland Park, KS 66207 Tel: (913) 383-1247 Fax: (913) 383-1247 http://www.brokerworldmag.com Industry Trade Data and Analysis 1401 Constitution Ave. NW Washington, DC 20230 Tel: (800) USA-TRADE (872-8723) http://ita.doc.gov New York Stock Exchange 11 Wall St. New York, NY 10005 Tel: (212) 656-3000 http://www.nyse.com ON WALL STREET 1 State St. Plaza, 27th Floor New York, NY 10004 Tel: (212) 803-8200 http://www.onwallstreet.com

ABOUT

THE

AUTHOR

Norma Lewis is the author of four nonfiction books, one an account of the Yukon gold rush for young adults, and the other three pictorial histories of the Southwest Michigan area she calls home. She is a prolific magazine writer. During the twenty years she has been writing, her travel articles have covered destinations, escorted group travel, solo travel, and recreational vehicle camping. Her work in children’s and retirement magazines has received national awards. She holds a bachelor of science degree in business administration from Aquinas College, but left the corporate world for what she considers the best job in the world: freelance writing.

FURTHER

READING

Addison, John A., et al. Financial Services Leadership Strategies: Industry Leaders on Service Culture and the Impact of Technology. New York: Aspatore Books, 2005. Brighouse, David, and Janet Hontour. Financial Services: The Commercial Environment. Sterling, Va.: Global Professional Publishing, 2008. Fitch, Thomas. Career Opportunities in Banking, Finance, and Insurance. New York: Checkmark Books, 2007. Harvard Business School. Guide to Careers in Finance. Boston: Harvard Business School Press, 2002. Mullen, David J. The Million-Dollar Financial Services Practice: A Proven System for Becoming a Top Producer. New York: AMACOM, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Management and Business and Financial Occupations.” In Occupational Outlook Handbook, 2010-2011 ed. http:// www.bls.gov/oco/oco1001.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

Fishing and Fisheries Industry ©Joe Klune/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Agriculture and Food Career Cluster: Agriculture, Food, and Natural Resources Subcategory Industries: Aquaculture; Finfish Farming and Fish Hatcheries; Finfish Fishing; Shellfish Farming; Shellfish Fishing Related Industries: Farming Industry; Food Manufacturing and Wholesaling Industry; Livestock and Animal Products Industry; Natural Resources Management Annual Domestic Revenues: Fishing: $3.7 billion USD (IBISWorld, U.S. Fishing Industry Report, 2009); fish processing: $7 billion USD (Business Wire, 2005); distributing: $14 billion USD (Business Wire, 2005) Annual International Revenues: $66.5 billion USD (GreenFacts Scientific Board, 2006) Annual Global Revenues: $91.2 billion USD (GreenFacts Scientific Board, 2006) NAICS Numbers: 1141, 11251

INDUSTRY

pus, and squid. A variety of methods are employed to capture these creatures in the wild, from singleperson angling with a hook and line to large commercial endeavors that harvest food using fleets of ships employing nets and traps. There are more than a dozen terms for different types of fishing vessels. In addition, aquaculturists raise fish and shellfish in aquatic farms rather than hunting them in open waters.

History of the Industry The world’s rivers and coasts have provided food for humans for millions of years. Scientists believe that humans began fishing during prehistoric times, perhaps 2.5 million years ago. Those early fishers might have used pieces of bone, wood, or stone to create fishhooks with fragments of bait. Archaeologists have found evidence that prehistoric European, American, and African coastal cultures gathered seafood, especially salmon and mollusks. The earliest known record of humans eating seafood is 380,000 years old. Some biologists have theorized that the human brain evolved in part as a result of

DEFINITION

Summary The fishing and fisheries industry raises and captures acquatic animals for use as food and for other applications. Fished creatures include finfish, shellfish, marine mammals, sea turtles, octo663

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diets including fish, which contain specific oils and proteins that help compose and maintain healthy brains. While famous European cave art depicts horses and deer, ancient Egyptian art offers paintings of men hunting fish with spears and in boats. Naturally, people who lived along the shores of rivers or seas would gather what they could to supplement their diet with protein, in which fish and shellfish are rich. At some unknown point, ancient peoples discovered that fishes could be preserved in salt; salted preserved fish, such as pickled herrings and lox, is still eaten today. A related term to salting is “curing,” which refers to the preservation of meat with salt, sugar, or other flavorings. Science cannot determine when people first began using boats to fish. In South Korea, archaeologists have found a fishing boat dating from seventyfive hundred years ago, the oldest known vessel. Other ancient boats have been found in, remarkably, the desert of Kuwait, as well as in China (the world’s most productive fishing nation), in Japan,

A trout hatchery provides albino and rainbow trout for stocking lakes. (©Richard Gunion/Dreamstime.com)

off the coast of Devon, England, and in the Great Pyramid of Egypt. Fish spearing and harpooning were practiced in Europe as much as 300,000 years ago. Line fishing and netting came in later, in Mesolithic times (roughly 11,000-5000 b.c.e.). The Roman Empire, noted for its efficiency and ingenuity in a wide variety of methodologies from building and engineering to international trade, was a region successful in capturing, marketing, and distributing seafood. Increasingly sophisticated capture methods evolved during the Middle Ages in Europe: Vessels were built to larger sizes and capabilities, and fishing took place at farther distances offshore. Ecologists believe that herring and cod, two important staple fishes, began suffering from overfishing at this time. Archaeologists have found evidence that oysters and mussels formed a major part of the medieval European diet. To offset harmful hunting, aquaculture was developed in the nineteenth century. Territoriality is an important concept in the fishing world. The United Nations Convention on the Law of the Sea, developed by scientists and diplomats, stipulates that countries own exclusive rights to their offshore resources, including fisheries, within an area extending twenty miles off their coasts. Earlier, these possessive rights had been considered to extend only three nautical miles from the coast, for an interesting reason: The Dutch legal writer Cornelis van Bijnkershoek (1673-1743) had argued that a reasonable distance for national control of the sea was the distance that a cannonball could be fired from shore. Aquaculture farmers raise and tend fish and shellfish in inland or coastal, fresh or salty waters. Small fish farms usually use ponds or raceways (canals); larger fisheries are usually coastal. Canneries were built in the United States in the nineteenth century, although traditional methods of processing and packing seafoods predate the settlement of the Americas. The Industry Today As of 2009, there were an estimated 250 million fishers in the world (most in Asia, particularly China). Members of the fishing industry vary in size, from single-person or small-family efforts to large corporate endeavors. The largest aquatic resources remain along marine coasts and the high

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An ocean salmon farm in Maine. (AP/Wide World Photos)

seas—the most productive areas being the Pacific Northwest, the Pacific Southeast, and the Atlantic Northeast—while poor peoples in many parts of the world still rely for food on rivers such as the Nile, Mekong, and Amazon. Developed nations have fleets of ships as large as football fields on which commercial fishers use electronic equipment and satellite communications to track fish. As these vessels have enormous freezers to store tons of “catch” (the professional term for seafood that is harvested), employees may live onboard for six months. As of 2010, the industry harvested hundreds of billions of creatures every year, more than any other industry. Industry followers estimate that the U.S. fishing and seafood industries consist of about twenty-five thousand commercial fishing vessels (mostly independently owned), seven hundred fish processors, and twenty-eight hundred distributors. Their total commercial value is approximately $14 billion. Most companies are privately held or are divisions of larger corporations. International fishing efforts saw a dip in production and profits during the first decade of the twenty-first century, although fishing remains a flourishing business. In 2008, Ichiro Nomura, the assistant director-general of the Food and Agricul-

ture Organization of the United Nations Fisheries and Aquaculture Department, announced that the steadily growing endeavor of seafood farming would soon contribute half of the seafood consumed by humans worldwide. Aquaculture employees have, for many decades, tinkered with optimal food for the fishes they nurture. Nutreco Holding NV is the world’s largest manufacturer of fish feed, and in 2009, it succeeded in replacing the normal predatory diet of salmon with soy foods and other vegetable-based products. This substitution made possible a significant reduction in business costs for fishery farmers, as fish feed makes up about 60 percent of the total cost in salmon farming alone. Scientists predict that future experiments with feed will greatly help the world’s aquaculture economies, although such a radical change in salmon’s diet necessarily also alters its nutritional content for consumers. Fisheries are theoretically renewable resources, but countries around the globe report overfishing, in which fishers take such big catches that they deplete neighborhood stocks. The U.S. National Oceanic and Atmospheric Administration (NOAA) reports that, at the end of 2008, the number of threatened, endangered, or depleted protected species had reached twenty-four, a grim statistic.

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This might not sound large, considering that the United States alone is estimated to have more than seven hundred different commercial species, yet it is a troubling figure. A related concept is sustainability. Sustainability was defined in 1987 at the World Commission on Environment and Development as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Hunting a marine species to extinction can have A small fishing boat off the coast of Alaska. (©Joe Klune/Dreamstime.com) dire and unpredictable results, and coastal nations exert efforts to prevent overfishing. otherwise known as the “net ban,” outlawed the use Every country with a fishing industry has enof entangling nets in Florida’s waters and restricted acted legislation concerning fishing. An important the use of other forms of nets, such as seines and concept is “illegal, unreported, and unregulated” shrimp trawls. The amendment was considered a (IUU) fishing. This refers to fishing activities that pioneering measure and was enacted by a popular violate national or international laws or rules, referendum. The law damaged the profits of fishwhich were defined in 2007 by NOAA as follows: ers in the short term but favored the preservation (A) Fishing activities that violate conservation and of local renewable resources. management measures according to an internaClimate change is another hazard for fishery tional agreement, including capture limits or quostocks. The melting of the polar ice caps leads to tas, capacity restrictions, and bycatch (that is, mawarmer water and greater acidity in the oceans. rine animals caught unintentionally) reduction Warm-water areas are becoming warmer, which requirements; leads to changes in fish behavior and to damages to (B) Overfishing; or coral reef ecosystems. Fishes in tropical and equatorial regions have begun to migrate northward (C) Any fishing activities that endanger undersea and southward toward the poles, where they bemountains (“seamounts”), hydrothermal vents come invasive species. Fishing communities in (“fumaroles”), and coral reefs. these regions may find that their local hatcheries are decreasing, while fishers in colder climes must In 2007, the NOAA spent $84.8 million on its Law deal with the unpredictability of species behavior Enforcement and Observers program, as well as when invasion occurs. Extreme weather events, $327 million on its Fisheries Research and Managesuch as hurricanes and flooding that may be ment program and $163.8 million on its Marine caused by climate change or by earthquake, jeopMammal and Endangered Species Research and ardize the lives and livelihoods of all people who Management program. These numbers suggest work outdoors in the regions affected. For examhow seriously the administration takes its regulaple, the devastating Indian Ocean tsunami of 2004 tory responsibilities. harmed fishing operations in fourteen countries In the United States, federal laws regulate fishfor more than a year. In 2010, a catastrophic oil ing in all U.S. territories, while other rules vary spill in the Gulf of Mexico endangered the livelifrom state to state. For example, in 1994, in order hoods of thousands of Gulf Coast fishers, seafood to protect several species suffering bycatch status, restarateurs, and tourism companies; that region is Amendment Three of the Florida Constitution,

Fishing and Fisheries Industry home to one of the largest seafood industries in the United States, second only to Alaska. After seafood is captured from fisheries or wild stocks, most of it is processed. Three stages of processing are handling (the initial stage of processing), packing, and manufacturing related products, such as fish oil, clam sauce for pasta, and pet food. The beginning step of processing can occur at sea—if the vessel contains a workroom with the proper tools and refrigeration—or at fish processing plants. Processing companies of all sizes employ people as handlers: They sort, clean, cut, eviscerate, and scale (remove fish scales) or shuck (remove mollusk shells). The next step is to dress the products, which can include salting, filleting, blanching, precooking, spicing, and breading. Seafood may be preserved with salt and spices or by drying, smoking, or pickling in brine. Aquatic products may be delivered to grocery stores, restaurants, wholesal-

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ers, exporters, or directly to the public as fresh, canned or frozen fish, whole or filleted, as caviar, fish oil, or fish meal. The popularity of seafood restaurants remains on the rise, as seafood is considered to be healthful. The United States is the world’s third-largest consumer of seafood and related products. As of 2010, statisticians listed about four hundred seafood companies in the United States.

INDUSTRY MARKET SEGMENTS Businesses in the fishing and aquaculture industry range in size from small, family-owned endeavors to larger, perhaps recreational businesses to vessels weighing over a hundred tons and employing several dozen employees. Ever-growing mariculture fisheries produce many millions of tons of

In 2010, a catastrophic oil spill in the Gulf of Mexico endangered the livelihoods of Gulf Coast shrimpers. (©Rimas Zilinskas/ Dreamstime.com)

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seafood annually. Following the processes of harvesting, the industry proceeds to those devoted to preservation, delivery, and marketing, whether to seaside-dwelling individuals or to large chains of grocery stores, restaurants, and other purchasers (such as pet food manufacturers). The following sections provide a comprehensive breakdown of each of these different segments. Small Businesses Potential Annual Earnings Scale. The average earnings for a small fishing business, which is called an artisanal fisher business, vary from region to region, from subsistence level to feeding the family with some profit left over. It is impossible to announce average earnings from self-employed fishers in developing countries, as most of them do not report reliable income, if they report any at all. In the United States, the scale depends greatly on whether the fisher is working full time or seasonally, on the size of the crew, and on the capabilities of the vessel. The range can be between $16,000 and $40,000, taking those variations into account. Clientele Interaction. Fishers meet consumers at the point of sale, for the most part. The market chain varies depending on the size of the catch, on whether the fisher has access to refrigeration, and on the distance to production centers and ports. In many parts of Africa, for example, after the fishes are caught, they will be dried or smoked to offset the roughly 30 percent of losses caused by insecure preservation methods. Small producers can sell their catch within their communities, usually in an open-air market or by home delivery. Amenities, Atmosphere, and Physical Grounds. Artisanal fishers can boast of few amenities. In developing countries, the fisher works on a small boat, often entirely open-air, and thus is subject to the vagaries of the weather, as well as sunburn and other injuries, minor or major, depending on the size of the crew, which might be a single person or a two- or three-member crew. In developed countries, where a vessel plying coastal waters might have a modest dinghy (a small vessel with or without a sail, and with or without a covered area for a bridge), it will probably be made of sturdier materials than local wood and therefore less likely to risk capsizing or basic problems such as wood rot. Small-time fishers include the wealthy who

crew yachts, which offer more comforts; they might seek a catch chiefly for themselves but might also be small-time, local seafood vendors. Typical Number of Employees. As in agriculture, most small fishing businesses employ fewer than six workers. Usually only one or two people work together on all aspects of the job. Unpaid family members make up a significant part of the business, such as handling and preparing the seafood for market. Most unpaid family workers assist with the fishing, but a small number might keep track of income and expenses or aid in selling the daily catch. Traditional Geographic Locations. Fishing occurs wherever there is an intersection between human settlements and the sea; even landlocked countries may have fishing communities if they contain rivers and lakes. Fishing communities have a fascinating and picturesque variety: from the busy boatbuilding Village of Riverton, a community of about six hundred people on the banks of the Icelandic River in Manitoba, Canada, to guided trips for hunting large peacock bass on the Amazon River in Brazil to the courtyard houses of coastal fishing villages in Taiwan and many thousands more. Pros of Working for a Small Fishing Business. Fishers work in their local fisheries or aquaculture facilities, so they have knowledge of the neighborhood resources. They know the behavior of the fishes, or the location of shellfish, and they know what to expect from the weather and seasons. No formal academic requirements exist. They acquire occupational skills on the job, many as members of fishing or farming families. Most workers employed in fishing can return to their homes at the end of the workday. They can set their own hours and work as much or as little as their ambition demands. They can oversee all aspects of the operation from capture to sale, and will usually be acquainted with their buyers. Cons of Working for a Small Fishing Business. Fishing offers some of the most hazardous conditions to be encountered in any profession. Many fishers cannot fish daily but must rely upon seasonal conditions. Lobster fishers in Maine, for example, may reap large profits in one month but work only half the year. The work itself may be arduous and demanding, so fishers must be healthy and strong.

Fishing and Fisheries Industry Costs Payroll and Benefits: Small and subsistence-level fishers, especially in developing countries, do not need payroll offices as such. Sickness or other down-time factors result in no income. Job benefits may be meager or sporadic for the self-employed; as a rule, these jobs are not unionized, and workers must plan for their own futures. Deckhands are generally paid a percentage of the boat’s catch. Supplies: Fishing can require little more than a pole and hook or a net; even these are not necessary for the person who can harvest oyster reefs or dig for clams. In developing countries, fishing is often done from a small-draft boat, or a boat with little distance between the waterline and the keel. The small-business fisher might use rods, reels, hooks, lures, bait, fishing lines, or floats. A seiner with a few crew members will tug a seine net behind it and use a power block (a specialized winch) to hoist its catch onto the deck; a trawler uses a trawl net. In the United States, even small vessels usually have sophisticated electronic sensing equipment that works in conjunction with sonar or echo sounding to inform fishing captains when fishes are present in the net, the species of the catch, and its size. Fishers also use navigational devices such as Global Positioning System (GPS) technology. They also have kitchens and refrigeration. External Services: Small fishing businesses may require no external services or the occasional help from family or friends. In developed countries, a captain may seek an intermediary to process or sell the catch. Utilities: At the artisanal level, a fisher might work from a simple dory or from a cruise or sail boat containing basic materials such as directional devices (maps and compasses) and ice coolers for preserving the catch on the return to port. An onboard computer and radio can be life-saving. Taxes: Statisticians cannot provide global figures for taxation of small fishing businesses; in developing countries, taxes might be paid at the state or province level and at the federal level. Midsize Businesses Potential Annual Earnings Scale. Income varies greatly around the world, and the variables in-

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clude the size of the catch (most fishers and industry employees earn a percentage of the revenues made from voyage to voyage), the local, national, or international market price of seafood, and the captains’ discretion. As a rule, when fishers return to shore and sell their catch, the captain takes half of the earnings. He or she will have made a deal with the crew members, at the point of hiring, to share the monetary proceeds at a certain percentage (usually 10 percent, but it varies). As of 2008, American fishers earned a median annual wage of $27,950; the least successful earned about $16,080, and the more successful earned between $33,580 and $45,930. The seasons are crucial to fishers: They normally earn the most in the summer and fall and the least during the winter, except in far northern climes. Alaskan crab fishers can earn as much as $20,000 to $40,000 per month during the peak season, though this is not the typical income. Fishers who live on ships for days or weeks are given free room and board, reducing their living expenses. Salary ranges vary greatly depending on the responsibilities of the job: A beginning aquaculture employee might earn about $17,000 annually for taking care of fish and for cleaning and processing, whereas a marine biologist specializing in oceanography can earn between $55,000 and $100,000 per year. Workers in processing plants are usually paid by the hour, and with overtime and bonuses can earn up to $800 to $1,000 per week during the peak season. Clientele Interaction. Fishers may collaborate with processing plants onshore, with wholesalers, with marketers and sales personnel, and with exporters; they may deal directly with onshore fish markets or with restaurateurs with whom they are personally acquainted. They must report catch statistics to regulatory agencies. Amenities, Atmosphere, and Physical Grounds. Midsize fishing businesses’ employees have a fairly happy situation, happier than that of artisanal workers—especially if they are in command of their vessels. Deckhands are expected to work hard and long hours, and they often retire at the end of the day to a section of the ship in which they share bunks with their crewmates. The working day might not be the normal nine-to-five hours of the landlocked civilian, either; if the call comes that a good fishing ground has been discovered in

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the middle of the night, then crews are expected to wake and report quickly to the deck and be ready to handle whatever job is before them, even if it is raining and they are relying on lamps and searchlights. If the sea waves are rolling high, it can be risky to work on deck. However, hundreds of biographies and autobiographies testify that morale remains high, and pride and camaraderie grow after particularly dangerous trips to sea. A person seeking a place on a midsize fishing vessel might complain, during the trip, about the crowded conditions, the few bathing facilities (if, indeed, there are any), the lack of variety in prearranged meals (which are mostly canned), and other perceived incivilities. However, in the United States and other countries, crews are likely to have showers, television, Internet connections, and some free time to enjoy them. Typical Number of Employees. There really is no typical number of employees of midsize businesses. Each ship has a captain and is likely to have a first mate who assists the captain and who is responsible for the vessel when the captain is off duty. Boatswains supervise any number of deckhands, from a couple to a couple dozen. Traditional Geographic Locations. The midsize fishing operation is most likely to be found in the developed world, especially in the United States, Europe, Australia, and many South American and Asian countries. Fishing takes place on ships rather than boats, though the size of the ship can vary. The Food and Agriculture Organization of the United Nations states that, in the twenty-first century, about 4 million commercial fishing vessels are reported to be in business. The sponge business is healthy in Florida. Pros of Working for a Midsize Fishing Business. Fishing captains own their own vessels and can set their own hours. Workers hoping to move to a larger business can gain invaluable experience and expertise. Often, a captain will pay employees a basic wage as well as a percentage of the profits; the industry is similar to bartending and waiting tables in this regard. Ambition is well rewarded, and camaraderie is highly valued. Usually, just like any office workers, employees can return home at the end of the workday. Cons of Working for a Midsize Fishing Business. The fishing industry is second only to timbercutting in risk to life and health. More than four

hundred commercial fishers died on the job between 1999 and 2008 in the United States alone. U.S. fatalities in the twenty-first century average 71 per 100,000 workers, with drowning the most common cause of death. Fishers and crabbers usually share quarters, up to six in a room. Work is risky because of slippery decks and high seas; crewmembers might be swept overboard; an overloaded ship can capsize. Many fishers work sixteen-hour days, five days a week. The weather can be extreme and can be very cold in the Northern Atlantic and Northern Pacific, especially when the peak season for a given species falls during the winter (as it does for Alaskan crabbers). Handling and processing the catch is monotonous and can also be dangerous. Costs Payroll and Benefits: Fishing captains and crew members agree before each job on the terms of contracts that specify the percentage of profits that will be paid to each worker. Captains or vessel owners take the lion’s share of the profits, but they are responsible for such expenses as maintenance of the vessel and the tools onboard, fuel, repairs, replacement of gear, licenses, fishing permits, and insurance. The income varies between crew managers and deckhands; bonuses might be handed out for hazardous duty or for overtime. A major benefit is that employees are often friends or family members who enjoy working together. Supplies: Deckhands bring their own clothes, boots, and wet-weather gear, so they spend a few hundred dollars before leaving port. The vessel owner provides the safety equipment required by the Coast Guard and might charge the crew a percentage of the fuel, food, and other operating expenses. Deckhands purchase their own fishing licenses. A midsize fishing endeavor will use vessels such as sixty- to seventy-foot-long launches powered by outboard motors or by inboard engines. The vessel should have a container for ice or chilled seawater, such as a cooler, fish hold, or refrigerator. Fishers who leave the shore will need vessels with fishing gear, such as lobster traps, nets for trawling shrimp, or seines for capturing finfish. Navigational aids, such as GPS and charts, are

Fishing and Fisheries Industry crucial, as are communication devices such as the radio. The deckhands may be responsible for operating oceanographic sensors, sonar, conductivity-temperature-depth systems, and other devices. Every crew member should wear a life jacket and know how to ready a life raft and use a first-aid kit in case of emergency. Processing can occur onboard or onshore. Handling and processing supplies can include rendering devices such as handheld or automatic knives for gutting and filleting; band saws for cutting large frozen fishes; and salt-packing boxes, jars, or cans, though the latter requires a factory for canning, whether a commercial cannery or a community (or shared) kitchen. Smoked fish is produced by hanging the cleaned, cured, and dried fish above a woodsmoke fire in a room or building known as a smokehouse. External Services: Sale of catch might occur at a neighborhood farmers market or even directly at the harbor where the vessel docks. The handling and processing of products is performed by the employees onboard, at seaside fish-chopping benches and tables, or at their homes or community factories such as canneries. Depending on the usual size of the catch, the captain might work with a repair facility, equipment sales and service, marine electronics, truckers, an exporter, or a marketing agency. Utilities: Most vessels use power generators to provide electricity, sewerage, and security. They enjoy potable water, home- or ship-cooked food, television, shower stalls, and lodging for anywhere from days to weeks without the costs of usual onshore living expenses. Taxes: In the United States, taxation on midsize fishing businesses varies from state to state; fishers may face both state and federal taxes, as well as sales taxes. Statisticians cannot supply a reliable number for worldwide tax figures. Large Businesses Many countries own fleets of enormous ships that serve as home to their crews for weeks or months. They ply the high seas, the ships have upto-date amenities, and global production (annual size of the catch) is measured in the billions of tons. In the area of seafood processing and distribution, U.S. industries are estimated to consist of about 650 processors and about 2,500 distributors;

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they handle fresh or frozen fish and shellfish, as well as canned seafood. Other companies produce and sell related products, such as fish oil and pet food. Potential Annual Earnings Scale. The earnings of large-scale fishing employees vary greatly, depending on the position, the company, experience, and benefits, as well as the geographic location of the business. As a rule, the larger the catch, the larger the paycheck. In 2010, the average salary estimated by various sources was between about $27,250 and $44,000 for fishers and fishingindustry-related positions. During peak seasons, even deckhands can earn $80,000 to $100,000 in a six- or eight-month workyear. Even entry-level factory trawler fish processors might earn $30,000 to $40,000 in six to eight months, depending on the size and species of the catch. Clientele Interaction. With over ten thousand national seafood restaurants and hundreds of thousands of general restaurant chains that offer seafood, there are plenty of clients eager to buy shrimp, finfish, lobsters, clams, and other seafood. The catch is usually transferred to a processing plant or to a distributor, depending on whether it is processed out at sea or sold in whole form. Major companies such as Bumblebee Foods and StarKist rarely interact with civilian consumers face-to-face, even when shoppers are familiar with the brand names. Amenities, Atmosphere, and Physical Grounds. The largest commercial fishing vessels use widely mechanized processes, and while their crews are subject to environmental conditions, they work among more comfortable living conditions than their colleagues in smaller businesses, as most of their ships are covered rather than exposed to the weather. Because a ship may remain months out at sea, it is in the captain’s interest to ensure that conditions are as safe as possible in this dangerous profession. Crewmembers can enjoy many of their favorite pastimes during off-hours, as they would at home. Seafood farms have traditionally operated inland or in coastal areas, which is certainly easier than wild-fishing, but twenty-first century entrepreneurs are discovering the advantages of using large pens in the open seas. The expenses caused by waste, pollutants, diseases, antibiotics, and other environmental disasters are obviated, and it is not

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necessary to monitor offshore cages on an hourly or daily basis. Typical Number of Employees. Giant factory trawlers employ crews of over a hundred workers. Employers in the offshore fishing industry include giant floating processors (which process but do not catch fish) and tenders (which deliver fish to land and to offshore processors). There are also a number of “factory” or “catcher/processor” vessels that both capture and process fish at sea. Traditional Geographic Locations. Large corporate businesses have fleets of ships and can voyage to great distances from coastlines, into the high seas. Alaska has held the title of the most productive fishing state since 1975, even though it competes with the much larger East and West Coasts. While Florida enjoys the most seafood restaurants, it is also a preferred destination for tourist and recreational fishers rather than huge businesses. Pros of Working for a Large Fishing Business. Jobs at large companies can be very lucrative, for both fishers and fish processors, and there are always openings for young, energetic employees. Working for a few months out of the year allows employees to enjoy other work during off-peak seasons. Many positions are open to beginners who have studied merely two years at vocational schools, which offer hands-on experience. A wide variety of community colleges and universities offer courses in seamanship, vessel operations, marine safety, navigation, vessel repair and maintenance, and fishery technology. The U.S. Coast Guard also offers training courses. For fishers who enjoy teamwork, the camaraderie and morale can be high. Many seafood farms also use state-of-the-art technologies (such as water purification and recycling of resources) and may enjoy the umbrella of government or other financial grants and tax incentives. Successful aquaculturists can produce hundreds of tons of seafood annually at a single fishery. Cons of Working for a Large Fishing Business. Fishing is a grueling and potentially hazardous business, even on a large, technologically advanced ship. The high seas court the dangers of large waves and bad weather. Every vessel, small or enormous, has an open deck where employees do most of their labor, and large waves and wet decks require that deckhands use caution and look out

for one another, in case someone is swept offboard. Fish processing, with its use of knives and saws for slicing, gutting, and filleting, also carries risk of harm, even accidental amputation. It is a cold, wet, and monotonous job; these employees must remain alert at all times. If on-the-job injuries occur, the crew member must make do with what first aid the crew has to offer. The industry is seeing aging in the workforce and difficulties with recruitment and retainment of younger workers. Fishers and crabbers usually share quarters, up to six in a room. Those who work on the sea for extended periods of time may miss their families. Costs Payroll and Benefits: The captain, vessel owner, or holding company manages payroll and determines benefits. Paychecks might be written for weekly or for monthly wages, depending on the company; usually, wages are paid out some time after the catch has been brought to its destination. Supplies: Large fishing vessels have refrigeration equipment, factory freezer trawlers, and fishfinding equipment, including sonar, radar, temperature-probing equipment, night vision apparatuses, on-board computers, and many other systems and devices built in during the process of shipbuilding. These must be maintained and, perhaps, repaired. Survival suits, life rafts, and fire extinguishers are required. The U.S. Coast Guard supervises and regulates safety and security precautions. Every ship must carry an emergency position indicating radio beacon (EPIRB) in case the crew must radio for help, as well as medical kits that carry more than the usual first aid: antibiotics, morphine, and sutures. External Services: Factory floaters are able, with their large crews, to do enormous amounts of work onboard; aquaculturists have also become technologically sophisticated in the last few decades. The At-sea Processors Association, to name just one, operates about twenty catcherprocessor vessels. Still, they have market chains between catch and civilian shopper; the captains and crew think globally rather than locally. They might hire planners, marketers, wholesalers, exporters, retailers, and ecolabelers.

Fishing and Fisheries Industry Utilities: Factory floaters and other very large industrial fishing ships come equipped with all of the utilities one would expect in an onshore business: computers for the leaders on the bridge and good amenities for the crew, including Internet service, television, shower stalls, and online or real-life activities for down-time workers. Taxes: Taxation varies from the captain to the last person listed as deckhand or greenhorn. Legislation has been proposed that would provide a 75 percent tax credit for the purchase and maintenance of the numerous pieces of safety equipment needed on the average commercial fishing vessel.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Because the fishing and aquaculture industries vary widely from country to country and from community to community, it is difficult to provide an average picture of the business. The lives of the subsistence-level fishers in Africa are very different from the lives of American fleet captains. Civilian career opportunities, for students and apprentice fishers, usually begin at the deckhand level. Even the newly hired can earn promotions after only months of experience, depending upon their skills and ambition. The U.S. Coast Guard regulates requirements for experience, as well as physical and academic status. Those who want promotion can find satisfaction in learning the skills necessary for such departments as engineering, navigational, or supervisory positions on the bridge. The Department of Commerce, NOAA, and the Office of Marine and Aviation Operations offer a variety of fishing industry jobs in the Pacific Fleet; the Pacific Ocean is the region of most fishing operations. The following umbrella categories apply to the organizational structure of businesses in the fishing and fisheries industry: ■ ■ ■ ■ ■

Bridge Engineering Galley Factory/Processing Quality Assurance

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Distribution Sales and Marketing Surveying

Bridge The hierarchy on a fishing vessel may take many forms, depending on its size. The bridge is run by the captain, who is responsible for the safety and actions of the crew and for decision making. The captain decides where to fish, maintains the ship’s log, sets the course of the ship, commands the helm, and is responsible in the event that it is necessary to signal other ships. At the end of the trip, the captain determines where and how to return to port and is responsible for avoiding reefs, shoals, and other potential dangerous waters. The captain must be licensed by the U.S. Coast Guard. Depending on the size of the vessel, there may be first mates and second mates, who are the highest executives after the captain. They help in supervising the crew and the overall good shape of the ship. The boatswain is a position of power, as it is the supervisory controller of the deckhands. The boatswain (also known as and pronounced as bos’n) collaborates closely with the captain and first mate in decision making, but is basically in charge of the nets, tools, and other fishing devices on the deck. The decision to find the best area for fishing is shared between the captain and the boatswain, and the boatswain oversees the maintenance and use of nets and weights and other gear. Boatswains require a lot of experience, but if they excel, they are in line to earn the positions of second mates, first mates, and captains. On a large ship there will likely be a purser, who serves a great variety of functions. Pursers enjoyed a bit of glamour and fame with the 1977 launch of a television program called The Love Boat; the purser was a popular character. Rather than facilitating romantic escapades, however, pursers on fishing vessels have the pragmatic jobs of maintaining payroll records and cargo manifests and paying crew members when a trip is over, as well as working as liaison to various government agencies in the form of delivering lists of crew member names. On a cruise ship, the purser is responsible for the passengers, but in any case he or she is in charge of the finances. This position fulfills the duties of human resources, as well: recruitment and retention of

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workers, seeking the best technologies and customer service, and related tasks. According to the NOAA Workforce Management Office, a vessel’s deckhands are responsible for maintaining the ship’s exterior and interior spaces; maintaining and operating deck machinery and fishing gear; mooring and anchoring the ship; handling equipment; and standing watches. They may also build, rig, and maintain missionrelated shore-side facilities such as electronic navigation towers, tide gauges, and visual stations. The deck department’s crew includes the ordinary seaman (this job title includes both women and men) or the general vessel assistant, the able seaman deck utilityman, and the seaman surveyor. This unlicensed profession accepts high school graduates who are interested in the industry. Bridge occupations may include the following: ■ ■ ■ ■ ■ ■

Captain Mate Boatswain Purser Deckhand Greenhorn

Engineering According to the NOAA Workforce Management Office, a vessel’s engineer is responsible for operating all of the ship’s engineering systems, such as propulsion, fuel, electric power, refrigeration, ventilation, air-conditioning, and sanitation; maintaining all engineering systems in the ship and its boats; providing general engineering support for all departments and ship operations; maintaining inventories of equipment, tools, parts, and consumable supplies; and preparing a fueling plan and conducting fueling operations. Assistant engineers stand watches as the engineer in charge, direct the activities of assigned engineering watch personnel, and maintain and repair the engineering systems. These positions require a license. Related, unlicensed positions include the fireman, the oiler, the engine utilityman, and the junior engineer, all of whom are responsible for making sure that the vessel and its employees work under safe conditions. The oiler and fireman take care of the heavy propulsion machinery. The junior engineer has usually had working experience in the roles of oiler or fireman, and must know how

to operate and repair auxiliary equipment. Applicants for these positions usually have to show working experience, but sometimes college course work in mathematics, various sciences, mechanical drafting, and mechanics can stand in stead of previous experience. Engineering occupations may include the following: ■ ■ ■ ■ ■

Chief Engineer Assistant Engineer Electrician Oiler Refrigeration Engineer/Cooling System Operator

Galley The galley is the kitchen of a vessel. Before the vessel leaves port, the stewards go shopping for provisions. The chefs, or stewards, are responsible for planning, preparing, and serving healthy meals. They also maintain the galley, the messes (where crew eat together), storage areas, living areas, and other areas assigned in the contract and make sure these areas are neat and sanitary. Other tasks might include providing clean linens and other supplies that the crew needs. This department does not require licensing but may require general experience gained onboard or in a restaurant, and/or education in a culinary school. Galley occupations may include the following: ■ ■ ■ ■ ■ ■

Chief Steward Chief Cook Cook/Baker Second Cook Galley Assistant Housekeeper

Factory/Processing The factory/processing department is operative only on a floating factory or other ship that includes a processing plant. The manager has a variety of responsibilities, including directing the processing plant or, alternatively, delivering seafood to and serving as a liaison with buyers who will process the products. The manager is in charge of payroll and other payments relating to supplies, equipment, and

Fishing and Fisheries Industry other expenses; this position works with the captain in human resources activities such as supervising employees and ensuring that the vessel’s procedures and equipment are the best possible. Factory foremen (also known as fish processing supervisors) train and supervise employees in cleaning, eviscerating, and preparing fish for packing or canning. These supervisors are responsible for quality control during the various steps of processing, and may be in charge of hourly work schedules. They are concerned with the safety of the employees. Seafood processors do the hands-on work of cleaning fish, shucking oysters, chopping lobsters, or handling whatever product the vessel brings aboard. They carry the catch into the department, which will have work tables and various tools, and begin sorting the catch. Larger ships may contain conveyor belts. On the largest ships, the catch may be very large indeed, so that speed is as important as artistry. After the products are sorted, they must be washed and then speedily preserved: fish might be gutted and sliced (by hand or machine) into fillets, then chilled or frozen; oysters, shrimp, and other products will be put on ice and remain iced until delivery to a grocery store or seafood market. The processors face fairly strenuous labor. Handling the fish and using, for example, grinding machinery is only part of the job; they also might weigh the catch, carry racks of product from table or conveyor belt to boxes or other containers, prepare for canning, or actually do the canning. These positions include “slimers” (the title suggests the messy nature of the job), packers, cleanup crew, machine operators, and office staff. The U.S. Bureau of Labor Statistics (BLS) estimates that food processors earned a median annual wage of $18,600 in 2008. Factory/processing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Factory/Processing Manager Factory Foreman Safety Manager Seafood Processor Fish Packer Fish Roe Processor Machinist Assistant Factory Technician

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Surimi Staff Surimi Technician Fishmeal Technician

Quality Assurance The quality assurance manager holds a heavy responsibility, because consumers all over the globe are insistent on purchasing products that are not polluted, undersized, past their use-by date, or improperly preserved in any way. Quality assurance occupations may include the following: ■ ■ ■ ■

Quality Assurance Manager Quality Assurance Technician Sanitation Crew Offloading Crew

Distribution Once seafood has been captured, the products will be brought to shore either by the fishers themselves or by workers on what are called tender boats, who deliver the products to shore for the fishers. Then distribution can proceed in a wide variety of ways. Fish, crustaceans, and mollusks might be delivered to a cannery; in the Pacific Northwest, family-owned microcanneries have become a flourishing business. Shellstock shippers is the term for those who distribute mollusks such as oysters, mussels, octopus, squid, clams, scallops, and conch. Another big industry processes crustaceans such as lobsters, shrimp, and crayfish (or, popularly, crawfish). Other companies manufacture fresh and frozen seafood dinners for grocery stores and restaurants; a majority of the latter offer at least one fish entrée on the menu. Salmon, grouper, snapper, and halibut dinners, as well as fish and chips, are enormously popular in the English-speaking world, not to mention many other European and Latin American countries. Frozen fishes, in blocks or fillets, as well as other ready-to-serve products such as raw or precooked oysters, lobsters, and shrimp, can be prepared and readied for distribution almost anywhere. Raw aquatic products, from fish to crustaceans and mollusks, safely chilled from point of capture to point of preparation and sale, are snapped up by sushi restaurants. A small slice of fish is placed on a small ball of flavored rice, or the rice is surrounded

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by nori (a type of seaweed), and seafood (such as fish roe) is placed on the rice. Some seaweed, such as nori, is usually dried before it is consumed, but other seaweed, such as wakame, is eaten fresh in soups and other dishes. Seaweed collection is a large industry in Japan, with a large export trade, and smaller elsewhere. The distribution role collaborates with both seller and buyer and, perhaps, a merchandising team/marketing agency. Distribution occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Inventory Manager Importer/Exporter Distributor Freight Loader/Unloader Warehouse Manager Warehouse Worker Shipping and Receiving Clerk

Sales and Marketing The fishing captain who knows that a market (grocery stores, restaurants, processing plants, and the like) is anticipating receiving captured products is a happy captain. It is difficult to describe a typical sales and marketing workforce because of the vast differences in sizes throughout the fishing industry. At the smallest end of the spectrum, the captain or fisher is most likely to function as a seller and marketer; at the largest end, the captain works with international marketers, exporters, and distributors. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■

Sales Manager Sales Representative Marketing Manager Marketing Representative Market Research Analyst

Surveying According to the NOAA Workforce Management Office, a surveying department is responsible for collecting oceanographic and survey data; providing technical assistance to personnel in the research program; and perhaps maintaining oceanographic and survey instruments. Employees (who

may be federal employees) must have experience in working onboard or in an oceanographic survey program, in which they collected and annotated information and worked with monitoring instruments. The Survey Department gathers and records data about the catch and observes whether captured species are allowed by commercial fishing regulations. Observers may share use of the vessel radio to report to the regulatory agency, and they might be required to speak a foreign language if they are working abroad. Surveying occupations may include the following: ■ ■ ■ ■ ■

Chief Survey Technician Senior Survey Technician Survey Technician Assistant Survey Technician Junior Survey Technician

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be in decline. This decline appears slight when one looks at a drop of a few percentage points in global production and income, counted in the billions of dollars. However, factors such as the shrinking of fisheries and fish stocks, the aging of the overall workforce and difficulties with recruitment and retainment, competition with importers and with aquaculturists, poor management by such agencies as the National Marine Fisheries Service that police the industry, poor choices made by many fishers (from ignorance of or disregard for the laws) that lead to overfishing, climate changes that affect the oceans and coastlines, and coastal and marine pollution have left many small communities and many large companies staring at large or, in developing countries, even devastating slumps. During the twentieth century, fishers plundered their aquatic resources with abandon; in the twenty-first century, almost all sectors are now paying for the activities of the previous generations. According to the BLS, employment declines will continue also because of recently imposed and strictly regulated limits on fishing. BumbleBee, a major seller of canned tuna and salmon, found in 2009 that it had to issue $220 mil-

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and other areas limit the oceanaccess possibilities to fishers who live in popular touristdestination countries. However, the outlook is not totally grim. The worldwide fishing and seafood production industries still remain one of the fastest growing food sectors; they employ around 200 million people globally, generating $80 billion a year. While fishing in the wild has suffered diminished returns, aquaculture is on the rise, so seafood farmers have a happier outlook. Freshly caught skipjack tuna. (©Dreamstime.com) There is also the chartered ship industry for recreational fishers on inland rivers and in many American lion worth of notes to refinance debts, after seeing coastal regions, such as the Florida Keys. Commera rise in profits between 2003 and 2008. The slowcial fishing is done only to a very slight extent in down was expected to continue through the followrivers, chiefly because of overfishing and increased ing few years. Revenue in 2007 had been healthy, regulations. Rivers are chiefly a natural resource but the company downsized to lose about a thoufor recreational fishers and guided tours, which ensand employees. StarKist had showed a 2.9 percent courage fly-fishing (the tourists throw their capuptick from 2007 to 2008, but those profits were tured fish back into the water) and which usually $70 million below those of 2003. Chicken of the Sea faced declining sales and negative publicity that resulted from a 2004 lawsuit, which alPROJECTED EMPLOYMENT leged that the company failed FOR SELECTED OCCUPATIONS to warn consumers about their products’ mercury contents. Fishing Industry Countries abroad have also reported a variety of problems. Employment In 2008, The Guardian pub2008 Projected 2018 Occupation lished an article concerning anecdotal evidence that fishing 14,700 13,900 Fishers and related fishing workers captains in the United King600 600 Cutters and trimmers (includes dom were hiring Eastern Euromeat and poultry as well as fish) peans rather than local employees in order to offset payroll 200 200 Sailors and marine oilers costs. Many countries, in which 25,800 27,500 Supervisors (includes farming and captains own traditional enforestry as well as fishing workers) gine-propelled boats that use diesel, find that regional or Source: U.S. Bureau of Labor Statistics, Industries at a Glance, global crude oil prices make Occupational Employment Statistics and Employment Projections fishing trips expensive, someProgram. times prohibitively so. Privatized beaches in the Caribbean

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return the tourists to their starting point on the same day. Employment Advantages There are always a great many and varied occupations in the fishing industry and its support industries. Inexperienced civilians (“greenhorns”) travel in large numbers to Alaska and the Pacific Northwest to hire on as fishers and processors for a summer or simply to enjoy the adventure of gaining experience. The diversity of positions in all areas of fishing, aquaculture, and related fields offers job satisfaction to workers of all kinds, in the handson physical side or the office-based, regulatory and research side. Tri Marine International, the top-earning North American seafood supplier in 2008, operates in countries around the world and is a major supplier of much-loved seafood, such as albacore, skipjack, yellowfin, bigeye, bluefin, and tuna. It oversees about ten refrigerated cargo ships that operate in the Pacific and Indian oceans, as well as both contracted and affiliated fishing boats. Its facilities include eight processing plants located worldwide. Trident Seafoods, a major employer that was the second most flourishing North American seafood supplier after Tri Marine, is actually only a regional company in Alaska and the Pacific Northwest. Its employees capture salmon, crab, and assorted other fin- and shellfish, and do their own processing, canning, or freezing. Working for various retail and food service clients, Trident Seafoods operates a fleet of about thirty processing boats and trawlers, as well as about a dozen onshore processing plants. The company’s brands include Trident, Louis Kemp, and SeaLegs brand of surimi (processed fish), which remain popular among shoppers. In 2009, Trident was healthy enough to purchase a bankrupt seafood company for about $4 million and to establish a new processing facility in Alaska. Because the American dollar has weakened overseas, many vacationers choose to jaunt to inland aquatic resource activities such as recreational fishing. Leisurely tourist activities within the fifty states include fishing from chartered boats on rivers or lakes and wading through the Everglades to learn about wetland ecosystems. Tourism guides knowledgeable about local and regional aquatic resources are in increasingly high demand.

Specialist sight-seeing companies can employ all kinds of transport from speedboats to helicopters to cruise liners. Fishing and aquaculture are industries that greatly reward ambition and provide gratification to the workers who know how much their labors are enjoyed by the average family sitting down to a good seafood meal. Annual Earnings The fishing industry earned global revenues of $91.2 billion in 2006, according to the GreenFacts Scientific Board. According to the BLS, in 2008 American fishers and workers in related fields (other than the self-employed) earned an average of $13.68 hourly and $28,460 annually, though managers earned about $42,740 and often much more. Fish cutters earned an average of $10.77 hourly and $22,400 annually. Fish packers might earn around $12.00 hourly. American fish and game wardens earned an average of $26.94 hourly and $56,030 annually. The twenty-first century downturn in revenues is expected to turn around within a decade or so of proper regulation and education of fishers in good practices of sustainability.

RELATED RESOURCES FOR FURTHER RESEARCH American Fisheries Society 5410 Grosvenor Ln. Bethesda, MD 20814 Tel: (301) 897-8616 Fax: (301) 897-8096 http://www.fisheries.org Food and Agriculture Organization of the United Nations Viale delle Terme di Caracalla 00153 Rome Italy Tel: 39-6-570-53099 Fax: 39-6-570-53152 http://www.fao.org Food Institute Online 1 Broadway Elmwood Park, NJ 07407 Tel: (201) 791-5570

Fishing and Fisheries Industry Fax: (201) 791-5222 http://www.foodinstitute.com Intergovernmental Oceanographic Commission IOC/UNESCO Paris 1 rue Miollis 75732 Paris CEDEX 15 France Tel: 33-1-45-68-39-84 Fax: 33-1-45-68-58-12 http://ioc-unesco.org National Marine Fisheries Service 1315 East West Hwy. Silver Spring, MD 20910 Tel: (301) 713-2334 http://www.nmfs.noaa.gov/fishwatch Northwest Atlantic Fisheries Organization P.O. Box 638 Dartmouth, NS B2Y 3Y9 Canada Tel: (902) 468-5590 Fax: (902) 468-5538 http://www.nafo.int WorldFish Center Jalan Batu Maung, Batu Maung 11960 Bayan Lepas Penang, Malaysia Tel: 60-4-626-1606 Fax: 60-4-626-5530 http://www.worldfishcenter.org

ABOUT

THE

AUTHOR

Fiona Kelleghan is a cataloging and metadata librarian at the University of Miami. Since about 1995, she has been responsible for cataloging federal and international government documents, including materials produced by such agencies as the Food and Agriculture Organization of the United Nations, as well as books and other materials for the University’s Rosenstiel School of Marine and Atmospheric Science.

FURTHER

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READING

Banse, Tom. “First Microbreweries, Now MicroCanneries Flourish.” OPB News (Bellingham, Washington), November 9, 2009. http:// news.opb.org/article/6177-firstmicrobreweries-now-micro-canneries-flourish. Barrett, James, Alison Locker, and Callum Roberts. “The Origins of Intensive Marine Fishing in Medieval Europe: The English Evidence.” Proceedings: Biological Sciences 271, no. 1556 (2004): 2417-2421. Eilperin, Juliet. “World’s Fish Supply Running Out, Researchers Warn.” The Washington Post, November 3, 2006. http://www.washingtonpost .com/wp-dyn/content/article/2006/11/02/ AR2006110200913.html. Food and Agriculture Organization of the United Nations. Aquaculture Development. Rome: Author, 2001. _______. Report of the Expert Consultation on the Development of a Comprehensive Global Record of Fishing Vessels. Rome: Author, 2008. _______. The State of World Fisheries and Aquaculture. Rome: Author, 2008. Haggan, Nigel, Barbara Neis, and Ian G. Baird, eds. Fishers’ Knowledge in Fisheries Science and Management. Paris: UNESCO, 2007. Morris, Steven, and Severin Carrell. “Enforcement and Voluntary Deals Prompt a Renaissance.” The Guardian, March 25, 2008. http://www.guardian.co.uk/environment/ 2008/mar/25/fishing.food1. Myers, Ransom, and Boris Worm. “Rapid Worldwide Depletion of Predatory Fish Communities.” Nature 423 (2003): 280-283. National Oceanic and Atmospheric Administration Workforce Management Office. “Vessel Employment: Career Opportunities in the Pacific Fleet.” http:// www.wfm.noaa.gov/about_us.html. Pillay, T. V. R., and M. N. Kutty. Aquaculture: Principles and Practices. Ames, Iowa: Blackwell, 2005. Stickney, Robert R., ed. Encyclopedia of Aquaculture. New York: Wiley, 2000. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg.

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U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Wright, Sarah Anne. “Gone Fishing: Rugged Job

Can Pay.” The Seattle Times, February 8, 2004. http://community.seattletimes.nwsource .com/archive/?date=20040208&slug =fisherman080. Zugarramurdi, Aurora, Maria A. Parin, and Hector M. Lupin. Economic Engineering Applied to the Fishery Industry. Rome: Food and Agriculture Organization of the United Nations, 1995.

Food Manufacturing and Wholesaling Industry ©Dreamstime.com

INDUSTRY

INDUSTRY DEFINITION

SNAPSHOT

General Industry: Agriculture and Food Career Clusters: Agriculture, Food, and Natural Resources; Manufacturing Subcategory Industries: Animal Food Manufacturing; Animal Slaughtering and Processing; Bakeries and Tortilla Manufacturing; Coffee and Tea Manufacturing; Dairy Product Manufacturing; Farm Product Raw Material Merchant Wholesalers; Flavoring Syrup and Concentrate Manufacturing; Fruit and Vegetable Preserving and Specialty Food Manufacturing; Grain and Field Bean Merchant Wholesalers; Grain and Oilseed Milling; Grocery and Related Product Merchant Wholesalers; Seafood Product Preparation and Packaging; Seasoning and Dressing Manufacturing; Snack Food Manufacturing; Sugar and Confectionary Product Manufacturing Related Industries: Beverage and Tobacco Industry; Farming Industry; Fishing and Fisheries Industry; Food Retail Industry; Food Services; Livestock and Animal Products Industry; Restaurant Industry; Veterinary Industry Annual Domestic Revenues: At least $1 trillion USD (IBISWorld, 2009, and Plunkett’s Research, 2010) Annual Global Revenues: At least $1.6 trillion USD (Euromonitor International, 2007, and Plunkett’s Research, 2010) NAICS Numbers: 311, 4244-4245

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Summary The food manufacturing and wholesaling industry processes agricultural resources harvested from farms into products and distributes them to retail markets. A major global industry, food production occurs worldwide for both domestic consumption and export. Food engineers and scientists design technology and procedures that transform livestock and crops into commercial goods that meet government regulations for nutritional quality and protection from contaminants. Legislation addresses safety issues associated with this industry. History of the Industry Since ancient times, humans have processed agricultural resources to preserve them or make them suitable for consumption. For example, people learned before recorded history began to cook foods and to soak grains in

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Tins in a production line in a salmon cannery. (©Bruce Amos/Dreamstime.com)

liquid to make them easier to eat and digest. Salting, smoking, and fermenting methods, moreover, were developed to preserve foods made from animals and plants. Records indicate that Romans preserved fruit in honey. By the Middle Ages, people used heat to dehydrate fresh agricultural goods. In late eighteenth century France, Nicholas Appert invented techniques using heat to sterilize food and seal it in corked glass bottles. He built a factory in 1810 to produce canned foods that could be stored for later consumption. The canning technologies developed by Appert and other nineteenth century inventors were essential to food manufacturing becoming a modern industry. The Industrial Revolution caused European and American urban populations to expand significantly and made it possible for large-scale farms to produce an abundance of fresh ingredients. Urban dwellers were less equipped to produce their own food than rural populations, so the demand for food as a commodity increased. The supply of perishable foodstuffs increased at the same time. As a result, there was significant new demand for improved food manufacturing techniques that could process and transport food from field to consumer quickly and that could preserve perishable foods or transform them into less perishable commodities.

During the mid-nineteenth century, Louis Pasteur recognized that heat killed microorganisms, establishing principles for pasteurization that were eventually implemented to manufacture safe foods. Improved preservation methods enabled agricultural resources to be processed in the locations where they were abundant and then distributed to a broader market. These methods transformed the food manufacturing and wholesaling industry, opening new, distant markets for products that had previously been available only to local purchasers. The food industry became global, and new products became available in many markets for the first time. In addition to canning and preserving techniques, advances in mechanical refrigeration methods made this expansion possible because even perishable foods could be shipped long distances by ship and rail. In the 1860’s, the U.S. Civil War expanded the American commercial canning industry, as 30 million cans of food were manufactured each year to feed soldiers. Legislation regulated the quality and safety of manufactured foods. The U.S. Department of Agriculture (USDA), established in 1862, enforced these regulations through its Food Safety Inspection Service (FSIS). By the 1890’s, Samuel Prescott and William Underwood were studying the bacteriology associated with canning food and

Food Manufacturing and Wholesaling Industry were using mathematics to describe relationships between the amount of heat applied and the resulting reduction of microbe activity. Food manufacturing engineers applied that information to design effective food-sterilization procedures. Upton Sinclair’s book The Jungle (1906) revealed the dangerous and unsanitary conditions in some meatpacking houses and canneries. Established in 1906, the U.S. Food and Drug Administration (FDA) issued standards for food manufacturing. Some food manufacturers, such as Libby, McNeill, and Libby, promoted sanitation in their factories, requiring employees to change work clothing frequently in order to prevent them from contaminating the food they handled. Twentieth century food manufacturing machinery benefited from scientific and technological advances. In the 1920’s, Clarence Birdseye developed processes to manufacture and package frozen foods, which soon dominated the wholesale food market. In 1925, C. Olin Ball pioneered computer modeling of the heat processes used by food manufacturers to destroy harmful microorganisms, such as botulin. His FDA-endorsed mathematical mod-

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els allowed manufacturers to determine the desirable thermal levels for food processing, and they have retained value into the twenty-first century. By the late 1940’s, many food manufacturers were exposing food to radiation to pasteurize it. They later used ultrahigh-temperature (UHT) methods. Better understanding of thermodynamic principles led to improved refrigeration technology. Food engineers devised ways to freeze-dry food, allowing companies to process and distribute popular consumer foods, including coffee. G. Howard Kraft patented a modified atmosphere packaging concept in 1960, which modern-day food manufacturers use to produce several billion packages annually. Advances in computer technology enabled the Sara Lee factory in Deerfield, Illinois, to initiate comprehensive computer-controlled food manufacturing in 1964. That pioneering plant-automation system regulated several hundred production roles, including freezers in the company’s warehouse and distribution systems. Other food manufacturers incorporated automation in their factories as those facilities were redesigned to replace

These cows are being milked with an automatic system. (©Picsfive/Dreamstime.com)

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outdated technology. Starting in 1974, food supply chains used computerized Universal Product Codes (UPC). Researchers examined high-pressure techniques to impede harmful contaminants, resulting in industrial use of that technology by the 1990’s. The Industry Today Twenty-first century food manufacturers and wholesalers pursue goals similar to those of their predecessors: improving food safety, quality, and variety. They strive to provide consumers with appealing foods that meet their expectations regarding nutrients, freshness, taste, and cost. By the early twenty-first century, many food manufacturers and wholesalers had become substantial corporations. Acquisitions, mergers, and takeovers consolidated the wealthiest food manufacturers and wholesalers. Manufacturers have often become identified with their most popular brands, which have thrived despite economic downturns. Many food manufacturers dominate their food specialties. For example, Tyson Foods manufactures the most poultry products globally. Fortune and Forbes magazines include food manufacturers on their lists of the world’s most lucrative businesses. Food engineers and scientists devise technologi-

cal advances that are incorporated into contemporary food manufacturing. Powerful microchips enhance plant automation, allowing plants to process agricultural resources and package food more efficiently and swiftly. Engineers have developed biosensors that can locate harmful microorganisms in food. The use of heat remains a basic aspect of many modern food manufacturing techniques. Twenty-first century food manufacturers have refined heating methods to achieve more precise temperatures and shorter heating times for consistent production results. Manufacturers have begun to use new methods to pasteurize food, including pulsed electric field (PEF) processing, magnetic resonance, irradiation, ultraviolet exposure, and high-pressure processing (HPP). These techniques have reduced the amount of heat used to destroy microorganisms, particularly bacteria, because thermal pasteurization processes often detrimentally alter food’s chemical composition or structure. Foods pasteurized with these new techniques retain desired characteristics and nutrients, including vitamins. The food manufacturing industry is reassessing its impact on the environment. Environmental awareness has contributed to food engineers de-

Chickens being processed. Tyson Foods manufactures the most poultry products globally. (©Picsfive/Dreamstime.com)

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Trade Item Numbers to achieve better tracking of food products. The GS1 Global Data Synchronization Network (GDSN) aspired to secure 75 percent of manufacturers’ participation by 2015. Most food packaging meets government requirements for accurate labeling, Value Added Amount although incidents of food fraud someGross domestic product $189.5 billion times occur. Inspectors use deoxyribonuGross domestic product 1.3% cleic acid (DNA) tests and isotope ratio Persons employed 1.678 million analysis to determine the source of misTotal employee compensation $87.8 billion identified foods. In March, 2010, the FDA intensified its efforts to penalize manufacSource: U.S. Bureau of Economic Analysis. Data are for turers that deceptively label food. The 2008. proposed FDA Food Safety Modernization Act would expand inspection of domestic and imported foods. In 2010, critics revealed that the FDA had not inspected 44 percent of the 51,229 food manufacturers in the veloping machinery and techniques that waste less United States from 2004 through 2008, demandenergy and water. Many manufacturers recycle ing that the agency achieve more comprehensive wastes produced during processing, attempt to oversight of the food industry. achieve sustainable practices, and use packaging Consumers’ critical reactions to some technolomade from renewable materials. Some food packgies, such as the use of irradiation, have affected aging incorporates mechanisms designed to prefood manufacturing. Some manufacturers have revent or reveal tampering detrimental to food sponded to consumer demand for organic foods safety. by processing agricultural materials that meet The Public Health Security and Bioterrorism USDA and other standards to be certified organic. Preparedness Act of 2002 requires manufacturers By 2005, the organic food manufacturing industry to record the sources and distribution chains of was generating approximately $14 billion annutheir products. Contemporary food manufacturers ally. In 2009, the Ecological Food Manufacturers and wholesalers use electronic methods to compile Association was established to assist food manufacinventories of food produced and shipped and to track the movement of ingredients and products within factories and to warehouses and retailers. The Institute of Food Technologists (IFT) has enInputs Consumed by dorsed using electronic documentation of critical tracking events (CTEs) in the food supply chain, Manufacturers of Food, from agricultural resources to shipments. Because Beverages, and Tobacco radio frequency identification (RFID) tracking Products tags on pallets are expensive, only about 40 percent of U.S. manufacturers use them, according to a Input Value 2006 Food Engineering survey. Energy $17.3 billion In 2007, the FDA developed the Food Protection Materials $460.9 billion Plan in response to incidents of agricultural and Purchased services $78.8 billion foods contamination caused either maliciously by Total $557.0 billion terrorists or by other sources. In October, 2009, fiftyfive food manufacturers and distributors agreed to Source: U.S. Bureau of Economic Analysis. Data comply with the Foodservice GS1 U.S. Standards are for 2008. Initiative for identifying food businesses and products with Global Location Numbers and Global

The Contribution of Food, Beverage, and Tobacco Product Manufacturing to the U.S. Economy

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turers in adopting environmentally sustainable methods and resources. Food manufacturers have also responded to public opinion regarding health issues, especially obesity in adults and children. In March, 2010, U.S. First Lady Michelle Obama spoke to Grocery Manufacturers Association members, asking food manufacturers to offer consumers healthier food choices. Starting in 2010, Campbell’s Soup Company and Kraft Foods both decreased the amount of sodium in some of their foods. Food Network’s Unwrapped and the History Channel’s Food Tech delved into the industry, revealing to viewers the sources of their food, as well as manufacturing, packaging, and distribution processes and the workers employed at food plants. Food manufacturing has been affected by a price crisis that occurred in the first decade of the twenty-first century, when wholesale prices for foods increased by approximately 25 percent. Prices for wholesale foods rose by 7 percent in 2007 alone, more than they had in any year since the 1980’s, and wholesalers expect prices to keep increasing in the 2010’s. Many manufacturers and wholesalers have turned their focus to inexpensive canned, frozen, and easy-to-prepare foods, which consumers affected by economic problems have sought for their affordability and convenience. Brands including Chef Boyardee, Hunt’s, Peter Pan, and Banquet have experienced significant sales growth. Recognizing that Internet sales represented one-fifth of total U.S. business revenues by 2010, the North Iowa Area Community College at Mason City established an associate of applied science degree in electronic agribusiness. This degree program is designed to prepare graduates for careers increasing electronic commerce related to the agriculture and food industries.

INDUSTRY MARKET SEGMENTS The food manufacturing and wholesaling industry operates small to large businesses that create or distribute food to consumers. These businesses vary from sole practitioners who market specialty or boutique items, such as preserves or handmade cheese, through a handful of local

stores in a given community to vast multinational corporations that own many subsidiaries and produce and distribute dozens of different food brands throughout the globe. Some 89 percent of food manufacturers employs fewer than one hundred people. The following sections discuss aspects of each of these varying segments. Small Businesses Small food manufacturers and wholesalers often produce foods for specialized markets and purposes, such as holiday candies or gourmet salad dressings. These businesses are sometimes affiliated with specific stores, tourism centers, hotels, restaurants, or groceries, which supply a steady source of clients. They strive to attract customers who will become loyal to their brands and appreciate unique food items. Potential Annual Earnings Scale. Small food manufacturers pay employees varying wages depending on their skills, tasks performed, and production demands. According to the U.S. Bureau of Labor Statistics (BLS), food cooking machine operators earned an average of $26,200 in 2009, while bakers earned an average of $25,940, and butchers and meat cutters earned an average of $27,130. Food scientists and technologists earned an average of $59,790, and operations managers in food manufacturing firms earned an average of $107,650. Small businesses may pay less than these averages, and they often pay hourly wages or per-piece wages for pastry decoration and other hand-intensive labor. Clientele Interaction. Small food manufacturers and wholesalers seek to provide food items, tastes, and qualities customers cannot find elsewhere. Owners and managers often are directly involved in making and distributing foods. Candy makers, for example, may personalize chocolates for customers by creating designs or decorations specific to individuals, groups, or occasions. Many small food manufacturers produce seasonal items and encourage customers to purchase those items from them each year. Some emphasize regional products, such as pecans grown in southern states. Small food manufacturers and wholesalers sometimes distribute cookbooks containing recipes that use their products. Because customized orders are often expensive, small food manufacturers sometimes offer deals

Food Manufacturing and Wholesaling Industry and discounts. They may create clubs, for example, in which customers receive a different food monthly by paying an annual fee, to please clients and ensure consistent business. Other offers might provide repeat customers special foods to celebrate birthdays or other occasions. Such personal attention usually enhances customer satisfaction. Electronic newsletters and blogs also provide manufacturers a means to interact with customers and tell about their business, provide recipes, and share photographs of workers, equipment, and processes used to make their food products. Some small food manufacturers incorporate elements of entertainment and hospitality in their businesses, providing visitors closer access to manufacturing processes than larger companies can permit. Visitors may enjoy watching such foods as cheeses and maple syrup being made. Small food wholesalers seek contracts by visiting managers of grocery stores and other retail markets in their local area, emphasizing the uniqueness, quality, and affordability of the foods they offer. They often use electronic communications to distribute information about products and prices to retailers they identify as potential clients throughout the United States and globally. Amenities, Atmosphere, and Physical Grounds. Small food manufacturers operate in a variety of settings, ranging from functional factories to attractive buildings adjacent to commercial stores. Regardless of their appearance, small food manufacturers share common elements. They stock their manufacturing space with equipment, including mixers, ovens, molds, pans, and machinery designed to perform specific tasks according to each manufacturer’s needs. Some small food manufacturers have adjacent store and dining areas for customers to sample and buy their products. Small food manufacturing sites sometimes have glass windows in walls separating the manufacturing and public areas so people can observe workers making food items. Some manufacturers provide visitors with free souvenirs relevant to foods they produce. Small food wholesalers keep products in one or several warehouses. They are often located near the manufacturers who produce the foods and beverages the wholesalers sell and ship to retailers. Buildings used for small food wholesaling are primarily utilitarian, including office and storage space. Parking areas provide space for vehicles and

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the maintenance processes they require. Both small food manufacturers and wholesalers keep grounds surrounding their businesses neat, trimming grass and shrubbery and removing debris, for safety reasons and to convey a positive image to the public. Typical Number of Employees. Small food manufacturers and wholesalers usually have small staffs, employing an average of twenty people or less to acquire ingredients and make, sell, or distribute food products. Owners and managers often work alongside employees. Some small food manufacturing and wholesaling businesses are family operations, employing relatives and friends. Businesses involving seasonal food items sometimes hire temporary workers to supplement full-time staffs. Traditional Geographic Locations. Many small food manufacturing and wholesaling businesses are located in communities with low populations or rural areas in a variety of geographical settings. Some of these companies select their locations based on characteristics that make them conducive to manufacturing or selling their products, such as proximity to agricultural resources they need or to high-traffic areas, such as historical, tourist, or recreational sites. Pros of Working for a Small Food Business. Employees of small food manufacturers and wholesalers often find their work enjoyable because they are able to interact with and receive feedback and appreciation from customers. Many workers also enjoy the sense of community that small businesses can cultivate. Most positions in these small businesses do not generally require college degrees. Special services, such as assembling gift baskets from manufacturers’ foods and other artistic presentations involving food, enable employees to use their creativity. Some small businesses pay for employees to receive training in cake decoration or other skills. The seasonal nature of the market for many small-scale food products appeals to workers interested in part-time labor. Small businesses often give their staffs gifts of food they make and distribute. Experiences working in businesses of this size can prove beneficial to employees who decide to seek employment in larger companies. Cons of Working for a Small Food Business. Small food manufacturing and wholesaling businesses may be understaffed, causing both owners

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and employees to be overwhelmed by high demand. Maintaining financial stability can be both difficult and stressful and can require owners or managers to find the time to gain knowledge of marketing, accounting, and other fundamental business subjects to keep their businesses operational. Some employees may not have the training needed to perform complex tasks involving decorating luxury foods adequately. Wholesaling jobs may require employees to complete training and certification to operate equipment such as forklifts and to drive commercial vehicles. Some positions require employees to work nighttime and early morning hours, and those baking or freezing foods, for example, may have to spend hours in hot or cold workspaces. Seasonal food production and distribution can interfere with employees’ holiday plans. Business may slow between the holidays associated with many small food businesses’ products. Costs Payroll and Benefits: Employees at small food manufacturing and wholesaling businesses may be paid hourly wages or salaries. These businesses often hire temporary or seasonal workers, who are paid hourly and generally do not receive benefits. Benefits for full-time staff, including sick and vacation time, vary according to agreements between employers and workers. Supplies: Small food manufacturing and wholesaling businesses require diverse items to maintain their facilities and services, including ingredients, office supplies, cleaning materials, telecommunications equipment, baking and other industrial cooking equipment, and sterile foodpackaging materials. External Services: Many small food manufacturing businesses contract with suppliers to receive necessary agricultural resources and ingredients to make their food products. Both manufacturers and wholesalers often contract cleaning and maintenance services for their office spaces, external grounds, and production equipment and machinery; pest control services; and accounting and legal services. Contracted lawyers may oversee trademark acquisition and enforcement, arrange for inspections by officials, and ensure compliance with local, state, and federal licensing requirements. Manufacturers and wholesalers usually hire insurance agents to

provide liability, property, and other insurance protection they need. They may contract for fuel services for vehicles. Utilities: Small food manufacturers and wholesalers must pay for electricity, gas/oil, water, sewage, telephone, and Internet access. Taxes: Small food manufacturing and wholesaling businesses pay property taxes and local, state, and federal income taxes. Wholesalers pay vehicle registration and licensing taxes, which may also apply to some small manufacturing companies. Manufacturers that sell their products directly to customers must collect sales taxes. Midsize Businesses Many midsize food manufacturing and wholesaling businesses are regional companies. Some produce and distribute brand-name foods that are familiar and popular mostly with consumers in their geographical region. Others manufacture and sell foods for nationwide distribution but operate at lower production and revenue levels than large food corporations achieve. Potential Annual Earnings Scale. According to the BLS, food cooking machine operators earned an average of $26,200 in 2009, while bakers earned an average of $25,940, and butchers and meat cutters earned an average of $27,130. Food scientists and technologists earned an average of $59,790, and operations managers in food manufacturing firms earned an average of $107,650. Production supervisors in the industry earned an average of $50,380, wholesale sales managers earned an average of $107,260, and sales representatives earned an average of $57,210. Clientele Interaction. Midsize food manufacturing and wholesaling businesses often emphasize the economic importance of their products to their immediate communities and surrounding areas, where many of their employees and customers live. They also note sentimental aspects of their products’ ties to geographical places or beloved hometown figures to appeal to customers who have moved away and might be homesick for those foods. Some manufacturers provide discounts and services to ship their products to soldiers from the region who are serving overseas. Many manufacturers welcome groups from schools and other visitors to tour their facilities and learn about the products they make, providing opportunities to

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able trucks to access the buildings to unload or taste samples. Midsize food manufacturers and load supplies associated with food manufacturing wholesalers frequently participate in scholastic or wholesaling. Speakers and intercoms transmit business programs or offer internships to high communications throughout plants. school or college students. Many midsize food manufacturing and wholeMidsize food industries promote their brands saling facilities are surrounded by fences and have by presenting company information, product deguard stations at entrances to prevent inventory scriptions, and order forms and contracts on their theft and unapproved visitors. Employees often Web sites. Some midsize food manufacturers mainhave identification cards, some with bar codes or tain social networking Internet sites to interact magnetic strips they can use to access production with their customers. They sometimes offer couand storage areas. Most midsize food businesses pons or other deals to attract customers. Compaemphasize cleanliness and safety over appearance nies sometimes sell merchandise with their logos within the spaces used for manufacturing. Public and print cookbooks containing recipes using areas—where visitors view production processes, their products. They occasionally offer special gift usually through glass walls, or buy foods and merpackages, combining such products as potato chandise—often have designs relevant to the comchips and dip, or provide tourist bureaus with panies’ products and provide facilities to accomfoods to give away in promotions or to sell at commodate visitors. Landscaping is usually attractive to munity welcome centers. convey a positive image. Amenities, Atmosphere, and Physical Typical Number of Employees. Midsize food Grounds. Most midsize food manufacturing and manufacturing and wholesaling businesses often wholesaling industries consist of utilitarian strucemploye fewer than one hundred people, but they tures where foods are processed and stored. Agrimay employ up to five hundred depending on cultural goods move through a variety of machines their needs. and tools designed for specific purposes, such as Traditional Geographic Locations. Agriculcutting, pressing, dipping, and other movements. tural communities in all regions of the United Manufacturing plants often use long conveyer belts States are common sites for midsize food manufacto move foods being processed to various stations turing and wholesaling businesses because of the where they undergo such treatments as drying, proximity to resources needed to create food prodheating, or freezing and are pasteurized to remove contaminants. Buildings housing midsize manufacturers and wholesalers include freezers and shelving to store products. Facilities usually include areas where employees can shower to prevent contaminating food-handling stations and can change into work clothing and safety gear. Some businesses maintain health stations where employees can be treated for any injuries occurring at work. Storage areas are provided for vehicles such as forklifts to move supplies and food within the processing and shelving sections of buildings. Parking lots and garages provide spaces for employees’ and According to the American Egg Board, hens lay about five eggs per week. companies’ vehicles. Docks en(©Dreamstime.com)

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ucts. These industries often operate on the periphery of both urban and rural locations, depending on specific attributes those places offer. Midsize food manufacturers and wholesalers often choose sites near major transportation routes, including highways, interstates, railways, and rivers. Places with airports are essential for food businesses needing to ship by air. Pros of Working for a Midsize Food Business. Midsize food manufacturing and wholesaling businesses endeavor to please their workers. Many companies provide training to prepare entrylevel employees for their new positions and to teach all personnel about new technologies and procedures as needed. Food managers, engineers, and scientists also have access to educational opportunities to enhance their skills. These businesses often encourage employees to consider their workplaces and colleagues as forming communities: They host parties and picnics for employees and their families, honor employees at awards programs, distribute newsletters, and form committees for various projects in which employees can participate. Some midsize food businesses reward employees with such perks as stock dividends and recognize service anniversaries with gifts. Cons of Working for a Midsize Food Business. Employees in midsize food manufacturing and wholesaling businesses are at constant risk from various hazards. Despite safety training and efforts to minimize accidents, some incidents do occur. Workers also experience physical problems such as carpal tunnel syndrome because of the repetitive motions involved in their tasks. Hearing loss is a concern because manufacturing requires the use of loud machinery. Some workers may be expected to monitor several tasks simultaneously and feel overwhelmed. The monotony and tedium involved with many workers’ roles in manufacturing processes may bore or desensitize them, affecting their ability to pay attention to their assignments and possibly reducing the quality of the foods they produce. Some employees are must work night shifts or in hot or cold environments, depending on the manufacturing processes they are assigned. Some items may be subject to declines in production, recalls, or discontinaation as a result of food contamination, economic issues, or other problems: All these eventualities can result in reduced hours or layoffs for employees.

Costs Payroll and Benefits: Employees in midsize food manufacturing and wholesaling businesses often work for hourly wages, especially if they are temporary workers. Overtime pay is available to employees working beyond their scheduled shifts. Managers and other higher-level employees usually receive annual salaries. Extra income or other forms of compensation reward some employees’ job performance and their contributions to their companies’ success. Such benefits as sick days, vacation time, and health insurance vary based on terms negotiated for each employee’s contract. Employees in these businesses sometimes join labor unions, which monitor conditions relevant to their employment. Supplies: Materials essential for midsize food manufacturing and wholesaling industries include ingredients, production machinery, safety equipment, cleaning supplies, telecommunications and computer technology, office supplies, and maintenance equipment for facilities and grounds. External Services: Many midsize food manufacturing and wholesaling businesses purchase containers and packaging from other companies. They often contract for security cameras and personnel; pest control; maintenance and repair services for vehicles, machinery, and computers; and attorneys and business professionals to perform accounting, marketing, and other tasks, such as filing for brand trademarks. Many manufacturers consult with insurance experts to secure coverage for properties and any liabilities associated with workplace injuries and food safety. They sometimes arrange for consultants to assess whether businesses have adequately complied with health and safety laws and are ready for inspectors to evaluate their sites and performance. Fuel companies may provide these food industries with gasoline contracts to fuel vehicles. Utilities: Midsize food manufacturers and wholesalers must pay for electricity, gas/oil, water, sewage, telephone, and Internet access. Taxes: Midsize food manufacturing and wholesaling businesses pay property taxes and local, state, and federal income taxes. Wholesalers pay vehicle registration and licensing taxes, which may also apply to some small manufacturing

Food Manufacturing and Wholesaling Industry companies. Manufacturers that sell their products directly to customers must collect sales taxes. Large Businesses Large food manufacturers and wholesalers are mostly corporations, often operating factories and warehouses in several geographical locations, including internationally. They usually produce or distribute major food brands, which form those businesses’ identities. Approximately five hundred of the approximately twenty-eight thousand U.S. food manufacturers in 2006 were considered large businesses. Potential Annual Earnings Scale. According to the BLS, food cooking machine operators earned an average of $26,200 in 2009, while bakers earned an average of $25,940, and butchers and meat cutters earned an average of $27,130. Food scientists and technologists earned an average of $59,790, and operations managers in food manufacturing firms earned an average of $107,650. Production supervisors in the industry earned an average of $50,380, wholesale sales managers earned an average of $107,260, and sales representatives earned an average of $57,210. The average chief executive of a food wholesaler earned $186,630, and the average chief executive of a food manufacturer earned $179,990. Employees of large firms typically earn salaries equal to or greater than these averages, although pay may vary significantly in different geographic areas. Clientele Interaction. Most employees of large food manufacturing and wholesaling corporations have limited interactions with customers as a result not only of their scale of operation but also of safety and privacy concerns regarding their products. Some factories schedule tours for visitors, ranging from school groups to industrial professionals, and they may provide samples of their foods to the public in addition to selling merchandise and cookbooks featuring food brands they make or distribute. Large food manufacturers and wholesalers often establish Web sites to promote their products. Marketing includes coupons and discount offers. Some large food corporations sponsor competitors in cooking contests; others sponsor entire cooking or recipe contests in which contestants must use their products. Many corporate food

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manufacturers and wholesalers invest in placement of their brands on television and in films to expand public awareness of their foods. Large food manufacturing and wholesaling businesses occasionally encourage the development of educational programs incorporating their products, such as documentaries examining how foods are manufactured. Many large food manufacturers and wholesalers offer internships for college students and young professionals to acquire experience working in big food industries. Amenities, Atmosphere, and Physical Grounds. Large food manufacturers and wholesalers require big spaces for their processing plants, warehouses, and necessary structures and facilities for equipment and supplies. Many of these businesses cover substantial acreage. Their buildings are generally utilitarian and furnished with industrial machinery and equipment, such as vats and mixers, that sort, clean, and process agricultural materials into manufactured foods. Sanitary conditions, safety, and food quality are these businesses’ primary concern, not appearances. Large food companies that permit public visitors incorporate areas for those visitors to watch manufacturing processes through windows that separate them from sanitized workspaces and workers. Foods on conveyor belts sometimes pass through metal detectors to locate any harmful materials they acquire while being processed. Storage areas keep foods in freezers or on shelves in temperatureand humidity-controlled conditions. Large food manufacturers and wholesalers install such security and safety measures as alarms, speakers, and intercoms to transmit various communications and warn workers of dangers. Surveillance cameras monitor inside and outside areas. Fences circle the grounds of large plants. Guard buildings monitor movement through entrances and exits, preventing hazardous materials from being brought inside plants and detecting attempts to steal property. Many large manufacturers and wholesalers require employees to wear identification badges or use cards with bar codes or magnetic strips to enter restricted areas. Trucks deliver livestock and other resources to docks and also are loaded with manufactured foods. Parking areas and maintenance buildings house vehicles. Grounds are usually maintained to enhance security, safety, and appeal for both employ-

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ees and visitors. Employee areas at large food manufacturing and wholesaling facilities typically have locker rooms where workers can shower before putting on work clothes and safety equipment in order to wash away any contaminants on their bodies. Employee usually also have access to a dining area and places to exercise and relax. Health services are equipped to deal with routine matters as well as emergencies. Typical Number of Employees. Large food manufacturing and wholesaling businesses may employ thousands of people at sites worldwide. Traditional Geographic Locations. The vast physical size of most large food manufacturing and wholesaling businesses’ buildings influences where they can be located. Some are built near cities, while others benefit from being in remote rural areas. Most are near transportation hubs for railroad, cargo ship, aviation, and trucking services. Some manufacturers and wholesalers use barges to move goods on rivers. Major food industries usually choose locations near agricultural resources, such as livestock yards and grain and soybean crops in the Midwest; poultry farms in the South; seafood and freshwater fisheries in coastal areas; and dairy, vegetable, and fruit farms in various areas. Pros of Working for a Large Food Business. Employment at large food manufacturing and wholesaling businesses is accessible to entry-level workers who are unskilled and have minimal work experience and education. Many high school graduates and immigrants secure their first jobs with large food manufacturers or wholesalers. Most such businesses provide employees with training, and they often routinely provide workers safety education, rotate positions, schedule sufficient breaks, and install safer, more ergonomic equipment to meet Occupational Safety and Health Administration requirements. Large food corporations occasionally give employees clothing, food, or other items, frequently with brand logos, to recognize their contributions to company achievements and celebrate their employment anniversaries. Employees often enjoy participating in corporationsponsored activities, such as sports teams, and belonging to large industrial communities. Cons of Working for a Large Food Business. Large-scale food processing—especially seafood, dairy, and meat processing—is the most dangerous industry in the United States. Employees often suf-

fer injuries, including occasional fatal injuries, from sharp tools and heavy machinery that operates at fast speeds, high pressures, and extreme temperatures. The machinery is also loud and often causes hearing problems. Standing for lengthy periods of time and engaging in repetitive arm and hand motions can harm muscles. The corporate culture at most large food industries can cause workers, especially entry-level workers, to feel insignificant and undervalued. They often envision few opportunities for advancement and salary increases, feeling stuck in their positions. As a result, employees may lack enthusiasm and commitment to their work, and the quality of their companies’ products may suffer. Costs Payroll and Benefits: Employees at large food manufacturing and wholesaling businesses earn varied salaries based on positions held, credentials, tenure, and responsibilities. Administrators usually receive annual salaries, while most lowerlevel and temporary employees earn hourly wages. Employees also are sometimes compensated financially or with other incentives for achieving workplace goals and meeting inspection standards. Benefits such as health insurance and sick and vacation time vary according to workers’ contracts. Supplies: Large food manufacturers and wholesalers require bulk amounts of cleaning and office supplies. They need current technologies for communications and computer processes and equipment to repair and update machinery and ensure that it runs efficiently. Large manufacturing and wholesaling businesses acquire maintenance supplies for their buildings and grounds. External Services: Some large food manufacturing and wholesaling corporations contract with suppliers to acquire employee uniforms and safety equipment. They may also contract with security services, pest control, and maintenance services for machinery, computers, vehicles, facility interiors, and grounds. They may have their own accounting and legal departments, or they may contract with legal and accounting services to oversee bookkeeping, marketing, trademark acquisition and enforcement, and other matters. Large food companies sometimes secure outside experts to ensure that they comply

Food Manufacturing and Wholesaling Industry with safety and health regulations and can pass inspections. They also hire insurance agents to provide sufficient coverage for properties, inventories, and possible liabilities presented by injured workers and contaminated foods. Cleaners sometimes are contracted to launder employees’ work clothing. Large food manufacturers often buy containers and packaging made by other companies. They usually purchase large quantities of vehicle gasoline from businesses specializing in fuels. Utilities: Large food manufacturers and wholesalers must pay for electricity, gas/oil, water, sewage, telephone, and Internet access. Taxes: Large food manufacturing and wholesaling businesses pay property taxes and local, state, and federal income taxes. Wholesalers pay vehicle registration and licensing taxes, which may also apply to some small manufacturing companies. If they sell any products directly to customers, they must collect sales taxes. They may also need to pay taxes in other countries if they have offices there, as well as tariffs and other trade fees for exported goods.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Food manufacturing and wholesaling businesses have similar organizational structures and employee tasks regardless of size. Unique situations due to manufacturers’ and wholesalers’ production and distribution goals and personnel qualifications often determine whether employees are assigned a specialized role or given responsibility for multiple positions. Small companies, especially sole proprietorships, may not have the luxury of choice: They may of necessity assign multiple roles to a single individual. The following umbrella categories apply to the organizational structure of businesses in the food manufacturing and wholesaling industry:

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Business Management Customer Service Sales and Marketing Facilities and Maintenance Security

Technology, Research, Design, and Development Production and Operations Distribution Groundskeeping Human Resources Information Technology Administrative Support

Business Management Executives and other managers oversee overall operations and policies of food manufacturing and wholesaling companies. They establish goals and enact plans to achieve desired production, sales, and revenues. Managers often have specific assignments, supervising groups of workers or departments focusing on distinct processes. They secure consultants and experts in inspection and auditing to ensure their businesses meet all certification and safety requirements. Food manufacturing and wholesaling managers usually have university degrees in business, foodrelated, scientific, or engineering fields. Some managers have master of business administration (M.B.A.) degrees to supplement technological or scientific degrees. Work experience and tenure at various corporation branches help managers advance. They usually earn the highest salaries at their businesses and receive bonuses and perks for outstanding performance, often measured by profits or the quality of the foods they produce. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

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Owner Sole Proprietor President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Vice President General or Operations Manager Plant Manager Warehouse Manager Department Director Legal Counsel

Customer Service Customer service personnel in food manufacturing and wholesaling industries interact with clients and seek ways to expand sales by pleasing

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existing customers, responding to criticisms and requests, and attracting more buyers. They arrange plant tours and often work closely with marketing and sales personnel. They evaluate responses to surveys to assess customer satisfaction with their companies’ products and services and report to management any problems affecting public opinion of those products. Some customer service personnel prepare educational materials for consumers, such as nutritional information, recipes, or suggestions for incorporating their companies’ products into their diets. Most customer service personnel have college or vocational degrees in business, public relations, or hospitality. Some also have food-related course work or employment experience. The ability to communicate well is essential for customer service positions.

Customer service occupations may include the following: ■ ■ ■ ■

Customer Service Director Customer Service Representative Public Relations Director Public Relations Representative

Sales and Marketing Sales and marketing personnel promote their businesses’ products to potential customers and retail markets. Marketing personnel develop publicity to advertise foods directly to potential retail customers, building the market for their products. Food manufacturers’ sales staffs convince wholesalers to carry their products, and wholesalers’ sales staffs convince retail stores to stock their products, based on the brand reputations and demand

OCCUPATION

PROFILE

Manufacturer’s Representative Considerations

Qualifications

Description

Interests wholesale and retail buyers in carrying foods and other manufactured products by traveling to and visiting with prospective buyers.

Career clusters

Agriculture, Food, and Natural Resources; Architecture and Construction; Business, Management, and Administration; Human Services; Marketing, Sales, and Service

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

On-the-job training; junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ESA

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Food Manufacturing and Wholesaling Industry built by advertising and marketing campaigns. Personnel travel to trade shows, conventions, and fairs to promote their products and attract clients. Sales and marketing personnel develop contacts with media, chambers of commerce, and other resources to help them determine the interests and needs of consumers, as well as those of retail outlets. Sales and marketing personnel often have undergraduate degrees in business or marketing. Some of them have degrees in food science, nutrition, or other related fields, often with minors in business. Students seeking food sales and marketing positions sometimes acquire industry experience through internships and work-study programs while still in college, increasing their chances of both finding positions and succeeding in those positions upon graduation. Sales and marketing personnel usually receive annual incomes based on their qualifications and performance, as well as perks and bonuses to reward outstanding service. Some marketing personnel are graphic artists, photographers, or Web designers. Communication skills enhance sales and marketing personnel’s work. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■

Sales Director Marketing Director Sales Representative Marketing Representative Market Research Analyst

Facilities and Maintenance Food manufacturers and wholesalers rely on a staff of maintenance and building engineering workers to service and repair systems, including electrical, water, refrigeration, and heating, ventilating, and air-conditioning (HVAC) systems, as well as industrial equipment and vehicles crucial for business operations. Some maintenance personnel have specialized assignments, while others are generalists. Maintenance personnel also include custodial workers who clean buildings and stock the soaps necessary to sanitize production workers’ and other employees’ hands. Some food industries also hire laundry personnel to wash and sanitize employees’ uniforms and safety equipment. Facilities workers may also be responsible for pest control.

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Most workers responsible for maintaining food industry facilities are required to have training or educational credentials, ranging from vocational course work to university-level engineering or technology degrees, and are expected to have licenses in their fields. Many seek additional training and certification to gain competence with new technologies. Technical maintenance personnel’s credentials and skills usually determine their wages. Entrylevel workers responsible for cleaning assignments usually are paid hourly wages, starting at minimum levels, and lack the educational background of technical maintenance personnel. Maintenance and facilities occupations may include the following: ■ ■ ■

■ ■ ■

Chief Engineer Facility Manager Heating, Ventilation, and AirConditioning (HVAC) Engineer Electrician Plumber Custodian/Janitor

Security Food manufacturing and wholesaling companies require security personnel to protect both employees and food products. These personnel monitor workers’ and visitors’ activities inside plants, in restricted areas, and on surrounding grounds. They use surveillance equipment, such as cameras and audio devices, as well as patrolling production and warehouse facilities on foot or in small vehicles. Chemical and smoke sensors alert security personnel to biohazards and fires. Some personnel guard plant entrances, examining employee identification badges and inspecting vehicles for dangerous items that could contaminate foods or injure people. They also look for stolen items when people leave. All security personnel must be prepared to provide support when emergencies occur. Some security personnel have received public safety training at vocational schools or universities, while others have backgrounds in law enforcement, fire safety, or military service. Most qualified security personnel are certified in their field. Many also acquire training and certification to use weapons and administer first aid. Security workers earn salaries based on their security ex-

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The Federal Poultry Processing Inspection Act of 1957 mandated the inspection of all poultry slaughtered for human consumption. (©Picsfive/Dreamstime.com)

perience, responsibilities, and useful skills applicable to the food industry. Security occupations may include the following: ■ ■ ■ ■ ■

Security Guard Food Safety Inspector Food Safety Manager Biohazard Specialist Firefighter

Technology, Research, Design, and Development Food manufacturers and wholesalers hire a variety of personnel to develop new products and improve manufacturing processes. Engineers design production factories and machinery. They also develop improved methods for storing and shipping food products. Food scientists investigate combinations of ingredients and chemicals to design food that tastes good or has other desired traits, including appealing texture or appearance and in-

creased shelf life. Nutritionists evaluate samples for nutritional value or deficiency. Quality control personnel inspect new products. Test groups provide opinions and insights that research and development personnel use to refine products. These technical personnel usually have college degrees in engineering or scientific fields and are familiar with using laboratory equipment. Many have advanced degrees. They acquire licenses and certification when required. The food industry depends on highly trained technicians to design new foods, and the Department of Labor projects that jobs in these positions will increase by 16 percent between 2008 and 2018. According to the BLS, in 2009 food scientists and technologists working for manufacturers earned annual incomes averaging $59,790. The tenth percentile salary was $34,530, and the ninetieth percentile salary was $103,160. Researchers who create new products or flavors often receive extra monetary compensation for expanding their employers’ lines. Industries have dif-

Food Manufacturing and Wholesaling Industry ferent agreements regarding intellectual property rights if technologies or formulas associated with an employee’s work are patented or trademarked. Technology, research, design, and development occupations may include the following: ■

■ ■ ■ ■ ■ ■

Vice President of Research and Development Food Engineer Food Scientist Nutritionist Biochemist Food Laboratory Technician Quality Assurance Specialist

Production and Operations Food manufacturing and wholesaling industries rely on entry-level workers to conduct many crucial functions. Production workers perform approximately 54 percent of food manufacturing tasks in

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the United States. They are assigned diverse tasks, ranging from sorting vegetables to cutting up seafood. Some 34 percent of the food manufacturing workforce processes livestock, while 19 percent makes tortillas and bakery foods. Supervisors, often employees with more work experience and training than line workers, monitor production workers’ performance and productivity. Inspectors evaluate the safety of products. Testers sample products for taste and quality before they are packaged for distribution. Many entry-level production and operations workers lack specialized education or professional food industry experience. Manufacturers and wholesalers frequently train these workers to perform specific tasks. According to the BLS, the median hourly wage of all food production was $11.94, while the median for all production workers in all industries was $14.41. Food inspectors and quality assurance personnel, including USDA

OCCUPATION

PROFILE

Millwright Considerations

Qualifications

Description

Installs machinery and equipment according to layout plans, blueprints, and other drawings in an industrial establishment such as a food factory.

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work inside; work both inside and outside

Minimum education level

On-the-job training; high school diploma/technical/community college; apprenticeship

Physical exertion

Heavy work

Physical abilities

Basic fitness; must have trunk strength

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

RES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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inspectors assigned to plants, often have completed food-related education and training, such as earning veterinary or agricultural degrees. Veterinarians are required to secure state licenses. Inspectors, often government workers, are certified to evaluate foods. Federally employed veterinarians earned annual salaries averaging $84,200 in 2009, while veterinary technologists and technicians earned $47,020 on average. Occupations include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

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Production Manager Operations Manager Quality Assurance Director Quality Assurance Technician Supervisor Inspector Baker Butcher/Meat Cutter/Meat Trimmer Roasting, Baking, and Drying Machine Operator/Tender Food Batchmaker

Distribution Distribution personnel deliver agricultural materials to plants to be processed into food and ship finished food products to customers. Distribution managers prepare manifests for shipments of raw goods and foods using various transportation modes traveling by land, air, and water. They secure agricultural permits and customs documents needed to transport food products over state and country borders and ensure that any tariffs are paid. Distribution positions require differing qualifications. Many warehouse jobs are entry-level, involving moving inventory and loading and unloading vehicles. Workers often receive training after they are hired. They are paid hourly or yearly wages based on their assignments, with drivers often being compensated according to the mileage they cover. Physical strength and the ability to lift heavy weights often determine who works in warehouses. People who drive distribution vehicles usually are required to have training and licenses to operate commercial trucks. Distribution personnel often are trained and certified to use specific equipment, such as forklifts. Managers usually receive annual salaries, which are sometimes supplemented with bonuses and perks to reward performance.

Distribution occupations may include the following: ■ ■ ■ ■ ■ ■

Distribution Manager Heavy Truck Driver Light Truck Driver Train/Truck/Ship Loader Packer and Packager Freight Loader/Unloader

Groundskeeping Groundskeeping workers keep the areas surrounding warehouses and plants safe. They clear drives, parking lots, and loading docks of debris, snow, ice, and other hazards that might injure workers and visitors or impede production and deliveries. In addition to practical tasks, groundkeepers design attractive gardens and landscapes to enhance companies’ appearances. Occasionally, groundskeepers incorporate decorative examples of foods in which their companies specialize, such as corn stalks in landscapes at cereal companies. They sometimes build exercise trails for employees. They usually have experience using various gardening tools and basic knowledge of plants. Some may have horticultural training from high schools, vocational institutions, or colleges. Most have innate awareness of how to position plants and landscaping materials to beautify areas. Hourly or yearly wages vary according to workers’ abilities and credentials. Groundskeeping occupations may include the following: ■ ■ ■ ■

Head Groundskeeper Groundskeeper Landscape Architect Landscaper

Human Resources Human resources personnel advertise available jobs, recruit candidates, assess applications, interview applicants, and hire successful candidates. They oversee employee training, administer payrolls and benefits, and help set and ensure employee compliance with company policy and procedures, including safety and food-handling procedures. They also respond to employee grievances and they may be involved in contract negotiations with collective bargaining units.

Food Manufacturing and Wholesaling Industry Human resources directors usually have human resources management or business degrees and previous work experience. Human resources managers in the food manufacturing industry earned annual salaries averaging $97,100 in 2009, whereas human resources specialists earned an average of $57,750 and human resources assistants earned an average of $35,080. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Human Resources Specialist Human Resources Assistant Benefits Specialist Payroll Clerk

Information Technology Information technology (IT) professionals maintain and design computer systems for use by food manufacturers and wholesalers. These systems include standard business computers and networks for use by administrative and management personnel, as well as specialized manufacturing computers. Computer programmers write code to direct automated production machinery, as well as designing custom databases to meet their companies’ needs. They often oversee the computer control rooms that direct automated production processes. IT personnel maintain, repair, and update computers and ensure they are free of viruses, spyware, and other potential hazards. They may also manage their companies’ Web sites. Some food manufacturers hire personnel skilled with visual and audio equipment to document procedures at their plants. Technicians also provide support services necessary for meetings at industrial sites or presentations, setting up audiovisual and other electronic equipment. IT personnel usually have degrees or training in computer science or systems from universities or vocational schools. Some seek advanced degrees or training to secure certification in specialties or acquire knowledge of new technologies. Their salaries are based on their qualifications and responsibilities. IT occupations may include the following: ■ ■

Information Technology Director Computer Programmer

■ ■ ■ ■ ■

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Software Engineer Network and System Administrator Database Administrator Webmaster Multimedia Technician

Administrative Support Administrative workers perform the tasks associated with routine day-to-day business support. They fulfill a wide range of duties to aid managers and department heads and are crucial for manufacturers’ and wholesalers’ effectiveness. Some administrative clerks perform several tasks, while others specialize. They often document food resources brought in or shipped out of companies’ buildings. Administrative workers deal with correspondence, answer phones, file invoices, prepare schedules, enter data in computers, and perform other clerical tasks. Receptionists greet visitors, record information about them, and provide them with identification badges. Administrative workers have diverse educational and professional backgrounds. Some begin their careers in the food industry through temporary assignments. Many start as interns or in entry-level jobs and advance as they gain training, experience, and tenure. Administrative occupations may include the following: ■ ■ ■ ■

Office Manager Administrative Assistant Bookkeeper Receptionist

INDUSTRY

OUTLOOK

Overview The outlook for the food manufacturing and wholesaling industry shows it to be on the rise. The industry thrives worldwide as decreasing percentages of nations’ populations produce their own food. The United Nations emphasizes that more people live in urban areas than in rural areas, so the majority of Earth’s population needs to purchase food it cannot produce. The BLS, meanwhile, notes that food manufacturing differs from nonfood industries because it is more resilient in the face of economic fluctuations. Indeed, one

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common response to economic downturns in inFood manufacturers building new plants often exdustrialized nations is to eat fewer meals at restaupand to locations that offer economic incentives, rants and purchase more food for preparation at as when ConAgra Foods built a new sweet potato home. Most experts agree that these industries will processing plant in Louisiana that was projected to sustain future growth. create several hundred new jobs by 2011. TechnoIn the early twenty-first century, food processing logical advances have contributed to financial starepresents the biggest manufacturing industry in bility and growth. the United States, and it continues to grow to feed As the recession affected consumers’ budgets, increasing populations. Mergers and acquisitions food manufacturers produced affordable foods. have contributed to some food manufacturers atReuters noted that the food manufacturing sectors taining substantial revenues. In 2001, when Kellogg generating the most revenues were meat and dairy bought the Keebler Foods Company, its revenues products, fruits and vegetables, and specialty foods. increased from $6 billion (earned in 2000) to $8.3 Manufacturers and wholesalers continuously surbillion (2002). That corporation and other major vey markets to become aware of trends, such as lowfood manufacturers credited revenue growth to carbohydrate diets, so they can produce foods to their management adjusting strategies to stress cater to those trends. The ability to adapt producvalue over volume. Kellogg mixed freeze-dried tion to changing consumer behavior often ensures fruits in its cereals, appealing to health-conscious food manufacturers’ success. consumers, achieving $8.8 billion in sales by 2003. Food manufacturing revenues also benefit from In 2007, weakened economies resulted in some consumers’ health concerns. In the first decade of food manufacturers reporting net losses. A variety the twenty-first century, gluten-free food products of factors contributed to these losses, including the realized annual sales of $1.5 billion in the United H1N1 influenza, energy costs, and depreciating currencies. The losses were short-lived, however. AccordPROJECTED EMPLOYMENT ing to Food Processing, twenty-six of FOR SELECTED OCCUPATIONS the twenty-seven largest food manufacturers did not experience declinFood Manufacturing ing sales during the global financial crisis of 2007-2009. Some food manEmployment ufacturers were unable to attain prof2009 Projected 2018 Occupation its, however. Pilgrim’s Pride declared bankruptcy in 2008, and Smithfield 49,440 49,100 Bakers Foods closed plants and decreased 45,850 46,100 First-line supervisors/ production the following year. Durmanagers of production and ing 2008, the Food Institute anoperating workers nounced that the number of food manufacturing mergers and acquisi81,880 85,300 Food batchmakers tions had decreased by 8.5 percent 106,470 101,400 Packaging and filling from the previous year. In Global Ecomachine operators and nomic Prospects, 2009, the World Bank tenders noted prices of food increased by 138 percent between 2003 and 2008. 92,690 96,900 Slaughterers and meat Major food manufacturing corpopackers rations, such as General Mills, Kraft Foods, and Cadbury, continue to Source: U.S. Bureau of Labor Statistics, Industries at a Glance, thrive. Many U.S. food manufacturOccupational Employment Statistics and Employment ers and wholesalers export products Projections Program. and operate plants in other countries to meet international demand.

Food Manufacturing and Wholesaling Industry States. Production of “nutraceuticals” and functional foods earned over $75.5 billion for U.S. manufacturers in 2007, with sales projected to reach $167 billion in 2010. That subsector generated $2 billion in Canada and created twenty-five thousand jobs in that country. By late 2008, many U.S. food wholesalers had merged and consolidated, while others declared bankruptcy. Small wholesalers, averaging $750 million in revenues annually, risked being taken over by larger wholesalers or foreign companies. C&S Wholesale Grocers, one of the U.S. industry’s leading wholesalers, earned $19 billion in 2009, distributing food products to five thousand independent and chain grocery stores. Warehouse wholesalers, including Sam’s Club, dominated much of the industry’s sales. Many wholesalers gained more customers as increasing numbers of restaurants and food services purchased food. Employment Advantages The BLS projects that food manufacturing employment will decline by an estimated 0.1 percent from 2008 to 2018, a significant loss as the average industry will grow by 11 percent during the same period. Although automation will displace workers in various food manufacturing sectors, machines cannot perform all necessary manufacturing tasks. The need for humans to perform such tasks as processing livestock will ensure a steady supply of jobs for production workers. The quantity of those production positions will increase to meet a higher consumer demand for beef, fish, and poultry products. The food manufacturing industry will consistently need employees specializing in tasks requiring hand labor and human interaction with resources being processed. The food manufacturing and wholesaling industry will need employees to perform more diverse roles at all levels of employment to meet increasing populations’ food demands. Food manufacturing workers will be sought to fill positions vacated by retiring employees. First-job seekers lacking qualifications can often secure entry-level food industry positions that provide steady income and occasional perks. Increased use of automation technology creates demand for engineers, computer scientists, and repair personnel to develop, program, and service computer and machinery technology. Employees often benefit from training and certifi-

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cation offered by employers to aid in professional advancement. Annual Earnings Food manufacturing and wholesaling revenues have remained steady despite the global recession of 2007-2009. Market analysts emphasize that tallying exact monetary figures is difficult because food manufacturing and wholesaling statistics are often combined with agricultural statistics. The World Bank has stated that the food and agricultural industries represent 10 percent of the global gross domestic product (GDP), estimating their combined value at $4.8 trillion in 2006. In that year, U.S. food manufacturers’ revenues of $372 billion represented more than 12 percent of the U.S. GDP. Canned foods accounted for $12.6 billion in revenues in the United States and $50.9 billion globally that year. Frozen food products in the United States generated $25.1 billion in revenues the next year. Euromonitor International assessed global food industry revenues at $1.6 trillion in 2007. The food price crisis starting that year caused some manufacturers’ and wholesalers’ profits to decline. In 2009, Fortune magazine noted that successful large food manufacturers generated several billion dollars each in revenues, with Nestlé producing revenues of $104 billion. The 2010 Plunkett’s Food Industry Almanac reported that U.S. companies’ food sales during the previous year generated $579.3 billion domestically and $501.9 billion in exports, totaling $1.08 trillion. IBISWorld estimated 2009 U.S. wholesaling revenues at $241.5 billion.

RELATED RESOURCES FOR FURTHER RESEARCH FOOD ENGINEERING Magazine 1050 Illinois Rte. 83, Suite 200 Bensenville, IL 60106-1048 Tel: (630) 694-4351 Fax: (630) 227-0527 http://www.foodengineeringmag.com Food Marketing Institute 2345 Crystal Dr., Suite 800 Arlington, VA 22202 Tel: (202) 452-8444

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Fax: (202) 429-4519 http://www.fmi.org Grocery Manufacturers Association 1350 I St. NW, Suite 300 Washington, DC 20005 Tel: (202) 639-5900 Fax: (202) 639-5932 http://www.gmabrands.com Institute of Food Technologists 525 W Van Buren, Suite 1000 Chicago, IL 60607 Tel: (312) 782-8424 Fax: (312) 782-8348 http://www.ift.org National Frozen and Refrigerated Foods Association 4755 Linglestown Rd., Suite 300 P.O. Box 6069 Harrisburg, PA 17112 Tel: (717) 657-8601 Fax: (717) 657-9862 http://www.nfraweb.org

ABOUT

THE

AUTHOR

Elizabeth D. Schafer received a Ph.D. in the history of technology and science, specializing in agricultural history, from Auburn University in 1993. Her research focuses on agricultural engineers’ work to develop more efficient machinery, equipment, and techniques to cultivate and harvest food and fiber crops. It also examines the role of veterinary science in controlling and eradicating animal diseases that cause public health risks by contaminating food and dairy supplies. She has contributed articles on food science and technology, nutrition, and veterinary history to numerous publications.

FURTHER

READING

Basu, Saikat K., James E. Thomas, and Surya N. Acharya. “Prospects for Growth in Global Nutraceutical and Functional Food Markets: A Canadian Perspective.” Australian Journal of

Basic and Applied Sciences 1, no. 4 (2007): 637649. Belasco, Warren, and Roger Horowitz, eds. Food Chains: From Farmyard to Shopping Cart. Philadelphia: University of Pennsylvania Press, 2009. Bowden, Rob. The Food Industry. London: Wayland, 2009. Cubbitt, Ben. “Food Distribution: The Supply Chain Optimization Challenge.” Food Manufacturing 19, no. 3 (March, 2006): 12. Fraser, Jill Andresky. “A Return to Basics at Kellogg: How a Focus on Profitability, Cash Management, and Realistic Forecasting Spurred Innovation and Revival at One of America’s Venerable Food Companies.” MIT Sloan Management Review 45, no. 4 (Summer, 2004): 27-30. Galvez, Farah R., and Sonia Yuson De Leon. Food Technology and Globalization. Manila, Philippines: Merriam Webster Bookstore, 2006. Institute of Food Technologists. “Traceability (Product Tracing) in Food Systems: An IFT Report Submitted to the FDA.” Comprehensive Reviews in Food Science and Food Safety 9, no. 1 (January, 2010): 92-175. http://www.ift.org/ Knowledge%20Center/Read%20IFT %20Publications/Science%20Reports/ Contract%20Reports/Traceability%20in %20Food%20Systems.aspx. Kutz, Myer, ed. Handbook of Farm, Dairy, and Food Machinery. Norwich, N.Y.: William Andrew, 2007. Maroulis, Zacharias B., and George D. Saravacos. Food Plant Economics. Boca Raton, Fla.: CRC Press, 2008. Mattsson, Berit, and Ulf Sonesson, eds. Environmentally Friendly Food Processing. Boca Raton, Fla.: CRC Press, 2003. Millstone, Erik, and Tim Lang. The Atlas of Food: Who Eats What, Where, and Why. Foreword by Marion Nestle. Rev. ed. Berkeley: University of California Press, 2008. Morris, Charles E. “Seventy-five Years of Food Frontiers.” Food Engineering 75, no. 9 (September, 2003): 54-63. Murray, Sarah. “Food: The World’s Biggest Industry.” Forbes, November 15, 2007. http:// www.forbes.com/2007/11/11/growth-

Food Manufacturing and Wholesaling Industry agriculture-business-forbeslife-food07cx_sm_1113bigfood.html. Nestle, Marion. Food Politics: How the Food Industry Influences Nutrition and Health. Berkeley: University of California Press, 2002. Nützenadel, Alexander, and Frank Trentmann. Food and Globalization: Consumption, Markets, and Politics in the Modern World. New York: Berg, 2008. Pehanich, Mike, and Dave Fusaro. “The Changing Fortunes of Food Manufacturing.” FoodProcessing.com, September 7, 2007. http://www.foodprocessing.com/articles/ 2007/221.html. Plunkett, Jack W., ed. Plunkett’s Food Industry Almanac, 2010: The Only Comprehensive Guide to Food Companies and Trends. 7th ed. Houston, Tex.: Plunkett Research, 2010. Trager, James. The Food Chronology: A Food Lover’s Compendium of Events and Anecdotes, from Prehistory to the Present. New York: Henry Holt, 1995.

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U.S. Bureau of Labor Statistics. “Animal and Food Scientists.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos046.htm. _______. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/oco/cg. _______. “Food Processing Occupations.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos219.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Food and Drug Administration. Investigations Operations Manual. Falls Church, Va.: FDAnews, 2004.

©Nolte Lourens/Dreamstime.com

Food Retail Industry

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Agriculture and Food Career Cluster: Agriculture, Food, and Natural Resources Subcategory Industries: Baked Goods Stores; Commissaries; Confectionary and Nut Stores; Convenience Stores; Delicatessens Primarily Retailing a Range of Grocery Items and Meats; Fish and Seafood Markets; Fruit and Vegetable Markets; Meat Markets; Retailing Automotive Fuels in Combination with a Convenience Store or Food Mart; Retailing via Direct Sales to Residential Customers; Supermarkets and Other Grocery (except Convenience) Stores Related Industries: Farming Industry; Food Manufacturing and Wholesaling Industry; Food Services Annual Domestic Revenues: $719.5 billion USD (Gale Group, 2007) Annual International Revenues: $1.461 trillion USD (Gale Group, 2007) Annual Global Revenues: $2.1805 trillion USD (Gale Group, 2007) NAICS Numbers: 424410, 424420, 424430, 424440, 424450, 424460, 424470, 424480, 424490, 445110, 445120, 445210, 445230, 445291-445292, 445299, 454390

704

DEFINITION

Summary The retail food industry sells food and nonfood items from fixed locations, ranging from small specialty shops and convenience stores to supermarkets, supercenters, and large bulk warehouse-type facilities. Gas stations that include convenience stores also sell a limited range of grocery products. Businesses such as delicatessens purvey a limited amount of retail foodstuffs to customers, besides serving as restaurants. Some grocery stores sell prepared foods. Retail food facilities contain specialized equipment, including shelves, bins, refrigerated cases, and freezers, to display food and nonfood items. Food also is sold directly to consumers via online Web sites. Items for sale include dairy products, baked goods, canned and frozen foods, fresh fruits and vegetables, fresh and prepared meats, fish, and poultry. Government regulations mandate proper storage and adherence to strict sanitary conditions. History of the Industry The nineteenth century general store, which sold everything from farm implements to clothing to food staples, can be considered the direct progenitor of the modern food re-

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come an accepted part of the grocery business. tail industry. It in turn had evolved from frontier Also becoming more common by then was the trading posts. Specialized food, dairy, and meat “combination” store, which provided groceries, markets were the next type of outlet in this evoluproduce, meat, and dairy products within one extion, beginning about 1860. Most such food marpanded facility for so-called one-stop shopping. By kets continued many of the customer policies used about 1930, this innovation had led in the eastern in general stores; these included personal service United States to the establishment of supermarkets by clerks, liberal credit terms, and even payment by that were four or five times larger than earlier grobartering of store goods for consumer-produced cery stores. goods. The stock was presented to customers by One of the first supermarkets—originally callclerks because shelves were inaccessible behind ing itself a “warehouse grocery”—was the King counters. Kullen, founded by Michael Cullen in Jamaica, The first chain food store was almost certainly the Queens, New York, in 1930. Big Bear was also Great Atlantic and Pacific Tea Company, univeramong the first supermarkets, as was Alpha Beta, sally referred to as the A&P. It began in 1859 as a tea probably the most widespread of the early chains. shop and by the end of the American Civil War had For the first few years, supermarkets were not twenty-five stores that sold groceries. By 1880, it housed in specially built stores but operated from had opened its one hundredth store. Another early any spacious available property, including former chain was the Jones Brothers Tea Company, which garages, factories, warehouses, and even movie began about 1872 and later became the Grand Union chain. Other well-known food companies that had their origins in the nineteenth century include Bohack’s and the Great Western Tea Company, which became the massive Kroger Company. Some of the largest chains grew via vertical integration, expanding through ownership of meatpackers, coffee-roasting plants, dairies, bakeries, and other subindustries. With somewhat less significant impact, expansion also has occurred the opposite way, with manufacturers and grocery wholesalers expanding into retail operations. Independent food stores of various sizes continued to operate, but as time progressed they captured a declining percentage of the market. Because of their lower prices, possible because of economies of scale, chain stores also became known as “economy” stores. By the early 1910’s, a few stores were advertising “self-service” while still providing the assistance of clerks for customers accustomed to such service. A Memphis, Tennessee, Piggly Wiggly market is considered to be Supermarkets remain a popular source of fruits and vegetables. Kroger is one of the earliest self-service stores. one of the largest food retail chains. (©Dreamstime.com) By about 1920, self-service had be-

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theaters. Sometime during the 1930’s, stores began being planned from the ground up. Some of the major twentieth century food retail chains included Grand Union, Albertson’s, Safeway, Lucky, Vons, Supervalu, Winn-Dixie, Food Fair, Stop & Shop, Ralphs, and American. Many are no longer in business as independently owned chains. The origin of the word “supermarket” is not clear, but one of its earliest uses was by the Cincinnati-based Albers Super Market in 1933. Its common definition is an aggregation of departments selling varieties of foodstuffs and a large number of other products in which the grocery area must be self-service. The various departments in early supermarkets might have been operated by individual owners who had banded together within a single facility. This is uncommon now, except in cooperative food stores (co-ops), where independent merchants routinely band together. They also may be known as affiliated independent retailers. A term that is no longer much in use is the “superette,” a concept that is akin to today’s convenience store. About 1949, after a slow recovery from World War II, a lengthy period of consolidation began in the food retail industry. By 1967, the Federal Trade Commission (FTC) had issued an enforcement policy to address what it saw as overconcentration. This edict curtailed but did not end the mergers, which continue to this day. In the early years of the twenty-first century, the FTC again stepped in to halt mergers that it considered likely to unfairly limit competition. By the 1950’s, food retailing constituted the largest percentage of any retail industry in sales, employing one out of every seven people working in all retail businesses. Within the food retail industry, grocery sales constituted more than 88 percent of all sales by the end of the 1950’s, a 22 percent increase over a thirty-year span. The 1950’s had seen a resounding boom in supermarket openings; some even had floodlit premieres just like films of the day. In that decade, supermarket sales doubled from 35 percent of all retail food sales in 1950 to 70 percent at decade’s end. Nonfood items, such as flowers, health and beauty aids, and greeting cards, were added to the stock of products, as was a greater selection of alcoholic beverages. In the thirty years between 1977 and 2007, food retail industry sales grew from $141 billion to almost $720 billion.

The birth of the convenience store is credited to an ice company owner in Dallas, Texas, in 1927. Because his business stayed open longer than local groceries—sixteen hours a day, seven days a week—he decided to add a few staples, such as eggs, milk, and bread, to his inventory. The convenience for customers increased his business, and other entrepreneurs followed suit. Various names—including “midget stores” and “bantam markets”—were used for this kind of business until the term “convenience store” came into general usage sometime after World War II. The Industry Today The retail food industry has historically operated on low profit margins, primarily because of competition. Its pretax profit generally has ranged from 1.3 to 2.5 percent of sales, depending on volume. In fiscal year 2003-2004, the percentage fell to a more than twenty-year low, with an estimated net profit after taxes of a mere 0.88 percent. By 2009, overall industry net profits were 1.43 percent, a loss from the previous year. The decline has been attributed to such factors as the poor economy, rising employee health care costs, the increasing costs of adhering to government regulations, and even credit card use fees. Independent retailers—those operating one to ten stores—actually garnered the highest profits, with a 1.9 percent return in 2009. However, because of the industry’s ongoing consolidation, many independents during this period went out of business. In 2008, there were more than 85,000 nonwarehouse grocery outlets, of which almost 26,000 were convenience stores that did not sell gasoline. In addition, about 120,000 convenience stores were attached to gas stations, a phenomenon more common in suburban and rural areas. It is estimated that there is one convenience store for every twenty-one hundred Americans. In those stores that are part of a gas station, an average of 65 percent of revenue comes from gasoline sales, groceries account for 12 percent, cigarettes 11 percent, beer and wine 4 percent, and prepared fast food (such as hot dogs and burritos) 2 percent. Most such places also dispense lottery tickets in states where they are legal. By 2005, there were more than 3,100 warehouse-type food outlets, including 680 Sam’s Clubs. According to statistics of the Food Marketing Institute, in 2006 supermarkets alone

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A shopper closely examines a loaf of bread at the supermarket. Generic or store-brand products are increasingly popular. (©Dreamstime.com)

had sales of almost $500 billion. In the same year, approximately one-half of every one hundred dollars spent in grocery stores was for perishable items. Even some of the largest multibillion-dollar grocery chains remain regionally based and are not found in every state. Small to midsize chains, such as Trader Joe’s, which have established a popular niche but offer a fairly limited stock of products, slowly are expanding into many regions of the United States. There are an increasing number of specialty stores that sell niche products such as organically grown “health” foods or ethnic foods. The growth in health food retailers springs from the growing desire of people to lead healthier lives. Stores even may specialize in only a single type of product, such as candy, cheese, nuts, or pastry. These stores generally charge higher prices but offer merchandise that may not be as readily available or of the same high quality elsewhere. Most food-store chains offer goods under storebrand labels that usually cost less than similar national brand products. As early as 1930, almost 50 percent of all chains offered these “private” labels. In 1977, so-called generic brands were introduced in the United States by Jewel Food Stores, following

a trial by the French giant Carrefours S.A. Containers often carried just a word or two describing their contents (like “cola” or “sweet peas”) but bore either no brand name at all or one that was not recognizable to consumers. Such products sold for less than similar branded ones because there were few advertising costs, and some consumers had reservations about their quality. (Store ads carried slogans such as “Generics: Just plain good! Just plain cheap!”) Within three years, almost fifteen thousand markets carried these no-frills products, and they accounted for up to 20 percent of sales in their categories. Large chain operations such as Walmart and Target, which once dealt exclusively in nonfood items, increasingly are adding grocery sections. They usually do not purvey as much variety as large supermarkets, but they do provide convenience and lower prices because of their considerable buying power. By 2005, Walmart was deriving 28 percent of its sales from its grocery line, and by 2007, it had captured 17.5 percent of the grocery market share. With the start of the recession in 2007, many chains cut their prices. At the same time, food manufacturers began downsizing product packaging and contents, and consumers began paying as much for less.

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Studies show that price and convenience are what customers value most, more than particular brands or stores. Markets that offer lower prices, discount cards, doubled coupons, and reward programs are more likely to retain long-term customers. Such incentives have replaced the once omnipresent variety of trading stamps (such as Green Stamps) that could be pasted in books and exchanged for many types of goods. The convenience of online shopping from such companies as the bulk-sales chain Costco also is a draw for consumers. Also selling online is the mega-chain Walmart, currently the world’s largest, although it does not offer food in all its stores. Some companies also offer limited home delivery. Items such as DVDs for sale and rent now are available in markets. It is estimated that the average full-service supermarket will derive 25 percent of its sales from canned goods and other edible packaged shelf items; 20 percent from a variety of nonfood items; 15 percent from meat, fish, and poultry; 11 percent from produce; 7 percent from the prepared foods or delicatessen section; 6 percent from dairy products; 6 percent from baked goods, either packaged or from an in-store bakery; 5 percent from frozen foods; and 5 percent from in-store pharmacies that fill prescriptions for medications. (Ratios for other types of food stores differ markedly.) After Walmart, the Kroger chain, which also offers online sales, is the next largest retail food chain. By 2008, it had almost twenty-five hundred outlets located in more than thirty states. It operates under a variety of names and owns small convenience stores as well as huge markets. Like Walmart, Kroger’s facilities offer a wide variety of services, including (at some locations) pharmacies, photo-processing services, and gasoline sales. It manufactures a large proportion of the products it sells, including dairy products and baked goods. In 2007, its net profit was 16 percent higher than the previous year. Of the bulk warehouse-type businesses, Costco has membership stores in North America, Mexico, Asia, and other locations. In 2008, the company owned more than five hundred outlets, of which almost four hundred were in the United States. Its largest facilities contain up to 205,000 square feet, and its average outlet measures slightly more than 140,000 square feet. Its stores stock all manner of

A butcher stacks turkeys for Thanksgiving sales. The average Costco outlet measures slightly more than 140,000 square feet. (AP/Wide World Photos)

items, from furniture and appliances to food and tires. In fiscal year 2007, the company’s net profit was almost $1.1 billion. The cost of opening new stores has increased over the years. At the beginning of the twenty-first century, the cost to build, equip, and open a small business of twenty-four hundred square feet was at least $80,000. The cost of a large business with thirty-two thousand square feet required an investment of at least $850,000. Midsize locations fell somewhere in between. Labor costs at that time were estimated to be about 8 to 11 percent of sales. Food industry workers are more heavily unionized than the average of 14 percent for workers in other industries; in 2008, about 22 percent belonged to unions. Unionized employees tend to be found in nationwide grocery chains; huge warehouse-type operations and smaller businesses are almost never unionized. Union membership and staffing requirements undoubtedly will be adversely affected in the future by further company consolidations.

Food Retail Industry Many of the jobs remain part time and relatively low paying, and as a result, these jobs tend to be filled by younger workers. According to the U.S. Bureau of Labor Statistics, in 2008 fewer than 14 percent of food retail industry jobs were held by workers fifty-five years of age and older, a smaller percentage than is seen in American industry as a whole. There are several major types of food retail outlets that exist in the United States today. Of these, supermarkets, specialty shops, and warehouse-type facilities together compose the largest percentage by far. Supermarkets. By industry standards, supermarkets are businesses that generate revenue in excess of $2 million per annum. They carry a full range of food and nonfood products and may offer prepared foods. They may be independently owned, but most probably are part of larger chain operations. Each store that is part of a large organization follows the corporate standards in matters such as design, product selection, and other operations. Independent markets may offer products unique to certain ethnic groups or have established other niches that enable them to withstand competition from chains. Most fall within a size range of thirty thousand to seventy thousand square feet. Affiliates and Cooperatives. A grouping of independently owned stores, independent affiliates may band together to purchase from a central wholesaler for economies of scale. They may offer commonly held private labels. By industry standards, such affiliates do not exceed ten stores. Cooperatives are somewhat similar to independent affiliates in that they are individually owned businesses that group together for economies of scale. They may offer commonly held private labels. Instead of purchasing from a central wholesaler, they most often own shares in it, and profits in part depend on the performance of each store. Cooperatives are more commonly found outside the United States. A specialty store may deal in only one product or a type of product, such as health or ethnic food. They are sometimes called “gourmet” groceries. There are stores that sell only products made from olives, teas and coffees, cheeses, cakes, and gourmet meats. Greengrocers specialize in produce. Single specialty outlets usually are found in more

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upscale areas and most malls, while those selling ethnic foods can be located in compatible ethnic areas or increasingly anywhere such food is relished. Hypermarkets. Mostly a European phenomenon, hypermarkets may run over 300,000 square feet and offer full department store facilities as well as groceries, gas stations, and other services. The origin of the format is credited to the French company Carrefours S.A. in the 1970’s. Hypermarkets of about 225,000 square feet were tested in the United States by Walmart, but presumably because of their overwhelming size, they were not enthusiastically accepted. Supercenters. Smaller than a hypermarket but larger than an average supermarket, supercenters generally range from 100,000 to 200,000 square feet. Such facilities—many owned by Walmart— are located in numerous U.S. localities; by 2007, Walmart had 2,250 supercenters. The company also has been the target of vocal protests because supercenters tend to drive small local stores out of business. Some cities have held elections to determine whether a supercenter should be built there. Statistically, nearby stores immediately tend to lose from 10 percent to 20 percent of their clientele when supercenters open. Deep-Discount Stores. These stores offer a limited variety of grocery items, often private-label brands, at prices that are discounted relative to regular retail outlets. Their facilities tend to be quite spartan. Such chains as the Dollar Store and the 99 Cents Only Store may be the most ubiquitous examples of deep discount stores in the United States. General-Line Grocery Stores. The closest type of food retail outlet to convenience stores is the general-line grocery, sometimes called the “limited assortment” grocery. It offers staples like milk and bread and a small selection of canned and frozen goods, but not meats or produce. Generalline grocery stores are more common outside the United States. Convenience Stores. Convenience stores provide a limited stock of basic supplies including foodstuffs and generally are open long hours, sometimes twenty-four hours daily. The majority of their sales are derived from cigarettes, beer, milk, candy, and soft drinks. They generally occupy between fifteen hundred and two thousand square

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feet. Two well-known chains are the Pantry and 7Eleven, and there are many single-owner “mom and pop” stores in this category. In Latino areas, bodegas—which usually are not part of a chain— are plentiful. Convenience stores are found in most areas, even when there are supermarkets present, and are intended for those who need only a small number of items and want to get in and out quickly. For this advantage, customers generally pay a higher price per item than for comparable products in supermarkets. The stores attached to gas stations far outsell, in the aggregate, standalone convenience stores. Warehouse Stores. The hallmarks of warehouse stores such as Costco and Sam’s Club are huge size, utilitarian design, a membership fee, and merchandise sold in super-sized and/or large bundled-together quantities. Goods usually are shelved from floor to ceiling and may only include the most popular goods, usually numbering about one thousand different items, rather than a supermarket-type selection. Because the purchaser buys in bulk, the price per unit generally is lower.

INDUSTRY MARKET SEGMENTS

personal relationship with individual customers. They may choose to be loyal to a business they know rather than shop around for somewhat lower prices. Although individually owned “mom and pop” stores are becoming less prevalent, except perhaps in heavily ethnic neighborhoods, specialty shops and ethnic markets may engender some of the same loyalty. Amenities, Atmosphere, and Physical Grounds. Small retail food outlets rarely exceed fifteen hundred square feet, and 80 percent of the available space is for customer service, with the remaining 20 percent divided among backroom storage, a restroom, office space, and general work area. Some older stores may seem dark and cramped in comparison with newer facilities, which usually are attractively designed and well lit. Typical Number of Employees. The number of employees depends on the store’s hours; the average small independent business may have as few as two or three. If a store is open twenty-four hours, like some convenience chains, there will be at least three people on a day shift, including a manager, and one or two at night. Traditional Geographic Locations. Many small general food businesses are clustered in lower socioeconomic areas that large chains do not find potentially profitable to enter. Specialty shops are more prevalent in wealthier areas where their higher prices do not matter and their “exotic” products are in demand. Ethnic markets mainly can be found in areas where corresponding ethnic

Small Businesses Potential Annual Earnings Scale. Because a great many food retail industry jobs are part time and entry level, salaries for most positions are lower than the average for all industries. The workers in a small business are not likely to be unionized. The majority of nonmanagement workers earn between $9 and $15 per hour, but the average unskilled small-business employee will earn an hourly wage on the low end of the scale. Some nonunionized businesses pay even less than minimum wage. A small business will probably employ just an owner or manager and a small number of salespeople. If it is a onestore operation, the owners’ earnings will vary according to the store’s profits. Clientele Interaction. In a small Many doughnut shops are mom-and-pop operations, but some are part of business, there is likely to be some national chains. (©Nolte Lourens/Dreamstime.com)

Food Retail Industry populations are concentrated, but increasingly they are locating in higher socioeconomic locations as diverse groups of people develop a taste for their wares. Pros of Working for a Small Business. Owners and employees of small businesses may get to know their customers by name and have personal relationships with them. Employees may have more say in how the business is run and can feel more integral to the operation, even making suggestions for improving service. Cons of Working for a Small Business. In a small food store, prospects for long-term employment may be shaky, and benefits such as vacation time, health insurance, and sick leave are very limited. For the owner, who may have to take on all the duties in the business, there are long hours and little time off. Employees may only work part time and are not likely to be unionized. They generally earn less than comparable workers in other industries. Legally required expenses, such as for insurance and business licenses, reduce profits. Bad economic times may cause the business to close or to seek a less expensive location away from an established customer base. Costs Utilities: Utilities include water, gas, electric, telephone, and Internet service. If the property is not owned by the business operator, some or all of those expenses may be split as part of a lease agreement. Taxes and Insurance: Small businesses are required to pay business, property, and other applicable taxes and collect sales taxes from their customers. They purchase business licenses and insurance, including fire, health, and liability as appropriate. Rent: Rent is a major expense if the location is leased, particularly in a well-maintained downtown area or within a successful shopping center or mall. Flat fees or a percentage-of-sales fees are the usual lease arrangements. Escalator clauses are common. Rents are lower in downscale areas where profits also might be lower. Midsize Businesses Potential Annual Earnings Scale. Most midsize businesses are part of a chain and have at least one manager and multiple assistant managers.

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The average manager earns about $19 an hour and may receive bonuses and profit sharing based on store performance. As a result, those in the more profitable stores will earn more than others in the same position at less profitable stores. Managers’ salaries can rise to as much as $85,000 a year. Specialized workers such as butchers earn an average of $15 an hour. Less skilled workers earn on average about $10 an hour, depending upon whether they are unionized, and unskilled personnel such as baggers earn about $8 an hour or less. Clientele Interaction. Because customers generally shop around for the best prices, store employees probably will not know most customers by name or even by sight. Employees who deal with the public are expected to be polite and helpful to everyone, even when customers are angry or unreasonable. Amenities, Atmosphere, and Physical Grounds. Stores are likely to be well lit and invitingly decorated with professional displays and dependable temperature control. Aisles are wide and stock on shelves handily displayed. Typical Number of Employees. The number of employees in a midsize store may number thirty to fifty or more, most of whom are part time. Traditional Geographic Locations. Midsize facilities are found in urban and suburban areas. Ethnic markets usually are located in areas where there are sizable ethnic communities but increasingly are found in other areas as well. Pros of Working for a Midsize Business. Workers in a midsize business are more likely to be union members and thus eligible for paid vacations, sick leave, and health insurance. Staff discounts often are available for employees who shop in the store. Physical surroundings usually are pleasant. Those who enjoy contact with the public are well suited to the food retail industry. Cons of Working for a Midsize Business. Parttime or nonunion workers may be eligible for few benefits. Workers in chain stores are most likely to be covered by union contracts, but job security in independently owned stores is not as great, and average salaries are lower than in other industries. Midsize businesses may be more prone to takeovers from large chains, so job security may be affected. Injuries occur at a higher rate than average in the grocery industry. Long service hours may re-

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sult in varied work schedules, including night and weekend shifts. Costs Utilities: Utilities include water, gas, Internet services, electricity, and telephone. For stores that are part of chains, these expenses are paid by corporate headquarters. Taxes and Insurance: Owner-operated facilities pay local and state business taxes and collect sales taxes from their customers. Business licenses and health, fire, and liability insurance are part of doing business. For chain stores, such expenses are paid by the corporate headquarters rather than individual stores. Rent: Midsize stores generally are built specifically for the business and may be either wholly owned or leased. In the latter case, flat-fee leases or a percentage of sales are the most common arrangements. Most midsize groceries are usually freestanding and not located within malls. Large Businesses Potential Annual Earnings Scale. A large facility may have an overall manager, assistant managers, and several department managers. The top manager may earn $20 or more per hour, receive bonuses based on the store’s profits, and even have a profit-sharing arrangement. The manager’s salary can be as high as $85,000 per year at national chains; convenience store managers earn less. Department or first-line managers can expect to earn about $17 per hour. Specialized workers such as butchers have the highest salaries among nonmanagerial personnel, averaging about $14 an hour. Pharmacists earn the most, possibly in excess of $100,000. Low-ranking personnel such as baggers earn the least, not much more than minimum wage, or about $8 per hour. Clientele Interaction. There is little opportunity to get to know customers well in high-volume stores, but each employee is expected to treat shoppers with courtesy and respond quickly to their requests. Amenities, Atmosphere, and Physical Grounds. Large businesses will most likely be well designed and inviting to shoppers, except in warehouse facilities. Climate control, product placement, and lighting usually are very good.

Typical Number of Employees. Because of their long hours of operation, large high-volume stores may employ seventy to one hundred workers, up to 80 percent of whom may work part time. Traditional Geographic Locations. Large facilities are located in most urban and suburban areas but may not be found in places perceived as high-crime areas. Large grocery businesses usually are not found in malls. Pros of Working for a Large Business. Fulltime unionized employees are more likely to be found in large businesses. They have benefits such as health insurance, vacations, and sick leave. Employees often receive a store discount. The physical surroundings are usually pleasant. Those who enjoy interaction with the public will have amply opportunity for it. Because of government regulations, the health and safety of workers usually is well protected. Managers are provided with the valuable experience of supervising many employees and overseeing complex operations. Cons of Working for a Large Business. In busy locations, work is likely to be hectic and nonstop. Some customers may be difficult to deal with. Salaries for less skilled workers in the food retail industry generally are lower than the average for all industries. Job security for nonunion workers may not be good. Because stores usually are open for long hours, workers may have to come in very early or work very late into the evening and on weekends and holidays. Injuries occur at higher rates in the grocery industry than the average for all other industries. Costs Utilities: Large stores will have major utility bills covering electricity, water, Internet service, gas, and telephone. Taxes and Insurance: Payment of state and local taxes is required, and stores collect sales taxes from their customers. Business licenses and health, liability, and fire insurance are required. Corporate headquarters cover the expenses of individual stores that are part of the company. Rent: Large stores are almost always constructed and wholly owned by the controlling corporation; if a store is leased, the rent is determined on a flat-fee or percentage-of-sales basis. Large stores generally are freestanding and not located within malls.

Food Retail Industry ORGANIZATIONAL STRUCTURE AND JOB ROLES The organization of a retail food facility can vary considerably according to its size. A small store— regardless of whether it is independently owned, part of a convenience store chain, or a specialty shop—may have an owner or manager and perhaps one or two other employees. Larger facilities usually are divided into functional departments, each with its own manager, with an overall store manager who oversees all the various operations. There also may be assistant managers who are in charge when the store manager is not present. In turn, the facility’s manager may be overseen by regional management. The following umbrella categories apply to the organizational structure of small, midsize, and large food retailing businesses: ■ ■ ■ ■ ■

■ ■ ■

Management Customer Services Sales and Marketing Facilities and Security Technology, Research, Design, and Development Regulation Centralized Operations Distribution and Supply

Management The owner of a food store that is not part of a larger chain is responsible for all activities, including those involving ordering, displays, inventory, and sales. The manager supervises one or more employees and maintains the payroll. In larger facilities, certain activities such as display planning, payroll, advertising, and product ordering may be done at a regional company facility. The in-store manager is responsible for hiring, supervising, scheduling, training, and motivating employees and ensuring customer satisfaction. He or she oversees removal of outdated foodstuffs and the cleanliness of the facility in compliance with state and federal laws. According to 2010 statistics, 27 percent of overall store managers in regional or national grocery chains were women; 60 percent of all managers had at least ten years of experience. Individual stores, depending on their size, will

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have an overall manager and assistant managers who may also be in charge of specific departments within the store. They also are referred to as firstline managers or department heads. Chains also have regional managers who supervise several stores. In addition, purchasing managers plan and direct the purchasing process. Category managers are similar to purchasing managers, but they specialize in specific areas such as soft drinks or snack foods. Marketing managers attempt to forecast sales and develop marketing plans based on consumer trends, customer feedback, and sales figures. Occupations in the area of management may include the following: ■ ■ ■

Manager Assistant Manager Department Manager

Customer Services Because loyalty to individual market chains typically is not strong, customer service is an important component of the industry. Everyone who comes into contact with customers is held responsible for treating shoppers with respect and ensuring their satisfaction. In smaller stores, the owner, the manager, or a responsible employee will personally handle customers’ concerns, provide assistance, and respond to problems. Larger markets and warehouse-type facilities have service areas where people can request refunds or exchanges, register complaints, and ask to speak to a manager. Such areas generally are staffed by employees who also perform other duties, but sometimes specific employees are posted there for an entire shift. Among the positions that are involved in customer service are the following: Cashiers. Along with stock clerks and order fillers, cashiers make up the largest segment of the food retail industry. Together these positions total almost 35 percent of all industry workers. They scan items being purchased, accept payment and make change, and produce a receipt. For items that are priced by weight, such as produce, and those that come without bar codes, they compute the correct price or key in product codes. They pack purchases in the absence of baggers. When necessary, cashiers may assist in other areas when union rules do not limit such activities.

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Baggers. Sometimes called packers, packagers, or hand packers, baggers usually are the lowest paid employees in the industry. They place purchased items in sacks, assist shoppers in carrying packages to their vehicles, retrieve shopping carts from outside the store, return misplaced items to the shelves, and assist other store personnel as needed. Butchers and Assistants. Butchers prepare meats, poultry, and fish by cutting, grinding, and trimming as appropriate, and they package and price their finished work for sale. They may prepare ready-to-eat foods. Most butchers and their assistants work in individual stores, but some may be located at processing facilities that prepare food for individual stores. Bakers and Assistants. Bakers make bread, rolls, doughnuts, cakes, cookies, and similar products in stores or at centralized facilities. They create specialty items such as birthday cakes to order. Salespeople/Counter Attendants. In stores with specialty shops that offer refreshments such as coffee, tea, and snacks, salespeople sell the products and may act as baristas. They also may prepare basic food such as sandwiches. Produce Clerks. Responsible for keeping fruits and vegetables in fresh condition, produce clerks maintain optimum temperature and humidity levels in storage areas. They wrap items as necessary, keep produce moist in sales bins, and remove items that are no longer saleable because of deterioration. Food Preparers. In stores that house delicatessens or other prepared-food sections, food preparers may assemble salads, fry chicken, and cook meats and other ready-to-eat foods. They assemble party platters and entire meals and prepare the edibles sold in-store. Product Demonstrators. Usually hired on a sporadic and part-time basis, product demonstrators offer coupons and free samples of store items to entice customers to purchase the demonstrated products. Chefs/Cooks. Very large stores and centralized facilities may have a head chef or cook who plans menus, sets prices, directs the preparation of foodstuffs, orders supplies, and maintains accounts. Pharmacists. Pharmacists fill orders for medications and dispense them based on prescriptions and advise customers about over-the-counter health

aids. They usually have technicians and aides assisting them. Occupations in the area of customer services may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Sales Clerk/Counter Attendant Cashier Bagger/Packer/Packager Produce Clerk Butcher/Meat Cutter/Meat Trimmer Bakery Clerk Delicatessen/Food Preparer Pharmacist Product Demonstrator

Sales and Marketing Shoppers usually enter a food retail facility with specific needs in mind but can be induced to purchase more than they intended. This is known as “impulse” buying. Less essential goods such as candy, gum, breath mints, and magazines usually are placed adjacent to checkout counters where they are sure to be noticed. Staples may be placed in areas where shoppers will first have to pass shelves of less necessary items. Sometimes, the ends of shelves have impulse goods displayed because they are more readily visible from different areas of the store. Related items that are normally not shelved together, such as soft drinks and potato chips, may be featured together in special displays. If possible, products are arranged so customers are drawn first to the sides of the store and then to the rear. This creates a circular traffic pattern that exposes shoppers to a greater proportion of the facility. Impulse goods are placed at eye level so they will be easily spotted. More vertical space is used to display certain items than horizontal space because this arrangement exposes customers to a greater variety of items. Heavy and bulky items are placed nearer the floor. Individual stores cannot possibly carry every product available, so shelf space in markets is purchased by manufacturers to enable their goods to be featured and sold. In turn, the markets determine what is selling by keeping computerized records integrated with the cash registers. More space is given to hot-selling items, while lower-volume sellers and niche products generally receive less shelf or bin room. New products that come on the market also must compete for shelf space.

Food Retail Industry Until recent years, advertising for supermarket products generally was limited to newspapers. With the decline of that medium, paper advertising now is widely done through colorful flyers delivered once a week or more with the mail. Because allpurpose chain markets are more or less similar in pricing and merchandise, advertising usually focuses on sale-priced items. People are well aware of what convenience stores offer without advertisements. Specialty stores tend to generate most publicity through such outlets as Web sites, blogs, and other modern electronic methods of reaching potential shoppers. As with any business, word of mouth is a potent method of advertising for stores that sell “nonessential” products. Coupons and store discount cards also are methods for attracting customers. To increase sales potential, some stores have prepared food or snack shops on the premises, usually leased to chains such as Starbucks or Coffee Bean. They may sell sandwiches and provide cater-

715

ing service to large groups with party platters, particularly around holiday times. Large stores such as Costco may have fast food available within the store or at an outside kiosk. Among the positions involved in sales and marketing are the following: ■ ■ ■ ■

Sales Clerk Stock Clerk/Order Filler Display Designer Computer Technician

Facilities and Security With the trend toward larger store size, security is likely to remain a major concern despite increased electronic surveillance and other measures. The rate of loss through theft has historically run between 1 percent and 3 percent of sales and usually falls into one of three categories: thefts by employees, by customers, or by vendors. Of these, employee theft has historically been the largest

OCCUPATION

PROFILE

Retail Salesperson Considerations

Qualifications

Description

Sells and promotes food products on a retail basis.

Career clusters

Agriculture, Food, and Natural Resources; Business, Management, and Administration; Marketing, Sales, and Service

Interests

Data; people

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical school

Physical exertion

Light work; medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ESA; ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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problem for retailers. The design of a store should try to minimize blind spots where shoplifting may occur. Other security measures such as cameras, exit alarm systems, and even undercover security personnel may be utilized. Store design is also important for inviting customers in as well as deterring malefactors. The design of a store can be used to steer shoppers to areas they may not have been planning to visit. A well-planned design is particularly important for specialty stores that rely on passersby who may not have been intending to buy. Attractive window displays are generally not important in food retail outlets except for specialty stores. Lighting in all retail food outlets should be bright throughout the facility, and items that are on special display should be lit two to five times more brightly than the surrounding light source. Dependable refrigeration and temperature control is a must for all food stores. Occupations in the area of facilities and security may include the following: ■ ■ ■ ■ ■

Security Guard Cleaner Custodian/Janitor Interior Designer Architect

Technology, Research, Design, and Development Technology plays a major role in the industry. In retail markets, integrated computer software keeps track of customer purchases while simultaneously updating inventory and ordering from suppliers. In the 1980’s, a concept called Efficient Consumer Response (ECR) was instituted. It tracks purchasing patterns from store to store and therefore can allocate products to the individual stores where they are most needed. Its goal is to help stores avoid overstocking items while keeping enough inventory on hand to fill immediate needs. The industry also makes use of the Internet. At the least, stores maintain Web sites to post their business hours, locations, and other basic information. Online selling has become an increasing part of the industry after a false start in the 1990’s. By 2005, Internet sales accounted for almost $2.5 billion of the industry’s gross sales; the Safeway chain

saw Internet purchases double in two years. Leading the way was Britain’s vast Tesco chain, which reported 150,000 online orders each week. Online sales were estimated to account for $100 billion in Europe and at least $85 billion in the United States by 2010. Consumers were less likely to shop online for perishable goods like produce. Other technological advances include tracking delivery trucks to determine their locations and predict when deliveries will be made. Self-checkout technology was developed in 2002, combining bar code scanners, payment devices, and scales. This technology even allows for use of coupons. In an experimental stage is “scan-as-you-go,” which begins to track purchases when a customer first selects an item. The ultimate goal is to eliminate checkstand delays and deter shoplifting. Innovations that consumers take for granted today, such as shopping carts, also had to be developed. The first prototype of a cart, described as a folding chair on wheels, was developed in 1937 and patented by an Oklahoma man named Sylvan Goldman. Other ideas also were tested, including a cart set on tracks that ran parallel to markets’ shelves. Twelve-digit bar codes using a Universal Product Code (UPC) that are used to quickly scan products at the checkout counter were another important innovation. Two developments from the 1960’s—relatively inexpensive lasers and integrated circuits—made bar code use feasible. In Ohio in 1974, a package of chewing gum supposedly was the first product scanned and commercially sold, and the use of bar codes eventually became commonplace. Automated self-checkout is available for customers who have few items. In many stores, this system has eliminated the so-called “express” line, but a majority of consumers still prefer to check out with a clerk. Another potential advance is the use radio frequency identification (RFID), which replaces bar codes with microchips. It enables the contents of a shopping cart to be instantaneously scanned. Both of these technologies eventually may eliminate many cashier positions. Many software packages for such tasks as inventory control, accounting, ordering, and shopper tracking are commercially available. Computer analysis of customer demand makes it possible to reduce large stockpiles of inventories. If the design of displays is not done in-house, there are compa-

Food Retail Industry nies that specialize in designing optimum displays for different types of products within a store. Technological occupations in food retailing include the following:

■ ■ ■ ■ ■

■ ■ ■ ■

Computer Technician Maintenance and Repair Worker Researcher/Scientist Product Tester

Regulation The retail food industry is subject to local, state, and federal regulations, including those of the U.S. Occupational Safety and Health Administration (OSHA), especially in regard to sanitation and freshness. Wage and hour laws must be adhered to. However, in some nonunionized, low-profitmargin facilities such as bodegas or greengrocers, wages may be very low, hours long, and labor laws violated. Such places often hire low-skilled people who may have little other choice of jobs. Occupations that may deal with aspects of governmental regulation include the following: ■ ■

■

Store and Regional Manager Compliance Specialist (usually a part of Human Resources departments) Inspector

Centralized Operations Large chains have corporate headquarters where much of the administrative work, such as design planning, payroll, and human resources, is housed. Executives such as regional managers (sometimes called area or zone managers) oversee the operations of a number of stores within a large geographic area. Distribution warehouses stock products until they are needed in individual stores. There also may be factory-type facilities for bakery goods, meat processing, and so on. In large chains with warehouse facilities, warehouse workers unload, load, and keep track of stock to be delivered to individual stores. With the increasing automation in the food retail industry, these jobs may decline in number. Truck drivers pick up stock from warehouses and other central locations, deliver it to individual stores, and return outdated and superfluous merchandise not otherwise disposed of. Occupations in the area of centralized operations may include the following:

■ ■ ■

■ ■

717

Regional Manager Purchasing Manager Purchasing Agent Marketing Manager Office Worker Truck Driver Warehouse Worker Factory Worker (at chains that manufacture some of their own products) Laborer Bookkeeper

Distribution and Supply Large chains buy from a wide range of suppliers, and their purchasing power enables them to obtain the lowest prices. They generally do not favor long-term contracts. Walmart and its subsidiaries such as Sam’s Club have their own distribution centers, more than 120 as of the late 2000’s. Specialized stores tend to enter into longer-term contracts with a very few suppliers, presumably of high quality, such as growers of particular produce. Generally the retail business is responsible for arranging product shipment from its suppliers, and perishable items must be shipped safely and rapidly. Cooperatives and affiliated independents usually purchase through a central wholesaler that may charge them less than it would a major chain. The primary occupations in food-retailing distribution and supply include the following: ■ ■ ■

Wholesaler Warehouse Worker Farmer/Grower

INDUSTRY

OUTLOOK

Overview In the five years from 2003 to 2007, the food retail industry grew approximately 3 percent to some $719.5 billion in annual domestic revenues. Of this amount, supermarkets accounted for the largest portion—almost $405 billion, or about 56 percent—in 2007. Sales in supercenters amounted to more than 9 percent of the total revenue. Warehouse-style chains like Sam’s Club and Costco continued to expand their market share. With the onset of the worldwide recession at the end of 2007,

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the rate of growth in the industry was expected to be very slow or even remain flat several years. Sales may reach $800 billion by 2012. Wages were expected to climb very slowly compared with other industries and perhaps experience little growth until 2018. A factor in the slowdown may be that busy twojob families are increasingly buying their meals already prepared from a variety of specialized takeout chains and restaurants. With the growing interest in healthier diets and the burgeoning ethnic populations in the United States, general markets may try to subsume smaller stores by offering larger varieties of foodstuffs that appeal to a narrower and more specialized group of consumers. They will continue to expand the range of services they offer, including automated teller machines (ATMs), bakeries, prepared food outlets, liquor sections, and delicatessens. Store loyalty, except for specialty stores and niche chains such as Trader Joe’s or Whole Foods, usually is low or absent in grocery chains. As of 2007, some 75 percent of consumers routinely shopped at five or more different stores looking for both lower prices and convenience. Foreign-owned chains like Great Britain’s Tesco now are attempting to enter the U.S. market. The

financial success of this penetration will determine whether or not this trend continues. Conversely, U.S. firms have made forays into foreign markets, particularly in Latin America, and have bought up indigenous food retail chains. Using Americanstyle management and retail techniques, these acquisitions increasingly resemble American stores. Some local stores have fought back by upgrading their service levels and the size of their facilities. Expansion by American-owned interests in other markets sometimes has proved to be unsuccessful, particularly during the economic downturn that began in 2008. Walmart has been a leader in such expansion and by the beginning of the twenty-first century owned more than eleven hundred stores, including locations in Europe. The vast market in Asia would seem to be the next logical place for the entrance of the megachains, but the emergence of local competition may be strong, particularly in China.

Employment Advantages Because employees are generally hired into entry-level positions, little or no prior experience is expected. Advancement in the retail food industry may be easier because on-the-job training is provided. Some positions, such as cashiers, may require at least a high school diploma, and PROJECTED EMPLOYMENT higher management positions FOR SELECTED OCCUPATIONS may require a college or technical school degree, but advanced Food and Beverage Stores schooling is not required for most positions. Because a majorEmployment ity of jobs are part time, flexible 2009 Projected 2018 Occupation schedules may allow time for school or other activities. 99,940 99,400 Butchers and meat cutters About 30 percent of employ955,090 961,000 Cashiers ees are under the age of twentyfour, so the industry is a youth149,300 145,300 First-line supervisors/managers of friendly environment. For those retail sales workers who enjoy working with the pub135,830 154,200 Food preparation workers lic, there is ample opportunity to do so. Even in a recession, 447,100 441,300 Stock clerks and order fillers people must purchase food, although their tastes may change. Source: U.S. Bureau of Labor Statistics, Industries at a Glance, By 2007, according to the U.S. Occupational Employment Statistics and Employment Projections Census Bureau, the retail food Program. industry employed 3.5 million people, not including conve-

Food Retail Industry nience stores attached to gas stations, so employment opportunities were ample. Turnover is high, especially among younger employees, thus creating openings for future workers. Annual Earnings The food retail industry is second in sales volume only to the motor vehicles industry. Just before the onset of the 2007-2009 recession, U.S. sales were almost $720 billion, a $15 billion increase over a five-year period. It was not a steadily rising trend line, however; for instance, in 2004, revenues decreased to $635 billion. Supermarkets continued to dominate the industry; 85 percent of their sales came from chains, and the remainder from independently owned markets. In 2004, wholesale clubs had sales of $32.6 billion and convenience stores $127 billion.

RELATED RESOURCES FOR FURTHER RESEARCH American Wholesale Marketers Association 2750 Prosperity Ave., Suite 530 Fairfax, VA 22031 Tel: (703) 208-3358 Fax: (703) 573-5738 http://www.awmanet.org Careers in Food 3800 S Fremont, Suite 200 Springfield, MO 65804 Tel: (877) 329-1693 Fax: (417) 447-0738 http://www.careersinfood.com Food Industry Suppliers Association 1207 Sunset Dr. Greensboro, NC 27408 Tel: (336) 274-6311 Fax: (336) 691-1839 http://www.fisanet.org Food Marketing Institute 2345 Crystal Dr., Suite 800 Arlington, VA 22202 Tel: (202) 452-8444 Fax: (202) 429-4519 http://www.fmi.org

719

Grocery Manufacturers Association 1350 I St. NW, Suite 300 Washington, DC 20005 Tel: (202) 639-5900 Fax: (202) 639-5932 http://www.gmaonline.org Mexican-American Grocers Association 405 San Fernando Rd. Los Angeles, CA 90031 Tel: (323) 227-1565 Fax: (323) 227-6935 http://www.buscapique.com/latinusa/ buscafile/oeste/maga.htm National Association of Convenience Stores 1600 Duke St. Alexandria, VA 22314 Tel: (800) 966-6227 Fax: (703) 836-4564 http://www.nacsonline.com National Grocers Association 1005 N Glebe Rd., Suite 250 Arlington, VA 22201 Tel: (703) 516-0700 Fax: (703) 812-1821 http://www.nationalgrocers.org/ United Food and Commercial Workers International Union 1775 K St. NW Washington, DC 20006 Tel: (202) 223-3111 http://www.ufcw.org

ABOUT

THE

AUTHOR

Roy Liebman is an emeritus librarian (full professor) of the California State University, Los Angeles, where he held several management positions during a thirty-five-year career. He is a 1958 graduate of Brooklyn College, a 1961 graduate of Pratt Institute (M.L.S.), and a 1978 graduate of the California State University, Los Angeles (M.A.). He is the author of five reference books to date, as well as having written numerous periodical articles, reference book essays, and more than two hundred book reviews covering a wide range of subjects. He

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wrote the script for a produced television documentary and has appeared as an interview subject in two other documentaries. He also previously held positions at the California Institute of Technology and the Brooklyn and New York Public Libraries, among others, and he is currently serving part time as a reference librarian at the Los Angeles Public Library.

FURTHER

READING

Brownstone, Douglass L. How to Run a Successful Food Specialty Store. New York: Wiley, 1978. Groceteria.com. “A Quick History of the Supermarket.” Available at http://www .groceteria.com/about/a-quick-history-ofthe-supermarket. Lewis, Jerre G., and Leslie D. Renn. How to Start and Manage a Retail Grocery Store Business: A Practical Way to Start Your Own Business. Interlochen, Mich.: Lewis & Renn Associates, 1999. Lewis, Len. The Trader Joe’s Adventure: Turning a Unique Approach to Business into a Retail and Cultural Phenomenon. Chicago: Dearborn Trade, 2005. Lichtenstein, Nelson. The Retail Revolution: How Wal-Mart Created a Brave New World of Business. New York: Metropolitan Books/Henry Holt, 2009. Marion, Bruce W., et al. The Food Retailing Industry: Market Structure, Profits, and Prices. New York: Praeger, 1979.

Mueller, Willard F., and Leon Garoian. Changes in the Market Structure of Grocery Retailing. Madison: University of Wisconsin Press, 1961. Pegler, Martin. Food Retail Design and Display. New York: Retail Reporting, 1994. Regmi, Anita, and Mark J. Gelhar. New Directions in Global Food Markets. Washington, D.C.: U.S. Department of Agriculture, 2005. Available at http://www.ers/usda.gov/publications/ alb794. “A Short History of the Convenience Store Industry.” Available at http://www .nacsonline.com/NACS/Resources/ Research/History/Pages/default.aspx. Speak, Hugh S. Supermarket Merchandising and Management. Englewood Cliffs, N.J.: PrenticeHall, 1977. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. Available at http:// www.bls.gov/oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Congress. House Committee on the Judiciary. Competitive Issues in Agriculture and the Food Marketing Industry. 106th Congress, 1st session, 2000. Walsh, William. The Rise and Decline of the Great Atlantic and Pacific Tea Company. Secaucus, N.J.: Lyle Stuart, 1986.

SURVEY OF

American Industry and Careers

SURVEY OF

American Industry and Careers Volume 3 Food Services—Local Public Administration

The Editors of Salem Press

Salem Press Pasadena, California

Hackensack, New Jersey

Editorial Director: Christina J. Moose Project Editor: Rowena Wildin Manuscript Editors: Stacy Cole, Andy Perry Acquisitions Manager: Mark Rehn Administrative Assistant: Paul Tifford, Jr.

Research Supervisor: Jeffry Jensen Photo Editor: Cynthia Breslin Beres Design and Layout: James Hutson Additional Layout: William Zimmerman

Cover photo: ©Image Source/CORBIS

Copyright ©2012, by Salem Press, A Division of EBSCO Publishing, Inc. All rights in this book are reserved. No part of this work may be used or reproduced in any manner whatsoever or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without written permission from the copyright owner except in the case of brief quotations embodied in critical articles and reviews or in the copying of images deemed to be freely licensed or in the public domain. For information, address the publisher, Salem Press, at [email protected]. ∞ The paper used in these volumes conforms to the American National Standard for Permanence of Paper for Printed Library Materials, X39.48-1992 (R1997). Library of Congress Cataloging-in-Publication Data Survey of American industry and careers / The Editors of Salem Press. v. cm. Includes bibliographical references and indexes. ISBN 978-1-58765-768-9 (set : alk. paper) — ISBN 978-1-58765-769-6 (vol. 1 : alk. paper) — ISBN 978-158765-770-2 (vol. 2 : alk. paper) — ISBN 978-1-58765-771-9 (vol. 3 : alk. paper) — ISBN 978-1-58765-772-6 (vol. 4 : alk. paper) — ISBN 978-1-58765-773-3 (vol. 5 : alk. paper) — ISBN 978-1-58765-774-0 (vol. 6 : alk. paper) 1. Business—Vocational guidance—United States. 2. Industries—United States. 3. Occupations— United States. 4. Vocational guidance—United States. I. Salem Press. HF5382.5.U5S87 2012 331.7020973—dc23 2011019601 First Printing

printed in the united states of america

Contents Complete List of Contents . . . . . . . . . . . . . . . . . . . . . . lxi List of Tables and Sidebars . . . . . . . . . . . . . . . . . . . . . . lxv Food Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 721 Freight Transport Industry . . . . . . . . . . . . . . . . . . . . . 742 Funerary Industry . . . . . . . . . . . . . . . . . . . . . . . . . . 760 Furniture and Home Furnishings Industry. . . . . . . . . . . . . 775 Hand Tools and Instruments Industry . . . . . . . . . . . . . . . 793 Health and Fitness Industry . . . . . . . . . . . . . . . . . . . . . 808 Heavy Machines Industry . . . . . . . . . . . . . . . . . . . . . . 825 Higher Education Industry . . . . . . . . . . . . . . . . . . . . . 844 Highway, Road, and Bridge Construction Industry . . . . . . . . 863 Home Maintenance Services . . . . . . . . . . . . . . . . . . . . 881 Hospital Care and Services . . . . . . . . . . . . . . . . . . . . . 899 Hotels and Motels Industry . . . . . . . . . . . . . . . . . . . . . 918 Household and Personal Products Industry . . . . . . . . . . . . 937 Industrial Design Industry. . . . . . . . . . . . . . . . . . . . . . 952 Insurance Industry . . . . . . . . . . . . . . . . . . . . . . . . . . 971 Internet and Cyber Communications Industry . . . . . . . . . . 989 Landscaping Services . . . . . . . . . . . . . . . . . . . . . . . . 1005 Legal Services and Law Firms . . . . . . . . . . . . . . . . . . . 1026 Libraries and Archives Industry . . . . . . . . . . . . . . . . . . 1043 Light Machinery Industry . . . . . . . . . . . . . . . . . . . . . 1060 Livestock and Animal Products Industry . . . . . . . . . . . . . 1078 Local Public Administration . . . . . . . . . . . . . . . . . . . . 1096

lix

Complete List of Contents VOLUME Contents . . . . . . . . . . . . . . . . . . . . . . v Publisher’s Note . . . . . . . . . . . . . . . . . vii Contributors . . . . . . . . . . . . . . . . . . . xi Complete List of Contents . . . . . . . . . . . xiii List of Tables and Sidebars . . . . . . . . . . xvii Accounting Services . . . . . . . . . . . . . . . 1 Advertising and Marketing Industry . . . . . . 19 Airline Industry . . . . . . . . . . . . . . . . . 36 Alternative Power Industry . . . . . . . . . . . 54 Animal Care Services . . . . . . . . . . . . . . 74 Apparel and Fashion Industry . . . . . . . . . 86 Automobiles and Personal Vehicles Industry . . . . . . . . . . . . . . . . . . . 105

1

Banking Industry . . . . . . . . . Batteries and Fuel Cells Industry Beverage and Tobacco Industry. Biofuels Industry . . . . . . . . . Broadcast Industry . . . . . . . . Building Architecture Industry . Building Construction Industry . Business Services . . . . . . . . .

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125 141 159 177 197 215 233 252

Casino Industry. . . . . . . Chemicals Industry. . . . . Civil Services: Planning . . Civil Services: Public Safety

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271 288 305 325

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Contents . . . . . . . . . . . . . . . . . . . . xxxv Complete List of Contents . . . . . . . . . xxxvii List of Tables and Sidebars . . . . . . . . . . . xli

Day-Care Services. . . . . . . . . . . . . . . . 503 Defense Industry . . . . . . . . . . . . . . . . 523 Dental and Orthodontics Industry . . . . . . 541

Coal Mining Industry . . . . . . . . . Complementary and Alternative Health Care Industry . . . . . . . . Computer Hardware and Peripherals Industry . . . . . . . . . . . . . . . Computer Software Industry . . . . . Computer Systems Industry . . . . . . Construction Equipment Industry . . Corporate Education Services . . . . . Counseling Services . . . . . . . . . . Criminal Justice and Prison Industry .

Electrical and Gas Appliances Industry . . . . 559 Electrical Power Industry . . . . . . . . . . . 578 Environmental Engineering and Consultation Services . . . . . . . . . . . . 593

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379 397 414 432 452 469 485

Farming Industry . . . . . . . . . . . . Federal Public Administration . . . . Financial Services Industry . . . . . . Fishing and Fisheries Industry. . . . . Food Manufacturing and Wholesaling Industry . . . . . . . . . . . . . . . Food Retail Industry . . . . . . . . . .

VOLUME Contents . . . . . . . . . . . . . . . . . . . . . lix List of Tables and Sidebars . . . . . . . . . . . lxv

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613 631 648 663

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Food Services . . . . . . . . . . . . . . . . . . 721 Freight Transport Industry . . . . . . . . . . 742 Funerary Industry . . . . . . . . . . . . . . . 760 lxi

Survey of American Industry and Careers Furniture and Home Furnishings Industry . . . . . . . . . . . . . . . . . . . 775 Hand Tools and Instruments Industry . . Health and Fitness Industry . . . . . . . . Heavy Machines Industry . . . . . . . . . Higher Education Industry . . . . . . . . Highway, Road, and Bridge Construction Industry . . . . . . . . . . . . . . . . . Home Maintenance Services . . . . . . . Hospital Care and Services . . . . . . . . Hotels and Motels Industry . . . . . . . . Household and Personal Products Industry . . . . . . . . . . . . . . . . .

. . . .

. . . .

793 808 825 844

. . . .

. . . .

863 881 899 918

Industrial Design Industry . . . . . . . . . . . 952 Insurance Industry . . . . . . . . . . . . . . . 971 Internet and Cyber Communications Industry . . . . . . . . . . . . . . . . . . . 989 Landscaping Services . . . . . . Legal Services and Law Firms . Libraries and Archives Industry Light Machinery Industry . . . Livestock and Animal Products Industry. . . . . . . . . . . . Local Public Administration . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

1005 1026 1043 1060

. . . . . . . 1078 . . . . . . . 1096

. . 937 VOLUME

4

Contents . . . . . . . . . . . . . . . . . . . lxxxiii Complete List of Contents . . . . . . . . . . lxxxv List of Tables and Sidebars . . . . . . . . . lxxxix

Nuclear Power Industry . . . . . . . . . . . 1297

Logging Industry . . . . . . . . . . . . . . . 1113

Paper Manufacturing and Products Industry. . . . . . . . . . . . . . . . Passenger Transportation and Transit Industry. . . . . . . . . . . . . . . . Personal Services . . . . . . . . . . . . Petroleum and Natural Gas Industry . Pharmaceuticals and Medications Industry. . . . . . . . . . . . . . . . Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry . Plastics and Rubber Manufacturing Industry. . . . . . . . . . . . . . . . Political Advocacy Industry. . . . . . . Postal and Package Delivery Services .

Mass Transportation Vehicles Industry . Medicine and Health Care Industry . . . Metals Manufacturing Industry . . . . . Mining Industry . . . . . . . . . . . . . . Motion Picture and Television Industry . Museums and Cultural Institutions Industry. . . . . . . . . . . . . . . . . Music Industry . . . . . . . . . . . . . .

. . . . .

. . . . .

Outdoor Recreation Industry . . . . . . . . 1312

1131 1151 1169 1187 1204

. . 1225 . . 1241

National and International Security Industry. . . . . . . . . . . . . . . . . . . 1260 Natural Resources Management . . . . . . . 1276

VOLUME

Printing Industry . . . . . . . . . . . Private Education Industry . . . . . . Public Elementary and Secondary Education Industry . . . . . . . . Public Health Services . . . . . . . . Publishing and Information Industry

. . . . 1495 . . . . 1515

. . . 1351 . . . 1369 . . . 1384 . . . 1403 . . . 1423 . . . 1440 . . . 1458 . . . 1476

5

Real Estate Industry. . . . . . . . . Rental and Leasing Services . . . . Residential Medical Care Industry . Restaurant Industry . . . . . . . . . Retail Trade and Service Industry .

Contents . . . . . . . . . . . . . . . . . . . . cvii Complete List of Contents . . . . . . . . . . . cix List of Tables and Sidebars . . . . . . . . . . cxiii

. . . 1332

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

1588 1606 1626 1644 1664

Scientific and Technical Services . . . . . . 1682 Scientific, Medical, and Health Equipment and Supplies Industry . . . . 1703

. . . . 1537 . . . . 1554 . . . . 1572 lxii

Complete List of Contents Shipbuilding, Submarines, and Naval Transport Industry. . . . . . . . . . Space Exploration and Space Science Industry. . . . . . . . . . . . . . . . Spectator Sports Industry. . . . . . . . Sports Equipment Industry. . . . . . .

Telecommunications Equipment Industry. . . . . . . . . . . . . . . . . . . 1799 Telecommunications Infrastructure Industry. . . . . . . . . . . . . . . . . . . 1819

. . . 1722 . . . 1741 . . . 1762 . . . 1783

VOLUME

6

Contents . . . . . . . . . . . . . . . . . . . cxxxi Complete List of Contents . . . . . . . . . cxxxiii List of Tables and Sidebars . . . . . . . . cxxxvii

Waste Management Industry . . . . . . . . . 1981 Watches and Jewelry Industry . . . . . . . . 1999 Water Supply Industry . . . . . . . . . . . . 2017

Textile and Fabrics Industry . . . . . . Theater and Performing Arts Industry Themed Entertainment Industry . . . Toys and Games Industry. . . . . . . . Travel and Tourism Industry. . . . . .

Employment by Industry, 2008 and Projected 2018 . . . . . . . . . . . Fortune 500 Companies by Industry, 2009. . . . . . . . . . . . . . . . . Bibliography. . . . . . . . . . . . . . Electronic Resources . . . . . . . . .

. . . . .

. . . . .

. . . . .

1839 1859 1877 1893 1910

Veterinary Industry . . . . . . . . . . . . . . 1927 Video, Computer, and Virtual Reality Games Industry . . . . . . . . . . . . . . 1947

. . . . 2037 . . . . 2044 . . . . 2060 . . . . 2129

Industries by Career Cluster . . . . . . . . . 2161 Jobs and Careers . . . . . . . . . . . . . . . 2164 Subject Index . . . . . . . . . . . . . . . . . 2181

Warehousing and Storage Industry . . . . . 1964

lxiii

List of Tables and Sidebars Accommodation Industry’s Contribution to the U.S. Economy, 920 Accountant: Occupation Profile, 12 Accountants and Auditors: Occupation Specialties, 4 Activities Therapist: Occupation Specialties, 1636 Actor: Occupation Specialties, 1871 Actuary: Occupation Profile, 984 Advertising Account Executive: Occupation Profile, 25 Advertising Agent: Occupation Specialties, 27 Aerospace Engineer: Occupation Profile, 1756 Aerospace Engineer: Occupation Specialties, 1755 Agricultural Scientist: Occupation Specialties, 627 Agriculture: Projected Employment for Selected Occupations, 628 Air Transportation: Projected Employment for Selected Occupations, 51 Aircraft Mechanic: Occupation Profile, 48 Airline Industry’s Contribution to the U.S. Economy, 39 Ambulatory Health Care Services’ Contribution to the U.S. Economy, 1153 Amusement Parks: Projected Employment for Selected Occupations, 1889 Animal Caretaker: Occupation Profile, 81 Animal Caretaker: Occupation Specialties, 82 Apparel Industry: Projected Employment for Selected Occupations, 102

Apparel Worker: Occupation Specialties, 92 Architect: Occupation Profile, 225 Architect: Occupation Specialties, 228 Archivist and Curator: Occupation Profile, 1235 Archivist and Curator: Occupation Specialties, 1237 Athletic Trainer: Occupation Profile, 1773 Auditor: Occupation Profile, 14 Automobile Salesperson: Occupation Profile, 112 Automotive Technician: Occupation Specialties, 119 Bank Teller: Occupation Profile, 135 Barber: Occupation Profile, 1374 Bellhop/Bell Captain: Occupation Specialties, 931 Beverage and Tobacco Product Manufacturing: Projected Employment for Selected Occupations, 174 Bindery Worker: Occupation Specialties, 1510 Biomedical Engineer: Occupation Profile, 1714 Biomedical Equipment Technician: Occupation Profile, 1716 Boilermaker: Occupation Profile, 191 Brickmason/Stonemason: Occupation Profile, 247 Broadcast Technician: Occupation Specialties, 210 Broadcasting and Telecommunications Industries, inputs consumed by the, 201 Broadcasting and Telecommunications lxv

Industries’ Contributions to the U.S. Economy, The, 201 Broadcasting: Projected Employment for Selected Occupations, 212 Budget Analyst: Occupation Profile, 262 Bulldozer Operator: Occupation Specialties, 873 Bus Driver: Occupation Profile, 1364 Business Services Industry’s Contribution to the U.S. Economy, 254 Camera Operator: Occupation Profile, 1220 Career/Technology Education Teacher: Occupation Profile, 464 Chemical Engineer: Occupation Specialties, 299 Chemical Equipment Operator: Occupation Specialties, 300 Chemical Manufacturing: Projected Employment for Selected Occupations, 302 Chemical Products Industry’s Contribution to the U.S. Economy, 289 Chemist: Occupation Profile, 190 Chemist: Occupation Specialties, 189 Child-care Worker: Occupation Profile, 518 Chiropractor: Occupation Profile, 370 Cinematographer: Occupation Profile, 1217 Civil Engineer: Occupation Specialties, 311 Clergy: Occupation Profile, 1435 Clothes Designer: Occupation Profile, 98

Survey of American Industry and Careers College Faculty Member: Occupation Profile, 859 Compositor and Typesetter: Occupation Profile, 1509 Computer and Electronic Product Manufacturing: Projected Employment for Selected Occupations, 394 Computer and Electronic Products Industry’s Contribution to the U.S. Economy, 381 Computer-Controlled Machine Tool Operator: Occupation Profile, 443 Computer-Controlled Machine Tool Operator: Occupation Specialties, 440 Computer-Controlled Tool Programmer: Occupation Profile, 442 Computer Engineer: Occupation Profile, 391 Computer Programmer: Occupation Profile, 408 Computer Security Specialist: Occupation Profile, 1000 Computer Systems Analyst: Occupation Profile, 426 Computer Systems Industry’s Contribution to the U.S. Economy, 416 Construction and Building Inspector: Occupation Specialties, 243 Construction Industry: Projected Employment for Selected Occupations, 250 Construction Industry’s Contribution to the U.S. Economy, The, 234 Construction Manager: Occupation Profile, 874 Contribution of Apparel and Leather Manufacturers to the U.S. Economy, 87 Contribution of Food, Beverage, and Tobacco Product Manufacturing to the U.S. Economy, 685

Contribution of Food Services and Drinking Places to the U.S. Economy, The, 1646 Contribution of Funds, Trusts, and Other Financial Vehicles to the U.S. Economy, The, 651 Contribution of Hospital, Nursing, and Residential Care Facilities to the U.S. Economy, 902 Contribution of Personal Services to the U.S. Economy, 1371 Contribution of Securities, Commodity Contracts, and Investments to the U.S. Economy, The, 650 Contribution of Textile and Textile Produce Mills to the U.S. Economy, The, 1841 Contribution to the U.S. Economy of Scientific, Technical, and Miscellaneous Professional Services, 1683 Cook/Chef: Occupation Profile, 1656 Cook/Chef: Occupation Specialties, 1657 Copywriter: Occupation Profile, 30 Corrections Officer: Occupation Profile, 494 Corrections Officer: Occupation Specialties, 493 Cosmetologist: Occupation Specialties, 1375 Cost Estimator: Occupation Specialties, 1507 Counter and Rental Clerk: Occupation Profile, 1619 Couriers and Messengers Industry: Projected Employment for Selected Occupations, 1492 Dancer/Choreographer: Occupation Profile, 1872 Dancer/Choreographer: Occupation Specialties, 1873 Dental Hygienist: Occupation Profile, 554 lxvi

Dental Laboratory Technician: Occupation Specialties, 555 Dentist: Occupation Specialties, 553 Dietician and Nutritionist: Occupation Specialties, 819 Dispatcher: Occupation Profile, 1489 Drafter: Occupation Specialties, 313 Education Administrator: Occupation Specialties, 1527 Educational Counselor: Occupation Specialties, 1549 Educational Services: Projected Employment for Selected Occupations, 1551 Electrical and Electronics Engineer: Occupation Profile, 572 Electrical Equipment, Appliance, and Component Manufacturing: Projected Employment for Selected Occupations, 575 Electrical Equipment, Appliances, and Components Industry’s Contribution to the U.S. Economy, 561 Electrical Line Installer and Repairer: Occupation Specialties, 588 Electromechanical Equipment Assembler: Occupation Profile, 573 Electronic Commerce Specialist: Occupation Profile, 997 Elementary School Teacher: Occupation Profile, 1547 Energy Conservation and Use Technician: Occupation Profile, 607 Energy Conservation and Use Technician: Occupation Specialties, 608 Engineering Technician: Occupation Specialties, 1689 Environmental Engineer: Occupation Profile, 606

List of Tables and Sidebars Fabricated Metal Product Manufacturing: Projected Employment for Selected Occupations, 1183 Farmer/Farm Manager: Occupation Specialties, 625 Farming Industry’s Contribution to the U.S. Economy, 614 Federal Government’s Contribution to the U.S. Economy, The, 633 Federal Law Enforcement Agent: Occupation Specialties, 336-337 Finance and Insurance Industry: Projected Employment for Selected Occupations, 139 Firefighter: Occupation Profile, 1565 Fishing Industry: Projected Employment for Selected Occupations, 677 Fitness Trainer and Aerobics Instructor: Occupation Profile, 818 Flight Attendant: Occupation Profile, 46 Food and Beverage Service Worker: Occupation Profile, 736 Food and Beverage Stores: Projected Employment for Selected Occupations, 718 Food Manufacturing: Projected Employment for Selected Occupations, 700 Food Service Manager: Occupation Profile, 733 Food Services and Drinking Places: Projected Employment for Selected Occupations, 739 Forester and Conservation Scientist: Occupation Specialties, 1288 Forestry Worker: Occupation Profile, 1122 Forklift Operator: Occupation Profile, 1977

Funeral Director: Occupation Profile, 771 Furniture and Related Product Manufacturing: Projected Employment for Selected Occupations, 790 Furniture Manufacturing Industry’s Contribution to the U.S. Economy, 776 Gambling Industry: Projected Employment for Selected Occupations, 286 Gardener and Groundskeeper: Occupation Profile, 1020 Gardener and Groundskeeper: Occupation Specialties, 1021 Geologist and Geophysicist: Occupation Profile, 356 Hazardous Waste Manager: Occupation Profile, 1994 Health Care and Social Assistance Industry: Projected Employment for Selected Occupations, 1166 Health Information Technician: Occupation Profile, 910 Heavy and Civil Engineering Construction: Projected Employment for Selected Occupations, 877 Heavy Equipment Service Technician: Occupation Profile, 839 Highway Maintenance Worker: Occupation Profile, 875 Home Appliance Repairer: Occupation Profile, 888 Hospitals Industry: Projected Employment for Selected Occupations, 915 Hotel/Motel Manager: Occupation Specialties, 927 Hotels Industry: Projected Employment for Selected Occupations, 934 Housekeeper: Occupation Specialties, 1376 lxvii

Industrial Designer: Occupation Profile, 965 Industrial Engineer: Occupation Profile, 966 Industrial Hygienist: Occupation Profile, 1091 Industrial Machinery Mechanic: Occupation Profile, 1071 Inputs Consumed by Ambulatory Health Care Services, 1154 Inputs Consumed by Food Services and Drinking Places, 1646 Inputs Consumed by Funds, Trusts, and Other Financial Vehicles, 651 Inputs Consumed by Hospital, Nursing, and Residential Care Facilities, 902 Inputs Consumed by Manufacturers of Food, Beverages, and Tobacco Products, 685 Inputs Consumed by Personal Services, 1371 Inputs Consumed by Scientific, Technical, and Miscellaneous Professional Services, 1684 Inputs Consumed by Securities, Commodity Contracts, and Investments, 650 Inputs Consumed by State and Local Governments, 1097 Inputs Consumed by Textile Mills and Textile Product Mills, 1842 Inputs Consumed by the Accommodation Industry, 921 Inputs Consumed by the Airline Industry, 39 Inputs Consumed by the Apparel and Leather Manufacturing Industry, 88 Inputs Consumed by the Broadcasting and Telecommunications Industries, 201 Inputs Consumed by the Business Services Industry, 254

Survey of American Industry and Careers Inputs Consumed by the Chemical Products Industry, 289 Inputs Consumed by the Computer and Electronic Products Industry, 381 Inputs Consumed by the Computer Systems Industry, 416 Inputs Consumed by the Construction Industry, 234 Inputs Consumed by the Electrical Equipment, Appliances, and Components Industry, 562 Inputs Consumed by the Farming Industry, 614 Inputs Consumed by the Federal Government, 634 Inputs Consumed by the Furniture Manufacturing Industry, 776 Inputs Consumed by the Insurance Industry, 973 Inputs Consumed by the Legal Services Industry, 1029 Inputs Consumed by the Machinery Manufacturing Industry, 830 Inputs Consumed by the Mining Industry, 1191 Inputs Consumed by the Motion Picture and Sound Recording Industries, 1209 Inputs Consumed by the Motor Vehicle Industry, 107 Inputs Consumed by the Oil and Natural Gas Extraction Industry, 1387 Inputs Consumed by the Paper Products Industry, 1335 Inputs Consumed by the Pipeline Transportation Industry, 1388 Inputs Consumed by the Plastics and Rubber Products Industry, 1443 Inputs Consumed by the Primary Metals Manufacturing Industry, 1172

Inputs Consumed by the Printing Industry, 1499 Inputs Consumed by the Publishing Industry, 1575 Inputs Consumed by the Real Estate Industry, 1590 Inputs Consumed by the Rental and Leasing Industry, 1607 Inputs Consumed by the Retail Trade Industry, 1666 Inputs Consumed by the Transit and Ground Passenger Transportation Industry, 1353 Inputs Consumed by the Truck Transportation Industry, 744 Inputs Consumed by the Utilities Industries, 581 Inputs Consumed by the Warehousing and Storage Industry, 1967 Inputs Consumed by the Waste Management Industry, 1984 Inputs Consumed by the Water Transportation Industry, 1725 Inspector and Compliance Officer: Occupation Profile, 167 Inspector and Tester: Occupation Specialties, 533 Insulation Worker: Occupation Profile, 894 Insurance Carriers and Related Activities: Projected Employment for Selected Occupations, 986 Insurance Claims Adjuster and Examiner: Occupation Profile, 983 Insurance Industry’s Contribution to the U.S. Economy, 973 Interior Designer: Occupation Profile, 229 Jeweler and Watch Repairer: Occupation Profile, 2009 Journalist: Occupation Specialties, 1583 lxviii

Landscape Architect: Occupation Profile, 1019 Laundry/Dry Cleaning Machine Operator: Occupation Specialties, 1373 Lawyer: Occupation Specialties, 1037 Legal Services Industry’s Contribution to the U.S. Economy, 1029 Librarian: Occupation Specialties, 1053 Library Technician: Occupation Profile, 1055 Locomotive Engineer: Occupation Profile, 1365 Logging Industry: Projected Employment for Selected Occupations, 1128 Lumber Production Worker: Occupation Specialties, 1124 Machinery Manufacturing Industry’s Contribution to the U.S. Economy, The, 829 Machinery Manufacturing: Projected Employment for Selected Occupations, 841 Machinist: Occupation Profile, 803 Mail Carrier: Occupation Profile, 1490 Mail Clerk and Messenger: Occupation Specialties, 1491 Management Analyst and Consultant: Occupation Specialties, 264 Management of Companies and Enterprises: Projected Employment for Selected Occupations, 267 Manufacturers Representative: Occupation Profile, 694 Marine Biologist: Occupation Profile, 1289 Marine Engineer and Architect: Occupation Profile, 1735 Marine Engineer and Architect: Occupation Specialties, 1734

List of Tables and Sidebars Marriage Counselor: Occupation Profile, 473 Meat Cutter: Occupation Profile, 1088 Mechanical Engineer: Occupation Profile, 1074 Media Specialist: Occupation Specialties, 1056 Medical and Health Services Manager: Occupation Specialties, 911 Medical Records Administrator: Occupation Profile, 1637 Medical Scientist: Occupation Profile, 1566 Medical Social Worker: Occupation Profile, 478 Medical Technologist: Occupation Specialties, 1567 Merchandise Displayer: Occupation Profile, 1671 Metal/Plastic Working Machine Operator: Occupation Profile, 1144 Metallurgical/Materials Engineer: Occupation Specialties, 1180 Millwright: Occupation Profile, 697 Mining and Geological Engineer: Occupation Specialties, 1198 Mining and Quarrying: Projected Employment for Selected Occupations, 1201 Mining Industry’s Contribution to the U.S. Economy, 1190 Motion Picture and Sound Recording Industries’ Contribution to the U.S. Economy, 1209 Motion Picture, Video, and Sound Recording Industries: Projected Employment for Selected Occupations, 1222 Motor Vehicle Manufacturing: Projected Employment for Selected Occupations, 122 Motor Vehicles Industry’s Contribution to the U.S. Economy, The, 107

Museums, Historical Sites, and Similar Institutions: Projected Employment for Selected Occupations, 1238 Music Therapist: Occupation Profile, 480 Musical Instrument Repairer: Occupation Specialties, 1254 Musician and Composer: Occupation Profile, 1252 Musician and Composer: Occupation Specialties, 1251 Nuclear Engineer: Occupation Profile, 1306 Nuclear Engineer: Occupation Specialties, 1307 Nuclear Quality Control Inspector: Occupation Profile, 1308 Nurse Practitioner: Occupation Profile, 1638 Nursing and Residential Care Facilities: Projected Employment for Selected Occupations, 1641 Occupation Profile: Accountant, 12 Occupation Profile: Actuary, 984 Occupation Profile: Advertising Account Executive, 25 Occupation Profile: Aerospace Engineer, 1756 Occupation Profile: Aircraft Mechanic, 48 Occupation Profile: Animal Caretaker, 81 Occupation Profile: Architect, 225 Occupation Profile: Archivist and Curator, 1235 Occupation Profile: Athletic Trainer, 1773 Occupation Profile: Auditor, 14 Occupation Profile: Automobile Salesperson, 112 Occupation Profile: Bank Teller, 135 Occupation Profile: Barber, 1374 lxix

Occupation Profile: Biomedical Engineer, 1714 Occupation Profile: Biomedical Equipment Technician, 1716 Occupation Profile: Boilermaker, 191 Occupation Profile: Brickmason/Stonemason, 247 Occupation Profile: Budget Analyst, 262 Occupation Profile: Bus Driver, 1364 Occupation Profile: Camera Operator, 1220 Occupation Profile: Career/ Technology Education Teacher, 464 Occupation Profile: Chemist, 190 Occupation Profile: Child-care Worker, 518 Occupation Profile: Chiropractor, 370 Occupation Profile: Cinematographer, 1217 Occupation Profile: Clergy, 1435 Occupation Profile: Clothes Designer, 98 Occupation Profile: College Faculty Member, 859 Occupation Profile: Compositor and Typesetter, 1509 Occupation Profile: ComputerControlled Machine Tool Operator, 443 Occupation Profile: ComputerControlled Tool Programmer, 442 Occupation Profile: Computer Engineer, 391 Occupation Profile: Computer Programmer, 408 Occupation Profile: Computer Security Specialist, 1000 Occupation Profile: Computer Systems Analyst, 426 Occupation Profile: Construction Manager, 874 Occupation Profile: Cook/Chef, 1656

Survey of American Industry and Careers Occupation Profile: Copywriter, 30 Occupation Profile: Corrections Officer, 494 Occupation Profile: Counter and Rental Clerk, 1619 Occupation Profile: Dancer/ Choreographer, 1872 Occupation Profile: Dental Hygienist, 554 Occupation Profile: Dispatcher, 1489 Occupation Profile: Electrical and Electronics Engineer, 572 Occupation Profile: Electromechanical Equipment Assembler, 573 Occupation Profile: Electronic Commerce Specialist, 997 Occupation Profile: Elementary School Teacher, 1547 Occupation Profile: Energy Conservation and Use Technician, 607 Occupation Profile: Environmental Engineer, 606 Occupation Profile: Firefighter, 1565 Occupation Profile: Fitness Trainer and Aerobics Instructor, 818 Occupation Profile: Flight Attendant, 46 Occupation Profile: Food and Beverage Service Worker, 736 Occupation Profile: Food Service Manager, 733 Occupation Profile: Forestry Worker, 1122 Occupation Profile: Forklift Operator, 1977 Occupation Profile: Funeral Director, 771 Occupation Profile: Gardener and Groundskeeper, 1020 Occupation Profile: Geologist and Geophysicist, 356

Occupation Profile: Hazardous Waste Manager, 1994 Occupation Profile: Health Information Technician, 910 Occupation Profile: Heavy Equipment Service Technician, 839 Occupation Profile: Highway Maintenance Worker, 875 Occupation Profile: Home Appliance Repairer, 888 Occupation Profile: Industrial Designer, 965 Occupation Profile: Industrial Engineer, 966 Occupation Profile: Industrial Hygienist, 1091 Occupation Profile: Industrial Machinery Mechanic, 1071 Occupation Profile: Inspector and Compliance Officer, 167 Occupation Profile: Insulation Worker, 894 Occupation Profile: Insurance Claims Adjuster and Examiner, 983 Occupation Profile: Interior Designer, 229 Occupation Profile: Jeweler and Watch Repairer, 2009 Occupation Profile: Landscape Architect, 1019 Occupation Profile: Library Technician, 1055 Occupation Profile: Locomotive Engineer, 1365 Occupation Profile: Machinist, 803 Occupation Profile: Mail Carrier, 1490 Occupation Profile: Manufacturers Representative, 694 Occupation Profile: Marine Biologist, 1289 Occupation Profile: Marine Engineer and Architect, 1735 Occupation Profile: Marriage Counselor, 473 lxx

Occupation Profile: Meat Cutter, 1088 Occupation Profile: Mechanical Engineer, 1074 Occupation Profile: Medical Records Administrator, 1637 Occupation Profile: Medical Scientist, 1566 Occupation Profile: Medical Social Worker, 478 Occupation Profile: Merchandise Displayer, 1671 Occupation Profile: Metal/ Plastic Working Machine Operator, 1144 Occupation Profile: Millwright, 697 Occupation Profile: Music Therapist, 480 Occupation Profile: Musician and Composer, 1252 Occupation Profile: Nuclear Engineer, 1306 Occupation Profile: Nuclear Quality Control Inspector, 1308 Occupation Profile: Nurse Practitioner, 1638 Occupation Profile: Occupational Therapist, 515 Occupation Profile: Office Machine Repairer, 1073 Occupation Profile: Online Merchant, 941 Occupation Profile: Packer/ Packager, 1905 Occupation Profile: Painting/ Coating Machine Operator, 1904 Occupation Profile: Paralegal, 1038 Occupation Profile: Park Ranger, 339 Occupation Profile: Parole and Probation Officer, 495 Occupation Profile: Pharmaceutical Sales Representative, 1416 Occupation Profile: Pharmacist, 1410

List of Tables and Sidebars Occupation Profile: Plumber and Pipefitter, 892 Occupation Profile: Precision Assembler, 535 Occupation Profile: Prepress Technician, 1584 Occupation Profile: Principal, 1546 Occupation Profile: Production Coordinator, 1812 Occupation Profile: Professional Athlete, 1774 Occupation Profile: Public Administrator, 1108 Occupation Profile: Public Relations Specialist, 1470 Occupation Profile: Quality Control Inspector, 1795 Occupation Profile: Range Manager, 1290 Occupation Profile: Real Estate Sales Agent, 1601 Occupation Profile: Recreation Program Director, 1324 Occupation Profile: Recreation Worker, 1325 Occupation Profile: Refuse Collector, 1995 Occupation Profile: Research Assistant, 857 Occupation Profile: Retail Salesperson, 715 Occupation Profile: Retail Store Sales Manager, 1675 Occupation Profile: Riveter, 1145 Occupation Profile: Robotics Technician, 804 Occupation Profile: Science Technician, 154 Occupation Profile: Secondary School Teacher, 1531 Occupation Profile: Ship Loader, 755 Occupation Profile: Software Designer, 409 Occupation Profile: Soil Scientist, 1291 Occupation Profile: Solar Energy System Installer, 69

Occupation Profile: Stationary Engineer, 1811 Occupation Profile: Teacher Assistant, 1532 Occupation Profile: Technical Sales Representative, 1715 Occupation Profile: Telecommunications Installer and Repairer, 1834 Occupation Profile: Telephone Installer and Repairer, 1813 Occupation Profile: Textile Machine Operator, 1852 Occupation Profile: Tool and Die Maker, 2012 Occupation Profile: Upholsterer, 788 Occupation Profile: Urban and Regional Planner, 319 Occupation Profile: Veterinary Assistant/Technician, 1939 Occupation Profile: Water and Wastewater Engineer, 2029 Occupation Profile: Water Treatment Plant Operator, 2030 Occupation Profile: Wholesale Sales Representative, 170 Occupation Profile: Wind Energy Engineer, 71 Occupation Profile: Woodworker, 789 Occupation Specialties: Accountants and Auditors, 4 Occupation Specialties: Activities Therapist, 1636 Occupation Specialties: Actor, 1871 Occupation Specialties: Advertising Agent, 27 Occupation Specialties: Aerospace Engineer, 1755 Occupation Specialties: Agricultural Scientist, 627 Occupation Specialties: Animal Caretaker, 82 Occupation Specialties: Apparel Worker, 92 Occupation Specialties: Architect, 228 lxxi

Occupation Specialties: Archivist and Curator, 1237 Occupation Specialties: Automotive Technician, 119 Occupation Specialties: Bellhop/Bell Captain, 931 Occupation Specialties: Bindery Worker, 1510 Occupation Specialties: Broadcast Technician, 210 Occupation Specialties: Bulldozer Operator, 873 Occupation Specialties: Chemical Engineer, 299 Occupation Specialties: Chemical Equipment Operator, 300 Occupation Specialties: Chemist, 189 Occupation Specialties: Civil Engineer, 311 Occupation Specialties: Computer-Controlled Machine Tool Operator, 440 Occupation Specialties: Construction and Building Inspector, 243 Occupation Specialties: Cook/ Chef, 1657 Occupation Specialties: Corrections Officer, 493 Occupation Specialties: Cosmetologist, 1375 Occupation Specialties: Cost Estimator, 1507 Occupation Specialties: Dancer/ Choreographer, 1873 Occupation Specialties: Dental Laboratory Technician, 555 Occupation Specialties: Dentist, 553 Occupation Specialties: Dietician and Nutritionist, 819 Occupation Specialties: Drafter, 313 Occupation Specialties: Education Administrator, 1527 Occupation Specialties: Educational Counselor, 1549

Survey of American Industry and Careers Occupation Specialties: Electrical Line Installer and Repairer, 588 Occupation Specialties: Energy Conservation and Use Technician, 608 Occupation Specialties: Engineering Technician, 1689 Occupation Specialties: Farmer/ Farm Manager, 625 Occupation Specialties: Federal Law Enforcement Agent, 336337 Occupation Specialties: Forester and Conservation Scientist, 1288 Occupation Specialties: Gardener and Groundskeeper, 1021 Occupation Specialties: Hotel/ Motel Manager, 927 Occupation Specialties: Housekeeper, 1376 Occupation Specialties: Inspector and Tester, 533 Occupation Specialties: Journalist, 1583 Occupation Specialties: Laundry/Dry Cleaning Machine Operator, 1373 Occupation Specialties: Lawyer, 1037 Occupation Specialties: Librarian, 1053 Occupation Specialties: Lumber Production Worker, 1124 Occupation Specialties: Mail Clerk and Messenger, 1491 Occupation Specialties: Management Analyst and Consultant, 264 Occupation Specialties: Marine Engineer and Architect, 1734 Occupation Specialties: Media Specialist, 1056 Occupation Specialties: Medical and Health Services Manager, 911 Occupation Specialties: Medical Technologist, 1567

Occupation Specialties: Metallurgical/Materials Engineer, 1180 Occupation Specialties: Mining and Geological Engineer, 1198 Occupation Specialties: Musical Instrument Repairer, 1254 Occupation Specialties: Musician and Composer, 1251 Occupation Specialties: Nuclear Engineer, 1307 Occupation Specialties: Packer/ Packager, 1906 Occupation Specialties: Pharmacist, 1409 Occupation Specialties: Police Officer, 341 Occupation Specialties: Power Plant Operator, 587 Occupation Specialties: Precision Assembler, 534 Occupation Specialties: Property and Real Estate Manager, 1600 Occupation Specialties: Psychologist, 471 Occupation Specialties: Public Relations Specialist, 1469 Occupation Specialties: Rail Transportation Worker, 752 Occupation Specialties: Recreation Worker, 1326 Occupation Specialties: Renewable Energy Technician, 70 Occupation Specialties: Reservation and Ticket Agent, 1920 Occupation Specialties: Science Technician, 1694 Occupation Specialties: Small Engine Mechanic, 1072 Occupation Specialties: Special Education Teacher, 1548 Occupation Specialties: Sports Instructor/Coach, 1772 Occupation Specialties: Telecommunications Equipment Installer/ Repairer, 1833 lxxii

Occupation Specialties: Textile Machine Operator, 1853 Occupation Specialties: Travel Agent, 1921 Occupation Specialties: Veterinarian, 1938 Occupation Specialties: Welder, 1144 Occupational Therapist: Occupation Profile, 515 Occupations in Pharmaceutical and Medicine Manufacturing: Projected Employment for Selected Occupations, 1420 Office Machine Repairer: Occupation Profile, 1073 Oil and Gas Extraction Industry’s Contribution to the U.S. Economy, 1387 Oil and Gas Extraction: Projected Employment for Selected Occupations, 1400 Online Merchant: Occupation Profile, 941 Packer/Packager: Occupation Profile, 1905 Packer/Packager: Occupation Specialties, 1906 Painting/Coating Machine Operator: Occupation Profile, 1904 Paper Manufacturing: Projected Employment for Selected Occupations, 1347 Paper Products Industry’s Contribution to the U.S. Economy, 1335 Paralegal: Occupation Profile, 1038 Park Ranger: Occupation Profile, 339 Parole and Probation Officer: Occupation Profile, 495 Performing Arts: Projected Employment for Selected Occupations, 1874 Personal and Laundry Services: Projected Employment for Selected Occupations, 1382

List of Tables and Sidebars Petroleum and Coal Products Manufacturing: Projected Employment for Selected Occupations, 1401 Pharmaceutical Sales Representative: Occupation Profile, 1416 Pharmacist: Occupation Profile, 1410 Pharmacist: Occupation Specialties, 1409 Pipeline Transporation Industry’s Contribution to the U.S. Economy, The, 1388 Plastics and Rubber Products Industry’s Contribution to the U.S. Economy, 1443 Plastics and Rubber Products Manufacturing: Projected Employment for Selected Occupations, 1455 Plumber and Pipefitter: Occupation Profile, 892 Police Officer: Occupation Specialties, 341 Postal Service Industry: Projected Employment for Selected Occupations, 1493 Power Plant Operator: Occupation Specialties, 587 Precision Assembler: Occupation Profile, 535 Precision Assembler: Occupation Specialties, 534 Prepress Technician: Occupation Profile, 1584 Primary Metal Manufacturing: Projected Employment for Selected Occupations, 1184 Primary Metals Manufacturing Industry’s Contribution to the U.S. Economy, 1172 Principal: Occupation Profile, 1546 Printing and Related Support Activities: Projected Employment for Selected Occupations, 1512 Printing Industry’s Contribution to the U.S. Economy, 1499

Production Coordinator: Occupation Profile, 1812 Professional Athlete: Occupation Profile, 1774 Professional, Scientific, and Technical Services: Projected Employment for Selected Occupations, 1700 Projected Employment for Selected Occupations: Agriculture, 628 Projected Employment for Selected Occupations: Air Transportation, 51 Projected Employment for Selected Occupations: Amusement Parks, 1889 Projected Employment for Selected Occupations: Apparel Industry, 102 Projected Employment for Selected Occupations: Beverage and Tobacco Product Manufacturing, 174 Projected Employment for Selected Occupations: Broadcasting, 212 Projected Employment for Selected Occupations: Chemical Manufacturing, 302 Projected Employment for Selected Occupations: Computer and Electronic Product Manufacturing, 394 Projected Employment for Selected Occupations: Construction Industry, 250 Projected Employment for Selected Occupations: Couriers and Messengers Industry, 1492 Projected Employment for Selected Occupations: Educational Services, 1551 Projected Employment for Selected Occupations: Electrical Equipment, Appliance, and Component Manufacturing, 575 lxxiii

Projected Employment for Selected Occupations: Fabricated Metal Product Manufacturing, 1183 Projected Employment for Selected Occupations: Finance and Insurance Industry, 139 Projected Employment for Selected Occupations: Fishing Industry, 677 Projected Employment for Selected Occupations: Food and Beverage Stores, 718 Projected Employment for Selected Occupations: Food Manufacturing, 700 Projected Employment for Selected Occupations: Food Services and Drinking Places, 739 Projected Employment for Selected Occupations: Furniture and Related Product Manufacturing, 790 Projected Employment for Selected Occupations: Gambling Industry, 286 Projected Employment for Selected Occupations: Health Care and Social Assistance Industry, 1166 Projected Employment for Selected Occupations: Heavy and Civil Engineering Construction, 877 Projected Employment for Selected Occupations: Hospitals Industry, 915 Projected Employment for Selected Occupations: Hotels Industry, 934 Projected Employment for Selected Occupations: Insurance Carriers and Related Activities, 986 Projected Employment for Selected Occupations: Logging Industry, 1128

Survey of American Industry and Careers Projected Employment for Selected Occupations: Machinery Manufacturing, 841 Projected Employment for Selected Occupations: Management of Companies and Enterprises, 267 Projected Employment for Selected Occupations: Mining and Quarrying, 1201 Projected Employment for Selected Occupations: Motion Picture, Video, and Sound Recording Industries, 1222 Projected Employment for Selected Occupations: Motor Vehicle Manufacturing, 122 Projected Employment for Selected Occupations: Museums, Historical Sites, and Similar Institutions, 1238 Projected Employment for Selected Occupations: Nursing and Residential Care Facilities, 1641 Projected Employment for Selected Occupations: Oil and Gas Extraction, 1400 Projected Employment for Selected Occupations: Paper Manufacturing, 1347 Projected Employment for Selected Occupations: Performing Arts, 1874 Projected Employment for Selected Occupations: Personal and Laundry Services, 1382 Projected Employment for Selected Occupations: Petroleum and Coal Products Manufacturing, 1401 Projected Employment for Selected Occupations: Pharmaceutical and Medicine Manufacturing, 1420 Projected Employment for Selected Occupations: Plastics and Rubber Products Manufacturing, 1455

Projected Employment for Selected Occupations: Postal Service Industry, 1493 Projected Employment for Selected Occupations: Primary Metal Manufacturing, 1184 Projected Employment for Selected Occupations: Printing and Related Support Activities, 1512 Projected Employment for Selected Occupations: Professional, Scientific, and Technical Services, 1700 Projected Employment for Selected Occupations: Publishing Industries, 1585 Projected Employment for Selected Occupations: Rail Transportation, 1147 Projected Employment for Selected Occupations: Real Estate Industry, 1603 Projected Employment for Selected Occupations: Real Estate Rental and Leasing, 1604 Projected Employment for Selected Occupations: Religious, Grantmaking, Civic, Professional, and Similar Organizations, 1437 Projected Employment for Selected Occupations: Rental and Leasing Services, 1623 Projected Employment for Selected Occupations: Restaurants, 1660 Projected Employment for Selected Occupations: Retail Trade Industry, 1679 Projected Employment for Selected Occupations: Scenic and Sightseeing Transportation, 1922 Projected Employment for Selected Occupations: Securities, Commodity Contracts, and Related Activities, 661 lxxiv

Projected Employment for Selected Occupations: Social Assistance, 520 Projected Employment for Selected Occupations: Specialty Trade Contractors, 897 Projected Employment for Selected Occupations: Sporting Goods, Hobby, Book, and Music Stores, 1796 Projected Employment for Selected Occupations: Support Activities for Mining, 1399 Projected Employment for Selected Occupations: Support Activities for Transportation, 1367 Projected Employment for Selected Occupations: Telecommunications Industry, 1832 Projected Employment for Selected Occupations: Textile Mills, 1851 Projected Employment for Selected Occupations: Textile Product Mills, 1854 Projected Employment for Selected Occupations: Transit and Ground Passenger Transportation, 1366 Projected Employment for Selected Occupations: Transportation Equipment Manufacturing, 1147 Projected Employment for Selected Occupations: Truck Transportation, 757 Projected Employment for Selected Occupations: Utilities Industry, 590 Projected Employment for Selected Occupations: Warehousing and Storage, 1978 Projected Employment for Selected Occupations: Waste

List of Tables and Sidebars Management and Remediation Services, 1997 Projected Employment for Selected Occupations: Water Transportation, 2031 Projected Employment for Selected Occupations: Wood Product Manufacturing, 230 Property and Real Estate Manager: Occupation Specialties, 1600 Psychologist: Occupation Specialties, 471 Public Administrator: Occupation Profile, 1108 Public Relations Specialist: Occupation Profile, 1470 Public Relations Specialist: Occupation Specialties, 1469 Publishing Industries: Projected Employment for Selected Occupations, 1585 Publishing Industry’s Contribution to the U.S. Economy, 1574 Quality Control Inspector: Occupation Profile, 1795 Rail Transportation: Projected Employment for Selected Occupations, 1147 Rail Transportation Worker: Occupation Specialties, 752 Range Manager: Occupation Profile, 1290 Real Estate Industry: Projected Employment for Selected Occupations, 1603 Real Estate Industry’s Contribution to the U.S. Economy, 1590 Real Estate Rental and Leasing: Projected Employment for Selected Occupations, 1604 Real Estate Sales Agent: Occupation Profile, 1601 Recreation Program Director: Occupation Profile, 1324

Recreation Worker: Occupation Profile, 1325 Recreation Worker: Occupation Specialties, 1326 Refuse Collector: Occupation Profile, 1995 Religious, Grantmaking, Civic, Professional, and Similar Organizations: Projected Employment for Selected Occupations, 1437 Renewable Energy Technician: Occupation Specialties, 70 Rental and Leasing Industry’s Contribution to the U.S. Economy, 1607 Rental and Leasing Services: Projected Employment for Selected Occupations, 1623 Research Assistant: Occupation Profile, 857 Reservation and Ticket Agent: Occupation Specialties, 1920 Restaurants: Projected Employment for Selected Occupations, 1660 Retail Salesperson: Occupation Profile, 715 Retail Store Sales Manager: Occupation Profile, 1675 Retail Trade Industry: Projected Employment for Selected Occupations, 1679 Retail Trade Industry’s Contribution to the U.S. Economy, 1666 Riveter: Occupation Profile, 1145 Robotics Technician: Occupation Profile, 804 Scenic and Sightseeing Transportation: Projected Employment for Selected Occupations, 1922 Science Technician: Occupation Profile, 154 Science Technician: Occupation Specialties, 1694 Secondary School Teacher: Occupation Profile, 1531 lxxv

Securities, Commodity Contracts, and Related Activities: Projected Employment for Selected Occupations, 661 Ship Loader: Occupation Profile, 755 Small Engine Mechanic: Occupation Specialties, 1072 Social Assistance: Projected Employment for Selected Occupations, 520 Software Designer: Occupation Profile, 409 Soil Scientist: Occupation Profile, 1291 Solar Energy System Installer: Occupation Profile, 69 Special Education Teacher: Occupation Specialties, 1548 Specialty Trade Contractors: Projected Employment for Selected Occupations, 897 Sporting Goods, Hobby, Book, and Music Stores: Projected Employment for Selected Occupations, 1796 Sports Instructor/Coach: Occupation Specialties, 1772 State and Local Governments’ Contribution to the U.S. Economy, 1097 Stationary Engineer: Occupation Profile, 1811 Support Activities for Mining: Projected Employment for Selected Occupations, 1399 Support Activities for Transportation: Projected Employment for Selected Occupations, 1367 Teacher Assistant: Occupation Profile, 1532 Technical Sales Representative: Occupation Profile, 1715

Survey of American Industry and Careers Telecommunications Equipment Installer/Repairer: Occupation Specialties, 1833 Telecommunications Industry: Projected Employment for Selected Occupations, 1832 Telecommunications Installer and Repairer: Occupation Profile, 1834 Telephone Installer and Repairer: Occupation Profile, 1813 Textile Machine Operator: Occupation Profile, 1852 Textile Machine Operator: Occupation Specialties, 1853 Textile Mills: Projected Employment for Selected Occupations, 1851 Textile Product Mills: Projected Employment for Selected Occupations, 1854 Tool and Die Maker: Occupation Profile, 2012 Transit and Ground Passenger Transportation Industry’s Contribution to the U.S. Economy, 1353 Transit and Ground Passenger Transportation: Projected Employment for Selected Occupations, 1366

Transportation Equipment Manufacturing: Projected Employment for Selected Occupations, 1147 Travel Agent: Occupation Specialties, 1921 Truck Transportation Industry’s Contribution to the U.S. Economy, 744 Truck Transportation: Projected Employment for Selected Occupations, 757 Upholsterer: Occupation Profile, 788 Urban and Regional Planner: Occupation Profile, 319 Utilities Industries’ Contribution to the U.S. Economy, 580 Utilities Industry: Projected Employment for Selected Occupations, 590 Veterinarian: Occupation Specialties, 1938 Veterinary Assistant/Technician: Occupation Profile, 1939 Warehousing and Storage Industry’s Contribution to the U.S. Economy, 1966

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Warehousing and Storage: Projected Employment for Selected Occupations, 1978 Waste Management and Remediation Services: Projected Employment for Selected Occupations, 1997 Waste Management Industry’s Contribution to the U.S. Economy, 1983 Water and Wastewater Engineer: Occupation Profile, 2029 Water Transportation Industry’s Contribution to the U.S. Economy, 1724 Water Transportation: Projected Employment for Selected Occupations, 2031 Water Treatment Plant Operator: Occupation Profile, 2030 Welder: Occupation Specialties, 1144 Wholesale Sales Representative: Occupation Profile, 170 Wind Energy Engineer: Occupation Profile, 71 Wood Product Manufacturing: Projected Employment for Selected Occupations, 230 Woodworker: Occupation Profile, 789

SURVEY OF

American Industry and Careers

Food Services ©George Muresan/Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Agriculture and Food Career Clusters: Agriculture, Food, and Natural Resources; Hospitality and Tourism Subcategory Industries: Airline Food Services; Cafeteria Food Services; Caterers; Food and Beverage Carts; Food Concession Contractors; Food Concession Stands; Food Service Contractors; Industrial Caterers; Lunch Wagons; Mobile Food Services Related Industries: Airline Industry; Beverage and Tobacco Industry; Criminal Justice and Prison Industry; Food Manufacturing and Wholesaling Industry; Food Retail Industry; Hospital Care and Services; Public Elementary and Secondary Education Industry; Restaurant Industry; Spectator Sports Industry; Travel and Tourism Industry Annual Domestic Revenues: At least $8.15 billion USD (Datamonitor, 2010) Annual International Revenues: At least $84.3 billion USD (Euromonitor International, 2007, and Datamonitor, 2010) Annual Global Revenues: At least $92.5 billion USD (Euromonitor International, 2007, and Datamonitor, 2010) NAICS Number: 7223

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DEFINITION

Summary The food services industry provides nourishment to consumers eating in a variety of settings, including schools, hospitals, military bases, recreational sites, work sites, commercial transportation carriers, and prisons. Constituting a leading global industry, food services are available from numerous sources, including cafeterias, caterers, mobile carts, booths, and concessions. Services are adjusted to comply with the different cultural protocols regarding food in different countries. Many food service businesses supply large quantities of food for crowds, while contractors frequently provide food services for businesses, industrial sites, and other establishments. The industry employs people to fulfill diverse roles at various levels, often providing teenagers and other workers their first jobs. History of the Industry Because food is an essential aspect of life, humans have depended on food services for several thousand years to sustain them when they are not in their residences. Historical records refer to ancient Egyptians, Greeks, and Romans serving quantities of food to groups of people assembled for religious ceremonies, so-

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A young girl gets her lunch at a school cafeteria. (©Monkey Business Images/Dreamstime.com)

cial celebrations, and sporting events. By the Middle Ages, crowds gathered at monasteries, castles, and colleges relied on staffs of cooks and workers to prepare their meals. Abbeys and royal households cultivated vegetables, fruits, and grains and maintained large kitchens. Food services have fed workers throughout history, from ancient eras onward, whether those workers were hired, apprenticed, or enslaved. During the nineteenth century Industrial Revolution, Robert Owen, a Scot, established a dining room and kitchen for his mill workers to prepare meals or buy food at affordable costs, often subsidized by him. Considered a pioneer in workplace food services, Owen realized that investing in nutritional resources enhanced his workers’ productivity. Other employers adopted food service plans for workers to receive complimentary meals or foods priced at less than market cost. Workplace food services expanded in the twentieth century, enabling workers to obtain nourishment from on-site cafeterias or machines vending food and drinks. Food

service carts often assembled near workplaces at lunch time to sell workers foods. During the 1970’s, food services businesses, especially caterers, began bringing workers’ orders to their workplaces. California restaurants developed the cafeteria concept to feed miners quickly during the midnineteenth century gold rush. Instead of being served by waiters, patrons gathered their food choices from displays. Cafeterias became fundamental to many types of food services, especially those provided by schools to feed simultaneously large groups of students, faculty, and staff. Many prisons also incorporated centralized food services to feed inmates. Food services have been associated with education for centuries. In the mid-nineteenth century, schools provided meals that students’ families might have been unable to afford, as an incentive for attendance. College students often acquired food from social clubs they joined or boarding houses where they roomed. By the early twentieth

Food Services century, nutritional science developments helped educators realize that food choices were crucial to the functioning of children’s brains and their learning processes. Many communities adopted food quality standards for school lunchrooms. The National School Lunch Act of 1946 and the Child Nutrition Act of 1966 provided funds to incorporate meals and milk distribution into school schedules. In the nineteenth century, hospital food services recognized that serving nutritional foods to patients could help improve their health. Soldiers injured in 1850’s Crimean War benefited from Florence Nightingale’s insistence on supplying nutritious foods to hospitalized troops. Military forces worldwide developed food services to feed troops and their dependents during peacetime and wartime. This nourishment is often credited with boosting troop morale. Transportation food services have provided meals for passengers on railroads since the midnineteenth century. In the 1940’s, J. Willard Marriott was supplying box lunches for passengers on some airplane flights. By the mid-twentieth century, the International Foodservice Distributors Association aided suppliers in that industry. The 1970 founding of Sysco Corporation altered the food services industry by uniting distributors to dominate the market, selling $415 million worth of products soon after being established. The Industry Today Modern food services represent a significant aspect of many people’s lives worldwide, both as a source of nourishment and as a source of employment. Consumers have come to both appreciate and expect that food will be conveniently available in or near most public social and employment settings. About half of the U.S. population frequently uses food services when they are not eating at home. One-fourth of people in the United States often consume meals in their residences that have been prepared by some form of food services business. Twenty-first century commercial and noncommercial food services represent the greatest source of retail employment, hiring almost 10 million people in both nonrestaurant and restaurant food services. Many modern food services occupations resemble their precedents, such as cooks, nutri-

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tionists, and servers, with changes reflecting technological advances and improvements. Food services remain essential to the operation of schools, hospitals, military bases, long-distance transportation, prisons, and basic institutions common to most world cultures. Twenty-first century food service providers evaluate consumers’ demands and interests, especially regarding popular types of cuisines—often ethnic or gourmet foods—and fads in taste, in order to retain and gain more customers. They also attempt to address the dietary concerns of specific groups, such as consumers who are diabetic or who keep kosher. To be competitive, modern food service providers strive to recognize potential new markets and products they can exploit to expand their enterprises and increase their profits. Twenty-first century cruise ships promote food services as part of their brand identity, emphasizing the quality

Company cafeterias can be very attractively designed. (©Sandra Howard/Dreamstime.com)

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and variety of the meals they serve as incentives for people to choose specific cruise lines for vacations. Modern food service providers recognize that consumers’ cultural backgrounds, lifestyles, and attitudes regarding food shape their dietary and nutritional expectations. Some providers also try to satisfy clients concerned about animal welfare and the environment. They may purchase food supplies from local farmers or sell organic foods whose ingredients have not been exposed to chemicals, hormones, or antibiotics. Green food services strive to use cage-free poultry eggs, recycled packaging, and foods without monosodium glutamate (MSG), high-fructose corn syrup, or partially hydrogenated fats. The economic recession of 2007-2009 affected both food services businesses and their clients. Food services managers endeavor to deliver goods

Caterers, who often provide food and beverages for wedding receptions, are an important aspect of the food services industry. (©Dreamstime.com)

that meet the budgets of their clients, especially those of large institutions. Some of them seek wholesome foods to fulfill contracts, considering such issues as rising food prices. Food services companies prepare meals for people to cook at home, providing the convenience of prepared foods more economically than restaurants can. Some companies cook for customers in their residences. Many twenty-first century food services companies take advantage of resources available on the Internet, such as professional and marketing networks, and create Web sites to publicize their services. Some food services vendors maintain blogs that discuss their activities, achievements, ratings, and reviews. Social networking sites, including Facebook and Twitter, enable mobile service providers to transmit their current and future locations to their client base, alerting potential customers of their availability. Customers often promote or critique their food services experiences online. Medical food services providers also incorporate technological innovations, including computers and robots, to improve their performance. Food services companies supply day-care centers, tending children and adults unable to function independently. Mobile food services, such as Mealson-Wheels, deliver prepared meals to housebound people. Wholesale warehouse stores, such as Sam’s Club, provide extensive food services, issuing catalogs for customers operating restaurants and other food-related businesses to acquire essential supplies, ranging from bulk quantities of food to individual pieces of equipment. According to the U.S. Department of Agriculture (USDA), American schools served 30.1 million lunches and 9.8 million breakfasts in 2007. The USDA under the Barack Obama administration sought to improve and modernize the nutritional requirements for public school lunches to address a growing childhood obesity crisis. In 1993, the U.S. Food and Drug Administration (FDA) began to publish updated Food Codes at four-year intervals. These codes (including a 2007 supplement between the 2005 code and the 2009 code) emphasize food safety and establish guidelines for food services and other food industries. Although not compulsory, this system encourages uniform food service practices in diverse geographical areas. In June, 2005, the Association of Food and Drug Officials stated that forty-eight states and U.S. territo-

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be extended to over 350 cafeterias for which the GSA contracts food services. Food services industry personnel benefit from participation in professional organizations. Many such groups maintain Web sites that provide members access to resources and apprise them of industry news. Message boards and listservs enable industry members to interact and share ideas, experiences, and employment opportunities. Some organizations post podcasts of speeches by industry leaders. Members may also participate in Webinars that offer educational information related to food services.

INDUSTRY MARKET SEGMENTS Food services businesses vary greatly in size. Many food trucks, carts, and other small vendors are sole proprietorships or employ at most three to five people. Other businesses are large corporations that run the concessions at multiple sports arenas and convention centers or that provide food to prisons or schools throughout the country.

Meals on airlines are prepackaged by food service companies. (©Tyler Olson/Dreamstime.com)

ries utilized aspects of the FDA Food Code to monitor food services. In the twenty-first century, the U.S. federal government expanded funding for military food services, specifically the Army and Air Force Exchange Services (AAFES). The AAFES feeds not only troops but also children attending school on military bases. The U.S. Department of Defense has authorized expenditures of $465 million annually for military food services to hire disabled employees, many of whom are wounded veterans. In February, 2010, the U.S. General Services Administration (GSA) announced plans for improved food services, incorporating fresh and organic foods grown by local agriculturists, for federal employees at workplaces throughout the United States. U.S. State Department employees in Washington, D.C., were the first to experience these revised government food services, which will

Small Businesses Caterers, food-preparation businesses, and mobile carts and trucks represent food services that usually serve meals to small groups or help customers assemble ingredients to cook in their homes later. These businesses sometimes are affiliated with hotels, grocery stores, schools, malls, or other establishments that can supply steady streams of clients. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual income of a worker who both prepares and serves food, such as a food cart worker, was $20,810 in 2009. Food service cooks earned an average of $25,790, head cooks and chefs earned an average of $45,340, and nonrestaurant food servers earned an average of $22,740. PayScale.com, meanwhile, estimates that caterers, 70 percent of whom are self-employed, can earn around $50,000 annually. Clientele Interaction. Most small food vendors depend on returning customers. Owners and managers seek ways to develop customer loyalty, such as creating programs offering discounts or other re-

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Amenities, Atmosphere, and Physical Grounds. Small food service providers often operate in buildings adjacent to the owners’ or managers’ homes. Most state and local laws prohibit food prepared in private residences from being sold to the public, so mobile service providers are often affiliated with restaurants, delis, or similar businesses and use those establishments’ kitchens to cook and package food items. Many caterers create functional food services facilities with spacious kitchens they design to provide adequate prepStreet vendors, like this peanut vendor in New York, take food anywhere people aration and cooking areas and gather. (©David Smith/Dreamstime.com) supply with necessary utensils and equipment. Their storage spaces include freezers, refrigerators, and shelves wards, including free food or beverages, to customto hold ingredients and foods, both before and afers who purchase a specific amount of items or serter they are prepared for customers. Food services vices. Small food vendors often seek to emphasize facilities often include areas where customers can the uniqueness of their businesses and products, consult with employees regarding their food resuch as trendy ethnic or health-conscious menus, quests or events. Many small food services busicompared to the uniformity of products often nesses include dining areas for clients and guests in served by larger franchises. Vendors stress their their facilities, decorating them with artwork, flowwillingness to design and deliver customized foods ers, and other aesthetic items. Some caterers and and services to meet individual expectations. Small small food service providers operate from historic food vendors often supply foods for exclusive properties that may appeal to customers. Outdoor groups in skyboxes at athletic events and other sodining sites adjoining small food services facilities cial activities and are expected to be discrete reare usually attractively landscaped. garding any celebrities they serve. Small food vendors offering meal assembly and Many small food vendors have Web sites where food preparation provide clients with large tables they describe their services, post coupons, or enwhere they assemble and prepare ingredients they able customers to order online. Some print brohave gathered from bins, refrigerators, and other chures or send electronic newsletters, updating storage areas according to recipes and instructions clients regarding changes in menu items and provided by employees. Small food services buildother news. These businesses sometimes host open ings emphasize functionality and food hygiene, houses or participate in local celebrations to adverwhile striving to create a welcoming atmosphere. tise their services to their communities. Customer Typical Number of Employees. Approximately recommendations to friends and positive reviews two-thirds of food service providers are small busiby professional and amateur food critics also aid in nesses employing twenty workers or fewer. They increasing business. Small food vendors’ owners hire workers to perform various tasks, ranging and managers realize that all guests at events they from baking, to serving, to cleaning up. Staff size serve are potential customers and endeavor to imdepends on owners’ financial resources, as owners press people with the quality, efficiency, and conveoften perform the majority of the work. Some small nience of their services in the hope of securing food service providers hire temporary employees more clients.

Food Services during peak event times, such as spring months when many graduations and weddings occur or months of major holidays. Employee levels fluctuate in college towns, where food service workers are frequently students seeking temporary sources of income during school sessions or are studying food- or hospitality-related curricula and want to acquire professional experience. Traditional Geographic Locations. Small food service businesses can be found throughout the United States. Urban areas host a diversity of such businesses, ranging from those offering commuters meals during work breaks to social-event caterers. In rural areas, small vendors often provide foods for special occasions, including cakes for celebrations, snacks for community activities, and other foods not easily acquired from distant cities. Some vendors accept short-term food services contracts from visitors; they may, for example, provide catering for film or television productions filming on location in their communities. Caterers and other small food vendors also occasionally travel to work at events outside their communities. Pros of Working for or as a Small Food Vendor. Many small food vendors’ owners oversee their daily business operations and have the freedom to make essential decisions regarding menus and facilities. Owners and managers often hire relatives or friends as staff, enhancing workplace morale and cohesion. Their work is frequently satisfying because they can connect with and attempt to satisfy individual customers, who often contract their services in conjunction with emotional life events, including weddings and funerals. Employees in small food services sometimes receive extra pay for the long hours, weekends, and holidays they must work and for preparing customized products such as elaborately designed cakes. Although many small-business owners and chefs have completed culinary or other specialty schools and courses, such educational experiences usually are not mandatory, especially if employees are talented and willing to learn as they work. Cons of Working for or as a Small Food Vendor. Employees of small food service providers often are expected to work for extended periods, setting up for events, serving food throughout the events, and cleaning up afterward. They also must often work on weekends and holidays. The long hours can exhaust employees and interfere with

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their familial, educational, and other commitments, discouraging some people from continuing their employment. Employees work with knives, hot stovetops and ovens, and other kitchen hazards that can cause injuries. The enjoyment of creating beautiful foods for special occasions can be diminished by business necessities. Owners are often distracted from their food activities by concerns associated with customers’ accounts, licensing, inspections, and maintaining kitchens and equipment, including delivery vehicles. Vendors’ familiarity with many of their clients may pose problems if those clients’ demands are unrealistic or if they expect vendors to make unreasonable financial or performance exceptions for them. Some customers may insist that vendors or their employees attain credentials or acquire special skills, such as preparing exotic foods, that require investments of time and money. Costs Payroll and Benefits: Most small food business owners compensate employees with hourly wages or by the project. Benefits are often not offered. Owners of small businesses and self-employed vendors pay themselves out of their companies’ profits, only after all financial obligations— including employee pay—are met. If a business realizes no profits in a given month, the owner will not be paid in that month. Supplies: Small food service providers require basic equipment, appliances, and furniture associated with preparing and serving food. Plates, glasses, and utensils utilized by many of these businesses often are of a higher quality, including china and silver, than are those utilized by larger providers because small providers often serve smaller, more socially important events. Related supplies include linens, electronic devices such as computers and stereos, and materials to clean equipment, kitchens, and public areas. External Services: Small food vendors may contract cleaning services to clean their equipment or they may clean it themselves. They may also contract the cleaning and maintenance of their facilities. Some vendors rent rather than own plates and serving utensils, passing on the cost of the rentals to their customers. Vendors may also contract accounting, business management, col-

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lection, or advertising services, as well as consultants to ensure that they are properly licensed and pass all health code inspections. Insurance agents provide food services with various coverage contracts for liabilities and losses. Some small food services invest in floral, landscaping, photography, and pest control services. Utilities: Small food vendors usually need electricity, gas/oil, water, sewage, telephone, and Internet access. Food services renting their business properties might have those costs included in their leases. Taxes: Small food vendors must pay local, state, and federal income taxes. Those owning kitchen and dining facilities must also pay property taxes. Those operating motor vehicles, such as vans to deliver or sell food, must pay the taxes associated with vehicle registration and licenses. They must collect any applicable sales taxes from their customers. Midsize Businesses Midsize food vendors usually provide meals for such institutions as nursing homes and elementary and secondary schools with several hundred students. They also run cafeterias and businesses’ dining commons, and provide food service on various modes of transportation. Such midsize businesses often function as contractors, fulfilling specific fixed-term or per-project requests for service from other businesses. Potential Annual Earnings Scale. According to the BLS, institutional and cafeteria cooks employed by food service companies earned average salaries of $24,990 in 2009. This average salary was greater than the average salary of cafeteria cooks employed directly by elementary and secondary schools ($22,290) but less than the average salary of those employed directly by hospitals ($26,620). Food servers in the industry earned an average of $22,740. In the same year, food service managers earned $56,460 per year, on average, while general managers of food service companies earned $83,320. Purchasing agents—who are responsible for obtaining ingredients—earned average salaries between $37,660 and $48,510 per year, depending on the types of ingredients in which they specialized. Salaries at midsize companies are likely to be somewhat below these national averages.

Clientele Interaction. School food service workers prepare and serve food on a regular basis to the same group of diners, including students, teachers, and staff. Most of these clients interact with people monitoring buffet lines of foods, usually limited to specific items scheduled to be prepared according to standardized menus, and with cashiers. Cooks usually remain in the kitchen and do not have much direct interaction with clients, although they may be asked to meet with parents or teachers’ representatives to discuss concerns over menus’ nutritional content or variety. School food service workers often are aware of special dietary needs of specific students and ensure that they do not consume any foods that might trigger allergic reactions or violate religious restrictions. Nursing home food service staffs similarly consider potential conflicts with medications and other health concerns when planning and serving meals. They often become aware of diners’ food preferences and accommodate requests for substitutions or supply favorite foods when possible. Workplace food service workers interact with office employees and visitors in company dining rooms and in cafeterias that cater to multiple businesses located in the same building or area. As in school cafeterias, buffet-line workers and cashiers interact regularly with customers, while cooks experience much less interaction. Workers may get to know regular clients and become aware of their food interests. In commercial cafeterias, food service companies attempt to cater to local food preferences. In the South, for example, they may feature homestyle meals or regional favorites such as fried catfish. Food service vendors for airlines, trains, and ships provide snacks, meals, and beverages that the carriers sell or distribute based on travel duration and class of service. Many such vendors prepare foods at commerical kitchens to be distributed by employees of the carriers and never interact with passengers. Amenities, Atmosphere, and Physical Grounds. Most midsize food service companies feature utilitarian work or production spaces full of the industrial equipment used to prepare and store foods efficiently and quickly for several hundred people. Serving areas are often utilitarian as well. Foods are usually offered in buffet lines and stations featuring metal serving pans in which they

Food Services are kept warm or chilled, sneeze guards, and shelves of presliced and other individual items covered in plastic wrap. Vending machines sometimes are available for customers to buy drinks or snacks. Eating areas often feature uniform tables, chairs, or booths, as well as stations with trays of condiments, seasonings, napkins, and utensils. Bussing stations include trash receptacles and repositories for dirty trays and dinnerware. Instead of repositories, some cafeterias have conveyor belt systems that move dirty trays and utensils directly to dishwashing stations. School lunchrooms often are painted in bright colors and decorated with mobiles and images that appeal to children and convey educational themes. Workplace dining commons and commercial cafeterias have more mature decorations, including artwork and plants. Food on trains and ships may be served in dedicated dining rooms or cars, or it may be sold at concession stands and snack bars. Meals on all vehicles, including airplanes, is often delivered to economy passengers in functional, shrink-wrapped trays accompanied by plastic utensils. First-class passengers are served meals on plates with metal utensils and linen tablecloths. Midsize school, workplace, and commercial cafeterias often have attractive patios or other landscaped areas where patrons can eat meals outside. These outdoor areas tend to duplicate elements of their adjacent indoor spaces for design continuity. Museum, theater, botanical garden, and zoo food services often provide dining areas that merge into other architectural elements of those establishments. Typical Number of Employees. Midsize food vendors generally employ between twenty and one hundred persons, though most employ less than fifty. Traditional Geographic Locations. Midsize food services are typically located in populated areas with school systems, sizable business communities, government buildings, or other potential clients. Those that supply transportation carriers typically locate themselves near transportation hubs, including airports, train stations, and ports of call. Pros of Working for a Midsize Food Service Company. Midsize food service vendors that are able to secure long-term or reliably renewable contracts with schools or businesses can offer their employees greater job stability than is available to

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small catering firms’ staffs. Many workers are able to develop relationships with recurring patrons and enjoy interacting with them, forming a relaxed, friendly community atmosphere in dining areas. Working hours and salaries are usually stable, and employees are not expected to work overtime or on holidays unless they agree to do so. Some companies follow standardized menus that meet government nutrition requirements, eliminating the potential stress of planning more creative offerings. By contrast, companies that contract for cruise ships and other expensive venues may be expected to offer exotic foods, giving employees the opportunity to work with fine cuisine. Cons of Working for a Midsize Food Service Company. If a midsize company loses or fails to renew a contract, employees may suddenly face layoffs, reassignment, or reduced hours. Midsize food vendors contracting with schools must find alternative sources of income when school is not in session, and those contracting with transportation carriers face the potential of decreased demand for their services when the demand for travel decreases. Kitchen work can be dangerous, involving sharp knives and extreme heat. Employees sometimes suffer injuries and burns from kitchen tools and equipment. Some employees become bored by routinely dealing with the same customers or are unable to avoid unpleasant recurring clients. Other workers sometimes dislike immature patrons, especially schoolchildren, or other difficult consumers who complain about their food or are picky eaters. Many employees consider the uniform nature of some institutional menus and procedures to be tedious and unchallenging. Conferences can be stressful for food service workers if the organizers decide to offer diverse dietary options, ranging from vegetarian to gluten-free meals, to participants. Costs Payroll and Benefits: Wages for employees at midsize food service vendors may be hourly, weekly, monthly, or yearly, and they may be tied to a specific contract. Employees usually receive benefits including health insurance, vacation, and sick time, especially if they are employed through a government contract. Some companies provide their employees with meals and other food perks.

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Supplies: In addition to ingredients and industrial cooking and serving equipment, midsize food service vendors require bulk quantities of trays, plates, cups, and utensils. They may also need furnishings, computers, and cleaning materials. External Services: Midsize food service companies may contract services such as interior cleaning and maintenance, uniform and linen laundering, exterior landscaping, pest control, accounting or tax preparation, advertising or public relations, or government relations consulting. At conferences, they may also hire musical performers and technical personnel to operate technological equipment to display visual entertainment. Utilities: Midsize food service companies usually need electricity, gas/oil, water, sewage, telephone, and Internet access. Taxes: Most midsize food service companies pay local, state, and federal income taxes and property taxes as applicable. Commercial food services collect sales taxes from retail customers. Those providing meals as wholesalers for transportation carriers and others to resell are not responsible for sales taxes. Large Businesses Large food service companies provide meals and snacks for hospital patients, military bases, schools, universities, sporting venues, prisons, and transportation carriers. The largest such companies—such as Sysco, Aramark, and U.S. Foodservice—usually participate in several different food-related industries. That is, in addition to providing food services, such as workplace coffee carts or cafeterias, they may act as food wholesalers, providing ingredients to retail groceries and restaurants, as well as running their own chains of restaurants or grocery stores. Potential Annual Earnings Scale. According to the BLS, institutional and cafeteria cooks employed by food service companies earned average salaries of $24,990 in 2009. This average salary was greater than the average salary of cafeteria cooks employed directly by elementary and secondary schools ($22,290) but less than the average salary of those employed directly by hospitals ($26,620) or by the federal government ($39,760). Food servers in the industry earned an average of $22,740. In the same year, food service managers earned $56,460 per year, on average, while general man-

agers of food service companies earned $83,320 and chief executives earned $131,250. Purchasing agents—who are responsible for obtaining ingredients—earned average salaries between $37,660 and $48,510 per year, depending on the types of ingredients in which they specialized. Salaries at large corporations are likely to be either equal to or greater than these national averages. Clientele Interaction. Employees in large food services experience varying degrees of contact with varying types of clients. Dining area personnel and cashiers interact with diners, while sales and marketing personnel and executives interact with purchasers and decision makers at contracting companies and institutions such as airlines and prisons. Amenities, Atmosphere, and Physical Grounds. Large food service companies exist in multiple venues. Corporate headquarters resemble the headquarters of any large company, occupying commercial office space or entire buildings in urban centers. Production and operations facilities generally include manufacturing, cooking, or assembly areas in which products such as airline meals or coffee pods are created. Many such facilities produce ready-to-prepare foodstuffs that are then shipped to cafeterias and other kitchen facilities for cooking and assembly. Kitchens located at venues being served, including schools, military bases, and prisons, resemble those used by midsize companies: They are utilitarian and designed for optimal efficiency and food production on an industrial scale. Serving areas are similarly functional, and those in penal cafeterias are designed for security and efficient control of prisoners rather than for attractiveness. The interiors and exteriors of many collegiate food service areas are designed to be compatible with campus architecture. Large companies serve venues of varying size. They serve massive sites, such as major convention centers and schools of thousands of students, but they also serve the small venues served by midsize companies. Such venues allow diners to choose from among foods presented buffet-style in metal bins that keep them either warm or cold as appropriate. Plastic shields protect food from airborne contaminants. Stations are stocked with standard dining items, including utensils, condiments, straws, and napkins. Automated systems may be used to move used trays, plates, and utensils

Food Services to dishwashing areas. Some venues maintain outdoor areas to encourage patrons to move from crowded indoor spaces to other eating sites to ease the flow of diners, especially at peak meal times. Typical Number of Employees. Large food service companies employ more than one hundred people, and many employ workforces in the tens of thousands. For example, Gate Gourmet, an airline catering corporation, has twenty-two thousand employees. At many of the largest corporations, food services such as industrial catering form divisions within the company rather than representing the mandate of the entire company. Traditional Geographic Locations. Large food service corporations are national and multinational entities. They have corporate headquarters in major urban centers, as well as regional offices throughout the United States and the world. The sites operated by these corporations can be located anywhere, from urban to rural schools, to prisons, military bases, hospitals, and elderly care centers. Corporations serving the airline industry operate at every major and regional airport, while those providing coffee service to businesses operate everywhere such businesses exist. Pros of Working for a Large Food Service Corporation. Many employees of large corporations appreciate the stability and consistency of their jobs. Depending on their assignments, employees may enjoy being affiliated with schools, universities, hospitals, or other institutional clients—such as government agencies and entities— that sometimes offer perks and that may encourage employees of contractors to feel as though they are part of their communities. In addition to job security, many food service employees receive benefits associated with working for large corporations, which often give employees stock dividends or gifts. The latter are frequently emblazoned with the corporations’ logos, enhancing employees’ sense of belonging. Large employers often recognize workers’ loyalty by providing service awards, noting anniversaries of their employment, and providing opportunities for educational improvement and professional advancement. Cons of Working for a Large Food Service Corporation. The atmosphere and corporate culture of large companies often seem impersonal, and employees sometimes feel anonymous and underappreciated as they perform their duties for

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often changing crowds. Employees with long-term assignments at smaller venues may avoid this feeling to a certain extent, but they may feel a disconnect between their assigned venues and the larger corporations for which they work. Food service workers in universities are vulnerable to school schedules that include semester breaks in which food services are not required. Safety is a concern of food service employees in prisons, as well as at military bases, which have become terrorism targets in the twenty-first century. School violence is another potential risk large food service employees face. Workers also risk injuries from equipment and tools used to prepare and serve food. Large conventions and trade shows hosting a thousand or more participants can overwhelm food staffs striving to meet the numerous and often unrealistic demands of organizers. Costs Payroll and Benefits: Large food service companies may pay hourly wages or annual salaries. They often provide salaries because staff can be transfered from one venue to another when contracts expire, so it less likely that they will be underutilized. Large companies usually provide employees with sick leave and vacations, and they often provide health insurance. Promotions and perks reward employees’ extraordinary service. Supplies: Large food services require bulk amounts of food, equipment, and materials used to prepare, package, ship, and serve food. They also need cleaning supplies for kitchens and indoor and outdoor dining areas, as well as computer and telecommunications equipment, office supplies, and shipping vehicles. External Services: Many large food service companies contract with cleaning services to wash dishes, utensils, linens, and other equipment used to prepare and serve food. They may also contract custodial and pest-control services to keep dining and kitchen spaces clean and free of vermin. While they may have their own advertising staffs, even the largest corporations often hire dedicated advertising or public relations firms to create or consult on major advertising campaigns. Utilities: Large food services need electricity, gas/ oil, water, sewage, telephone, and Internet access.

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Food Services

Taxes: Food service corporations must pay local, state, and federal taxes, as well as applicable taxes in other countries. Commercial food services at many universities, hospitals, cafeterias, and arenas collect sales taxes from customers. Taxes for large noncommercial food services affiliated with some public schools, military bases, and prisons are paid for by governments directly. Large food services owning kitchen and dining facilities and vehicles also pay property taxes and vehicle registration and license taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Food service businesses must perform the same basic tasks, whether the business in question is a sole proprietorship or a multinational corporation. At small catering businesses, a single owner may perform almost all tasks and contract out the rest, while large companies generally institute division of labor, assigning a single job role to each employee. The following umbrella categories apply to the organizational structure of businesses in the food services industry: ■ ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■

Business Management Customer Service Sales and Marketing Facilities and Maintenance Security Technology, Research, Design, and Development Cooking and Food Preparation Operations Distribution Groundskeeping Human Resources Information Technology Administrative Support

perform diverse tasks, ranging from preparing business plans to cooking food, and they are accountable for all aspects of their departments or businesses. Food service managers provide leadership for their employees and underlings: They set goals and ensure that their businesses function efficiently. As the ultimate decision makers, they must ensure that their businesses comply with safety and health regulations, either by personally securing licenses and enforcing regulations or by delegating those tasks to others. Managers at midsize and large companies need significant work experience or internships in food professions, and some employers seek further qualifications, such as degrees from culinary schools, community colleges, or four-year institutions in food-, hospitality-, or business-related fields. Individuals may start their own businesses without any specific training or background, but they generally require relevant credentials or other proof of competence and likelihood of success if they wish to receive business loans to cover their start-up costs. Significant work experience or internships in food professions or other businesses is often sufficient for employment as a manager in many food services, but some employers seek managers who attended a culinary school or earned an associate’s or bachelor’s degree focusing on food, hospitality, business, or related fields. Food service managers earned an average annual salary of $56,460 in 2009; general managers of food service companies earned $83,320, and chief executives earned $131,250. Promotions, bonuses, and perks are presented to managers to recognize their professional contributions. Business management occupations may include the following: ■ ■ ■ ■ ■ ■

Business Management Managers include small-business owners, as well as corporate executives. Whatever the scope of the operation, the management staff monitors all aspects of it, as well as of the industry sector or subsector in which they compete. Managers may

Owner President/Chief Executive Officer (CEO) Food Service Manager Food Service Department Manager General or Operations Manager Chief Financial Officer (CFO)

Customer Service Customer service personnel interact with existing clients to determine how to improve services. Those clients may be individual customers of catering firms, diners at cafeterias, institutional contract

Food Services OCCUPATION

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PROFILE

Food Service Manager Considerations

Qualifications

Description

Plans and coordinates the preparation and serving of food and beverages and handles all associated tasks.

Career clusters

Business, Management, and Administration; Hospitality and Tourism

Interests

Data; people

Working conditions

Work inside

Minimum education level

High school diploma or GED; high school diploma/technical school; junior/technical/community college; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; volunteer work; part-time work

Licensure and certification

Recommended

Employment outlook

Slower-than-average growth expected

Holland interest score

ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

supervisors and purchasing agents, or even the heads of other companies and institutions. Customer service staff consider clients’ suggestions for different menu items and other requests. They also handle complaints and attempt to resolve grievances. They sometimes work with marketing and sales personnel to develop strategies to convince potential customers to try their services, and they survey existing customers’ opinions of those services, presenting the results to managers as appropriate. Customer service personnel’s qualifications usually include studies in public relations, hospitality, business, or food-related fields at vocational schools or universities. Previous work experience or internships involving food are beneficial. Most customer service jobs require personnel who can communicate well. Customer service occupations may include the following:

■ ■ ■

Customer Service Director Customer Service Representative Public Relations Representative

Sales and Marketing Marketing personnel promote their companies’ services to existing and potential clients. Sales personnel interact with customers to determine what food services they need and how best to provide them. They often work closely with customer service personnel to identify ways to attract customers. Sales and marketing staffs create publicity and Web sites to advertise food services. They use coupons and other promotions to increase sales. They also attend events, such as bridal fairs, to promote their companies’ services. Most employees hired for sales and marketing positions in the food services industry have bachelor’s degrees in marketing or business. Employers also seek sales and marketing personnel with food

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Food Services

science or nutrition degrees, especially those with business or communications minors. Photographers, graphic artists, and Web designers often find work in food services sales and marketing departments. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Vice President of Sales and Marketing Sales Director Senior Sales Manager Marketing Director Senior Marketing Manager Sales Representative Marketing Representative Market Research Analyst

Facilities and Maintenance Facilities and maintenance personnel monitor the technical systems used by food service companies and seek to ensure minimal disruption to their operations if problems occur. They regularly check and fix malfunctioning machines and the equipment that provides businesses with such necessary resources as water, electricity, refrigeration, and heating, ventilating, and air-conditioning (HVAC). Many maintenance personnel have specific assignments based on their technical qualifications. Some of them specialize in delivery and freight vehicles. Custodial workers ensure that commercial and industrial facilities are clean. In some companies, custodial personnel launder employees’ uniforms. Facilities personnel may also be responsible for pest control. Facilities and maintenance workers in food service companies have varied educational and professional qualifications. Most positions require vocational school training or college degrees in engineering or technology-related fields. Many also require relevant licenses. Entry-level workers usually receive hourly wages. Facilities and maintenance occupations may include the following positions: ■ ■ ■

■ ■

Chief Engineer Facility Manager Heating, Ventilation, and AirConditioning (HVAC) Engineer Electrician Plumber

■ ■

Mechanic Custodian/Janitor

Security Security personnel protect employees, clients, and food. Some patrol food services facilities, observing customers and employees inside dining areas and kitchens to prevent them from contaminating food or committing acts of bioterrorism or theft. Others monitor surveillance cameras placed both inside and outside buildings. Food service companies often deploy sensors capable of detecting various hazards, including chemicals and carbon monoxide, and some employ guards to control access to restricted areas, checking employees’ identification and inspecting their bags or vehicles for possible food contaminants, weapons, or stolen property. Food service companies seek security personnel with both training and experience in public safety. They generally prefer to hire candidates who have studied criminal justice or related fields at vocational schools or universities. Security personnel often are military veterans or former police officers or firefighters. They frequently have certification in first aid, use of firearms, and operation of security technologies. Security occupations may include the following: ■ ■ ■ ■

Security Guard Food Safety Inspector Biohazard Specialist Firefighter

Technology, Research, Design, and Development Diverse personnel contribute to the creation of products and equipment sold and used by the food services industry. Food scientists test ingredient combinations to produce new flavors and textures to please clients. Nutritionists often contribute to recipe development to provide new foods with marketable nutritional profiles. Food engineers help design food service facilities and plan the placement of equipment and furnishings to facilitate more efficient preparation and serving of foods. They also devise better machinery to improve food services. Cake and pastry decorators attempt to create original designs to attract customers.

Food Services Food service companies’ scientific and technical employees usually have university degrees in food science or engineering, nutrition, or agricultural engineering. Some have advanced degrees. Many have studied at culinary schools or interned with pastry chefs. Technology, research, design, and development occupations may include the following: ■

■ ■ ■ ■ ■ ■ ■

Vice President of Research and Development Food Engineer Food Scientist Nutritionist Biochemist Food Laboratory Technician Quality Assurance Specialist Cake Designer

tenth percentile of earners in this occupation earned $22,860, while those in the ninetieth percentile earned $69,560. Cafeteria cooks employed directly by food service companies earned mean salaries of $24,990, again slightly above the mean salary for all cafeteria cooks of $23,870. Tenth percentile earners earned $15,820, while ninetieth percentile earners earned $34,030. Food preparation workers (that is, workers with food preparation duties other than cooking) earned mean salaries of $18,090, below the occupation’s crossindustry average of $20,420. Tenth percentile earners earned $15,380, and ninetieth percentile earners earned $28,280. Cooking and food preparation occupations may include the following: ■ ■

Cooking and Food Preparation Cooking jobs vary widely between social and institutional caterers and food service providers. Premium providers, such as wedding caterers, may seek chefs who can prepare elaborate cuisines, and such chefs may be owner-operators of catering businesses. Caterers in particular must be flexible and creative because they must be able to design menus and recipes to customers’ specifications. Institutional caterers and similar companies, by contrast, require cooks who can produce large amounts of basic foods efficiently and consistently, with little variation. These lead food preparers are often supported by assistants with varying degrees of skill and experience, who sometimes aspire to become chefs or head cooks themselves. Culinary students sometimes gain credentials by interning in such positions. Caterers have varied credentials. Chefs usually have studied at culinary schools and acquired recognition and occasionally certification for their talents preparing foods. Cooks may also have attended culinary schools or have taken food-related courses or home economics at trade schools, community colleges, or universities. Some food service cooks have experience in military food service occupations. According to the BLS, food service chefs and head cooks earned mean yearly salaries of $45,340 in 2009, slightly higher than the mean salary for all chefs and head cooks of $44,240. Those in the

735

■ ■ ■ ■ ■ ■ ■ ■ ■

Caterer Chef Sous Chef Head Cook Cook Cafeteria Cook Assistant Cook Baker Pastry Chef Line Cook Food Preparation Worker

Operations Both commercial and noncommercial food service providers need a variety of supervisors and entry-level personnel to function. Operations staff set up mobile providers’ equipment at venues; carry food from kitchens to serving areas; serve food to diners; clean up after meals and events; wash dishes; stock stations with utensils, dinnerware, and trays; staff buffet lines; bus and clean tables; assist customers; and collect payments. Supervisors may take part in any or all of these tasks, or they may monitor and instruct front-line workers as needed. The average annual income for food service operations managers in 2009 was $34,530, which was higher than the cross-industry average for supervisors of food preparation and serving workers, $31,460. Tenth percentile earners earned $19,180, while ninetieth percentile earners earned $47,420. Food service companies often arrange for entrylevel employees to receive initial job training and

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Food Services

provide additional instruction when new technologies or techniques are introduced. Most entry-level workers receive hourly wages, as low as the federal minimum hourly rate, $7.25, set in 2009. The average hourly wages of cafeteria attendants employed directly by food services companies in that year were $9.40, or $19,540 per year. Food services employees often receive uniforms and food free or at discounted prices. Operations occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Food Preparation Supervisor Serving Supervisor Logistics Supervisor Cafeteria Attendant Cart Attendant Server Cashier

■ ■ ■

Table Busser Bartender Dishwasher

Distribution Distribution personnel deliver foods and other products to customers. Distribution managers schedule shipments, assign them to drivers and vehicles, and oversee all other necessary logistics. Distribution personnel maintain records and invoices, documenting dates and distances that products are transported. If food services products are shipped overseas, distribution managers typically arrange for permits, customs documents, and tariff payments. They also complete any paperwork associated with transporting food across state lines. Many food service distribution personnel are entry-level workers whose employers provide all necessary training. Distribution personnel operat-

OCCUPATION

PROFILE

Food and Beverage Service Worker Considerations

Qualifications

Description

Takes customers’ orders, serves food and beverages, cleans tables, and welcomes customers.

Career clusters

Business, Management, and Administration; Hospitality and Tourism

Interests

People; things

Working conditions

Work inside

Minimum education level

No high school diploma; on-the-job training; high school diploma or GED; high school diploma/technical school

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

CRE; CSR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Food Services ing motor vehicles are required to have licenses, including commercial licenses if they drive large trucks. They may have to undergo additional training and certification to obtain credentials and learn to operate equipment such as forklifts. Some distribution employees may be required to maintain physical standards necessary to lift heavy weights. Entry-level distribution workers typically earn hourly or yearly wages depending on the work they perform. Employers pay some drivers by the mile. Most food services distribution managers earn yearly salaries. Distribution occupations may include the following: ■ ■ ■ ■ ■ ■

Distribution Manager Heavy Truck Driver Light Truck Driver Freight Loader/Unloader Warehouse Worker Shipping and Receiving Clerk

Human Resources Human resources personnel recruit, hire, and fire employees. They sometimes use Internet resources to find potential employees who have posted resumes on social networking sites, blogs, or other Web sites, and they also recruit employees from culinary schools and other food-related educational programs. Human resources personnel also train employees or secure training for them, administer payroll and benefits, and respond to employee grievances. Most human resources positions require bachelor’s degrees in human resources management or similar business fields. Experience or education in food-related fields is also helpful in obtaining human resources jobs in the food services industry. Human resources occupations may include the following: ■ ■ ■ ■

Groundskeeping Groundskeeping personnel perform various tasks for both safety and appearance purposes. They keep exterior areas around buildings clear of debris and other hazards, preventing employees and clients from suffering injuries. Groundskeeping workers also perform landscaping duties, designing attractive grounds for employees and customers to enjoy. They occasionally create butterfly gardens, gazebos, walking trails, or other outdoor sites for employees and customers to use. These aesthetic details usually benefit food service companies by appealing to clients who associate a location’s visual appearance with the quality of food served there. In addition to obtaining gardening experience, some groundskeeping personnel working for food service companies have studied horticulture or botany in high schools, vocational institutions, or universities. Groundskeeping personnel earn hourly to yearly wages, based on their credentials. Groundskeeping occupations may include the following:

■

■ ■

Head Groundskeeper Groundskeeper Landscaper

Human Resources Director Human Resources Manager Human Resources Generalist Benefits Specialist Payroll Clerk

Information Technology Information Technology (IT) personnel procure computers and related equipment; maintain, repair, and troubleshoot that equipment; and acquire and perform hardware and software upgrades. They check computers for viruses, malware, and spyware and install firewalls and antivirus programs. They often manage employees’ e-mail and Internet services. At companies employing automated production or distribution machinery, IT personnel write the code to drive and monitor such equipment. IT technicians may also manage and operate audiovisual systems used by food service companies. Most IT staff have college degrees in computer science or vocational school certification and training in IT specialties. They often have advanced degrees or training as well. IT occupations may include the following: ■ ■

■

737

■ ■ ■

Information Technology Director Computer Programmer Computer Technician Computer Security Specialist Computer Networking Technician

738 ■ ■ ■

Food Services Help Desk Staff Webmaster Multimedia Technician

Administrative Support Administrative workers perform clerical duties and otherwise assist in all aspects of running the day-to-day business operations of a company. They assist food service managers, file invoices, answer telephones, and prepare correspondence. Receptionists welcome customers and schedule appointments. Many food services administrative workers begin as interns or in temporary or entry-level positions. Requirements vary by employer, but administrative personnel often receive training after they are hired, learning about office technology and procedures—particularly the computer software used to manage food inventories and orders. Administrative occupations may include the following: ■ ■

Administrative Assistant Receptionist

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise. Food services form a dynamic industry that is common to a diverse set of cultures and income levels and experiences consistent demand from individuals and institutions. As populations worldwide increase, so will the need for varied institutional food services to supply students, workers, prisoners, and other institutional populations, as well as caterers and other mobile service providers for special occasions and convenient everyday meals. Social and institutional catering represents the fastest-growing sector in the food services industry. The global economic recession of 2007-2009 slowed demand for some food services, as consumers with reduced budgets adjusted their spending habits. Food services contractors providing foods for schools, military bases, hospitals, and prisons did not experience significant decreases in their businesses, but caterers, cafeterias, and other independent food services did. Some of these businesses lost customers, while others adjusted menus, ser-

vices, and prices to accommodate and retain clients, decreasing their profits. As economies recover in the 2010’s, industry analysts expect food services to thrive. Food service companies typically account for 5 to 6 percent of the overall employment in the larger restaurant, drinking places, and food service industry. In 2008, there were approximately 28,954 nonrestaurant food service companies operating in the United States, representing 5.3 percent of businesses in the larger category. These companies employed approximately 547,200 people, or 5.7 percent of the overall restaurant and food service industry. Almost 2 percent of food service employees either belonged to unions in 2008 or benefited from union policies. While many food service companies employ twenty people or fewer, others have many thousands of employees. Sodexo, for example, employs 110,000 people in its food services division in the United States. According to the Society for Foodservice Management, its members secure more than 16,500 contracts internationally each year, with sales exceeding $20 billion. In 2009, Food Management reported that the leading food service equipment managers in North America and globally included Compass Group North America, Aramark Corporation, and Sodexo. Notable industry supplier Sysco achieved 2008 sales of $37.5 billion. The International Foodservice Distributors Association (IFDA) reports that its members achieve $110 billion in yearly revenues. In 2009, the Tyson Food Service Group was named IFDA Supplier of the Year, an honor it received four consecutive years. Food services that begin as community businesses often expand into national franchises. By 2006, Dream Dinners, established in the previous decade, operated at 235 sites in thirty-three states and earned $57 million in annual revenues. That business and other food service companies secure contracts from other corporations to provide their employees with food services, especially meal preparation, as an employment benefit. In winter of 2010, Continental Airlines announced changes in its economy class meal services. It started to charge economy passengers separately for food in the fall of 2010 instead of including the cost of meals in their fares. Continental’s Chelsea Food Services maintains kitchens at five of that airline’s hubs, including Newark, New

Food Services Jersey, and Houston, Texas. Annually, Chelsea Food Services serves over 31 million meals and employs twenty-three hundred people. Continental also contracts with food service companies operating in several international airports to produce and deliver in-flight snacks and meals. Chelsea Food Services, meanwhile, prepares first-class and business-class meals for other domestic and foreign airlines.

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PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Food Services and Drinking Places Employment 2009 2,214,270

Projected 2018 2,517,700

Occupation Combined food preparation and serving workers, including fast food

513,090 569,100 Cooks, fast food Employment Advantages 791,780 846,900 Cooks, restaurant The BLS anticipates a consistent 599,450 645,900 First-line supervisors/ need for food service employees in managers of food preparation the twenty-first century. It projects and serving workers that employment in entry-level food service positions will grow by 1,997,710 2,169,600 Waiters and waitresses 7.7 to 10 percent between 2008 and 2018. Moreover, a high turnover Source: U.S. Bureau of Labor Statistics, Industries at a Glance, rate in the industry increases the Occupational Employment Statistics and Employment number of available positions. EnProjections Program. try-level food service jobs are often people’s first source of employment. Two-fifths of food service employees work part time, double the proportion Annual Earnings of part-time employees in other industries. Many The food services industry is difficult to quanpart-time employees prefer this status because it tify because its revenues are often included in overpermits time for other activities and commitments. all restaurant and drinking places statistics and The BLS projects that food service manager pobecause large corporations often include food sitions will increase by 17 percent by 2014, noting service divisions alongside other food-related divian increasing demand for food service managers in sions. Euromonitor International in 2007 estihealth care institutions such as hospitals and retiremated global restaurant and food service revenues ment homes in particular. This increase, due to at $1.85 trillion, of which nonrestaurant food sergrowth in geriatric populations, reveals a consisvices generated approximately $92.5 billion. In tent trend: As a given class of institution—such as 2009, Global Industry Analysts projected the comnursing homes, schools, or prisons—experiences bined restaurant and catering industries to achieve increasing populations, it will also experience an $2.2 trillion in revenues by 2015, approximately increased demand for food service workers, since $110 billion of which would come from nonrestauits members need to eat. Food services thus offers rant food services. opportunities for managerial positions to candiAccording to Datamonitor, total North Ameridates who may have difficulty finding similar posican restaurant and food service revenues in 2008 tions in other industries harmed by the recession. were $191.2 billon, including $163 billion in the White-collar workers seeking employment would United States. Assuming that nonrestaurant food do well to consider this industry, which will require services accounted for 5 percent of those revenues, people with business degrees and experience, those services generated $9.56 billion in North whether or not they have prior employment in America and $8.15 billion in the United States. International revenues were at least $84.3 billion. food-related businesses. The food services industry The G8 nations (United States, Canada, Germany, will continue to grow as the baby boomers retire.

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France, United Kingdom, Italy, Russia, and Japan) experienced revenue growth in the restaurant and food service industry of 3.7 percent between 2004 and 2008. Their 2008 revenues totaled $366.9 billion, which suggests $18.3 billion in nonrestaurant food service revenues at a rate of 5 percent. Datamonitor projects that 2013 G8 revenues would reach $427.5 billion ($21.4 billion for nonrestaurant food services).

RELATED RESOURCES FOR FURTHER RESEARCH Association for Healthcare Foodservice 455 S 4th St., Suite 650 Louisville, KY 40202 Tel: (888) 528-9552 Fax: (502) 589-3602 http://www.healthcarefoodservice.org Catersource 2909 Hennepin Ave. South Minneapolis, MN 55408 Tel: (612) 870-7727 Fax: (612) 870-7106 http://www.catersource.com International Foodservice Distributors Association 1410 Spring Hill Rd., Suite 210 McLean, VA 22102 Tel: (703) 532-9400 Fax: (703) 538-4673 http://www.ifdaonline.org National Association of College and University Food Services 2525 Jolly Rd., Suite 280 Okemos, MI 48864-3680 Tel: (517) 332-2494 Fax: (517) 332-8144 http://www.nacufs.org Society for Foodservice Management 15000 Commerce Parkway, Suite C Mount Laurel, NJ 08054 Tel: (856) 380-6829 Fax: (856) 439-0525 http://www.sfm-online.org

ABOUT

THE

AUTHOR

Elizabeth D. Schafer received a Ph.D. in the history of technology and science, specializing in agricultural history, from Auburn University in 1993. Her research focuses on agricultural engineers’ work to develop more efficient machinery, equipment, and techniques to cultivate and harvest food and fiber crops. It also examines the role of veterinary science in controlling and eradicating animal diseases that cause public health risks by contaminating food and dairy supplies. She has contributed articles on food science and technology, nutrition, and veterinary history to numerous publications. FURTHER

READING

Birchfield, John C. Design and Layout of Foodservice Facilities. 3d ed. Hoboken, N.J.: John Wiley & Sons, 2008. Borges, Manuel P., ed. National School Lunch Program Assessment. Hauppauge, N.Y.: Nova Science, 2009. Bright, Saunya N., et al. “Institutional Foodservice Benchmarking: Survey of Administrators’ Attitudes and Practices in the USA.” Journal of Foodservice 20, no. 3 (June, 2009): 123-132. Buzalka, Mike. “FM’s Top Fifty Foodservice Management Companies—2009.” Food Management. September 1, 2009. http://foodmanagement.com/business_feature/fms-topmanagement-0909. Chmelynski, Carol Caprione. Opportunities in Food Service Careers. Foreword by William P. Fisher. Rev. ed. New York: McGraw-Hill, 2006. Engelund, Eva Høy, Gitte Breum, and Alan Friis. “Optimisation of Large-Scale Food Production Using Lean Manufacturing Principles.” Journal of Foodservice 20, no. 1 (February, 2009): 4-14. Farkas, David. “Finding Tomorrow’s Foodservice Leaders Today.” Foodservice Equipment and Supplies 62, no. 3 (March 1, 2010): 18. Fenich, George G. Meetings, Expositions, Events, and Conventions: An Introduction to the Industry. 2d ed. Upper Saddle River, N.J.: Pearson/ Prentice Hall, 2008. Katsigris, Costas, and Chris Thomas. Design and Equipment for Restaurants and Foodservice: A

Food Services Management View. 3d ed. Hoboken, N.J.: John Wiley & Sons, 2009. Manask, Arthur M., with Mitchell Schechter. The Complete Guide to Foodservice in Cultural Institutions: Keys to Success in Restaurants, Catering, and Special Events. New York: John Wiley & Sons, 2002. Mattel, Bruce, and the Culinary Institute of America. Catering: A Guide to Managing a Successful Business Operation. Hoboken, N.J.: John Wiley & Sons, 2008. Millstone, Erik, and Tim Lang. The Atlas of Food: Who Eats What, Where, and Why. Foreword by Marion Nestle. Rev. ed. Berkeley: University of California Press, 2008. Payne-Palacio, June, and Monica Theis. Introduction to Foodservice. 11th ed. Upper Saddle River, N.J.: Pearson/Prentice Hall, 2009. Plunkett, Jack W., ed. Plunkett’s Food Industry Almanac, 2010: The Only Comprehensive Guide to

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Food Companies and Trends. 7th ed. Houston, Tex.: Plunkett Research, 2010. Strianese, Anthony J., and Pamela P. Strianese. Dining Room and Banquet Management. 4th ed. Clifton Park, N.Y.: Thomson/Delmar Learning, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Food Service Managers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos024.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

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Freight Transport Industry

INDUSTRY

SNAPSHOT

General Industry: Transportation, Distribution, and Logistics Career Cluster: Transportation, Distribution, and Logistics Subcategory Industries: Deep Sea, Coastal, and Great Lakes Water Freight Air Transportation; Freight Transportation; Freight Transportation Arrangement; General Freight Trucking; Inland Water Freight Transportation; Pipeline Transportation; Rail Transportation; Specialized Freight Trucking; Support Activities for Transportation; Warehousing and Storage Related Industries: Airline Industry; Highway, Road, and Bridge Construction Industry; Mass Transportation Vehicles Industry; Passenger Transportation and Transit Industry; Petroleum and Natural Gas Industry; Postal and Package Delivery Services; Shipbuilding, Submarines, and Naval Transport Industry; Travel and Tourism Industry; Warehousing and Storage Industry Annual Domestic Revenues: Freight transportation, $1.8 trillion USD (Plunkett’s Research, 2008); oil pipelines, $9.6 billion USD (RITA, Bureau of Transportation Statistics, 2001); gas pipelines, $102 billion USD (RITA, Bureau of Transportation Statistics, 2005) Annual International Revenues: $66,395,000 (U.S. Bureau of the Census, 2010) NAICS Numbers: 481112, 481212, 481219, 482, 48311, 483113, 493211, 484, 486, 4881-4885, 4889

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INDUSTRY DEFINITION Summary The freight transportation industry is among the most important industries in the global economy. Its primary purpose is to move raw materials and finished products across distances. It moves goods from manufacturers and wholesalers to retailers, among various manufacturers, and from sources of raw materials to industrial refiners. It does so via road, air, and rail transportation and by inland, coastal, and deep-water ship transportation. Bulk liquids are moved through pipelines. In addition, the industry includes logistics and warehousing. This highly diversified industry is the circulatory system of the modern global economy. History of the Industry Early regular bulk cargo transportation began during the Bronze Age, although Stone Age

Freight Transport Industry people were known to have transported large objects over long distances. Merchants using rowed galleys plied the ancient Mediterranean Sea, transporting grain, olive oil, and metals as well as luxury goods. Inland waterways also were used for transportation in ancient times. Shallow draft river vessels were common in ancient Egypt and China. The Chinese empire undertook massive canal-building projects that served to enhance water transportation as well as providing irrigation and flood control. Until the nineteenth century, most bulk cargo was transported by water. Trade by land or water often was hazardous because of natural disasters, poor facilities and infrastructure, disease, pirates and bandits, and few laws protecting merchants from excessive tolls and taxes. Roads were few and poorly maintained, and moving large quantities of goods using horses, oxen, elephants, camels, or human labor was rarely cost-effective. Long-distance trade over land thus generally dealt with high-value and easily transportable goods. The Silk Road,

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which connected China with Europe and the Middle East, was a major trade route in ancient and medieval times. Another trade route took gold and salt from West and Central Africa to various points north. The modern transportation industry has its roots in the Middle Ages, with the first stirrings of modern capitalism. Italian city-states provided shipping transportation for the Crusades (eleventh through thirteenth centuries) and reaped the benefits of bulk trade with the Middle East. At the same time, trading cities on the Baltic and North Seas formed the Hanseatic League, which encouraged the growth of shipping and the development of ports as major trade hubs. This development was aided by new technology. Portuguese mariners developed new navigation techniques in the 1400’s that were enhanced by advances in sails and rudders. Port cities built new docks and cranes. The medieval Zuraw crane, still visible in the port of Gdansk, Poland, dates from 1367 and is one of the few extant examples of this tremendous period of growth.

A container ship makes its way down a river. (©Peter Neychev/Dreamstime.com)

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Freight Transport Industry

European migrations to the New World, beginning in the late fifteenth century, brought a great burst of exploration, and transportation of bulk goods expanded dramatically. Europeans became the leaders in world transportation by the late sixteenth century; the trade empires of Spain, Portugal, the Netherlands, and Great Britain connected China, India, Africa, and the Americas. Sugar, tobacco, indigo, and other crops poured into Europe, along with gold and silver from American colonies. The dark side to this growth was the trade in slaves brought from Africa to the New World to work on plantations. After the American Revolution, New England merchants took a growing part in the transportation industry. By the middle of the nineteenth century, Americans had become major players in global sea trade. The famous Yankee clipper ships could travel from China to London in as few as 130 days, carrying valuable cargoes of tea. The development of steam power revolutionized transportation. Steamships no longer depended on wind and currents, dramatically increasing the potential for water transportation. In America and Europe, extensive canal building allowed for cheap bulk transportation far inland. The opening of the Erie Canal in 1825 helped make New York a major trade hub and allowed midwestern wheat to flow to Europe in vast amounts. The greatest revolution in transportation, however, was the development of the railroad, which ultimately conquered the tyranny of space. Railroads extended transportation and logistics into the vast

Inputs Consumed by the Truck Transportation Industry Input

Value

Energy Materials Purchased services Total

$65.4 billion $12.6 billion $86.5 billion $164.5 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

hinterlands of North America far from navigable rivers, opening up the West for settlement, farming, mining, and logging. By the late nineteenth century, a quarter of all steel in America was being used to make rails. Transportation bound the young United States together, allowing the growth of large-scale industry that relied on raw materials from distant sources. Air transportation began in earnest during World War II, when huge numbers of transport aircraft were used to supply island outposts around the Pacific in a timely manner. Until the 1970’s, this part of the freight transportation industry remained limited because of government regulation, and most cargo flew on commercial passenger planes. This changed in 1977 with airline deregulation, which removed restrictions on the routes operated by all-cargo airlines. Companies such as FedEx grew apace, offering The Truck Transportation overnight package delivery worldwide. The pipeline transportation industry Industry’s Contribution to the U.S. has its own separate history. During anEconomy cient times, Roman engineers developed aqueducts to supply cities with water from Value Added Amount distant mountain sources. Some of these Gross domestic product $125.6 billion ancient structures remain serviceable toGross domestic product 0.9% day. The first known industrial pipeline Persons employed 1.443 million was built in 1595 and used to transport Total employee compensation $76.8 billion brine 40 kilometers between Hallstadtt and Ebensee, Austria. Oil and natural gas Source: U.S. Bureau of Economic Analysis. Data are for transportation by pipeline began after 2008. World War II but did not take off until the 1970’s and 1980’s.

Freight Transport Industry

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The Industry Today The freight transportation industry today is a crucial part of the global economy. Indeed, the development of the industry and increasingly efficient movement of large quantities of goods and materials makes possible and profitable the creation and distribution of the goods and services on which consumers and societies rely. Despite the economic downturn of the 2000’s and the concerns raised over port security in the wake of the terrorist attacks in New York and Washington, D.C., on September 11, 2001, the freight transportation industry remains strong. According to 2006 Census statistics, the freight transportation sector employs more than 2 million Americans. The modern freight transport industry has been transTrucks transport containers filled with a wide variety of finished and manufactured formed by several major ingoods to ports. (©Dreamstime.com) novations. The first and most important was the development of intermodal shipping containers. These Using simple bar-code scanners, workers can track humble boxes allows shippers to efficiently carry a containers and their contents at every stage of wide array of cargo. Containers are especially imthe transportation process. The information can portant for shipping high-value but potentially then be relayed to customers. The system does fragile products such as electronics but can be used away with a large amount of paperwork, speeds for nearly any cargo that can fit within their dimencargo through international customs, and reduces sions. Containers can be easily and quickly moved delays and loss of cargo. Information on the locaamong various modes of transport—from ship to tion of containers also can be coded via the Global train to truck—without unloading the cargo inPositioning System (GPS). Computerized control side. Today, 90 percent of nonbulk cargo shipping systems are especially critical for pipeline transporis carried out using containers. This has led to nutation, allowing for greater safety, security, and merous innovations, such as the development of product monitoring throughout the transportacontainer ships and more advanced port, rail, and tion process. truck terminals. The old method of freight shipThere are six major sectors of the freight transping—called “break bulk”—has fallen out of use portation industry: sea-borne shipping, inland wabut still is necessary in some less developed regions terway shipping, air, rail, truck (tractor trailer), that lack modern port facilities. Bulk cargo shipand pipeline. ping—shipping of raw materials in an unpackaged Sea-Borne Shipping. Sea-borne shipping carform—remains a significant part of the industry. ries the greatest quantity of goods and materials A second major innovation has been the use of based on both volume and dollar value. Oceangoing ships carry the largest and most valuable carcomputerized tracking and distribution systems.

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Freight Transport Industry

Air cargo carriers transport smaller, high-value cargo, particularly consumer and business packages and bulk mail. (©Mike Kwok/Dreamstime.com)

goes the greatest distance at the lowest cost. There are several major types of cargo delivered by marine transportation. Automobiles and other vehicles are shipped using special “roll-on/roll-off” (RORO) ships. Bulk cargo shipping moves raw materials in large unpacked quantities. Bulk carriers include oil tankers and ore carriers. Containers ride the waves in special container ships. Containers are ideal for a wide variety of finished and manufactured goods including food, textiles, electronics, and spare parts. Because of outsourcing and the wide dispersal of manufacturing facilities to take advantage of lower labor costs, container shipping is the fastest growing segment of the market. The growth of high-volume shipping has led to the massive expansion of port facilities worldwide. Singapore tops the list as the world’s busiest port in terms of ship tonnage served, transshipment, container traffic, and bunkering (that is, the supplying of fuel and other necessities for cargo vessels). Shanghai, China, is the second busiest port and is

first in terms of cargo tonnage handled. Rotterdam, Holland, is the busiest port in Europe, and Los Angeles/Long Beach, California, tops the list in North America. Inland Waterway Shipping. Inland waterway shipping is similar to marine shipping, but here the emphasis is on bulk cargo transported in barges using special river tugboats for motive power. This type of shipping is slow but highly cost-effective because it has significantly lower energy costs. A typical river barge can hold the contents of fifteen railroad cars or sixty trucks. This method of shipping is particularly suited to moving bulk cargo domestically either for local consumption or for transshipment globally at ports that handle both river and ocean traffic. Grain, ore, and coal are the most common loads found on barges. Air Cargo. Air cargo is another important segment of the freight transport industry. Using specialized cargo aircraft, air cargo carriers transport smaller, high-value cargo, particularly consumer

Freight Transport Industry and business packages and bulk mail. The overnight package industry is perhaps the best-known example of this type of transportation, and Memphis, Tennessee-based FedEx is the world’s largest air cargo shipper. This segment of the industry continues to grow dramatically. Rail Cargo. The rail cargo transportation industry is a major part of the domestic cargo shipping industry. Trains provide inexpensive shipping (based on tonnage per mile) for both containers and bulk goods. Container trains have become a common sight, utilizing both single- and doublestack flat cars especially designed for this purpose. Bulk cargo is handled in special hopper or gondola cars. Live animals also are transported by rail in specially designed cars. Truck Shipping. Truck transportation is a vital part of the freight cargo supply chain. In the United States, truck drivers account for 45 percent of all freight transportation industry employees. Trucks can carry containers, bulk goods, and live animals, as well as smaller loads. The trucking seg-

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ment of the industry, for example, handles most of the business-to-business (B2B) freight traffic, using large tractor trailers or smaller delivery vehicles. Most truckers operate either independently (working directly for the client) or through freight carriers or shipping agents. Some big companies (such as grocery store chains) operate their own internal trucking operations. Some road transportation is done on regular routes or for only one consignee per run, while others transport goods from many different loading stations/shippers to various destinations. On longer runs, only cargo for one leg of the route is known when the cargo is loaded. Truckers may have to wait at the destination for the return cargo. Pipeline Transport. Pipeline transportation is a special branch of the freight cargo industry. Pipelines transport bulk liquids, primarily oil and natural gas, although pipelines also are used for public water supplies, especially for urban centers in more arid regions. There are three main types of pipelines. The first are gathering lines, which move

Trains provide inexpensive shipping (based on tonnage per mile) for both containers and bulk goods. (©Dreamstime.com)

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raw material from a wellhead or production point to processing or refining facilities. The second type are longer-distance transport pipelines. These move the material from the production or processing site to further processing or transportation facilities. The trans-Alaska pipeline, which moves oil from the North Slope of Alaska to ports such as Valdez, is a well-known example. Finally, there are distribution pipelines, which move finished or processed bulk liquids to the end users. Natural gas pipelines, which distribute natural gas for home heating, are a good example. Each of these types of pipeline relies on a complex series of pumping and monitoring stations that ensure the viability and safety of the system. Natural gas pipelines are an important growth segment of the industry because of rising demand worldwide and the development of cost-effective liquefied natural gas (LNG) facilities, which allow transportation of gas by bulk carrier. Ancillary Services. In addition to these major segments of the industry, there are important ancillary parts of the freight transportation industry. These include support and logistics, maintenance and repair, port and terminal facilities, warehousing, and tracking.

INDUSTRY MARKET SEGMENTS Small Businesses Small businesses in the transportation industry range from individual owner-operators to small start-up firms. The trucking industry is the most common venue for small businesses. There are also independent tugboat operators working coastal waters and ports. The railroad and oceangoing freight transport businesses and the pipeline transport industry are dominated by large firms, although individuals and small consulting firms do provide specialized services to some of these bigger companies. Potential Annual Earnings Scale. The average owner-operator of a truck can earn in the vicinity of $52,000 per year, although most truck drivers— including individual contractors—make a median salary of about $39,000, according the U.S. Bureau of Labor Statistics. Most drivers are paid by the mile, usually about $0.35 per mile, and average

twenty-five hundred to three thousand miles per week. Drivers cannot exceed thirty-five hundred miles per week by law. Pay rarely covers load times, which can be a couple of hours or more. Some companies will pay drivers extra to wait more than two hours for a load. Having a load does not always guarantee that a driver will have a return load either, and a driver may need to wait until a load is available or drive empty to a third location. Federal rules restrict the number of hours a driver can work per week; a truck driver can work for fourteen hours per day, but only eleven hours can be actual driving time. A truck driver also must take thirty-four hours off after working seventy hours in a week. This time includes load and drive time. This time off is referred to as thirty-four-hour restart, and after this, a driver can begin a new workweek. Other factors may affect weekly pay. Driving in heavy traffic, for example, takes time but does not add to paid mileage. Drivers working for small and start-up firms usually are contractors, and those running smaller firms often double as drivers. In some family businesses, for example, it is common for one spouse to drive and manage other contractors while the other manages the business and keeps the books. Clientele Interaction. Clientele interaction is very important for small companies and owneroperators. They rely on good relations with customers and suppliers to keep running. Owneroperators also must be able to interact well with fellow drivers because networking is a good way to find jobs and avoid problems such as heavy traffic, poor road conditions, and construction. Amenities, Atmosphere, and Physical Grounds. Truckers live on the road and as such usually are away from their families for extended periods of time. Truck stops are necessity for drivers; many are open twenty-four hours a day and offer food and showers for truck drivers. Many cabs have small sleeping compartments that allow drivers to park and sleep when needed. Drivers work in nearly any kind of weather unless it is so harsh that major roads are closed. This type of life can be difficult. Experience and reputation count, especially for owner-operators. Although drivers compete with each other, experienced drivers are respected, and there is a sense of community among drivers on the road.

Freight Transport Industry Typical Number of Employees. Most small businesses in this industry consist of a single owneroperator, although small firms employing a few drivers also exist. Traditional Geographic Locations. Over-theroad truckers can be found anywhere in the continental United States and Canada, from major cities to the smallest communities. Owner-operators of tugboats are found on major inland waterways such as the Mississippi River or in major ports. Pros of Working for a Small Freight Transportation Company. Smaller transportation companies often allow for greater flexibility. The individual strengths and weaknesses of any employee are immediately clear. Greater control over working conditions is another advantage of a small-firm setting. Finally, there is greater potential to develop close working relationships and camaraderie in smaller companies. Owner-operated companies and those in which most or all of the employees are family gives one the feeling of independence and self-reliance. The firm rises and falls on the owner’s decisions, skills, and work ethic. Many independent truckers enjoy having no boss but themselves. Cons of Working for a Small Freight Transportation Company. The industry is dominated by large companies that set the pace for change, influence many of the rules and practices, and provide economies of scale that can price smaller companies and owner-operators out of some markets. Owner-operators in particular are often on the margins, especially during difficult economic times or when fuel prices are especially high. In smaller companies, benefit packages are almost always smaller and, as with many smaller and individually owned firms, finding affordable health insurance for employees often is tricky and expensive. For owner-operators, the amount of work needed to run the business can be daunting. With more freedom comes more risk and exposure. Costs Payroll and Benefits: Average yearly gross pay ranges from $40,000 to $60,000. Benefits at small firms tend to be sparse, and owner-operators often buy individual insurance or rely on a spouse for insurance. Supplies: The main recurring cost is diesel fuel. In late 2010, the average price was between $2.90

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and $3.00 per gallon. An average tractor trailer will consume about $10,000 a year in diesel fuel. However, many independent truckers work on contracts with larger companies in which the contracting company pays for fuel and oil costs. Oil and tires are other expenses and can cost several thousand dollars per year, although some of these costs may not be borne by the operator. External Services: Cleaning and repair are the major external services needed by small transportation firms, although many operators do their own basic maintenance. Major repairs can cost more than $10,000. Utilities: Unless the small transportation firm owns its own facilities, utility costs generally are minimal. Taxes: Most small firms are taxed as Type S corporations, while owner-operators are usually treated as self-employed. There are additional licenses and fees that can cost between $200 and $500 a year, depending on the state. Vehicles: The capital costs of trucks can be a major cost for small firms. An average “big rig” costs about $100,000. Small firms and owner-operators will be need to calculate financing costs for this expensive but necessary equipment. Midsize Businesses Midsize businesses in the freight transportation industry conduct a wide range of activities. There are midsize trucking and delivery firms, smaller air cargo carriers that serve a particular region, tugboat operators, and regional freight railroads that serve a limited geographic area. Midsize firms often develop a niche or specialization that larger companies in the industry do not have or do not find profitable. These niches often include service to specialized areas or industries. By providing flexible, lower-cost service, they can hold their own against larger, better-funded competitors. Potential Annual Earnings Scale. Because midsize firms have a greater range of services and more employees than smaller companies, salaries vary widely. Truck drivers, for example, work on a pay scale similar to their small-firm and owneroperator counterparts, although they may enjoy better benefits. Flight crews on cargo aircraft earn rates based on experience and position. Pilots earn between $80 and $105 a hour, first officers between

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$54 and $72 per hour. Most air cargo companies also pay crews per diem if they have to spend time on layovers away from home. According to the Bureau of Labor Statistics, the median salary for all air crew is $107,000 per year. Cargo and freight agents working for the airlines earn on average $37,000 per year. For those working in the water transportation field, salaries average $100,000 or more per year for managers, $68,000 for skilled captains, and $35,000 a year for sailors. For midsize companies in the pipeline transportation business, most workers earn $45,000 to $60,000 per year on average. Clientele Interaction. As with smaller firms, clientele interaction is a crucial part of the business. Freight transportation is primarily a service, even if customers are other businesses rather than the general public. Face-to-face contact still is important, although most companies in this category communicate with existing clients and find new customers using modern marketing and communications tools, ranging from specialized Web tools for clients to social-networking media. Amenities, Atmosphere, and Physical Grounds. Truck drivers, sailors, air cargo crews, and railroad train crews may spend a significant amount of time away from home with all of the advantages and disadvantages of travel. Those working in the trucking industry will experience settings familiar to their counterparts in smaller and owner-operated firms. Inland water freight transport crews tend to work in smaller tugboats with a crew of a few fellow sailors and relatively close living quarters. Air cargo flight crews that experience regular layovers stay in hotels close to the airport. Those employees who work in management, warehousing, logistics, and maintenance do not experience frequent travel; they work in offices, warehouses, and shops appropriate to their tasks. Typical Number of Employees. Midsize companies in the freight transportation sector can vary widely in size depending on the type of transportation used. Trucking companies can be economically viable with a smaller number of drivers, whereas other forms of transportation require greater overhead and thus more people. On the lower end, companies of ten employees are not uncommon and larger companies in this segment can have one hundred employees or more. Traditional Geographic Locations. Midsize freight transportation companies can be found all

over the United States and Canada. They also are found worldwide. Some midsize companies in this sector are large enough to have multiple locations, including offices in major international transportation hubs such as Singapore or Rotterdam. Pros of Working for a Midsize Freight Transportation Company. In some ways, employees in midsize freight transportation companies have the best of both worlds. They tend to enjoy greater job security and better benefits than their counterparts in smaller firms without the bureaucratic overhead and the hierarchy. Midsize companies can provide a sense of belonging and camaraderie to employees while giving them better material rewards. As with all companies in this sector, there is a significant opportunity to travel, which is attractive to some people. Cons of Working for a Midsize Freight Transportation Company. Compared with larger firms, benefit packages in midsize firms can be less attractive (although this is not always the case). In addition, there may be less opportunity for individual advancement within a midsize company. Employees in midsize firms that operate within a particular market niche and interact with a limited number of clients may also find this limiting. Finally, as with any company in this business, workers who do not like to travel or who have families will be displeased with the frequency of time spent away from home. Costs Payroll and Benefits: Warehouse and support personnel average less than front-line crew in most of the industry. Experienced air cargo pilots earn an average of $105,000 per year in salary and benefits, while freight handlers in warehouses may earn a third of that. Supplies: The main recurring cost is diesel fuel. In late 2010, the average price was between $2.90 and $3.00 per gallon. An average tractor trailer will consume about $10,000 a year in diesel fuel. Tugboats and other inland cargo craft also consume a significant amount of diesel, although in terms of moving cargo, they are highly efficient in tons moved per gallon. DC-10 cargo aircraft, one of the mainstays of the industry, use more than 2,100 gallons of fuel per hour at cruising altitude. In late 2010, aviation fuel cost about $2.27 per gallon, so that hour of flight would expend some $4,700 in fuel alone. Most of these

Freight Transport Industry costs are borne by the company and passed on to consumers. Employees may be responsible for some specialized uniforms or work-related clothing, but this varies from company to company. External Services: Midsize companies may use a wide range of outside services, from business consulting to outsourcing particular business functions such as human resources or payroll. Utilities: Utility costs are incurred in warehouses, offices, and operations centers and include the usual light, heat, and water as well telephone and high-speed Internet. Taxes: Midsize companies are taxed at the standard corporate rates. Companies that handle foreign trade also may be subject to taxes and fees in other countries if they have operations overseas. Training Services: Many positions, especially air cargo crew; sailors, deckhands, and captains; and train crew need specialized training and certifications. These often need to be upgraded and renewed with refresher courses and recertification. These services cost, though employees may be reimbursed by their employers. Those entering training programs may be eligible for various scholarships and apprenticeship programs. Large Businesses Large businesses in the transportation industry are fewer in number but have many more employees and a global presence. Many, if not most, are multinational companies. Many freight transportation companies are headquartered overseas but have major operations in the United States and Canada, such as Hanjin and Maersk. Large businesses hold a dominant place in the world’s oceangoing freight business, in both bulk cargo and container shipping. Large companies also hold a critical position in pipeline transportation, air cargo, and rail freight transportation. Trucking companies, at least within North America, tend to be more diversified, but here again large companies are quite important. Potential Annual Earnings Scale. Most salaries in large companies are comparable with those in midsize companies because they often compete for the same pool of employees. Truck drivers, for example, work on a pay scale similar to their smallfirm and owner-operator counterparts, although

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they may enjoy more or better benefits. Flight crews on air cargo aircraft earn rates based on experience and their position. Pilots earn between $80 and $105 an hour, first officers between $54 and $72 per hour. Most air cargo companies also pay crews per diem if they have to spend time on layovers away from home. According to the Bureau of Labor Statistics, the median salary for all air crew is $107,000 per year. Cargo and freight agents working for the airlines earn on average $37,000 per year. For those working in the water transportation field, salaries range from an average of $100,000 or more per year for managers to $68,000 for skilled captains to around $35,000 a year for sailors. In the pipeline transportation industry, most workers earn between $45,000 and $60,000 per year on average. Clientele Interaction. Because of the global reach of large companies in the freight transportation industry, being able to work with an international clientele is critical. Foreign-language skills and sensitivity to other cultures are definite advantages in this business, especially for workers in management roles. Understanding foreign business models, legal systems, and formal and informal regulations also is important. Amenities, Atmosphere, and Physical Grounds. Large companies have operations across North America and around the world, so while many employees will be found in corporate office buildings, warehouses, ports, and terminals in the United States and Canada, others will be found in places such as Hong Kong, Singapore, Rotterdam, and Osaka. Because of this, atmosphere, amenities and physically surroundings can vary widely depending on the type of freight transportation involved, the company, and the location. As in small and midsize companies in this industry, workers who help operate cargo planes, trains, or ships will experience a great deal of travel. Crews on large oceangoing vessels, for example, will live and work on board and may experience new ports of call every month. Typical Number of Employees. Large companies can have hundreds or thousands of employees. Many international companies have employees at major shipping centers worldwide. Traditional Geographic Locations. Large freight transportation companies can be found all over the United States and Canada. They also are

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found worldwide. Most large companies in this sector have multiple locations around the world, especially in cities that are major seaports and road, rail, and air cargo hubs. High-profile multinational delivery companies such as FedEx have offices in many smaller communities as well. Pros of Working for a Large Freight Transportation Company. Large companies have a global reach, so there are opportunities to work overseas and meet colleagues from other cultures. Wages are competitive with midsize companies, though benefit packages may be better (each company is different). As with small and midsize firms

OCCUPATION

in this industry, those who like to travel and to work around and in trains, ships, trucks, and aircraft will enjoy the fast pace of working for a large international freight transportation company. Cons of Working for a Large Freight Transportation Company. The downside of working for a large company in this industry, as with many large companies, is that many individual employees can feel their individual needs are overlooked. Large firms tend to have more standardized and bureaucratic personnel policies. There is less flexibility and consequently a lower degree of employee loyalty toward large companies. As with

SPECIALTIES

Rail Transportation Workers Specialty

Responsibilities

Crane operators

Operate heavy equipment that lifts and transfers intermodal containers and other freight containers from one vehicle or location to another. They facilitate the loading and unloading of trains with self-contained, preloaded containers.

Freight loaders

Load and unload freight from individual train cars and containers, either by hand or using forklifts and similar devices.

Locomotive engineers

Drive electric, diesel-electric, and gas-turbine-electric locomotives; monitor the operation of the engine; oversee the function of the entire train; and maintain prescheduled timetables.

Passenger car conductors

Coordinate the activity of train crews transporting people on passenger trains, maintain timetable schedules, and comply with orders from the train dispatcher.

Passenger train brakers

Inspect equipment prior to, during, and after service; assist passengers entering and exiting the train; operate all climate control equipment in the nonlocomotive sections of the train; and assume responsibility for all nonlocomotive-related functions of trains.

Tower operators

Operate switching equipment from a control tower centrally located within a railroad yard. These operators are responsible for the proper sequencing of switching equipment according to a prearranged schedule.

Yard conductors

Supervise and coordinate all activity related to the movement of cars inside the railroad yard.

Yard tenders

Perform most of the physical work related to coupling and uncoupling railroad cars in a train yard.

Freight Transport Industry midsize and smaller firms, those who do not like to travel or who have families may find aspects of this industry difficult; large firms may expect to transfer employees to far-flung locations worldwide as needed. Costs Payroll and Benefits: Pay and benefits in large companies vary according to position and experience. Experienced ship captains and air cargo crew can earn $100,000 per year or more. Major corporate officers can earn several times that amount. Warehouse and support personnel average less than front-line crew in most of the industry, generally averaging $35,000 to $40,000. Supplies: Most of these costs are borne by the company and passed on to consumers. Employees may be responsible for some specialized uniforms or work-related clothing, but this varies from company to company. External Services: Large companies may use a wide range of outside services, from business consulting to outsourcing particular business functions. Utilities: Utility costs are incurred in warehouses, offices, and operations centers and include the usual light, heat, and water as well telephone and high-speed Internet. Taxes: Large companies are taxed at the standard corporate rates. Because nearly all handle foreign trade, they also are subject to taxes and fees in other countries. Training Services: Many positions—especially air cargo crews; sailors, deckhands, captains; and train crews—need specialized training and certifications. These often need to be periodically renewed with refresher courses and recertification. Costs for these programs may be reimbursed by employers. Those entering training programs may be eligible for various scholarships and apprenticeship programs.

ORGANIZATIONAL STRUCTURE AND JOB ROLES

notable and visible are those directly involved in transporting freight—the truck drivers, train crews, ship crews, and air cargo crews. However, there also are support and maintenance personnel, warehouse staff, management, sales, security, and logistics and operations, just to name a few. In smaller freight companies, one person may play several roles. In larger freight transportation companies, specialists are much more common. Companies that specialize in certain types of transportation may have materials specialists. A good example is the pipeline transport sector, which needs engineers and scientists who are able to measure and monitor the factors related to the flow rate or temperature of crude oil or natural gas. Research and development also may be important. Because new developments in the freight transportation industry are so often driven by new and emerging technologies, most large and midsize companies need a wide range of specialists, particularly in information technology. The following umbrella categories apply to the organizational structure of businesses in the freight transportation industry: ■ ■ ■ ■ ■

■ ■ ■

Business Management Customer Services Sales and Marketing Facilities and Security Technology, Research, Design, and Development Operations Distribution Human Resources

Business Management Business management employees in freight transportation companies direct the overall business and its daily and annual operations, develop and execute business plans and strategies, assess the effectiveness of operations, evaluate employee performance, and interact with the board of directors or owners. Occupations in the area of management include the following: ■

Employment opportunities within the freight transportation industry are varied but tend to fall primarily into several main categories. The most

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■ ■ ■

Top Executive Middle Manager Logistics and Operations Manager Regional Manager

754 ■ ■

Freight Transport Industry Accountant Auditor

Customer Services In the freight transportation industry, customer service personnel assist customers in preparing and shipping orders using phone and Internet communication. Webmasters maintain tools that allow customers to track orders, and specialists handle overseas shipping by interfacing with customers and customs and border officials in several countries in order to ensure that paperwork and documentation is in order so that shipments arrive as rapidly as possible. Occupations in this category include the following: ■ ■ ■

Customer Service Representative Customer Service Specialist Webmaster

Sales and Marketing Sales and marketing employees in the freight transportation industry interact with customers, maintain existing accounts, find new accounts, and ensure customer needs are being met. Some occupations in this area are salespeople who market the company’s services, employees who create marketing materials (both paper and electronic), and creative staff such as graphic designers who help develop brand identity and test market examples, and conduct surveys. Occupations in sales and marketing include the following: ■ ■ ■

Salesperson Marketing Specialist Art Director

Facilities and Security Facilities and security are important sectors of most midsize and large freight transportation companies. Facilities employees maintain warehouses and terminals. They provide maintenance and repair for many modes of transportation—trains, trucks, aircraft, boats, ships, and barges. In pipeline companies, they play vital roles in creating and maintaining all pumping and flow as well as monitoring pressure, flow, and temperature gauges/ transmitters for the pipeline at injection or deliv-

ery stations, pump stations (liquid pipelines) or compressor stations (gas pipelines), and block valve stations. Security is equally important. Transportation security workers maintain the physical safety of facilities, responding to and preventing accidents and preventing, stopping, and investigating cases of theft, vandalism, fraud, and terrorism. Many transportation companies maintain cyber security offices that prevent data theft and penetration by viruses and worms. This is particularly critical for pipeline transport companies, whose operations are heavily computer reliant and are particularly vulnerable to cyber attacks, especially against oil and natural gas pipelines. An emerging area of security in the freight transportation industry involves the screening and monitoring of shipping containers. Because of the threat of terrorist attacks, there is renewed importance in ensuring that the many thousands of containers moving about on the world’s oceans, rivers, railroads, and roads are safe and secure. Occupations in this area include the following: ■ ■ ■ ■

Security Guard Cyber Security Personnel Facility Worker Maintenance and Repair Worker

Technology, Research, Design, and Development Only larger companies in this industry engage in research and design, since the main function of freight transportation is to distribute existing products and materials rather than to come up with new ones. Many companies will contract or partner with outside engineering firms, think tanks, or universities when they need new technologies. Nevertheless, implementing new technologies, new software, and methods to streamline distribution are important. Technical and information technology (IT) staff play critical roles in maintaining and upgrading existing technology for internal and external customers. Operations Operations is the most critical sector of the freight transportation business. Operations personnel are directly responsible for moving freight to appropriate destinations. In air cargo companies, these employees include air crews, especially

Freight Transport Industry OCCUPATION

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PROFILE

Ship Loader Considerations

Qualifications

Description

Loads and unloads freight, moving it from transportation vehicles to storage areas.

Career clusters

Manufacturing; Marketing, Sales, and Service

Interests

Things

Working conditions

Work outside

Minimum education level

On-the-job training; high school diploma or GED

Physical exertion

Medium work; heavy work

Physical abilities

Unexceptional/basic fitness; may be required to lift heavy objects

Opportunities for experience

Military service

Licensure and certification

Usually not required

Employment outlook

Decline expected

Holland interest scores

RES; RIS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

pilots, flight engineers, and first and second officers who operate the aircraft in a safe and effective manner. Loadmasters oversee the proper stowage of air cargo loads along with handlers, who ensure the integrity of the contents of each flights. Ground crews service and assist air cargo craft on terminals, hangars, and runways. In the trucking industry, drivers are the critical component, but they are supported by warehouse and terminal personnel who load both freight and bulk cargo and complete bills of lading. Bulk cargo and container ships are sailed by a captain who is assisted by officers, radar and radio operators, deckhands, oilers, engineers, and cooks. The number and range of tasks will depend on the size and nature of the ship. Freight trains also demand a variety of operations personnel. There are switchmen or brakemen who work as on-the-ground traffic control. Conductors are responsible for the train, the freight, and the crew, and the locomotive engineer actually operates the locomotive. Pipeline companies employ a wide range of industrial and fluid engineers as well

as maintenance, monitoring, and control technicians; safety and environmental engineers; and repair and construction crews. Occupations in this category include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Pilot Flight Crew Loadmaster Ground Crew Truck Driver Warehouse Worker Ship Captain Sailor Train Conductor Switchman Locomotive Engineer Pipeline Engineer

Distribution Distribution jobs within freight transportation companies usually involve internal logistics. These

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Freight Transport Industry

employees are often responsible for bunkering of supplies, especially large quantities of fuel required for oceangoing vessels, air cargo craft, and trains. They oversee the acquisition of supplies for crews and vessels and ensure that appropriate supplies are in distributed to locations worldwide and are available as needed. Human Resources Human resources employees in the freight transportation industry perform many of the same functions as human resources In the United States, truck drivers account for 45 percent of all freight transportaemployees in other industries. tion industry employees. (©Chad Mcdermott/Dreamstime.com) They recruit and retain employees, maintain job descriptions, port American products. Likewise, other econoassist employees with benefits, manage payroll, mies are dependent on exporting finished goods. monitor compliance with workplace regulations, This means that the long-term prospects for freight handle employee complaints and grievances, and transportation are very good, especially in internamaintain employee personnel records. tional and container shipping. Companies such as Occupations in this category include the followFedEx that distribute business cargo in large quaning: tities every day around the world also appear posed ■ Human Resources Manager for steady growth. ■ Human Resources Generalist In the air cargo industry, according to the Bu■ Benefits Specialist reau of Labor Statistics (BLS), job opportunities ■ Administrative Assistant for pilots and flight engineers are expected to be best; opportunities will continue to exist for those pilots who choose to work for air cargo carriers because of the increase in global freight demand. INDUSTRY OUTLOOK Opportunities should be favorable for aircraft and avionics equipment mechanics and service techniOverview cians, reflecting the likelihood of fewer entrants This industry is on the rise because of the growth from the military and a large number of retireof globalization. Although the industry is highly senments. However, mechanics and technicians will sitive to economic fluctuations, and the world ecoface more competition for jobs with large airlines nomic situation has affected shippers and freight because the high wages and travel benefits that handlers across the board, the long-term prospects these jobs offer generally attract more qualified apfor freight cargo shipping look bright. plicants than there are openings. Applicants who The global economy and national economies have experience and who keep abreast of the latest worldwide have become highly dependent on systechnological advances should have the best optems of distributing goods, services, and informaportunities. Opportunities also are expected to be tion. Freight cargo is a critical component of these good for those seeking unskilled, entry-level posinetworks. Indeed, without freight transportation, tions, such as baggage handlers and aircraft cleanthe global economy as whole and most major iners, because turnover is high in these jobs. dustrialized economies would grind to a halt. In The BLS also foresees good prospects in the the United States, there is a continuing push to ex-

Freight Transport Industry

757

trucking industry: It notes that opportunities for Employment Advantages truck drivers are especially favorable because of Jobs in the freight transport industry often are high turnover linked to the lengthy periods away in high demand and provide many skilled, wellfrom home. Strict requirements for obtaining and paying positions. They demand a wide variety of keeping a commercial driver’s license also result skills. Travel is a frequent perk of the business, alin attrition. New restrictions on the hazardousthough schedules can be demanding. Ship and material license endorsement also should increase barge crews, train crews, and long-haul truckers opportunities for those able to pass the criminal frequently log tens of thousands of miles per year background checks now required. A 2005 study traveling across the country or around the world. commissioned by private industry showed that Ship’s officers in the transportation industry have there is a large projected shortfall in future overan especially exciting and demanding job, as they the-road heavy truckers in the next ten to twenty are charged with operating huge multimillionyears. It urged increased efforts to recruit new, dollar container ships or oil tankers with valuable younger drivers and to improve working condicargo through all types of weather, navigating evtions for existing and future drivers as a way to erything from the open ocean to canals and enhance recruitment efforts. Opportunities for crowded container ports. This is an ancient and diesel service technicians and mechanics also are honorable profession with traditions stretching expected to be favorable, especially for appliback hundreds of years. Transportation industry cants with formal postsecondary training. Growth jobs in security and logistics demand high-level in the truck transportation and warehousing incomputer and organizational skills. These posidustry should prompt an increase in office and administrative support employment. More PROJECTED EMPLOYMENT dispatchers, stock clerks, and FOR SELECTED OCCUPATIONS shipping, receiving, and traffic clerks will be needed to support Truck Transportation expanded logistical services across the country. OpportuniEmployment ties for those with information 2009 Projected 2018 Occupation technology skills should be excellent. 41,950 46,800 Bus and truck mechanics and Prospects appear equally diesel engine specialists good for the pipeline trans31,030 33,500 First-line supervisors/managers of portation industry, which is in transportation and materialconstant need of trained engimoving machine and vehicle neers. Although new crude oil operators pipelines are fewer, there is major growth in natural gas 103,570 105,700 Laborers and freight, stock, and pipelines in the United States material movers, hand and Canada as well as in Eu756,010 943,100 Truck drivers, heavy and tractorrope, where three or four matrailer jor lines are in the planning stages. In addition, as the de56,460 61,800 Truck drivers, light or delivery mand for natural gas increases services worldwide and the technology of liquefied natural gas (LNG) Source: U.S. Bureau of Labor Statistics, Industries at a Glance, becomes ever more cost-effecOccupational Employment Statistics and Employment Projections tive, there will be demand for Program. new pipelines to serve LNG plants.

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Freight Transport Industry

tions are charged with maintaining the safe and efficient movements of products worldwide and in countering threats that range from environmental hazards to terrorist threats to computer hackers. Large multinational companies often dominate this industry, providing employees with a degree of stability and security. At the same time, there is room for smaller businesses and even individual owner-operators, most notably in the trucking industry. Annual Earnings In 2005, the U.S. trucking industry earned $272 million, railroads $52 million, domestic water freight more than $6 million, oil pipelines more than $9 million, and gas pipelines $102 million. Projections are for these numbers to continue to increase. The freight transportation industry is strongly influenced by trends in the global economy. Shortterm prospects during an economic downturn are mixed. However, even with a slow-growth model for the world’s major economies, the freight transportation industry in set to grow over the long term, and large, midsize, and small companies will benefit from this trend. Container ship demand is expected to rise at least through 2012. The International Air Transport Association expects Asian cargo volume to surge 33 percent, but growth may slow in 2011. North American airlines are forecast to earn $3.5 billion in 2010 compared with the previously forecast $1.9 billion because rising cargo and passenger traffic enable carriers to post bigger increases in yields than in other regions. Freight transportation is a leading indicator in global economic trends, and while the outlook for the world’s economy remains uncertain, the importance of freight transportation is such that steady long-term growth will win out over any temporary declines.

RELATED RESOURCES FOR FURTHER RESEARCH American Trucking Associations 950 N Glebe Rd., Suite 210 Arlington, VA 22203-4181 Tel: (703) 838-1700 http://www.truckline.com

American Waterways Operators 801 N Quincy St., Suite 200 Arlington, VA 22203 Tel: (703) 841-9300 Fax: (703) 841-0389 http://www.americanwaterways.org Association of American Railroads 425 3d St. SW, Suite 1000 Washington, DC 20024 Tel.: (202) 639-2100 Fax: (202) 639-2558 http://www.aar.org International Freight Association P.O. Box 655 Lane Cove, NSW 2066 Australia Tel: 61-2-9420-9817 Fax: 61-2-9247-7419 http://www.ifa-online.com National Motor Freight Traffic Association 1001 N Fairfax St., Suite 600 Alexandria, VA 22314 Tel: (703) 838-1810 Fax: (703) 683-6296 http://www.nmfta.org U.S. Department of Transportation 1200 New Jersey Ave. SE Washington, DC 20590 Tel.: (202) 366-4000 http://www.dot.gov U.S. Merchant Marine Academy 300 Steamboat Rd. Kings Point, NY 11024 Tel: (516) 773-5000 http://www.usmma.edu

ABOUT

THE

AUTHOR

John Radzilowski is an assistant professor of history and geography at the University of Alaska Southeast. He received his Ph.D. in history in 1999 from Arizona State University. He is the author or coauthor of thirteen books and numerous articles for academic and popular readers, with work ap-

Freight Transport Industry pearing in such publications as American Heritage of Invention and Technology, Minnesota History, and The Public Historian. His main areas of research specialization include immigration and ethnicity, Polish and Polish American history, and the development of the American Midwest. He writes and teaches on the impact of transportation and infrastructure on urban and rural communities, with a particular interest in how railroads helped to transform and colonize the North American Great Plains.

FURTHER

READING

Donovan, Arthur, and Joseph Bonney. The Box That Changed the World: Fifty Years of Container Shipping—An Illustrated History. East Windsor, N.J.: Commonwealth Business Media, 2006. Global Insight. The U.S. Truck Driver Shortage: Analysis and Forecasts. Study prepared for the American Trucking Associations, May 2005. http://www.cdlschool.com/_pdf/ ATADriverShortageStudy05.pdf Heitzman, William Ray. Opportunities in Marine Science and Maritime Careers. New York: McGraw-Hill, 2006. Plunkett, Jack W. Plunkett’s Transportation and Logistics Industry Almanac, 2008. Houston, Tex.: Plunkett Research, 2008.

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Research and Innovative Technologies Administration, Bureau of Transportation Statistics. National Transportation Statistics (2010). http://www.bts.gov/publications/ national_transportation_statistics/. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Transportation and Material Moving Occupations.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/oco1011.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. _______. U.S. International Trade in Goods and Services. July, 2010. http://www.census.gov/ foreign-trade/data/index.html. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Labor. “High Growth Industry Profile: Transportation.” http:// www.doleta.gov/BRG/Indprof/ Transportation_profile.cfm.

©Ken Cole/Dreamstime.com

Funerary Industry

INDUSTRY

SNAPSHOT

General Industry: Personal Services Career Cluster: Human Services Subcategory Industries: Animal Cemeteries; Cemeteries; Crematories; Embalming Services; Funeral Homes; Funeral Services; Memorial Gardens; Mortuaries; Undertaker Services Related Industries: Landscaping Services; Personal Services; Public Health Services; Waste Management Industry Annual Domestic Revenues: $14 billion USD (U.S. Department of Labor, 2009); $20.7 billion (U.S. Funeral Market, 2009) NAICS Number: 8122

INDUSTRY

pets. The ideal and most profitable constellation of services includes funeral services, cremation services, pet services, mausoleums, refrigeration, and cemetery services.

History of the Industry Ritual funerary practices date back at least as far as the Stone Age. The area around Kassel, Germany, contains evidence of gravesites created during the late Stone Age, between about 3500 and 1600 b.c.e. The graves themselves consist of slabs of sandstone. A large hole in the center of one of the end slabs must have taken some effort to create with simple tools. In folk lore, these holes are known as “soul-holes” and are believed to be openings left for the nonmortal parts of the dead. Ancient Egyptian culture is notable for its elaborate ideas of death. Huge pyramids and elaborate burial sites with thoroughly embalmed bodies, burial vaults, burial chambers, and sealed rooms characterize that culture. Whether these elaborate places for the dead were built by slaves or by honored experts with their own special tombs near the noble dead is a matter of conjecture and scholarly

DEFINITION

Summary The funerary industry provides places and services to facilitate the final disposition of the remains of and the dignified mourning of the deceased. These services vary widely among cultures. In the United States, funerary services are most commonly provided by local funeral homes. While these services are commonly thought of as applying to humans, a growing portion of the industry deals with the disposal and mourning of deceased 760

Funerary Industry debate. Experimentation with embalming came about in the United States during the Civil War, when remains of soldiers were shipped home and needed to be preserved. Some cultures have eaten their dead. The Anasazi, forebears of the pueblo dwellers, may have eaten all or part of their dead; the Agoris, contemporary followers of Shiva, still eat their dead. Zoroastrianism required disposal of the dead by feeding sacred birds atop tall towers. Some Native Americans buried their dead in mounds; others left them to dry on wooden structures. The cultural common element in most practices seems to be a desire to respect and honor the dead in some fashion, whether in anticipation of a continued existence in an afterlife or in anticipation of finality and a return to the environment. An excellent overview of sepulchral culture is available also in Kassel, Germany, where coffins from Ghana are sold in the shape of cars, fish, and other lively and colorful objects that may have had strong meaning to the deceased. Similar products

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have been sold as Crazy Coffins by Vic Fearn & Company in England since the 1860’s. In a cemetery in Daytona Beach, Florida, one person is buried in an automobile that he did not want to part with in death. Europe’s sepulchral culture began in the seventeenth century for those who could afford coffins. Until well into the nineteenth century, poor people would conduct funeral services using coffins fitted with gates in the bottom. The gates would open to let each body fall into the grave beneath it, and the coffin would be reused. Tin or lead were used by more affluent families to contain their dead. Coffins constructed from these metals cost about fifty times as much as simple pine boxes. Some religions, notably Islam, call for bodies of the deceased to be interred without vaults or coffins. In such cases, reusable coffins may serve to transport bodies between places of worship and funeral homes. Some religious groups bar funeral directors from altering deceased bodies at all. As recently as the beginning of the twentieth

American cemeteries are often vast expanses of lawn and subdued markers. (©Ken Cole/Dreamstime.com)

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Funerary Industry

century, the deceased were often washed, dressed, and placed in coffins by relatives at home. Caskets might remain in the home for viewing of the deceased without embalming or other preparatory steps. The average dwelling was also more likely to be near a cemetery than they are today. Even today, however, some rural cemeteries are reminiscent of a time when the living and the dead existed in closer proximity to each other. The growth of the funerary industry is likely to have been a direct result of increasing distance in modern culture from the end-of-life experience, representing a kind of collective denial, although many people visit cemeteries to find solace in contact with the deceased and interred. Some modern markers make such contact easier by displaying pictures of the deceased. Use of the term “churchyard” for cemeteries indicates that communal burial sites were once close to the world of the living. Situated near, around, and frequently (for particularly respected persons) inside churches, these burial places affirmed community. Gravesites in Denmark and northern Germany are carefully marked with the deceaseds’ professions, defining their role in the community when they were alive. Population densities push some cultures to reuse graves. Typically in such cultures, a grave remains for as long as there are relatives willing to rent the site. In the United States, where churches may fail fiscally, churchyard burial is a bit precarious because the fate of churchyards becomes uncertain if their churches fail. Privately owned cemeteries provide greater assurances of burial plots lasting for eternity because their grounds’ upkeep must be financially insured by trust funds, the nature and solvency of which are governed by state regulations. A closer proximity to death is also typical for the culture of Mexico. El Dia de los Muertes, or the Day of the Dead, is a an event celebrated in Mexico with pan de muerto (death bread) and various customs, including polishing bones and dressing up as skeletal figures. The celebration may move the living toward a more accepting stance toward their own demise. Having life take prominence over the immediacy of death is another value as central to Irish wakes as to the funerary practices of many continental European cultures. Such practices are often accompanied by eating, drinking, and visiting

members of the bereaved family. Celebrating the life of the deceased is often the theme of formal meetings of friends and relatives. Light and often humorous remarks, reminiscences, and occasional tearful recollections characterize such celebrations. Church services may vary from serious to light-hearted. American culture appears to be averse to direct contact with death. Cemeteries are typically located relatively far away from residential and commercial areas and, except for some holidays, appear to be generally deserted. While, particularly for rural Europeans, cemeteries may be places for meeting and chatting, American cemeteries are often vast expanses of lawn and subdued markers (although at least one cemetery in Hollywood, California, hosts outdoor film screenings and other events). For practical reasons, cemetery directors prefer to hire groundskeepers to mow their properties rather than relying on relatives of the deceased to maintain each individual plot. Cemetery licensing requires that new cemeteries have at least thirty acres available for expansion. Some cemeteries, such as St. Louis Cemetery Number 1 in New Orleans, Louisiana, contain mausoleums and surface vaults that vary in structure and appearance. Religious beliefs and traditions are largely responsible for these variations. Families may own cemetery mausoleums, which may be worth up to $700,000. Such structures may contain up to a dozen bodies in sliding drawers that hold one or two bodies each. In Europe, nobles are the most likely to own such mausoleums, while in the United States, wealthy families are the most common owners. A burial plot may cost $2,400. In American cemeteries, plots may be owned indefinitely; in Europe, they are usually rented for about twenty-five years. When a rental term expires, a family may renew its plot rental or abandon its plot, in which case it is leveled and made available for rental by another family. In the Far East, some religions and traditions employ open funeral pyres. Some Eastern religious traditions teach that the heavenly sphere is coextensive with the world of the living, and pyres may be symbolic of a merging of the dead with that ubiquitous heavenly sphere. Scattering of ashes as ritual goes back thousands of years in Far Eastern cultures. Large pictorial representations of the

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Funeral homes tend to be family businesses and rarely hire outsiders, except ad hoc, temporary workers. (©Dreamstime.com)

dead may remain in the family home for meditative or even communicative purposes. The Industry Today The modern American funerary industry relies heavily on Christian traditions; statuary in cemeteries, for example, often depicts angelic figures or good shepherds. As American culture becomes increasingly diverse, however, its funerary traditions are becoming equally diverse. Muslims must bury their dead within twenty-four hours of death; however, many jurisdictions require a longer period before interment to ensure that cause of death is properly determined. Florida, for example, requires forty-eight hours before burial to allow time for coroners’ reports to be issued. Laws in some jurisdictions also place restrictions upon the locations and manner in which ashes may be dispersed after cremation. Hindus and some other Far Eastern cultures require open-air cremation, which also clashes with common American laws. Eating of the dead, as practiced by Agoris, would be unthinkable by contemporary Western cultural

standards. Some of these limits are set by religious and cultural traditions and habits, although American culture also pays tribute to some levels of diversity. Funeral services, for example, may be practiced where women’s presence is not permitted or where no mortician may touch the body. American funeral directors are becoming increasingly sensitive to cultural diversity but may also recognize some limits to cultural tolerance. Similar culture clashes characterize the funerary industry in other countries. China, for example, is slowly losing the strong taboos that Chinese people tend to associate with the industry. Traditionally, the subject of funerals was not to be talked about, and funeral work was among the lowest-paid and least socially acceptable types of work in China, performed by some of its least educated citizens. Today, however, attitudes are changing. Families attempt to secure low prices for funeral servcies, and they seek bargains. Funeral homes tend to be family businesses and rarely hire outsiders, except ad hoc, temporary workers. Peripheral industries, such as floral industries, grave contrac-

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About 1.8 million caskets are sold each year in the United States. (©Laurin Rinder/Dreamstime.com)

tors, and providers of funeral accessories, are also developing. Some of these services may be offered as part of the diversification of funeral homes. The relatively high cost of burial has motivated an increase in the use of the cheaper cremation. The percentage of funerals employing cremation increased from 3.6 percent in 1960 to 41.8 percent in 2007. In that year, cremations accounted for 25.2 percent of funerals in New York and 36.8 percent of those in Connecticut. In many other parts of the United States, the rate of cremation is greater than 50 percent. Funeral directors may find that this trend decreases the profitability of the funerary business. To maintain profitability, crematories may require clients to purchase shrouds. Funeral homes seeking to minimize losses may diversify to include both crematories and cemeteries, as well as a variety of related businesses such as flower sales, jewelry sales, and catering. Flowers sold by funeral homes are most commonly artificial, but they are generally removed after about a month, necessitating new purchases. Casket sales stand at about 1.8

million each year in the United States. Caskets may be purchased from retailers not affiliated with funeral homes. In most jurisdictions, funeral homes are required by law to accommodate families that buy caskets elsewhere. Special financial support from the state or federal government is provided to help pay for the funerals of veterans and paupers. Veterans are entitled to plots in national cemeteries, when they are available; however, an increasing number of relatives are requesting disinterment from national cemeteries for reburial nearer the family. Paupers’ funerals are no-frills arrangements, paid for by local government or religious agencies. Funeral directors set prices in conference with the family of the deceased. While directors may display great sensitivity to the needs of the family, such pricing arrangements also allow for abuse if a director attempts to sell more services, or more expensive services, than are necessary. On the other hand, funerary services may not vary prices. State, county, or federal agencies conduct reviews of fu-

Funerary Industry neral homes to find whether stated pricing is being adhered to from one service to the next. This institution of governmental oversight has remedied some egregious abuses that occurred in the early twentieth century, when funeral homes made up prices as they went along, selling the same casket to different families at different prices. A new orientation toward environmentally friendly burials may be found in the Neptune Society, which offers cremation and ecologically sound disposal of the ashes, including a submarine cemetery. Neptune Societies abound in Florida, in Texas along the Gulf Coast, and along the Pacific coast. The corporate office of the Neptune Society is in Plantation, Florida, near Ft. Lauderdale. The British Natural Death Centre advocates for alternate methods of cremation, specifically open pyres rather than crematories. Some businesses provide services to smaller funeral homes, such as organizing transfers of remains, as well as embalming, shipping, cremating, interring, disinterring, and refrigerating them. These businesses support small establishments that cannot provide a full range of services themselves, especially services not in frequent demand. Ancillary businesses may also consist of crematories, cemeteries, or chapels. Most businesses claim no particular religious orientation, though some make a point of listing their orientation. Funerary businesses are regulated by the Federal Trade Commission, the Occupational Safety and Health Administration (OSHA), and various state and local entities. All facilities are subject to inspections and to review of their contracts, as well as comparisons among the prices listed on pricing schedules, contracts, and invoices to ensure that they all match. Shipping services are particularly in demand. These involve a variety of services, rules, and regulations. Interpreters offer their services for country-to-country transfers. The country from which remains are shipped and the country receiving the remains may each have a variety of rules and regulations governing such shipping. In some cases, specific airlines may impose rules of their own. For example, Germany does not require any particular shroud for human remains, but Lufthansa German Airlines requires a wooden box. An international funeral service exists to handle such issues. Some services focus on issues that typically arise during

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transfers between two adjacent countries, such as Mexico and the United States. For these two countries, services may also include overland transportation. Shipping requires consular approvals and inspections, flight and document arrangements, and specialized shipping containers. The U.S. State Department publishes specifications for shipping the remains of U.S. citizens abroad. Consular approval is required for shipping to other countries. States have different rules and regulations regarding the issuance of death certificates. Specialized services exist to help scatter ashes at sea or in the mountains. Some are associated with funeral homes; some act on a freelance basis. All must abide by the laws that govern the scattering of ashes within their jurisdictions. For example, one may travel with an urn and ashes, but one may not carry these as part of carry-on luggage on airplanes.

INDUSTRY MARKET SEGMENTS The funerary industry tends to present itself as comprising small, family-owned businesses, but its businesses range in size from such small operations up to large corporations that operate multiple venues. The largest of these corporations is Service Corporation International, headquartered in Houston, Texas. Small Businesses The industry tends to present itself as small with one establishment in a city, town, or village, depending on the size of the population of the service area. Many funeral homes or cremation centers, thus, are small and local. Some may be without competitors in small towns and villages. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the mean annual income of all workers in the funerary industry in 2009 was $35,700; the median hourly wage was $13.25 and the mean hourly wage was $17.16. Funeral directors earned an average of $60,230 in that year. Workers such as greeters, drivers, and caterers in small establishments are likely to be hired on an ad hoc basis at minimum wage. Clientele Interaction. Although it is often the assets of the deceased’s estates that pay for funerary services, the clientele of a funeral home are best

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thought of as the family and friends of the deceased. Funeral homes seek to meet the grieving needs of those who survive deceased persons within the context of their religious and cultural practices. Great seriousness and dignified comportment are essential to the behavior of employees, from directors to greeters, information providers, phone answerers, drivers, cooks, and servers. Cultivating the trust of clients increases the likelihood of repeat business. Funeral directors may also need to interact with local banks and other financial entities when funerals are paid for by longterm certificates of deposit or other financial accounts of the deceased. In the case of paupers’ funerals, they may be competing with relatives of the diseased to access those accounts. While special interactions are required for dealing with veterans or military personnel, a small local funeral home or cremation service is less likely to encounter such special cases. Amenities, Atmosphere, and Physical Grounds. Small funeral homes attempt to cultivate a sense of dignity reflected in the curb appeal of their facilities, although those in small towns may attempt to blend into the ambience of their towns. Interiors are generaly decorated in a tasteful, understated fashion in keeping with the somber mood displayed by employees. Physical grounds of both cemeteries and funeral homes must generally be well maintained and ordered; signs of decay or disrepair may harm the impression of potential clients and decrease business. The work atmosphere at funerary businesses is affected not only by the need to maintain a somber mood for the sake of the bereaved but also by the fact that workers interact with and manipulate dead bodies. This job function almost certainly colors the experience of all funeral workers, but its effects may be radically different for different people. Typical Number of Employees. Small funeral homes are typically staffed by a single family. They are often owned by parents who employ two or three offspring in the family business. Crematories may employ only an administrative assistant and a cremation operator, since such facilities do not typically provide religious services. In addition, these businesses are likely to hire groundskeepers, drivers, and other support staff on a temporary basis, usually at minimum wage. Traditional Geographic Locations. Funeral

homes are located close to the communities they serve. Because all communities require their services, they exist within all communities. Pros of Working for a Small Funerary Business. Family ownership often sets the mood of small funerary businesses. When clients are not around, the atmosphere at such establishments is likely to be a bit more relaxed and informal than that of a large corporation. The mode of decision making and problem solving is likely to be one of mutual adjustment among collaborators. Cons of Working for a Small Funerary Business. A small, family-owned business is also likely to be patriarchal in orientation. Grievance procedures, consultations with one another, and collective reflections about the work environment are less likely to be fully evolved. The work environment is much more dependent on goodwill and congenial personalities than at larger firms. Additional workers are likely to be hired on an ad hoc basis, as independent subcontractors, and to be paid minimum wage without benefits. These workers also have little say in the daily operation of the business. Costs Payroll and Benefits: In small family businesses, all members of the family are likely to have some role in the business and to share in profits as family income. Temporary additional workers may be hired on an as-needed basis, usually at hourly wages. Supplies: Funeral homes require embalming chemicals and makeup; protective clothing, body bags, and other equipment for handling and transporting the dead; automobiles and fuel; gardening supplies; and office supplies and equipment. They may also require either premade coffins, urns, and headstones or the materials and tools necessary to construct them. External Services: Funeral homes may contract casket, urn, and headstone design and engraving services, as well as maintenance and equipment repair, groundskeeping, landscaping, cleaning, or security services as necessary. They may also contract printing, accounting, automobile customization, and private autopsy services. Utilities: Funeral homes generally pay for electricity, gas or oil, water, sewage, trash collection, telephone, and Internet access.

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Clientele Interaction. Although it is often the assets of the deceased’s estates that pay for funerary services, the clientele of a funeral home are best thought of as the family and friends of the deceased. Funeral homes seek to meet the grieving needs of those who survive deceased persons within the context of their religious and cultural practices. Great seriousness and dignified comportment are essential to the behavior of employees, from directors to greeters, informaPet cemeteries are increasingly common. (©Jason Rothe/iStockphoto.com) tion providers, phone answerers, drivers, cooks, and servers. Cultivating the trust of cliTaxes: Funeral homes and cremation services pay ents increases the likelihood of repeat business. Fulocal, state, and federal corporate and property neral directors may also need to interact with local taxes, but family businesses may not pay these banks and other financial entities when funerals taxes themselves. Rather, the owners and their are paid for by long-term certificates of deposit or family members may claim and pay this income other financial accounts of the deceased. In the on their personal returns, in which case they case of paupers’ funerals, they may be competing must also pay self-employment taxes. with relatives of the diseased to access those acLicenses: An embalmer’s license may be issued by counts. Midsize businesses may be better prepared the appropriate state and may be reexamined than are small businesses for the particular reand reissued periodically. Funerary businesses quirements of veterans’ and military personnel’s must keep their licenses current or face addifunerals. Some may even specialize in such sertional fees and penalties. vices. Midsize businesses’ funeral directors are often Midsize Businesses actively involved in their communities. Particularly Midsize funerary businesses generally operate in geographic locations where the population has a multiple facilities, provide diversified services, and high percentage of retired and elderly persons, fumaintain their own cemeteries. These businesses neral directors may formally present information are able to enjoy some economies of scale, since about preparing for end-of-life decisions. Vetertheir different facilities can share resources such as ans’ benefits, forms of services, disposal of ashes, vehicles and laborers. They may also provide pet forms of interment, death certificates, templates cremation or burial services. for newspaper publication, and living wills may all Potential Annual Earnings Scale. According be subjects about which a funeral director can ofto the BLS, funeral directors earned an average of fer useful guidance and information. While some $60,230 in 2009, while general managers of funerelderly people may react with discomfort to the ary businesses earned an average of $95,040. Empresence of a funeral director, conducting inforbalmers earned an average of $41,150, and funeral mational sessions may help directors build relaattendants earned an average of $23,890. A story tionships with their communities that can greatly published in 2009 in the Vancouver Sun indicated benefit both those communities and the directors’ that the average salary of all Canadian industry businesses. Future clients may appreciate a funeral workers was about $40,000, or roughly $38,500 director’s aid in planning details of their services USD. ahead of time. It is even possible to arrange and pay

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for one’s funeral in advance. Such contractual agreements may be more reliable when made with midsize businesses than with small businesses. Amenities, Atmosphere, and Physical Grounds. Midsize funerary businesses attempt to cultivate a sense of dignity reflected in the curb appeal of their facilities, as well as elaborate landscaping and well-kept surroundings. Interiors are generaly decorated in a tasteful, understated fashion in keeping with the somber mood displayed by employees. The work atmosphere at funerary businesses is affected not only by the need to maintain a somber mood for the sake of the bereaved but also by the fact that workers interact with and manipulate dead bodies. This job function almost certainly colors the experience of all funeral workers, but its effects may be radically different for different people.

Elaborately luxurious hearses and limousines, as well as antique cars and vehicles, are likely to be part of the inventory of a midsize funeral home. (©Andy Heyward/Dreamstime.com)

Contemporary audiovisual technology is becoming incorporated into many funeral services, so most funeral homes must include such equipment and expertise. Elaborately luxurious hearses and limousines, as well as antique cars and vehicles, are also likely to be part of the inventory of a midsize business. Some funeral homes, for example, offer carefully maintained antique military vehicles to honor veterans or motorcycle-drawn hearses for motorcycle enthusiasts. Typical Number of Employees. Midsize funerary businesses may employ twenty or more workers. They generally employ larger and more specialized full-time staffs at each funeral home than are employed at single homes by small businesses. For example, many employ full-time groundskeepers, drivers, and other support staff, usually as salaried employees. These establishments also employ several full-time office staff, possibly including audiovisual experts. Some employ full-time chaplains as well. Traditional Geographic Locations. Funeral homes are located close to the communities they serve. Because all communities require their services, they exist within all communities. Midsize businesses may operate funeral homes almost anywhere, although their branches must be located near one another if they are to share resources effectively, so they are more likely to be found in regions with large enough populations to support multiple branches. Pros of Working for a Midsize Funerary Business. Diversified midsize funerary businesses are more likely to achieve financial stability and to provide job security than are small businesses. Midsize businesses are often still small enough that a collaborative, family atmosphere may characterize the relationships among employees. Because these businesses are often somewhat decentralized and lack headquarters, each branch may be afforded freedom to make some business decisions for itself. Cons of Working for a Midsize Funerary Business. The work environment of a midsize business is still dependent on goodwill and congenial personalities. While such businesses are decentralized, they do have supervisory staff who monitor and instruct other employees, introducing a measure of formality and bureaucracy into the workplace.

Funerary Industry Costs Payroll and Benefits: Midsize funerary businesses may pay information providers, greeters, drivers, chaplains, and similar personnel under contract, while others receive salaries. Larger companies are more likely to provide benefits. Supplies: Funeral homes require embalming chemicals and makeup; protective clothing, body bags, and other equipment for handling and transporting the dead, including refrigeration facilities; automobiles and fuel; gardening supplies; office supplies and equipment; and audiovisual equipment. They may also require either premade coffins, urns, and headstones or the materials and tools necessary to construct them. External Services: Funeral homes may contract casket, urn, and headstone design and engraving services, as well as maintenance and equipment repair, groundskeeping, landscaping, cleaning, or security services as necessary. They may also contract printing, accounting, advertising, technical support, automobile customization, and private autopsy services. Utilities: Funeral homes need standard utilities such as electricity, gas, water, sewage, telephone, and Internet access. Crematories and refrigeration units may increase the costs of electricity or gas by up to $50,000 per year. Taxes: Funerary businesses must pay local, state, and federal corporate and property taxes, as well as sales taxes and payroll taxes as appropriate. Licenses: An embalmer’s license may be issued by the appropriate state and may be reexamined and reissued periodically. Funerary businesses must keep their licenses current or face additional fees and penalties. Large Businesses In North America, only one large funerary business exists: Service Corporation International (SCI). This chain owns funeral homes all across the United States and Canada. Subchains within the larger chain include Stanetsky, Dignity Memorial, National Cremation, Advantage Funeral & Cremation Services, Funeraria Del Angel, Making Everlasting Memories, and Memorial Plan. Like midsize businesses, each of these subchains is able to distribute resources as necessary among its branches, and SCI is able to distribute resources among all of its various businesses as necessary.

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This ability is somewhat restricted, however, by the variation in license requirements among the various states. For example, a funeral director licensed in one state may be unable to work in any other states without obtaining additional licenses. Potential Annual Earnings Scale. According to the BLS, funeral directors earned an average of $60,230 in 2009, while general managers of funerary businesses earned an average of $95,040. Embalmers earned an average of $41,150, and funeral attendants earned an average of $23,890. The top 10 percent of funeral attendants earned more than $33,350, and the top 10 percent of funeral directors earned more than $94,050. A story published in 2009 in the Vancouver Sun indicated that the average salary of all Canadian industry workers was about $40,000, or roughly $38,500 USD. Clientele Interaction. Although it is often the assets of the deceased’s estates that pay for funerary services, the clientele of a funeral home are best thought of as the family and friends of the deceased. Funeral homes seek to meet the grieving needs of those who survive deceased persons within the context of their religious and cultural practices. Great seriousness and dignified comportment are essential to the behavior of employees, from directors to greeters, information providers, phone answerers, drivers, cooks, and servers. The local face of SCI, or any corporation, is the manager and staff of a particular branch. Cultivating the trust of clients increases the likelihood of repeat business for that branch. SCI is in a position to provide all special interactions for dealing with veterans or military. SCI’s funeral directors may be actively involved in their communities, at their own discretion. Particularly in geographic locations where the population has a high percentage of retired and elderly persons, funeral directors may formally present information about preparing for end-of-life decisions. Veterans’ benefits, forms of services, disposal of ashes, forms of interment, death certificates, templates for newspaper publication, and living wills may all be subjects about which a funeral director can offer useful guidance and information. While some elderly people may react with discomfort to the presence of a funeral director, conducting informational sessions may help directors build relationships with their communities that can greatly benefit both those communities and

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the directors’ businesses. Future clients may appreciate a funeral director’s aid in planning details of their services ahead of time. It is even possible to arrange and pay for one’s funeral in advance. Such contractual agreements may be more reliable when made with a large corporation such as SCI than with a smaller business. Amenities, Atmosphere, and Physical Grounds. The dignity of SCI’s establishments usually is reflected in their curb appeal. Elaborate landscaping and well-kept surroundings are typical. The work atmosphere at funerary businesses is affected not only by the need to maintain a somber mood for the sake of the bereaved but also by the fact that workers interact with and manipulate dead bodies. This job function almost certainly colors the experience of all funeral workers, but its effects may be radically different for different people. Contemporary audiovisual technology is likely to be featured at all SCI franchises. SCI makes its own travel arrangements for the transfer of bodies. Typical Number of Employees. SCI has more than thirteen thousand employees. Traditional Geographic Locations. SCI operates more than fifteen hundred funeral homes and four hundred cemeteries in forty-three U.S. states, eight Canadian provinces, and Puerto Rico. Pros of Working for a Large Funerary Business. The greatest possible diversification in the funerary business and the greatest possible financial solvency is likely to provide employees of SCI with job security. Cons of Working for a Large Funerary Business. SCI has been a subject of several well-publicized controversies involving alleged body switching, leaky caskets, political-influence peddling, and storing decomposing bodies—including those of veterans—in an unrefrigerated garage, among other irregularities. The fact that these various incidents took place in different states at different facilities with different names may highlight the difficulty for a large corporation of policing all of its various branches. It is possible for any branch of SCI to be tarnished by these incidents, even if it has no direct involvement in them. SCI is a large corporation with a large corporate bureaucracy. Employees, even those who never travel to corporate headquarters or interact faceto-face with corporate heads, may feel less engaged in their work than they would in a smaller business.

Canadian employees of SCI have gone on strike, perhaps indicating a problem with working conditions in at least some locations. Costs Payroll and Benefits: SCI’s pay rates may vary significantly by location, but the company tends to pay annual salaries and to provide benefits. Supplies: SCI funeral homes and facilities require embalming chemicals and makeup; protective clothing, body bags, and other equipment for handling and transporting the dead, including refrigeration facilities; automobiles and fuel; gardening supplies; office supplies and equipment; audiovisual equipment; and materials and tools necessary to construct caskets, urns, and headstones. External Services: SCI is a largely self-sufficient company, but individual branches may sometimes contract security, groundskeeping, or other ancillary services. Utilities: Funeral homes generally pay for electricity, gas or oil, water, sewage, trash collection, telephone, and Internet access. Taxes: SCI pays local, state, and federal corporate and property taxes, in addition to other standard taxes, including sales taxes on sales and services. Licenses: SCI employees must secure the necessary embalmers’ and funeral directors’ licenses within each jurisdiction. Such licenses are usually issued by states and may be reexamined and reissued periodically. Funerary businesses must keep their licenses current or face additional fees and penalties.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The staff of most funeral homes is small. Many bill themselves as family businesses. While some may be part of a large corporation such as SCI, the emphasis is always on the family orientation of the business, since the service itself is geared to families. Funeral directors may pride themselves on having inherited the business from parents or other family members and continuing in their families’ traditions. In such small businesses, each

Funerary Industry owner and employee is likely to fulfill several different job roles. As in other industries, larger businesses are more likely to be compartmentalized and to assign a single job role to each worker. The following umbrella categories apply to the organizational structure of businesses in the funerary industry: ■ ■ ■ ■ ■ ■

Business Management Customer Service Sales and Marketing Facilities and Security Operations Human Resources and Administrative Support

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Small businesses generally have only one manager each, while larger businesses may have several. Managers are typically responsible for all activities associated with operations, customers, staff, facilities, and financials in a particular location. The primary responsibilities of general managers include daily management of business and finances, tracking of sales and targets, marketing and program development, selection and training of staff, oversight of staff, and community engagement. Business management occupations may include the following: ■ ■ ■

Business Management Business managers oversee the operation of a single funeral home or a chain of such homes.

OCCUPATION

■ ■ ■

Owner President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) General Manager General Counsel

PROFILE

Funeral Director Considerations

Qualifications

Description

Arranges and directs all services associated with a funeral, including body transport, arranging service details, and transporting mourners.

Career cluster

Human Services

Interests

Data; people; things

Working conditions

Work both inside and outside

Minimum education level

On-the-job training; junior/technical/community college; apprenticeship; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Customer Service Service is the core activity of the funerary business, whose focus is the satisfaction of mourners. Virtually all positions in the funerary industry focus on service in one way or another. The guiding principle of a funeral home is providing service to mourners in a style that must adapt to the mourners’ social, ethnic, and religious backgrounds. Funeral directors oversee all customer service and funeral arrangements. They plan all details and handle all logistics of each service in consultation with their clients. Often, they not only provide services themselves but also act as an interface with any other service providers, such as florists or engravers, whom the clients wish to engage. They must be aware of all common cultural and religious traditions in their area, as significant differences exist among, say, Hispanic funerals, Italian funerals, and Irish funerals. Funeral homes may offer food and drink on premises to accommodate mourners. They generally include kitchen areas for food preparation and adjacent sitting areas for eating. While funeral directors may have their own religious beliefs, they must cater to the customs of each set of mourners unless they are committed to serving a specific religion. Customer service occupations may include the following: ■ ■ ■ ■ ■

Funeral Arranger Funeral Director Funeral Attendant Chaplain Grief Counselor

Sales and Marketing Sales and marketing operate slightly unusually in the funerary industry, as a central goal of sales and marketing personal is to convince families to plan before they need funerary services. Even when a death has occurred and services are needed immediately, sales personnel make every effort to convince the family to plan for their later needs. The costs of funerals are a matter of planning between funeral director and family. Ethical directors must be careful to avoid exploiting bereaved loved ones and selling them services or frills that they do not need. Directors lacking ethics may be able to realize high profits by appealing to family

members’ sense of guilt and loss while negotiating prices. Many funeral homes maintain Web sites for contacting families seeking their services. Others rely on word-of-mouth advertisement. For example, if a funeral home has managed to accommodate, say, a particularly well structured Hispanic funeral, members of that community are likely to continue seeking the services of that funeral home. The same is true for religious groups and economic strata. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■

Sales Representative Family Services Counselor Marketing Representative Web Designer Webmaster

Facilities and Security Facilities and security personnel oversee the care and maintenance of buildings and physical grounds, as well as protecting them from theft or vandalism. They may also maintain and repair funeral home vehicles. Facilities staff keep interior rooms presentable and help clean them after a ceremony in order to prepare them for the next ceremony. They also help maintain behind-thescenes areas, such as embalming stations. Groundskeepers maintain exterior grounds, mowing grass and otherwise maintaining the appearance of cemeteries and other landscaped areas. Guards protect buildings and grounds from vandals and from curious children and other relatively innocuous interlopers. Facilities and security occupations may include the following: ■ ■ ■ ■

Groundskeeper Mechanic Custodian/Janitor Security Guard

Operations Operations staff perform all central tasks at a funerary business not related to customer service. They transport, embalm, dress, bury, and cremate bodies. They apply clothing and makeup to the deceased to make them appear more alive, especially

Funerary Industry if there is to be an open-casket ceremony. For victims of severe accidents, this preparation may even entail rebuilding destroyed or disfigured portions of the features, replacing them with wax or other substances. Embalming may also become complicated, depending on chemicals or medications to which the deceased may have been exposed. Specific embalming chemicals are used to counteract excessive bloating associated with life-support systems, for example. Funeral homes must have mobile hearses, as well as limousines to accommodate mourners. These vehicles are generally relatively rarely used, but they still require some regular maintenance. In the case of small, family-owned businesses, they are likely to be vintage automobiles. Hearses too may be vintage automobiles or even motorcycles. Larger businesses have dedicated drivers and may even have full-time dispatchers to assign pickups and deliveries to those drivers. Businesses that do have dedicated dispatchers and drivers utilize them not only for decedent transport but also for transportation of supplies such as caskets and cremation containers. Operations occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Wax-Model Artist Embalmer Makeup Artist/Dresser Crematorium Operator Refrigeration Technician Driver Dispatcher Gravedigger Undertaker

Human Resources and Administrative Support Human resources personnel recruit, hire, train, and fire employees, as well as administering payroll and benefits. At small funerary businesses, these tasks are usually performed by the owner. Larger businesses may have at least one dedicated staff member to oversee benefits and pay. Midsize businesses may assign such tasks to administrative staff. Most midsize businesses and even some small businesses employ at least one dedicated administrative assistant to run the office, maintain files and paperwork, oversee invoicing, and take

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care of other clerical tasks necessary to maintaining a business. Human resources and administrative support occupations may include the following: ■ ■ ■ ■ ■ ■

Owner Human Resources Generalist Administrative Assistant Receptionist Payroll Clerk Benefits Manager

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise, or stable relative to the overall economy. The BLS projects that, between 2008 and 2018, the number of U.S. funeral director jobs will increase by 12 percent, about the same as the average for all occupations, and prospects are particularly good for directors who are also licensed embalmers. Mourners have begun to spend less on each funeral than they once did, but the number of deaths per year will increase in the United States as the population both increases and ages in the coming decades. Thus, demand for funeral services is almost guaranteed to increase, even if the profit margin associated with each client decreases. Employment Advantages People with good relationship skills are in demand in the funerary industry. Contact with mourners requires sensitivity, compassion, and tact. While embalmers may not have any contact with mourners, funeral directors must rely on their relationship skills to satisfy clients by arranging ceremonies that are as meaningful and satisfying as possible. Persons with both compassion and event-planning skills are particularly well suited to careers as funeral directors. Annual Earnings Various sources indicate annual revenue in the U.S. industry between $14 billion and $20.7 billion. U.S. Funeral Market estimates the average cost of a traditional funeral with burial plot and services at about $8,000.

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Funerary Industry RELATED RESOURCES FOR FURTHER RESEARCH

Family Funeral Home Association 585 Liverpool St. New Westminster, BC V31 1K5 Canada Tel: (888) 683-4533 Fax: (604) 736-2668 http://www.familyfuneral.org National Funeral Directors and Morticians Association 3951 Snapfinger Parkway, Suite 570 Decatur, GA 30035 Tel: (800) 434-0958 http://www.nfdma.com New York State Funeral Directors Association 426 New Karner Rd. Albany, NY 12205 Tel: (518) 452-8230 Fax: (518) 452-8667 http://www.nysfda.org Selected Independent Funeral Homes 500 Lake Cook Rd., Suite 205 Deerfield, IL 60015 Tel: (800) 323-4219 Fax: (847) 236-9968 http://www.selectedfuneralhomes.org Service Corporation International 1929 Allen Parkway Houston, TX 77019 Tel: (713) 522-5141 http://www.sci-corp.com

ABOUT

THE

AUTHOR

Reinhold Schlieper teaches English, literature, philosophy, and professional and practical ethics at Embry-Riddle Aeronautical University. He holds a Ph.D. in literature, an M.A. in English, and an M.A. in philosophy from Ball State University. He also holds a graduate certificate in practical and professional ethics from the University of New South Wales.

FURTHER

READING

Bowman, Leroy. The American Funeral. New York: Paperback Library, 1964. Bryce, Robert. “The Dying Giant.” Salon, September 29, 1999. http://www.salon.com/ news/feature/1999/09/29/sci/index.html. Hafenbrack Marketing. Report: Analysis of Funeral Home Industry. Dayton, Ohio: Author, 2007. Available at http://www.independent advantage.com/assets/ReportHMCFuneralServicesIndustryAnalysis-100207.pdf. Hoovers. “Industrial Overview: Funeral Operations, 2010.” http://www.hoovers.com/ funeral-operations/—ID__55—/free-ind-frprofile-basic.xhtml. Laderman, Gary. Rest in Peace: A Cultural History of Death and the Funeral Home in Twentieth-Century America. New York: Oxford University Press, 2005. Michaelson, Jo. Step Into Our Lives at the Funeral Home. Amityville, N.Y.: Baywood, 2010. Morton, Brian. “Vancouver Funeral Workers Strike: Average Workers’ Income Is About $40,000 a Year.” The Vancouver Sun, June 11, 2009, p. A3. Papagno, Noella C. The Hairdresser at the Funeral Home: Desairology Handbook Questions and Answers. Hollywood, Fla.: J. J., 1981. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Funerals On-Line. “U.S. Funeral Market.” http://www.us-funerals.com/funeral-articles/ usa-funeral-market.html. Wolfelt, Alan. Funeral Home Customer Service from A to Z. Shippensburg, Pa.: Companion Press, 2001.

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The furniture and home furnishings industry manufactures and markets functional and decorative goods to furnish the spaces people inhabit. In addition to furniture, these goods include floor coverings, window treatments, mattresses and bedding, and outdoor furnishings. Goods are sold in furniture stores, department stores, and specialty stores, including antiques shops and shops that specialize in single products, such as mattresses or patio furnishings. They are also sold by mail order, either through print catalogs or online.

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Blind and Shade Manufacturing; Furniture and Home Furnishings Stores; Furniture and Related Product Manufacturing; Furniture Stores; Home Furnishings Stores; Household and Institutional Furniture and Kitchen Cabinet Manufacturing; Mattress Manufacturing; Office Furniture (Including Fixtures) Manufacturing Related Industries: Electrical and Gas Appliances Industry; Household and Personal Products Industry; Textile and Fabrics Industry Annual Domestic Revenues: $150.7 billion USD (MarketResearch.com, 2008; includes home appliances) Annual International Revenues: $534 billion USD (Business Horizons, 2009; includes home appliances) Annual Global Revenues: $685 billion USD (MarketResearch.com, 2008; Business Horizons, 2009; includes home appliances) NAICS Numbers: 337, 442

History of the Industry People have furnished their homes since at least 3000 b.c.e. The wealthy had slaves to build their tables and seating, while the less privileged paid or bartered with craftspeople. Over the ensuing centuries, European countries, most notably England and France, emerged as trend setters. Asian styles developed as well. Those with the financial means wanted their homes to reflect both their personal taste and their position in society. In America, the early colonists built crude furnishings for their homes using pine and oak from the abundant forests. In the cities, cabinetmakers honed their skills and began producing fine pieces in what would later be called the “colonial 775

©Wilfred Stanley Sussenbach/Dreamstime.com

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produced in Asia, but the largest of the semiannual furniture markets are still held in North Carolina. Department stores and mass marketers have competed for customers with furniture and home furnishing stores. The Value Added Amount most aggressive of the mass marketers was Gross domestic product $30.2 billion Sears, which began its rise to prominence Gross domestic product 0.2% when Richard Sears and Alvah Roebuck Persons employed 484,000 released their first mail-order catalog in Total employee compensation $22.5 billion 1888. The company enjoyed tremendous growth, and among its many offerings Note: Includes home furnishings and other related were not only home furnishings but also, products. for a few years, houses in which to place Source: U.S. Bureau of Economic Analysis. Data are for them. 2008. Styles have changed over the years. In the early 1900’s, the style associated with late Victorian England went out of fashion, replaced by the mission style, the arts and crafts style, and other plain, modern designs. style.” Such early American pieces are now highly Five brothers named Stickley operated successsought by collectors, and many are in museums. ful furniture factories. Three remained in New New England, Pennsylvania, and Virginia led the York, while two, Leopold and John George, settled field of furniture makers, and the high cost of imin Grand Rapids. Their company, L. and J. G. porting, coupled with the colonists’ growing prefStickley, still manufactures furniture in New York erence for domestic goods, drove the industry to state, at one of the dwindling American manufacgrow. By 1775, seven master craftsmen operated turing facilities. furniture shops in Williamsburg, Virginia, alone. Gradually, retail furniture chains appeared, The inevitability of the coming revolution turned such as Ethan Allen, Haverty, and La-Z-Boy. Their the preference for domestic goods into a fullsize gave them a buying advantage over individual fledged boycott of English imports, as the colonies retailers, and they were able to purchase wholesale prepared for war. As more Europeans immigrated to the New World, they plied their trades in the growing number of furniture factories on the East Coast and in Inputs Consumed by the the Midwest. They trained apprentices, so the ornate carvings and other embellishments they valFurniture Manufacturing ued would continue to be produced by the next Industry generation of furniture makers. In 1876, the Centennial Exposition in PhiladelInput Value phia put Grand Rapids, Michigan, on the map as Energy $0.8 billion the U.S. capital of furniture manufacturing, a disMaterials $31.4 billion tinction it would hold for more than a century. BuyPurchased services $12.7 billion ers for retail establishments from all over the counTotal $44.9 billion try came to Michigan for its semiannual furniture markets. Eventually, however, Grand Rapids’ factoNote: Includes home furnishings and other ries needed rebuilding, and North Carolina, parrelated products. ticularly Hickory, was able to usurp the former Source: U.S. Bureau of Economic Analysis. Data city’s status as the nation’s furniture capital by ofare for 2008. fering lower taxes and cheaper labor to manufacturers. In the twenty-first century, most furniture is

The Furniture Manufacturing Industry’s Contribution to the U.S. Economy

Furniture and Home Furnishings Industry goods from manufacturers and importers for lower prices. This development put an end to the furniture departments in most department stores. Some retailers have since failed, while some have responded to economic troubles by closing their least profitable outlets. Fine furniture produced in Europe and the United States fell out of favor with consumers who no longer sought furnishings built to last a lifetime and then be passed on to one’s heirs. Instead, consumers came to expect furniture to be more disposable, requiring periodic replacement. A desire for novelty—and for the freedom to buy replacement furniture in the future—spurred the growth of companies selling less costly pieces and harmed those selling more expensive pieces that required significant investment to purchase. Those contemporary consumers seeking more expensive, longlasting, finely crafted pieces primarily patronize either antiques stores or craftspeople who build custom pieces. The Industry Today While some furniture is still manufactured in the United States, most is made abroad, primarily in Asia. North Carolina remains the American furniture center, still hosting semiannual furniture markets for buyers from individual and chain retail establishments. By far the largest domestic manufacturer of home furnishings is Furniture Brands International, which markets many of the bigger industry brands, including Thomasville, Broyhill, Henredon, Drexel-Heritage, and Lane. The company is based in St. Louis, Missouri, and only about 25 percent of its products are manufactured abroad. Emerging trends, such as the increased use of renewable resources such as bamboo, help keep the industry vital. The Stickley company in New York still produces its own line and has taken over the Widdicomb line as well. Both brands have loyal followings. The Netherlands-based IKEA, in 2009, opened a factory in Danville, Virginia, though the vast majority of its products are still made abroad. Ethan Allen operates six domestic factories. The retail furniture industry consists of more than twenty thousand companies, many of which are single proprietorships or partnerships. IKEA, Ashley Furniture Industries, Ethan Allen, La-ZBoy, and Pottery Barn are among the chains in the

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forefront of the industry today. It is estimated that the fifty largest companies command more than 30 percent of the market share, so the industry is relatively fragmented. Some manufacturers, such as Furniture Brands International’s Thomasville and Broyhill companies, operated their own retail stores, but they were forced to close some of their less profitable locations as a result of the recession of 2007-2009. Former retail giants Wickes Furniture and Jennifer Convertibles have shut down completely. New furniture is an expenditure that is put on hold when jobs are lost, and furniture sales are also closely related to home sales, which have been markedly below average in recent years. The industry is expected to grow slowly until the economy stabilizes and consumer confidence is restored. Furnishings sales in the early twenty-first century may be categorized as follows: Some 38 percent are of wooden case goods (primarily bedroom pieces), 39 percent are of upholstered pieces, 17 percent are of mattresses and bedding, and the remaining 6 percent are of metal pieces (primarily porch, deck, and patio furniture). In a fiercely competitive industry, small companies hold their own by specializing in merchandise for a particular and clearly identifiable market. Doing better than the basic furniture retail stores are those specialty companies that cater to a specific niche, often high end, that is not as likely to be influenced by the economy. Kindel Furniture in Grand Rapids, Michigan, builds custom pieces for a select clientele that is located worldwide. Kindel is the only remaining manufacturer from the Grand Rapids glory days. Independently owned furniture stores can succeed by offering something different. The Gallery Furniture store in Houston, Texas, holds its own against larger businesses by offering superior service, a wide selection of moderately priced furnishings, same-day delivery, and over-the-top promotions, including chef-prepared dinners for shoppers. The Gallery has reported over $150 million in annual sales and enjoys a loyal customer base. The Nell Hill store in Atchison, Kansas, did not have the advantage of being in a big city but still managed to attract clients from all over the Midwest by offering unusual furnishings not found anywhere else. Word-of-mouth and aggressive mar-

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keting have driven the store’s success. The owner, Mary Carol Garrity, has written magazine columns on decorating, as well as several books. Her legendary success propelled her to open a second store in Kansas City. Along with an eclectic array of case goods and upholstered pieces, she stocks antiques and original oil paintings. Industry giants such as IKEA and Pier 1 Imports do well because their goods are lower priced than those of other stores and their styles appeal to young people furnishing their first homes or apartments and whose tastes have not yet evolved. These buyers often want what is already deemed popular, as opposed to developing their own styles. Mall fixtures such as Pottery Barn, Restoration Hardware, and Z Gallerie attract younger buyers as well. One consistently successful market niche serves parents furnishing their children’s rooms, as well as prospective parents furnishing nurseries. Parents want the best they can afford, and often grandparents help with the cost of baby furniture or buy

pieces as gifts. Another key to success, especially for single-store companies, is awareness of the needs of the surrounding community. A big-city retailer may cater to loft owners, who may want glass, brass, and leather furnishings. Suburban retailers typically serve clients seeking more traditional styles. Shopping, even in bad economic times, has been called the United States’ national pastime, and Americans continually look for new and better ways to shop. Buying clubs and members-only outlets attract large numbers of eligible members, and home furnishings are just a small part of what they offer. Mail ordering has come a long way since Sears and Roebuck mailed their first catalog, and despite high shipping costs, it is once again popular. Most of the catalog companies, such as Pottery Barn, also maintain traditional stores, but some are catalog and Internet only, allowing them to offer lower pricing. Internet furniture sales have been steadily increasing and produced more than $4.6 billion in 2008.

The retail furniture industry consists of more than twenty thousand companies, many of which are single proprietorships or partnerships. (©Alex Varlakov/Dreamstime.com)

Furniture and Home Furnishings Industry INDUSTRY MARKET SEGMENTS The furniture industry is fragmented: The top fifty manufacturers control only 30 percent of the market. Thus, manufacturers and retailers of all sizes compete successfully. Small businesses in the industry include individual craftspeople and small shops, whereas the largest companies are multinational corporations that may manufacture furniture, sell it, or both. Small Businesses Small furniture businesses include craftspeople operating small workshops, restorers, upholsterers, freelance designers, and single retail stores. Small retail businesses include locally owned furniture stores; specialty shops that focus on a single category, such as hand-crafted Amish furnishings, or that specialize in a single product, such as patio furnishings; and antiques and consignment shops. The global economic downturn has helped second-hand retailers seeking to compete with those selling new furnishings. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary of all workers in the furniture manufacturing industry in 2009 was $35,390. Industrial engineers earned an average of $62,570, and commercial and industrial designers earned an average of $51,200. Clientele Interaction. Furniture makers work alone most of the time but interact with their buyers. They may perform custom work for individual clients or sell to small stores. Either way, they sell themselves along with their products, so they need to establish trust. Retail owner-proprietors have high levels of clientele contact, as they do virtually everything from advertising to buying merchandise to staffing the sales floor. Good people skills are necessary, including the ability to listen attentively in order to gain insight into a customer’s taste, needs, and budget. Being able to offer decorating advice is helpful. At the very least, being knowledgeable about the local community can help salespeople and proprietors refer customers to drapers, upholsterers, and other industry-related professionals. Acting as this sort of resource beyond their own stores can help small-business owners cultivate re-

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peat business and community loyalty. Furniture retailing is an industry in which customer service can make or break a small business. Amenities, Atmosphere, and Physical Grounds. A furniture workshop should be clean, bright, and well-organized, especially if clients visit. Because furniture makers often work alone, they have no other requirements, as long as their workshops are conducive to working comfortably and efficiently for long periods of time. Retail stores should be aesthetically appealing, with merchandise arranged to give customers an idea of how it will look in their homes. Wood surfaces must be dusted, glass sparkling, and pillows fluffed. Extras such as china on the tables and books or decorative objects on shelves add a cozy feel. Because furniture buying is time-intensive, retailers who offer coffee or other refreshments, encouraging prospects to linger, may enhance the chances those prospects will buy something. Retail outlets should be large enough to display merchandise in an uncrowded manner. Multistory stores often group pieces by manufacturer, and they may put bedroom suites on upper floors, with basements reserved for sale items. Typical Number of Employees. All types of small furniture businesses are usually one- or twoperson operations, with a few part-time employees to help during busy hours or seasons. A furniture maker might have an apprentice. Store employees can include delivery, clerical, and sales staff. Retail stores are typically open days, evenings, and weekends, so part-time workers are essential. Traditional Geographic Locations. Workshops can be located anywhere and are often separate buildings on their owners’ residential properties where zoning laws permit. Furniture stores are found in cities and in suburban mall areas. Ample parking adds to the attraction of a suburban location, but it is not always an option in congested urban centers. Chain stores are found in malls, strip malls, and on the commercial strips where other franchises are located. Pros of Working for a Small Furniture Business. Small-business owners have complete control of their businesses. Manufacturers can work as much or as little as they choose. Retailers can enhance their business by determining their clients’ tastes and preferences and buying accordingly, unbound by corporate dictates regarding inventories.

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For example, they can add complementary lines such as carpeting as they see fit. On the employee side, selling furniture may be fun for anyone interested in learning to build furniture, an art that is fast disappearing. Potential retailers with an interest in home decor have a good opportunity to learn the business from the ground up before opening their own businesses. If benefits are not needed, the flexibility of part-time hours appeals to retirees, college students, or mothers of school-age children. A commissioned sales associate with good people skills can earn a good living. Cons of Working for a Small Furniture Business. Self-employed business owners may need to work long hours. Customer orders have to be filled, and the bulk of every task falls upon an owner’s shoulders. Stores traditionally do most of their business during evenings and weekends. An employee in such a business is limited in earnings, as there is no corporate ladder to climb. Also, fulltime work is not always available. Costs Payroll and Benefits: Small-business owners pay themselves out of their profits. If there are no profits, they do not get paid. Small furniture businesses often pay their employees hourly wages. Full-time employees may receive benefits, such as paid sick leave, vacations, and health care, along with discounts on merchandise. If part-time employees receive benefits, they are often prorated in accordance with the number of hours worked. Supplies: Supplies are a major item for furniture builders and can include wood, hardware, tools, fabrics, and wood-finishing products, as well as a limited amount of office supplies and equipment. For retailers, supplies are a relatively small expense and include office supplies and equipment, including consumables such as printer cartridges, business cards and flyers, coffee, paper towels, and toilet paper. A range of furniture polish, glass cleaner, metal polish, and fabric spot remover is also necessary to maintain display merchandise, as are general cleaning supplies for the rest of the store. External Services: Small furniture businesses may contract legal counsel, accounting and tax preparation, cleaning, maintenance, landscaping, and snow removal. Some store owners hire free-

lance window- and interior-display specialists, though most find designing displays themselves to be an enjoyable part of their work. Utilities: Utilities in the small furniture workshop or retail store include heat, gas, water, electricity, telephone, and Internet access. Taxes: Small furniture businesses must pay local, state, and federal income, property, and payroll taxes, as well as collecting sales taxes on retail sales and obtaining necessary business licenses and permits. Owners may report their income on their personal returns, in which case they must pay self-employment taxes. Midsize Businesses Midsize businesses include single factories, as well as small retail chains that are usually local or regional, with from two to ten stores, and larger singlestore operations. Midsize retail home furnishings companies offer more opportunities for employment, with more full-time jobs, as well as greater opportunities to advance within the company. They are less likely to specialize in a single style or single type of product, and they can offer their customers extras that are cost-prohibitive to many smaller companies, such as interior decorating assistance and company financing of purchases. Potential Annual Earnings Scale. According to the BLS, the average annual salary of all workers in the furniture manufacturing industry in 2009 was $35,390. Industrial engineers earned an average of $62,570, and commercial and industrial designers earned an average of $51,200. The most common production jobs had average salaries between $25,000 and $30,000, and the average salary of all production workers was $30,020. Production supervisors earned an average of $49,190, and production managers earned an average of $82,530. General and operations managers earned an average of $106,980. Among manufacturers, sales managers earned an average of $109,010, sales supervisors earned an average of $80,770, sales representatives earned an average of $61,270, and retail salespersons earned an average of $36,740. At retail stores, sales managers earned an average of $96,590, sales supervisors earned an average of $49,640, and retail salespersons earned an average of $36,360. Clientele Interaction. Clientele interaction in a furniture factory is low and is limited to personnel

Furniture and Home Furnishings Industry in marketing, customer service, and delivery, as well, in some cases, as clerical staff. Retail employees experience high levels of clientele interaction. Other than positions in warehousing and visual merchandising (designing window and interior displays), there are few behind-the-scenes jobs in midsize retail businesses. Sales personnel need good people skills, and clerical and delivery workers need to excel at customer service. From the person who first greets a customer to the clerical support staff who process payments, all must make sure each sale is a positive experience so clients will become repeat buyers and refer acquaintances to the store. Every employee has a responsibility to work toward enhancing the company’s reputation within the community. Amenities, Atmosphere, and Physical Grounds. A midsize factory works best on a single level, arranged so materials come in one door, are moved through various workstations until the products are complete, and then go out another door to the loading dock. It must also meet all government health and safety regulations regarding saws and other tools and equipment, as well as chemicals such as paints and varnishes. Good ventilation is a must. Where necessary, employees should use masks, safety glasses, and other protective items. A midsize company’s physical store must meet all the requirements of smaller businesses, but it has the advantage of a larger space in which to display merchandise. Midsize stores generally have more sample rooms and more opportunities to show decorative accessories. They strive to make customers feel both welcome and comfortable. Parking areas and sidewalks should be kept clean and well lit to ensure safety. Where there are multiple stores selling the same merchandise mix, they should have similar atmospheres so that regular customers shopping in different branch stores will have a feeling of familiarity, so they trust the level of service and quality to be as high as at their regular branch. If a building is multistoried, bedroom pieces may be on the upper floor, with sale pieces in a scratch-and-dent basement room. Clearance sale pieces are usually displayed on the main sales floor and are intermingled with those pieces not on sale. Typical Number of Employees. A midsize factory usually employs from fifty to three hundred

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people, depending on the degree of automation used in manufacturing and the company’s needs for administrative and office staffs. Factory workers may be unionized, as may delivery people, if the company employs its own delivery workers. Depending on the number of stores, the number of employees at midsize retail businesses could number from about thirty to two hundred or more. These employees perform the same roles as the employees of small retail companies but in greater numbers. Midsize companies generally have a greater mix of full- and part-time employees. Delivery personnel may work out of individual stores, out of central warehouses, or both. Company offices are likely to be centralized in an original or flagship store. Traditional Geographic Locations. Factories can be located anywhere, but newer facilities are likely to be in suburban locations. Irrespective of the size of the company, furniture stores are traditionally located both in central urban areas and in suburban retail hot spots, near similar stores. Many customers prefer suburban stores for the ease of parking and safety. Pros of Working for a Midsize Furniture Business. Midsize companies are able to offer employees more opportunities and higher financial compensation than are small companies. They provide employees with a good overview of the industry, helping build foundations of experience and insider knowledge that can serve them in future careers, either as employees of large companies or as business owners. With fewer layers of management than are typical of larger firms, midsize businesses provide employees with greater access to decisionmakers. Job descriptions can overlap, so ambitious employees are more likely to assume greater responsibilities and can even offer input into the running of the company. Because employees play vital roles in the overall success of midsize companies, they gain more visibility and more hands-on experience. As in any retail situation, employee discounts are an advantage. Cons of Working for a Midsize Furniture Business. Midsize businesses are more structured than small businesses, but they lack the flexibility of large businesses. Conventional retail hours can be inconvenient for part-time staff, though fulltime employees with seniority can usually choose their preferred hours. A commissioned salesper-

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son may lose a sale, along with income, if a customer makes several visits but finally makes a purchase on the employee’s day off. While some view indistinct job descriptions as a plus, others may prefer greater structure and resent being asked to perform tasks beyond the scope of their regular duties. Costs Payroll and Benefits: Midsize furniture and home furnishings factories have both salaried and hourly employees, and all employees are usually full time. Salaried employees often receive benefits, including retirement plans, health insurance, sick and vacation pay, and sometimes flexible scheduling. Hourly employees may receive benefits as well. If they are represented by collective bargaining units, their benefits and salaries will be negotiated by their unions. Midsize stores have mostly salaried employees, along a few who generate sales and are paid on commission. Full-time employees are often given sick leave, vacation, and other benefits, while part-time workers may also receive such benefits at the discretion of the owner or manager. Vacation and sick days are often prorated for part-time staff. Supplies: Midsize businesses require office supplies and equipment, including ink cartridges, toner, and other supplies for electronic machinery. Retailers require furniture polish, glass cleaner, and metal polish, and other cleaning supplies. Factories require tools, machinery, raw materials, and safety supplies. Both businesses may require delivery vehicles, as well as the tools and supplies necessary to maintain them. External Services: Midsize businesses may contract accounting and legal services, insurance, cleaning and janitorial services, merchandise and window display design, trash removal, and snow plowing. Utilities: Midsize businesses must pay for telephone, Internet access, electricity, water, gas, and heat. Taxes: Midsize furniture businesses must pay local, state, and federal income, property, and payroll taxes, as well as collecting sales taxes on retail sales and obtaining necessary business licenses and permits.

Large Businesses While furniture manufacturing in the United States is not the big business it once was, there are still opportunities for those wanting to work in the industry. Thomasville, Henredon, Drexel-Heritage, and Lane—all components of Furniture Brands International—are the largest manufacturers. Some of the others are Ethan Allen, La-Z-Boy, Flexsteel, and Stickley. Large businesses in the retail furniture and home furnishings industry include chains such as IKEA, Ethan Allen, Rooms to Go, Pier 1 Imports, La-Z-Boy, Ashley, and Pottery Barn, as well as mass merchandisers such as Sears, Walmart, Babies R Us, and Target, which include furniture among their product lines. Their volume gives them the buying power to offer goods at affordable prices. Potential Annual Earnings Scale. According to the BLS, the average annual salary of all workers in the furniture manufacturing industry in 2009 was $35,390. Industrial engineers earned an average of $62,570, and commercial and industrial designers earned an average of $51,200. The most common production jobs had average salaries between $25,000 and $30,000, and the average salary of all production workers was $30,020. Production supervisors earned an average of $49,190, and production managers earned an average of $82,530. General and operations managers earned an average of $106,980. Among manufacturers, sales managers earned an average of $109,010, sales supervisors earned an average of $80,770, sales representatives earned an average of $61,270, and retail salespersons earned an average of $36,740. At retail stores, sales managers earned an average of $96,590, sales supervisors earned an average of $49,640, and retail salespersons earned an average of $36,360. Clientele Interaction. As in the midsize segment, manufacturing employees have limited clientele interactions, unless they are employed in specific client-oriented divisions such as marketing or customer service. Retail employees have much greater clientele interaction, though large companies employe more behind-the-scenes support personnel. Good interpersonal skills are key to success for all employees who sell or who deal with the public. Sales associates must learn to walk the tightrope between friendly customer service and aggressiveness. Furniture buying is a slow, personal process,

Furniture and Home Furnishings Industry and a hard-sell approach may send a prospect elsewhere. A good sales associate learns to read people and determine which customers need assistance and which will bolt if they are not left alone to browse at their leisure. Amenities, Atmosphere, and Physical Grounds. The ideal factory has an efficient traffic flow to receive materials and discharge finished products. It should contain the latest in technology and tools, have sufficient light, and be well-ventilated. Most important, employee safety should be considered in all phases of production, with strict compliance to Occupational Health and Safety Administration regulations. Branches of chain stores are decorated similarly to one another no matter where they are located. This consistent decor fosters a feeling of familiarity to customers moving around the country. Display furniture must never be allowed to become dusty, and all glass surfaces must sparkle. Manager and franchise owners should strive for an atmosphere of comfort and well-being, as clients often visualize the pieces they are considering in their own homes. Decorative accessories add a cozy touch when not so overdone as to look cluttered. Good traffic patterns make it easy to go from display to display. Retail stores can be sprawling one-story buildings or, more likely in cities, occupy several stories, with the main floor reserved for living- and diningroom furnishings. Ample parking is usually available, except in large city retail areas, and should be well-lit and monitored with security cameras. Typical Number of Employees. Employees of large furniture companies can number from several hundred to tens of thousands or more, including those employed in factories, stores, warehouses, and corporate headquarters. IKEA employs nearly 130,000 people globally, making it the world’s largest home furnishings company. Connecticut-based Ethan Allen operates six factories, maintains stores in the United States, Canada, and Great Britain, and employs about 5,000 people. Traditional Geographic Locations. Factories can be located anywhere, and sites are often chosen because of favorable tax regulations, a ready pool of workers, low costs, and ready access to transportation infrastructure. Furniture stores that are part of large corporations are usually located in suburban retail malls, strip malls, and the so-called

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franchise rows where similar businesses have outlets in every midsize to large city. Most cities have downtown furniture districts as well. Pros of Working for a Large Furniture Business. Large companies offer greater opportunities to advance. They employ hundreds, if not thousands, and have multiple levels of hierarchy in multiple locations. Thus, they provide ample opportunities for advancement or geographic change. Motivated employees can start at the bottom of a department and work their way up, or they can move from department to department to learn the entire business before striking out on their own if that is their goal. Large companies also tend to pay higher wages and offer better benefits than smaller companies. Once employees attain a certain degree of seniority, the large staffs of large retail stores make it easier to arrange more flexible work schedules. Employees may enjoy working in furniture stores if they are interested in home decor. Unlike some other retail businesses where the commodities are more disposable or less personal, sales employees in the furniture business can build long-term relationships with their clients. Employees may also receive discounts on their merchandise. Cons of Working for a Large Furniture Business. Some people are frustrated by the multiple layers of management and other bureaucratic structures common at large businesses. Those working in the lower tiers of such an organization can feel anonymous and insignificant. Workers who like to make decisions and see them implemented immediately are likely to be happier in smaller venues where each employee’s contribution is both more important and more visible. Employees may need to work long hours, which may be particularly inconvenient for newer employees. Managers are more likely to face unionized employees. Costs Payroll and Benefits: Large companies generally pay a mix of hourly wages and annual salaries depending on the position. Sales personnel may be paid on commission. Most large companies pay full benefits to full-time employees, including sick and vacation pay, holiday pay, various types of insurance, and retirement plans or profit sharing. Part-time employees may not qualify

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for benefits. Union members’ compensation and benefits are arranged through negotiations conducted by collective bargaining units. Supplies: Large businesses require office supplies and equipment, including ink cartridges, toner, and other supplies for electronic machinery. Retailers require furniture polish, glass cleaner, and metal polish, and other cleaning supplies. Factories require tools, machinery, raw materials, and safety supplies. Both businesses may require delivery vehicles, as well as the tools and supplies necessary to maintain them. Large companies often also require food and foodpreparation supplies for staff break rooms and cafeterias. External Services: Legal, auditing, advertising, and insurance services are usually contracted and managed by a large company’s corporate headquarters. Individual locations often contract directly for local services such as cleaning, routine maintenance, and snow removal. Utilities: Large companies require all the basic utilities: electricity, gas, water, telecommunications, and Internet connections. Taxes: Large furniture companies must pay local, state, federal, and international income, property, and payroll taxes, as well as collecting sales taxes on retail sales and obtaining necessary business licenses and permits in each jurisdiction. They must also pay any applicable tariffs or other import and export fees.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The various tasks required to conduct a furniture business remain the same irrespective of a company’s size. In a small operation, the owner handles all or most of the responsibilities, acting in roles including chief executive, advertising executive, sales associate, accountant, window dresser, janitor, and coffee brewer. Midsize companies have employees charged with various, often overlapping, job descriptions. Large companies have whole departments devoted to each function, such as accounting or marketing. Job descriptions at such companies are more rigid than they are at smaller firms, and they are sometimes frustrating

for employees who enjoy performing a variety of tasks and encountering new challenges. Many of the jobs available in the furniture industry exist in many other industries, while others, such as furniture designer, wood carver, upholsterer, carpet installer, and interior decorator, are specific to furniture and home furnishings companies. Not all companies require all positions, as a production operation’s needs differ greatly from those of a retail business. Within the industry as whole, however, there is a wide range of job opportunities. The following umbrella categories apply to the organizational structure of businesses in the furniture and home furnishings industry: ■ ■ ■ ■ ■

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Business Management Customer Service Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production Distribution Retail Sales

Business Management Business managers oversee companies. Managers may be sole proprietors answerable only to themselves or chief executive officers (CEOs), who are accountable to boards of director or shareholders. A midsize operation typically has one person, usually the owner, calling the shots with input from employees with various responsibilities. The larger the company, the more layers of management. Those with decision-making authority plan their companies’ activities and oversee the execution of their plans. With the possible exception of those sales staff earning commissions, the top managers are the highest-paid employees of a given company. Generally speaking, the larger the company, the more educational credentials and experience that are required for management positions. Managers most often have degrees in business management, accounting and finance, or sales and marketing, including M.B.A. degrees. Smaller companies’ owners or managers may overlook the lack of formal degrees and choose applicants with solid industry track records coupled with enthusiasm and proven

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ability to achieve goals. The smallest businesses, especially those with limited budgets, are more likely to train applicants with no experience, since such candidates command lower salaries. In the furniture and home furnishings industry, important decisions include what to produce or, in retail situations, what to sell and from whom to purchase inventory; how to finance purchases of equipment or inventory; and how large a workforce is needed. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Owner/Sole Proprietor Partner President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Vice President of Sales and Marketing Vice President of Business Development Controller Sales and Marketing Manager Human Resources Manager

Customer Service Customer service is often the standard by which customers judge the efficiency of a company. People working in this capacity work in concert with sales departments. In manufacturing companies, they expedite orders, arrange shipments, authorize returns, and, in general, anticipate and solve problems to keep customers happy and to keep them coming back. Succeeding in this job requires product knowledge, good communication skills, organizational skills, tact, and patience. Small manufacturers and craftspeople are their own customer service staffs, so they must do whatever they can to make sure their customers are happy with their purchases. Some retail stores offer interior design services to their customers, often free of charge, to help them make design choices. Interior design specialists assist customers in assembling ensembles of furniture, custom window coverings, rugs, and other accessories that will complement one another and create desired effects in their homes. Large retail sellers of home furnishings may have corporate customer service departments, but their in-store sales associates are the first ones to whom customers come if they experience problems. In small stores, the owner answers customer complaints.

Interior decorating makes use of wall coverings such as wallpaper. (©Dreamstime.com)

Customer service occupations may include the following: ■ ■ ■ ■ ■

Customer Service Manager Customer Service Representative Expediter Returned Goods Coordinator Interior Decorating Consultant

Sales and Marketing Sales and marketing are the lifeblood of a company and of the whole furniture industry. Manufacturers sell to wholesale buyers for resale. They display coordinated suites of furniture and individual pieces and accessories to furniture markets, where buyers place orders based on anticipated customer demand. Long before these pieces reach furniture markets, a company’s marketing department will have created a plan based on past performance,

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new trends, and the health of the economy. A crucial part of marketing is advertising. In the furniture industry, advertising comprises catalogs, billboards, newspaper and magazine advertisements, and—for those companies large enough to afford them—television commercials. Most forms of advertising are expensive and consume a large portion of a company’s marketing budget. Advertisements are placed by both manufacturers and retail outlets. Stores advertise locally to announce sales. Large companies have their own advertising departments, midsize ones often use agencies, and small companies’ owners may run advertisements in local newspapers, rent billboards, or buy targeted online advertising. Retail marketing includes designing merchandise displays. Designers, called visual merchandisers, set up “rooms” on sales floors and dress store windows to attract customers and motivate purchases. Both window and interior displays need to be changed frequently to avoid looking stale, to coordinate with seasons and holidays, and to showcase sale pieces. Freelance visual merchandisers may work for a number of noncompeting businesses. Sales and marketing occupations may include the following:

can prevent equipment breakdowns that would not only be costly to repair but also interfere with filling orders on time. Maintenance personnel also keep things running smoothly in offices and warehouses. They include electricians, plumbers, general repair workers, heating and air-conditioning specialists, and carpenters, who perform preventive maintenance and general repairs. Security personnel must not only guard the safety of personnel, consumers, and physical property but also guard against corporate espionage. In large stores, they make sure customers enjoy safe shopping experiences. Surveillance cameras monitor stores’ interiors and parking lots. Alarms protect property from burglars and vandals outside of business hours. Though shoplifting is not likely in a furniture store, robberies and burglaries can occur. Employee theft is costly but easily prevented. Facilities and security occupations may include the following: ■ ■ ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■

Marketing Director Sales Manager Sales Representative Market Research Analyst Visual Merchandiser Advertising Executive Advertising Assistant Account Executive Account Associate

Facilities and Security Facilities and security personnel maintain buildings and keep them clean and safe. A facilities manager oversees housekeeping and janitorial, maintenance, and security staffs. This manager is also responsible for interacting with contractors who perform outsourced facility-related work, such as landscaping, snow removal, and pest control. Maintenance is a major concern in factories and in corporate or regional headquarters. Machinery used in production must be kept in good repair for both efficiency and safety. Regular maintenance

■

■ ■ ■ ■ ■ ■

Facility Manager Housekeeping Director Cleaner Custodian/Janitor Maintenance Manager Electrician Plumber Heating, Ventilation, and AirConditioning (HVAC) Specialist Industrial Engineering Technician Carpenter Chief Security Officer Investigator Plainclothes Operative Security Guard

Technology, Research, Design, and Development Computer technology drives many aspects of business, and information technology (IT) personnel oversee, maintain, and repair computer systems and equipment. IT directors and computer support technicians are involved in equipment purchase recommendations and personnel training, and they must be on call to address problems whenever they arise. A company can stay competitive only as long as its products appeal to the buying public. For that reason, new home furnishings products are con-

Furniture and Home Furnishings Industry stantly introduced, and they are developed by product designers. After initial consultations with management, designers create designs and then submit them for final approval. After selections have been made, designers and the new product developers work together to build prototypes. Any problems are fixed, and then industrial production engineers design machines and processes to manufacture the products on a mass scale. The pieces are then put into production. Many factors go into deciding which products to add to existing lines. These include profitability, sustainability and other materialrelated issues, and whether the product fits into a company’s existing line and public image. New products are introduced to replace those that are slow sellers and to keep up with the competition. Technology, research, design, and development occupations may include the following: ■

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vice president of manufacturing. Reporting to the vice president is a superintendent, who handles day-to-day operations. Department supervisors are responsible for the various steps in the process, from the first assembly to the finishing to the addition of drawer pulls or other hardware. The supervisors bring potential problems or concerns to the attention of superintendents. Unskilled workers operate machinery and produce bare-bones pieces. Then, skilled workers apply artistic embellishments, such as carvings or painted designs. Finishers complete the products,

Information Technology Director Computer Support Specialist Network and Systems Administrator Computer Programmer Industrial Engineer Industrial Engineering Technician Mechanical Drafter Commercial/Industrial Designer

Production Production personnel make furniture and home furnishings. They include self-employed craftspeople who create unique pieces alone in their workshops, as well as team assemblers working on assembly lines to manufacture thousands of identical products. In most factories, strict hierarchies determine the division of labor, particularly in union shops. A typical production department operates under the leadership of a

Workers spray paint furniture parts in an assembly line. (©Thor Jorgen Udvang/Dreamstime.com)

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Furniture and Home Furnishings Industry which are inspected by quality control personnel at various stages of production. After the final application, products are prepared for shipment. Production occupations may include the following: ■ ■ ■ ■ ■ ■ ■

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A young joiner works on a piece of furniture. (©Dreamstime.com)

OCCUPATION

■ ■

Owner/Craftsperson Vice President of Manufacturing Plant Superintendent Department Supervisor Team Assembler Cabinetmaker/Bench Carpenter Coating, Painting, and Spraying Machine Setter and Operator Woodworking Machine Operator Sawing Machine Operator Furniture Finisher Sewing Machine Operator Upholsterer Quality Assurance Manager Inspector

PROFILE

Upholsterer Considerations

Qualifications

Description

Makes new furniture, reconditions old furniture, restores antiques, and repairs broken furniture.

Career clusters

Human Services

Interests

Things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

RCS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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PROFILE

Woodworker Considerations

Qualifications

Description

Cuts, shapes, and assembles raw wood to make household furnishings and components, recreational items, and many other products.

Career clusters

Manufacturing

Interests

Things

Working conditions

Work inside

Minimum education level

High school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

REI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Distribution Distribution personnel transport finished home furnishings from factories to warehouses, retail stores, and consumers’ homes and offices. A traffic manager runs the department and arranges pickups with commercial carriers. The traffic manager may work alone or may have a staff, depending on the size of the company. The job requires contracting with carriers and preparing all the bills of lading and other relevant paper work. Some companies maintain their own delivery fleets and hire their own drivers. Those corporations need both drivers and truck mechanics to maintain their fleets. Distribution occupations may include the following: ■ ■ ■

Traffic Manager Shipping and Receiving Clerk Expediter

■ ■ ■ ■ ■

Freight Loader/Unloader Truck Driver Mechanic Routine Truck Maintenance Worker Truck Washer/Detailer

Retail Sales At a retail store, a store manager oversees all employees with the help of assistant managers, as long retail hours make it impossible for one person to be on site during all business hours. Larger stores have department managers as well. Sales associates serve customers directly. Buyers visit markets and make informed decisions about which offerings will best appeal to their companies’ clientele. Buying products at wholesale for retail sale requires extensive knowledge of the industry as a whole, as well as an understanding of what motivates a company’s typical customer. A buyer must also be able to evaluate the compatibil-

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ity between a given product and the public image or branding of the buyer’s store. There are behind-the-scenes jobs as well. Delivery personnel, including truck drivers, furniture movers, and delivery schedulers, handle the transport of goods from stores to consumers’ homes. Stock clerks and pickers staff the warehouses of bigger companies and the back rooms of all stores. Inventory control specialists maintain computerized databases of what has been received and what has been sold. If an item is out of stock in one store, it may be available in another. Databases also track sales to ascertain which items are most successful, providing valuable information to a company’s buyers. Retail occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Store Manager Assistant Manager Department Manager Sales Associate Store Clerk Buyer Warehouse Manager Stock Picker Freight Loader/Unloader Delivery Truck Driver Inventory Specialist

INDUSTRY

PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Furniture and Related Product Manufacturing Employment 2009

Projected 2018

Occupation

70,540

91,000

Cabinetmakers and bench carpenters

11,930

16,300

Carpenters

16,610

20,300

First-line supervisors/managers of production and operating workers

11,410

13,900

Furniture finishers

38,530

45,100

Team assemblers

15,380

18,800

Upholsterers

18,200

24,400

Woodworking machine setters, operators, and tenders, except sawing

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

OUTLOOK

Overview The outlook for the furniture and home furnishings industry shows it to be stable. The industry enjoyed a particularly robust year in 2006, but it has declined since then, experiencing lackluster growth of 2.0 to 2.8 percent per year. Growth is projected to increase between 2011 and 2015, however. Some companies have not been able to survive the recession of 2007-2009 and have ceased

operations or have closed some stores or production facilities. Others may follow. The home furnishing industry is closely tied to new home construction, so when the housing market rebounds, the furniture industry is expected to rebound as well. There will always be a market for nursery and children’s room furnishings. More generalized products remain in demand as young people establish their first homes, apartment renters become home buyers, and downsizers decide their old furnishings do not reflect their new lifestyles. As more people opt to work from home offices, the market for suitable furnishings will grow proportionately. Also, American society is relatively mobile, and each move requires at least some new purchases. What may change is where and how people shop. Companies such as IKEA and Value City Furniture may benefit from expected shifts, while sales

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at pricier chains, including Pottery Barn and Ethan Allen, are expected to suffer until the economy recovers. Shoppers are also more likely to shop in secondhand or consignment shops during a slow economy. Antiques are growing in popularity, but—as is true of secondhand stores—sales at such shops are difficult to track. While they take away from the production end of the industry, they enhance the retail segment. E-commerce is also growing in the furniture industry. Though in past decades manufacturing has been increasingly outsourced overseas to take advantage of cheaper labor, this trend may be lessening. In 2009, IKEA opened its first American factory in Danville, Virginia. Other companies located abroad, but with large North American customer bases, may also find it necessary to establish manufacturing facilities in the United States or in other countries to which they export. This development would not change the global market, but it would enhance the domestic sector. The industry is further driven by trends. Shelter magazines and programming such as the House and Garden Television Network (HGTV) influence taste and help drive consumer demand. Homemakers no longer remain loyal to a particular style but have bought into the makeover mindset that demands a periodic update, whether of a few accessories or an entire home. Globally, the outlook is similar. Economies have become so intertwined that when one falters, the ripples are felt around the world. Here, as well, there is room for optimism. Developing economies provide growth that helps offset losses. Also, new stylistic trends increasingly originate in Asia or Europe, meaning they benefit those economies first before taking hold in North America.

Creative people are drawn to the artistic detailing and design portions of the production process. Potential carvers and other skilled craftspeople can learn through apprenticeship programs that place applicants with skilled workers to learn a given process from the ground up. While the number of factory jobs has dwindled, there are still viable companies with an ongoing need for good employees. There have been layoffs, but the industry is expected to pick up momentum in the years ahead. Shelter is a basic need, and anything associated with it will always be in demand, albeit with market fluctuations. The industry is highly competitive, however, so job seekers need to distinguish themselves from the field of candidates.

Employment Advantages The furniture industry is a good fit for anyone who enjoys interior design and has a gift for helping others furnish their homes. Many opportunities exist in retail businesses for professional decorators. Candidates will benefit from gaining degrees in the field and being able to design complete ensembles by working with others to coordinate window coverings, floor coverings, accessories, and furniture. The proliferation of shelter magazines and furnishingrelated television programming indicates that people are still interested in home decoration.

FURNITURE TODAY Magazine P.O. Box 2754 High Point, NC 27261-2754 Tel: (336) 605-0121 Fax: (336) 605-0131 http://www.furnituretoday.com

Annual Earnings According to Market Research, the U.S. furniture, home furnishings, and home appliance industry earned revenues of $150.7 billion in 2008, and the global industry earned $685 billion. Because these figures include home appliances, electronics, and lighting, they are slightly misleading, but they provide a general idea of the scope of industry earnings. These earnings have slowed following the global economic crisis, but they are expected to begin to grow again between 2011 and 2015, beginning modestly and then gaining momentum. Growth may reach 5.8 percent in 2014. Should the production portion of the domestic industry grow more slowly, the retail portion may make up the deficit, as its product mix includes imports as well as domestically produced goods.

RELATED RESOURCES FOR FURTHER RESEARCH

National Home Furnishings Association 3910 Tinley Dr., Suite 101 High Point, NC 27265-3610 Tel: (800) 888-9590 Fax: (336) 801-6102

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Upholstered Furniture Council P.O. Box 2346 High Point, NC 27261 Tel: (336) 885-5065 Fax: (336) 885-5072 http://www.ufac.org

ABOUT

THE

AUTHOR

Norma Lewis is the author of four nonfiction books, one an account of the Yukon gold rush for young adults, and the other three pictorial histories of the Southwest Michigan area she calls home. She is a prolific magazine writer. During the twenty years she has been writing travel articles, she has covered destinations, escorted group travel, solo travel, and recreational-vehicle camping. She holds a bachelor of science degree in business administration from Aquinas College but left the corporate world for what she considers the best job in the world: freelance writing.

FURTHER

READING

Bennington, Richard R. Furniture Marketing: From Product Development to Distribution. New York: Fairchild Books, 2003. Dugan, Michael K. The Furniture Wars: How America Lost a Fifty Billion Dollar Industry.

Conover, N.C.: Goosepen Studio & Press, 2009. International Trade Centre UNCTAD/WTO and International Tropical Timber Organization. International Wooden Furniture Markets: A Review. Geneva, Switzerland: Authors, 2005. Purdy, Warren G. The Guide to Retail Business Planning. Boston: Inc. Magazine Business Resources, 1997. Schroeder, Carol L. Specialty Shop Retailing. Hoboken, N.J.: John D. Wiley and Sons, 2007. Segel, Dick, CSP. Retail Business Kit for Dummies. Indianapolis: Wiley, 2008. Taylor, Don, and Jeanne Smalling Archer. Up Against the Wal-Marts. 2d ed. New York: American Management Association, 2005. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Wille, Stefan, ed. Employment Conditions in the U.S. Furniture Sector. Atlanta, Ga.: ATKRIN Furniture, 2004.

Hand Tools and Instruments Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Cutlery and Flatware Manufacturing; Cutlery and Hand Tool Manufacturing; Fabricated Metal Kitchen Utensil Manufacturing; Hand and Edge Tool Manufacturing; Power-Driven Hand Tool Manufacturing; Saw Blade and Handsaw Manufacturing Related Industries: Household and Personal Products Industry; Industrial Design Industry; Light Machinery Industry; Scientific, Medical, and Health Equipment and Supplies Industry Annual Domestic Revenues: $5.9 billion USD (High Beam Research, 2010) Annual International Revenues: $12.3 billion USD (Research & Markets, 2009) Annual Global Revenues: $19.87 billion USD (MindBranch Market Research, 2010) NAICS Numbers: 3322, 333991

INDUSTRY

changing array of high-technology machinery available in hardware stores around the globe, for many, hand tools are preferred because they require less effort, maintenance, and know-how. Although they have evolved over the years, many hand tools—such as the chisel—have remained allpurpose and may be used for marking, measuring, striking, and scraping. With such a wide variety of instruments, hand tools are just as useful now as they were in the eighteenth century and will always be the desired choice of furniture makers, builders, and woodworkers who build for work or craft for fun.

History of the Industry The use of hand tools is directly associated with the human species, and their invention is presumed to be one of the earliest events in human history. Since trade has existed, there has always been a market for tools. Perhaps the golden age of American hand tools encompasses the decades between the Civil War and World War II. That period produced a huge va-

DEFINITION

Summary From woodworking and chiseling to boring and sawing, hand tools serve many purposes for builders and crafters of all skill levels. Despite an ever793

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Hand Tools and Instruments Industry

Hand tools serve many purposes for builders and crafters of all skill levels. (©Dreamstime.com)

riety of tools and many variations of the same tool in a range of qualities and materials. The mass industry for such tools, however, began booming in the late twentieth century, when the do-it-yourself (DIY) craze began. Since then, the hand tools industry has evolved dramatically, and the competitive market has become saturated with many products claiming to make home building, improving, decorating, and refurbishing easy. Hand tools went from being heavy and bulky to lightweight and sleek, making them appealing to both men and women. During the industry’s early days, hand tools were targeted to skilled, professional crafters. Today, housewives, mothers, and daughters know exactly where to go and what to buy when it comes to hand tools. Another change over the years relates to cost. Hand tools are more expensive than ever, and now there is something for every application—whether to build a birdhouse or renovate a bathroom. Hand tools were once used daily to build fences, cabins, furniture, barns, horse carriages, and bug-

gies. The simplicity of the same tools makes them attractive to modern people who simply like working with their hands. The hand tool market has been dramatically expanded by the many avenues of guidance and assistance now available to amateurs. Many television networks broadcast programming that teaches viewers to use hand tools to complete specific projects. From Web sites to catalogs to home improvement stores in just about every community, the hand tools industry has become ubiquitous. This wide availability, as well as the streamlining of tools over the years, continues to increase hand tools’ appeal. Manufacturers of hand tools engage in branding wars, seeking to associate their products with quality and reliability in the minds of consumers. As with any other product, there are high-end hand tool makers that target serious users and more inexpensive manufacturers that appeal to more utilitarian users. Today’s industry has changed, though, in that as a whole it no longer targets a specific audience. Instead, it appeals to anyone who may have

Hand Tools and Instruments Industry any use for a tool, whether professionals, serious hobbyists, or simply homeowners who wish to have hammers and wrenches in their tool kits just in case they are needed. The Industry Today The U.S. hand tools industry faces challenges, especially in the face of globalization. The use of electronic business is also creating a problem for the industry. E-commerce is forcing the current hand tools market to adjust its activities and business practices around the globe. Major products of the hand tools industry include wrenches, hammers, scissors, vises, clamps, screwdrivers, pliers, chisels, and measuring devices, to name just a few products. These items account for nearly 60 percent of the industry’s revenue. Cutlery, including kitchen knives, sporting knives, razor blades, and flatware—table knives, forks, and spoons—accounts for about 15 percent of industry revenue. Saw blades and kitchen utensils account for about 13 percent each. Manufacturers use a wide range of fabrication processes, including forging, stamping, bending, forming, and machining, to turn purchased metal into final products. Steel and steel alloys are the major raw materials used by the industry. Alloys have special properties, such as hardness or resistance to corrosion, that suit them well to tool manufacture. Outside the United States, hand tools are big business. China continues to be one of the biggest manufacturers of hand tools. The value of its exports of hand tools grew by 28 percent in 2004, from $493 million to $630 million, and has continued to rise, averaging around 20 percent growth. India has an advantage in the hand tool industry because of its easy access to raw materials and available qualified labor at low wages. The country has experienced and benefited from an average annual growth rate of about 17 percent in the hand tool market since 2003. Not surprising, Taiwan has already turned to the production of digitally enhanced tools to drive growth of its own hand tools industry. Digital tools such as torque wrenches and screwdrivers have become an increasingly important category in the hand tools industry. They generate better margins but require more advanced production technologies that use electromechanical integration to ensure quality and reliability. Taiwan’s advantages

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mean that digital tools can be an answer for Taiwanese hand tool makers who face an increasingly challenging global market for DIY tools. Competition from China has eroded these Taiwanese manufacturers’ sales, as the former has dumped lowend and very cheap tools on the international market. Indeed, China is now the largest exporter of hand tools in the world, with Germany and Taiwan ranking second and third, respectively. To enhance the functionality and value of digital tools, Taiwanese hand tool makers have developed digital modules that allow wireless data transmission using the Bluetooth protocol. Manufacturers believe that the use of Bluetooth is a major enhancement in the reliability of digital tools because it allows remote control of the torque force applied through each digital torque wrench that is properly equipped. As a result, improperly torqued fasteners can be detected quickly.

A simple electric drill makes woodworking easier. (©Wellford Tiller/Dreamstime.com)

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Hand Tools and Instruments Industry

Modules with built-in Bluetooth have already been completed and are expected to boost Taiwan’s profile as a home of digital tool experts. Digital modules make it more feasible to mass produce digital tools, and they help assure the tools’ quality. The modules are designed to meet most digital tool specifications. Thus, manufacturers can use them with their existing tool models, using modular production methods to boost their capacity and maintain quality. Digital hand tools are quickly becoming a major force for Taiwan’s hand tools industry. Even though the cost of manufacturing and distributing digital torque tools is about five times that of traditional hand tool models, torque tools are expected to replace only 5 percent of total exports of traditional hand tool models but to generate an export value ten times greater than those they replace. Among the foremost Taiwanese digital-tool mak-

ers with their own brands in the global market is Eclatorq. The popular toolmaking company makes annual shipments of more than twenty thousand digital tools, including torque wrenches, screwdrivers, and pullers. The company claims that its torque wrenches are almost immune to stressful conditions and are especially cost-efficient because they need only one sensor instead of four strain gauges. Their simple design not only reduces defect rates but also enhances measuring accuracy. There are more than fifteen hundred firms active in the U.S. hand tools industry, with a combined annual revenue of about $5.9 billion. These businesses range from small to major corporations. Some of the better-known hand tool manufacturers include Bostitch, Craftsman, Jennings, Plumb, Diamond, Disston, Rubbermaid, Marples, Starrett, Cooper Industries, Record, and Stanley. The hand tools industry has also become extremely energyintensive, for the most part. In most economies all over the world, adoption of energy-efficient, green processes and technologies can yield energy savings between 30 and 50 percent. Hand tools’ most common subindustries include hardware, lumber tools, cutlery, power tools, automotive tools, garden tools, plumbing tools, and carpentry tools. Automotive, construction, and home improvement are among the most common partnership industries.

INDUSTRY MARKET SEGMENTS The hand tools and instruments industry includes facilities ranging in size from small momand-pop shops to large franchise stores. The industry serves a wide array of clients, from college students and housewives to newlywed couples and entrepreneurs looking to expand or improve their homes or work spaces. The following sections provide a comprehensive breakdown of each of these different segments.

A hammer hangs from a builder’s tool belt. (©Chris Hellyar/Dreamstime.com)

Small Businesses The demand for hand tools depends on the construction and building repair industries. Fortunately, small businesses in the hand tools industry are able to compete with larger businesses by making specialty products. Ongoing introduction of

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new hand tool products, especially improved cordless tools, will create gains in all markets. Potential Annual Earnings Scale. The average earnings for an employee at a small company in the hand tools industry vary from state to state, but the salary range in the United States is from $16,000 to $35,000 a year for a clerk and $35,000 to $70,000 annually for a store manager. The salaries for employees that work in small hand tool businesses usually remain steady because of the nature of the business. Also, small establishments do not usually experience seasonal rushes, as do hand tool companies that are located in shopping centers Toolboxes can be large and elaborate. (©Filip Miletic/Dreamstime.com) such as malls or other highly populated shopping areas. Hand tool store employees that work in small businesses may not get regular pay raises or salary Typical Number of Employees. The typical increases, but managers often provide other incennumber of employees in small hand tool stores can tives, such as complimentary time off. range from two employees to four. In small estabClientele Interaction. A lot of the clientele inlishments, many stores can operate on less than ten teraction in the hand tools industry is based on employees. A clerk to greet customers and sell product demonstration and safety tips. Many of products and tools and an owner will suffice in today’s hand tools are advanced and updated vermany cases. One- to two-person shops are often sions of the hand tools of yesterday. Many sales prosuccessful, particularly in small rural communities. fessionals and even store clerks spend a few minThey usually have low turnover rates because many utes with their customers to make sure they are well of the businesses are either family-owned compaaware of how their new hand tools should be used, nies or locally owned and operated. stored, and maintained. Traditional Geographic Locations. Hand tool Amenities, Atmosphere, and Physical stores are located in every city in America. Whether Grounds. Small hand tools businesses tend to have it is a large chain like Home Depot, Lowe’s, or few amenities. They do not offer the large-scale Handy Dan’s or a small family-owned store, hand demonstrations available in some of the larger tool businesses are rarely hard to find. Rural locastores that specialize in hand tools, but there are intions or hand tool stores in areas that have a small timate and often one-on-one interactions between population are more likely to sell hand tools that customers and employees. The atmosphere, as is are suitable for use on farms and in fields. the case with most “mom and pop” companies, Pros of Working for a Small Business. Emtends to be personal and nurturing, since many of ployees of small companies often know their reguthe smaller stores want to make sure their customlar customers by name and are often more knowlers are informed, safe, and happy with their prodedgeable about their products. This allows the ucts. Physical grounds may include a one-room faemployees to speak with their customers in detail cility with a small storage area, perhaps in the back about the projects they are working on and the of the store, for hand tool storage and incoming tools they will need to complete those projects and outgoing shipments. safely, effectively, and successfully.

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Hand Tools and Instruments Industry

Cons of Working for a Small Business. The cons of working in a small business include low pay and the possibility of wearing many hats. For instance, the owner of the establishment is usually also the receptionist, accountant, and clerk. Also, the products available in small businesses may not be as up-to-date or advanced as the tools available in larger stores. Shipments may be fewer for economic reasons. In addition, small hand tool store employees may not get paid sick time, vacation leave, or retirement plans because they simply may not be affordable for the business owner. Costs Payroll and Benefits: Small businesses that specialize in hand tools have both full-time and parttime staff, including salaried positions. Hand tool establishments with at least one employee but no more than nineteen employees must cover payroll, fringe benefits—including vacation, sick leave, and possible bonuses—health coverage, and benefit pension plans such as IRAs and 401(k) plans. There must also be a budget for temporary staff and leased employee expenses. Supplies: Materials, parts, containers, shipping, packaging, and other essentials can cost $1,000 annually. In addition, fuel costs can be quite high. One way that small hand tool companies cut costs is by buying forgings or castings that are semifinished from external suppliers. Large hand tool makers usually manufacture their own. External Services: Hand tool companies may contract accounting, advertising, cleaning, maintenance, computer support, or landscaping services, as necessary. Utilities: Hand tool companies generally pay for electricity, water, sewage, refuse removal, telephone, gas or oil, and Internet access. Taxes: Hand tool companies must pay local, state, and federal corporate and property taxes. Owners of very small companies may claim their income on their personal returns, in which case they must also pay self-employement taxes. Midsize Businesses Midsize hand tool businesses offer the same products and services as small businesses, but they offer more of them. They also have bigger budgets,

but they often face the same challenges as smaller companies if the economy is in a recession. Imported hand tools from other countries also pose a threat to midsize businesses, just as they do to small hand tool companies. Potential Annual Earnings Scale. The average earnings for an employee at a midsize company in the hand tools industry vary from state to state, but the salary range in the United States is from $17,000 to $35,000 a year for a clerk and up to $75,000 a year for a store manager or owner of a hand tool and equipment store. Unlike small hand tool companies, midsize establishments experience a seasonal rush during peak times of the year, such as the summer and spring months, when home renovation projects increase. Hand tool store employees that work in midsize businesses are likely to receive regular pay raises or salary increases, if budgets allow. Clientele Interaction. In midsize hand tool companies, there is a lot of clientele interaction, which is beneficial for both employees and their customers. There are greeters, stockers, account managers, and employees who repair and maintain the supply of tools. There are dozens of employees in midsize businesses who perform a variety of tasks but can sometimes wear more than one hat. One of the benefits of patronizing midsize companies is that the customers are usually regulars who are somewhat familiar with the company’s employees. This interaction allows the customers to receive one-on-one care when it comes to questions, product demonstrations, and follow-up visits regarding their tool purchases. Midsize companies also are likely to offer coupons, discounts, reward cards, and sales for their customers. Amenities, Atmosphere, and Physical Grounds. Midsize hand tool companies may have multilevel facilities that house repair shops to work on damaged or malfunctioning hand tools. There may also be break rooms for members of the staff, as well as show rooms and several areas for certain tools; for example, power tool sections, modern hand tool sections, and sections for older hand tools. There may even be areas for refurbished hand tools. Typical Number of Employees. The typical number of employees in midsize hand tool stores can range from twenty to forty. These employees are usually longtime members of the team who

Hand Tools and Instruments Industry have benefits—job stability, retirement plans, paid vacation, and sick leave. Employees in midsize hand tool establishments often have opportunities for growth and advancement within the company. Traditional Geographic Locations. Midsize hand tool stores are usually found in larger cities where there is plenty of room to grow and expand and flourish. Pros of Working for a Midsize Business. Unlike small businesses, midsize hand tool stores do not have so few employees that they have a hard time keeping up with their regular customers and being familiar with what their patrons need. Midsize hand tool stores are able to deliver to their customers promptly, efficiently, and successfully. These companies are almost always fully stocked with the latest merchandise and receive frequent shipments to keep up with their customers’ everchanging needs. Cons of Working for a Midsize Business. The cons of working in a midsize business include not having as much access to the latest tools as one would in a large business. Like any other business in any other industry, midsize hand tool companies are not immune to layoffs, downsizing, and taking financial hits when the economy is not booming. Costs Payroll and Benefits: Midsize businesses that specialize in hand tools have both full-time and parttime staff, including salaried positions. Hand tool establishments with at least twenty employees but no more than forty employees have to cover payroll, fringe benefits—including vacation, sick leave and possible bonuses—health coverage, and pension plans such as IRAs and 401(k) plans. There must also be a budget for temporary staff and leased employee expenses. Supplies: Materials, parts, containers, shipping, packaging, and other essentials can cost $1,000 annually. In addition, fuel costs can be quite high. Midsize hand tool makers usually manufacture their own forgings or castings, which can save them money in the long run, though they may still buy forgings or castings that are semifinished from external suppliers. External Services: Hand tool companies may contract accounting, advertising, cleaning, maintenance, computer support, or landscaping services, as necessary.

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Utilities: Hand tool companies generally pay for electricity, water, sewage, refuse removal, telephone, gas or oil, and Internet access. Taxes: Hand tool companies must pay local, state, and federal corporate and property taxes. Large Businesses American demand for hand tools depends a great deal on the construction and building repair industries. The profitability of individual companies depends on marketing and efficient production. Large companies have economies of scale in purchasing and production. Potential Annual Earnings Scale. The average earnings for a manager or owner of a large hand tools company can be as much as $100,000 or more annually. An entry-level employee at a large hand tools business can earn anywhere from $10 to $14 an hour or $20,000 to $25,000 a year. The salaries for employees that work in large hand tool businesses usually remain steady because of the nature of the business. Some large hand tool stores may also include bonuses and commissions as part of their employees’ salaries, based on their performance and sales. Also, large establishments usually experience a seasonal rush during the holiday season and hurricane and tornado seasons, when repairs and renovations are needed. Hand tool store employees that work in large businesses get full benefits, including bereavement, sick, holiday, personal, and holiday time off. Clientele Interaction. There is not much clientele interaction in large hand tool stores. Much of the interaction that takes place happens at checkout when the customer is actually making the purchase. Large hand tool stores are often crowded, and customers who need assistance do get the assistance they need, but they may not get as much time with a store employee simply because of the volume of customers in the store at any given time. Amenities, Atmosphere, and Physical Grounds. Large hand tool companies are usually complex, multilevel establishments. There are acres of land for storage facilities, repair shops within the facility, and loading and unloading docks for outgoing and incoming shipments. There is usually plenty of room for expansion, and there is usually more than one location, since many large hand tool facilities are part of a franchise or chain.

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Typical Number of Employees. The typical number of employees in a large hand tool store can range anywhere from forty employees to hundreds of workers. There are several clerks to greet customers as they walk into the store and sales clerks who sell products and tools to customers. Traditional Geographic Locations. In large metropolitan areas, there are usually well-known store chains such as Lowe’s and Home Depot, which specialize in hand tools and equipment for building and maintenance. There are also general stores like Walmart that have departments within the store that feature the latest in hand tools. In smaller communities, there are also stores that are part of a retail chain, but there is usually only one per community. Pros of Working for a Large Business. Employees of large companies often get frequent shipments of the latest products that the hand tool industry has to offer. Employees are usually stable in their jobs and have plenty of opportunities for professional growth, development, and advancement. In addition, employees of large hand tool companies enjoy full retirement, medical, and other benefits. Employees who work in a large hand tool store often have access to top-of-the-line items that many of the smaller hand tool stores cannot afford or of which they may simply be unaware. Cons of Working for a Large Business. The cons of working in a large business include serving thousands of different customers each week. This leaves little opportunity for individual interaction with the customers, aside from checking them out at a register when finalizing the sale. Employees in larger hand tool stores also have to keep up with the ever-increasing and ever-changing demand that customers have for hand tools. Also, when the economy takes a downturn and layoffs happen, many employees may be terminated to cut costs. Costs Payroll and Benefits: Large businesses that specialize in hand tools have both full-time and parttime staff, including salaried positions. Hand tool establishments with at least forty employees have to cover tens of thousands of dollars in payroll, fringe benefits—including vacation, sick leave, and possible bonuses—health coverage, and pension plans such as IRAs and 401(k) plans. Such expenses can cost large hand tool

businesses several million dollars a year. There must also be a budget for temporary staff and leased employee expenses. Supplies: Materials, parts, containers, shipping, packaging, and other essentials can cost several thousand dollars a year. In addition, fuel costs can be quite high. External Services: Hand tool companies may contract accounting, advertising, cleaning, maintenance, computer support, or landscaping services, as necessary. Utilities: Hand tool companies generally pay for electricity, water, sewage, refuse removal, telephone, gas or oil, and Internet access. Taxes: Hand tool companies must pay local, state, and federal corporate and property taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The hand tools industry consists of many employee roles. The employees are responsible for the day-to-day operations of a successfully run hand tool business, as well as the management, maintenance, service, and payroll schedule at the establishment. From cashiers to accountants to managers to owners, a lot of hats are worn in the hand tool business. While small hand tool shops may only have one person who serves as the store cashier, mechanic, accountant, and office manager, large hand tool stores have hundreds of employees that can fill such roles as clerk, repairman, order filler, stock room clerk, and so on. There may also be several human resources representatives responsible for interviewing potential employees and hiring new workers. In addition, there are interns, apprentices, builders, product demonstrators, and safety experts on hand to make sure customers know what products they are getting, what the products should be used for, and why they are or are not necessary for their impending projects. These employees, regardless of their role at the hand tool business, all need to be properly oriented and trained in order successfully and efficiently to perform their assigned duties and tasks. The following umbrella categories apply to the organizational structure of businesses in the hand tools and instruments industry:

Hand Tools and Instruments Industry ■ ■ ■ ■ ■ ■

Business Management Customer Service Facilities and Security Production Distribution Human Resources

■ ■ ■ ■ ■ ■ ■

Accountant President Vice President Executive Assistant Administrative Assistant Industrial Production Manager Engineering Manager General or Operations Manager

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■ Business Management The business management division centers around aligning all aspects of a company with the Customer Service wants and needs of its customers. Some of the roles Customer service representatives are responsiassociated with business management include acble for ensuring customer satisfaction from the countants, administrative assistants, receptionists, moment customers enter the establishment to the and secretaries. In larger businesses, roles may also time they make a purchase and leave the store. Cusbe fiscal analysts, bookkeepers, purchase order tomer service may also interact with customers clerks, bursars, and file clerks. There are also finanlong after the purchase is made. This follow-up cuscial analysts and planners in this division. The busitomer service may be done through customer satisness management division of the hand tools busifaction surveys and follow-up postcards to the cusness must keep up with each and every transaction tomer’s home or even coupons or reward cards for that occurs day to day. This department keeps fidiscounts on future purchases at the hand tool nancial order and makes sure that the company store. Customer service positions include quality stays in the black. The business management deinsurance specialists, the cashiers who actually partment is also responsible for making sure that make the sale, the greeters who are the first to inall taxes are paid at the end of the year; that all literact with the customer upon entering the store, censes are obtained, up to date and renewed regand even the manager or owner of the establishularly; and that all necessary fees are taken care ment, who may have some sort of communication of. The business management office consistently with the customer at some point. Customer service makes sure that all transactions are necessary and beneficial to the establishment. Business management employees at some of the larger companies, for example, work to ensure that the company’s revenue is enough to cover regular expenses, including employees’ salaries, health insurance costs, maintenance expenses, and unexpected emergencies. Smaller companies may be a one-man-shop that work to bring in just enough money to run the business day to day. Keeping up with the budget from year to year is important so that the company’s expenses do not exceed the business’s revenue and profits. Many hand tools—such as the chisel—have remained all-purpose and may be Business management occupations may include the followused for marking, measuring, striking, and scraping. (©Claudio Fichera/Dreamsing: time.com)

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Hand Tools and Instruments Industry

representatives provide a valuable link between customers and the companies who make the products they buy and the services they use. Most customer service representatives are able to do their work by telephone or in call centers, but some interact with customers by e-mail, fax, or face-to-face. In some cases, a representative’s main function may be to determine who in the organization is best suited to answer a customer’s questions. In large shops, customer service employees route calls to the appropriate department or person. In smaller stores, customer service may consist of a smile and getting to know their customers on a first-name basis. These skills will come across when it comes to revenue, the number of patrons that visit a store, and certainly the number of patrons that recommend that their friends and family members visit the establishment. Great customer service will also result in patrons revisiting a store regularly, which will result in more business and financial gains in the long run. Customer service occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Customer Relations Manager Customer Relations Representative Sales Manager Sales Representative Account Executive Account Associate Clerk Cashier Receptionist Switchboard Operator

Facilities and Security Facilities and security staff provide services, technical support, and information for managers. This staff can offer support with regards to the selection of design professionals and contractors, space planning, design development and construction administration. Anything regarding security issues, technology, furnishings, fixtures, and related equipment can also be provided. Facilities and security workers are responsible for the maintenance and upkeep of the facilities and keeping the business safe and secure, yet presentable and professional. This particular division is essential because security keeps the peace and keeps the environment free from any disturbances and inap-

propriate activity. Security not only protects the property from outside disturbances but also controls internal issues such as unruly or disgruntled employees, altercations between employees and customers, and also disturbances caused by breakins, burglaries, shoplifting, and theft. Such security measures are effective because they are almost always enhanced with hidden surveillance equipment and sensor technology to keep products from being taken out of the store illegally. Facilities workers are necessary for the complicated upkeep of any business. These employees keep lawns manicured, buildings freshly painted, restrooms clean, floors swept and mopped, windows clean, and hallways and walkways clear of clutter and debris. Facilities workers keep general store workers, such as clerks, managers, and customer service representatives, in larger companies, from having to maintain and service the grounds in addition to serving customers and selling equipment and hand tools to patrons. A list of associated roles in this division includes security officers, janitorial employees including landscapers, maintenance employees, and general groundskeepers. Facilities and security occupations include the following: ■ ■ ■ ■ ■ ■

Groundskeeper Maintenance and Repair Worker Loss Prevention Specialist Inventory Clerk Security Supervisor Security Guard

Production Production personnel have the task of producing and overseeing the producers of hand tools. These workers manufacture wrenches, hammers, scissors, vises, clamps, screwdrivers, pliers, chisels, and measuring devices. Manufacturers rely on an array of fabrication processes, including bending, forming, and machining, to transform metal into finished products. Production and operations roles include assembly-line workers, producers, operations managers, and production managers and assistants. Perhaps one of the most important roles is that of chief operating officer (COO). The chief operating officer is responsible for integrating production, inventory, logistics, and transportation activities; lowering manufacturing costs; innovating in new

Hand Tools and Instruments Industry OCCUPATION

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PROFILE

Machinist Considerations

Qualifications

Description

Makes metal parts and goods in numbers too small to produce with automated machinery but that must still meet precise specifications, sets up and operates machines in order to make metal and nonmetal parts, and fits and assembles the parts into complete units.

Career clusters

Agriculture, Food, and Natural Resources; Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

Apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service

Licensure and certification

Recommended

Employment outlook

Decline expected

Holland interest score

RIE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

production and service techniques and processes; building standardized and streamlined processes to provide stable, consistent, and quality products; eliminating unnecessary production activities; and identifying key drivers of cost, risk, expenses, business growth, competition, quality, and profits, to name just a few duties. All these workers help ensure that products in the hand tools industry are made safely, efficiently, effectively, and quickly. Production occupations may include the following: ■ ■ ■ ■ ■ ■

Chief Operating Officer (COO) Industrial Production Manager Industrial Engineer Production Supervisor Team Assembler Computer-Controlled Machine Tool Operator

■ ■ ■

Machine Operator Machinist Tool and Die Maker

Distribution The distribution department’s function is to generate and print a pick list, pull products from inventory, box up products for shipping, and create and send a shipping label and bill to the accounting department and freight company. Distribution centers are run by general managers and middle managers, who oversee direct labor staffs and indirect labor staffs. The direct labor staff executes the distribution processes, while the indirect labor staff supports the direct labor staff. The associated roles of a warehouse can include unloaders, who unload trucks and break down pallets as needed; receivers, who inventory and tag unloaded pallets; haulers, who transport received pal-

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Hand Tools and Instruments Industry OCCUPATION

PROFILE

Robotics Technician Considerations

Qualifications

Description

Installs, services, troubleshoots, maintains, and repairs robots and robot systems used in such jobs as spray painting, welding, assembly, die casting, machine loading and unloading, plastic molding, forging, and heat treating.

Career clusters

Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma/technical training; junior/technical/community college

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship

Licensure and certification

Recommended

Employment outlook

Slower-than-average growth expected

Holland interest score

REC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

lets with equipment from the receiving dock to the storage racks; putaway drivers, who put products into racks with forklifts; replenishment drivers, who pull products from the racks and place them into the “pick slot” with a forklift; order-fillers, who pick products from the “pick slot” by hand and move them with power equipment; and loaders, who wrap order-filled pallets and load trucks. Distribution occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Warehouse Manager Distribution Manager Distribution Worker Freight Loader/Unloader Shipping and Receiving Clerk Heavy Truck Driver Delivery Truck Driver Dispatcher

Human Resources Human resources (HR) workers are responsible for finding and retaining qualified employees in the hand tools industry. Traditionally, the role of the HR professional in many companies has been to serve as the systematizing, policing arm of executive management. In this role, the HR team member also served executive agendas, such as addressing complaints of sexual harassment, discrimination, criminal activity, or unfair treatment by another employee or supervisor. These employees post newly created and vacant positions, contact potential employees for job interviews, screening and interviewing potential applicants and setting up drug screenings and physical examinations if required to fulfill the duties of a job. Also, HR workers are responsible for making sure that newly hired employees fill out all necessary paperwork, including retirement papers, investment forms, federal paperwork, pay-

Hand Tools and Instruments Industry roll deductions, and other new hire forms. Associated HR roles include assistants and managers, shared services employees, and HR generalists. HR specialists are essential to any business because they help companies maintain a full staff. HR workers also keep employee paperwork updated and filed in an orderly manner and also set up training and training seminars for employees who want to develop and enhance their job skills. HR workers also process payroll information and keep track of employees’ sick time, vacation request forms, personal time off and any overtime hours accrued. More often than not, HR is the first department that potential workers and newly hired workers see, and are the initial point of contact for employees. HR occupations may include the following: ■ ■ ■ ■

Human Resources Manager Human Resources Generalist Benefits Specialist Administrative Assistant

INDUSTRY

OUTLOOK

Overview The outlook for the hand tools and instruments industry shows it to be rising rapidly. Power and hand tool demand in the United States is predicted to increase by more than 3 percent per year through 2012. This projected increase in demand is partly due to the construction outlook, as building construction is expected to increase as well. DIY popularity will contribute to consumer demand, in addition to home renovation and refurbishment projects. Steady introduction of new products—particularly improved cordless tools— will also create gains in all hand tool markets. Increased competition from imported hand tools has certainly had a negative impact on U.S. production. Asian countries are leading suppliers of power and hand tools because of low labor cost advantages compared to the price of labor in the United States. China has become the major source of American imports. U.S. production of electric tools has been surprisingly decreased by outsourcing of production to lower-cost countries across the globe. Maintaining established trends, power tool demand is forecast to outpace hand tool demand as a result of the continuing popularity of

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cordless electric products such as chain saws, power drills, sanders, wood polishers, and grinders. Hand tool demand is limited by the durability of these newer and updated products. One of the major advantages of hand tools that makes them particularly attractive to users is their durability. Hand tools such as hammers and wrenches very seldom break. This fact lowers the demand for replacements for such products. Another thing that is appealing about hand tools is that they are cheaper than power tools. The cost of hand tools plays a big role in consumer demand, especially in markets with older families and customers who are on fixed incomes or live in rural areas, where hand tools are needed often but pay raises are few. In addition, product innovation is less common than in power tools, limiting opportunities for value gains. Cordless products will continue to post the best gains, benefiting not only from macroeconomic factors but also from performance advantages over plug-in models. The development of better battery technology, such as lithium-ion chemistry, has encouraged both consumers and professionals to use cordless technology. Consumer hand tool demand will grow faster than will demand for professional tools, benefiting from the ongoing popularity of DIY activities and the desire of consumers to trade up to power tools that boast many features. In addition, the tightening of mortgage markets in the United States will compel many homeowners to remain in their current homes rather than purchasing new ones. This trend will boost home remodeling and repair activity. Although growing more slowly than consumer demand, professional demand will continue to account for the majority of overall tool demand through 2012. Professionals use a greater variety of tools, most of which are also more expensive than those used by consumers. Employment Advantages Although the domestic hand tool industry is being challenged by foreign competition, the boom in power tool sales, and the new market for digital hand tools, there are plenty of advantages to working in the hand tool industry. Americans will always need and use hand tools, whether standard wrenches or new and improved chisels. There will always be a demand for such tools. Home improvements will always be made and so will renovations

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Hand Tools and Instruments Industry

to tool sheds, farm houses, and other facilities. For these tasks, many Americans prefer hand tools because they require little maintenance. Hand tools also require little training. In today’s DIY age, homeowners want to take control of their maintenance and building needs. There will always be a need for men and women who understand the importance of hand tools and their numerous uses. With new technology, there will be opportunities for growth, training, and advancement in the hand tools industry.

Tel: (301) 253-4892 http://www.patinatools.org TOOLS OF THE TRADE Magazine 1 Thomas Circle NW, Suite 600 Washington, DC 20005 Tel: (202) 452-0800 Fax: (202) 785-1974 http://www.toolsofthetrade.net

ABOUT Annual Earnings The domestic U.S. hand tool industry earned revenues of $5.9 billion in 2009. Annual international revenues were $12.3 billion, while annual global revenues were $19.87 billion, an increase of more than 4 percent from 2006. These revenues are expected to continue growing, as the economy improves and the market for hand tools grows and expands.

RELATED RESOURCES FOR FURTHER RESEARCH Antique Tools and Trades in Connecticut 61 Hawthorne Fairfield, CT 06825 Tel: (203) 453-4281 Fax: (203) 371-4701 http://www.attic-us.org Hand Tools Institute 25 N Broadway Tarrytown, NY 10591 Tel: (914) 332-0040 Fax: (914) 332-1541 http://www.hti.org Missouri Valley Wrench Club 7913 SW 24th St. Halstead, KS 67056 Tel: (316) 283-5876 Fax: (316) 284-7345 http://www.mvwc.org Potomac Antique Tools and Industries Association 6802 Nesbitt Place McLean, VA 22101

THE

AUTHOR

Ramonica R. Jones has more than ten years of professional experience as a general-assignment reporter and media-relations writer. She is a 1999 cum laude graduate of Huston-Tillotson University in Austin, Texas, and also attended Texas Southern University’s Graduate School of Communications in Houston, Texas. Jones has written numerous articles about many industries, including city, county, and state business dealings, product manufacturing, and the American economy. Throughout her career, she has consulted with experts in both the public and private sectors.

FURTHER

READING

Chuang, Steve. “Digital Tools to Drive Growth of Taiwan’s Hand Tool Industry.” China Economic News Service, November, 2009. http://cens.net/cens/html/en/news/ news_inner_30792.html. Chylinski, Manya. Career Launcher: Manufacturing. New York: Ferguson, 2010. Korn, Peter. The Woodworker’s Guide to Hand Tools. Newtown, Conn.: Taunton Press, 1997. Leseure, Michel J. “Manufacturing Strategies in the Hand Tool Industry.” International Journal of Operations and Production Management 20, no. 12 (2000): 1475-1487. Mintel International Group. DIY Review. London: Author, 2008. Trotman Real Life Guides. Manufacturing and Product Design. Richmond, England: Author, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg.

Hand Tools and Instruments Industry U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data

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and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Vereen, Bob. Surviving in Spite of Everything: A Postwar History of the Hardware Industry. Indianapolis: Dog Ear, 2010. Watson, Aldren A. Hand Tools: Their Ways and Workings. New York: W. W. Norton, 1982.

©Lougassi Gilles/Dreamstime.com

Health and Fitness Industry

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The health and fitness industry comprises facilities that offer exercise and recreational activities. Considered part of the amusement and recreation sector, this industry includes small aerobic dance or body building studios and large clubs that offer exercise, racket sports, and skating opportunities. These facilities may be found in a variety of locations, including communities, hospitals, corporations, and hotels, as well as cruise ships. Although the industry operates predominantly in the more economically developed areas of the world, it can be found worldwide, employing people as fitness leaders, managers, clerks, and maintenance workers.

General Industry: Arts and Entertainment Career Cluster: Education and Training Subcategory Industries: Aerobic Dance Centers; Exercise Centers; Fitness and Recreational Sports Centers; Gymnasiums; Health Clubs; Ice and Roller Skating Rinks; Personal Fitness Trainers; Physical Fitness Centers; Physical Fitness Evaluation Services; Racket Clubs; Spas; Swimming and Wave Pools; Weight Training and Body Building Facilities Related Industries: Outdoor Recreation Industry; Sports Equipment Industry; Travel and Tourism Industry Annual Domestic Revenues: $23.8 billion USD (IBISWorld, 2008) Annual International Revenues: $44.4 billion USD (IBISWorld, 2010; International Health, Racquet, and Sportsclub Association, 2009) Annual Global Revenues: $68.2 billion USD (International Health, Racquet and Sportsclub Association, 2009) NAICS Numbers: 621999, 713940, 812990

History of the Industry The value of fitness dates back to prehistoric times, when physical abilities were important for survival. Fitness as an optional activity evolved in early civilizations throughout the world. Ancient Greece is well known for using exercise to promote aesthetics and health. Its fitness facilities were called palaestra and gymnasiums, and paidotribes—similar to a modern-day fitness trainers—led men and boys in gymnastics, running, jumping, and wrestling. In ancient China, gymnastics and wrestling were promoted, and in ancient India a popular form of gymnastics called yoga was developed. 808

Health and Fitness Industry In the United States, fitness grew slowly at first. During the colonial period, most people performed hard, physical labor on farms. They became fit without having to engage in exercise or fitness training. By the early 1800’s, Europe had organized physical education programs for children, while the U.S. education system was still focusing on the mind. In the 1880’s, the Young Men’s Christian Association (YMCA, now known as the Y) began building gyms and pools in its buildings. These facilities were among the first in the health and fitness industry. With the development of machines that reduced the amount of physical labor required by workers, more people became unfit. The value of physical activity became more apparent. At a time when more physical education programs were developed in the United States, sports were gaining popularity too. A debate started about whether physical education should be geared toward the development of general health or specific sport skills. Sport skills became the focus in the early years.

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By the advent of World War I, the fitness industry had still not fully emerged in the United States. Evaluating data after the war revealed that one in three draftees had been physically unfit for battle. Efforts to increase physical education in schools were emphasized again. However, the Great Depression began, and physical activity continued to be a relatively low priority. When World War II began, the Americans who were drafted were still unfit as a group. After the war was over, the nation renewed its focus on physical fitness and health. Dr. Thomas K. Cureton at the University of Illinois began scientifically studying the effects of exercise on the human body. More specifically, he studied what type of exercise was needed to produce health benefits. In the 1950’s, two events had profound impacts on the emerging fitness industry. In response to the lack of fitness of soldiers in World War II, a large study was conducted on the fitness levels of school children. The results were troubling, and President Dwight D. Eisenhower created the President’s Council on Physical Fitness and Sports. In

Larger health and fitness clubs offer studio exercise classes, including spinning classes. (©Andres Rodgriguez/Dreamstime.com)

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Health and Fitness Industry

the same decade, Jack LaLanne began a fitness television show in San Francisco that was eventually broadcast nationally by the American Broadcasting Company (ABC). LaLanne was a major player in taking the fitness movement nationwide. Prior to his television show, he opened his first health spa in 1936. His chain of health spas grew into the hundreds by 1980. He also developed exercise equipment whose designs are the basis of present-day exercise equipment. Fitness in the United States boomed in the late 1960’s, when Dr. Kenneth H. Cooper published his book, Aerobics (1968). The health benefits of exercise were becoming apparent to the masses across the nation. Further promotion of the President’s Council on Physical Fitness and Sports by President John F. Kennedy also helped create a young generation of physically active people, accelerating the development of the U.S. health and fitness industry.

Most health and fitness clubs have cardiovascular training equipment, including treadmills. (©Adam Edwards/ Dreamstime.com)

The Industry Today Health and fitness facilities come in many sizes and are located both separately from and within many other industries. Some are small, individually owned facilities with limited programs, while others are large, national chains with extensive programs. Many health and fitness centers are distributed throughout communities and target the general populations of those communities. These include privately owned clubs, large national chains, hospital-owned and -operated complexes, municipal recreation centers, Ys, Young Women’s Christian Associations (YWCAs), and Jewish Community Centers (JCCs). Other health and fitness centers target more specific groups. Corporations and other workplaces have facilities and programs for their employees. Retirement homes offer programs and facilities for older people. Many colleges and universities have recreational facilities for their students and employees that include health and fitness programs. Hotels, resorts, and cruise ships also operate health and fitness clubs for their guests. Any of these fitness centers may employ fitness trainers, aerobics instructors, managers, sales representatives, lifeguards, janitors, receptionists, and maintenance workers. The largest health and fitness centers offer the most programs and services. They are more likely to have swimming pools, gymnasiums, racquetball courts, and running tracks. Some specialty clubs may have climbing walls, ice or roller skating rinks, turf fields, and wave pools. Most, however, have cardiovascular training equipment that could include treadmills, stationary bicycles, climbers, elliptical trainers, and rowing machines. There are many variations of these types of equipment, and the large centers usually have the most variety. Larger centers also have the most variety of weight training equipment, which may include free weights and selectorized, weight-stacked equipment. Larger health and fitness clubs also offer many studio exercise classes. New types of classes are constantly being developed, and larger clubs are able to offer more options. Besides the original choreographed dance, some of the more popular classes include water aerobics, yoga, Pilates, boxing and other martial arts, step, weight equipment, and cycling or spinning. Fitness assessments are commonly offered by health and fitness clubs. Assessments are beneficial

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Personal trainers are fitness professionals who develop specific exercise programs tailored for individuals and then personally manage their clients’ workouts. (©Dreamstime.com)

for determining a person’s fitness level prior to beginning a fitness program or to periodically measure improvements (or lack of improvements) resulting from individuals’ exercise programs. Such information is important to determine whether programs are accomplishing their intended goals or whether changes need to be made. Fitness assessments may include measurements of body composition, cardiovascular endurance, muscular endurance, strength, flexibility, balance, power, and agility. An increasing number of consumers are employing personal trainers, either at health and fitness clubs or at home. Personal trainers are fitness professionals who develop specific exercise programs tailored for individuals and then personally manage their clients’ workouts. They first assess clients’ fitness levels. Then, trainers work with their clients to determine the specific goals of their exercise programs. Trainers develop exercise prescriptions with precise details for each exercise session.

In most cases, they direct exercisers throughout their sessions to verify proper technique and to motivate them to work hard. This one-on-one service is labor-intensive and therefore is more expensive than group training. Many of the large health and fitness centers offer spa services. Spas focus on relaxing and healing. Many people find spa services appealing after hard workouts. The most common spa services in fitness centers include massage and skin care. Several types of massage can be offered, including Swedish massage, sports massage, aromatherapy massage, reflexology, and shiatsu. Standard skin services may include scrubs, wraps, peels, waxing, and moisturizing. Hydrotherapy can benefit both relaxation and skin. Some in-center spas also offer hair and nail care. After exercise, people can be hungry and thirsty. Larger health and fitness clubs may have small restaurants or cafeterias. Generally, these establishments offer nominally healthy food and drink op-

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Health and Fitness Industry

tions in keeping with fitness centers’ missions. Sport drinks, yogurt, low-fat soups, and sandwiches are most common. Light, healthy breakfast foods are also offered, since many people exercise early in the morning. In addition to prepared foods, many clubs sell nutritional supplements. Since exercisers tend to be health conscious, they are likely to purchase these products. Some health and fitness facilities provide child care while parents exercise. These require dedicated child-care areas and staffs. Others offer towel serSome fitness centers provide towels and offer laundry service; others may have litvices to their patrons. Others, tle more than drinking fountains. (©Lougassi Gilles/Dreamstime.com) although fewer, may also provide workout clothes. Thereclasses. Others may offer only free weights for fore, some facilities also have laundries. Some building muscle. One national chain offers primarclubs may use laundry services, but many have their ily a circuit training program for women. Midsize own laundries to reduce costs. health and fitness clubs may offer several exercise Large, midsize, or small health and fitness cenoptions. The mega clubs can offer almost everyters must be prepared to change with the changing thing. Smaller clubs usually offer fewer services: fitness market. New types of equipment are conFood services may be limited to sports drinks and stantly being produced. New types of exercise pronutritional supplements, and spa and laundry sergrams are being developed. To keep members vices may not exist. The different segments of the happy, health and fitness clubs must be willing to health and fitness industry are analyzed in the secchange to meet their members’ new expectations. tions below. Interest in fitness is growing among people all around the world, making the outlook in the fitSmall Businesses ness industry very exciting for the organizations Privately owned spas and health and fitness that stay creative and focus on the future. clubs generally are single facilities that serve the same clientele as the larger organizations and national chains. While membership costs may not be INDUSTRY MARKET significantly different at small clubs, each club speSEGMENTS cializes in a few types of exercise rather than offering a large selection. Self-employed personal trainThe health and fitness industry ranges in size ers also fall into this business segment. from small spas to mega fitness centers that serve Potential Annual Earnings Scale. According to communities, employees, travelers, retirees, and the U.S. Bureau of Labor Statistics (BLS), personal students. While each of the larger health and fitfitness trainers and aerobics instructors earned an ness facilities offers many programs and services, average of $42,170 in 2009, while those employed the smaller facilities are more focused. Since they by fitness and recreation centers earned an average cannot offer as many programs and services as of $36,710. In the United States, owners of well-run their larger competitors, smaller clubs target spesmall health and fitness clubs can earn $100,000 cific segments of the exercising community. Some per year and more. may simply be studios that offer group fitness

Health and Fitness Industry Clientele Interaction. Small spas and clubs offer more intimate relationships between staff and clients than do larger centers. Since these clubs have fewer members and more focused program offerings, all people involved get to know one another better. Instructors are better able to understand the fitness needs and desires of their clients and can provide a personal touch that attracts certain individuals to their clubs. Depending on the focus of a club’s offerings, certain amenities may be offered. The combination of limited but specific program offerings with complimentary amenities can be appealing to a specific niche market, resulting in a successful business operation. Amenities, Atmosphere, and Physical Grounds. Small fitness facilities generally offer fewer amenities than their larger counterparts, so those offered are usually strategic. The major amenities are offered in locker rooms, where they exist. Quality showers with sinks and hair dryers are more standard than at larger facilities with more institutional locker rooms. Toiletries offered may include soap, shampoo, conditioner, shaving cream, disposable razors, skin creams, and lotions. Many fitness centers also offer entertainment during exercise, primarily cable television. Clubs may offer bottled water, water coolers, or simply drinking fountains. Successful small spas and clubs generally serve small niche markets. Therefore, the atmosphere of such facilities is very important and designed to appeal to a smaller subset of exercisers. No two in a given area will be the same. The key is to create the right combination of atmosphere, programs, and amenities for potential clients. Health and fitness businesses carefully design their indoor facilities and exercise programs. Many small operations are located in strip malls. Sometimes, outside exercise areas are offered. However, in the smaller facilities this is less likely to be the case. The most important aspect of exterior grounds is parking. Even though people are going to these clubs to work out, they do not want to spend time walking to and from their cars. Typical Number of Employees. Small health and fitness businesses employ small full-time staffs, engaging part-time employees as necessary to ensure all necessary work gets done. Owners may be the only full-time workers in such businesses. They may manage all day-to-day operations and employ

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part-time workers to teach specific classes, staff front desks, clean and maintain equipment, and perform other duties that do not justify the expenses of full-time positions. Using this approach allows owners to staff their facilities fully only during peak hours and to engage few or no assistants during low-demand hours. Traditional Geographic Locations. Small spas and health and fitness clubs can be found anywhere there are enough people to make them profitable. This includes large cities, suburban areas, and small towns. In large cities and suburban areas, smaller facilities cater to niche markets, while in small towns they may be the only facilities available—and offer more options than do small urban facilities. Pros of Working for a Small Fitness Club. Small clubs provide their employees and owners greater autonomy than do larger clubs. Owners control hours of operation, programs offered, equipment available, decor, and other factors. Although they need to understand the fitness field and degrees in health and fitness are useful, owners of small clubs do not need to have the advanced degrees required by many larger organizations. Owners and managers also typically have a variety of responsibilities, including not only fitness operations but also business administration and facility maintenance. Some background in sales and marketing, accounting, and maintenance is therefore beneficial. Cons of Working for a Small Fitness Club. Small clubs offer little or no opportunity for promotion. Employees can be limited to the same responsibilities for many years. Owners and managers can expand their roles only by adding new facilities, which can be expensive and risky. Costs Payroll and Benefits: Small health and fitness clubs typically pay employees hourly wages or pay instructors by the class. Benefits such as health care, retirement, sick leave, and vacation are typically limited and are offered at the discretion of the owner. Small-business owners and personal trainers pay themselves out of their profits, and their income is dependent on their businesses’ consistent profitability. Supplies: Health and fitness clubs require exercise equipment, maintenance tools, and cleaning

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supplies. They also need office materials such as paper, pens, phones, and computers. Some also provide toiletries such as soap, shampoo, towels, and other personal items. Personal trainers need vehicles and cell phones or other mobile communications devices. External Services: Depending on the skills of their owners and managers, small clubs may need few external services. However, they may contract external, specialized fitness instructors, equipment maintenance, or business support services such as accounting, marketing, or legal counsel. Utilities: Health and fitness centers typically require water, sewage, electricity, natural gas or oil, telephone, cable television, and Internet access. Taxes: Small health and fitness facilities are required to pay local, state, and federal income taxes, as well as property taxes. Small-business owners may pay these as taxes on personal income rather than through their businesses. In many states, a sales tax is levied on membership fees and monthly dues, as well as on any retail products sold. Midsize Businesses Midsize health and fitness facilities offer multiple exercise options to their members. Typically, they include areas with cardiovascular machines, weight-training areas, and often group exercise rooms. Some may offer one or two additional specialized programs as well. Potential Annual Earnings Scale. According to the BLS, fitness trainers and aerobics instructors employed by fitness and recreation centers earned an average of $36,710 in 2009, while massage therapists earned $41,830. General managers of fitness centers earned an average of $80,830. Clientele Interaction. Personal contact between fitness trainers and their clients is always very important. Communication helps maintain members’ commitment to a given club and gives trainers the opportunity to provide assistance, which can make exercise programs safer and more beneficial. As facilities increase in size, patrons interact less with management. Since managers are often busy handling many other issues, fitness trainers generally stand in for managers, routinely communicating with their clients and conveying any in-

formation that managers need to know about. As exercise trainers assume greater client-interaction responsibilities, managers must train and empower them to successfully perform this function. Amenities, Atmosphere, and Physical Grounds. Locker rooms in midsize health and fitness clubs are generally more lavish than those in smaller facilities. Because they experience a higher volume of exercisers, midsize clubs find it feasible to expand locker rooms both in size and in amenities. Consumable amenities such as soaps and toiletries depend more on a given club’s clients’ desires and target market than on its size. Entertainment offered during exercise is often superior to that offered by smaller clubs. More television monitors and cable channels may be offered. Some of the more expensive exercise equipment can have an individual television built into each unit. Few midsize facilities offer food services. However, many have vending machines with healthy snacks, water, and sports drinks available for their members. The atmosphere of health and fitness centers becomes less personal as the facilities grow in size and membership. At larger facilities with more employees and members, there is less likelihood of seeing the same people on a regular basis and developing personal relationships with them. However, it remains important for employees to make personal contacts, so members feel connected to their clubs and the employees get feedback on their exercise programs and techniques. Also, members must work harder to connect with others for exercise companionship. Fitness trainers need to help connect people with common interests to maintain a positive social atmosphere within their facilities. Many health and fitness facilities are located in strip malls. Some are freestanding structures; however, there is generally limited value placed on the grounds. The important factor is good, convenient parking. In a few facilities, outside exercise is offered and exterior grounds are more important. If their locations are suitable, some clubs may provide running maps of their local areas for those who would prefer to run or walk outside as part of their exercise sessions. Typical Number of Employees. Midsize facilities can employ up to fifty or one hundred people, and they generally employ more of their staffs full

Health and Fitness Industry time than do small clubs. They rely less on contracted instructors since they offer enough classes to employ instructors full time. Some workers may still be employed part time to increase the flexibility of scheduling and to reduce costs. Traditional Geographic Locations. Midsize health and fitness clubs are typically found in larger cities and suburban areas, where the population base is large enough to support them. Many are located on heavily traveled roads where their visibility is high. The cost of real estate in such locations is typically much higher, however, so some facilities are located on less-traveled streets. Pros of Working for a Midsize Fitness Club. Midsize health and fitness facilities provide workers with more opportunities for full-time employment and professional advancement than do small businesses. Since these clubs offer a greater number of programs and exercise options, it is easier for them to fill full-time employees’ schedules, provided employees have the right combination of skills. The varied nature of such schedules is also advantageous for employees who prefer to have variety in their work. Midsize clubs are large enough to employ staff at various levels of responsibility, providing opportunities for promotion. Cons of Working for a Midsize Fitness Club. Midsize health and fitness facilities have more, and more diverse, members. Fitness trainers in particular must make an effort to get to know all the people exercising at their clubs. While doing so may be more challenging than it is at a small club, some employees may find this feature attractive. Midsize health and fitness centers also have more management issues. With more employees performing more specialized functions, more coordination is needed, and employees must often attend formal meetings. Costs Payroll and Benefits: Midsize health and fitness facilities hire many staff at hourly wages but also have some salaried employees. Benefits such as medical insurance, retirement, vacation, and sick leave are offered by some organizations. Supplies: Health and fitness clubs require exercise equipment, maintenance tools, cleaning supplies, and audiovisual equipment. They also need office materials such as paper, pens, phones, and computers. Some also provide toi-

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letries such as soap, shampoo, towels, and other personal items. Products for vending machines may also be needed. External Services: Midsize health and fitness centers may contract equipment maintenance, custodial services, laundry, accounting, computer and audiovisual support, credit card processing, or vending machine stocking and maintenance. Utilities: Health and fitness centers pay for water, sewage, electricity, natural gas or oil, telephone, cable television, and Internet access. Taxes: Midsize health and fitness facilities are required to pay local, state, and federal income taxes, as well as property taxes. In many states, a sales tax is levied on membership fees and monthly dues, as well as on any products or special services that are sold. Large Businesses Large health and fitness centers are often chains, but a few are privately owned. They are very large operations that include cardiovascular fitness and weight training areas and a multitude of specialized programs. Many may also include specialized facilities such as racquetball courts, skating rinks, swimming pools, or turf fields. Potential Annual Earnings Scale. According to the BLS, fitness trainers and aerobics instructors employed by fitness and recreation centers earned an average of $36,710 in 2009, while massage therapists earned $41,830. General managers of fitness centers earned an average of $80,830. At large businesses, salaries may be significantly above these averages. Clientele Interaction. Large health and fitness centers have so many members that it is difficult for employees to maintain regular one-on-one interactions with everyone. Despite having many activities and exercise options, each member typically focuses on just a few. Therefore, fitness trainers in specific areas tend to see the same people often and may never see other members, who patronize other areas. It is important for trainers to establish working relationships with the members who exercise in their programs in order to encourage their continued participation and verify proper exercise techniques. Amenities, Atmosphere, and Physical Grounds. Many amenities may be offered by large health and fitness facilities. Locker rooms are gen-

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erally roomy and offer various toiletries and towel service. Some fitness centers have food service operations that include snack bars, cafeterias, or restaurants. They may sell exercise clothing and equipment in small retail shops. Others may include spas that offer massage and hair and nail care, as well as simple lounges for relaxation after exercise. Entertainment is generally available during exercise: Large televisions on walls or small televisions on individual exercise machines are common. Large health and fitness centers are spacious and offer many options for their members. Their size, however, tends to make the atmosphere less personable. This poses a challenge for employees seeking to create a more intimate feel. Receptionists need to greet all members when they arrive and be ready to answer questions. Fitness trainers need to take the time to get to know the members who exercise in their program areas, so the members do not get lost in the large surroundings and so members get the personal attention needed to exercise safely and effectively. Customer service is an important component of all employees’ jobs. Large health and fitness centers may be located in high rises in major cities, or they may be selfcontained suburban facilities with expansive lawns, woods, or gardens. Outdoor running trails, swimming pools, and tennis courts may be important parts of such complexes. Convenient parking or access on public transportation is required, and some facilities may offer valet parking. Typical Number of Employees. Large fitness centers may employ more than one hundred people. Traditional Geographic Locations. Large health and fitness clubs are usually found near large population centers. Those that have expansive grounds are generally outside or on the perimeters of large cities. Since these facilities have large memberships and tend to be destination clubs, they are often not located on highly traveled streets. Pros of Working for a Large Fitness Center. A major benefit of large health and fitness clubs is variety. Because they offer many programs and services, employees have many different opportunities. To manage their large facilities, these clubs adopt compartmentalized structures, so employees can focus their work and training in specific ar-

eas. Since many of these facilities are part of chains, they offer significantly greater opportunities for promotion and other forms of career advancement. They may also enable employees to transfer among branches, allowing them to move without giving up their jobs. Employees also have opportunities to move laterally, from one department or program to another, enabling them to develop new skills and minimize the staleness of performing the same job functions for years. Furthermore, large organizations provide more training and development programs for their employees. Cons of Working for a Large Fitness Center. Operating a large health and fitness club presents many unique challenges. Large facilities have more maintenance issues, and they experience significant changes in the volume of participants throughout the day that must be managed to maximize service while minimizing costs. Customer service is very important, and regular evaluations and trainings are required. Employees have a larger and more diverse clientele to understand and support. Club managers must administer a wide variety of programs and services that require a variety of skills. Costs Payroll and Benefits: Since there are many employees and job classifications in large health and fitness facilities, pay structures can be complicated. Managers at all levels are generally salaried. Receptionists, cleaning staff, retail personnel, and food service workers are usually hourly. Fitness trainers may be either salaried or hourly. Membership salespersons may work on commission. Benefits are offered at the discretion of management, with salaried personnel most likely to receive medical insurance, retirement plans, vacation time, and sick leave. Supplies: Large health and fitness clubs require exercise equipment, maintenance tools, cleaning supplies, office supplies, toiletries, food products, audiovisual equipment, and communication and information technology. Those with grounds may need lawn mowers and other landscaping materials. External Services: Large health and fitness centers may contract exercise equipment maintenance, custodial services, laundry, accounting, computer and audiovisual support, credit card

Health and Fitness Industry processing, lawn and landscaping services, and vending machine stocking and maintenance. Utilities: Large health and fitness centers typically pay for water, sewage, electricity, natural gas or oil, telephone, cable television, and Internet access. Taxes: Large health and fitness facilities are required to pay local, state, and federal income taxes, as well as property taxes. In many states, a sales tax is levied on membership fees and monthly dues, as well as on any extra products and services that are sold.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organization and job functions of health and fitness clubs vary with the size of the facility. A small club or spa may have only one full-time employee who manages the whole operation and performs many different tasks. As the size of the business increases there is a manager in charge who delegates responsibilities to other employees. All sizes of health and fitness clubs have similar job functions that must be completed by someone. The following umbella categories apply to the organizational structure of businesses in the health and fitness industry: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Sales and Marketing Fitness Operations Aquatics Recreation and Sports Reception Child Care Locker Room Attendants Personal Care Physical Therapy Food and Beverage Service Retail Sales Cleaning and Maintenance Groundskeeping Administrative Support

Executive Management The general operations of health and fitness clubs are directed by executive managers. All facili-

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ties have club managers, who are responsible for all the operations, planning, and supervision. In stand-alone clubs, managers are the chief executives. In chain facilities, club managers report to central offices that direct the operations of all clubs in the organization. Club managers supervise all employees of their clubs. Larger clubs may employ department managers, who are supervised by club managers. Club managers are responsible for club operations, while department managers are responsible for the functions of their departments. Club managers are generally the highest-paid employees of their clubs. Many have advanced degrees in fitness or business. To become a club manager, it is important to develop a good understanding of all operations in the health and fitness industry, as well as developing general business skills. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■

Owner-operator Club Manager Operations Manager Marketing Manager Food Service Manager Financial Manager

Sales and Marketing One of the most critical functions in health and fitness club management is maintaining a solid membership base. Most club revenues come from initiation fees and membership dues. Other revenues depend on members being on the premises to purchase additional products and services. Therefore, membership sales is one of the most vital departments of a club. Larger health and fitness clubs may have sales and marketing departments. Smaller operations may rely on their managers to handle marketing and sales functions. Marketing personnel typically have degrees in business. They develop marketing plans, including advertisements and promotions. Membership salespersons may have college degrees but must have good interpersonal and sales skills. Some clubs offer commissions on sales to their employees. Marketing and sales managers are among the highest-paid employees within the health and fitness industry after club managers.

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Sales and marketing occupations may include the following: ■ ■ ■ ■

Marketing Manager Membership Sales Manager Advertising and Promotions Manager Retail Sales Manager

Fitness Operations The primary operations of health and fitness centers are carried out by the employees who design and direct exercise programs and classes. Fitness trainers have a wide variety of responsibilities that include orienting new members, assessing fitness levels, writing exercise prescriptions, supervising cardiovascular and strength training areas, leading specialized classes, and training clients one-on-one. Some trainers may perform a variety of these functions, while others may focus on one or two. Clubs prefer fitness trainers to have at least undergraduate degrees in the exercise and fitness

area. Associate’s degrees and certifications are also preferred. The average fitness trainer makes more than $35,000 per year. Entry-level positions pay closer to $20,000 per year. The highest-paid fitness trainers are usually personal trainers. Personal trainers can charge $60 or more per hour. However, those that work at health and fitness clubs must give a share to their billable payments to those clubs, up to 50 percent. The average income of personal trainers is over $42,000 per year. Nevertheless, personal trainers who have full client lists and who are willing to work long hours can earn more than $100,000 per year. Aerobics instructors lead group classes in a specific type of exercise. Many different classes have been offered. Traditionally, these classes were dance oriented. However, now there are hundreds of different types. Classes include stepping, kick boxing, and spinning (stationary cycling), to name a few. Related group classes include various forms of yoga, Pilates, and tai chi.

OCCUPATION

PROFILE

Fitness Trainer and Aerobics Instructor Considerations

Qualifications

Description

Instructs individuals or groups in exercise activities, observes their progress, and helps them improve.

Career clusters

Education and Training; Hospitality and Tourism; Human Services

Interests

People; things

Working conditions

Work inside; work outside; work both inside and outside

Minimum education level

Bachelor’s degree

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Volunteer work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest score

ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Health and Fitness Industry OCCUPATION

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SPECIALTIES

Dieticians and Nutritionists Specialty

Responsibilities

Clinical dieticians

Plan and direct the preparation and service of diets prescribed by a physician.

Community dieticians

Plan, develop, administer, and coordinate nutrition programs and services as part of the health care services for an organization.

Consultant dieticians

Advise and assist public and private establishments, such as child care centers, hospitals, nursing homes, and schools on food service management, nutritional education programs, and nutritional problems.

Research dieticians

Conduct, evaluate, and interpret research to improve the nutrition of healthy and sick people.

Aerobics instructors need group leadership skills, and outgoing personalities are helpful. No college education is required for these positions, but many different specific certifications exist in the various types of aerobic activity, and such certifications may be helpful in securing employment. Many instructors work part time and get paid by the class. Pay averages $20 or more per hour, but few leaders can teach more than a couple of hours per day. Often, full-time fitness trainers can teach a class or two per day as part of their full-time jobs. Fitness operations occupations may include the following: ■ ■ ■ ■

Fitness Manager Fitness Instructor Personal Trainer Aerobics Instructor

Aquatics Health and fitness centers that have swimming pools must employ lifeguards and staff to maintain and ensure safety in their pool areas. Temperature, pH, and chlorine levels must be checked regularly and adjusted. The pool and decks must be kept clean. Lifeguards are required when anyone is in the pool area. Specialized water classes are also taught by aquatics personnel. To work in aquatics, certifications in lifeguarding, first aid, and cardiopulmonary resuscitation (CPR) are required.

Some aquatics director positions require college degrees. Aquatics occupations may include the following: ■ ■ ■ ■

Aquatics Director Aquatics Instructor Lifeguard Pool Maintenance Staff

Recreation and Sports Health and fitness centers with specialized program offerings, such as tennis or skating, employ workers with the skills to teach and supervise these programs. They may teach individual or group lessons. Recreation workers are also used in programs for children. The educational backgrounds of recreation and sports personnel vary by their diverse job responsibilities. Most important are their specific teaching and sport skills. Compensation varies dramatically. Those who teach basic sports skills to children average $20,000 per year. Skilled coaches who train more elite athletes can earn significantly more, especially if they teach one-on-one. Recreation and fitness center coaches earned an average of $33,830 in 2009, while athletic trainers earned an average of $40,380. Recreation and sports occupations may include the following:

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■ ■ ■

Health and Fitness Industry Recreation and Sports Director Recreation Worker Sport Skills Coach Athletic Trainer

Reception The first contact members have with a health and fitness club is the front desk, where a receptionist greets them and checks their membership cards. This is a very important position from a public relations standpoint. Receptionists also answer phones, do cleriGyms, fitness clubs, and body-building studios offer weight training with free cal work, operate cash registers, weights and equipment. (©Andres Rodriguez/Dreamstime.com) and direct people to appropriate staff. They do not typically need bacteria to grow is high. Therefore, locker room atcollege degrees but must have good interpersonal tendants must constantly clean and dry these faciliand organizational skills. Pay often starts near minimum wage. ties. Attendants do not need college degrees and Reception occupations may include the followgenerally work at minimum wage. ing: Locker room attendant occupations may include the following: ■ Reception Desk Manager ■ Receptionist ■ Locker Room Attendant ■ Custodian/Janitor ■ Cleaner Child Care Child-care staff watch children while their parents exercise. Child-care centers are generally Personal Care stocked with games and activities to occupy chilMassage, hair styling, and skin care are spa serdren. Depending on the size of the facility, there vices offered at some of the larger facilities. Hard exmay be several different programs for children of ercise and sweating create a market for services to different ages. Personnel entertain the children revitalize the body. Massage therapists rub and maand maintain a safe environment for them. Childnipulate muscles to soothe them. Hair dressers cut care workers do not need college degrees but need and style hair, while skin-care specialists provide fato know how to supervise children and are typically cials, manicures, and pedicures. These employees paid minimum wage. must have training and certification in massage Child-care occupations may include the followtherapy or cosmetology. Wages vary but often deing: pend on the type and amount of services provided, and they are commonly supplemented by tips. ■ Child-Care Center Manager Personal care occupations may include the fol■ Child-Care Worker lowing: Locker Room Attendants Large health and fitness clubs with large locker rooms may employ attendants to keep them clean and dry, hand out towels, and refill toiletries. Since many people shower in the locker rooms, water is dispersed throughout them, and the potential for

■ ■ ■ ■ ■ ■

Massage Therapist Cosmetologist Hair Dresser Manicurist Pedicurist Skin Care Specialist

Health and Fitness Industry Physical Therapy Some of the larger health and fitness clubs have physical therapy units on-site. Often, these operations are contracted with local sports-medicine clinics. Having physical therapy on-site benefits the clinics by bringing their services closer to potential patients and increasing their visibility. Also, therapists and patients gain access to club exercise equipment, which gives them more options for rehabilitation therapy. Fitness clubs can gain new members from among a clinic’s patients, since those patients see the club’s facilities during their rehabilitation. Physical therapists must have graduate degrees and be licensed to practice. This training qualifies them to develop specific exercise regimens to rehabilitate injuries. They are often assisted by athletic trainers, physical therapy assistants, or physical therapy aids. Athletic trainers must have bachelor’s degrees and pass certification exams. Physical therapy assistants need associate’s degrees, and aides require no formal education. Physical therapists’ incomes at fitness and recreation centers averaged $67,150 in 2009. Athletic trainers averaged $40,380, while physical therapist aides averaged in the $24,790 range. Physical therapy occupations may include the following: ■ ■ ■ ■

Physical Therapist Athletic Trainer Physical Therapist Assistant Physical Therapist Aide

Food and Beverage Service Most health and fitness clubs offer some food and beverage service to their members. In smaller facilities, this service may be limited to vending machines or a few items sold by receptionists. Some large clubs may offer a full-service restaurant with bar. A wide range of food services can be found in various health and fitness clubs. Most tend to be limited to a food counter or nutrition bar and focus on healthier food and beverage options. Food and beverage personnel generally sell bottled beverages and prepackaged food products. They may heat some food in microwave ovens, but their facilities are not typically stocked with deep fryers, grills, or conventional ovens. Therefore, these workers are easily trained on the job and do

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not require formal advanced education. They usually perform many functions that include greeting, serving, light food preparation, and cleaning. Food and beverage service occupations may include the following: ■ ■ ■

Food Service Manager Counter Attendant Cook

Retail Sales Large health and fitness clubs may have small retail outlets or pro shops. Small clubs may offer limited merchandise sold by their receptionists. The merchandise sold is often limited to exercise clothing and sports equipment. Retail operations may constitute stand-alone departments if they are large enough, but they more commonly are part of larger departments. Some clubs may contract with retail companies to operate their shops. Retail salespersons may receive minimum wage or commission. They do not require college degrees, but knowledge of exercise clothing and equipment is needed. Retail sales occupations may include the following: ■ ■

Retail Sales Manager Retail Salesperson

Cleaning and Maintenance Keeping facilities clean is a very important requirement in the health and fitness industry. Since patrons routinely sweat, floors and equipment must be cleaned often. Also, exercise equipment has many moving parts and is used heavily at fitness clubs and centers. Therefore, the equipment breaks down regularly and must be repaired. In locker rooms, water is constantly tracked around and must be mopped. Janitors and cleaners are responsible for most of the cleaning. Attendants can assist in the locker rooms, and fitness instructors can help with the equipment in the exercise rooms. Because of the risk of bacteria spreading among club members, equipment and floors must be cleaned many times per day. Maintenance staff is assigned to repair broken equipment and building systems. A major concern is plumbing, which is a heavily used system in locker rooms. Large health and fitness centers can justify

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hiring their own maintenance workers. Smaller clubs may have to contract out such duties. Clubs generally provide so many different types of complex exercise equipment that their maintenance staffs may not be able to fix everything themselves. Cleaning personnel do not need higher education and earn a little more than minimum wage. Maintenance personnel’s qualifications vary widely, as do their wages. Some have vocational or higher education and earn higher wages than those with only experience. Cleaning and maintenance occupations may include the following: ■ ■ ■ ■

Maintenance Manager Custodian/Janitor Cleaner Maintenance and Repair Worker

Groundskeeping Most health and fitness clubs have no exterior grounds to maintain. Those that do, however, may have extensive grounds for aesthetic purposes and to provide venues for physical activity. Walking and running trails need to be maintained. Other outdoor facilities, such as tennis courts and swimming pools, may have landscaping around them. Mowing grass and caring for flower gardens are common responsibilities. In some geographical areas, snow removal is also required. Groundskeepers do not require higher education. They usually earn hourly wages based on their skills, which vary widely based on a property’s characteristics. Groundskeeping occupations may include the following: ■ ■ ■

Head Groundskeeper Landscaping Worker Groundskeeper

Administrative Support The size of the administrative support department varies with the size of the facility. Support staff answer phones, maintain files and records, manage data, and support managers in their responsibilities. They have many different skills and types of experience. The ability to adapt to and understand the fitness business is beneficial. These positions may be full or part time, and compensation is based on an individual’s skills.

Administrative support occupations may include the following: ■ ■ ■

Administrative Assistant Secretary Office Clerk

INDUSTRY

OUTLOOK

Overview The outlook for the health and fitness industry shows it to be on the rise. In response to growing obesity concerns in the United States and other developed countries, government and health organizations are strongly encouraging people to increase their participation in exercise and recreational activities. As a result, more people are taking control of their health by exercising regularly. The baby boomers make up the largest age group of fitness club members, and the increasing number of older individuals in the United States will support further growth. Increasing numbers of children and young adults are also expected, as families try to stay healthy and physical activity becomes more of a priority. The arts, entertainment, and recreation sector is expected to grow faster than the average of all sectors combined between 2008 and 2018, with a sector growth rate of 15 percent. Overall industry employee numbers are expected to rise from 551,000 employees in 2010 to 610,000 employees in 2015. Within the sector, fitness and recreation jobs are expected to increase the most, by 37 percent. With 188,900 people in the workforce in 2008, an increase of 70,000 positions is expected by 2018. The 2007-2009 recession presented challenges to the health and fitness industry. However, its impact was not as devastating as it was to some other industries. Customer loyalty helped minimize membership declines, and the development of creative nondues revenues along with cost-cutting minimized financial losses. Although club memberships dropped in 2009, they were expected to rebound shortly. The increase in memberships will increase revenues from monthly dues, as well as revenues from selling extra programs, services, and products to clients. People join health and fitness clubs for a number of reasons. The major ones are to maintain or

Health and Fitness Industry improve one’s health, appearance, and social relationships. With increased media attention to health and obesity, more people are becoming aware of the health benefits of exercise. The media also continues to feature men and women with good muscle tone and physiques, increasing the desire of others to mimic their appearance. Also, health and fitness clubs are good places to meet others and to socialize while engaging in healthy activities. As more people begin to exercise, the demand for health and fitness services will increase. Governments are also playing roles that could improve the future outlook of the industry. New York, New Jersey, and Oklahoma are considering legislation that would provide tax benefits to individuals or families who purchase health and fitness club memberships. If these bills pass and other states follow suit, citizens will have a financial incentive to join health and fitness clubs. The American Recovery and Reinvestment Act of 2009 provided $1 billion to the Department of Health and Human Services for prevention and wellness. These funds should help generate more demand for health and fitness facilities across the country. First Lady Michelle Obama has made childhood obesity in particular one of her primary areas of focus, and she has launched several initiatives—such as the Web site letsmove.gov—to convince young people to exercise, developing habits that should last into adulthood. The support of governments will only improve the future outlook of the industry. The health and fitness industry is not as large as a function of total population in most other countries as it is in the United States. In 2006, Europe had slightly fewer health and fitness club members than the United States despite having nearly twice the population. Health and fitness clubs are growing internationally, but this growth in different countries varies with those countries’ economic situations. Data from the International Health, Racquet, and Sportsclub Association reported in 20062007 indicated that Canada had the highest rate of health and fitness club membership, at 15 percent of its population. The United States closely followed at 14 percent. Australia and New Zealand had membership rates of 9 and 10 percent, respectively. Japan led Asian countries with 3 percent, while other Asian countries were below 1 percent. South America was led by Argentina with 3 percent membership and Brazil, Chile, and Mexico with

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2 percent membership. The most developed countries had the highest membership rates, followed by those with emerging economies. Employment Advantages The health and fitness industry is among the fastest-growing industries in the United States. Its growth equates to future employment opportunities: It is expected that the number of available jobs will increase in the next five to ten years. Also, as the industry grows, there will be more opportunities for professional advancement. The health and fitness industry is attractive to active people who enjoy exercise and sports. Fitness trainers can make a living doing the things they love. Since entry-level salaries and wages are below the national average of all jobs, professional advancement is desired by many. Fortunately, opportunities for promotions exist for individuals who are knowledgeable about health and exercise and have good business skills. Oftentimes, promotions entail spending less time working with clients and more time managing operations and employees. For entrepreneurial fitness leaders who like to be more independent, personal training is an option. Personal trainers are the highest-paid health and fitness practitioners in the industry. They generally need to recruit their own clients and develop specific exercise programs to meet their clients’ goals. This occupation is particularly attractive to people who like to work with clients one-on-one. Annual Earnings The health and fitness industry’s earnings are influenced by the economy and people’s desire to look good and be healthy. Because many people value their bodies and their health, the industry has continued to grow even when the economy slows. In 2009, memberships in the United States dropped for the first time in years, by 200,000 clients, and industry positions dropped by three thousand jobs. However, the number of health and fitness clubs increased by one hundred and revenues increased by $527 million, or 2.2 percent. As the economy slowly improves, employment is expected to increase by fifteen thousand jobs and memberships to increase by 700,000 people, easily erasing the drops in 2009. Revenues are also expected to increase by $775.5 million, or 3.2 percent. Through 2014, sustained growth is anticipated.

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Revenues are expected to increase by an average of 3 percent per year. Health and fitness club memberships should reach a record 45.9 million people in 2014. With more members and new highermargin products and services, it is projected that profits will continue to rise at an annualized rate of 5.6 percent from 2009 to 2014.

RELATED RESOURCES FOR FURTHER RESEARCH American College of Sports Medicine P.O. Box 1440 Indianapolis, IN 46206-1440 Tel: (317) 637-9200 Fax: (317) 634-7817 http://www.acsm.org American Council on Exercise 4851 Paramount Dr. San Diego, CA 92123 Tel: (888) 825-3636 Fax: (858) 576-6564 http://www.acefitness.org International Health, Racquet, and Sportsclub Association Seaport Center 70 Fargo St. Boston, MA 02210 Tel: (800) 228-4772 Fax: (617) 951-0056 http://cms.ihrsa.org National Strength and Conditioning Association 1885 Bob Johnson Dr. Colorado Springs, CO 80906 Tel: (800) 815-6826 Fax: (719) 632-6367 http://www.nsca-lift.org

ABOUT

THE

AUTHOR

Bradley R. A. Wilson has taught students in health and exercise at the university level for more

than twenty-five years. He has coauthored three books on health and fitness management, published numerous articles on exercise-related topics, and conducted presentations on fitness topics internationally. As a student internship coordinator, he has visited hundreds of exercise facilities, including community for-profit and nonprofit health clubs, hospital and corporate fitness centers, and sports medicine clinics. His long career in the health and fitness industry also includes experience with the many types of exercise equipment found in these facilities.

FURTHER

READING

American College of Sports Medicine. ACSM’s Health/Fitness Facility Standards and Guidelines. 3d ed. Champaign, Ill.: Human Kinetics, 2007. Bates, Mike, ed. Health Fitness Management. 2d ed. Champaign, Ill.: Human Kinetics, 2008. Maguire, Jennifer Smith. Fit for Consumption: Sociology and the Business of Fitness. New York: Routledge, 2008. Oakley, Ben, and Martin Rhys, eds. The Sport and Fitness Sector: An Introduction. New York: Routledge, 2008. Tharrett, Stephen J., and James A. Peterson. Fitness Management. 2d ed. Monterey, Calif.: Healthy Learning, 2008. Thatcher, Ron, and Andy Li. Fitness Memberships and Money. Victoria, B.C.: Trafford, 2004. Thompson, Walter R. “Worldwide Survey Reveals Fitness Trends for 2010.” ACSM’s Health and Fitness Journal 13, no. 6 (November/ December, 2009): 9-16. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Heavy Machines Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Automatic Vending Machine Manufacturing; Commercial Laundry, Drycleaning, and Pressing Machine Manufacturing; Construction Machinery Manufacturing; Farm Machinery and Equipment Manufacturing; Food Product Machinery Manufacturing; Industrial Machinery Manufacturing; Metalworking Machinery Manufacturing; Mining Machinery Manufacturing; Oil and Gas Field Machinery and Equipment Manufacturing; Paper Industry Machinery Manufacturing; Plastics and Rubber Industry Manufacturing; Sawmill and Woodworking Machinery Manufacturing; Textile Machinery Manufacturing; Tractor Equipment Manufacturing; Ventilation, Heating, Air-Conditioning, and Commercial Refrigeration Equipment Manufacturing Related Industries: Construction Equipment Industry; Farming Industry; Mining Industry Annual Domestic Revenues: $350 billion USD (Hoovers, 2009) Annual International Revenues: $344 billion USD (Research and Markets, 2009) Annual Global Revenues: $694 billion USD (Research and Markets, 2009) NAICS Numbers: 33210-333112, 333120, 333131-333132, 333220, 333291-333294, 333298, 333311-333312, 333500, 333511-333516, 333921, 333991

INDUSTRY

DEFINITION

for earth moving and manipulation, such as bulldozers and tractors. Other wheeled equipment has limited mobility, primarily for transfer from one location to another, such as cranes and drilling equipment. Mobile equipment requires specialized tires; thus, it supports a significant subindustry. Examples of fixed equipment include printing

Summary Heavy equipment either reduces or replaces manpower to accomplish a task. It can be either mobile or fixed. A large portion of this industry is devoted to the manufacture of wheeled equipment 825

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Heavy Machines Industry

A large portion of the heavy machine industry is devoted to the manufacture of wheeled equipment for earth moving and manipulation, such as this skip loader. (©Dreamstime.com)

presses, textile manufacturing machinery, and plastics and rubber manufacturing equipment. Heavy machines also encompass assembly lines, which can occupy an extensive area (for example, an automobile assembly line). Virtually every industrialized nation in the world has a significant heavy machines industry employing individuals in a wide variety of careers. History of the Industry Sectors of this industry either appeared or markedly expanded as a result of the Industrial Revolution, which began in the eighteenth century in the United Kingdom and then spread throughout Europe, North America, and the rest of the world. It was marked by major changes in manufacturing, mining, agriculture, and transport. This phenomenon had a profound impact on the economy and culture. However, the use of heavy equipment began in ancient Rome. In De architectura (c. 27 b.c.e.; The Architecture, 1771), the Roman engineer Marcus Vitruvius Pollio provided detailed descriptions of heavy equipment, cranes, and hoists, as well as war machines such as catapults and siege engines. He

also described the aeolipile, a precursor to the steam engine. In 1836, John Deere manufactured a polishedsteel plow for use by pioneer farmers in the American Midwest. By 1870, the company was producing plows, cultivators, harrows, drills, planters, wagons, and buggies. In the 1880’s, steam tractors appeared; they were replaced thirty years later by gasoline-powered tractors. In 1931, the first dieselpowered tractor rolled off the assembly line at Deere & Company in East Peoria, Illinois. By 1940, the U.S.-based Caterpillar Tractor Company was producing motor graders, generators, and a special tank engine used by the United States in World War II. In 1963, Caterpillar and Mitsubishi Heavy Industries formed one of the first joint ventures in Japan, Caterpillar Mitsubishi Ltd. The company is now known as Shin Caterpillar Mitsubishi and in 2010 was the second-largest producer of construction and mining equipment in Japan. In the early 1960’s, Deere & Company also was taking steps to become multinational, opening small tractor plants in Mexico, France, Argentina, and South Africa. Before 1900, machinery was produced at one lo-

Heavy Machines Industry cation, one unit at a time. Although the origin of the assembly line often is associated with Henry Ford, Ransom Olds patented the assembly line concept and implemented it in his Olds Motor Vehicle Company factory in 1901. The concept was improved a few years later by Ford. Ford’s version of the assembly line involved moving the work from one worker to another until each unit was complete; these units were then moved to a final assembly line, which produced the finished product. As a result of Ford’s improvements, a complete automobile was produced every three minutes. Previous assembly lines produced a vehicle at a rate of about two an hour and required significantly more manpower. Furthermore, Ford implemented safety procedures that assigned workers to specific locations rather than allowing them to roam about the work area; this dramatically reduced the rate of injury. Oil and gas field machinery also first appeared at the turn of the twentieth century. Prior to that time, drilling was done with muscle power—human or animal. Internal combustion engines revo-

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lutionized this burdensome task. In the early twentieth century, drilling rigs were semipermanent structures, often left in place after wells’ completion. In the second half of the twentieth century, custom-built machines were developed that could be moved between drilling locations. Larger rigs required disassembly for the move. Before 1970, the drill bits were diamond-tipped; subsequently, faster and more efficient pneumatic reciprocating piston reverse circulation drills were developed. Mining dates to prehistoric times. Tools made of stone, ceramics, and later metal were used to retrieve metals close beneath the Earth’s surface. The ancient Romans employed hydraulic mining— diverting water to an area to wash the earth from mineral deposits. The introduction of the internal combustion engine dramatically transformed this industry. Other heavy machines industries, such as food product machinery and sawmills, rapidly evolved with the introduction of the internal combustion engine. Textile manufacturing is one of the oldest human activities, dating back to 5000 b.c.e. Automa-

The heavy machines industry includes fixed machinery, such as this offset printing press. (©Moreno Soppelsa/Dreamstime.com)

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Heavy Machines Industry

tion of the textile industry began in the eighteenth century in England. James Hargreaves developed the spinning jenny, which replaced the work of eight hand spinners. In 1792, Samuel Slater opened a yarn spinning mill in Pawtucket, Rhode Island, the first successful business of its kind in the United States. In 1793, Eli Whitney and Hogden Holmes developed a simplified method of removing cotton lint from the seed. Their invention, the cotton gin, revolutionized the cotton industry in the United States and, subsequently, the rest of the world. The textile industry in the United Sates flourished until the 1990’s, when lower-priced products from Asia replaced those made domestically. South Americans first used natural rubber in the eleventh century; however, the plastics and rubber industry originated in 1839 when American Charles Goodyear discovered that combining natural rubber with sulfur greatly increased its flexibility. The development of motor vehicles by the end of the nineteenth century created high demand for tires. Plastics first appeared in 1909 when Leo Baekeland, an American chemist, developed phenoformaldehyde plastics (more popularly known as “phenolics”). Phenolics were the first

plastics to gain worldwide acceptance. The use of plastics evolved in the 1940’s and by the end of that decade, they were used in many products. Today, they are ubiquitous. The Industry Today Today’s heavy machines industry is dominated by large, multinational companies that produce a wide range of products from industrial turbines to tractors. The industry supports major subindustries such as maintenance and repair, sales, leasing, engine manufacturing, and tire manufacturing. While some of these companies focus on one type of product (for example, Otis Elevator Company of Farmington, Connecticut), others produce machines for a variety of applications (such Mitsubishi Heavy Industries of Tokyo). Thus, some companies’ products fall into more than one of the following categories. Furthermore, many companies not only manufacture products but also sell, lease, and repair the equipment. A major segment of this industry is focused on construction and farming equipment. Products include graders, excavators, cranes, tractors, and cultivators. Some products—such as tractors—can be

Machines such as this excavator are used for construction. (©Dreamstime.com)

Heavy Machines Industry

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used for a variety of tasks, while others— pipe layers, for example—are designed for specific tasks. As of 2010, the top ten construction equipment companies were Caterpillar (Peoria, Illinois), Komatsu (Tokyo), Terex (Westport, Connecticut), Case New Holland (CNH; Amsterdam, the Netherlands), Volvo Construction Equipment (Götenburg, Sweden), Deere & Company (Moline, Illinois), Doosan Group (Bobcat Company; Seoul, South Korea), Hitachi Construction Machinery (Tokyo), Bell Equipment (Rochester, New York), and Hitachi Construction Machinery-Europe (Oosterhout, the Netherlands). These companies primarThe heavy machines industry is a significant source of revenue for the ily produce earth-moving, construction, subindustry of tire manufacturing. (©Marian Mocanu/Dreamstime.com) and farming equipment. Many manufacture their own engines, which are primarily diesel. Some, like Caterpillar, market their enment is important because it can have a major gines as separate products. Although the word impact on per-unit production costs. The aforeCaterpillar brings to mind earth-moving equipmentioned companies are susceptible to the rate ment, the company also has a large presence in the of economic growth. Much of the equipment is demarine engine industry. signed for construction; thus, when new construcHeavy equipment manufactured by these comtion experiences a slowdown, these companies are panies requires either continuous tracks or specialaffected. Equipment produced for farm use is afized tires. The equipment with more severe service fected to a lesser degree because of the ongoing requirements utilizes continuous tracks; however, need for agricultural products worldwide. tires are preferable when greater speed and mobilIn the early 1900’s, textile manufacturing equipity is required. Because of this need, the heavy mament was primarily produced in the United States chines industry is a significant source of revenue and Western Europe; however, this production has for the subindustry of tire manufacturing. Selectshifted to Asia and Australia. Driving this shift is the ing the proper tire for the lifetime use of the equipfact that most textiles are now produced in Asia, including India. Textile manufacturing involves spinning natural or synthetic fibers into yarn, then weaving the yarn into cloth. The Machinery Manufacturing This cloth is then processed to become fabric. The fabric may be dyed, printed, Industry’s Contribution to the U.S. or embellished with colored yarns. Most Economy textiles are machine-produced; however, many high-end textiles are produced by Value Added Amount nonindustrial methods dating back cenGross domestic product $124.0 billion turies. Textile production is an essential Gross domestic product 0.9% industry for nations at all levels of develPersons employed 1.185 million opment. Globally, the top five companies Total employee compensation $84.5 billion are Alok Industries (Mumbai, India), Bhavani Weavess (Erode, India), Bullivants Source: U.S. Bureau of Economic Analysis. Data are for (New South Wales, Australia), Manacol 2008. (Victoria, Australia), and Toray Industries (Tokyo).

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Heavy Machines Industry

Oil and gas field machinery and equipment manufacturers produce products for drilling rigs, such as this one in North Dakota. (©David Gaylor/Dreamstime.com)

Mining machinery manufacturing companies produce drills, ore crushers, loading machines, washers, mining cars, and quarrying machinery. Oil and gas field machinery and equipment manufacturing companies make products such as drill bits, derricks, and pipe assemblies. The equipment is produced for both land and offshore use. They also produce equipment for water drilling. Globally, the five leading companies that produce machinery for the mining, oil, and gas industries are Schwing Stetter (Tamil Nadu, India), Caterpillar (Peoria, Illinois), Katsushiro Indonesia (Bekasi, West Java), Komatsu (Tokyo), and Abu Dhabi Petroleum Company (London). Plastics and rubber industry manufacturing companies produce machinery used to produce plastics, pipes and pipe fixtures, plastic bottles, and tires. They design and develop application-specific machinery, which must meet critical performance standards; often, these products are often produced in collaboration with their customers. Globally, the five largest companies (excluding tire manufacturing) are AVC Trading (Victoria, Aus-

tralia), Faurecia Interior Systems South Africa (Uitenhage, South Africa), Amcor Limited (Victoria, Australia), Trelleborg (Trelleborg, Sweden), and Fletcher Wood Panels—Australia (Queensland, Australia). The top five tire manufacturing companies are Bridgestone Corporation (Tokyo), Compagnie Générale des Établissements Michelin (Clermont-Ferrand, France), Goodyear Tire & Rubber Company (Akron, Ohio), Pirelli (Milan, Italy), and Sumitomo Rubber Industries (Kobe, Japan). Food product machinery manufacturing companies produce machines that cook, mix, chop, preserve, or otherwise process food products. Representative products include pasteurizing equipment, commercial ovens, distilleries, and juice extractors. As of 2010, the top five companies globally were Fuji Electric Retail Systems (Tokyo), Electrolux Lehel Hutogepgyar Korlatolt Felelossegu Tarsasag (Jaszbereny, Hungary), Enodis (London), John Bean Technologies Corporation (Chicago), and DeLaval International (Tumbla, Sweden). Automatic vending machine manufacturing companies produce specialized vending machines for dispensing such items as snacks, ice cream, beverages, and stamps; they also manufacture changemaking machines. Major companies include divisions of Coca-Cola (Atlanta, Georgia), Compass Group North America (Charlotte, North Carolina), Aramark (Philadelphia), and Sodexo (Issyles-Moulineaux, France). Of interest is the dominance of U.S.-headquartered businesses compared with other segments of this industry.

Inputs Consumed by the Machinery Manufacturing Industry Input

Value

Energy Materials Purchased services Total

$3.1 billion $174.6 billion $48.1 billion $225.8 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

Heavy Machines Industry The ventilation, heating, air-conditioning, and commercial refrigeration equipment manufacturing industry segment manufactures climatecontrol machinery for residential and commercial buildings. In addition to heating and cooling equipment, this industry manufactures air purification equipment, which is extremely common in all new construction. The top five companies are Systemair (New Brunswick, Canada), Carrier Corporation (Farmington, Connecticut), Daikin Industries (Osaka, Japan), Ferguson Enterprises (Newport News, Virginia), and Kohler Company (Kohler, Wisconsin). The metalworking machinery segment of this industry manufactures tools that form, cut, and shape metals. Because metal is a strong, durable material, it is difficult to form. This industry manufactures specialized molds, presses, rollers, grinders, and drills. Companies also produce the accessories used by these machines. Compared with the many large companies in the heavy machines industry, most metalworking machinery businesses are small—more than half of the businesses employ fewer than twenty workers. Sawmill and woodworking machinery manufacturing companies produce sawmill and woodworking machinery (not including handheld tools), such as band saws, circular saws, drill presses, lathes, planers, sanders, shapers, and veneer forming machinery. Many companies that manufacture products for this industry also manufacture light machinery equipment and products for other industry segments. An example of a manufacturer in this segment of the industry is Schelling Anlagenbau (Schwarzach, Austria), which has subsidiaries based in North America, Great Britain, Poland, Slovakia, China, and Australia. This company manufactures woodworking machinery and precision saws for plastics, circuit boards, and nonferrous metals. It also manufactures sorting and stacking equipment, materials handling equipment, and packaging equipment and has a division that produces software to control production processes. Commercial laundry, drycleaning, and pressing machine manufacturing companies manufacture commercial grade (nonhousehold use) washing machines, dryers, drycleaning equipment, and laundry pressing machines. Many companies that produce products for this industry also manufac-

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ture products for household use, light machinery, and products for other industry segments. For example, the Whirlpool Corporation, a global leader in this industry segment, markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht, and Gladiator appliances. Whirlpool, Maytag, KitchenAid, Jenn-Air, and Amana are familiar appliance brands in the United States and other parts of the world. Brastemp and Consul appliances are sold in Brazil. Bauknecht appliances are sold in Germany. Gladiator appliances are designed for the garage and the product line includes workbenches, tool storage, and cabinets. Whirlpool maintains headquarters in Michigan; São Paulo, Brazil; Comerio, Italy; and Shanghai, China. The company produces many models of each specific product. For example, as of 2010 it offers twenty different models of washing machines designed for home use.

INDUSTRY MARKET SEGMENTS Although some smaller companies with fewer than one thousand employees compete in the marketplace, the heavy machines industry is dominated by large, international companies. The products manufactured by this industry are large and complicated, so large facilities are necessary for their production. The largest businesses are focused on producing construction, agricultural, and mining equipment. Companies producing machinery for commercial ventilation, heating, air-conditioning, and refrigeration also tend to be large. The metalworking machinery segment has the smallest businesses; half the companies have fewer than twenty employees. Small Businesses Small businesses in the heavy machines industry are concentrated in the metalworking machinery industry segment and the subindustry of maintenance and repair. Potential Annual Earnings Scale. The average annual earnings for a small-business owner in the heavy machines industry vary from region to region and usually are less than $100,000. Clientele Interaction. Small businesses tend to favor more interaction with customers, and the

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Heavy Machines Industry

personal touch can foster consumer satisfaction. However, clientele interaction can vary widely. The owner might have direct contact with his or her customers or market products over the Internet with contact limited to the telephone and e-mail. A Web site is essential to a small business. A welldesigned site can successfully compete with that of a large company. The Web site can not only market the product but also offer technical advice and serve as a vehicle for customer feedback. Amenities, Atmosphere, and Physical Grounds. Amenities of small businesses often are limited. Inasmuch as the owner has extensive control over the business, the working environment can be tailored to personal taste and budget. An owner interested in a favorable working environment might have a facility with extremely pleasant working conditions; however, most facilities are utilitarian, no-frills structures. Typical Number of Employees. The number of employees can range from one to several dozen. Traditional Geographic Locations. Geographic locations of small businesses are unlimited. They usually are located near the owner’s home. Pros of Working for a Small Heavy Machines Business. The owner of a small business often is responsible for all operational decisions. The owner might consult with staff members regarding these decisions. A staff member usually has a closer working relationship with the owner than in a larger company. Part-time employment and flexible hours usually are easier to arrange than they would be in a larger company. A small-business owner can control waste and unnecessary expenditures to a greater degree than the owner of a larger company because all expenditures are subject to his or her approval. If the company fosters teamwork and group decision making, an individual employee can be closely involved in the company’s growth. In some cases, partnership opportunities exist for exceptional employees. If the company flourishes, the company might grow in size and revenue; this could lead to expansion or purchase by a larger company. In either case, the financial return could be significant. Some small-business owners are able to sell their companies for large profits, which might be shared among key or long-term employees. Cons of Working for a Small Heavy Machines Business. Like most major industries, the

heavy machines industry is extremely competitive. Even if a small company produces a good product, it might not be able to compete successfully with a large company that can produce a comparable product at a lower price. A small business is less resilient and can be bankrupted by an unexpected major expense such as a lawsuit or major equipment replacement cost. Also, the owner and staff of a small company generally will not have the variety of skills that the staff and management of a larger company possess. For example, the staff may have technical expertise but lack marketing skills. Furthermore, with a small staff, the owner and employees will be responsible for a wider range of duties. Loss of a key employee could slow or even halt production until a suitable replacement is found. Costs Payroll and Benefits: Small companies often pay all employees an hourly wage and usually do not provide the same level of benefits as do large companies; these benefits are at the discretion of the owner and include sick pay, health insurance, and vacations. Supplies: Supplies usually cost more for smallbusiness owners than for large businesses, which can negotiate lower prices for bulk purchases. Not only will supplies directly related to the construction of the machinery cost more per unit but also other office supplies necessary for the business will be more expensive. External Services: Costs for external services for a small business are typically minimal and might include such things as Web site development and maintenance and billing services. If a small business becomes involved in a legal dispute, an attorney usually must be retained. In this situation, the small-business owner might incur significant costs. Utilities: Utilities may be comparable to that of a home. The manufacturing of some equipment might involve significant usage of electricity or natural gas. Taxes: Small businesses are obligated to pay local, state, and federal taxes. Midsize Businesses Midsize heavy machines manufacturing businesses tend to favor niche markets with limited product lines. These products might compete with

Heavy Machines Industry those produced by large businesses; however, some midsize companies manufacture products that complement products made by large businesses. An example of a midsize heavy machines business is Technik Manufacturing. The company operates out of a single facility in Columbus, Nebraska, and employs fifty people. Technik manufactures automatic vending machines and vending machine kiosks. The company markets its products in more than forty-five nations. It offers online technical support and after-sales service, including replacement parts, of their products. Potential Annual Earnings Scale. Salaries vary from region to region; however, the annual salary for a mechanical engineer is $32 per hour; sales representatives earn about $28 per hour and may receive commissions for sales; first-line supervisors/managers of production and operating workers earn about $26 per hour; tool and die makers earn about $21 per hour; machinists earn about $18 per hour; computer-controlled machine tool operators (metal and plastic) earn about $17 per hour; inspectors, testers, sorters, samplers, and weighers earn about $17 per hour; welders, cutters, solderers, and brazers earn about $16 per hour; cutting, punching, and press machine setters, operators, and tenders (metal and plastic) earn about $14 per hour; and team assemblers earn about $14 per hour. Incomes for managers in the manufacturing arm vary widely from more than $100,000 to less than $50,000 annually. Clientele Interaction. Vendors can foster longterm relationships, which can generate repeat business. All midsize businesses will have a Web site for marketing and client interaction. The site will offer customer service, technical support, and often provide downloads of user manuals. Amenities, Atmosphere, and Physical Grounds. Manufacturing facilities are customarily spartan and utilitarian. Typical Number of Employees. A manufacturing facility consists of a management staff, assembly supervisors, and assemblers. Traditional Geographic Locations. Manufacturers are typically in the industrial area of a city and are commonly located in areas near rail or ocean cargo service. Pros of Working for a Midsize Heavy Machines Industry. The owner of a midsize manufacturing business often has more control over opera-

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tional decisions than he or she would in a large company. Employee-management interaction often is more frequent and meaningful than at a large company. Midsize manufacturing businesses can employ individuals with a variety of skills; these employees include technicians, assemblers, and marketing personnel. Employees of a midsize company may have closer relationships with management than they would at a large company and may have a greater sense of being part of a team. Midsize businesses also may have one or only a few locations; thus, an employee who prefers to remain in one location usually will not be confronted with the threat of a transfer to another location as in a large, international company. Cons of Working for a Midsize Heavy Machines Industry. Many midsize businesses produce a limited product line. In times of economic downturn, these companies are more susceptible to failure than larger companies. The limited number of management positions in a midsize company decreases opportunities for advancement, particularly for those commanding a high salary. Costs Payroll and Benefits: Midsize companies usually can offer benefits comparable to those of a large company; these benefits include sick pay, health insurance, and vacations. Supplies: Midsize companies can often negotiate discounts from suppliers; however, the unit production cost may be higher than a comparable product produced by a large company. External Services: Manufacturing companies often use accounting services and billing services; however, they might also maintain employees that can perform these services. They also often use outside legal services rather than in-house services. Taxes: Midsize businesses must pay local, state, and federal income taxes, as well as applicable property taxes. Almost all businesses in the United States are incorporated; thus, they pay state and federal taxes at the corporate level. They also must collect state sales taxes for retail sales. Large Businesses Large heavy machines manufacturing businesses market their products internationally. The large

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companies in the United States are in direct competition with products manufactured by companies whose headquarters are in other nations. For example Deere & Company, headquartered in Moline, Illinois, maintains facilities in Canada, Europe, China, Australia, South America, and Russia. These companies often market a variety of products, including light equipment and products in other market segments (such as life insurance and televisions). They profit from brand recognition. Most consumers recognize these brand names when considering a purchase and will often favor a product that they deem to have a good reputation for reliability and features. Some equipment manufactured by non-American companies may have less brand recognition in the United States. An example of a large, global company in the heavy machines industry is Mitsubishi Heavy Industries (Tokyo), one of the core companies of the Mitsubishi Group. The Mitsubishi Group markets an extensive variety of products, including automobiles, televisions, Nikon cameras, beer, and life insurance. A division of Mitsubishi Heavy Industries is located in the United States. Products marketed by Mitsubishi Heavy Industries include airplanes, shipbuilding/marine structures, steel structures and construction, power systems, turbochargers, forklifts, military combat tanks, wind turbines, air-conditioning/refrigeration systems, industrial machinery, paper and printing machinery, machine tools, and light rail vehicles. An example of a large heavy machines company with a much narrower product range is Deere & Company, which primarily markets products for farm and construction use. At the heart of the farm product line is the John Deere tractor. Other farm equipment includes planting/seeding machines, combines, tillers, cotton harvesters, sugar harvesters, and cutters/shredders. The company markets a variety of construction products, including bulldozers, graders, and scrapers, as well as engines and drivetrains, forestry equipment, and golf carts. Deere & Company also markets smaller equipment for home use, such as lawn mowers (walking and riding), home workshop products, and snow equipment. Potential Annual Earnings Scale. Salaries vary from region to region; the salaries for top management positions, such as chief executive officer (CEO), can be well over $1 million per year. The

annual salary for a mechanical engineer is $32 per hour; sales representatives earn about $28 per hour and might receive commissions for sales; firstline supervisors/managers of production and operating workers earn about $26 per hour; tool and die makers earn about $21 per hour; machinists earn about $18 per hour; computer-controlled machine tool operators (metal and plastic) earn about $17 per hour; inspectors, testers, sorters, samplers, and weighers earn about $17 per hour; welders, cutters, solderers, and brazers earn about $16 per hour; cutting, punching, and press machine setters, operators, and tenders (metal and plastic) earn about $14 per hour; and team assemblers earn about $14 per hour. Many large companies offer dealership franchises. A motivated individual with capital to invest has an opportunity to develop a dealership into a multimillion-dollar business providing tremendous personal financial benefits. These dealerships can operate with a high degree of autonomy, provided that they generate adequate revenues to the parent company. Clientele Interaction. Vendors can foster longterm relationships, which can generate repeat business. All large businesses will have Web sites for marketing purposes and clientele interaction. A company’s Web site can offer customer service, technical support, and often provides downloadable copies of operator manuals. Amenities, Atmosphere, and Physical Grounds. Manufacturing facilities are customarily spartan and utilitarian. Dealerships range from utilitarian to luxurious. Corporate headquarters are luxurious and modern. The headquarters often have a large area devoted to displaying examples of the company’s product line. For example, the Deere & Company World Headquarters in Illinois is located on 1,400 acres of manicured land, which is home to a variety of wildlife, such as deer, ducks, geese, and swans. Visitors can view displays of John Deere equipment, ranging from antiques to the company’s latest offerings. Typical Number of Employees. The number of individuals employed by many companies in the heavy machines industry dropped from 2009 to 2010 because of the widespread economic downturn. Deere & Company reported having 51,262 employees in 2009, down 10 percent from its 56,653 employees in 2008. Mitsubishi Heavy Industries initiated a plan in 2008 to reduce its average

Heavy Machines Industry number of employees in Japan from 3,500 to 2,000 over two years. However, over that same period, the company planned to increase its workforce in overseas companies from 8,450 to 15,000 employees, particularly in growth businesses. The company predicts a consolidated workforce of 72,000 by March, 2015. Traditional Geographic Locations. Corporate headquarters can be located in virtually any large or small city; large retail outlets also can be located in any area with a reasonable population density. Manufacturing facilities typically are found in industrial areas of large cities, near rail or ocean cargo services. Pros of Working for a Large Heavy Machines Industry. A wealth of career opportunities exists within large manufacturing companies and their dealerships. Positions include high-paying management positions, technical/engineering opportunities, information technology, marketing, and sales. Upper management positions can be extremely lucrative in regard to salaries, bonuses, and retirement benefits. Even lower-level employees may be entitled to generous bonuses and retirement benefits. Large corporations offer summer internships for college students and training for those employees who wish to advance their careers. Lateral transfers are possible. For example, a marketing employee might have the opportunity to transfer to a management position in human resources. Large manufacturers offer a wide range of products at various price points; thus, they are more likely than smaller companies to survive an economic downturn. Cons of Working for a Large Heavy Machines Industry. Despite efforts to foster good employee-management relations, an employee might have a sense that his or her opinion does not matter and that his or her position could readily be filled by another individual. Upper management personnel might be urged to relocate to another state or even another country at regular intervals to ensure promotion. Performance goals sometimes imposed on employees, even those in lower positions, also might be extremely stressful. These large businesses are profit-driven and must answer to a board of directors and shareholders. If a company loses market share or profitability, the CEO might be terminated. The same holds true for department managers if revenue drops.

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Costs Payroll and Benefits: Large companies usually offer many benefits, including sick pay, health insurance, vacations, and family leave. Supplies: Large companies can achieve economies of scale because they purchase large quantities of goods. However, since they need constant replenishment of many items, a breakdown in the supply chain (for example, delays caused by weather, natural disasters, or strikes) can slow or halt production. Large companies often strive for just-in-time delivery of supplies (supplies arrive when needed to avoid maintaining a large inventory). This concept, however, increases the likelihood of a production slowdown in the event of a supply chain disruption. For example, the 2010 volcanic eruption in Iceland halted air shipment of many products. External Services: Large companies usually have in-house departments for most services, which include accounting, payroll, legal, and even urgent-care medical services. Utilities: Manufacturing of heavy equipment often entails high costs for utilities, particularly gas and electricity. Taxes: Large heavy machines businesses—both manufacturing plants and dealerships—must pay local, state, and federal income taxes as well as applicable property taxes. These businesses are incorporated; thus, they pay state and federal taxes at the corporate level. They also must collect state sales taxes for retail sales.

ORGANIZATIONAL STRUCTURE AND JOB ROLES A large business will have departments for each division of its organization. A midsize company often will have a department or at least one employee for each division. The following umbrella categories apply to the organizational structure of businesses in the heavy machines industry: ■ ■ ■ ■

Business Management Customer Services Legal Services Medical Services

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■ ■ ■ ■

Heavy Machines Industry Sales and Marketing Information Technology Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources Payroll

Business Management Management of a heavy equipment company usually consists of hundreds of top-level individuals; some midsize companies might have a few dozen management positions. At a large company, the hierarchy is headed by the CEO; under the CEO are upper-management personnel who oversee operations for facilities in other countries or regions of the United States. Below these uppermanagement positions are middle-management positions and low-level managers. A large dealership may have a similar hierarchy. Individuals in the upper-management positions command high salaries ranging from several hundred thousand to more than $1 million a year. These individuals have college degrees and usually major in a business-related curriculum. Most also have master of business administration (M.B.A.) degrees. These high positions usually are achieved by motivated individuals who work their way up the corporate ladder. In some cases, after achieving a high-level position in one company, a manager will be recruited to work for a rival company or a company in a different industry. Included in management are assistants such as secretaries and clerks. Business management occupations may include the following: ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Controller Administrative Assistant Secretary

Customer Services Customer services are essential for both manufacturing companies and dealerships. Individuals working in this capacity must possess excellent people skills. When a customer issues a complaint, customer service personnel must handle it in a compe-

tent and pleasant manner. The customer may be an individual or a representative of another company that might purchase thousands of units annually. A large company may employ managers, assistant managers, and representatives who communicate with customers via the telephone or Internet. Customer services usually are augmented by automated telephone messages as well as Webbased services to handle common questions. It is imperative that these services be well designed and capable of handling many common customer service issues. These automated services can result in extreme customer frustration if the customer must invest significant time without getting an answer or being able to talk directly to a company representative. Customer services are a link between customers and the company and can therefore obtain valuable information about how a product is received. Customer services occupations may include the following: ■ ■ ■ ■ ■

General Manager Assistant Manager Supervisor Customer Service Representative Webmaster

Legal Services Large companies incur significant expenses for legal services. Legal issues can arise with companies of any size and can include product liability, copyright infringement, employee matters, and disputes regarding business practices. Large companies are more vulnerable to large settlements because of their financial standing. Lawsuits ranging from the frivolous to multimillion-dollar cases all require the company’s attention. Small and some midsize businesses must retain an outside attorney in these instances. Larger companies maintain inhouse counsel consisting of one or more full-time attorneys. These attorneys must specialize in or have some expertise in the following areas: mergers and acquisitions, patents, contracts, and labor law. When a company is exploring a merger with another company or dissolution of a business segment, the in-house counsel is involved in the negotiations. These teams also include assistants such as legal secretaries and paralegals. Even large companies may be required to obtain additional legal ser-

Heavy Machines Industry vices in the event of a high-profile case. Lawsuits have the potential to financially devastate even the largest corporations. Legal services occupations may include the following: ■ ■ ■ ■

General Counsel Paralegal Legal Secretary Administrative Assistant

Medical Services Large companies might maintain in-house health care professionals, who can handle urgentcare issues such as job injuries that arise during the workday. This department also might promote preventive health care including weight loss and smoking cessation programs. Medical services occupations may include the following:

play. This department includes photographers and videographers. Photographers take pictures for sales brochures and advertisements. Videographers prepare video clips for television advertisements and the company’s Web site. Writers also are employed to prepare text for publications. The marketing department also consists of public relations (PR) specialists. These personnel prepare press releases announcing new products. Large companies employ specialists in the aforementioned areas. Smaller companies typically contract for that work. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■

■

■ ■ ■ ■ ■

Physician (usually a family practitioner, emergency medicine physician, or a physician with specialized training in industrial medicine) Nurse Practitioner Registered Nurse Physician Assistant Medical Assistant Administrative Assistant

Sales and Marketing A manufacturing company maintains a staff of vendors—salespeople who call on businesses or individuals to promote the product line. These vendors often invite customers to lunches or dinners to explain and promote the company’s product line; other incentives—which must comply with federal and state regulations—also might be offered. Dealerships maintain staffs of salespeople. Marketing is conducted by advertising in trade magazines and newspapers and on television and radio. Internet advertising also is a common way to promote products. Potential customers can obtain product specifications, compare products (including those of rival manufacturers), and purchase products (either on a company’s Web site or by referral to a dealership). The marketing department includes graphic designers who can develop illustrations for a Web site, brochure, or magazine dis-

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■ ■

General Manager Assistant Manager Secretary Administrative Assistant Webmaster Photographer Videographer Sales Representative

Information Technology All heavy machines businesses will have individuals familiar with computer maintenance and operation. Computer networks are involved in many aspects of a business, including inventory, payroll, sales, and production. A breakdown in a computer network can bring production or sales to a halt. The information technology (IT) department consists of individuals with college degrees in computer science as well as technicians with lower levels of education. These employees usually receive their training in vocational schools or community colleges. Lower-level IT positions include installation, wiring, and maintenance of computer equipment. Information technology occupations may include the following: ■ ■ ■ ■ ■

General Manager Assistant Manager Information Technologist Technician Data Entry Clerk

Facilities and Security Maintenance of large facilities requires housekeeping personnel, painters, and repairmen. A

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large manufacturing corporation also may have a large security department headed by one or more managers. Security personnel are responsible for preventing unauthorized entry to areas where research and development are being conducted. They also are responsible for ensuring safety of the company’s personnel by guarding against entry by individuals who could pose a threat. Identification badges are commonly required for all personnel. Security staff often monitor surveillance equipment and electronic entry into restricted areas. Dealerships also often have video monitoring. Theft is a much greater problem for mobile equipment than it is for fixed equipment. The size and weight of these products limits theft; however, their per-unit value is high. Theft can be committed by employees as well as burglars. Larger establishments will maintain an on-site security force during nonbusiness hours. Facilities and security occupations may include the following:

cles, knobs are twisted, buttons are pushed, and doors are slammed. If a construction defect surfaces after a product is released, the company might incur a major expense in product recall. Electrical and electronics engineers are required for the development of machines with complicated electric or electronic systems; these engineers also assist in the design and testing process. The responsibility of industrial engineers is to optimize production of the product; they determine how to best allocate the factory’s resources, both workers and equipment. Once the design process and testing are completed, draftsmen prepare the plans that production workers use for assembly of the machine. For each part, draftsmen provide specifications and diagrams; they also produce assembly instructions for the final product. Technology, research, design, and development occupations may include the following: ■ ■

■ ■ ■ ■ ■

General Manager Assistant Manager Security Guard Housekeeper Custodian/Janitor

■ ■ ■ ■ ■

Technology, Research, Design, and Development Ongoing research and development is a vital element of a heavy machine construction company. Even midsize businesses must devote time in this arena to remain competitive. Although engineers and technicians are primarily responsible for the development of a new product, this department also includes a large number of support personnel. Before a new machine is ready for the production line, an extensive process of creation and testing must be completed. For complicated equipment, this process can take several years. Engineers with a variety of specialties are employed by this department. Mechanical engineers design the moving parts of the machine (for example, hydraulics, gears, levers, and engine pistons). They also oversee the work of technicians, who run tests on materials and parts before they are assembled into the final product. After assembly, this department tests products before they are released to the marketplace. Equipment is run through repeated duty cy-

■

Engineering Manager Engineer (electrical, mechanical, and industrial) Manager Supervisor Technician Mechanical Drafter Production Worker Assembly Worker

Production and Operations Production is overseen by managers, assistant managers, and supervisors. The bulk of the workforce consists of a hierarchy ranging from experienced workers with expertise in one or more production areas to inexperienced new hires. Large companies offer training programs to help workers advance. Large and many midsize companies assemble their products on a production line similar to that of an automobile company. Robots increasingly are being used in heavy equipment manufacturing. These devices replace workers, but personnel still are required to control them. A conflict often arises between management, which is interested in improving production with robotics, and labor unions, which are focused on preserving jobs. Employee safety is a major concern, and the production line is equipped with features to ensure safety. Special clothing and goggles may be required for workers. The primary responsibility of

Heavy Machines Industry OCCUPATION

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PROFILE

Heavy Equipment Service Technician Considerations

Qualifications

Description

Maintains and repairs heavy equipment such as cranes and bulldozers.

Career clusters

Agriculture, Food, and Natural Resources; Manufacturing; Transportation, Distribution, and Logistics

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

On-the-job training; high school diploma/technical training; junior/technical/community college; apprenticeship

Physical exertion

Medium work; heavy work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service

Licensure and certification

Recommended

Employment outlook

Average growth expected

Holland interest score

REI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

some supervisors is to ensure employee safety. Small companies often have fewer than a dozen workers responsible for the entire production process. However, large companies often have a multistage production process, consisting of separate teams of workers for design and testing, parts manufacturing, and product assembly. Despite this segmentation, considerable interaction takes place among the teams. For example, to promote worker interaction, design offices often are located near the assembly line. Production and operations occupations may include the following: ■ ■ ■ ■ ■ ■

Manager Assistant Manager Supervisor Assembly Worker Wireman Maintenance and Repair Worker

Distribution Companies own or lease distribution centers to store and distribute products. Because many companies are global in nature, they have distribution centers located in various areas around the world. These centers typically are located near rail lines, ports, and interstate highways. Distribution centers are overseen by managers, who are in charge of a workforce consisting primarily of warehouse workers who move products in and out of the facility. Managers also must ensure that inventory remains at an appropriate level. A distribution center may employ truck drivers or contract with a trucking company to transport items. Distribution occupations may include the following: ■ ■ ■

Manager Assistant Manager Supervisor

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■

Dispatcher Warehouse Worker Truck Driver Freight Loader/Unloader

■ ■ ■

Human Resources The human resources department of a manufacturing company or retail outlet is responsible for all personnel. It handles employee hiring and dismissal, employee relations, employee benefits (such as health care insurance, retirement plans, profit-sharing plans, and interdepartmental or interfacility transfer requests), and training. The human resources department is involved with recruiting employees via the Internet or personal contact at college campuses or job fairs. Managers typically are college graduates. Clerical personnel and assistants with less educational experience also can be employed in this department. Human resources occupations may include the following: ■ ■ ■ ■ ■

Manager Assistant Manager Administrative Assistant Secretary Interviewer

Payroll The payroll department at a heavy machines company often is overseen by a certified public accountant (CPA) with management experience. Other CPAs, clerical personnel, and assistants also work in this department. Large companies have a computerized, automated system to generate paychecks; however, some daily human monitoring or input is required. Payroll occupations may include the following: ■ ■ ■ ■

Manager Assistant Manager Administrative Assistant Secretary

INDUSTRY

OUTLOOK

Overview The heavy machines industry declined both in the United States and globally amid the overall eco-

nomic downturn. However, The Wall Street Journal reported in September, 2010, that the Institute for Supply Management—which surveys U.S. purchasing managers—noted that its manufacturing index rose from 55.5 in July, 2010, to 56.3 in August, 2010. The Wall Street Journal also reported that new orders for factory goods rose in July, 2010, while the U.S. trade deficit decreased. In that month, exports increased by $2.8 billion and imports decreased by $4.2 billion. As a result, the trade deficit shrank from $49.8 billion to $42.8 billion. If this trend continues, hiring will increase. Many companies reduced their staffs between 2008 and 2010 through hiring freezes, layoffs, and incentives for early retirement. Augmenting this process was increased efficiency of operation via robotics and other technologies that reduced the demand for manpower. Even if a broad upsurge in hiring does not continue, many positions likely will become available because of the need to replace workers who retire or move to other industries. Production workers account for more than 50 percent of the workforce in this industry; those with greater technical skills will have a significant advantage in obtaining and maintaining work. Training beyond high school often is necessary for these positions. Midsize and small businesses likely will see their numbers reduced. If the economic downturn continues further into the 2010’s, smaller companies are more likely to become insolvent. These companies will either shut down or be acquired by other companies. Furthermore, mergers and acquisitions will result in an increase in size of the dominant companies. Large companies will increase not only in size but also in global reach. For example, Japanese businesses often require personnel to become fluent in English so that they can compete more successfully in the marketplace. One sector of the industry will profit if an economic downturn continues: the repair sector. In this economic situation, consumers will be much more likely to have existing equipment repaired than replaced. The use of robotics will increase for manufacturing. This increase may be hampered by labor unions, which will fight to preserve jobs. A number of manufacturing plants outside the United States utilize robotics to a greater degree. The added efficiency increases their profit margin, thus giving these companies a competitive advantage over those in the United States. The in-

Heavy Machines Industry dustry also likely will continue to improve technology to add new features and increase the energy efficiency of heavy machines. Considerable research is focused on increasing energy efficiency and reducing emissions. “Green” products often are more attractive to end users ranging from companies to individuals. An example of a machine that is being modified to be more ecofriendly is the diesel engine. Diesel engines are powerful, reliable, and yield significantly better mileage than gasoline engines; however, they release high levels of pollutants into the air. Engines are being designed to run on cleaner diesel fuel; emissionreducing techniques also have been developed.

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choice. Heavy equipment is an essential component of any industrialized nation. A demand for heavy machinery and its components and maintenance always will exist. Most of these companies are large, global, and produce a wide variety of products; thus, they offer a degree of stability not found in smaller companies and those that do not produce essential products. The industry can support a wide variety of careers including managerial, technical, and sales.

Annual Earnings In the short term, the industry’s growth potential is uncertain. Most companies reported a decline in net sales from 2008 to 2009. For example, Employment Advantages net sales declined 26 percent for Deere & ComAccording to the Bureau of Labor Statistics pany from 2008 to 2009. Komatsu also reported a 9 (BLS), “machinery manufacturing has some of the percent decline. The Doosan Group (Bobcat Commost highly skilled—and highly paid—production pany) bucked the trend and reported a 2 percent jobs in manufacturing.” Even though this industry increase in net sales. The decline for most compais in a decline, the industry is still a good career nies was attributed to a slowdown in both the United States and global economies as well as a slowdown in the U.S. construction, housing, and PROJECTED EMPLOYMENT home improvement markets. AfFOR SELECTED OCCUPATIONS fecting the heavy machines industry is the stagnation of new home Machinery Manufacturing construction, which began in 2009. Some building resumed in the Employment first quarter of 2010; however, the 2009 Projected 2018 Occupation trend did not continue through the next two quarters. The econ28,450 7,300 Computer-controlled machine omy also improved to a degree tool operators, metal and plastic during the first quarter of 2010; 16,990 4,800 Engine and other machine however, consumer spending for assemblers all products in the United States fell 1.2 percent from April to May, 71,090 16,700 Machinists 2010. 30,090 8,000 Mechanical engineers The relative stability of the United States economy also will 115,470 27,000 Team assemblers benefit this industry. As of 2010, 21,930 23,800 Tool and die makers the American economy was faring somewhat better than the Euro60,640 15,200 Welders, cutters, solderers, and pean economy. If this trend conbrazers tinues, the U.S. heavy machines industry will grow. However, the Source: U.S. Bureau of Labor Statistics, Industries at a Glance, American industry is facing everOccupational Employment Statistics and Employment increasing competition from Asian Projections Program. manufacturers. A large portion of the heavy machines industry is

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Heavy Machines Industry

based in Asia. Japanese and Korean manufacturers hold a significant market share in the United States; however, a greater threat is that of China, which exports light machines. The heavy machines industry in the United States is likely to face major competition from China in the near future.

RELATED RESOURCES FOR FURTHER RESEARCH Caterpillar 100 NE Adams St. Peoria, IL 61629 Tel: (309) 675-1000 Fax: (309) 675-4332 http://www.cat.com Deere & Company Deere & Company World Headquarters 1 John Deere Place Moline, IL 61265 Tel: (309) 765-8000 Fax: (309) 765-7283 http://www.deere.com EQUIPMENT WORLD 3200 Rice Mine Rd. Tuscaloosa, AL 35406 Tel: (800) 633-5953 Fax: (205) 349-3765 http://www.equipmentworld.com Institute for Supply Management P.O. Box 22160 Tempe, AZ 85285 Tel: 480-752-6275, or 800-888-6276 Fax: 480-752-7890 http://www.ism.ws Komatsu 2-3-6 Akasaka, Minato-ku Tokyo 107-8414 Japan Tel: 81-3-5561-2616 http://www.komatsu.com MarketResearch.com 11200 Rockville Pike, Suite 504 Rockville, MD 20852

Tel: (240) 747-3000 Fax: (240) 747-3004 http://www.marketresearch.com Mitsubishi Heavy Industries 16-5 Konan 2-chome Minato-ku Tokyo 108-8215 Japan Tel: 81-3-6716-3111 Fax: 81-3-6716-5800 http://www.mhi.co.jp/en Technik Manufacturing 1005 17th St. Columbus, NE 68601 Tel: (800) 795-8251 Fax: (402) 564-0406 http://www.technikmfg.com

ABOUT

THE

AUTHOR

Robin L. Wulffson, M.D., is a board-certified specialist in Obstetrics and Gynecology. In 1997, he transitioned to a writing career. He has written analytic reports on major corporations and industries. He has analyzed hospital systems and medical device manufacturers. He is familiar with the heavy machines industry in the United States, Europe, and Asia. For the past fifteen years, he has closely followed the business sector in the United States and abroad.

FURTHER

READING

Dennis, Neil. “Economic Outlook: Measure of Manufacturing.” The Financial Times, September 26, 2010. Mitchel, Doug. Anatomy of the John Deere. Iola, Wisc.: Krause, 2007. Orlemann, Eric C. Caterpillar Chronicle: The History of the World’s Greatest Earthmovers. St. Paul, Minn.: Motorbooks International, 2009. Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010. Stearns, Peter N. The Industrial Revolution in World History. 3d ed. Boulder, Colo.: Westview Press, 2007.

Heavy Machines Industry Supplier Relations U.S. Farm Machinery and Equipment Manufacturing Industry in the U.S. and Its International Trade. 2010 ed. http:// www.marketresearch.com/product/ display.asp?productid=2802962 U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco.

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U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

©Joern Schulz/Dreamstime.com

Higher Education Industry

INDUSTRY

SNAPSHOT

General Industry: Education and Training Career Cluster: Education and Training Subcategory Industries: Business Schools; Colleges; Junior and Community Colleges; Music Conservatories; Professional Schools; Theological Seminaries; Universities Related Industries: Private Education Industry; Public Elementary and Secondary Education Industry Annual Domestic Revenues: $474 billion USD (U.S. Department of Education, 2006-2007) NAICS Number: 6112-6113

INDUSTRY

most obvious position within this industry is perhaps that of a professor, the industry also comprises numerous supporting roles across a variety of fields, including administration, management, marketing, and finance, all of which are essential to the operations of a postsecondary educational institution of any size.

History of the Industry Higher education in the United States dates back to the seventeenth century, when its primary objective was to educate future members of the clergy. At that time, most higher education curricula were dominated by liberal arts subjects, particularly languages, literature, and religious studies. Faculties were small, and courses of study were often broad and designed on an individual basis depending on the interests of the student. The nineteenth century saw significant change in the purpose of higher education, beginning with the Morrill Land-Grant Act of 1862. Signed by President Abraham Lincoln, the act included grants of land to states and territories to establish colleges devoted to agriculture, science, and engineering. This law sparked the growth of public colleges and universities, and it was an important step

DEFINITION

Summary The higher education industry serves students seeking postsecondary education—that is, education beyond the high school level. It includes colleges and universities with programs leading to undergraduate degrees such as associate’s and bachelor’s degrees, graduate degrees such as master’s and doctoral degrees, and professional degrees such as medical or legal degrees. Higher education institutions may also offer other specialized degree programs, including a variety of academic and professional certificate programs. While the 844

Higher Education Industry toward the explosive growth that would be experienced by the higher education industry during the twentieth century. Demand for higher education programs in the early twentieth century was frequently driven by the needs of the Industrial Revolution. During this time, many schools expanded their engineering and science offerings, particularly in the fields of chemistry and physics, and specialization became more common. Programs that assisted in the manufacture of steel, rubber, chemicals, sugar, drugs, petroleum, and electricity generation grew in popularity. As specialization increased, faculty size grew, and the higher education industry experienced a fundamental change in both the way students were taught and the way departments were organized.

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Following World War II, increased federal funding to public colleges, along with the GI Bill (officially, the Servicemen’s Readjustment Act of 1944), made higher education affordable for a wider range of students. As a result, more young people started to attend college than ever before. This growth in scholarship was in large part directed toward public colleges and universities, as the tuition at such institutions was generally more affordable and the large number of students at public schools resulted in larger departments offering a wider variety of programs. In the latter part of the twentieth century, programs such as affirmative action encouraged ethnic diversity within student bodies, and increased federal funding in the form of government-sponsored student loans and grants provided more indi-

The most obvious position within the higher education industry is perhaps that of a professor like this one; however, the industry also offers many positions in a variety of fields, including administration, management, marketing, and finance. (©Gualtiero Boffi/Dreamstime.com)

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the nature of the jobs available may shift as institutions make changes to accommodate the early twenty-first century’s lifestyles, demands, and economy. Many schools, for example, are moving away The Industry Today from hiring full-time tenured professors and toHigher education in the early twenty-first cenward hiring part-time adjunct instructors in order tury has grown to include a vast number of acato save money on salaries and benefits. This may demic and vocational disciplines and a wide variety have an unexpected up-side, however, in that these of delivery systems. Many schools now offer certifipart-time instructors are often working professioncation programs, as well as programs designed to als. As a result, they may be better able to relate to help working adults enhance their existing caworking adults returning to school and can help reers. Additionally, many programs have moved students of all ages integrate their academic expeaway from traditional full-time day classes to include riences into the workplace upon graduation. On part-time and night programs, distance learning, the other hand, adjunct instructors do not have the online courses, and academic credit for employinstitutional service requirements that full-time ment experience. faculty have. They are not required to serve on The addition of new programs, as well as new committees and are usually not asked to serve as adloan and grant opportunities for students to fund visers to students. As schools hire more adjuncts, their educations, has increased the number of indithen, the fewer remaining tenured and tenureviduals attending American colleges and universitrack faculty must pick up the slack, and each proties. The U.S. Department of Labor projects that fessor’s workload outside the classroom increases these numbers will continue to grow in the early significantly. twenty-first century. This growth is expected not These changes have opened up higher educaonly to increase the enrollment numbers at existtion to a greater variety of individuals than ever being schools but also perhaps inspire the establishfore. While much debate remains within the acament of new ones, particularly in the for-profit demic community as to whether these changes sector. This growth bodes well for increased emhave been a positive development or whether they ployment opportunities in the industry, although are lowering the standards previously set for higher education, the increased diversity of students and programs can lead to a more enriching academic experience for everyone. The increased level of education among the U.S. workforce overall is likely to produce many positive changes in the years to come. In response to their changing environment, many schools are also branching out with respect to their private industry associations. Historically, many schools (particularly large ones with science and medical programs) have affiliated themselves with hospitals and other research institutions to exchange facilities, equipment, Many schools now offer certification programs, as well as programs designed to expertise, and revenue. Schools help working adults enhance their existing careers. (©Monkey Business Images/ are also increasingly seeking fundDreamstime.com) ing sources from private indusviduals with the opportunity to attend college. All these changes led to a more expansive and enriching experience in higher education, as well as an increased need for infrastructure and staff.

Higher Education Industry tries to finance everything from research labs to programs that provide computers and other equipment directly to students. These affiliations can be of great benefit, as the schools may be able to obtain resources that they could not otherwise afford. However, such affiliations raise ethical questions about potential conflicts of interest if private industry becomes too closely associated with teaching methods within a school.

INDUSTRY MARKET SEGMENTS Within the higher education industry, schools can range from small liberal arts or community colleges serving fewer than one hundred students housed in a single building to large universities with tens of thousands of students occupying as much space as a small city. The following sections provide details on different sizes of schools within the industry. Even within a particular size range, the specifics of a given institution are influenced by many factors, including the types of programs offered and the geographic location of the school. Small Schools Many small schools in the higher education industry are community colleges offering two-year associate degree programs, possibly along with some additional certification programs. However, there are some small schools that offer four-year bachelor degree programs and even some graduate-level programs. Small schools generally have fewer degree options than their larger counterparts, and their offerings are likely to be influenced by the types of jobs that are in high demand in the geographic area where the school is located. Smaller schools tend to attract local students, as well as older students who are returning to school after time spent in the workforce. Small schools generally have less than two thousand students and may have as few as twenty or thirty. Potential Annual Earnings Scale. Salaries generally remain consistent throughout the higher education industry. According to the U.S. Bureau of Labor Statistics (BLS), the mean salary for office and administrative support occupations is $33,290 per year, although individual salaries will vary depending on the department and the position. Me-

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dian salaries for middle-level managers and administrators, including the dean of students, registrar, and director of financial aid, range from $50,000 to $125,000. Median salaries for top-level management positions, including the chief academic officer and academic deans, range from $83,108 to $140,595. The mean salary for all managementlevel positions is $94,300. Salaries for any position at junior and community colleges are likely to be at the lower end of their respective ranges. Clientele Interaction. The primary clientele of a higher education establishment are its students. Regardless of the position held, most employees at a small school interact with students at least occasionally. Positions that require the most interaction with students include any teaching position, library service positions, and customer service positions such as those in the registration office, financial aid office, or information technology (IT) department. Academic administration positions, such as a dean or certain supervisory positions, often involve some interaction with students, particularly when there is a difficult situation or problem to be resolved. The highest-level management positions may require very little student interaction. Nonetheless, one of the perceived benefits of both working at and attending a small school is the increased opportunity for more interaction with students. Many students choose a small school because they want to receive personal attention that they believe they would not receive at a larger institution, so it is important to provide this personal touch when working in a small school environment. Additionally, many students at small schools are from the local area and may be working adults returning to school after time spent in the workforce. It is important for small schools to keep this background in mind when developing their educational programs, since these students may have significant experience in the employment industry but limited experience in an academic setting, and they may need some assistance making the adjustment. Amenities, Atmosphere, and Physical Grounds. The atmosphere of a school will often depend on the size of its campus and whether the majority of its students live on campus or commute. Schools with predominantly on-campus students often have more of a community atmosphere than schools where most of the students commute

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College recruiters sometimes ask current students to show prospective students around the campus. (©Lori Howard/ Dreamstime.com)

from their own homes. Similarly, schools where the staff consists mainly of individuals who live near the school may have more of a community feel than schools where much of the staff commutes from a significant distance. At many smaller schools, the staff tends to come primarily from the area immediately surrounding the school. The smallest of higher educational facilities may be housed entirely in a single building. Commonly, small colleges are made up of several small buildings, either lined up on a city block or situated in a cluster to form a small campus. Amenities vary greatly, depending on the size and location of the school. Most schools will offer separate lounge areas for students, faculty, and other staff, and many schools provide a small library and possibly a cafeteria. Depending on the location (urban, suburban, or rural), there may be parking facilities or access by public transportation, making a school more or less commuter friendly for students and employees.

Typical Number of Employees. Small colleges typically have between two hundred and eight hundred employees. This number includes all full- and part-time staff, including professors and other instructors, deans, directors, managers, and administrators. Small schools may also directly employ workers in additional support positions, such as maintenance or cafeteria staff, but they may also contract those services out to an external company. Traditional Geographic Locations. Small colleges can be found all over the country and in a variety of geographic areas, including quiet rural areas, suburbs, and large cities. The location of the school will have an impact on the feel of its campus. Often, rural or suburban locations feel more like college towns, where many of the local businesses cater to students and employees and many of the town’s residents are transient students. Urban schools may have more of the character of the city where they are located, and the transient nature of the students will be balanced with the high number

Higher Education Industry of permanent residents and non-education-related professionals in the community. The size of a school’s campus can also vary considerably. The smallest of schools may be located entirely within a single building, while others may include several buildings lining a city block or arranged in a cluster to form a campus. Small liberal arts schools may occupy quite large tracts of land that include athletic facilities, farmland, or other resources in addition to their academic buildings. The specific configuration will likely be dictated by the location of the school; for example, an urban school may be more limited in space than a suburban or rural school. Pros of Working for a Small School. Small schools generally employ fewer people within each department, and with fewer fellow employees as competition, it may be easier to distinguish oneself professionally, as well as to develop personal relationships with colleagues and supervisors. There may be greater opportunities to take on leadership roles or to expand the scope of an employment position to include new responsibilities. There may also be less bureaucracy within smaller colleges, as there are fewer employees and fewer layers of management. Smaller schools also usually provide more opportunity for interacting with students, regardless of position, and instructors in particular may find that their smaller class sizes allow for more meaningful relationships with students. Cons of Working for a Small School. Many smaller schools operate with a smaller staff, so any individual job description may expand beyond its expected scope. Even those occupying positions such as professor, dean, or upper-level management may occasionally need to perform their own administrative support tasks. With a smaller infrastructure, there may be less opportunity for advancement and fewer opportunities to develop new programs or courses. Smaller schools may also operate on smaller budgets, which could entail lower salaries than those paid for comparable positions at larger schools. Costs Payroll and Benefits: Salary and benefits vary widely depending on an individual’s role in the organization and whether the college is a public or private institution. Benefit packages range from quite generous to nonexistent, again de-

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pending on the position and employment status (full- versus part-time). Adjunct faculty often receive no benefits and are paid by the course taught, whereas tenured professors receive annual salaries and benefits. Potential benefits include health insurance, retirement packages or pension plans, paid time off, and reduced or free tuition for family members. Supplies: Small schools require all standard office supplies, plus telecommunication equipment such as computer hardware, software, networking equipment, and telephones; classroom supplies such as desks, chairs, chalk- or whiteboards; audiovisual equipment; and common area supplies for lounges, such as study carrels, couches, tables, chairs, and refrigerators. Libraries require a variety of books, journals, and other research material, as well as subscriptions to computer-based academic research databases. Schools that offer laboratory facilities require benches and stools, fume hoods, glassware, chemicals, storage cabinets, and safety equipment, such as laboratory coats, gloves, and eye protection. Schools that offer athletic facilities require cleaning and maintenance supplies, as well as sporting and exercise equipment. External Services: Common external services include landscaping of outdoor facilities and maintenance of athletic fields; cleaning of buildings containing classrooms, administrative offices, and common areas; and campus security services. Some smaller schools may also contract out telecommunication and computer network services, as well as dining-hall and other foodrelated services. Utilities: Common utility costs include electricity, heat, air-conditioning, water, telephone, and Internet service for classrooms, administrative offices, common spaces, and dorms (although many smaller schools do not have such facilities). Taxes: Applicability of state and local taxes depends on whether a school is a public, private nonprofit, or for-profit institution. Midsize Schools A midsize school in the higher education industry generally offers four-year bachelor’s degree programs, along with some graduate-level programs and possibly a variety of certificate pro-

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grams. Midsize schools will usually offer more degree options than their smaller counterparts but not the same variety as are available at large schools. A midsize institution may specialize in a particular area, offering a variety of degree programs within a single category (for example, liberal arts or science and engineering) and a limited number of programs in the other categories. Midsize schools have approximately two thouand to six thousand students across their various programs. Potential Annual Earnings Scale. Salaries generally remain consistent throughout the higher education industry. According to the BLS, the mean salary for office and administrative support occupations is $33,290 per year, although individual salaries will vary depending on the department and the position. Median salaries for middle-level managers and administrators, including the dean of students, registrar, and director of financial aid, range from $50,000 to $125,000. Median salaries for top-level management positions, including the chief academic officer and academic deans, range from $83,108 to $140,595. The mean salary for all management-level positions is $94,300. Clientele Interaction. Many employees at midsize schools have limited direct interactions with students, if any. Positions that require the most interaction with students include any teaching position, library service positions, and customer service positions such as those in the registration office, financial aid office, or computer help desk. Academic administration positions, such as a dean or certain supervisory positions, may require some interaction with students, but not as regularly and most likely only when there is a more serious problem to be resolved. Some positions, such as the highest-level management, financial services, or directorship positions, require very little, if any, student interaction. Many students choose a midsize school because they want the amenities of a larger school but still wish to have a more focused and personalized experience than would be possible at the largest schools. Many students at midsize schools come from the geographic region in which the school is located (for example, New England), but there may be a significant number of students from outside the area who are likely to require some time to adjust to their new surroundings. Regardless of the position held within a midsize school, these issues

will have an impact on any employee’s relationship and interaction with students. Amenities, Atmosphere, and Physical Grounds. The atmosphere of the school will often depend on the size of the campus, whether the campus setting is urban, suburban, or rural, and whether the bulk of the students live on the campus or commute. Schools with predominantly oncampus students often have more of a community atmosphere than schools where most of the students commute from their own homes. Similarly, schools where the staff consists mainly of individuals who live near the school may have more of a community feel than schools where much of the staff commutes from a significant distance or includes visiting professors. As many students move to campus from outside the immediate area, most midsize schools have student dormitories. Off-campus housing is also generally located near these schools. As a result, many schools actively seek to develop a strong community surrounding the campus. The staff of most midsize schools tends to come primarily from the area surrounding the school. Depending on the location (urban, suburban, or rural), there may be parking facilities or access by public transportation, making a school more or less commuter friendly for students and employees. Midsize colleges generally occupy a number of buildings grouped together, either lined up on a city block or situated in a cluster to form a small campus. Amenities vary depending on the size and location of the school, but schools generally offer separate lounge areas for students, faculty, and other staff. Many schools have a student union, which is typically a building set aside specifically for students to meet socially, study, and conduct meetings of various campus organizations. Midsize schools usually have a cafeteria and bookstore and often have a convenience store located on campus. Almost all midsize schools have libraries, although these vary in size and scope depending on the number of students and the types of programs offered. Many midsize schools, particularly those that cater to the study of science or engineering, will also have research laboratories and related facilities. Depending on the size and availability of space, midsize schools may also offer athletic facilities such as fields, gyms, and pools and may field a number of sports teams in lower divisions.

Higher Education Industry Typical Number of Employees. A typical midsize college has between four hundred and two thousand employees. This number includes all full- and part-time staff, including professors and other instructors, deans, directors, managers, and administrators. Midsize schools may also directly employ workers in additional support positions, such as maintenance or cafeteria staff, but they may also contract those services out to an external company. Traditional Geographic Locations. Midsize colleges can be found all over the country in a variety of geographic areas but will most often be found in suburban or urban locations. The location of a school will have an impact on the feel of the campus; often more suburban locations will feel more like college towns, where many of the local businesses cater to students and employees of the school (or schools) and many of the residents are transient students. Urban schools have more of the character of the city in which they are located, and the transient nature of the students is balanced by the high number of permanent residents and non-education-related professionals in the community. The size of the campus can vary depending on the number of students, the types of research facilities offered, and the geographic location. The configuration will likely be dictated by the location of the school, since an urban school is likely to be more limited in space than a suburban school. Pros of Working for a Midsize School. Midsize schools are in many ways a happy medium between the smallest and largest schools. Each department is generally moderate in size, not only providing employees the opportunity for personal relationships but also allowing them to benefit from a more hierarchical management structure than at small schools. This structure may allow for upward mobility within the organization. There may be opportunities to take on leadership roles on certain projects or to expand the scope of a particular job to include new responsibilities. Midsize schools are likely to enjoy more funding than smaller schools and thus more opportunities to create or expand programs to better serve students. Cons of Working for a Midsize School. Since midsize schools employ more people, their hierarchical management structure creates more bureaucracy than at a typical smaller school. More de-

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partments compete with one another for funds and students, and more people within each department compete for their particular resources and operations. Competition for full-time faculty positions is very competitive in midsize schools, and such positions often come with a requirement to conduct research and contribute to academic and scholarly publications to attract outside funding to the school. Costs Payroll and Benefits: Salary and benefits vary widely depending on an individual’s role in the organization and whether the college is a public or private institution. Benefit packages range from quite generous to nonexistent, again depending on position and employment status (full- versus part-time). Potential benefits include health insurance, retirement packages or pension plans, paid time off, and reduced or free tuition. Supplies: Midsize schools require all standard office supplies, plus telecommunication equipment such as computer hardware, software, networking equipment, and telephones; classroom supplies such as desks, chairs, chalk- or whiteboards; audiovisual equipment; and common area supplies for lounges, such as study carrels, couches, tables, chairs, and refrigerators. Since most midsize schools have dormitories, supplies for these facilities are needed as well, including beds, desks, lamps, and furniture for common areas. Libraries require a variety of books, journals, and other research material, as well as subscriptions to computer-based academic research databases. Schools that offer laboratory facilities require benches and stools, fume hoods, glassware, chemicals, storage cabinets, and safety equipment, such as laboratory coats, gloves, and eye protection. Athletic facilities require cleaning and maintenance supplies, as well as sporting and exercise equipment. External Services: Common external services include landscaping of outdoor facilities and maintenance of athletic fields; cleaning of buildings containing classrooms, administrative offices, and common areas; and campus security services. Some midsize schools also contract out telecommunication and computer network services, as well as dining-hall and other food-

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related services. Others have teams of in-house specialists for these functions. Utilities: Common utility costs include electricity, heat, air-conditioning, water, telephone, and Internet service for classrooms, administrative offices, common spaces, and dorms. Taxes: Applicability of state and local taxes depends on whether a school is a public, private nonprofit, or for-profit institution. Large Schools Large colleges and universities offer a wide variety of degree programs across many disciplines, including associate’s and bachelor’s degree programs, graduate programs that offer master’s and doctoral degrees, and possibly professional programs that offer medical, law, or business degrees, among others. These schools (which are often classified as universities) usually offer research facilities for a variety of fields. Large schools have more than six thousand students. Potential Annual Earnings Scale. Salaries generally remain consistent throughout the higher education industry. According to the BLS, the mean salary for office and administrative support occupations is $33,290 per year, although individual salaries will vary depending on the department and the position. Median salaries for middle-level managers and administrators, including the dean of students, registrar, and director of financial aid, range from $50,000 to $125,000. Median salaries for top-level management positions, including the chief academic officer and academic deans, range from $83,108 to $140,595. The mean salary for all management-level positions is $94,300. Clientele Interaction. As with all schools, the primary clients of a large university are its students, but many employees have limited or no direct interactions with students. Positions that require the most interaction with students include any teaching position, library service positions, and customer service positions such as working in the registration office, financial aid office, or computer help desk. Academic administration positions, such as deans or certain supervisory positions, may require some interaction with students but not as regularly. Some positions, such as higher-level management, financial services, or directorship positions, involve very little, if any, student interaction. Many students choose a large school because

they want the wide variety of amenities, as well as the name recognition, that comes with attending such a school. Many students realize that they will not receive the same personal attention that is possible at a smaller school. Nonetheless, they expect to receive the same high level of customer service that one would expect at a smaller school. Students come from all over the world to attend large universities, so a significant proportion of the student body is not from the local area, and these students may require some assistance to adjust to their new surroundings. Additionally, many students attend large colleges and universities immediately after high school and may need some additional assistance adjusting to life on their own. Regardless of which position one holds within a large school, these issues are likely to have an impact on student relationships and interaction. Amenities, Atmosphere, and Physical Grounds. The atmosphere of a school often depends on the size of the campus, whether the campus setting is urban or suburban, and whether the majority of students live on the campus or commute. Large schools generally have many student dormitories and a large on-campus population, and they thus have a rich community atmosphere. Many other students choose to live in nearby offcampus housing, thus encouraging a strong community surrounding the campus. The staff for most large-sized schools tends to come from the area surrounding the school, although there may also be a significant number of visiting staff members (usually professors and researchers) from other areas. Depending on the location, there may be parking facilities or access by public transportation, making a school more or less commuter-friendly for students and employees. Large colleges and universities occupy many buildings grouped together, either lined up on a group of city blocks or situated in a cluster to form a campus. These campuses range in size from several city blocks to the size of an entire town. Some universities situate various academic colleges or divisions in clusters within a city. This distribution might result in a university medical center being located alongside the city’s larger medical community while the institution’s school of study is located in an area that is less developed or where real estate is less expensive, allowing for future growth. Amenities vary depending on the size and loca-

Higher Education Industry tion of the school, but schools generally offer separate lounge areas for students, faculty, and other staff. Large schools have student unions, buildings set aside specifically for students to meet socially, study, and conduct meetings of various campus organizations. At universities where there are several or multiple campuses, an individual campus may contain amenities designed exclusively for that campus. Large schools have multiple cafeterias, one or more campus bookstores, and, often, convenience stores. Their libraries vary in size and scope, depending on the number of students and the types of programs offered, but are likely to be quite large and comprehensive and may offer private study or meeting areas. Most large schools have significant research laboratories and other facilities related to their myriad academic departments. Research labs provide a number of important benefits to colleges and universities: They encourage important scientific breakthroughs, provide opportunities for students to engage in specialized advanced training, and create jobs connected to the newly developed technologies. High-quality research labs can also help a school attract top faculty, staff, and students to further develop its programs. Additionally, research labs can provide a significant source of revenue through private industry investment, government grants, and income generated from patents developed by the school. Most large schools, particularly those in suburban settings with a lot of available space, have a variety of athletic facilities, including fields, gyms, and pools, and they usually field a number of sports teams, many of which may be upper divisional and high profile. Some programs, such as major conference football teams with national followings, can benefit their schools by providing a significant source of revenue through sales of tickets, merchandise, and concessions. Even sports teams that do not bring in a significant amount of revenue can raise the profile of their schools by providing positive media attention for the teams’ accomplishments. However, financing such teams can also cost a great deal of money. Sports that do not bring in enough revenue to cover their own costs may be at risk when a school of any size cuts its athletic budgets in the face of economic hardship. Typical Number of Employees. A typical large college will have anywhere from two thousand to

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more than ten thousand employees. This number includes full- and part-time staff, including professors and other instructors, deans, directors, managers, administrators, and numerous support staff positions. Traditional Geographic Locations. Large colleges can be found all over the country and in a variety of geographic areas, but they are most often found in suburban or urban locations. The location of a school has an impact on the feel of its campus. Often, more suburban locations feel more like college towns, where many of the local businesses cater to students and employees of the school (or schools) and many of the residents are transient students. Urban schools have more of the character of the city in which they are located, and the transient nature of the students is balanced by the high number of permanent residents and noneducation-related professionals in the community. The size of the campus can vary depending on the number of students, the types of research facilities offered, and the geographic location. The configuration will likely be dictated by the location of the school, since an urban school is likely to be more limited in space than a suburban school. Pros of Working for a Large School. Large schools have far more amenities and a far greater amount of funding than their smaller counterparts. Because each department is larger, there are greater opportunities for advancement within the hierarchical management system. Because of the increased funding and increased availability of support staff, there are often more opportunities to create or expand programs to better serve students. For academics, research facilities at large schools encourage professional growth by providing equipment and funding for advanced study of highly specialized subjects. The greater number of faculty and graduate students provides a support system to better distribute basic tasks such as teaching lower-level courses and grading papers, which allows professors more time to conduct research. Additionally, supervising graduate students can be a rewarding experience, as it provides additional teaching opportunities and helps prepare the next generation of academics for careers in teaching and research. Cons of Working for a Large School. Since large schools employ more people, the more hierarchical management structure creates more bu-

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reaucracy. More departments compete for funds and students. Competition for full-time faculty positions can be extremely competitive, and such positions often come with a requirement to conduct research and contribute to scholarly publications in order to attract outside funding to the school. While there is significant variation among schools, the research orientation of many large schools makes them poor fits for professors who see themselves primarily as teachers. Indeed, there may be fewer opportunities for people in all positions within a large school to work directly with students, and those interactions may not be as meaningful as they might be in a smaller setting. Costs Payroll and Benefits: Salary and benefits vary widely depending on an individual’s role in the organization and whether the college is a public or private institution. Benefit packages range from quite generous to nonexistent, again depending on position and employment status (full- versus part-time). Potential benefits include health insurance, retirement packages or pension plans, paid time off, and reduced or free tuition. Supplies: Large schools require all standard office supplies, plus telecommunication equipment such as computer hardware, software, networking equipment, and telephones; classroom supplies such as desks, chairs, chalk- or whiteboards; audiovisual equipment; and common area supplies for lounges, such as study carrels, couches, tables, chairs, and refrigerators. Since most large schools have dormitories, supplies for these facilities are needed as well, including beds, desks, lamps, and furniture for common areas. Libraries require a variety of books, journals, and other research material, as well as subscriptions to computer-based academic research databases. Laboratory facilities require benches and stools, fume hoods, glassware, chemicals, storage cabinets, and safety equipment, such as laboratory coats, gloves, and eye protection. Large schools have many different athletic facilities and require related supplies, including sporting and exercise equipment, as well as cleaning and maintenance supplies. External Services: Common external services include landscaping of outdoor facilities and main-

tenance of athletic fields; cleaning of buildings containing classrooms, administrative offices, and common areas; and campus security services. Utilities: Common utility costs include electricity, heat, air-conditioning, water, telephone, and Internet services for classrooms, administrative offices, common spaces, and dorms. Taxes: Applicability of state and local taxes depends on whether a school is a public, private nonprofit, or for-profit institution.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Any size school within the higher education industry needs to account for activities in the following areas. In smaller schools, one person may hold several roles within several groups, and several of these functions may be combined into a single department. In larger schools, specialists often fulfill unique requirements in specific groups. Regardless of size and scope, the functions must be fulfilled. The following umbrella categories apply to the organizational structure of institutions of higher education: ■ ■ ■ ■ ■

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Business Management Customer Services Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Human Resources

Business Management All institutions of higher education employ significant staffs in a variety of areas, both academic and administrative. Even the smallest schools require a management structure that can support the wide variety of functions that a school needs in order to serve its students. On the academic side, individual departments are led by department chairs, who are often also full-time professors. These individuals generally have doctorates in their fields and may also have experience in mana-

Higher Education Industry gerial roles. Larger institutions have deans who lead groups of academic departments or schools within universities (for example, a dean of a school of engineering). These individuals may have doctorates in specific academic fields and often have degrees, or at least significant experience, in management specifically related to institutions of higher education. On the administrative side, each department is led by a manager, who usually has at least a fouryear degree in a subject relevant to his or her department and may have either a master of business administration (M.B.A.) or an additional degree in college administration. Larger institutions have deans who lead groups of administrative departments (for example, a dean of academic affairs or a dean of student affairs). Members of a school’s board of directors or trustees are often community leaders or individuals who have worked in private industry and have long-term ties to the institution. New members are generally appointed or elected into these positions by current board members. The members are responsible for setting general policies that are in line with the institute’s mission and for ensuring its continuing financial health. The president or chancellor of the school is hired by the board and is responsible for executing tasks in a manner that aligns with the broader policy and fiscal guidelines set by the board. Depending on their specific role, these individuals are likely to have advanced degrees in business, management, law, or finance, as well as a great deal of experience performing these roles on behalf of an academic institution. Business management occupations may include the following: ■

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College/University President or Chancellor Dean Department Chair Admissions Manager Member of the Board of Directors Member of the Board of Trustees

Customer Services Students are customers of a higher education institution and require many administrative support services to assist them through their academic experience. Many positions within colleges and uni-

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versities work directly with students, but some positions are more customer-service oriented in that they are specifically geared toward helping students get the most out of their college experience. The most common departments to employ a large number of customer-service-related jobs are the admissions office, the registrar’s office, and the financial aid office. Each of these departments deals with a large number of students and an even greater volume of paperwork on a daily basis and so requires employees who can maintain a friendly, upbeat, and helpful service-oriented nature, even when faced with a great deal of work. Many of these positions are administrative in nature and require an ability to remain very organized when dealing with a high volume of paperwork, particularly in larger schools. Many positions require a four-year degree in a liberal arts field, and some require education and experience specifically in the area of college administration for advancement to supervisory positions. Customer services occupations may include the following: ■ ■ ■ ■

Registration Office Administrator Financial Aid Officer Admissions Officer Career Development Counselor

Sales and Marketing Within any given school, there are several different departments that can be categorized as sales and marketing. These include the admissions office, which recruits new students; the development office, which brings in funds and manages the school’s image both professionally and within the community; and the alumni relations office, which raises funds to support the school’s endowment through alumni donations and works to maintain an active community of graduates. Schools of all sizes need to bring in new students each year to maintain their business. Although this function is often called admissions or recruitment, the reality is that the school is marketing itself to prospective students. The admissions office has two objectives: First, it seeks to recruit students to enroll in the school. Responsibilities in this area include developing marketing materials in print and online, as well as visiting high schools and hosting prospective students on campus. Employees who

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serve these functions in the admissions office usually have four-year degrees in public relations or communication, sometimes with a concentration in education or academic administration. Second, the admissions office is responsible for selecting which students to admit to the school. This task requires reviewing application materials and possibly conducting interviews with individual students. Employees who serve this function in the admissions department generally have degrees in academic administration for higher education and often have experience working with postsecondary students either as an instructor or as an administrator. For privately funded schools, the development office is responsible for seeking out funding sources in the form of contracts for research activities and donations. In larger schools, the development or alumni relations office may also be responsible for attracting investments from outside organizations and school alumni. They solicit contributions to capital and endowment campaigns that fund research and academic facilities, as well as scholarships and faculty chairs. Fulfilling these responsibilities requires employees to develop marketing materials that showcase a school’s current facilities and potential for innovation in a particular field, as well as to cultivate relationships with business leaders and alumni. A typical employee in these areas has a four-year degree in a field such as public relations or communication, sometimes with a focus on academic administration or education. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Admissions Director Gift Planning Director Development Director Treasurer Director of Foundation Relations Vice President of External Relations Public Relations Director Marketing Director Graphic Designer Copywriter Photographer

Facilities and Security All higher education institutions, regardless of size or location, require some level of facilities

maintenance and security. Smaller institutions require minimal maintenance and may have only a small permanent staff of such workers, preferring to contract out most services. Even schools housed within a single building require some security to ensure that only authorized individuals are allowed access to the building, for the safety of the students, faculty, and other staff. Midsize institutions require more maintenance, addressing both indoor and outdoor facilities, and are likely to maintain a slightly larger staff of permanent maintenance workers. Other services may be contracted out. Midsize schools require more security staff to monitor access to buildings and the campus in general. Schools that house students in dormitories require some twenty-four-hour security services to ensure the safety of the students at all times. Many midsize institutions (and most large ones) also have athletic programs whose physical facilities require additional maintenance. Large institutions require a great deal of maintenance, both indoor and outdoor, and often maintain a significant staff of permanent workers in addition to contracted labor. Large schools also require significant staff to provide around-theclock security to students living on campus. Employment requirements vary depending on position. Basic maintenance or janitorial positions may require no advanced education or experience, while more specialized facilities positions may require both a special license and relevant experience. Qualifications for security positions also vary but likely include at least some level of education or certification beyond a high school diploma. Facilities and security occupations may include the following: ■ ■

■ ■ ■ ■

Building and Grounds Facility Manager Building Maintenance and Repair Worker Building Security Manager Security Guard Emergency Services Crew Athletic Director

Technology, Research, Design, and Development Most institutions of higher education rely heavily on technology to support their students’ growth and development. The two biggest areas of tech-

Higher Education Industry nology most frequently used by schools of all sizes are computer networks and classroom audiovisual equipment. Most schools maintain a campus network with both Internet and Intranet connections, and many have on-campus computer labs. The more extensive the network and the more students that rely on the network for their studies, the more support and assistance will be required to keep it functioning at all times. Depending on the size of the network, it may require a large staff of network and IT professionals to keep it functioning. A customerservice-oriented help desk may also be made available to answer students’ questions at important times of the day. The IT staff is in charge of maintaining not only a school’s network but also the computers of its employees, including its administrative support staff.

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Since most colleges now maintain all of their records on computers, this is an extremely important function; one seemingly small network failure could cause a far-reaching effect throughout all campus departments. As a result, these jobs are well suited for people who enjoy problem solving and who are not afraid to be on call to solve network problems at any time. IT staff often have fouryear degrees in computer programming, computer systems engineering, or information technology, with concentrations in network systems. Additionally, many classrooms are now equipped with audiovisual equipment such as SMART Boards, projectors, televisions, and digital video disc (DVD) players to allow instructors to make multimedia presentations in their classes. This equipment can require a great deal of support and maintenance to ensure that instructors know how to use it properly

OCCUPATION

PROFILE

Research Assistant Considerations

Qualifications

Description

Provides assistance and support to the work of a professor, including analyzing documents and data as well as conducting experiments.

Career clusters

Agriculture, Food, and Natural Resources; Business, Management, and Administration; Health Science; Manufacturing; Marketing, Sales, and Service; Science, Technology, Engineering, and Math

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

IER; ISE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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and to keep it in good working order at all times. Additionally, the presence of this type of equipment in classrooms may require more security personnel to ensure that it is secure and safe from theft. Audiovisual support staff may have two- or four-year degrees in computer programming, electrical engineering, or information technology. Schools with significant research facilities have additional technology needs, depending on the type of research being conducted and the equipment involved. Research facilities have the same basic computer, network, and audiovisual needs as the rest of their university, but they also employ laboratory managers to operate and maintain specialized laboratory equipment, as well as to monitor safety conditions. Laboratory managers must at least have four-year degrees in science or engineering and often have graduate degrees in their subject areas. They may also be employed to conduct research in the labs they manage, or they may be currently enrolled graduate students supporting their studies with research assistantships. Some large schools, particularly those that sponsor medical schools and are located in highly populated areas, may be affiliated with one or more local hospitals. These schools require managers to oversee the relationship between the hospital and the school, to ensure that the needs of both institutions are satisfied. This role is filled by a research administrator, who will generally have a four-year degree in business, administration, or finance. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

is the full-time professor. Professors teach classes within their areas of expertise and may eventually fill the role of department chair. Many institutions of higher learning, particularly the larger ones, require full-time professors to conduct research and publish papers in addition to their teaching responsibilities. Professors are usually required to have a doctorate in their subject area. Increasingly, colleges are relying on adjunct professors rather than hiring (and providing full tenure and benefits to) full-time professors. Adjunct professors typically teach only one or two courses per term, are not required to conduct research or publish papers, and receive few or no employment benefits beyond their salary. Adjuncts often teach basic first- and second-year courses, reserving the major-specific courses for full-time professors. Many adjuncts have doctorates, but some schools will hire adjuncts with master’s degrees in the appropriate subject. Some of the largest schools employ individuals solely to conduct research or run research labs at the institution, usually within scientific fields. This is not especially common; more often, researchers

Information Technology Manager Network Specialist Computer Support Specialist Audiovisual Support Specialist Research Laboratory Manager Laboratory Safety Manager Research Administrator Research Assistant

Production and Operations Since the “customer” of a higher education institution is the student, the “production” role is that of the educators, including professors, researchers, and librarians. There are several categories of instructors within most higher education organizations and institutions. The most traditional

Part-time adjunct instructors, often working professionals, teach classes in many subjects, including computer science. (©Dreamstime.com)

Higher Education Industry OCCUPATION

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PROFILE

College Faculty Member Considerations

Qualifications

Description

Teaches students academic subjects at the college level; many faculty also must conduct research in their area of expertise.

Career cluster

Education and Training

Interests

Data; people

Working conditions

Work inside

Minimum education level

Master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest score

ESI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

are also professors, and they are required to teach at least an occasional class or supervise students conducting graduate-level research. Researchers have doctoral degrees in their specific fields and may have outside experience managing research laboratories. Librarians and library staff also play a very important role in the academic experience at a college. Librarians are in charge of selecting materials for the library, maintaining an organized facility, and assisting students in finding the materials they need for their research and projects. Full librarians have master’s degrees in library science, while other library support staff may hold bachelor’s degrees in related fields. Production and operations occupations may include the following: ■ ■ ■ ■

Professor Associate Professor Assistant Professor Adjunct Professor or Instructor

■ ■ ■ ■

Researcher Teaching Assistant Librarian Library Support Staff

Human Resources Regardless of size, any institute of higher education is likely to employ at least one individual in a human resources role. The responsibility of human resources in an institution of higher education is to handle the paperwork required to hire new employees and to ensure that the needs of the faculty and staff are met. This can include anything from processing benefits paperwork to resolving disputes between employees and supervisors. Smaller schools may have only one or two individuals serving in the human resources function, and these employees must fill a variety of roles. Larger schools have entire departments dedicated to human resources and are thus able to hire individuals to specialize in specific areas within this field.

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Human resources staff often have four-year degrees in business administration or management, possibly with a concentration or emphasis on higher education administration. Department managers may also have master of business administration degrees and significant related experience. Within larger institutions, individuals who specialize in benefits management may have a background in finance, while those that specialize in handling employee complaints and disputes may have a background in mediation or dispute resolution. The largest institutions may also have in-house employment law attorneys to ensure that all policies and procedures meet the requirements of the law. Human resources occupations may include the following: ■ ■ ■ ■ ■

Human Resources Manager Human Resources Generalist Benefits Specialist Mediation/Dispute Resolution Specialist Employment Attorney

INDUSTRY

OUTLOOK

many smaller colleges expand their traditional enrollment numbers. Demand for course instructors will grow as colleges fill their classrooms and seek to expand their course offerings, although many institutions are choosing to meet this increased demand by hiring more part-time adjuncts, rather than creating additional full-time tenured professor positions. In addition, demand for the highestlevel managerial positions—such as deans, directors, and trustees—may grow somewhat, but since so few positions are available in these areas, the growth will not be as significant as in other occupations within the industry. Importantly, many of the new opportunities will come in less traditional forms, as many colleges and universities expand specifically to cater to working adults who might otherwise not pursue higher education. This expansion may include night and part-time programs, online and distance-learning programs, and programs that provide academic credit for on-the-job experience. Schools will need administrators, managers, and facilities directors with training and experience that are different from those traditionally expected in the field in order to adapt to these new educational models. There will be many opportunities, particularly for individuals with strong backgrounds in computers and technology, to play important roles in the development of these schools and their programs.

Overview The BLS projects significant growth for the higher education industry, particularly in the private and for-profit segments. Much of this growth can be attributed to continued education, as many adults are returning to school to further their education or change careers. This new segment growth will be in addition to an expected increase in the number of students who pursue higher education immediately following high school. As student enrollment increases, there will be an increased demand for individuals working in higher education across all occupations within the industry. In particular, this growth will create a greater demand for administrators to oversee the increased number Higher education has become available to a wider range of people, including of students, particularly as working adults. (©Joern Schulz/Dreamstime.com)

Higher Education Industry Employment Advantages Most people choose to work in the higher education industry because they enjoy and gain satisfaction from working with young people and returning adult students. This field can be incredibly rewarding, as there are many opportunities to help individuals make a difference in their own lives through education. Individuals who enjoy working with people and who are willing to provide a high level of personalized service will succeed in this industry and will find they are able to make satisfying and lasting interpersonal connections with the students whose lives they influence in a positive way. For those individuals working in research areas within colleges and universities, much depends on the availability of funds to support that research. When university coffers are well stocked, the role of a researcher can be fulfilling and challenging. Even those who choose to work within the industry in support positions that require minimal direct contact with students often find the work to be satisfying because their efforts to maintain the required infrastructure ultimately support the goal of helping students of all ages meet their goals. Annual Earnings Revenue can be difficult to define in the higher education industry, as there are public and private institutions, nonprofit and for-profit institutions, and many different sources of funding for each of these combinations. The most common sources of revenue for higher education institutions include student tuition and fees, government grants and contracts, private gifts, and investment returns from prior endowments. The U.S. Department of Education reports that the total domestic revenue from all sources for higher education in the United States was approximately $474 billion for the 2006-2007 academic year. This total includes revenue for public institutions ($268.5 billion), private nonprofit institutions ($182.5 billion), and private for-profit institutions ($14 billion). At public and private nonprofit institutions, only a small portion of this revenue comes from tuition and fees charged to students; at private for-profit institutions, the majority of the revenue comes from tuition and fees. Colleges and universities in the early twenty-first century have come to recognize the importance of both capital campaigns to fund the construction of

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new facilities and endowment campaigns to fund operating budgets and student scholarships. Because of cuts in state and federal budgets, large universities have had to develop these campaigns in much the same way as private small and midsize colleges and universities have, by soliciting donations from business leaders and alumni. Duke University, for instance, funds 15 percent of its operating budget from endowment funds, while Harvard University, which boasts the country’s largest endowment, funds about one-third of its operating budget from its endowment fund. Because nearly all investments lost significant value in the 20072009 fiscal crisis, many colleges and universities have implemented cost-saving measures to compensate for the loss in value of these endowment funds. In 2006, the U.S. Department of Labor reported that there are approximately 13.2 million individuals employed in the educational services industry generally, of which around 32 percent—nearly 4 million people—are employed in the higher education sector. The U.S. Department of Labor predicted wage and salary employment growth of 11 percent across the entire educational services sector over the 2006-2016 period, with much of this growth occurring in the higher (postsecondary) education segment, as more high school graduates attend college and more adults return to schools to advance or change their careers.

RELATED RESOURCES FOR FURTHER RESEARCH American Association of Collegiate Registrars and Admissions Officers 1 Dupont Circle NW, Suite 520 Washington, DC 20036-1171 Tel: (202) 293-9161 Fax: (202) 872-8857 http://www.aacrao.org American Association of University Professors 1133 19th St. NW, Suite 200 Washington, DC 20036 Tel: (202) 737-5900 Fax: (202) 737-5526 http://www.aaup.org

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APPA: Leadership in Educational Facilities 1643 Prince St. Alexandria, VA 22314 Tel: (703) 684-1446 Fax: (703) 549-2772 http://www.appa.org College Board 45 Columbus Ave. New York, NY 10023 Tel: (212) 713-8000 http://www.collegeboard.com National Association of Student Personnel Administrators 1875 Connecticut Ave. NW, Suite 418 Washington, DC 20009 Tel: (202) 265-7500 Fax: (202) 797-1157 http://www.naspa.org

ABOUT

THE

AUTHOR

Tracey M. DiLascio is a practicing small business and intellectual property attorney in Newton, Massachusetts. Prior to establishing her practice, DiLascio taught writing and social science courses in Massachusetts and New Jersey colleges and served as a judicial clerk in the New Jersey Superior Court. She is a graduate of Boston University School of Law.

FURTHER

READING

Belson, Ken. “Universities Cutting Teams as They Trim Their Budgets.” The New York Times, May 3, 2009. Bridges, David, et al., eds. Higher Education and National Development: Universities and Societies in Transition. New York: Routledge, 2007. Buller, Jeffrey. The Essential College Professor: A Practical Guide to an Academic Career. New York: John Wiley & Sons, 2010. Chen, Sheying, ed. Academic Administration: A Quest for Better Management and Leadership in Higher Education. Hauppauge, N.Y.: Nova Science, 2009.

Cohen, Arthur M., and Carrie B. Kisker. The Shaping of American Higher Education: Emergence and Growth of the Contemporary System. 2d ed. New York: John Wiley & Sons, 2010. Duderstadt, James J. A University for the Twenty-first Century. Ann Arbor: University of Michigan Press, 2000. Duesterhaus, Alan P. “College Board of Trustees and University-Structure and Composition, Governance, Authority, Responsibilities, Board Committees.” Education EncyclopediaStateUniversity.com. http://education .stateuniversity.com/pages/1793/BoardTrustees-College-University.html. Farrell, Maureen. “Universities That Turn Research into Revenue.” Forbes.com, September 12, 2008. http://www.forbes.com/ 2008/09/12/google-general-electric-ent-techcx_mf_0912universitypatent.html. Goldin, Claudia, and Katz, Lawrence F. The Shaping of Higher Education: The Formative Years in the United States, 1890 to 1940. Working Paper No. W6537. Cambridge, Mass.: National Bureau of Economic Research, 1988. Musselin, Christine. The Market for Academics. New York: Routledge, 2010. National Center for Education Statistics. “Contexts of Postsecondary Education.” In The Condition of Education. http://nces.ed .gov/programs/coe/2009/section5/ index.asp. Ruiz, Joaquin. “Research Universities Enrich State.” Arizona Daily Star, August 12, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Education Administrators.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos007.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The highway, road, and bridge construction industry is dedicated to new work, reconstruction, rehabilitation, and repairs of land-based infrastructure for land transportation. It builds and maintains airport runways, land-based bridges, elevated highways, roads and streets, public sidewalks, guardrails, and related structures. Industry crews also paint and repaint roads and fill potholes. The worldwide industry may be broken into several sectors because of significant differences in required equipment and skills, among other inputs.

General Industry: Architecture and Construction Career Cluster: Architecture and Construction Subcategory Industries: Airport Runway Construction; Bridge Construction; Highway, Elevated Highway, Causeway, and Parkway Construction; Highway, Road, Street, Bridge, and Airport Runway Repair and Resurfacing; Overpass and Underpass Construction; Public Sidewalk Construction; Road and Street Construction; Tunnel Construction Related Industries: Building Architecture Industry; Building Construction Industry; Civil Services: Planning; Federal Public Administration; Landscaping Services; Local Public Administration Annual Domestic Revenues: $376 billion USD (Datamonitor, 2009) Annual International Revenues: $785.1 billion USD (Datamonitor, 2009) Annual Global Revenues: $1.161 trillion USD (Datamonitor, 2009) NAICS Numbers: 2373, 237990

History of the Industry The first roads were paths created by animals that pushed and trampled through specific areas, creating clearings for humans to follow. The first stone-paved street is said to have been built in the Middle East around 4000 b.c.e. On the British Isles, corduroy roads or log roads were also built around 4000 b.c.e. Brick roads in India date from 3000 b.c.e. The Romans are considered to have had the best roadways of the ancient civilizations, inspiring the saying, “All roads lead to Rome.” The Roman army was responsible for the empire’s road construction and maintenance. The workforce typically comprised slaves and convicts. Toward the end of the Roman Empire, construc863

©Maria Isabel Villamonte/Dreamstime.com

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Highway, Road, and Bridge Construction Industry

The highway, road, and bridge construction industry is dedicated to new work, reconstruction, rehabilitation, and repairs of land-based infrastructure for land transportation. (©Ron Chapple Studios/Dreamstime.com)

tion ceased and maintenance became the primary concern, with the burden of maintaining roadways placed on private citizens. Holy Roman Emperor Charlemagne (771-814 c.e.) helped develop European roadways and bridges. He appointed officials whose sole task was to organize road construction. Charlemagne required all citizens to work on road or bridge maintenance if there were insufficient slave laborers or prisoners of war. This system was known as corvée. Road paving became a reputable artisan craft around the thirteenth century. Pavers were members of one of the earliest artisan guilds, the stonemasons. By 1502, apprentices were common. The English Highway Act of 1555 placed the obligation of road maintenance on parishes and required parishioners to devote four days a year to the corvée system. Workers were expected to have

their own equipment. Unpaid people in each parish were put in charge of inspecting the roads as surveyors. By 1570, the first official road construction and maintenance contracts were formed. John Loudon McAdam revolutionized road making when he created macadam. Macadam stones could be broken into pieces and manipulated as necessary by women or children. Thus, road maintenance and construction ceased to be the sole province of strong men. City roads in the 1700’s were deplorable. The craft of stone paving was time-consuming, laborintensive, and expensive. In the United States, slaves were often used for roadwork, and once emancipation occurred, convicts were used for roadwork instead. In the 1800’s, the United States saw a move toward centralizing control of roadwork. In 1802, the Army Corps of Engineers was created and lo-

Highway, Road, and Bridge Construction Industry cated at West Point. In the 1870’s, Washington, D.C., established an asphalt-paving program that met with great success, and in 1891, the New Jersey Board of Agriculture was given authority to create roads connecting farms and markets. Massachusetts, in 1893, became the first state to create a road authority, when it created a highway commission. The next year, New Jersey followed suit, giving the power to create roads to the Commission of Public Roads. In 1912, the American Highway Association (AHA) was created out of the American Association for Highway Improvement (formed in 1910), but it disbanded in 1916 under the pressure of competition from the American Road and Transportation Builders Association. By 1920, all American states had highway organizations. After World War I, American travel increased and roads deteriorated. The U.S. Highway Research Board was established. In 1921, the Federal Aid Highway Act gave each state funding for up to 7 percent of highway work and the federal government met half the cost. The act marked the beginning of the U.S. national highway system. The Industry Today The slice of the architecture and construction market of which the contemporary highway, road, and bridge construction industry is part allows for a great deal of competition, particularly in its ability to diversify and work in niche areas. Nonresidential construction brought in revenue of $330.4 billion and was the industry’s most lucrative segment in 2009. The civil engineering segment earned $305.6 billion, approximately 48 percent of the industry’s revenue. Company sizes range from one-person operations—which are no longer required to belong to a guild, though there are unions—to companies with thousands of employees. There are very few clients in this industry—most of them are federal agencies or major private-sector buyers—but these clients often announce jobs for which companies must bid to win contracts. Companies are very dependent on the economic market, and there is little loyalty to a particular company except, perhaps, in the private sector, where a company’s reputation and previous work are taken into account when a bid is made or announced. Construction projects vary in size, from minor road maintenance to major highway construction.

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Many times, subcontractors are hired by primary contractors, either because of their specialized skills or because the job is so large. One-person operations typically subcontract work, saving on expenses by renting necessary equipment and engaging labor as needed, instead of paying for constant upkeep, taxes, and salaries. Midsize companies may work from office buildings and typically have several full-time employees, allowing such companies to take on slightly larger or longer jobs. The largest of companies operate offices worldwide, with multiple employees from the administrative level down. These large companies bid on longterm and more complex projects. Financing to pay transportation construction companies comes from one of three sources: public money raised through general taxes or borrowing in the form of bonds; private investors or landowners wanting to create a road to increase the value of their land; or tolls, fuel taxes, and vehicles taxes and licenses. The American Road and Transportation Builders Association (ARBTA), started in 1902, is one of the most well-known national transportation construction associations, and there are several associations made of lobbyists such as ARBTA that exist to cultivate and protect investment within the industry. Instead of guilds for industry interests, there are now multiple associations

Construction projects vary in size, from minor road maintenance to major highway construction. (©Tomas Kraus/ Dreamstime.com)

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and boards. In 1991, the United States joined the Permanent International Association of Road Congresses (PIARC), an international group founded in France that represents government road authorities and acts as a forum for discussion on industry standards and issues. “By April, 2010, at least 14,000 gained employment in the construction industry sector,” according to Industry Today, and “these gains, which followed two years of dramatic losses, resulted from stimulus-funded projects now underway.” Since February, 2010, the construction industry in general has added forty thousand new jobs. Without new jobs underway, there are still several million miles of existing highways and roads, as well as bridges, that need repair or maintenance work. According to the American Association of State Highway and Transportation Officials (AASHTO), federal road funding must increase by more than 80 percent by 2015 just to keep up with inflation. It estimates that the total cost to improve highway conditions and performance will reach $189 billion in 2015. Of the total, $83 billion needs to come from federal funds.

The Transportation Construction Coalition agrees with AASHTO and keeps track of current issues within the industry, from expired bills that remove funding from construction to congressional acts that need further support in order to create more jobs.

INDUSTRY MARKET SEGMENTS The architecture and construction industry ranges in size from one-person operations to large global companies, and it serves a broad range of clients from the federal government to private consumers, such as a privately owned airport in need of runways. The following sections provide a comprehensive breakdown of each of these different segments. Small Businesses Small transportation construction businesses employ fewer than ten persons. Approximately 41 percent of them have one to four employees. They focus on maintenance, repair, reconstruction, ad-

ditions, and small-scale projects within narrow geographic markets. They often hire subcontractors to oversee work they cannot take on or perform themselves and often rent the equipment and tools necessary for a given job. Many times, small businesses are subcontracted themselves by larger firms or act as joint contactors with other firms, working on specific portions of larger projects. Typically, small businesses have fewer than five employees and can be found in rural and scattered areas, where there is less competition from larger firms. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual income of an operating engineer or other construction equipment operator in the highway, road, and bridge construction industry was $48,450 in 2009. Highway maintenance workers earned an average of $34,560; paving, surfacing, and tamping equipment operators earned an average of $39,150; and general construction laborers earned an average of $37,290. Construction supervisors earned an average of $61,760, and construction managers earned an average of $93,340. Civil engineers earned an average of $74,930, civil engineering technicians earned an average of $50,550, and engineering managers earned an average of $99,520. These averages all assume full employment: Because of the nature of the industry, workers often are not paid if inclement weather or seasonal changes cause their projects to be delayed or canceled. This is particularly true of employees of small businesses, which may work on only a single project at a time. Clientele Interaction. To compete for contracts, small businesses most often need to have proven themselves to be efficient and effective on previous jobs. They have a greater need to establish relationships with the appropriate local authorities in order to quickly learn about any upcoming contracts and to receive recommendations, and, depending on the size of the jobs or contracts they hope to receive, firms may have to impress clientele with their locations and images. Amenities, Atmosphere, and Physical Grounds. A construction business operates temporarily on a given site until its work is completed. These sites can range from natural settings that need clearing in order to begin construction work to hazardous highways that need to be blocked off, with local police to help prevent cars from injuring

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or killing workers. If the weather becomes inclement, work often stops, so seasons can affect the progress of a job. Depending on the location of the site, there may be amenities for workers on location—either in a building or brought to them. Generally, the work is dangerous and workers are required to wear specific protective gear, such as hardhats or steel-toed boots, to protect them from burns or dropped heavy objects. Typical Number of Employees. Because small construction companies are limited in geogThe equipment needed for construction, such as this tripod-mounted theodolite, raphy and type of job they can used to measure angles, is often very expensive but usually can be rented. complete, they also limit their (©Wally Stemberger/Dreamstime.com) staff size. In many cases, the owners are the companies’ only fullgrees in business, and most employees receive ontime employees. Some small-company owners hire the-job training in many skills—with the exception subcontractors for larger projects. In quickly develof some that require certification. Apprenticeship oping areas, staff sizes may be significantly larger in is typical in the construction industry, with on-theorder to take on more and bigger jobs. job training and sometimes classroom study in voTraditional Geographic Locations. Small comcational schools. A small company may be more panies are traditionally located outside the major willing to take on novices because skilled laborers cities where larger firms have already established are more likely to work for larger companies that themselves. These smaller companies are more offer steady employment and higher wages. willing to take on smaller and scattered jobs in ruCons of Working for a Small Construction ral areas where larger companies would earn less of Company. When owners are also employees, they a profit or would not be able to underbid a smaller are responsible not only for the administrative opcompany requiring less overhead. eration and success of their businesses but also for Pros of Working for a Small Construction performing necessary physical labor. When a comCompany. Because owners of small construction pany has few employees, the loss of a single one companies act as both owners and employees, (temporarily or permanently) can jeopardize its there is less overhead to be met—especially in a ability to complete a job (on time or at all). Small small company that does not use a store front—and companies may find it necessary to subcontract more potential profit because there are fewer emjobs, even if they must rely on subcontractors they ployees to insure and pay and no taxes to worry do not know. One-person companies may work about if the employer subcontracts work. There is only with subcontractors in order to cut overhead, also a measure of independence in being one’s placing the overhead burden on the subcontracown boss. There is often a greater efficiency level tors. Furthermore, the type of work a small comwith a small firm as there are fewer layers of bureaupany can obtain can be mundane and lack excitecracy and a shorter chain of command. A small ment. Small companies are more likely to gain company is also able to fill niches, whereas larger contracts to maintain roads rather than to build companies already have established markets and skyscrapers, for instance. Their narrow geographic clients. The few employees of a small company may scopes may limit small companies in their outreach often be friends or family. Owners of small compaefforts, rendering them unable to travel to another nies do not typically need to acquire advanced de-

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country or across a state to cultivate business. The competition among small companies is often fierce because several bid on any given job, and underbidding by too much could lead to loss of profit. Furthermore, small companies often exist from contract to contract, without steady income, and they may hire only highly skilled, fully trained laborers if they are under pressure to complete contracts quickly, consistently, and reliably. Costs Payroll and Benefits: Very small companies may pay daily wages instead of hourly to avoid the cost of overtime, but even small companies may not be exempt from federal labor laws mandating overtime payments. Most pay hourly wages to their own employees, as well as paying subcontractors based on the terms of their contracts. Owners, similarly, receive pay based on the terms of their contracts with contracting entities. Small construction companies with few if any full-time permanent employees are unlikely to pay benefits. Supplies: Smaller firms often rent the supplies and tools needed for a given job. They must purchase some supplies, however, such as office supplies and equipment and fuel to travel to construction sites. External Services: Small construction companies routinely subcontract portions of their contracts that they cannot themselves fulfill costeffectively (or at all). Subcontractors may supply additional skilled or unskilled labor, specialized skills that a contractor lacks, or both. Small companies also rent most of the heavy machinery, equipment, and tools they need to complete their contracts. They may also contract accounting or legal services as necessary, and if they own equipment, they may contract repair and maintenance services. They may also contract portable latrines for construction sites. Utilities: Typical utilities include Internet and telephone service, including mobile phone service, as well as electricity, water, and oil or gas. Contractors working from home may pay a portion of their home utilities from their business accounts or treat them as business expenses on personal tax returns. Taxes: Small businesses must pay income and property taxes. They must pay payroll taxes on

direct employees but not on subcontractors. Owners may report business income on their personal tax returns, in which case they must also pay self-employment taxes. Midsize Businesses Midsize construction businesses are often established firms and have between ten and fifty employees. They take on a wide range of projects, from maintenance to larger construction jobs, especially with their ability to hire multiple subcontractors should they need more people to complete their contracts. Often, the projects such companies take on include construction of runways, toll roads, and similar structures. They are not quite equipped to handle such major construction jobs as highway or street construction. Midsize businesses may operate in specific market niches, and they often own their own machines and tools rather than renting them. They are usually found in more developed urban and suburban areas and are equipped to travel to reach jobs. Potential Annual Earnings Scale. According to the BLS, the average annual income of an operating engineer or other construction equipment operator in the highway, road, and bridge construction industry was $48,450 in 2009. Highway maintenance workers earned an average of $34,560; paving, surfacing, and tamping equipment operators earned an average of $39,150; and general construction laborers earned an average of $37,290. Construction supervisors earned an average of $61,760, and construction managers earned an average of $93,340. Civil engineers earned an average of $74,930, civil engineering technicians earned an average of $50,550, and engineering managers earned an average of $99,520. These averages all assume full employment: Because of the nature of the industry, workers may not be paid if inclement weather or seasonal changes cause their projects to be delayed or canceled. Clientele Interaction. Competition for new projects can be intense, and midsize companies rely on their reputations and on obtaining repeat contracts with their clients. Often, midsize companies have storefronts to showcase either their work or their reliability and to impress potential clients. It still behooves midsize companies to make professional contacts and friends within city management in order to be among the first to know about

Highway, Road, and Bridge Construction Industry upcoming contracts and to have recommendations made on their behalf. Amenities, Atmosphere, and Physical Grounds. A construction business operates temporarily on a given site until its work is completed. Depending on the location of the site, there may be amenities for workers on location. Generally, construction work is dangerous, and workers are required to wear specific protective gear. Midsize companies also have storefronts where managerial personnel are located, and these companies may offer such amenities as coffee or other beverages to clients. They may also offer brochures and photographic examples of completed work for prospective clients to examine. Typical Number of Employees. The majority of establishments within the construction industry have fewer than ten employees, but midsize companies range between ten and fifty employees, including the owner and sometimes a manager, as well as any other managerial personnel who work within the storefront. Midsize companies also directly employ at least some of their physical laborers. Traditional Geographic Locations. Midsize companies are traditionally located within suburban and urban areas, where there is greater competition for contracts and established jobs. These companies are better able to take on larger jobs that require some travel—with more employees the midsize companies can ideally work on more than one contract at a time. Pros of Working for a Midsize Construction Company. Owners of midsize construction companies may limit themselves to managerial work, if they wish to do so. Midsize companies have greater profit potential than small companies because they can take on more than one contract at a time. They may also be more efficient than large companies because they retain relatively short chains of command. A midsize company often operates within a niche, whether it is building airport runways or constructing toll roads. The owner of a midsize company is more likely to have an advanced degree in business because of the competitive nature of the midsize segment and the high turnover. Employees of midsize construction companies may have college graduates working for them as they learn the trade at a lower wage and as they are apprenticed to more skilled workers. In a midsize

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company, there is also some room for advancement, but advancing may require further education or certification. Cons of Working for a Midsize Construction Company. Midsize companies see a high turnover because of the cost of overhead in keeping a storefront, full-time employees, and managerial personnel. The midsize segment of the transportation construction industry is highly competitive. Often, without a degree, certification, or experience, less skilled workers may be passed over for employment. Longer hours may also be required. Costs Payroll and Benefits: Midsize companies often pay hourly wages. Employees who belong to unions often enjoy greater benefits, such as vacation days and sick leave. Federal or state mandated benefits are offered usually as required. There is some chance for either bonuses or promotion. Supplies: Midsize companies often own the supplies and tools they need. These include hand and power tools, heavy equipment and machinery, and construction materials. They also require transportation vehicles and fuel, as well as office equipment, furniture, and supplies. External Services: Midsize construction companies routinely subcontract portions of their contracts that they cannot themselves fulfill costeffectively (or at all). Subcontractors may supply additional skilled or unskilled labor, specialized skills that a contractor lacks, or both. They may also contract equipment maintenance and repair; equipment rental; facilities cleaning, maintenance, and repair; printing; site security; or legal, accounting, or tax preparation services. They may also contract portable latrines for construction sites. Utilities: Typical utilities include Internet and phone service, water and sewage, and electricity. Taxes: Midsize businesses must pay income and property taxes. They must pay payroll taxes on direct employees but not on subcontractors. Large Businesses Large construction businesses are well-established firms with more than fifty employees. A large construction company operates large-scale projects, such as highway construction. Each large firm

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Two men work alongside an asphalt-paving machine. (©Dwight Smith/Dreamstime.com)

is located in multiple metropolitan areas in order to remain visible and competitive. Firms may also be located in multiple countries, and they take on a wide variety of construction projects, not just limited to highway and road construction. For example, Bechtel Corporation has offices in twenty-six countries, including the United States, employs over forty-nine thousand people, and performs highway and railway construction projects, as well as working on defense facilities and conducting environmental cleanup operations. Potential Annual Earnings Scale. According to the BLS, the average annual income of an operating engineer or other construction equipment operator in the highway, road, and bridge construction industry was $48,450 in 2009. Highway maintenance workers earned an average of $34,560; paving, surfacing, and tamping equipment operators earned an average of $39,150; and general con-

struction laborers earned an average of $37,290. Construction supervisors earned an average of $61,760, and construction managers earned an average of $93,340. Civil engineers earned an average of $74,930, civil engineering technicians earned an average of $50,550, and engineering managers earned an average of $99,520. These averages all assume full employment: Because of the nature of the industry, workers may not be paid if inclement weather or seasonal changes cause their projects to be delayed or canceled. However, large corporations overseeing many simultaneous projects may be able to transfer workers among projects as necessary to ensure full employment. Moreover, managerial salaries at such companies may be well above these industry averages. Clientele Interaction. It is important for large companies to maintain a visible presence worldwide because their competition is not just from local companies but from foreign ones as well. Therefore, large firms need to have multiple office locations in major cities, where potential clients can meet with contractors and administrative personnel. Furthermore, it is very important that clientele are duly impressed with the firms’ offices, as well as with the people within them, since both make direct impressions influencing a client’s choice of firms. Amenities, Atmosphere, and Physical Grounds. Large companies have offices worldwide, as well as online presences, and may provide amenities for their employees such as on-site gyms, cafeterias, and other recreational facilities and executive perks. On project sites, the amenities, atmosphere, and physical grounds vary by location, as they do for employees of any size company. Typical Number of Employees. Large firms typically employ thousands of persons. Bechtel, for example, has more than forty-nine thousand employees in twenty-six countries. Traditional Geographic Locations. Large construction firms have offices in major cities worldwide. For example, Bechtel has offices in Abu Dhabi, Istanbul, and London. Work locations vary worldwide, though they are typically near large or growing cities that require construction work to support their growth and infrastructure. Pros of Working for a Large Construction Company. Large companies often pay better than smaller companies, and they provide benefits such

Highway, Road, and Bridge Construction Industry as 401(k) plans, health insurance, paid vacation, and sick time. Many larger firms offer mentoring opportunities, as well as the chance to travel worldwide to different office locations or job sites. Wellknown companies are more likely to obtain larger and more lucrative contracts, providing employees with opportunities to work on landmark projects. They also provide greater opportunities for promotions and pay raises, and they often devote greater resources to maintaining employee safety in compliance with federal and state regulations. Working at large, well-known companies often increases employee prestige, which may be satisfying to employees while at such firms, as well as impressing potential employers if they choose to seek employment elsewhere. Cons of Working for a Large Construction Company. Large companies are highly bureaucratic, and employees may experience frustrations arising from ineffective communication or confusion. Employees of a large company may also have fewer close relationships with their coworkers, and their interactions may be more structured and regimented. There is also a great deal more competition within large companies for raises and recognition; this competition and other such workplace politics can lead to added stress. In a stressful economic period, hiring freezes and layoffs are highly likely. Working in other countries can be difficult because of language and cultural barriers. A balance between personal and work life may be difficult to achieve. Employees may be required to relocate to another city or country. Working for large companies can make employees feel anonymous, and they may have a great deal of trouble being noticed or having a recognizable effect upon their employers. Managers must often deal with collective bargaining units, complicating their jobs. Costs Payroll and Benefits: Salary structures within large companies vary widely as there are many types of employees with various jobs and skills. Employees such as maintenance and other service personnel are often paid hourly wages, while managers and administrative assistants are typically paid yearly salaries and may receive performance incentives. Employees of large companies often receive benefits such as health insurance, vacation, and sick pay.

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Supplies: Large construction companies require hand and power tools, heavy equipment and machinery, construction materials, transportation vehicles, and fuel, as well as office equipment, furniture, and supplies. Some companies also maintain amenities such as gyms or cafeterias and require the supplies necessary to operate and restock those amenities. External Services: Many large companies have on-site staff to handle maintenance and similar duties, but others contract this work to external vendors. Large construction companies may also contract catering, audiovisual services, technical support, lobbying, auditing, security, maintenance, and other support and business services. They may also contract portable latrines for construction sites. Utilities: Typical utilities for a large firm include water, sewage, electricity, telephone (including mobile phone service), Internet access, and perhaps cable television. Taxes: Large businesses must pay income and property taxes. They must pay payroll taxes on direct employees but not on subcontractors.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and distribution of job roles throughout the highway, road, and bridge construction industry can vary greatly depending on the size and scope of a company and the services it provides. Although construction roles make up over 66 percent of the industry, numerous additional job roles are imperative to the successful operations of a company. In large businesses, each separate job role could be fulfilled by one or more individual specialists, whereas smaller companies may require one individual to serve more than one role. Each job role, though, must be fulfilled in each company to some degree, even if very few individuals must serve them all. The following umbrella categories apply to the organizational structure of businesses in the highway, road, and bridge construction industry: ■ ■

Business Management Sales and Marketing

872 ■ ■

■ ■ ■ ■ ■

Highway, Road, and Bridge Construction Industry Facilities and Security Technology, Research, Design, and Development Operations Distribution Human Resources Business and Financial Office and Administrative Support

Business Management Business management is responsible for the overall direction of the company. Through the formulation of company procedures and policies, business managers guide the company and create its employment culture. These individuals are also responsible for supervising and managing specific areas and departments within the company, while determining the best use of human resources. They are generally the highest paid employees, earning mean annual salaries of $105,820 in 2009, and require the highest level of education. They are responsible for ensuring the fluid operation of all the company’s departments and achieving company goals. Ultimately, they are responsible for their company’s success or failure. Business management can take the form of a single employee or multiple employees, depending on the size of the company. The most common position under this umbrella is the construction manager, who coordinates, budgets, and plans the personnel and activities required to complete a project. Construction managers oversee projects from beginning to end and are immediately responsible for their successful completion. These projects can be complex, multiyear efforts or simple construction jobs. Construction managers must be able to work in a team environment and able to work with little or no supervision. They often require multiple years of experience on the job and advanced education. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) General or Operations Manager Financial Manager Superintendent Construction Manager Program/Project Manager Human Resources Manager

■ ■

Business Manager Quality Assurance Manager

Sales and Marketing Highway, road, and bridge construction companies sell services rather than products. A company that cannot sell its services will be unable to obtain revenue and continue its operations. A single job can employ a number of individuals for many months, or even years, and lead to a large amount of revenue, so the ability to sell one’s services is crucial for this industry. Often, construction companies are selling themselves in a way much different from the way a retailer sells a product. They can be very selective about the jobs they pursue and can refuse potential clients. A successful company can afford to be much more selective than a struggling company, but both need to be able to sell their ability to complete jobs efficiently, cost-effectively, and at a high quality. Sales and marketing occupations may include the following: ■ ■ ■

Sales Representative Business Developer Proposal Manager

Facilities and Security Facilities and security personnel are responsible for the maintenance and security of not only outdoor work locations but also administrative buildings and offices. They do not represent a very large portion of the workforce, but their functions are important, especially at larger companies. Work sites may require groundskeepers to maintain them or crossing guards to guide and manage vehicular traffic in and around them. Office areas may require cleaners or janitors to maintain them. Both areas could require security guards, depending on the business, location, and job. Facilities and security positions are generally the lowest-paid positions in the industry, but they do not necessarily require any specialized knowledge of the industry itself. It is possible for someone familiar with the job requirements to jump into one of these positions without having worked previously in the industry. Facilities and security occupations may include the following:

Highway, Road, and Bridge Construction Industry ■ ■ ■ ■

■

Custodian/Janitor Groundskeeper Security Guard Crossing Guard

■ ■ ■ ■

Technology, Research, Design, and Development The highway, road, and bridge construction industry relies heavily on technology. Construction companies that do not keep abreast of the latest technologies and methods for conducting their services may fall behind their competitors. Technology can apply directly to the equipment used or to the techniques and design plans for a highway, road, or bridge. Research and design personnel are important in the preliminary stages of construction jobs and are often involved in bidding for prospective jobs. Without proper planning, a construction job can meet numerous problems or provide a faulty or unsafe final product. Technology personnel must provide information related to the locations, dimensions, shape, and contours of land and land features on and near work sites. They may also conduct engineering work related to the planning, design, and oversight of construction structures. Technology, research, design, and development occupations may include the following:

OCCUPATION

■ ■

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Construction Engineer Field Engineer Office Engineer Structural Engineer Resident Engineer Structural Designer Drafter

Operations Operations personnel engage in the direct construction of highways, roads, and bridges, and they constitute the vast majority of the industry’s labor force, over 66 percent. Because construction jobs can be large scale and complex, effective and efficient operations are necessary for success. The efficiency of an operations crew can greatly affect the amount of time and money a job requires. Companies that require the least amount of time and money to complete jobs are often awarded contracts. An inefficient operations crew can harm the reputation of its company and possibly prevent it from winning construction bids. Operations personnel keep jobs on schedule, which can be a critical component of a construction job. Running behind schedule can have ripple effects, negatively affecting the company, the region surrounding the construction site, and future construction jobs.

SPECIALTIES

Bulldozer Operators Specialty

Responsibilities

Angledozer operators

Drive bulldozers equipped with special angled blades attached to the front.

Crawler-tractor operators

Drive tractors that are specially equipped to move over rough or muddy ground.

Fine-grade-bulldozer operators

Grade land to close specification.

Scarifier operators

Operate bulldozers for the purpose of loosening soil.

Scraper operators

Operate bulldozers for the purpose of scraping surface clay to determine the existence and types of clay deposits or to gather clay into piles in preparation for its removal to brick-and-tile manufacturing plants.

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The most common position within this umbrella is that of construction laborer, which earned a mean salary of $37,290 in 2009. Construction laborers perform the majority of the physical labor required at job sites and may operate hand tools, power tools, and other equipment and instruments. Equipment operators, or operating engineers, use power construction equipment, such as bulldozers, scrapers, shovels, tractors, and other motorized equipment. They use heavy equipment to excavate or move earth, erect structures, and perform other related functions. Other positions are responsible for maintaining tools and equipment, pouring and smoothing concrete, placing and uniting iron or steel girders or columns, laying pipe, or performing other maintenance activities. Operations occupations may include the following: ■ ■

Construction Worker Equipment Operator/Operating Engineer

OCCUPATION

■ ■ ■ ■

Heavy Equipment Mechanic Maintenance and Repair Worker Inspector Material Mover/Handler

Distribution Distribution of materials is a critical component of the highway, road, and bridge construction industry. Highways, roads, and bridges can require large pieces of equipment and large amounts of construction materials, all of which must be delivered to the construction location. Without the requisite materials and equipment, operations workers cannot perform their duties. Efficient distribution and delivery of construction equipment and materials are important to the completion of a construction job on time and at a high quality. The majority of positions under this umbrella are filled by heavy truck drivers. These employees are responsible for transporting and delivering machinery, equipment, or other materials to job

PROFILE

Construction Manager Considerations

Qualifications

Description

Plans, organizes, and budgets activities associated with the construction of structures or systems.

Career clusters

Architecture and Construction

Interests

Data; things

Working conditions

Work outside; work both inside and outside

Minimum education level

On-the-job training; junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

ERS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Highway, Road, and Bridge Construction Industry OCCUPATION

875

PROFILE

Highway Maintenance Worker Considerations

Qualifications

Description

Performs maintenance and repairwork on highways and other roads.

Career cluster

Architecture and Construction

Interests

Things

Working conditions

Work outside

Minimum education level

No high school diploma; on-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

CRS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

sites. Heavy truck drivers often require specialized training and licensing. Distribution occupations may include the following: ■ ■ ■ ■

Heavy Truck Driver Light Truck Driver Material Mover/Handler Loading and Unloading Machine Operator

Human Resources Human resources personnel are responsible for the interests of a company’s employees. They maintain personnel records regarding personal information, earnings, absences, performance evaluations, and so on. They also administer employee benefits, such as vacation and insurance, prepare and distribute evaluations, and facilitate new employee orientation. They recruit, develop, and retain employees.

Human resources positions do not make up a very large part of the industry. In small companies, human resources is one of many hats worn by a head manager, but larger companies employ individuals specifically to manage or otherwise work in the human resources department. Human resources managers require additional education but also earned mean salaries of $93,700 in 2009. Human resources occupations may include the following: ■ ■ ■

Human Resources Manager Human Resources Assistant Human Resources Specialist

Business and Financial Business and financial personnel are responsible for monetary aspects of their companies. The construction industry relies heavily on job bids and estimating the cost for certain jobs, so responsible and successful financial operations are critical for a

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The Hoover Dam Bridge under construction in March, 2010. (©Thaer Joseph/Dreamstime.com)

successful business. A company in this industry must balance job bids to be competitively priced but also profitable. A company delivering an underestimated job bid has a high chance of being awarded the project, but it will lose money. Contrarily, a company delivering an overestimated job bid in the hopes of realizing a large profit runs the risk of losing the bid to another company. Accurate and intuitive estimates are critical for the success of a highway, road, or bridge construction business. Cost estimators, specifically, are responsible for preparing cost estimates for construction projects in order to aid management and administration in bidding on potential jobs. These positions generally require a degree, training, or experience, and earned a mean salary of $67,270 in 2009. Cost estimators must work well with deadlines, and they must have strong work ethics and strong attention to detail. They must investigate job sites, evaluate complex projects, and prepare detailed cost estimates for entire jobs. Other business and financial personnel help keep financial records and maintain efficient utilization of funds. Business and financial occupations may include the following:

■ ■ ■ ■ ■

Cost Estimator Accountant/Auditor Purchasing Agent Accounts Payable Clerk Accounts Receivable Clerk

Office and Administrative Support Office and administrative support positions conduct the behind-the-scenes daily activities of highway, road, and bridge construction companies. These are the types of positions that conduct peripheral, yet important, tasks of the business, such as answering phones, filing and archiving records, organizing travel and meetings, and controlling documents. The positions are often clerical in nature and do not necessarily require advance knowledge of the industry. Advanced degrees are not necessarily a requirement for these positions, but it is important for individuals in these roles to have strong organizational and communication skills. Office and administrative support occupations may include the following: ■

Bookkeeping, Accounting, and Auditing Clerk

Highway, Road, and Bridge Construction Industry ■ ■ ■ ■ ■ ■ ■

Payroll and Timekeeping Clerk Receptionist Information Clerk Executive Assistant Administrative Assistant Office Clerk Document Control/Records Clerk

INDUSTRY

OUTLOOK

877

Tourism is also intimately linked with infrastructure: The tourism industry offers taxes and other support to the highway industry as it is in the tourism industry’s best interest to have maintenance and repairs ongoing in order to allow for easier and smoother access to specific destinations whose economies rely on tourists. Other intimately connected industries include construction equipment and materials. As a large portion of industry workers retire or leave between 2010 and 2020, skilled and experienced trade workers will be in demand. Furthermore, as technology rapidly develops, those within the industry who have technological skills and are up-to-date with the latest developments will be in high demand. New entrants into the industry who have stable backgrounds, such as retired military personnel, can expect excellent job prospects. Certain skill sets, licenses, or experience will be needed for most jobs. Employment growth within the office sector of

Overview The outlook for this industry shows it to be on the rise domestically as well as globally. The industry suffered significantly from the economic crisis of 2007-2009, but it was also a focus of the American Recovery and Reinvestment Act of 2009, so it has experienced an influx of government funding. U.S. infrastructure is in significant disrepair, so theoretical demand for the industry’s services is extremely high. However, funding to repair the infrastructure is not always available, so practical demand often lags behind theoretical demand. PROJECTED EMPLOYMENT Because its services are needed FOR SELECTED OCCUPATIONS but not always affordable, the transportation construction industry is an Heavy and Civil Engineering indicator of economic conditions, as Construction well as of population growth, in the United States and worldwide. Federal Employment Highway Administration research shows the relationship between the 2009 Projected 2018 Occupation economy and the highway industry, 27,220 30,900 Carpenters suggesting that investment in highway, road, and bridge construction 184,470 229,900 Construction laborers is important to economic growth. 63,300 72,500 First-line supervisors/ Worldwide, the industry facilitates managers of construction surface transportation, which in turn trades and extraction workers facilitates mobility and is therefore an integral part of life: Providing 109,550 22,000 Operating engineers and jobs, permitting travelers to go furother construction ther to consume and spend on prodequipment operators ucts, and moving consumer goods 38,250 45,300 Truck drivers, heavy and increases productivity and supports tractor-trailer the economy. Everyone uses infrastructure, from regular citizens to Source: U.S. Bureau of Labor Statistics, Industries at a Glance, the military. Increased growth within Occupational Employment Statistics and Employment the industry is expected, particuProjections Program. larly in the areas of maintenance and repair.

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the industry will continue to be limited, as automation replaces many of the human components. Overall, the number of available jobs fluctuates, as these jobs are dependent on the economy. Currently, there is a great deal of competition within the industry for jobs, particularly at the entry level. According to the BLS, those laborers with limited skills will experience the most competition, because of a plentiful supply of workers who are willing to work as day laborers. Overall opportunities will be best for those with experience and specialized skills and for those who can relocate to areas with new construction projects. Opportunities also will be better for laborers specializing in road construction.

Companies and individual employees familiar with green trends will be in high demand as a result of federal green initiatives. Employment Advantages According to the BLS, the highway, road, and bridge construction industry will see growth in wage and salary jobs of 19 percent between 2008 and 2018, or approximately 1.1 percent growth each year. This growth is higher than the average across all occupations of 11 percent growth. The U.S. Department of Commerce released data at the beginning of July, 2010, indicating that spending on construction in the industry overall was down 12 percent from 2009. However, highway construction specifically was at a “seasonally adjusted annual rate of $83.1 billion, 2.7 percent above the revised April estimate of $80.9 billion.” Jobs over the next decade are nearly assured with continued voting by citizens and legislators approving spending on road construction. Positions and employment for construction managers is an anticipated growth area resulting from the many new projects in development as well as because of the “increasing complexity of construction work that needs to be managed, including the need to deal with the proliferation of laws dealing with building construction, worker safety, and environmental issues.” Annual Earnings The highway, road, and bridge construction industry is inextricably linked with the economy in its ups and downs. Budget pressures have forced an

increasing number of states to cut funding for surface transportation projects. Over thirty states have cut their highway investments since 2009 according to Transportation for America and the American Road and Transportation Builders Association. However, revenue is expected to increase by 2.2 percent each year in the United States through 2015 as a result of federal funding. Globally, by 2014, the industry will have a forecasted value of $2.7585 trillion, which is a 23.3 percent increase since 2009.

RELATED RESOURCES FOR FURTHER RESEARCH American Association of State Highway and Transportation Officials 444 N Capitol St. NW, Suite 249 Washington, DC 20001 Tel: (202) 624-5800 Fax: (202) 624-5806 http://www.transportation.org American Road and Transportation Builders Association 1219 28th St. NW Washington, DC 20007-3389 Tel: (202) 289-4434 Fax: (202) 289-4435 http://www.artba.org Associated General Contractors of America 2300 Wilson Blvd., Suite 400 Arlington, VA 22201 Tel: (800) 242-1767 Fax: (703) 548-3119 http://www.agc.org Association Mondiale de la Route/World Road Association AIPCR/PIARC La Grande Arche Pario North, Level 5 92055 La Defense CEDEX France Tel: 33-1-47-96-81-21 Fax: 33-1-49-00-02-02 http://www.piarc.org/en

Highway, Road, and Bridge Construction Industry ENGINEERING NEWS-RECORD 2 Penn Plaza, 9th Floor New York, NY 10121 Tel: (212) 904-3507 Fax: (212) 904-2820 http://enr.construction.com Reed Construction Data 30 Technology Parkway South, Suite 100 Norcross, GA 30092 Tel: (800) 424 3996 http://www.reedconstructiondata.com WORLD HIGHWAYS Route One Publishing Horizon House, Azalea Dr. Swanley, Kent BR8 8JR United Kingdom Tel: 44-1322-612-055 Fax: 44-161-603-0891 http://www.worldhighways.com

ABOUT

THE

AUTHORS

Michelle Marie Martinez is an assistant professor and librarian at Sam Houston State University. She is a 2007 graduate of the University of North Texas Graduate School of Library and Information Sciences and a 2005 graduate of Sam Houston State University, where she earned an M.A. Her research includes a wide variety of topics, including Shakespeare, feminist literature, and film studies. She has presented research and papers at multiple conferences, including “Incest, Sexual Violence, and Rape in Video Games,” presented at Oxford University. Tyler Manolovitz is the digital resources coordinator and an assistant professor at Sam Houston State University. He earned an M.A. from the University of North Texas Graduate School of Library and Information Science in 2006. His research interests are varied and have included classic and contemporary literature, mythology, film studies related to Alfred Hitchcock and John Hughes, and sexual violence in video games. Manolovitz continues to research, write, and present at conferences internationally on a variety of topics.

FURTHER

879

READING

Associated General Contractors of America. “Construction Industry Adds Jobs (But with a Caveat).” Industry Today, May 17, 2010. http:// www.industrytoday.com/article_view .asp?ArticleID=we250. “Highway and Street Construction.” In Encyclopedia of American Industries. Farmington Hills, Mich.: Gale Group, 2010. Institute for Career Research. Careers in Infrastructure Building—Engineers, Contractors, Skilled Heavy Construction Workers: Building Our Nation’s Highways, Bridges, Tunnels, and Airports. Chicago: Author, 2008. _______. Highway Building Careers: Working to Keep America Connected—Excellent Earnings Operating Heavy Machinery and Managing Huge Construction Projects. Chicago: Author, 2005. JobBank USA. “Jobs Outlook: Construction Laborers.” http://www.jobbankusa.com/ career_employment/construction_laborers/ jobs_outlook.html. Jones, Heather. “Industry Forecast II: Highways and Streets.” Construction Today, September 25, 2007. http://www.construction-today.com/ cms1/content/view/676/82. Jones, Samantha R. Highways: Construction, Management, and Maintenance. Hauppauge, N.Y.: Nova Science, 2010. Kelly, Anthony, and Kathleen Ripley. “IBISWorld Industry Report 23411a: Road, Street, and Highway Construction in the U.S.” Santa Monica, Calif.: IBISWorld, 2010. Khan, Mohiuddin A. Bridge and Highway Structure Rehabilitation and Repair. New York: McGrawHill, 2010. LePatner, Barry B. Too Big to Fall: America’s Failing Infrastructure and the Way Forward. New York: Foster, 2010. Transportation for America et al. Stranded at the Station: The Impact of the Financial Crisis in Public Transportation. Washington, D.C.: Author, 2009. http://www.t4america.org/ docs/081809_stranded_at_thestation.PDF United Nations Centre for Human Settlements. Policies and Measures for Small-Contractor Development in the Construction Industry. Nairobi, Kenya: Author, 1996.

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Highway, Road, and Bridge Construction Industry

U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data

and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Transportation. Federal Highway Administration. “Productivity and the Highway Network: A Look at the Economic Benefits to Industry from Investment in the Highway Network.” Washington, D.C.: Author, 2006. http://www.fhwa.dot.gov/policy/otps/ 060320b/060320b.pdf. World Bank. Indian Road Construction Industry: Capacity Issues, Constraints, and Recommendations. Washington, D.C.: Author, 2008.

Home Maintenance Services ©Crystal Craig/Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Personal Services Career Clusters: Human Services; Architecture and Construction Subcategory Industries: Appliance Repair and Installation; Carpet, Upholstery and Floor Cleaning Service; Consumer Electronics Repair and Maintenance Services; Electrical Maintenance; Exterminating and Pest Control Service; Handyman Construction Service; Interior Design Service; Lawn and Garden Maintenance Services; Plumbing and Heating Maintenance Service; Residential Cleaning Service; Swimming Pool Maintenance and Service Related Industries: Building Construction Industry; Electrical and Gas Appliances Industry; Landscaping Services Annual Domestic Revenues: $27.4 billion USD (Freedonia Industry Market Research, 2009) Annual International Revenues: $41.4 billion USD (Global Industry Analysts, 2009) Annual Global Revenues: $68.8 billion USD (Global Industry Analysts, 2009) NAICS Numbers: 236118, 2382, 54141, 5617, 8114, 8123

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DEFINITION

Summary Owning or renting a home and surrounding property can require a great deal of work to ensure that the residence stays clean and in good repair. Even with regular maintenance, problems can develop and repairs will be needed. These repairs and maintenance may require expertise and equipment that are beyond the knowledge of the average resident. Home maintenance services provide assistance to residential customers with various tasks inside and outside their homes. The accessibility and affordability of outsourcing home maintenance has made it an attractive alternative to those who do not have the time, knowledge, or skill to perform household maintenance or repairs. This industry encompasses a wide range of cleaning, repair, landscaping, and maintenance services for the interior and exterior of the customer’s home. History of the Industry It can be argued that the beginning of the home maintenance industry began with the first emergence of humankind and the need for shelter. Homo habilis, one of the first species of humans, was nicknamed “handyman” because it was the first to create tools.

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amenities, which increased the potential for problems and need for skilled repair providers. In the 1880’s, small electrical stations able to power a few city blocks were created based on the principles of Thomas Alva Edison’s work. By 1930, most homes in American cities had electricity. Electricians and appliance repairmen had to be consulted to install and repair the new technology. Experts in the delivery and drainage of water to buildings were described by the ancient Romans. These individuals were Many home maintenance tasks, such as installing exterior lights, can be done by skilled in the installation and rea handyman. (©Crystal Craig/Dreamstime.com) pair of pipe and related apparatus. Indoor plumbing became more common in middle-class homes in the midThe home maintenance services industry has its 1800’s, and plumbing services soon followed. roots in several ancient occupations and tradiWall-to-wall carpeting, nailed to the floor, was tional roles within a household. In ancient times, introduced after World War II. It was considered pharaohs, kings, and emperors would assemble very luxurious but created a concern when the workforces of hundreds or thousands of people to time came for it to be cleaned. Previously, when build, maintain, and protect their castles and emrugs in a home became soiled, they were rolled pires. Residential maintenance service was someup and taken away to be cleaned. The need for inthing that only the noble, powerful, and wealthy home carpet cleaning fueled the development of had and it usually was performed by housemaids, mobile carpet cleaning technology and services beservants, and slaves. Service providers often were ginning in the 1950’s. By the late 1990’s, there were born into lower or impoverished castes and had few more than nine thousand mobile carpet and upor no other options beyond serving the wealthy. holstery cleaning services in the United States. Strenuous work was diligently performed in exchange for food and basic accommodations. Until The Industry Today the development of labor laws in the twentieth cenIt is estimated that almost 10 percent of housetury, service personnel had no protection under holds in the United States hire outside services to the law and often were considered property of help with housecleaning. Businesses in this industheir employers. try provide increasingly convenient, accessible, The Flatiron Cleaning Company, founded in and affordable options to consumers who are un1893, was the first residential house and window able or unwilling to perform cleaning and maintecleaning service in New York. In contrast, the first nance tasks in their homes. These services can inhome cleaning service company in the Republic of clude cleaning, repair, and maintenance of all China was not started until 2002 in Taiwan. For areas of a home and property. Businesses in this inmost people, household skills were passed from dustry are dominated by small establishments, opmothers to daughters and fathers to sons. People erating in metropolitan areas, employing fewer built and maintained their homes to the extent of than five people. However, many franchises and their skill and knowledge, using only materials that large, globally recognized companies with thouwere readily available to them. With the introducsands of employees also exist. tion of modern conveniences, homes became Historically, people who performed cleaning much more complicated in their construction and

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and maintenance services usually resided on the An independent company can assess the cusproperty, but this is no longer a common arrangetomer’s needs and arrange to have the required ment. Most services now are performed by a small services performed by other companies. This is team or individuals who visit regularly. Some cleanvaluable for large jobs where different services ing services may be performed by professionals livneed to be coordinated and when the customer ing in the home who also provide other services, prefers to have a single contact person for the durasuch as child care or daily living assistance to setion of a long or complicated job. These companiors or disabled persons. nies often are the first choice for groups of homes, As a large segment of the population ages, home such as gated and seniors’ communities. Large maintenance and cleaning services are expected to home improvement stores have begun to form grow in popularity. The baby-boomer generation partnerships with home maintenance companies tends to have higher than average annual income to provide customers with materials and services and the desire to maintain an independent lifestyle for their homes. An example is Home Depot, in their homes, which will lead to increased outwhich teamed with ServiceMaster, the nation’s sourcing of home maintenance and cleaning. leading provider of home services, to test the sale Home maintenance and improvement also has exof a wide range of co-branded residential mainteperienced growth because most homes in the nance and repair services to its retail customer United States are several decades old. Economic base. ServiceMaster specializes in a range of home challenges have convinced many homeowners to services, including professional lawn, tree, and spend available funds to improve and repair their shrub care, landscape installation and maintecurrent homes, rather than purchasing new homes. nance, termite and pest control, plumbing and Another driving force in this industry involves the drain cleaning, carpet and upholstery cleaning, amenities and technology available to average and home warranties. These services complement households. People enjoy modern conveniences Home Depot’s existing product installation and and high-tech devices but do not have the knowlhome improvement services, which include carpet edge to install them or perform repairs should and flooring installation, kitchen cabinet and a problem arise. Modern amenities such as swimcountertop installation, door and window replaceming pools, air-conditioning systems, underground ments, and roof replacements. Real estate compasprinklers, and home entertainment systems require specialized care, repair, or regular maintenance. This highly competitive industry is seeing increasing emphasis on services that use ecofriendly and nontoxic products. Consumers are demanding that products used in their homes for cleaning or pest control are safe for the environment, family members, and pets. This has led to research into more natural but equally effective products and methodologies. Large companies in this industry employ teams of chemists to develop superior cleaning agents. A man uses a pressure washer to clean an exterior deck. Cleaning, interior and exMaintenance management terior, is an important part of home maintenance. (©Crystal Craig/Dreamscompanies are emerging as a time.com) popular choice for consumers.

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nies also commonly enter into collaborative partnerships with home maintenance businesses. Realtors can sell a property more easily if it is clean and in good repair, so they may suggest these services to homeowners or bring them in to assist with preparing a vacant property for sale. New technology and strategies see businesses in this industry continuing to emerge and grow as customers regard these services as increasingly convenient, affordable, and essential to their lifestyles.

making. Specialty cleaning for items such as carpeting or drapery normally is arranged when needed. Maintenance services and repair services also tend to be contracted as problems arise. These small businesses can be contracted by larger businesses or management companies. Because services are provided at the customer’s residence, the small businesses in this industry are mobile and often home-based. Potential Annual Earnings Scale. The annual average earnings for small businesses in home maintenance vary widely by region and the type of INDUSTRY MARKET service being provided. The annual average inSEGMENTS come for an independent small-business owner providing cleaning services, general home mainteSmall Businesses nance, or lawn services is $52,000. The salary for a Small businesses dominate the home maintenonowner employee of these small businesses usunance industry: Most companies have fewer than ally starts at minimum wage and rises depending twenty employees, and the majority of those started on work performance. Outdoor maintenance and as sole proprietorships. Many small businesses procleaning can be seasonal in some regions, which vide service within a metropolitan area or specific can result in inconsistency of work available. Skilled neighborhood. Cleaning services can be provided tradespeople in this industry can earn significantly as needed, but many customers arrange for recurhigher income based on experience. Annual salaring service. Service often is provided on a weekly ries for independent or small-business plumbers basis, although frequency and level of service can and electricians start at approximately $48,000 vary greatly. Cleaning usually includes vacuuming, and increase with experience. Many independent dusting, and general tidying, and can also incorposmall businesses without regular contracts can see rate services such as laundry, wall washing, and bed variability in the amount of work available, relying on responses to local advertising and marketing, making the business challenging to predict. Clientele Interaction. Small home maintenance businesses have direct clientele interaction several times each day. Customers contact the service provider or dispatcher and normally arrange a time to meet the service provider at the residence. In some very small businesses or sole proprietorships, the dispatcher and service provider are the same person. Repeat business and recommendations from happy customers are keys to success, so all clientele interaction must be positive. Providing service in someone’s home can be a delicate A pool service employee cleans the filters on a pool. (©Dreamstime.com)

Home Maintenance Services situation and personnel must appear capable and trustworthy. Employees often are required to maintain appearance standards and undergo drug testing, as they are representatives of the company. Amenities, Atmosphere, and Physical Grounds. Small home maintenance companies might have a small office space, but most consider their vehicles to be their offices. Most of the actual service work is provided in a customer’s residence or yard. A dispatch center may be located in a home office or in a vehicle, with calls managed by cell phone. Most small businesses do not maintain retail locations. Typical Number of Employees. As in most small-business situations, the goal is to keep expenses low and revenues high. Depending on the service being provided, many businesses can be managed by a single individual or small group. For safety and security of employees, many businesses now have service providers work in pairs. The typical number of employees for a small home maintenance or cleaning service can range from one to twenty. Traditional Geographic Locations. Most small businesses operate in urban centers and serve a specific geographic area, such as a single city, neighborhood, or district within a city. Fuel, time, and other transportation expenses make it difficult to serve large areas. Pros of Working at a Small Home Maintenance Company. Independent service providers and subcontractors can decide how much and when they want to work. Small companies or individuals who have regular service contracts enjoy a familiarity with customers and the security of regular work. There usually is not a great deal of direct supervision for employees of small businesses; they most often work alone or in pairs. Many national labor unions have been established to provide guidance and protection to workers providing home maintenance services. Organizations such as the Association of Residential Cleaning Services International have been established to assist residential cleaning service owners and professionals in starting, promoting, building, and expanding their businesses. About 32 percent of all electricians are members of a union, such as the International Brotherhood of Electrical Workers. Starting a business in the home maintenance industry is one of the most popular choices for

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emerging entrepreneurs. Many guides are available to direct people through the process. It is an attractive industry because start-up costs are relatively low and return on investment can be quite quick. Cons of Working for a Small Home Maintenance Company. Within small companies, there is very little room for advancement. Seasonal fluctuations in business and a lack of regular service contracts can make income unpredictable. To generate income and keep existing customers satisfied, some work hours can be very long. For unskilled employees who are not owners or managers in the business, wages typically are low. Many workers find the circumstances and situations they encounter challenging and unpleasant. The work also can be physically demanding and may involve heavy lifting, moving of furniture, and prolonged bending, squatting, crouching, and fitting into tight spaces. Safety can be a concern for employees, as there is a certain level of uncertainty when entering into unknown premises. Costs Payroll and Benefits: Typically, small maintenance and cleaning companies pay their employees an hourly wage or employ independent contractors who are paid per completed job. Full-time employees usually receive the same benefits as other workers, at the discretion of the owner/manager; however, many independent contractors are not entitled to benefits. Supplies: Transportation and the supplies used to perform the specific services can vary. Cleaning services travel to customers’ homes, but some use cleaning supplies and equipment supplied by the customer. Most services provide their own supplies and equipment, including cleaning agents for a range of surfaces and mops, cloths, and dusters. Maintenance businesses need tools and materials specific to their service. A maintenance or trade worker may determine in advance what materials are needed for a repair, purchase them for the customer, and add the amount to the invoice for service. Pest control services require specialized equipment, such as traps and chemicals, depending on the problem being addressed. The means of transporting workers, equipment, and supplies also is very important. A vehi-

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cle in safe, working order is necessary. A landscaping service, for example, may use a truck and tow a trailer carrying mowers and tools to a property. In many businesses, the transportation vehicles also serve as advertisements and are painted or decorated with company logos and contact information. An effective communication system among dispatchers and service personnel also must be maintained, such as cell phones, wireless devices, or two-way radios. External Services: A small home maintenance business needs to maintain its vehicles and equipment. Fuel, repairs, and insurance costs can be considerable. In most regions, home maintenance businesses require licenses and insurance to protect themselves and their clients. In addition to insurance, many small businesses and individuals become bonded, which provides additional assurance to customers. Some services, such as landscaping, produce large amounts of material requiring disposal. Hauling and dumping fees usually are the responsibility of the service provider and are included in the overall fee charged to the customer. Utilities: Many small businesses do not have central offices or service centers, so utilities are minimal. Services are provided on customers’ properties, utilizing their water and electricity if required. Taxes: Small businesses are required to pay local, state, and federal income taxes, as well as regional business and service taxes and permit fees. Midsize Businesses Midsize home maintenance services usually operate within larger geographic areas, have more employees, and may provide a broader range of services to residential clients than small businesses. Midsize businesses also may have centralized customer service and dispatch hubs to manage service requests and inquiries. Potential Annual Earnings Scale. Midsize home maintenance businesses tend to have more employees and positions. Unlike at smaller companies, the owner or manager typically takes on a more administrative or supervisory role, rather than providing services directly to customers. Similar to small businesses, employees earn relatively low wages for unskilled positions. Trade and expe-

rienced workers earn significantly more. Some trades, such as electricians and plumbers, may have salary and pay increase structures outlined by local or national labor unions. Midsize companies might have positions available in customer service, advertising and marketing, and a range of other supporting roles in addition to the service providers. Wages for these positions vary by region and job responsibilities. Nonowner supervisors earn an average hourly wage of $18, and these positions often are filled by individuals with previous experience who have been promoted within the company. Supervisory and management positions come with higher earnings, depending on qualifications and responsibilities. Customer service representatives and dispatchers earn an average hourly wage of $12. Many midsize businesses have incentive and bonus programs available to employees in addition to their hourly wages. Clientele Interaction. As home maintenance service businesses get larger, they tend to have more positions that involve less direct clientele interaction. After a request for service, customers may be visited by a manager or estimator who will make arrangements for service and act as the contact person for future interactions. This position removes some of the clientele interaction from the actual service providers. More administrative positions are required to maintain the smooth operation of a midsize business. As with any service industry, repeat business and recommendations from happy customers is key to success, so all clientele interaction must be positive. Employees often are required to wear uniforms and carry identification, as well as adhere to appearance standards, as they are representatives of the company. Amenities, Atmosphere, and Physical Grounds. Midsize home maintenance service businesses often maintain an administrative office, central dispatch office, or warehouse space for equipment, supplies, and fleet vehicles. These businesses’ high standards can create a highly organized but frequently stressful atmosphere. Most service providers spend a minimal amount of time at an office receiving their instructions for the day and collecting the required supplies before going out to customer residences to work. Depending on the job, a service provider might work at the same

Home Maintenance Services residence for a long period of time, on a regular schedule, or go to several residences throughout the day. Typical Number of Employees. The typical number of employees for a midsize home maintenance service business depends on the service provided and geographic area covered. Businesses can have thirty to five hundred employees in a wide range of positions. Traditional Geographic Locations. Midsize home maintenance services usually operate within larger geographic areas and have more services and employees than small businesses. They may have service hubs in several cities within a state or region. Most operate in urban centers and might also serve some rural customers, although that is uncommon. Pros of Working at a Midsize Home Maintenance Company. Midsize companies tend to pay employees hourly wages or an annual salary, and many companies have established incentive or bonus programs. This results in more income stability. There also are more options for advancement or changes in position. Midsize companies often provide benefits and uniforms to their employees. They have their own equipment, supplies, and fleet of transport vehicles, so workers are not required to provide and maintain their own. Cons of Working for a Midsize Home Maintenance Company. Midsize company employees usually are on a more structured schedule and receive more direct supervision than employees of small companies. The work can be unpleasant and physically demanding. Service providers might have to perform heavy lifting, move furniture, and spend prolonged periods of time bending, squatting, crouching, and fitting into tight spaces. Safety can be a concern for employees entering unknown premises. The geographic area a midsize company serves is typically larger than that of a small business, which may cause increased stress because of time commitments and customer calls. Costs Payroll and Benefits: Midsize home maintenance companies pay their personnel an hourly wage or per completed job or service provided. Fulltime employees usually receive the same vacation and benefits as other workers, at the discretion of the owner/manager.

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Supplies: Similar to small businesses, transportation and the equipment and supplies used to perform the specific services can vary. Cleaning services travel to customers’ homes, but some use the customers’ own cleaning supplies and equipment. Companies purchase their cleaning chemicals and supplies in large quantities from wholesalers. Most services bring all of their supplies and equipment with them, including cleaning agents for a range of surfaces and any mops, cloths, or dusters they need. Maintenance businesses need tools and materials specific to their service. These tools will need to be reliable and of good quality. The means of transporting the workers, equipment, and supplies is very important. Safe, wellmaintained vehicles are required. A landscaping service, for example, might use a truck and tow a trailer carrying mowers and tools to a property. An effective communication system between dispatchers and service personnel also must be maintained, such as cell phones, wireless devices, or two-way radios. Some companies also have Global Positioning Systems (GPS) on their fleet vehicles to increase drivers’ efficiency and allow dispatchers to track service personnel. External Services: A midsize home maintenance business needs to maintain its transportation vehicles, communication equipment, and any tools or equipment required to provide the service. Insurance can be very expensive, but it is required to maintain the legal operation and safety of the business, employees, and customers and their property. Specific business and operating licenses will be required, as will certification and bonding of individual employees, depending on their position. Fleet vehicles must meet Department of Transportation and Federal Motor Carrier Safety Administration requirements. Advertising and marketing for midsize businesses may be managed within the company or outsourced to another company. Hauling and dumping fees for trash or landscaping materials usually are the responsibility of the company and will be included in the fee charged to the customer. Utilities: Utilities depend on the physical space or property type maintained by a business. Warehouses and dispatching or equipment hubs re-

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Home Maintenance Services OCCUPATION

PROFILE

Home Appliance Repairer Considerations

Qualifications

Description

Maintains and repairs appliances used in the home.

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma/technical training; junior/technical/community college; apprenticeship

Physical exertion

Medium work; heavy work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; part-time work

Licensure and certification

Required

Employment outlook

Slower-than-average growth expected

Holland interest score

RES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

quire electricity, heating, water, and sewer services. Internet and telephone services are the key to communication with customers and within the business. Taxes: Midsize businesses are required to pay local, state, and federal income taxes, as well as business and service taxes and permit fees as required by their specific region. Large Businesses Large home maintenance businesses are the best recognized in the industry and employ thousands of people. This highly competitive industry has revenues of more than $27 billion in the United States. ServiceMaster is the world’s largest cleaning and service company. It is the umbrella organization for well-known businesses such as Merry Maids and Terminix and operates more than 5,100 franchises. ServiceMaster provides expertise in cleaning, lawn care, pest control, and home inspection. American Residential Services/ Rescue Rooter is another of the largest home main-

tenance companies with more than sixty service locations in twenty-four states, providing plumbing, heating, and air-conditioning installation and repair. Sears remains a leader in the home appliance repair sector, providing almost 10 percent of all appliance and electronic repairs in the United States. Potential Annual Earnings Scale. The annual earnings for employees of large home maintenance service businesses have tremendous variability, depending on geographic area, service provided, and job responsibilities. At ServiceMaster, for example, there are more than 160 different job titles. The majority of these positions have a salary range of $18,000 to $55,000 annually. Executive positions can exceed $250,000. Service provider salaries at large businesses are similar to those at midsize companies and average $18,000 to $24,000 for unskilled crew members. At large companies, there is greater potential for higher earnings, benefits, and job security. Clientele Interaction. Larger home maintenance companies have many administrative and

Home Maintenance Services other behind-the-scenes positions that require little or no direct clientele interaction. Sectors for business management and operations are required in order to maintain the organization. Customer service representatives will accept telephone and online requests for service and provide information to potential customers regarding service and appointments. After a request for service, customers may be visited by a manager or estimator who will make all the arrangements for the service and act as the contact person for future interactions. These individuals often will follow up with the customer after the job has been completed. This position removes some of the clientele interaction from the actual cleaners or other service providers. Repeat business and recommendations from satisfied customers are key to success, so any clientele interaction must be positive. Employees often are trained in customer relations and required to wear uniforms and carry identification, as well as adhere to appearance standards, as they are representatives of the company. Amenities, Atmosphere, and Physical Grounds. The physical grounds of large home maintenance companies can include warehouses or offices, but the majority of work still is done at the residential properties of the customers. The company structure and service being provided determine what facilities are needed. Large companies usually have one or more large warehouses within a designated area where employees start their day, receive the addresses where they will respond to service requests, and collect supplies and equipment that are required. Large companies also have large administrative headquarters with smaller satellite offices to manage specific areas. Most service providers consider their transportation vehicle their office. The atmosphere can be stressful when trying to accommodate a large number of customer requests during a specific time period. Larger companies tend to have more resources available to contribute to causes within the community they serve, promoting a positive profile and increasing employee morale. An example is ServiceMaster’s employee and corporate involvement with Habitat for Humanity. Typical Number of Employees. Large home maintenance companies typically have hundreds or thousands of employees. Most are full-time employees, although casual and part-time staff can be

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brought in to assist with seasonal services. ServiceMaster employs more than 32,000 people. Traditional Geographic Locations. Large companies serve entire cities, states, or countries, some even expanding into neighboring countries. For instance, Davey Tree Expert Company provides landscaping and other services on a national and international level, including all fifty states and four Canadian provinces. ServiceMaster serves more than 6.5 million customers in thirty countries. Pros of Working at a Large Home Maintenance Company. Employees at large companies often are part of labor unions, which provide collective bargaining for better wages and benefits. Benefits provided to almost all workers include overtime pay, health insurance, and pensions. Large companies have a greater focus on workplace health and safety management, protecting the employees and the corporation. Wages at large companies usually are above average for nonskilled workers. Employees at larger companies normally are responsible for specific jobs, rather than covering multiple roles as required by smaller companies. Cons of Working for a Large Home Maintenance Company. These companies are a very popular career choice for many people, especially unskilled workers and new immigrants; therefore, hiring can be very competitive. The work can be unpleasant and physically demanding. It may involve heavy lifting, moving of furniture, and prolonged periods of time bending, squatting, crouching, and fitting into tight spaces. Safety can be a concern for employees, as there is a certain level of uncertainty when entering into unknown premises. Large companies usually have higher levels of supervision and enforce standard operating procedures, which do not allow for flexibility or creativity by individual workers. Completing all service requests in a timely manner can be stressful. Many large companies provide twenty-four-hour emergency service, requiring some maintenance professionals to be on call overnight and on weekends and holidays. Costs Payroll and Benefits: Large companies employ thousands of people with varying skills and job

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descriptions. Large teams of people are employed solely to manage the payroll and benefits for employees. Supplies: Costs for equipment, chemicals, and transportation are significant for large companies. External Services: Large home maintenance companies tend to have internal personnel to cover all requirements for operations. Hauling and dumping fees for trash or landscaping materials usually are the responsibility of the company and will be included in the fee charged to the customer. Maintenance of facilities and equipment is often managed on-site by employees of the company. Communication (Internet, telephone, radio, GPS) services are provided by national carriers and need to be of the highest quality and reliability. Insurance costs involving vehicles, worker injury, and property damage can be quite substantial. Fleet vehicles must meet Department of Transportation and Federal Motor Carrier Safety Administration requirements. Utilities: Large companies operate numerous offices, warehouses, and service hubs. Utilities for these facilities include water, sewer, electric, heat source, and communication services. Larger companies that have thousands of franchise locations do not pay the utilities for these locations; utility costs are the responsibility of the franchise owner. Taxes: Large home maintenance businesses are required to pay local, state, and federal income taxes, as well as business and service taxes and permit fees as required by their specific regions.

nies have thousands of employees with hundreds of distinct job classifications. Employees in this industry range from the unskilled or trade certified to corporate executives and scientists. The following umbrella categories apply to the organizational structure of businesses in the home maintenance industry: ■ ■ ■ ■ ■

■ ■ ■

Business Management Management and executive positions are the highest ranking positions within home maintenance corporations. This level normally comprises a small group of individuals, supported by a larger team of administrative and other professionals. The goal of this team is to make decisions that ensure that their company continues to generate maximum revenue, reduce costs, and improve service. A top executive at a large company in this industry, such as ServiceMaster, earns in excess of $950,000 annually. Executive assistants perform a wide range of administrative duties critical to business operations and earn an average annual salary of $40,000. Business management occupations may include the following: ■

ORGANIZATIONAL STRUCTURE AND JOB ROLES

■ ■ ■ ■

The organizational structure of companies within the home maintenance services industry is usually based on the size of the company and the service being provided. Some small, independent companies may only have one or a few employees who take on numerous roles. Sole proprietors directly accept the service request from the customer, provide the service, collect the fee, and perform all administrative and operations tasks. Larger compa-

Business Management Customer Service Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution and Service Providers Human Resources

■

Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) Chief Information Officer (CIO) Regulatory Compliance Executive Executive Assistant

Customer Service Customer service is critical to success. Customer service workers often create the first and lasting impression a company has on its customers. Personnel must provide accurate information and assistance, respond to inquiries, resolve problems, and sell company services.

Home Maintenance Services Customer service employees proactively provide answers and resolutions to any customer inquiry. This may include assisting customers to determine their residential service needs, tracking service personnel, providing rate quotes, setting up service appointments, and answering billing and/ or invoicing questions. Positions in customer service often do not require previous training or specialized education. Employees must demonstrate excellent communication skills, professionalism, patience, telephone etiquette, and problem-solving and multitasking skills. Bilingual or multilingual customer service representatives are in particularly high demand. In larger companies, customer service representatives provide customer support twenty-four hours per day, so limited shift work often is required. Full-time customer service representatives earn an average annual salary of $24,000. Supervisors and executives in customer service can earn $40,000 to $70,000 annually. Customer service occupations may include the following: ■

■ ■ ■ ■

Customer Service Representative (Telephone/Online) Customer Relations Executive Customer Service Supervisor Service Agent Estimators

Sales and Marketing Home maintenance and cleaning is a highly competitive industry. Customers have many choices depending on their service requirements, and therefore brand recognition and a superior service reputation are critical. Sales and marketing departments ensure that advertising dollars are well spent, their particular brand remains at the forefront of customer choice, and exceptional relationships with customers are maintained. All businesses, large or small, have a dedicated advertising budget with which they need to create imaginative strategies that best represent their services and influence customer perceptions throughout their area of service. Companies market their services primarily through advertisements in the yellow pages, direct mail, the Internet, television and radio advertising, print advertisements, doorto-door solicitation, and telemarketing. Additionally, some companies market their services through

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real estate brokerage offices in conjunction with the resale of single-family residences and through financial institutions and insurance agencies. Marketing and communications personnel need to project their message to potential customers; they also need to protect the company’s reputation by identifying and managing emerging issues that may be harmful to the corporation. Effective media relations and media monitoring are critical in the handling of a crisis. A key measurement of corporate success is revenue; therefore, sales of products and services are imperative. A sales team must contact customers and prospective customers to be certain that they are aware of current and upcoming products and services and are satisfied with current service. Sales and marketing analysts determine if the advertising funds have been well spent. They report whether proposed sales goals and targets have been achieved and develop recommendations for future sales opportunities. Sales positions often are compensated by a base salary and commission structure based on performance. Key skills include communication, influence, negotiation, problem solving, and organization. Marketing and communications positions usually require a college degree or training in the area. Salaries can start at around $25,000 annually for entry-level positions. Marketing directors and managers can earn $52,000 to $90,000. General marketing and sales positions earn an average annual salary of $52,000 and usually include a commission or bonus structure. Key skills include communication, organization, and knowledge of branding, promotions, trade shows and event planning, database marketing, telemarketing, promotions, advertising, and research. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

■ ■

Sales Account Manager Sales Analyst Sales Clerk Corporate Communications Specialist Marketing Manager Media Relations Representative Business Liaison Marketing and Business Development Coordinator Market Research Manager Business Analyst

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Facilities and Security The security and protection of customer property is extremely important, as is the safety of maintenance employees. The maintenance of facilities and equipment also is critical to the operation of any maintenance company. Disruptions or security failures in the information technology systems could create liability or limit the ability to effectively monitor, operate, and control operations and adversely affect operating results. The failure to protect the security of personal information of customers could subject a business to costly penalties or private litigation, as well as harm the company’s reputation. Security services for large companies work with local and federal law enforcement to investigate thefts, acts of vandalism, misconduct, and other activities detrimental to the company, its employees, and its customers. They also may be required to perform security duties to protect management and executives in the corporation. Specialized se-

OCCUPATION

curity personnel normally require training and experience in law enforcement and transportation security and familiarity with theft detection and applicable technical devices. Residential cleaning and maintenance companies require staff to clean and maintain their business facilities as well. It is not uncommon for larger companies to own or lease hundreds of properties that all need to be managed and maintained. Facilities positions cover a wide range of duties— anything that ensures the smooth running and maintenance of the larger operations. These employees are responsible for minor repairs and routine maintenance for office, shop, warehouse, and yard facilities. Basic knowledge of electrical work, plumbing, and carpentry are required. Specialized maintenance of equipment, tools, and vehicles often is contracted out to other companies; however, larger companies may keep individuals on staff to perform repair and maintenance of fleet vehicles.

PROFILE

Plumber and Pipefitter Considerations

Qualifications

Description

Plans, lays out, and installs pipe systems, particularly for water and sewage, and maintains and repairs such systems.

Career clusters

Architecture and Construction; Manufacturing

Interests

Data; things

Working conditions

Work inside; work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Heavy work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

RCE; REI; RES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Home Maintenance Services Facilities and security occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Security Specialist Security Guard Loss Prevention Specialist Risk Analyst Maintenance and Repair Technician Mechanic Electrical Engineer Cleaner Plumber

Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Technology, Research, Design, and Development Technology is becoming increasingly important in the home maintenance industry. Programmers, analysts, and technical support staff are experiencing the greatest job growth. Customers want to be able to make service requests online, get instant rate quotes, and electronically pay for service securely and in real time. Technology design constantly is changing because the systems need to be extremely efficient and effective while remaining easy for customers and employees to use. Positions in technology, research, design, and development require specialized training for specific roles, such as degrees in computer science and information systems. Programmer analyst and systems programmer salaries begin at about $35,000 and can reach $80,000 annually. Information technology project managers earn annual salaries of $75,000 to $88,000. Science careers are becoming increasingly important in the home maintenance and cleaning industry. Companies employ research and development teams to create effective cleaning, restoration, and pest control chemicals that are less harmful to people, pets, and the environment. Customers are demanding more natural options but still want to maintain cleaning and service standards. Companies with large fleets of service vehicles are exploring more cost-effective transportation options, including cleaner-burning fuel, in order to combat rising fuel costs and answer environmental concerns with the industry. Companies are becoming more aware of the demand of their customers to provide service while doing less damage to the environment.

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■ ■ ■

Programmer Analyst Systems Analyst Technical Analyst Application Manager Application Analyst Application Project Manager Technical Specialist Technology Consultant Technology and Application Support Technological Adviser Chemist Chemical Engineer Environmental Impact Analyst

Production and Operations Operations constitutes the inner workings of a home maintenance company and may include offices, storage, warehouse, call center, and data processing space. Operations personnel also assist customer service in the management and investigation of customer claims and complaints. Dispatchers receive information from customer service representatives and serve as liaisons between customers and service providers. The dispatcher may be a single position in a small company or part of a larger dispatch center. A dispatcher collects service requests and assigns them to appropriate service providers. Dispatchers may communicate with customers in case of delays and also are the primary contacts for service personnel when they are on the road. Dispatcher positions normally do not require any specialized training or diplomas. These workers need to be extremely organized, patient, and good multitaskers. The annual salary for dispatchers is about $25,000. Operations staff ensures that the service providers are well equipped with all the supplies, equipment, or tools they may need to effectively serve the customers. All equipment needs to be in excellent working order. Operations engineers oversee and apply standardization processes and improvement policies, to develop increased service and cost performance for operations. Annual salaries for operations engineers start at about $47,000. Operations supervisors coordinate the activities within a warehouse or service hub. This often involves the coordination of employees inside with those at loading

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Home Maintenance Services OCCUPATION

PROFILE

Insulation Worker Considerations

Qualifications

Description

Evaluates the appropriate insulating materials and installs insulation in structures.

Career cluster

Architecture and Construction

Interests

Things

Working conditions

Work inside; work outside; work both inside and outside

Minimum education level

No high school diploma; on-the-job training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; part-time work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest score

RCI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

and unloading docks, and the organization of the vehicles dropping off and picking up supplies and equipment at the site. They also may determine how many employees are required to complete a specified service. Production and operations occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Operations Supervisor/Manager Operations Engineer Dispatcher Stock Clerk Equipment Repair Specialist Procurement Staff Claims Manager Accountant

Distribution and Service Providers Distribution in a home maintenance company involves the providing of the actual service in the customer’s home or property. Successful and satisfactory completion of a repair, cleaning, or other

maintenance service is what customers expect. There are numerous career options as a service provider. Many of these careers overlap with customer service, as these individuals are often viewed as the face of the corporation and have a lot of direct interaction with customers. These positions can be physically demanding and may involve heavy lifting, moving of furniture, and prolonged periods of time bending, squatting, crouching, and fitting into tight spaces. Residential cleaners provide a range of services in order to keep homes organized and clean. These may include dusting, vacuuming, sweeping, mopping, washing dishes, making beds, removing trash, and cleaning all household surfaces. The U.S. Bureau of Labor Statistics (BLS) predicts that the demand for housekeepers will increase by 13 percent through 2016, resulting in the development of 186,000 new jobs in this service sector. Usually, there is no educational requirement for this type of job, although many employees do need to provide character references or submit to a

Home Maintenance Services background check. Housekeepers earn an average of $25,000 annually for full-time work. Handymen also are known as residential maintenance workers and perform a variety of services and small repairs. General maintenance tasks might include the repair of plumbing or electrical systems, appliance repair and installation, painting, and general upkeep of a home and surrounding grounds. They may be hired to perform a specific task at a single residence, or kept under contract to provide service to numerous homes in a community or office complex. These workers usually do not need any advanced education, although many have vocational training or certificates in certain technical fields. The average annual salary for residential maintenance workers is $48,000. Interior decorators and designers help people create pleasing and functional spaces in their homes. They may work with carpenters, painters, electricians, plumbers, and other maintenance professionals. Designers must be licensed in most areas and need to be familiar with building codes and regulations. There is a great deal of variability in income in these professions, depending on service and geographic area. According to the BLS, in 2008 the annual median wage for interior decorators and designers was $44,950. Plumbers, electricians, and carpenters provide specialized service and repair to specific areas of a residence. These careers usually require individuals to have completed high school as well as additional training at a junior college or a vocational school. This training is normally followed by an apprenticeship to provide further practical and theoretical training. Apprenticeships can last up to four years. Licensing is required by most jurisdictions for these career choices. These professionals can earn an average annual salary of $56,000. Residential repair professionals usually work a regular work week, although some may be required to be on call. Distribution and service provider occupations may include the following: ■ ■

■ ■ ■

Housekeeper Carpet/Upholstery/Window Covering Cleaner Window Cleaner Plumber Handyman

■ ■ ■ ■ ■ ■ ■

■ ■ ■ ■

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Electrician Appliance Repair Technician Carpenter Landscaper Gardener Pool Maintenance Technician Heating, Ventilation, and AirConditioning (HVAC) Specialist Chimney Sweep Pest Control Technician Interior Designer/Decorator Painter

Human Resources The human resources department is responsible for a company’s employees. Workers in this department ensure that all employees in the company have the tools and training that they need to be effective and productive in their positions. They

Gardeners at work in the backyard of an Irvine, California, home. (©Darrin Aldridge/Dreamstime.com)

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Home Maintenance Services

manage a variety of tasks, beginning with the hiring of personnel, their training and development, compensation and benefits, retirement, and dismissal. Human resources also ensures that all employee relations and practices comply with legal requirements and corporate policies. In many smaller companies, the owner or manager also assumes human resource responsibilities. Most positions within human resources require a college degree or equivalent experience. Managers in this field earn approximately $80,000 annually. This is often a challenging area and employee relations require patience, collaboration, negotiation, and conflict-resolution skills. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Human Resources Coordinator Human Resources Analyst Administrative Assistant Human Resources Generalist

INDUSTRY

OUTLOOK

number of single-parent homes consult with maintenance or cleaning services to help them with household jobs that they do not have the time, tools, or knowledge to complete. The rise in demand for services and relatively low start-up costs have led many people to become entrepreneurs in this industry. In 1998, there were more than 58,000 cleaning and home maintenance businesses in the United States, the majority being sole proprietorships or small businesses. Hiring professionals to perform home maintenance has become very accessible and affordable for customers. This highly competitive industry does limit the ability of businesses to raise their prices for service but also has led to creative solutions and service options to attract clientele. Employment Advantages Despite economic challenges, the home maintenance industry continues to experience growth. It is an attractive avenue for individuals with an entrepreneurial spirit to start their own business, with few materials and limited education necessary. The work can be challenging and physically demanding but also satisfying. Hard work and providing customers with quality service can lead to referrals and regular contracts. This also is a good industry for unskilled individuals seeking employment and experience. Employment within an established company can provide job security, benefits, and op-

Overview The outlook for the home maintenance services industry appears to be improving. Several factors are contributing to this growth, including an aging population, more two-income households, and more single-parent households. Almost 10 percent of all American residences outsource some or all of their household cleaning. Many seniors are turning to home maintenance services when they find that they can no longer perform some of the tasks they used to, but still wish to live independently in their homes. Double-income families use home maintenance services because they can afford to pay someone else to do the things they do not have time or desire Replacing a chimney may require the services of a mason or bricklayer. to do themselves. A growing (©Wisconsinart/Dreamstime.com)

Home Maintenance Services portunities for advancement, even for unskilled workers. Many large companies in this industry sell franchise opportunities, which provide an individual the independence of owning his or her own business with the brand recognition of a well-known and respected name.

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PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Specialty Trade Contractors Employment 2009 232,280

Projected 2018 320,800

Occupation Carpenters

287,190 429,600 Construction laborers Annual Earnings 421,690 536,000 Electricians Home maintenance services 199,930 260,900 First-line supervisors/managers of make up global revenues of alconstruction trades and extraction most $69 billion annually and workers are expected to experience annual growth of nearly 5 per292,890 392,500 Plumbers, pipefitters, and cent. The United States is the steamfitters largest market for this industry, with domestic revenues of Source: U.S. Bureau of Labor Statistics, Industries at a Glance, $27.4 billion. Residential cleanOccupational Employment Statistics and Employment Projections ing services, which make up a Program. large part of the industry, have projected revenue increases of 5.2 percent annually in the United States to $15.8 billion by 2013. These gains Tel: (614) 547-0887 will be driven by ongoing increases in the number Fax: (614) 888-9240 of older homes and aging residents, as well as the http://www.arcsi.org growing affordability and availability of services Building Services Contractors Association provided. More dramatic growth is expected interInternational nationally as economic development escalates in 401 N Michigan Ave., Suite 2200 markets such as China and the outsourcing of Chicago, IL 60611 home maintenance becomes more culturally acTel: (800) 368-3414 ceptable. Residential maintenance is expected to Fax: (312) 673-6735 experience average annual growth of 4.1 percent. http://www.bscai.org The economic downturn also has seen more families opting to repair and renovate existing homes Cleaning Management Institute rather than purchasing new homes. Employment 19 British American Blvd. West in appliance repair also is expected to remain Latham, NY 12110 steady, and good opportunities exist for trained inTel: (518) 783-1281 dividuals. Fax: (518) 783-1386 http://www.cminstitute.net RELATED RESOURCES FOR Professional Landcare Network (PLANET) FURTHER RESEARCH 950 Herndon Parkway, Suite 450 Herndon, VA 20170 Association of Residential Cleaning Tel: (703) 736-9666 Services International Fax: (703) 736-9668 7870 Olentangy River Rd., Suite 300 http://www.landcarenetwork.org Columbus, OH 43235

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Home Maintenance Services ABOUT

THE

AUTHOR

April D. Ingram is a writer and researcher in British Columbia, Canada. She is a graduate of the University of Calgary and has worked in varying capacities in the home maintenance and cleaning industry since 1992.

FURTHER

READING

Barnes Reports. U.S. Home and Garden Equipment Repair and Maintenance Industry Report. Woolwich, Maine: Author, 2009. Bewsey, Susan. Start and Run a Profitable Home Cleaning Business. North Vancouver, B.C.: International Self-Counsel Press, 1999. Commercial and Residential Cleaning Services to 2013. Cleveland, Ohio: Freedonia Group, 2010.

Meany, Terry. How to Start a Home-Based Handyman Business. Guilford, Conn.: Globe Pequot Press, 2009. Morrow, Beth. How to Open and Operate a Financially Successful Cleaning Service. Ocala, Fla.: Atlantic, 2008. Price, Laurence. How to Start Your Own Horticulture Business: Landscape Maintenance, Lawn Renovation, Landscaping Services, Home Nursery. Bremerton, Wash.: Botany Books, 1983. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Hospital Care and Services ©Dreamstime.com

ized accommodations required by inpatients are more costly to provide than are outpatient serGeneral Industry: Health Science vices, and they represent the priCareer Clusters: Business, Management, and mary expense for entities deliverAdministration; Health Science ing these services. Hospitals have Subcategory Industries: Cancer Hospitals; Children’s traditionally provided outpatient Hospitals; Extended Care Hospitals; General Medical and services as a secondary activity, Surgical Hospitals; Maternity Hospitals; Osteopathic but their focus has shifted in Hospitals; Psychiatric and Substance Abuse Hospitals; the twenty-first century (largely Rehabilitation Hospitals driven by cost). Hospitals admit Related Industries: Counseling Services; Insurance fewer patients to beds, and they Industry; Medicine and Health Care Industry; provide more care on a nonadPharmaceuticals and Medications Industry; Public Health mission basis, either through the Services; Residential Medical Care Industry; Scientific, hospitals proper or through their Medical, and Health Equipment and Supplies Industry ancillary clinics. Contemporary Annual Domestic Revenues: $575 billion (First Research, outpatient, or ambulatory, ser2010) vices provide greater revenue opAnnual Global Revenues: $4.5 trillion (total health care portunities than do inpatient serexpenditures; The Medica, 2009) vices. This situation represents NAICS Number: 622 a distinct change that occurred over the first decade of the twentyfirst century. The American Hospital Association (AHA) defines a hospital as a facility in INDUSTRY DEFINITION which at least six inpatient beds are available for admission and occupancy twenty-four hours a day, Summary seven days a week. A hospital must have on staff Hospitals provide medical, diagnostic, and treatfully licensed physicians and other medical profesment services that are delivered by physicians, sionals authorized to provide inpatient oversight nurses, and other medical services staff. SpecialINDUSTRY

SNAPSHOT

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Hospital Care and Services

Most hospitals provide both inpatient and outpatient services. (©Ken Cole/Dreamstime.com)

and care. Diagnostic services, some invasive, ranging from pathology to radiology are delivered by physicians, nurses, and ancillary staff. Inpatient services are highly specialized and require substantially greater facility and equipment expenditures and highly trained nursing support. Hospitals, however, must also provide some ambulatory services, such as emergency care, in order to meet criteria required to call themselves hospitals. There are three overarching categories of hospitals that admit patients for care: general hospitals, specialty (tertiary) hospitals, and psychiatric hospitals. Specialty hospitals provide higher-acuity services—specialized facilities, medical specialists, and enhanced technologies—that general hospitals do not. Private and public hospitals in the United States employed over 5.5 million people in 2006, according to the U.S. Bureau of Labor Statistics (BLS). Some 35 percent of the U.S. health care workforce works in a hospital setting. Of that number, 70 percent work in facilities with more than one thousand employees.

Health care reform and efforts to curb prohibitive costs have resulted in a push to deliver more services on an ambulatory basis. For example, years ago it was common practice to admit newly diagnosed diabetics to hospitals for at least several days to start insulin therapy and educate the patients about their condition and treatment. In the twentyfirst century, an admission of this sort is likely to be denied payment by most insurers, who expect such patients to be treated in doctor’s offices or clinics on an outpatient basis. Hospitals have become places where only the sickest and most resourceintense patients are admitted, leaving outpatient care to doctors’ offices and clinics. Many physicians (internists and specialists) establish relationships with hospitals so that when their patients are sick, they can send them to those facilities. Traditionally, doctors in private practice would communicate with relevant hospital staff to coordinate their patients’ care, visiting the hospital either before or after their workdays to gauge their patients’ progress and issue orders for patient care.

Hospital Care and Services However, a new physician specialty, the hospitalist, has developed. A hospitalist works solely within a hospital and assumes care for patients during their course of treatment. While hospitalists consult with their patients’ primary care physicians, the responsibility for those patients’ care rests with their hospitalists. History of the Industry Hospitals, or communal places where the sick might go to receive treatment, can be traced back to ancient cultures in Sri Lanka, India, and the Persian Empire. Later, in Europe, the Roman Catholic Church, through monasteries staffed with monks and nuns, assumed responsibility for the care of the sick. In eighteenth century England, independent hospitals developed, usually through the efforts of wealthy benefactors. The U.S. hospital system originated around the time of the Civil War, when sterilization and modern medical treatments were being developed. In

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these early years, hospitals were public or not-forprofit; they treated all comers and were staffed by physicians and nurses. By the 1920’s, public hospitals were viewed in some circles as service providers for the working class. A transition occurred, as some not-for-profit hospitals began to offer limited services for those who could afford them. This transition represented a response to a social demand for services of a presumed higher quality than those offered by public hospitals. People who could afford these better and costlier health care services, and who were willing to pay for them, brought much-needed revenue streams to the limited-access not-for-profits. In the 1950’s, during the baby-boom generation’s birth, American families were living more financially secure lives than they had during previous generations. People began to move away from the centers of towns and cities, taking their wealth with them. Public hospitals, located in the center of many communities, began to suffer even more fi-

Specialized equipment for newly developed surgical procedures represents a major capital investment, but without such technological advances, a hospital can lose its competitive edge. (©Harold Riddle/Dreamstime.com)

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Hospital Care and Services

nancial pressure, as their patients tended to be without means. It was not until 1965, though, with the passage of the Social Security Act that public hospitals began to have more secure sources of funding to treat the aged and the poor. As the years have progressed, public hospitals have not disappeared. In fact, public hospitals often play an important role as teaching institutions. Losing paying customers to not-for-profits, however, has presented an ever-growing challenge to the sustainability of these vital public institutions. In the 1970’s, federal legislation designated public hospitals serving a preponderance of poor and indigent persons as “disproportionate care hospitals.” Both federal dollars and a commitment to the population that public hospitals serve have maintained the livelihood of these hospitals. Together with private and other not-for-profit hospitals, they provide a network of medical services to an American population that demands top quality, patient-centered care.

Inputs Consumed by Hospital, Nursing, and Residential Care Facilities Input

Value

Energy Materials Purchased services Total

$9.7 billion $96.7 billion $215.6 billion $322.0 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

eryone in the hospital have began to specialize in any number of limited areas, such as orthopedics or emergency medicine. Nursing has begun to follow suit, as the medical community recognizes that consistency in care and highly skilled area-specific The Industry Today expertise results in better patient outcomes. There are nearly six thousand hospitals regisHospital inpatient care has historically been tered in the United States today. Over the years, paid by Medicare and other insurance companies hospital-delivered inpatient care has become more under a formula based on a hospital’s reported specialized, and designated units have been estabcosts to deliver service. Today, most hospitalizalished to serve specific populations. These include tions are paid on a per event basis, using a concept pediatrics wards, cardiac care units, and neurology known as a “diagnostic related group.” Physicians, units specializing in seizure and epilepsy patients, nurses, and care managers—everyone involved in among many others. Medical specialties started to patient care—work toward one goal: to discharge emerge in the latter part of the twentieth century, the patient, either in an improved state or in a and general practitioners who once took care of evmanner that allows for successful care at home. People working in hospital care today face greater expectations for efficiency and economy, working with enough people to The Contribution of Hospital, deliver quality care but, ideally, not so many as to cause financial hemorrhage to Nursing, and Residential Care the organization. Registered nurses suFacilities to the U.S. Economy pervise direct inpatient care with support from nonlicensed patient-care technicians Value Added Amount or licensed nursing assistants. Some hosGross domestic product $419.2 billion pitals employ licensed practical nurses Gross domestic product 2.9% (LPNs) for inpatient work, while some Persons employed 7.656 million limit the LPN role to the ambulatory setTotal employee compensation $381.6 billion ting. Phlebotomists, radiology technicians, ultrasonographers, and respiratory theraSource: U.S. Bureau of Economic Analysis. Data are for pists are just a few of the numerous profes2008. sionals employed to care for patients in an inpatient setting.

Hospital Care and Services Hospitals, according to the BLS, constitute only 1 percent of health care establishments, despite being one of the largest employers in the industry. The majority of health care services revenue is driven by pharmaceutical utilization, the longterm care industry, and ambulatory care, not by inpatient hospital activity. Common partnership industries to hospital care are primarily service driven. They include pharmaceutical companies and providers of medical technology for both patient care and information system infrastructure. Long-term care or rehabilitation facilities, which often serve those recovering from severe injury or illness, may be owned and operated alongside a parent hospital, or they may be privately owned. Transitioning patients too sick to go home but too well to stay in the hospital into such facilities is critical to medical professionals and their patients. Keeping patients in the hospital too long increases costs and can prevent the admission of patients needing immediate and more intense treatment by limiting bed availability.

INDUSTRY MARKET SEGMENTS Hospitals may be small, community-based institutions that tend only to the needs of the local populations, or they may be large urban centers of treatment, research, and instruction of medical students. Some hospitals that specialize in a particular highly demanding service, such as cardiac or brain surgery, receive patients from all over the world seeking the best care available. Other, smaller hospitals may have no specialties to speak of, acting as general medical centers for relatively small populations. Small Hospitals The Internal Revenue Service (IRS) categorizes smaller hospitals as those in the gross revenue range of $25 million or less annually. Many smaller hospitals are not-for-profit institutions that closely manage costs. In the early twenty-first century, many rural and small hospitals have been purchased by larger hospital systems, often those centered in nearby metropolitan centers. For instance, University Hospitals in Cleveland, Ohio—a large

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teaching institution affiliated with Case Western Reserve University Medical School—decided to expand its geographical reach. To that end, University Hospitals developed alliances with smaller hospitals outside the Cleveland area, expanding ambulatory services in these facilities. The benefit to smaller hospitals from such arrangements is an increase in the services they can offer, the ability to negotiate higher payments from insurers, and access to capital in order to purchase equipment and technology and to expand facilities. Potential Annual Earnings Scale. Earnings for hospital staff vary greatly because there are hundreds of job types in hospitals. It can be noted, however, that smaller hospitals exist in more rural communities and provide services for inpatients who can be managed in a general hospital setting. Relatively simple diagnoses are usually managed by the community’s private practice physicians or a small hospitalist group commonly employed by the hospital. Hospitalists are paid based on benchmarks compared to national benchmarks reported by the American College of Healthcare Executives or the National Medical Group Managers Association. Earnings for hospital-employed staff, including nurses and some physicians, are typically lower than those available in larger metropolitan hospitals. For those hospitals allied with larger health care systems, the earning potential can be greater. According to the Medical Group Management Association’s Physician Compensation and Production Survey, the 2008 median salary for a primary care physician was $186,044, and the median salary for a specialist was $339,738. Physicians in small hospitals can be expected to earn less than those at larger institutions. Clientele Interaction. Patients receiving services in a hospital setting, particularly during an inpatient stay, are in a highly vulnerable state and are often frightened, in addition to suffering the malady for which they are being treated. Patients rarely arrive alone, and employees of the hospital must be cognizant of extended family’s pressures and fears. Financial worries, child care, lost wages, and social concerns for the patient and the family require providers of care to have compassion, understanding, a good sense of timing, and empathy. Hospital staff, from physicians to housekeepers, must maintain professional and respectful decorum; they should promote the hospital’s quality to help allay

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fears and aid recovery, and they must always be aware of the need to protect patients’ privacy and confidentiality. Amenities, Atmosphere, and Physical Grounds. Cleanliness and a calm atmosphere are critical in hospitals. Entering the hospital should be made relatively simple, with such measures as sufficient parking and clear signage. Within the hospital, an attended receiving area should assist in allaying patients’ anxiety. Probably the most important consideration within care-delivery areas is the comfort of patients. Controlled humidity and temperature, rigorous attention to modest noise levels, utmost attention to privacy and confidentiality, and minimal odors are all important. Employees in hospitals can expect to undergo an orientation that highlights these important patient-care factors. Typical Number of Employees. Small hospitals employ up to one thousand staff members and often represent the largest employer in their small communities. These hospitals provide strong economic stability in their locales, offering positions from entry level all the way up to professional physician staff and chief operating officers. Traditional Geographic Locations. Small hospitals are likely to be located in rural communities (with populations under fifty thousand). It is not uncommon to find these hospitals colocated with long-term care facilities (the next step for many patients no longer sick enough to be hospitalized in acute hospital settings or for those, such as the elderly, needing full-time care). While staff are drawn primarily from the immediate locale, specialty services and providers travel to small rural hospitals from other areas to provide services. Patient transportation to larger hospitals can be cost prohibitive, so many smaller local hospitals work hard to staff additional service deliverables for their consumers. These enhancements might include telemedicine, which leverages patients’ ability to receive specialty services without leaving their hometown and can help smaller hospitals increase revenue and retain patients. Pros of Working for a Small Hospital. Providing local care at a small, local hospital allows employees to work in a more intimate community atmosphere. Direct health care providers see many types of diagnoses and are exposed to variation in their work, providing them with learning opportu-

nities. Working in a smaller setting will likely subject employees to less bureaucracy than they would encounter at larger hospitals. Larger hospitals have more pronounced cultures, or politics, which can be challenging to penetrate or change. Small hospitals provide full-service medical care, including emergency services, yet they rely on larger medical centers to treat complex patients who require specialty consultation and care. Cons of Working for a Small Hospital. Many small hospitals do not have the financial resources of their larger counterparts. Capital investment in advanced equipment, facility enhancements, or structural expansion is limited. Smaller hospitals can have trouble recruiting and retaining trained staff, including physicians. Lack of resources and inability to match the salaries of larger organizations are two primary drivers behind these staffing challenges. The hospitals’ purchasing power and negotiated prices for employee benefits are not as robust as those of larger institutions, which have better risk ratings and can likely offer employees more and better benefit options. In addition, small hospitals primarily provide general medical services, so health care providers working in this setting should not expect to see highly complex patients requiring specialty services. For some, this lack of specialty services may be limiting. These are the many reasons that smaller hospitals seek relationships with larger systems. Costs Payroll and Benefits: Hospitals employ both hourly and salaried employees, as well as doctors who often work on a fee-for-service basis. Benefits include health and dental insurance, possibly health savings accounts (HSA), longand short-term disability insurance, and Family Medical Leave Act coverage. Continuing professional education time and dollars are usually provided, as are malpractice insurance, sick time, and earned time. Supplies: Hospitals require medical supplies, disposables, pharmaceuticals, radiological products, surgical implants, and a plethora of patientcare-related items. Administrative and general operating supplies, such as cleaning, sterilization, and office supplies, are all required. According to Hoover’s, small hospitals must have the same expensive equipment as midsize hospi-

Hospital Care and Services tals, so economies of scale are important, and controlling costs in small facilities is critical. External Services: Small hospitals may engage outside legal and accounting counsel, groundskeepers, biomedical supply and removal services, records storage and destruction services, and pharmaceutical services. These are just a few of a long list of possible external services necessary to keep a hospital open and functioning. Utilities: Necessary utilities include electricity, heat, backup energy sources, telephone service, and high-speed Internet access. Temperature control and air-quality control are vital to successful patient treatment. Utility costs are often high for twenty-four-hour care facilities, and energy costs are volatile. Taxes: Public hospitals may enjoy tax breaks; notfor-profits are tax exempt. Private for-profit hospitals act as private corporations and are subject to state and local tax requirements. Midsize Hospitals A midsize hospital’s gross revenue is likely to be more than $100 million; net income after expenses, however, varies widely depending on the amount of charity care provided, the mix of insurance payers (including Medicare and Medicaid), expenses, and overhead. A hospital’s profit margin can be very small after the impact of many factors, including the strength of the national and local economies. In terms of employee annual earnings, professional staff can expect to be paid on a salary basis at a level commensurate with similar positions in similar benchmark organizations. Some professionals work under a base salary with incentive opportunities for additional bonuses. Incentive drivers can include, but are not limited to, productivity or quality metrics for patient-care outcomes. Nonsalaried staff members are paid hourly, and wages are generally competitive. Potential Annual Earnings Scale. According to the Medical Group Management Association’s Physician Compensation and Production Survey, the 2008 median salary for a primary care physician was $186,044, and the median salary for a specialist was $339,738. Staff members working in a midsize hospital, usually in a suburban location, are employed professionals. In these settings, professionals are salaried, their paycheck and benefits (if eligible) are guaranteed, and there may be an in-

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centive salary available for meeting certain workload benchmarks. Contractual arrangements should address benefits such as employer-sponsored malpractice insurance coverage, professional membership dues, and travel. Nonprofessional (nonlicensed) staff are every bit as important to the viability of the hospital, and they are more likely to hold nonexempt (hourly) positions with a benefit structure similar to that of salaried staff. Clientele Interaction. For the most part, hospitals’ core function is fairly consistent: Providing inpatient hospital care and ambulatory services. Working purely in a service industry, staff must be customer-focused, possess excellent communication skills, and truly desire to be in a hands-on, interactive, and caring industry. Midsize hospitals are likely to be general-service facilities and have a critical need to provide service to referring physicians trying to admit patients to the facility. Maintaining positive relationships with those individuals and groups who refer their patients for care is critical to an organization’s success. Amenities, Atmosphere, and Physical Grounds. Usually located in suburbs or small cities, midsize facilities must have adequate parking, secure storage for medical records, privacy in the waiting area, an information technology infrastructure, sufficient support staff, and a commitment to quality patient care. Clinicians should have control over their own office area, and attention to patients’ comfort and physical safety should be a priority. Typical Number of Employees. The number of employees in a midsize hospital will vary by size and service lines offered. General hospitals, specialty hospitals, psychiatric hospitals, and rehabilitative hospitals vary by service line and number of beds. The staff can extend into the thousands depending on the facility. Though defining hospitals by size is challenging, there is evidence that those housing two hundred or more beds are considered to be midsize. If centralized functions such as billing, contracting, collections, and communications systems are contracted externally rather than inhouse, the number of employees will be dramatically different. Traditional Geographic Locations. Midsize facilities are typically located near more populated areas, though there are exceptions. A hospitalservice-area population of fifty thousand or more

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Hospital Care and Services

in an urban setting would support a midsize facility. Referrals from medical providers are the lifeblood of these organizations. The closer they are to referring physicians, the greater the likelihood of visibility for such referrals. Professional engagement with the hospital’s physician staff and privatepractice physicians should be paramount. Socioeconomics in the area can play a role in a hospital’s viability. The ability to access inpatient care without onerous travel for patients can contribute to the need for midsize facilities to situate in more populated locales. Pros of Working for a Midsize Hospital. Wellestablished organizations provide employment security, and their purchasing power may allow them to offer better benefits at a more favorable rate for their employees that can smaller facilities. Midsize hospitals can provide the infrastructure for scheduling, human resource services, contracting, billing, managing day-to-day facility operations, and financial performance. Employees in this setting have access to health insurance for themselves and their families at group rates, which are more favorable than those a smaller hospital might be able purchase. Pay incentives may be available in these settings, usually based on productivity and expense controls. Shared responsibility for being on call at night and on weekends is more likely to be available than at smaller hospitals, given that more professionals are available to share this responsibility. Cons of Working for a Midsize Hospital. Midsize hospitals are more complex organizations than their smaller counterparts. This greater complexity can entail more communication challenges and less autonomy, which can pose a challenge for professional medical service workers. Hours and work output are likely to be defined by employers with minimum expectations, even for professional staff. Round-the-clock staffing is required, so working weekends and holidays is likely to be required. The organizational structure of the hospital may require worthy individuals and units within the organization to compete for limited resources. Costs Payroll and Benefits: Midsize hospitals hire professional staff and pay on salary. Available benefits may include health insurance, dental coverage, short-term and long-term disability insurance, malpractice premium reimburse-

ment, continuing education funds (including money and time), employee assistance programs, and retirement/401(k) plans. Supplies: Hospitals need both business (administrative) supplies and patient-care supplies. These include paper or electronic medical records, basic office supplies, computers, telephones, décor conducive to a health care setting, disposable medical supplies, uniforms, and other necessities far too numerous to list. Hospitals require a large number of supplies, and modern medical practice involves onetime use of most materials prior to either disposal or resterilization. External Services: Midsize hospitals may engage outside legal and accounting counsel, groundskeepers, biomedical supply and removal services, records storage and destruction services, and pharmaceutical services. These are just a few of a long list of possible external services necessary to keep a hospital open and functioning. Utilities: As is the case for small hospitals, necessary utilities include electricity, heat, backup energy sources, telephone service, and high-speed Internet access. Temperature control and airquality control are vital to successful patient treatment. Utility costs are high for twenty-fourhour care facilities, and energy costs are volatile. Taxes: Private for-profit institutions, as private corporations, are subject to applicable state and local taxes. Public and not-for-profit institutions enjoy certain tax exemptions. Large Hospitals According to an IRS study of over five hundred not-for-profit hospitals, the largest U.S. organizations accommodate over 100,000 visits annually, including inpatient, outpatient, and emergency services combined. An example of a large hospital is one housing sufficient inpatient beds to meet the needs of service and referral areas, a twenty-fourhour emergency department, and surgical and medical services. Typically, such an institution employs many thousands of people, ranging from physicians, nurses, and administrators to support staff, security, and housekeeping personnel. The organization may draw its business from patients within up to a one-hundred-mile radius, depending on competition and patient willingness to travel for services. Competition exists in the health

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Outpatient services, such as cardiac fitness assessments, provide greater revenue opportunities than do inpatient services. (©Monkey Business Images/Dreamstime.com)

care industry, and grappling for market share while maintaining sufficient staffing for a large hospital is a constant challenge. Potential Annual Earnings Scale. According to the Medical Group Management Association’s Physician Compensation and Production Survey, the 2008 median salary for a primary care physician was $186,044, and the median salary for a specialist was $339,738. Revenue from patient care services is in the tens of millions of dollars in large hospitals. These institutions target their revenue levels to maintain favorable operating margins in order to keep the hospitals viable and attract top-notch medical personnel. A favorable margin, depending on the legal structure of the organization, can result in profits for stakeholders or reinvestment into the entity. Not-for-profits, as a result of their legal structure, struggle for revenues and a sustainable bottom line because they are required to provide a certain level of charity uncompensated care. They may also experience the added expense of

conducting medical education if they are associated with training programs. Clientele Interaction. Larger organizations offer more diversity and opportunity for medical professionals. Concentrating on inpatient care, longterm care, or ambulatory care may be an option for professionals entering a large hospital setting. An example of a large organization would be an academic medical center with an embedded psychiatry department that offers both inpatient and outpatient services to adults, children, and employees. Daily interactions in such a hospital may involve patients and their families, as well as medical students, nursing students, insurance providers, social service providers, Medicare or Medicaid representatives, vendors, and myriad other stakeholders in the health care delivery system. Each physician or nurse in this type of setting is part of a large group of similar professionals. All of them are expected to share in on-call (after hours and weekend) duties. Professionals represent their

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Hospital Care and Services

A physician takes notes as paramedics arrive with a patient. Emergency services are generally provided by larger hospitals. (©Monkey Business Images/Dreamstime.com)

organization and their colleagues whenever they interact with clients, so they are expected to be available and responsive when they are on call. Nonprofessional staff members play just as pivotal a role in supporting excellent and timely care and safety for patients, so they must have the utmost integrity when committing themselves to a career in the health services industry. Amenities, Atmosphere, and Physical Grounds. Large organizations are typically freestanding, with sizeable grounds and many users. Open space, clear and visible signage, and friendly and helpful staff should be evident to make encounters favorable and stress-free for consumers and employees. Facilities maintenance is critical for patient health and continued patronage. Additionally, facility expansion (on-site or at a satellite location) is often desirable and necessary for large

institutions, as many expand their services within their campuses, within a larger urban neighborhood of medical facilities, or into suburban locations. Typical Number of Employees. Large health care facilities employ thousands of people, including medical, administrative, financial, operations, and support staff. From the first phone call, to patient admission, to patient discharge and followup, hundreds of staff members representing the hospital come in direct or indirect contact with patients. It takes a synergistic, well-coordinated staff to meet the needs of the patients and fulfill the mission of the hospital. Traditional Geographic Locations. Large hospital facilities, particularly academic ones, are generally located in metropolitan, highly populated areas. A sufficient population base with the promise of growth is critical to the livelihood of such a medical facility. Pros of Working for a Large Hospital. Large health care facilities offer many people the opportunity for advancement. Throughout their careers, employees can work hard to develop leadership skills and move into growth positions, such as administrative or management roles, especially if they are motivated and committed to learning. Larger organizations tend to have the financial capacity to develop employee skills, particularly if their mission includes academic instruction or research alongside clinical care. The hospital industry, embedded in the overarching and mammoth health care industry, offers job security and opportunities for advancement. Cons of Working for a Large Hospital. Employees of a large hospital can expect the bureaucracy and delays inherent to decision making within any large organization. Sometimes, it can take what seems a very long time to move initiatives forward. No area of the hospital is exempt from these challenges: Leadership and managers must advocate regularly for resources in order to receive them. Money plays a role in investments. Anyone searching for a position in a large hospital should pay close attention to the mission and vision of the organization and its current employees’ satisfaction with their work. Potential employees should feel empowered to ask these questions when applying for a position. The health care industry is somewhat more con-

Hospital Care and Services servative than are other major industries: Hospitals do not tend to be on the cutting edge of progress when compared to large corporations or technology-based companies in other sectors. However, large hospitals with robust surgical and medical services need to remain competitive. Investment in organizational and facility growth is an ongoing expectation; information technology is exploding in hospitals, with patients demanding more immediate access to their medical information. Surgical and diagnostic advances represent major capital investments, but without them a hospital can lose its competitive edge. Computer and technology staff are always in high demand in this fast-paced environment. Costs Payroll and Benefits: Large organizations hire professional staff under a salary structure; salaried employees fall under the IRS category of “exempt,” so overtime is not available for hours worked over what would be considered full time. The salary structure is built, presumably, to accommodate the peaks and valleys of the workload and to pay a fair, consistent rate. Benefits include insurance (health, dental, and disability), Family Medical Leave Act (FMLA) protection, retirement, malpractice coverage, continuing medical education (including reimbursements for travel, time, and registration for courses), and even tuition reimbursement for additional degree work. Benefits are generally prorated to the standard number of hours worked, with a minimum set for eligibility. Supplies: Hospitals need both business (administrative) supplies and patient-care supplies. These include paper or electronic medical records, basic office supplies, computers, telephones, décor conducive to a health care setting, disposable medical supplies, uniforms, and other necessities far too numerous to list. Hospitals require a large number of supplies, and modern medical practice involves onetime use of most materials prior to either disposal or resterilization. Administrative supplies are transitioning to an electronic world, and large hospitals with greater resources may be at the forefront of this trend. The need for typical “office” supplies is diminishing. For clinicians, their tools now in-

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clude laptop computers, electronic medical records, virtual operators, pagers, billing software, and faxes. The size of larger institutions, and the intense volume of supplies they require, gives them better bargaining power than that enjoyed by small and midsize hospitals when negotiating with vendors. External Services: Hospitals commonly outsource answering services, cleaning services, sterile supply services, uniform service, cell phone and pager service, waste disposal, medical records storage and destruction services, and risk management and legal counsel. Utilities: Necessary utilities include electricity, heat, backup energy sources, telephone service, and high-speed Internet access. Temperature control and air-quality control are vital to successful patient treatment. Utility costs are high for twenty-four-hour care facilities, and energy costs are volatile. Taxes: Many not-for-profit hospitals are 501(c)(3) organizations, making them exempt from federal income taxes. Rigorous requirements for this status include quantifying and reporting community benefit offerings, as well as restricting senior leadership salaries. For-profit hospitals are responsible for all applicable taxes under state and federal guidelines.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Any size entity providing hospital services must function as a business, no matter what its nature and mission are. Particularly important in the hosptial industry is keeping patient care and safety paramount. The need to provide a positive operating margin to sustain the mission of a hospital drives its financial stewardship. It can be very challenging for administrative and financial professionals to keep their hospitals going concerns while maintaining favorable relations. Hospitals rely greatly on their primary revenue producers (physicians and medical staff) for financial viability. They are highly complex, integrated systems that require many key critical roles to be filled. The following umbrella categories apply to the organizational structure of hospitals:

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Hospital Care and Services Business and Operations Management Medical Staff Contracting and Reimbursement Human Resources Customer Service/Risk Management Marketing and Public Affairs Information Technology and Communication Systems Facilities and Security Housekeeping Nutrition

Business and Operations Management Day-to-day operational management provides the infrastructure through which care is delivered to patients. Financial management—budgeting for revenues, expenses, and capital investments— keeps the doors open. Business and operations managers protect the jobs of everyone working in the hospital industry by assuring fiscal prudence and maximizing financial performance. Typical managers have undergraduate or graduate de-

grees. The business and operations group includes financial specialists, as well as on-the-ground managers who see to the smooth operation and delivery of services. Many of these positions are salaried or compensated at a higher hourly range than are entry-level positions. The BLS notes that the median annual salary for medical and health services managers was $80,240 in 2008. Financial and operations staff must work hand in hand, as those two functions are inextricably entwined in the hospital industry. It is important to maintain relationships with stakeholders both within and outside the hospital. In most hospitals, financial services employees work for a centralized department. These white-collar professionals’ work is intellectual in nature, drawing on their expertise in finance, operations, strategy, and relationships. In particularly large hospitals, a chief operating officer (COO) may direct them, setting the vision, strategy, and goals of the organization. Business and operations management occupations may include the following:

OCCUPATION

PROFILE

Health Information Technician Considerations

Qualifications

Description

Organizes, prepares, and maintains medical records on hospital and clinic patients.

Career clusters

Health Science; Human Services

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

Junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

CSI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Hospital Care and Services OCCUPATION

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SPECIALTIES

Medical and Health Services Managers Specialty

Responsibilities

Chief dietitians

Direct institutional departments that provide food service and nutritional care. They provide direction for menu development, food preparation and service, purchasing, sanitation, safety procedures, and personnel issues.

Coordinators of rehabilitation services

Plan and direct the operation of health rehabilitation programs, such as physical, occupational, recreational, and speech therapies.

Dental services directors

Administer dental programs in hospitals and direct department activities. They are responsible for establishing training programs, setting up policies and procedures, and hiring and promoting employees.

Nursing services directors

Administer nursing programs in hospitals, nursing homes, or other medical facilities. They maintain standards of patient care and advise other medical staff about the nursing services provided.

Pharmacy services directors

Coordinate and direct the activities and functions of a hospital pharmacy. They implement policies and procedures, hire and train interns, and aid in the development of computer programs for pharmacy information management systems.

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Chief Operating Officer (COO) Chief Financial Officer (CFO) President Accountant Business Manager Legal Counsel Administrative Assistant

Medical Staff Hospitals are defined by the quality and professionalism of those providing medical care, from surgeons to radiologic (X-ray) technicians. Successful organizations thrive on high standards of care, excellent communication, and a shared understanding of best practices in providing patient care. The range of medical staff is wide, including highly trained specialists, staff nurses, medical technicians, physical therapists, and nursing aides

or orderlies. Compensation is tied to training and expertise; according to the Medical Group Management Association’s Physician Compensation and Production Survey, the 2008 median annual salary for a primary care physician was $186,044, and the median salary for a specialist was $339,738. The BLS notes that the median compensation for a registered nurse within a hospital in 2008 was $30.71 per hour, and nurse’s aides or orderlies earned a median hourly wage of $12.03. Medical technicians, such as radiologic technicians, earned a median salary of $55,210 per year. Medical staff occupations may include the following: ■ ■ ■

Physician Specialized Physician Advanced Practice Nurse

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Hospital Care and Services Registered Nurse Licensed Practical Nurse Radiologic Technician Phlebotomist Physical Therapist Laboratory Technician

Contracting and Reimbursement Contracting, reimbursement, and billing departments are responsible for negotiating reimbursement contracts for all the services offered by a hospital, creating data sets for hospital-related billings, conducting actuarial analyses of financial risk, setting fee rates, and collecting fees owed. Responsibilities include working with legal counsel and with internal and external stakeholders to develop fair and reasonable contracts and working closely with operations to assure that the conditions of negotiated contracts are met. These job activities are white collar in nature and generally require a bachelor’s degree or higher. Legal expertise may be required in the contracting arena. Compensation for jobs in this department varies widely, but the BLS reports that in 2008 the median salary of a hospital administrative services manager was $77,870. Contracting and reimbursement occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Vice President of Finance Vice President of Contracting Revenue and Reimbursement Manager Contracting Director Financial Analyst Coding Manager Coding Analyst Charge Master Manager Denials Manager Data Entry Clerk

ing. Human resources professionals are responsible to managers and supervisors, providing them guidance in all functions of human resources and ensuring the fair and equitable treatment of employees. The human resources function is always centralized in hospitals, albeit with local autonomy within individual departments or business units. In 2008, hospital human resources managers earned a median annual salary of $91,580. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Customer Service/Risk Management Customer service and risk management underpin the very livelihood of every hospital. Responsibilities of employees in this division include receiving and resolving customer concerns in a professional, prompt, and thorough manner, as well as overseeing front-line managers and employees with direct customer interface. Malpractice claims, injury, and other legal liability issues are managed within this area of responsibility, in collaboration with legal and senior medical counsel. Compensation within these occupations coincides with that of hospital administrators. Customer service and risk management occupations may include the following: ■

Human Resources Human resources workers are responsible for recruiting, hiring, defining, and developing positions and for overseeing the compensation, benefits, education, and performance evaluation of employees. A growing area of responsibility within the domain of human resources is employee wellness. In larger organizations, professionals in human resources hold undergraduate or graduate degrees, sometimes with training in social work or counsel-

Chief Human Resources Officer Vice President of Human Resources Human Resources Director Recruiter Development and Education Specialist Benefits Manager Supervisor Payroll Clerk Health Coach Employee Health and Benefits Counselor

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Patient Relations Manager Risk Management Manager Legal Counsel Service Recovery Specialist

Marketing and Public Affairs Marketing and public affairs staff members are responsible for maintaining and growing a hospital’s market share. Their responsibilities include advertising, integrating with customers inside and outside the organization, and developing market-

Hospital Care and Services ing strategies alongside operations strategies. They must work closely with operations, overseeing and directing local departmental initiatives to grow their hospital’s customer base. It is also the responsibility of public affairs professionals to be spokespeople for their hospitals generally, touting new discoveries by their researchers and defending the institution in the public eye against claims of malfeasance. Advertising and outreach are a priority for hospitals, which get and retain business based on their reputation for quality, safety, and clinical outcomes. Public affairs professionals generally hold undergraduate or advanced degrees, and are paid roughly the same amount as hospital administrators, depending on their level of responsibility. Marketing and public affairs occupations may include the following: ■ ■ ■

Referring Physician Liaison Public Affairs and Marketing Director Vice President of Marketing

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External Relations Manager Marketing Manager Advertising Executive

Information Technology and Communication Systems Computer hardware and networks, electronic medical records, and the related software are the responsibility of the information technology (IT) department. Hospitals require a plethora of advanced technologies, including communications, interconnectivity for programs supporting clinical care, and diagnostic technologies such as cardiac monitoring, radiology, and laboratory systems. As IT systems represent a major cost for hospitals and are critical to the quality of patient care, IT staff members are highly valued. IT and communication systems occupations may include the following: ■ ■

Information Technology Manager Applications and Systems Manager

Diagnostic services, such as computed tomography (CAT) scans, are delivered by physicians, nurses, and ancillary staff. (©Monkey Business Images/Dreamstime.com)

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■ ■

Hospital Care and Services Telecommunications Manager Information Technology Training Manager Help Desk Officer Systems Analyst

Facilities and Security Facilities and security personnel are responsible for the safety, structural integrity, and maintenance of a hospital’s buildings, equipment, and grounds. Employees are valued for their consideration of personal responsibility, avoiding risk, and maintaining the safety and aesthetics of the facility. Maintenance personnel may have basic carpentry skills, some have plumbing and electrical training, and many have training in HVAC (heating, ventilation, and air-conditioning) systems. Their compensation may be hourly. Hospital security professionals provide roundthe-clock service and usually have law enforcement or similar backgrounds. Depending on their level of responsibility, high school or undergraduate education is required. Compensation may be a salary or an hourly wage, depending on the organization. Facilities and security occupations may include the following: ■ ■ ■ ■ ■ ■

Security Director Facility Management Director Security Guard Parking Attendant Engineer Maintenance Contractor

Housekeeping Housekeeping is responsible for maintaining a clean, safe environment for patients, visitors, and employees. This key role interacts with other staff and patients all day long. Hospital housekeeping staff generally receive specialized training, as their workplace holds many hazards particular to medical settings, including biological, chemical, and physical threats. Typical housekeeping staff members have high school or college degrees, depending on the level of their positions. Typically, wages are hourly and are paid at higher rates for evening and night shifts. Housekeeping positions must be staffed twenty-four hours a day, seven days a week. Housekeeping occupations may include the following:

■ ■

Housekeeping Director Housekeeper

Nutrition Nutrition and dietary workers are responsible for patient meals around the clock, seven days a week. They also are responsible for supplying and staffing employee and public-access food courts and cafeterias. Typically, their wages are hourly. Nutrition occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Cashier Nutritionist Chef/Cook Dietician Meal Delivery Staff Dishwasher Kitchen Worker

INDUSTRY

OUTLOOK

Overview The outlook for the hospital care industry shows it to be on the rise. Demand for workers and career opportunities are favorable. Growth is rapid, with total health care expenditures representing 17 percent of the U.S. gross domestic product (GDP). With the largest aging population in the nation’s history on the cusp of old age, growth in terms of services is inevitable, and with the passage of the Patient Protection and Affordable Care Act (2010), 34 million more Americans are projected to acquire health insurance and thereby gain greater access to health care services. By 2019, the health care sector is projected by the Department of Health and Human Services to represent 21 percent of GDP. Challenges for those entering this industry will include greater competition for college-educated professionals, with a bachelor’s degree as bare minimum. Those with advanced degrees will have greater prospects in this highly competitive service industry. The industry will look for those who are self-directed and have highly honed interpersonal skills. In the past, health care was not considered a business, so service, rather than finance, was its focus. Today, nurses and physicians are increasingly augmenting their education with finance and business operations training.

Hospital Care and Services PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

915

ing. Early exposure is invaluable and a strong self-marketing tool.

Employment Advantages People who work in hospitals will recognize job security as a strong Employment attractor in a global economy that 2009 Projected 2018 Occupation threatens other industries, such as manufacturing. Health care, par175,550 200,000 Licensed practical and ticularly inpatient services, cannot licensed vocational nurses be outsourced and demand for 102,050 101,600 Medical and clinical them will only grow over time. laboratory technologists Health care professions are vast and disparate. In an industry of 425,100 468,800 Nursing aides, orderlies, and increasing federal oversight and attendants legal compliance regulations, spe130,230 140,900 Radiologic technologists and cialization in career avenues is intechnicians evitable. Hospital service offerings are increasingly focused on spe1,571,850 1,844,200 Registered nurses cific populations and medical conditions, such as geriatrics, adolesSource: U.S. Bureau of Labor Statistics, Industries at a Glance, cent care, mental health care, and Occupational Employment Statistics and Employment other segments. Projections Program. Because of growing specialization, and because the work of hospitals is to help people gain wellness, the opportunities for a rich, diverse career In terms of hospitals’ financial stability, unemare numerous. Care and treatment of patients, as ployment has led more customers to be covered well as teaching and professional research in acaunder federal and state insurers (specifically Medidemic settings, are all intriguing opportunities for care and Medicaid), with insufficient reimburseprofessionals to explore. Strong communicators ment to hospitals to cover their costs. Pressures to who excel at helping others and who are emotionreduce both the costs and the length of patient ally competent will find themselves well-suited for stays in the hospital, as well as to lower nurse-tohealth care careers. Working within a hospital propatient ratios, have occurred as a result of financial vides great satisfaction to the professional who enconstraints on these health care facilities. The projoys working face-to-face with customers and who jected growth of the medical industry will make enjoys being part of a vital community asset. working in a hospital a secure career choice. The industry, however, is not immune to economic Annual Earnings pressures. Difficult financial times can result in unWith an aging U.S. population, the hospital inexpected hiring freezes or reductions in force for dustry is seeing an increasing number of older pa“noncritical” positions. Direct patient care positients demanding more intense and costly services. tions are mission-critical and are some of the most Technological and pharmacological advances consecure in the industry during economic downtinuously offer new treatments to meet this deturns. mand to extend quality of life well into patients’ Academic excellence is a sure stepping stone for eighties and nineties, as well as the demands of an entry into this competitive market, particularly for American public that has come to expect positive skilled, white-collar positions in the hospital sethealth outcomes. ting. Students should actively search for internship Parsing out earnings in the hospital industry, opportunities to gain hands-on exposure to the nationally or globally, is speculative at best. Hospihospital environment during their academic train-

Hospitals Industry

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Hospital Care and Services

tals employ 35 percent of all people working in the health care industry, according to the BLS. Annual earnings in the hospital setting are no longer a metric of direct relevance to the BLS. Hospitals’ gross revenues have historically been calculated based on what they bill insurers, and net revenues have been calculated based on what insurers actually pay, adjusted to reflect the hospitals’ reported costs to render service. However, quality and medical outcomes have become the financial metric of success and are quickly becoming the core basis on which payment is made to hospitals for both inpatient and outpatient services. A unit of service is an admission, and payment is based not only on how patients fare in terms of health but also on how efficiently and costeffectively the hospital rendered service. The BLS projects that health care and insurance revenues will grow by $547 billion by 2016. As the baby boomers continue into retirement, the demand for hospital services is expected to grow.

RELATED RESOURCES FOR FURTHER RESEARCH American Academy of Medical Management Crossville Commons 560 W Crossville Rd., Suite 103 Roswell, GA 30075 Tel: (770) 649-7150 Fax: (770) 649-7552 http://www.epracticemanagement.org American College of Healthcare Executives 1 N Franklin, Suite 1700 Chicago, IL 60606-3529 Tel: (312) 424-2800 Fax: (312) 424-0023 http://www.ache.org American Counseling Association 5999 Stevenson Ave. Alexandria, VA 22304 Tel: (703) 823-9800 Fax: (800) 473-2329 http://www.counseling.org

American Hospital Association 155 N Wacker Dr. Chicago, IL 60606 Tel: (312) 422-3000 http://www.aha.org Healthcare Financial Management Association 2 Westbrook Corporate Center, Suite 700 Westchester, IL 60154 Tel: (708) 531-9600 Fax: (708) 531-0032 http://www.hfma.org Medical Group Management Association 104 Inverness Terrace East Englewood, CO 80112-5306 Tel: (303) 799-1111 http://www.mgma.com National Association of Public Hospitals and Health Systems 1301 Pennsylvania Ave. NW, Suite 950 Washington, DC 20004 Tel: (202) 585-0100 Fax: (202) 585-0101 http://www.naph.org

ABOUT

THE

AUTHOR

Nancy Sprague holds a bachelor of science degree from Granite State College and a master of science degree in health policy from the Dartmouth Institute, Dartmouth College. She is a member of the National Medical Group Managers’ Association, the Healthcare Financial Management Association, and the American College of Healthcare Executives. She is a fellow in the American College of Healthcare Executives, a registered nurse, and a health care operations consultant. Sprague has spent her career in medical practice and hospital operations, both in private practice and in a large academic tertiary hospital setting. She has extensive experience in physician and staff relations and is an expert in human resources, compliance, risk, billing, health care business management, hospital administration, and patient-centered care.

Hospital Care and Services FURTHER

READING

Cutler, David M., ed. The Changing Hospital Industry: Comparing Not-for-Profit and For-Profit Institutions. Chicago: University of Chicago Press, 2000. Geisler, Eliezer, Koos Krabbendam, and Roel Schuring, eds. Technology, Health Care, and Management in the Hospital of the Future. Westport, Conn.: Praeger, 2003. Gordon, Suzanne, John Buchanan, and Tanya Bretherton. Safety in Numbers: Nurse-to-Patient Ratios and the Future of Health Care. Ithaca, N.Y.: ILR Press/Cornell University Press, 2008. Institute for Career Research. Careers in Hospital and Health Services Administration: Healthcare Executives. Chicago: Author, 2004.

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Ohsfeldt, Robert L., and John E. Schneider. The Business of Health: The Role of Competition, Markets, and Regulation. Washington, D.C.: AEI Press, 2006. Snook, I. Donald. Opportunities in Hospital Administration Careers. New York: McGraw-Hill, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

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Hotels and Motels Industry

INDUSTRY

SNAPSHOT

General Industry: Hospitality and Tourism Career Cluster: Hospitality and Tourism Subcategory Industries: Bed-and-Breakfasts; Casino Hotels; Innkeeping; Resorts; Rooming and Boarding Houses; Transient Accommodations; Vacation Rentals; Youth Hostels Related Industries: Casino Industry; Food Services; Outdoor Recreation Industry; Restaurant Industry; Themed Entertainment Industry; Travel and Tourism Industry Annual Domestic Revenues: $140.6 billion USD (Smith Travel Research, 2009) Annual International Revenues: $344 billion USD (Research and Markets, 2009) Annual Global Revenues: $484.3 billion USD (Research and Markets, 2009) NAICS Numbers: 721, 62422

INDUSTRY

industries in the world, it comprises small bed-and-breakfast establishments (B&Bs), inns, motels, hotels, resorts, and other room-rental properties. The industry is represented in virtually every country around the world, employing countless individuals who work across a broad spectrum of career paths.

History of the Industry The practice of renting rooms to transient guests dates back to ancient times. During the Middle Ages, inns and other guesthouses were developed to accommodate religious pilgrims, and monasteries began their tradition of offering lodging for travelers. As Europe was approaching the early modern period in the fifteenth century, more and more inns were developing along stagecoach routes. Ordinaries, later known as inns or taverns, cropped up in colonial America during the seventeenth and eighteenth centuries, offering their guests not just rooms but meals as well. The first hotel in the United States, the City Hotel, opened in 1794 in New York City. Twenty-five years later, the Tremont House in Boston became

DEFINITION

Summary The hotels and motels industry is dedicated to providing temporary lodging accommodations to tourists, business travelers, and other transient guests. A segment of tourism, one of the largest 918

Hotels and Motels Industry the nation’s first luxury hotel, complete with a lock on each room’s door. Nineteenth century America also witnessed an increase in the development of another type of hotel: the resort. Built at first around spas located on the East Coast, these kinds of accommodations quickly spread to seaside and mountain locations. The largest of the early resorts was built at the hot sulfur spa at Saratoga Springs, New York. In 1908, the first hotel chain, the Statler brand, was introduced. Hilton followed suit in 1919 after Conrad Hilton purchased the Mobley Hotel in oilrich Cisco, Texas. During the Great Depression of the 1930’s, the first Sheraton Hotels were opened. It was also during this time that a small root-beer stand was transformed into the first hotel managed by what would become Marriott International. The Depression era also saw America building on the tradition of B&Bs. The term, which was coined in England and Scotland before the American Revolution, applied to homeowners who of-

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fered rooms and meals to travelers. The concept expanded as boardinghouses opened during the Great Depression. These houses remained popular during the 1930’s, but they faded after the economic recovery and the advent of World War II. In 1916, the Federal Aid Road Act spurred the development of a new form of lodging: motels. These lodging establishments were to be built alongside new highways and would provide rooms to travelers arriving in motor vehicles (the words “motor” and “hotel” were conjoined to form the name of this new type of lodging). After World War II, the number of motels increased significantly to parallel the number of automobiles on the roads. Most motels were located near highways and on the outskirts of towns, where land was less expensive. In light of their locations, their expenditures were considerably less than those of downtown hotels, and motels could therefore offer rooms to guests at much lower rates. Motels originally offered minimal amenities for guests, but by

Motels and motor lodges, originally roadside establishments, also operate alongside larger hotels in urban areas and in resort and tourist communities. (©Oleg Ivanov/Dreamstime.com)

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the 1950’s many of them expanded to include cocktail lounges, pools, and other features.

The Accommodation Industry’s Contribution to the U.S. Economy

The Industry Today Value Added Amount Today, hotels, motels, and other types Gross domestic product $119.1 billion of lodging establishments continue to Gross domestic product 0.8% offer a wide range of accommodations Persons employed 1.869 million and services to their target clienteles. Total employee compensation $65.0 billion Some have thousands of rooms, while others have fewer than five. Many have Source: U.S. Bureau of Economic Analysis. Data are for in-house restaurants, pools, casinos, con2008. vention space, and other facilities and services that cater to the special needs of their particular clients. A single hotel may employ hundreds of people, from and are often limited in terms of the amenities they housekeepers and salespeople to security personoffer. They typically have relatively small staffs, ofnel and managers. The properties range in size ten comprising the proprietors themselves and from small, one- and two-bedroom B&Bs to massive convention hotels and resorts. They also operperhaps a few others (such as housekeepers). In many cases, B&Bs are also the residences of their ate across a broad spectrum of interests and owners or operators. These properties offer alterthemes, catering to specific clienteles and diverse natives for tourists and other travelers who prefer guest populations alike. quaint, intimate settings over larger, homogeB&Bs are the smallest hotels. These properties neous lodging establishments. They are particuhave only a handful of rooms available for guests larly prominent in tourist-heavy areas such as historical sites, beachfront areas, and mountainous or wooded settings, and are often appointed with more personalized furniture, decorations, and bedding than one might find in a hotel or motel. Larger than B&Bs, but still relatively small in terms of room numbers, are inns. Inns are frequently situated in historic areas, as well as picturesque and tourist-friendly regions. Some are attached to or contain restaurants or cocktail lounges, and many offer activities specifically designed for guests who appreciate the quaintness and antiquity of their settings. Motels and motor lodges have undergone a significant evolution since the 1950’s. Although many are still found along highways, twenty-first century motels also operate alongside larger hotels in urban areas and in resort and tourist communities. Many are independently operated, while others are franchised. Many more are part of national and even international chains, offering similarly appointed rooms and standard, recognizable building styles from one property to another to attract a B&Bs are the smallest hotels, having only a handful of rooms steady and loyal patronage from frequent travelers available for guests. (©Dreamstime.com) who can depend on their consistency.

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Hotels have also undergone a major transformaInputs Consumed by the tion in the late twentieth and early twenty-first centuries. Some properties, located primarily in urban Accommodation Industry centers, cater largely to convention business. They contain hundreds or even thousands of rooms and Input Value offer such amenities as free Wi-Fi, exercise faciliEnergy $10.9 billion ties, shuttle services, and meeting rooms of various Materials $14.3 billion sizes. Smaller hotels are also found in such areas, Purchased services $73.3 billion attracting tourists and business travelers. Boutique Total $98.5 billion hotels represent a growing trend in U.S. lodging establishments: These smaller properties may be decSource: U.S. Bureau of Economic Analysis. Data orated in contemporary or thematic styles and caare for 2008. ter to travelers with particular tastes and ideals. Most of the larger properties contain restaurants and lounges, although some, known as limitedservice properties, may not have food and beverage cles for reservations and bookings. Similarly, as services and may be near or attached to indepenmany hotels continue to be rated and chosen based dently owned restaurants. on the availability and quality of their amenities, Unlike its historical relatives, twenty-first cencomplimentary Internet access and related techtury lodging establishments seek to give their nologies have become sought-after amenities. In guests more than accommodations. Some contain 2005, for example, the Rosewood Hotels made casinos and entertainment facilities designed to Global Positioning Systems (GPS) devices, instead keep guests in-house for the duration of their stay. of paper maps, available to guests. Moreover, the Resorts remain enormously popular, with some Internet itself has become a primary tool for generowning adjacent theme parks, ski slopes, beaches, ating and disseminating hotel ratings. Rather than or wooded property—all dedicated to the sole use seek the opinions of travel experts published in of the hotel’s guests. Resorts and hotels are also cabooks and magazines, many travelers rely on Web tering to long-term guests, offering suites with sites with user-generated content (known as Web kitchens and living rooms that are akin to apartments. A growing number also accommodate pets in-room. A growing number of hotels and motels are adopting socially and environmentally conscious policies. For these properties, the use of green energy, recycling programs, low-flow faucets, and energy-saving lightbulbs not only reduces their carbon footprints but also attracts likeminded guests. Modern technologies, such as the Internet, have also changed the hotel industry in the twentyfirst century. Reservations, once made over the phone in the twentieth century, are now largely Internet-based, with an entire subinComputers and the Internet have made reserving a hotel and checking in easier dustry of online booking engines and faster. (©Andres Rodriguez/Dreamstime.com) serving as one of the primary vehi-

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2.0 sites), in which a hotel’s rating represents an amalgam of many individual ratings submitted by a consumer’s peers. Twenty-first century lodging establishments remain in a constant state of evolution, catering to the diverse needs of an increasingly diverse international population. With a multitude of internal and external staff and vendors, the industry remains one of the most powerful economic drivers in the global economy.

INDUSTRY MARKET SEGMENTS The hotel industry ranges in size from small properties to large convention hotels, and it serves a broad range of clients, from business travelers to tourists. The following sections provide a comprehensive breakdown of each of these different segments. Small Establishments B&Bs and inns typically have fewer than fifty rooms. In a B&B, the owner often lives on the property and serves a continental or full breakfast to guests. Such properties generally charge less than do major urban hotels, although properties in tourist areas tend to charge higher rates during the tourist season. Potential Annual Earnings Scale. The average earnings for a small property owner or manager vary from region to region. However, according to the U.S. Bureau of Labor Statistics (BLS), the range in the United States for such a position is between about $27,000 and $83,000 per year. Clientele Interaction. Small properties rely on repeat patronage, and the treatment guests receive during their first stay strongly influences whether they will return. Small-property owners and managers have the unique opportunity to work closely with guests. In many cases, the innkeeper plays multiple roles in the property, managing the front desk, preparing food, and providing concierge services. Filling such roles allows the small-property owner or manager to develop closer relationships with guests and, as a result, foster repeat visits. Because of the relatively intimate nature of small properties, clients seek a more personal touch during their stays than they would expect at larger ho-

tels. Innkeepers must therefore be more communicative and attentive to the individual needs of guests. Small properties often offer special amenities and services in order to ensure that a guest’s stay is comfortable. Amenities, Atmosphere, and Physical Grounds. Although B&Bs and inns offer relatively few rooms, they usually offer a wide range of amenities, services, and comforts that are atypical of the average lodging establishment. Many innkeepers decorate each room themselves, selecting furniture, linens, and artwork according to their own tastes and ideals. The atmosphere of these small properties is akin to that of a large house, appointed with comfortable lounges, sitting rooms, and dining rooms. Inns and B&Bs are designed largely for tourists. As such, they usually focus on fostering a relaxing atmosphere. Down comforters, operating fireplaces, four-poster beds, and antique furniture are prevalent, and a degree of informality among innkeepers and guests is typical. Breakfasts are casual, and many properties offer wine and other spirits for their guests. The physical grounds of a small lodging property are usually simple in terms of real estate. Most inns and B&Bs are large houses (and in many cases residences) or small, renovated buildings. Some were constructed in the eighteenth and nineteenth centuries. Many have small yards, outdoor pools, and patios. A growing number of properties are offering technological amenities such as free Internet access and Wi-Fi services. Typical Number of Employees. One of the largest issues facing innkeepers and small-property owners is expenses. In light of this fact, many inns and B&Bs have very small staffs. In many cases, the owners are the only individuals working on the property on a full-time basis. Some innkeepers hire additional staff to work at the front desk or perform housekeeping and laundry duties. In areas that receive seasonal guests, staff sizes often grow significantly for a few months to accommodate high demand and traffic during the peak season. On Cape Cod, Massachusetts, for example, large numbers of foreign workers and college students are hired during the summer months. Traditional Geographic Locations. Small properties such as B&Bs and inns typically cater to vacationers looking to get away without sacrificing

Hotels and Motels Industry some of the comforts of home. They are usually located in picturesque communities and touristfriendly areas—for example, along the shores of oceans or lakes or in regions of historic interest. Because they do not typically serve three meals per day, such properties are usually located near restaurants and taverns. Many of these properties appear in urban centers as well, providing less expensive basic alternatives for vacationers and business travelers alike. Pros of Working for a Small Lodging Establishment. Because they operate as both owners and staff of inns or B&Bs, innkeepers have total control over their property. Room decorations and breakfast menus are tailored to their tastes, and all aspects of maintenance and upkeep are within their purview. If there is a staff, it generally comprises only a handful of people, many of whom may be friends or family. Innkeepers also do not necessarily need to attend business school or attain advanced degrees in hotel management to manage a small property. The best education an innkeeper can obtain is broad-based training in sales and marketing, property maintenance, accounting, food preparation, and the legal requirements of the municipal, state, or other government entity that oversees regulation in such fields. Cons of Working for a Small Lodging Establishment. In many ways, the positive aspects of working on a small property are the same as the negative elements. For example, the fact that such a property owner can afford to hire few or no additional staff means that the innkeeper is responsible for virtually all operational duties, from cooking and dishwashing, to front-desk operations, to laundry and maintenance. Additionally, the innkeeper must take on the work of the business itself, from accounting to marketing. Hence, although a small operation may require only basic knowledge of these areas, it does require that the innkeeper fully grasp all areas necessary to running and maintaining the business, a requirement that entails training across a broad spectrum of vocations. Adding to the challenges of a small property manager are the peaks and valleys of business. A large number of B&Bs and inns are located in tourist areas such as coastal regions or mountains, and the seasonal appeal of these areas results in a high rate of business during certain periods of the year and a low rate of business during off-peak seasons.

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For example, tourist havens such as the islands Martha’s Vineyard and Nantucket in Massachusetts see a very high volume of guests during the late spring and early summer months, but that volume drops precipitously during the fall and winter months. For innkeepers, the seasonality of their business may require them to locate alternative sources of revenue to remain open during off-season periods—or to shut down altogether during those periods. Costs Payroll and Benefits: Small properties generally hire staff at hourly wages. Because such small businesses usually employ very few staff, government-mandated benefits are often not required of these enterprises. Benefits such as vacation and sick time are therefore offered at the discretion of the innkeeper. Supplies: Small inns, B&Bs, and similar properties require a wide range of items, including cleaning supplies, foodstuffs, linens, hardware (for maintenance), office supplies, information technology (telephones and computers), outdoor supplies (such as lawn mowers and snow shovels), bedding, and room amenities. External Services: Although many have laundry facilities on site, some small properties employ laundry services to clean sheets, towels, and other linens. They may also use accounting services, computer maintenance services, credit card processing systems, and food vendors. Many employ local landscaping contractors. Utilities: Typical utilities for a small property include water and sewage, electricity, gas or oil service, telephone, cable television, and Internet access. Taxes: Small properties are required to pay local, state, and federal income taxes, as well as applicable property taxes. They must also collect state and local room or sales taxes from guests. Midsize Establishments Midsize hotels and motels typically have room counts of up to one hundred, although some are larger. Many motels and motor lodges are considered midsize properties, but some inns and smaller hotels also fall into this category. Some offer limited food and beverage services, among other amenities. Room rates for such properties are generally lower than those of larger properties and resorts.

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Potential Annual Earnings Scale. Wages for senior managers at midsize properties depend largely on geography and the position itself. According to the BLS, the average salary of a frontdesk clerk at such an establishment, for example, is about $18,000 per year, while hotel managers earn between $32,000 and $58,000 per year. Clientele Interaction. Midsize hoteliers must maintain a delicate balance regarding interaction with their guests. Staffs are relatively small, which means that the hotelier must be easily accessible to guests. On the other hand, the hotelier may not be expected to tend to each guest personally, instead relying on a front-desk clerk, housekeeper, or sales manager to address guest needs. Because many midsize properties cater to lastminute travelers who are primarily seeking basic bed and bath accommodations during their journeys, client interaction is often limited to check-ins and check-outs. However, hoteliers may still be called upon to oversee guest disputes, eject unruly guests, or address maintenance issues. Amenities, Atmosphere, and Physical Grounds. Motels are the most prominent example of the midsize property. Motels traditionally differ from hotels in that many of their rooms have doors that lead outside, into a common courtyard or parking lot. This design is based on the premise that motels are convenient for those traveling by car, enabling suitcases to be moved readily from the vehicle to the room and back. In some cases, motels and similar midsize properties offer individual cabins for enhanced privacy. Midsize properties have evolved since the midtwentieth century to meet the changing demands of travelers. While pools, vending machines, and cable television are now generally considered standard features of motels, an increasing number of such properties now also offer limited meals, such as a continental breakfast or buffets, Wi-Fi access, meeting rooms, and other services. Although the traditional motel caters to travelers, a growing number market themselves as inexpensive alternatives to hotels in key tourist areas. As such, they also offer their guests tourist information, such as maps, coupons, and brochures. Many midsize hotel and motel properties are part of larger chains. They therefore maintain the same external appearance, staff uniforms, and room designs of the parent company in order to

generate repeat stays throughout all of the chain’s properties. If repeat guests are more often than not families, this changes the atmosphere of the property from the traditional image of the “refuge for the road-weary traveler,” replacing it with an image of a final destination for the cost-conscious tourist. Typical Number of Employees. Midsize properties tend to have more full-time employees than do small properties, but staff levels tend not to exceed twenty to thirty people. However, seasonal employees may be brought in at properties in tourist-heavy areas during peak times. Traditional Geographic Locations. Properties such as motels and other midsize lodging establishments have long been located in areas of high vehicular traffic, such as along highways and interstates. Because their prices are relatively low in comparison to those at other hotels, they also tend to be located outside downtown urban centers and on city outskirts. Many are also located near tourist areas, offering cost-effective alternatives to more expensive facilities in such areas. Pros of Working for a Midsize Lodging Establishment. Midsize properties such as motels enjoy certain advantages over both small and larger properties. For example, because they offer few amenities and have smaller staffs, they are able to minimize expenditures and can market themselves to budget-conscious travelers. Additionally, many motel chains provide hoteliers with franchising opportunities, allowing some flexibility in decorations, human resources, and other aspects of property management. Furthermore, although they are considerably smaller than downtown hotels, resorts, and convention properties, midsize hotels and motels are able to accommodate larger numbers of guests than inns or B&Bs. In peak tourist seasons, this availability provides a theoretical advantage that can enhance job stability. Cons of Working for a Midsize Lodging Establishment. Because midsize hotels and motels present themselves as budget-conscious alternatives to luxury hotels and other lodging houses, crime rates at such establishments are frequently higher than at more expensive properties. Other problems may be more common as well. Families with children, for example, may cause excessive damage to rooms or serve as sources of noise, prompting complaints from other guests. In addition, the fact that a midsize property still has a rela-

Hotels and Motels Industry tively small staff means that full-time workers, such as front-desk clerks and managers, must work longer hours. They must often assume multiple roles during their shifts as well, in order to address guests’ needs and complaints. Costs Payroll and Benefits: Midsize properties generally hire staff at hourly wages. Benefits such as vacation and sick time are offered at the discretion of the owner or manager. Supplies: Motels and other midsize properties require a wide range of items, including cleaning supplies, foodstuffs, vending machine items, linens, hardware (for maintenance), office supplies, information technology (telephones and computers), outdoor supplies (such as lawn mowers and snow shovels), bedding, and room amenities. External Services: Although many have laundry facilities on site, some midsize properties employ the use of laundry services to clean sheets, towels, and other linens. They may also use accounting services to help manage the books, computer maintenance services, credit card processing systems, and vending machine companies. Many employ local landscaping contractors. Utilities: Typical utilities for a midsize property include water and sewage, electricity, gas or oil service, telephone, cable television, and Internet access. Taxes: Midsize properties are required to pay local, state, and federal income taxes, as well as applicable property taxes. They must also collect state and local room or sales taxes from guests. Large Establishments Large properties are generally considered hotels, although they may include some of the largest motels. Typically, a large hotel has more than one hundred rooms, if not several hundred rooms or more. Large properties often have limited or full food and beverage services, as well as other amenities, and their room rates generally are higher than those of similarly located motels or smaller properties. Potential Annual Earnings Scale. The earnings of large-scale property employees vary considerably depending on their positions and the geo-

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graphic location of the property. A sizable majority of positions in a given large property, about 64 percent, are service-oriented and hourly, paying minimum wage. Other employees, such as clerks, managers, and salespeople, are typically salaried, with some receiving performance bonuses and other incentives. Clientele Interaction. At large hotels with many guests, hoteliers do not have much day-to-day interaction with their clients beyond casual greetings. Rather, an entire team will attend to a guest’s needs, from doormen, to front-desk clerks, to restaurant servers, to concierges. Some of these positions are more functional, requiring merely prompt and polite service when requested. Others, such as concierges, are expected to cultivate relationships with guests, anticipating their requests and needs and perhaps suggesting activities the guests would not have thought of on their own. Amenities, Atmosphere, and Physical Grounds. Large hotels and resorts offer a wide range of amenities that are often dependent on a business’s location and the profile of guests it seeks to attract. Most have either an in-house restaurant or one that is independently operated and attached. Full-service hotels usually offer room service for guests seeking to dine in their own rooms. Additionally, many large properties have cocktail lounges and similar venues that cater both to overnight guests and to people attending functions or meeting friends at the hotel. Some large resort properties may have golf courses, discounted skilift tickets, and similar amenities, as well as athletic equipment rentals. Large properties cater to a wide range of guests, from business travelers to tourists. Each property’s atmosphere therefore stems from the type of clientele the property attracts. Large convention hotels, for example, may be predominantly visited by business travelers who seek access to the Internet, meeting rooms, and relative quiet during evening hours. Resort hotels, on the other hand, may have a more festive atmosphere, with staff focusing on encouraging both activities and rest and relaxation. Physically, large properties tend to be multistory structures built for the maximum number of rooms and corresponding facilities. Some have swimming pools and parking lots with valets, and meeting rooms, ballrooms for large-scale events and receptions, and fitness facilities are quite prev-

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alent. Some hotels are part of larger building complexes that are joined by commercial space and private condominiums, while others stand alone. Typical Number of Employees. The number of employees a large property retains varies based on the size of the hotel, the number of rooms, the volume of guests, whether additional services (such as a casino, golf course, or theme park) are attached to the property, and other factors. New York’s Waldorf Astoria, for example, has sixteen hundred employees, while the Bellagio in Las Vegas, in which the hotel itself is an attraction, employs ninety-seven hundred people. Traditional Geographic Locations. Large hotels are found primarily in downtown urban environments, near or within tourist areas, and in other high-traffic locations. Some occupy multistory buildings in metropolitan centers, whereas others are constructed adjacent to beaches and ski resorts or near airports and other major transit centers. Many are situated at, or are part of, convention centers or, if located outside downtown areas, still offer easy access to them. Pros of Working for a Large Hotel. More than smaller and midsize properties, large hotels rely heavily on a departmental, team approach to their operations. Employees may therefore spend the bulk of their time focusing on their areas of expertise rather than assuming multiple roles. For hourly employees, another benefit is the relative stability of pay, due in large part to collective bargaining agreements at union hotels. Additionally, because of the locations of large properties and their high guest demand, room occupancy tends to be relatively stable, barring a major downturn in the economy. Furthermore, a high percentage of large hotels are part of chains or networks, and opportunities exist for on-the-job training and career advancement within these companies. Cons of Working for a Large Hotel. For many property managers, the sheer complexity of a large property, with its myriad working parts, can prove extremely vexing. Adding to the difficulty for managers is the high demand placed on hotel employees’ energies during times of peak occupancy, such as events and conventions, as well as simple day-today check-ins and check-outs. For managers, the fact that many facets of hotel operations involve unionized workers adds the challenge of complying with regulations governing employee pay, ben-

efits, workloads, and staffing levels. Additionally, the fact that many chains buy and sell large properties means that employees may learn one operational system, only to have that system change fundamentally when a new corporation assumes control. Costs Payroll and Benefits: The salary structure of a large property can be complex, owing to the many positions and job types. Service personnel (such as housekeepers and servers) are generally paid on an hourly basis, while those in administrative or other positions (managers, administrative assistants, and salespersons, for example) are paid on a yearly basis with some performance incentives. Benefits such as vacation time and sick time are offered at the discretion of the hotelier or the chain of which the hotel is a part. Supplies: Large hotels and resort properties require a wide range of items, including cleaning supplies, foodstuffs, dinnerware, vending machine items, linens, hardware (for maintenance), office supplies, information technology (telephones and computers), outdoor supplies (such as lawn mowers and snow shovels), bedding, and room amenities. Some, such as those that operate casinos, need entertainment supplies, such as playing cards, chips, and machine parts. External Services: Although many large hotels have laundry facilities on site, many other large properties employ laundry services to clean sheets, towels, and other linens. They may also use accounting services to help manage the books, computer maintenance services, credit card processing systems, and vending machine companies. To accommodate receptions, events, and meetings, many subcontract with on-site or external audiovisual companies. Utilities: Typical utilities for a large property include water and sewage, electricity, gas or oil service, telephone, cable television, and Internet access. Large hotels must also pay for sewer use and wastewater discharge, particularly in light of their significant use of such systems. Taxes: Large properties are required to pay local, state, and federal income taxes, as well as applicable property taxes. They must also collect state and local room or sales taxes from guests.

Hotels and Motels Industry ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and distribution of tasks within a hotel are typically based on its size. An innkeeper is likely to handle most of the major tasks because he or she is the only major employee, while the general manager of a large hotel will delegate tasks to the proper team. Nevertheless, the tasks themselves, in a general sense, remain similar throughout the industry. The following umbrella categories apply to the organizational structure of businesses in the hotels and motels industry: ■ ■ ■ ■ ■ ■ ■

Executive Management Sales and Marketing Reservations Front-Desk Operations Housekeeping Maintenance Security

OCCUPATION

■ ■ ■ ■ ■ ■ ■ ■ ■ ■

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Food and Beverage Concierge Groundskeeping Human Resources Doorpersons/Porters/Valets Laundry Personnel Entertainment Workers Recreation and Fitness-Center Personnel Information Technology/Multimedia Administrative Support

Executive Management Executive management handles the general operations of the hotel. These individuals help oversee major operations, goal setting, and the implementation of plans for the property. They also manage individual teams and departments (or, in the case of the general manager, oversee all departments). Many executive managers have advanced degrees, particularly in hospitality management, business, accounting, and similar fields. As with many industries, experience can sometimes serve as a substitute for advanced education. Executive managers generally earn higher sala-

SPECIALTIES

Hotel/Motel Managers Specialty

Responsibilities

Convention services managers

Coordinate the activities of the large hotels’ various departments for meetings, conventions, and other special events.

Executive housekeepers

Ensure that guest rooms, meeting and banquet rooms, and public areas are clean, orderly, and well maintained.

Food and beverage managers

Direct the food services of hotels.

Front office managers

Supervise front office activities and take care of reservations, room assignments, unusual requests, inquiries, and guests’ complaints.

Lodging facilities managers

Supervise and maintain temporary or permanent lodging facilities, such as small apartment houses, hotels, trailer parks, tourist camps, and resorts.

Resident managers

Live in hotels and are on call twenty-four hours a day to resolve any problems or emergencies.

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ries than anyone else in the business. Their job is to manage the overall functions of the property, address systemic issues, and ensure that all departments are functioning in a fluid fashion. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Chief Financial Officer (CFO) Hotel Manager General Manager Controller Sales Director Rooms Director Marketing Director Food and Beverage Director

Sales and Marketing Sales and marketing personnel manage the solicitation and acquisition of corporate, tourist, and special events groups. Such groups purchase room blocks rather than single rooms. Groups, therefore, represent the largest revenue generator for a hotel. Sales and marketing personnel usually have at least undergraduate degrees in business management, marketing, or related disciplines. Their salaries are competitive, and their compensation packages often include performance bonuses and other incentives. The primary task of sales and marketing personnel is to contact potential client companies that may require overnight accommodations, meeting or reception spaces, or both. They also help promote the company at trade shows, conferences, and other events. Because they are responsible for ensuring that room blocks and activities are satisfactory to their clients, they are closely connected with virtually every other department of the hotel. In many cases, marketing personnel serve as the advance communications representatives for properties that are under construction. In this capacity, they communicate with area media, trade associations, and other resources to ensure that the property’s interests are met as development is ongoing. Sales and marketing occupations may include the following: ■ ■ ■ ■

Corporate Sales Manager Sales Director Senior Sales Manager Administrative Assistant

■ ■

Catering Sales Manager Director of Catering

Reservations Reservations personnel are charged with managing a hotel’s reservation system and assigning rooms. They must consistently monitor the hotel’s booking system to reconcile group sales, rooms reserved by individual guests, and room blocks reserved by online booking agencies and travel agents. They must also register incoming guests, assign keys and room cards, and collect payments from departing guests, as well as maintaining records of guest accounts. The average pay for a reservations agent is about $21,000 per year. An advanced degree is not required, but the ability to operate computer programs is expected, as are outstanding communications skills. Reservations occupations may include the following: ■ ■ ■

Reservations Manager Reservations Assistant Administrative Assistant

Front-Desk Operations The front desk is the central receiving point for incoming, current, and outgoing guests. Frontdesk personnel manage guests who are checking in and ensure that their needs are met. The average pay for a front-desk manager, who oversees the operations in this department, is about $42,000 per year. Advanced degrees are not typical, but frontdesk personnel are expected to have excellent organizational and computer skills. Front-desk occupations may include the following: ■ ■

Front-Desk Manager Front-Desk Assistant

Housekeeping Housekeeping is charged with maintaining the general cleanliness of the hotel. Housekeeping personnel must change linens, vacuum, dust, empty trash and recycling bins, clean and sanitize bathrooms, and replace amenities (such as bar soap, shampoo, conditioners, shower caps, and glasses). Housekeepers are usually trained according to the hotel or hotel chain’s standards. Hourly salaries

Hotels and Motels Industry and benefits are determined largely through collective bargaining, but most housekeepers work for minimum wage and, where applicable, tips. Housekeeping occupations may include the following: ■ ■ ■ ■

Housekeeper Housekeeping Manager Executive Housekeeper Housekeeping Director

Maintenance Maintenance and building-engineering staff repair malfunctioning building systems, such as airconditioning, plumbing, electrical hardware, and similar devices. They may also play an important role in renovation planning and implementation. Building maintenance personnel are alternately called engineers, environmental services personnel, and facilities managers. Salaries are commensurate with experience. Most personnel in this department have vocational education and training, if not advanced degrees in engineering or related fields. Occupations within this department include the following: ■

■ ■ ■

Heating, Ventilation, and AirConditioning (HVAC) Specialist Plumber Apprentice Chief Engineer

Security The safety of hotel staff and guests alike is charged to a security team. Hotel security personnel ensure that unruly guests are disciplined or ejected, that no illegal activity takes place in or around the property, and that emergency situations are addressed. Security personnel conduct periodic rounds, monitor surveillance cameras, and respond to relevant calls. Hotel security personnel are expected to have training in public safety. They may obtain this training through undergraduate programs, vocational education, or by passing a variety of security certification programs. Many major hotels also require experience in military or professional law enforcement agencies. Additionally, security personnel may be required to obtain certifica-

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tion in cardiopulmonary resuscitation (CPR) and other first-aid techniques. Salaries generally start at $35,000 per year for entry-level officers. Hotel security personnel must maintain strong relationships not just with local and federal law enforcement but also with fellow security personnel at other properties. Good communication networks help track and defend against criminal activity directed against both the individual property and other properties in midsize and larger hotel chains. Security occupations may include the following: ■ ■ ■ ■ ■

Investigator House Detective Security Guard Chief of Security Technical Support

Food and Beverage Food and beverage personnel (including caterers) often maintain strong relationships with employees in the sales and marketing departments. Their responsibilities include ensuring that meetings, receptions, and large events held at the property are successful. They work with sales teams to meet the meal and beverage needs of incoming guests, and they often play a central role in contract development. Food and beverage personnel also provide food and drink service during such events, as well as setting up and breaking down event rooms before and after them. Catering managers often have educations in business or sales, while other food and beverage personnel may have limited educations but significant restaurant experience. Food preparers often have vocational training as well. Other food and beverage personnel work within a hotel’s restaurant, bar, or similar venues, serving guests, preparing food, and busing tables. Others work in room service, taking orders and delivering them to guests throughout the hotel. Because of the diversity of subgroups within a given food and beverage department, salaries range broadly. Managers generally earn between $30,000 and $55,000 per year, while bartenders, servers, and busboys typically earn minimum wage with tips. Chefs earn an average of about $45,000 per year, commensurate with experience. Food and beverage occupations may include the following:

930 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Hotels and Motels Industry Catering Sales Manager Director of Catering Administrative Assistant Server Greeter Executive Chef Line Cook and Chef Table Busser Room Service Personnel Dishwasher Bartender

Concierge The concierge is responsible for providing hotel guests with information and for making useful services available to them. Guests approach the concierge for information about tours, local directions, and attractions. Often, the concierge will help guests make dinner reservations, locate tickets to shows and concerts, and assist with travel arrangements. The concierge position varies in terms of the tasks performed from property to property. Qualified concierges have considerable training in the hotel and tourism industry and usually have undergraduate educations in hospitality. Concierges are also required to have strong organizational and communications skills. Normally, concierges are closely connected to virtually every aspect of their hotels, thereby ensuring that they will be able to provide every service to the guest that the property may offer. Concierge occupations may include the following: ■ ■

Chief Concierge Concierge

Groundskeeping The maintenance of the property surrounding a hotel, particularly a resort, falls to the establishment’s groundskeeping crew. The groundskeepers maintain flower gardens and, where applicable, nature trails, golf courses, and other outdoor amenities. Groundskeepers must be familiar with the equipment necessary to maintain the hotel’s horticultural features. They may not have advanced educations, but they generally have solid gardening experience, some ability to maintain sprinkler and other mechanical systems, and an eye for the aesthetic quality of the hotel’s natural resources.

Although they need not possess a postsecondary education, groundskeepers are expected to be familiar with their property’s external real estate. They may also be called upon to clear debris, snow, and other seasonal elements that may hinder guests’ activity or the hotel’s operations. Groundskeepers are usually paid hourly, at a rate commensurate with their experience and skills. They work closely with those in the maintenance and engineering departments in order to ensure that they have the proper resources to tend to the hotel’s grounds. Groundskeeping occupations may include the following: ■ ■ ■

Head Groundskeeper Landscaping Worker Assistant Groundskeeper

Human Resources The human resources department is responsible for hotel personnel. It handles employee hiring, dismissal, relations, and benefits (such as insurance, retirement funds, and other employee incentives). The human resources department also assists employees with obtaining additional onthe-job training. Human resources managers are well trained in their field through both experience and collegelevel education. Generally, human resources managers earn about $77,000 per year, although in many cases, depending on years of experience and level of responsibility, the salary is considerably higher. Human resources occupations may include the following: ■ ■ ■ ■

Human Resources Director Human Resources Coordinator Human Resources Manager Administrative Assistant

Doorpersons/Porters/Valets Usually, the first individual a guest encounters at a major hotel is a doorperson. This individual is assigned to stand in front of the property to greet guests and provide information about parking, the hotel, and nearby services. Doorpersons also signal for taxicab service and carry guest luggage into and out of the hotel.

Hotels and Motels Industry OCCUPATION

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SPECIALTIES

Bellhops/Bell Captains Specialty

Responsibilities

Baggage porters

Deliver luggage to and from guests’ rooms and set up rooms for sales personnel.

Doorkeepers

Serve residents and guests by opening doors, hailing taxicabs, answering inquiries, and assisting guests into automobiles.

Head baggage porters

Supervise and direct the activities of baggage porters.

Room-service clerks

Deliver and remove packages, laundry, groceries, and other articles to and from guests’ rooms and record all information pertaining to services rendered to guests.

Porters (also known as bellhops) are responsible for bringing hotel guests’ luggage to their rooms. They usually remain in the hotel lobby until summoned by the front desk for guest assistance. In addition to transferring luggage, bellhops may assist guests in locating room amenities and operating the room’s television, computer, and alarm system. Hotel valets, where applicable, assist guests with personal services and are comparable to porters. In hotels that offer laundry or shoe-shining services, valets are often responsible for transporting guests’ clothing to and from the hotel’s laundry facilities. This category also includes parking valets, who are responsible for parking and retrieving guests’ vehicles. Doorpersons, porters, and valets are not required to have a postsecondary education. However, all are expected to have a strong understanding of the hotel and its environs and are required to be friendly and courteous at all times. Employees in these positions generally rely on tips for at least part of their income. Occupations in this division may include the following: ■ ■ ■ ■ ■ ■

Doorperson Valet Parking Valet Chief Parking Attendant Parking Cashier Bellhop

Laundry Personnel Laundry workers are responsible for cleaning, folding, and storing all bed and bathroom linens from guestrooms. Such services are usually located on a single floor or section of a lodging establishment. In full-service hotels, laundry workers are also charged with cleaning tablecloths, bar towels, and napkins. Laundry personnel do not typically have advanced educations. However, their education should be sufficient to allow them to comply easily with the hotel’s rules on detergent usage, folding techniques, and other tasks. Laundry staff occupations may include the following: ■ ■ ■ ■

Head of Laundry Services Linen Cleaner Guest Clothing Cleaner Laundry Worker

Entertainment Workers In hotels and resorts that include such facilities as casinos and golf courses, personnel are required to perform such tasks as operating gaming machines and card tables, administering golf carts and equipment rental services, and driving shuttles and other service vehicles. Entertainment workers focus their attention solely on the casino, golf course, or other amenity in which they work. In many cases, they are employed by the facility and not directly by the hotel.

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Hotels and Motels Industry

Entertainment workers appear in a wide range of capacities and organizational networks. Most do not have formal postsecondary educations but do have extensive training and experience in the areas in which they work. Entertainment occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Card Dealer Stage Performer Pit Boss Golf Pro Caddy Gift Store Clerk Casino Security

Recreation and Fitness-Center Many hotels have full-service spas, complete with massage rooms. (©Inga Personnel Ivanova/Dreamstime.com) Many full-service and resort properties have on-site spas and at the property. They may help bring online and fitness centers for health- and fitness-minded guests. maintain computer networks in administrative ofPersonnel working in such facilities are on hand to fices, as well as at a hotel’s business center. assist guests in their use. Most such individuals have These personnel must have training in comtraining and certification in physical fitness, masputer and information technology, often obtained sage therapy, nutrition, cosmetics, or other fields. either at vocational institutions or at the underThey also have first-aid and CPR training or certifigraduate level. The average salary for IT managers cation. Salaries depend on the task performed, but is about $60,000 per year. most personnel in this field receive tips as well as an IT and multimedia occupations may include the hourly wage. following: Recreation and fitness-center occupations may include the following: ■ Information Technology Director ■ Massage Therapist ■ Information Technology Support ■ Personal Trainer Assistant ■ Spa Facial Provider ■ Multimedia Technician ■ Nutritionist ■ Tennis Pro Administrative Support Administrative personnel are located throughInformation Technology/Multimedia out the hotel, assisting each department in its overHotels and other lodging establishments often all operations. Administrative staff may be needed have on-site personnel who manage computer systo assist at the front desk in answering phones durtems, video technology, and sound systems. They ing high-traffic periods, run errands for the conare called upon to set up audiovisual devices such cierge, make photocopies and send faxes for clias microphones, laptops, projectors, speakers, and ents and guests, and perform other tasks. In many other hardware typically used during meetings and cases, they are the nucleus of each department, presentations. Information technology (IT) and providing support to managers through scheduling, data entry, filing, and other activities as warmultimedia personnel also help maintain the comranted by the particular department. puter networks and systems that are in everyday use

Hotels and Motels Industry Administrative personnel have a wide range of backgrounds and professional training experience. Many are temporary employees, while others are brought in as entry-level staff for managers and other personnel. Administrative support occupations may include the following: ■ ■ ■ ■

Administrative Assistant Executive Assistant Secretary Intern

INDUSTRY

OUTLOOK

Overview The hotels and motels industry has long been an indicator of economic conditions in the United States and around the globe. The close link between the health of this industry and that of the economy reflects demand for lodging across the spectrum of travelers, from business travelers and tourists to military personnel, political figures, public servants, and others whose jobs entail a high level of travel. Following the terrorist attacks of September 11, 2001, the impact of a receding economy sent the travel and tourism industry reeling. Virtually every type of lodging establishment saw significant losses during the 2001 recession. Hotel staffs were cut, and new hotel construction stagnated. By 2007, the industry had largely returned to its pre-September 11 growth rate, as the number of rooms in major urban centers and in tourist-rich areas surged. This resurgence was largely due to the health of the global economy, as business travelers increased in great numbers. With the 20072009 global economic crisis, however, concern over the lodging industry returned. Given the broad impact of that economic downturn—felt by tourist travel and business travel alike—hotels saw major drops in room revenues, as well as in the food and beverage business. Such losses caused hiring freezes, layoffs, and a slowdown in the construction of new properties. Several factors will contribute to the continued growth of the hotel industry over the long term. The first is the resurgence of corporate travel. When companies see opportunities for business

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development, they conduct more business travel. Corporate business is by far the largest contributor to a hotel’s bottom line, and with a resurgence of conventions and business meetings, hotel growth will continue. Accompanying the strengthening of corporate business is another key element for the hospitality industry: the return of vacationing guests. This clientele is essential to the survival of all lodging properties, large and small. With increased marketing and affordable rates, properties may see a return of steady tourist business. One of the most important keys to the recovery of the tourism and hospitality industry is the government. Tourism, of which hotels are a major part, is the third largest industry in the United States and is essential to most economies. How governments facilitate the growth of this industry is pivotal, but government efforts toward economic recovery can have an adverse impact on hotels. For example, the near collapse of the banking industry in 2008 and 2009 fostered an enormous U.S. government bailout, albeit one with conditions. These included limits on perceived reckless spending, such as sending executives on wasteful junkets to resorts and casino hotels. However, in imposing such restrictions, the government also hindered the growth of the lodging industry, which relies on legitimate corporate travel. Also invaluable to tourism is the attraction of foreign travelers. In 2007, nearly 56 million foreign travelers visited the United States, with a large percentage arriving from neighboring Canada and Mexico. Heightened security efforts in the postSeptember 11 environment may represent a challenge to would-be terrorists, but careful screening and security measures may also discourage foreign tourism. Encouraging foreign tourists and business travelers to spend their travel money in the United States during the new era of heightened security following September 11 is essential to the survival of the hotel and motel industry. Much of the success of a reinvigorated hospitality industry relies on the ability of hotels and motels to manage costs and compete. The widespread impact of the global economic crisis has kept energy costs largely in check. However, the lack of federal aid to states—and, in turn, the lack of state aid to municipalities—has led governments on all levels to look at increasing commercial property taxes.

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Hotels and Motels Industry

This is an added cost for hotels that include a great deal of taxable real estate. Additionally, the pursuit of additional revenues has led officials to seek higher taxes on room occupancy, sales, and meals. Such increased rates are passed along to guests, and unless properties lower room rates in an effort to remain competitive, potential guests may go to other areas or simply forgo travel. The diversity and flexibility of the hospitality industry are among the main elements driving its continued growth, even in times of recession. To be sure, the significant drop in corporate travel and bookings during the economic recession of 2007-2009 had a severe impact on business at large urban and luxury resort properties. However, many tourist and seasonal areas continue to see strong numbers, largely because of the “drive” market (tourists who drive from shorter distances): As out-of-region guests have become increasingly reluctant to pay for airfare, more local tourists have taken their place. Furthermore, the changing interests of the tourist and business markets have caused an evolution in the hotel industry. Increasing numbers of guests

look for environmentally friendly hotels that minimize their use of water and energy and employ other green practices. Many properties also focus on certain demographics, such as pet owners or the gay and lesbian community. With a consistently evolving business approach and strong marketing campaigns, the hotel industry will likely continue to see growth in both the short and the long term.

Employment Advantages According to the BLS, the lodging and hospitality industry will continue to grow well into the 2010’s. Wages and salaries are expected to remain above the national average in terms of growth—14 percent versus the industry aggregate average of 11 percent—and industry-wide construction growth is also anticipated to continue. The diversity of the industry in terms of the broad range of career paths it offers continues to be a great benefit to those seeking advancement. Most employees begin at a basic, entry-level position in a given hotel office, moving upward either within the hotel itself or at other properties owned by the hotel corporation. Most major hotels offer management training, certification, and other programs designed to give employees the PROJECTED EMPLOYMENT opportunity to thrive in their curFOR SELECTED OCCUPATIONS rent positions and advance in the future. Hotels and Motels Industry Additionally, those in the service sectors of the hotel industry, Employment such as housekeepers, restaurant 2009 Projected 2018 Occupation servers, and custodial staff, may see personal development in light 28,760 27,800 First-line supervisors/managers of an ever-changing industry. For of housekeeping and janitorial example, more programs in Enworkers glish as a second language (ESL) 213,570 248,800 Hotel, motel, and resort desk are being offered to foreign-born clerks employees in order to enhance their communication skills and 28,970 30,600 Lodging managers underscore the cosmopolitan im419,310 452,400 Maids and housekeeping cleaners age of a property. 130,420

149,500

Waiters and waitresses

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Annual Earnings In light of the widespread economic recession, it was believed that the hotel industry would continue to see drops in both room demand and revenues during the

Hotels and Motels Industry period immediately following 2008. One U.S. industry expert predicted in 2008 that profits at American lodging establishments would decline as much as 8 percent in the following year or two. Another study, however, indicated that, although a significant decline in earnings was expected in 2009, a modest turnaround would begin in 2010. Evidence bore out these predictions: One of the world’s largest hotel chains, for example, saw a precipitous drop in earnings in the second quarter of 2009. Marriott International posted a 76 percent drop in earnings, from $157 million in the second quarter of 2008 to $37 million in the same period in 2009. Such major drops in earnings, coupled with stagnant growth, led to widespread layoffs and hiring freezes within an industry accustomed to posting more than $483 billion in global revenues. Though the drop in revenues represented a dramatic trend in the short term, it was expected to reverse slowly as the U.S. and other economies recovered.

RELATED RESOURCES FOR FURTHER RESEARCH American Hotel and Lodging Association 1201 New York Ave. NW, Suite 600 Washington, DC 20005-3931 Tel: (202) 289-3100 Fax: (202) 289-3199 http://www.ahla.com American Resort Development Association 1201 15th St. NW, Suite 400 Washington, DC 20005 Tel: (202) 371-6700 Fax: (202) 289-8544 http://www.arda.org Hospitality Net BV Akersteenweg 31 6226 HR Maastricht Netherlands Tel: 31-43-362-6600 Fax: 31-43-362-6770 http://www.hospitalitynet.org

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Hospitality Sales and Marketing Association International 1760 Old Meadow Rd., Suite 500 McLean, VA 22102 Tel: (703) 506-3280 Fax: (703) 506-3266 http://www.hsmai.org International Hotel and Restaurant Association 41 Ave. General Guisan (Lausanne) 1009 Pully Switzerland Tel: 41-21-711-4283 http://www.ih-ra.com

ABOUT

THE

AUTHOR

Michael P. Auerbach has more than sixteen years of professional experience in public policy and administration, economic development, and the hospitality industry. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He has been associated with the hotel industry since 2006, both in Massachusetts and in other regions of the United States, and has worked closely with the American Hotel and Lodging Association and the International Society of Hotel Association Executives.

FURTHER

READING

ASIS International. Career Opportunities in Security. Alexandria, Va.: Author, 2005. Available at http://www.asisonline.org/careercenter/ careers2005.pdf. Barrows, Clayton W., and Tom Powers. Introduction to Management in the Hospitality Industry. 9th ed. New York: John Wiley & Sons, 2009. _______. Introduction to the Hospitality Industry. 7th ed. New York: John Wiley & Sons, 2009. Brymer, Robert A. Hospitality and Tourism. 11th ed. Dubuque, Iowa: Kendall/Hunt, 2004. Business Travel News. “STR Downgrades 2009 Hotel Forecast, but Sees Some Recovery.” April 28, 2009. http://www.btnonline.com/

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Hotels and Motels Industry

businesstravelnews/search/article_display .jsp?vnu_content_id=1003967053. CareerBuilder.com. Salary Calculator and Wage Finder. http://www.cbsalary.com/salarycalculator. Careers.org. Occupation Profiles: Descriptions, Earnings, Outlook. http://occupations .careers.org. Dopson, Lea R., and David K. Hayes. Managerial Accounting for the Hospitality Industry. Hoboken, N.J.: John Wiley & Sons, 2009. Internal Revenue Service. “Hotel Industry Overview: August 2007—History of Industry.” http://www.irs.gov/businesses/article/ 0,,id=174494,00.html. Larkin, Enda. How to Run a Great Hotel: Everything You Need to Achieve Excellence in the Hotel Industry. Oxford: How to Books, 2009. Lee-Ross, Darren, and Conrad Lashley. Entrepreneurship and Small Business Management in the Hospitality Industry. Boston: ButterworthHeinemann, 2009. Medlik, S., and H. Ingram. The Business of Hotels. 4th ed. Oxford, England: ButterworthHeinemann, 2000. PayScale.com. “Salary Survey for Job: Catering Sales Manager (United States).” January 28, 2010. http://www.payscale.com/research/ US/Job=Catering_Sales_Manager/Salary. PKF Hospitality Research. “PKF Revises 2009 U.S. Forecast.” Hotels, October 28, 2008. http:// www.hotelsmag.com/article/CA6609097.html. Rogers, Tony. Conferences and Conventions: A Global Industry. 2d ed. Tony Rogers. London: Butterworth-Heinemann, 2008. Rutherford, Denney G., and Michael J. O’Fallon. Hotel Management and Operations. 4th ed. New York: John Wiley, and Sons, 2007. SalaryList.com. “Manager of Information

Technology Jobs Salary, Ranked by Salary.” http://www.salarylist.com/all-manager-ofinformation-technology-real-jobs-salary.htm. Smith Travel Research. “Hotel Industry Posts Record Revenue in 2008, Other Metrics Slide.” Hotel News Resource, June 23, 2009. http:// www.hotelnewsresource.com/HNR-detail-sid39541.html. Stoessel, Eric. “Marriott Posts Steep Declines.” Lodging Hospitality, July 16, 2009. http:// lhonline.com/news/marriott_second _quarter_0716. United Nations World Tourism Organization. “Testing Times for International Tourism.” UNWTO World Tourism Barometer 7, no. 2 (June 2009). http://www.unwto.org/facts/eng/pdf/ barometer/ UNWTO_Barom09_2_en_excerpt.pdf. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Hotel, Motel, and Resort Desk Clerks.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos132.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Venison, Peter. One Hundred Tips for Hoteliers: What Every Successful Hotel Professional Needs to Know and Do. New York: iUniverse, 2005. Walker, John R., and Jack E. Miller. Supervision in the Hospitality Industry: Leading Human Resources. 6th ed. Hoboken, N.J.: Wiley, 2010.

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Polish and Other Sanitation Goods Manufacturing; Soap and Other Detergent Manufacturing; Soap, Cleaning Compound, and Toilet Preparation Manufacturing; Surface Active Agent Manufacturing; Toilet Preparation Manufacturing Related Industries: Apparel and Fashion Industry; Chemicals Industry; Retail Trade and Service Industry Annual Domestic Revenues: $102.7 billion USD in manufacturing (IBIS, 2010); $227.2 billion USD in sales (IBIS 2010) Annual International Revenues: $441.4 billion USD (Datamonitor, 2010) Annual Global Revenues: $492.4 billion USD (Datamonitor, 2010) NAICS Number: 3256

INDUSTRY

retail and online stores, such as beauty supply stores and pharmacies. The industry exists worldwide and includes one-person firms as well as major corporations such as Procter & Gamble.

History of the Industry Civilizations have been using and making household and personal products since ancient times. Makeup, for instance, in many ancient cultures such as Egypt, was thought to have magical properties, while perfumes initially had religious associations. Some cultures viewed them, as today, as enhancements or replacements for physical beauty or used them to decorate the dead. Beauty enhancement was not initially limited to women. For example, in ancient Egypt, men and women lined their eyes with kohl. Makeup could also indicate or hide social status or act as part of the preparation for war—to frighten opponents: Ancient Britons painted themselves with blue woad to frighten Romans. Initially, many cultures relied on homemade products of locally available raw materials. One of

DEFINITION

Summary The household and personal products industry manufactures and sells nondurable goods, from toilet-bowl cleaners and floor waxes to deodorants and lipstick. These items are sold through multiple 937

©Monika Adamczyk/Dreamstime.com

Household and Personal Products Industry

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Household and Personal Products Industry

Selecting the appropriate shampoo may not be so easy. Procter & Gamble makes twenty-two varieties of Pantene and eleven of Head & Shoulders. (©Dreamstime.com)

the first factories for perfumes was found at Pyrgos, the southern end of Cyprus, dating back approximately four thousand years. Culturally, makeup was not necessarily accepted worldwide. For example, in ancient Israel, only prostitutes wore makeup. Other personal products such as soaps followed much the same pattern as makeup: They were homemade initially and culturally accepted in certain places while viewed with skepticism in others. Household products were also initially made the same way—from local materials and by hand, typically by the women in the household— and there was not necessarily one set recipe to concoct a product. Traveling peddlers also sold personal and household items—sometimes these were items they had made themselves—that could be useful but more often than not were fake or, worse, dangerous. Eventually, guilds oversaw the processes and creation of certain products such as soap. Different sections of the household and personal products

industry were overseen by various guilds or were left entirely in the hands of individuals. However, during the Middle Ages, wearing makeup became associated with low morals. During the Renaissance, pale skin was deemed attractive, and dangerous powders made of lead to whiten the face were used by both men and women. Mercury was another substance in the cosmetic registry used on women to brighten their cheeks. The modern industry did not get its start until the Industrial Revolution, when the industry grew exponentially. There was a larger market for personal products as the middle class was created and grew, and there was a greater ability to create large amounts of product in a shorter time period, lowering the cost of such luxury items. With the growing concern for health, personal products such as soaps were successfully commercialized and sold. Major companies such as Clairol, L’Oreal, and Max Factor began industrial-scale operations. Initially, these companies had their own stores and

Household and Personal Products Industry chemists. Despite their creation, it was not until the 1920’s that cosmetics were seen as an acceptable part of the fashion industry and successfully advertised in women’s magazines. Until then, cosmetics, hair dyes, and the like were viewed as being worn only by women with low morals. They became more acceptable once they were popularized by movie stars. By this time, the industry had expanded into fashionable department stores. Household products had also moved from the private homemaker’s world into an industry where soaps, detergents, and other cleaners could be purchased through mail-order catalogs, as well as general goods stores. During World War II, many items were rationed, including products within the industry. Afterward, they became regulated in other ways. By the 1970’s, laws limited permissible ingredients in household products. In addition, the use of animals to test products became public knowledge, and some consumers reacted by refusing to purchase products tested on animals. For much of its history, the personal products industry marketed primarily to middle-class white women. It was not until the 1980’s that diversity became a keyword within the industry and products were developed for different ethnicities within the same company. With each decade, the marketing of household and personal products shifted with current political and social trends as well. The Industry Today Worldwide, cultural views and uses of makeup and household products are not the same, though with the advances in worldwide communications, there are very few places where advertising does not proliferate—whether online, on billboards, in magazines, on television, or on the radio. The major sectors of the industry own individual brand names that market not only specific products but also to specific cultures and cultural needs or desires. Skin-whitening products make up the sales for 60 to 65 percent of the female market in India, while in the United States antiaging personal products make up the bulk of sales to women. Green products have become popular, and products with environmentally friendly packaging or that use natural elements—such as minerals and nutrient-rich muds—are growing rapidly in demand over chemically laden products. The mar-

939

ket, though initially affected by the economic downturn of 2007-2009, is on the rise again. According to IBISWorld, it is expected to experience only moderate growth over the five years from 2010 to 2015. This will occur in line with favorable long-term underlying economic, demographic and social trends. As with the previous five year period, the industry is expected to continue to benefit from an increasing awareness of health and wellbeing, which will see the development of more health-oriented products. Continued product development including in natural/organic, cosmeceutical or nutraceutical fusion products as well as environmentally friendly/green products and ultra-niche products will also help stimulate industry growth.

The generation that drives sales behind the household and personal products industry is the generation of aging baby boomers and their children. The first group is most responsible for the antiaging trends within personal products and requests. They also purchase chemical cleansers and brand names they grew up with, such as Comet or Lysol, while the following generation is equally interested in more natural, organic, and environmentally safe personal and household products. Today, the industry is guided by government and other regulatory agencies, such as the Consumer Product Safety Commission, the U.S. Food and Drug Administration (FDA), and the FDA Center for Food Safety and Applied Nutrition. Reg-

A trend in household cleaners has been toward environmentally friendly, natural products, such as this line of nontoxic cleaners, safe for pets and children. (AP/Wide World Photos)

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Household and Personal Products Industry

ulations ban certain types of ingredients outright, limit the uses of others, and govern how certain products can be created, tested, labeled, packaged, marketed, and advertised. Companies within this industry vary in size and operation but typically fall into either the small or large business category. Smaller businesses include one-person operations that create their own products, selling them either at specialty stores, at farmers’ markets, or online. These small companies are operationally limited: They do not have the financial backing or cash flow to order raw materials in bulk or to open and operate stores or factories worldwide. However, the Internet has helped them succeed. With online marketing, small operations such as Sweet Petula have been able to reach a wide audience on Facebook, Twitter, Etsy, blogs, and local business-support Web sites. Small companies rely most heavily on wordof-mouth and repeat customers. They have a unique position within the industry in that they can quickly change their product lines and cater to specific customers, even individual customers, for

product requests and suggestions. Large companies take much longer to change their products to meet changing demand. Large companies are conglomerations of multiple brand names. Procter & Gamble, for example, is the leading manufacturer on the market, sells over three hundred brands, and has a 20.6 percent market share. SC Johnson is best known for household cleaning products such as Pledge, Glade, and Windex, operates in over seventy countries, and has approximately twelve thousand employees. Large corporations such as these had their start in the 1800’s, when the industry was just beginning to grow. Even if the overarching corporation is not as well-placed in consumers’ minds, the memories of brand names such as Pledge still stick, especially with the older generations. While large companies such as Procter & Gamble rely on brand loyalty, they have greater marketing reach and can sell their products at lower prices than can smaller companies. However, the major competitors of brand-name items have become value items, such as a store’s in-house version of a brand-name product. While sales of basic personal items such as soap, shampoo, and shaving products are generally not affected very much by economic trends, Standard and Poor’s noted some consumers “trading down to ‘value’ brands and private-label products in 2009.” Walmart is a large retailer of in-house brands. The most well known Walmart brands include Equate and Great Value, among nearly thirty others that compete in many industries. With conservative spending during the economic downturn, in-house brands saw a jump in sales. However, the market for brand-name items has a favorable outlook.

INDUSTRY MARKET SEGMENTS

Aging baby boomers are making antiaging products such as Olay’s Regenerist popular. (AP/Wide World Photos)

The household and personal products industry ranges in size from one-person operations to large global companies and serves primarily individual consumers through storefronts that vary in size. There are no true midsize companies within the industry—all are either small or large. The following sections provide a comprehensive breakdown of each of these different segments.

Household and Personal Products Industry OCCUPATION

941

PROFILE

Online Merchant Considerations

Qualifications

Description

Sells merchandise through the Internet.

Career clusters

Business, Management, and Administration; Human Services; Information Technology; Marketing, Sales, and Service

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

On-the-job training; junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Volunteer work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Small and Midsize Businesses Small household and personal product manufacturers, according to the U.S. Small Business Administration, range from one to one thousand employees. Within the sales industry, a small business earns $7 million or less per year. At the lowest end of the spectrum, with only a handful of employees, these companies typically manufacture and sell their own products online or at farmers’ markets. At the higher end of the spectrum, products may be sold wholesale to a small or specialty retail shop that in turn sells to the public at a markup. In the household and personal products industry, there is no true midsize business category. Either the companies are small, with one thousand employees or fewer, or they are large-scale. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), industrial engineers in the household and personal products industry earned an average of $77,460 in 2009, and chemical engineers earned an average of $86,900. Chemists earned an average of $68,620, and chem-

ical technicians earned an average of $42,070. The combined average salary of all production workers was $32,630, while production supervisors earned an average of $57,220 and production managers earned an average of $96,190. Sales representatives earned an average of $71,310, while sales managers earned an average of $120,300. General and operations managers earned an average of $132,640. Clientele Interaction. To compete for business, very small companies—such as one-person operations—have a greater need to be seen and known by the public, as the competition is exceedingly high within the industry at all levels. One-person operations need to have good interpersonal relationships with vendors and markets where they hope to sell their products, and they often reach out to consumers directly. One-person operations may also have good relationships with material manufacturers and vendors in order to get discounted products. Small companies with more employees at the production end of the industry need good negotiators in order to get contracts with

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those companies that will carry and sell their products because the product is not sold for free but for a fee. Small companies that act as the storefronts have more clientele interaction with consumers and need to be knowledgeable about the products they are selling on behalf of other companies or else the companies may not renew contracts and their sales figures may drop significantly. Amenities, Atmosphere, and Physical Grounds. The manufacturing portion of the industry is likely to include a specific physical location where chemicals are handled under multiple precautions. There will be emergency aid kits in case of accidents as well as wash stations. Depending on the types of chemicals used, there may or may not be clean rooms. Typically, there will be restrooms and other amenities that offices generally have in order to support their employees. The sales section of the industry will have an organized layout with signage directing customer traffic. Ideally, the atmosphere will be friendly and conducive to shopping. There may or may not be public restrooms available. A one-person operation is most often a home business. Typical Number of Employees. Because small companies are limited in the types and numbers of products they can produce and sell, they also limit their staff size. In some cases, the owners are the only full-time employees. Traditional Geographic Locations. Singleperson operations work locally, often on their own property, and sell their products through an online storefront or at a local farmers’ market or specialty boutique. Small companies that sell household and personal care products are located in the remotest areas across the world, but they are not likely to own a chain of stores. Pros of Working for a Small Business. Because owners of small companies act as both owners and employees, there is less overhead and more potential profit. However, there is often less product available because of the abilities of a small company. The small business can also neatly fill a niche and focus on a specific type of product such as allorganic and nonanimal tested. The few employees a small company might employ will often be friends or family. Owners of smaller companies do not typically need to acquire advanced degrees in business and most employees receive on the job training, especially for those working in the sales portion.

Cons of Working for a Small Business. For the sector of this industry working with chemicals, a degree or licensing will likely be needed to meet insurance needs or federal requirements of a small company. The hours may also be longer for those employees working in the chemical portion of production in this industry because once a chemical process has begun it cannot be stopped, and if there is only a single person they will be required, most likely, to remain to see the process through to the end. The company’s product line will often be limited because of the inability to develop multiple products with few available employees or even the limited physical space of a small company. Also due to its size, the commercial outreach will be far smaller than a larger company though the Internet may take care of reaching a global market. Costs Payroll and Benefits: Smaller companies may offer federal or state mandated benefits depending on their size. To save money and time, smaller companies may not offer vacation or sick leave. Also, because of low product sales, employees earn less than their larger company counterparts. Supplies: Small companies within this industry require a wide range of supplies, from chemicals to office supplies, depending on the products produced. External Services: Small household and personal product companies may contract Web hosting, hazardous waste disposal, cleaning, accounting, legal counsel, marketing, or equipment maintenance and repair. Utilities: Typical utilities include Internet and phone service, as well as electricity, water, sewage, and gas or oil. Taxes: Small businesses must pay income and property taxes. Self-employed persons may report their business income on their personal returns and pay self-employment taxes. Large Businesses Large businesses are well-established companies with over one thousand employees, or over $100 million in annual profits. The top thirty personal and household products companies each earn more than $300 million per year in profits. A large company focuses on a variety of products

Household and Personal Products Industry from household cleansers to makeup. These companies have recognizable brand names, such as Procter & Gamble, which owns multiple brands including Tide laundry detergent and Covergirl cosmetics. Large firms are located worldwide. Unilever, the top British company within the industry according to Household and Personal Products Industry (HAPPI), has offices globally from Argentina to Zimbabwe. Large companies such as Unilever and Procter & Gamble often have in-house teams of chemists and producers that create and manufacture their products. Potential Annual Earnings Scale. According to the BLS, industrial engineers in the household and personal products industry earned an average of $77,460 in 2009 and chemical engineers earned an average of $86,900. Chemists earned an average of $68,620, and chemical technicians earned an average of $42,070. The combined average salary of all production workers was $32,630, while production supervisors earned an average of $57,220 and production managers earned an average of $96,190. Sales representatives earned an average of $71,310, while sales managers earned an average of $120,300. General and operations managers earned an average of $132,640. Clientele Interaction. The companies that own popular brands are very conscious of their public interaction because of potential earnings loss should their branding be damaged. If a brand were to be associated with unpopular practices, such as hiring undocumented immigrants or dumping pollutants into oceans, sales could suffer. Companies conscious of the importance of branding interact with the public online through cheerful Web sites that discuss company policies and standards. The

Crest toothpaste is one of many household and personal products made by industry giant Procter & Gamble. (AP/ Wide World Photos)

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brands owned by the large companies interact on a closer level with the public through television and print advertisements and spokespeople such as famous actresses and models for makeup brands such as Covergirl. On an even closer scale, employees of stores that sell a company’s products interact on a personal level with consumers. Amenities, Atmosphere, and Physical Grounds. Large-scale companies have storefronts worldwide, as well as an online presence, and may include amenities for their employees such as an on-site gym, a cafeteria, or other recreational facilities and executive perks. Different industry functions require different facilities. Some plants include laboratories for experimenting or animal testing, as well as emergency care facilities in case of accidents. The stores that sell the products, such as CVS or Target, offer some public amenities such as restrooms. Typical Number of Employees. Large companies employ more than one thousand employees. Traditional Geographic Locations. Large companies are often global. They typically have headquarters in major cities, as well as production and research facilities in industrial areas outside metropolitan centers. Retail stores are located in rural, suburban, and urban communities throughout the world. Pros of Working for a Large Business. Large companies pay competitively and offer good benefits such as 401(k) plans, health insurance, paid vacation, and sick time. There is the potential for travel worldwide to different company offices. There is also a greater chance for promotion and pay raises. With a larger company there is often a safety program in order to meet federal, state, or a country’s standards. Many large companies are able to give back to the community through large donations to charities or through scholarships to universities. For example, Procter & Gamble sponsors a scholarship for chemical engineering students at the University of Florida Foundation. Cons of Working for a Large Business. Large companies are large bureaucracies, and employees may become frustrated by ineffective communication, confusion, or red tape. A large company may also be less personal with the employees and more structured and regimented when dealing with them. There is a high level of competition to enter into the industry and even from within the com-

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pany for raises and recognition, which can lead to added stress. In a stressful economic period, downturns, hiring freezes, and layoffs are highly likely. Working in other countries can be difficult because of language and cultural barriers, and an employee must be prepared to move to a country not of their own choosing. The balance between personal and work life may be difficult to achieve. As a single employee within a very large firm, the job a single person would have to do in order to get noticed by management would need to outshine several hundred or thousands of other employees. For managers, there will be unionized employees, which can add another level of difficulty in trying to meet union rules such as staffing regulations and time schedules. Costs Payroll and Benefits: The salary structure varies widely, as there are many types of employees with various jobs and skills. Supplies: Personal and household product companies require various supplies depending on the products they create. These may include chemical-handling and disposal equipment, industrial manufacturing machines and computers and software to control them, research laboratories, vehicles, and gasoline, as well as typical office supplies and equipment. External Services: Large companies may contract cleaning, maintenance, landscaping, security, catering, audiovisual services, Web design, accounting or auditing, legal counsel, lobbying, hazardous waste disposal, or information technology support. Utilities: Typical utilities for a large company include water and sewage, electricity, Internet, and perhaps cable television. Taxes: Large companies must pay local, state, federal, and international income and property taxes, including sales taxes, tariffs, and import/ export fees where applicable.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The household and personal products industry includes numerous job roles pertaining to the

preparation, manufacturing, packaging, and selling of a variety of products. Some of these products include dishwashing detergents, soaps, toothpaste, laundry cleaners, polishes, waxes, perfumes, shaving creams, hair care products, beauty creams and lotions, sunscreen, cosmetics, bath salts, deodorants, nail care products, and toilet creams. Companies within this industry may be responsible for any combination of preparing, manufacturing, packaging, or selling of these products. Job roles, though, will be relatively similar whether as part of a small business or large business. Small businesses may require employees to fulfill multiple job roles, whereas large businesses will often employ specialists or employees who fill only a single role. As a result of steep competition within the industry, businesses specifically involved in the manufacturing of soap and cleaning compounds reduced their employment by an average of 4.8 percent between 2005 and 2010. These companies are expected to further reduce employment by 5.3 percent each year through 2015. Also, as technology has advanced, much of the production of these products has become automated. In 2010, computers generally control the production equipment and manage the inventory. The following umbrella categories apply to the organizational structure of businesses in the household and personal products industry: ■ ■ ■ ■

■ ■ ■ ■ ■

Business Management Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources Business and Financial Office and Administrative Support

Business Management Business managers provide top-level leadership of their companies. They drive the direction of a company and create the culture and attitudes that it encompasses. Business managers develop procedures, policies, and goals that form the framework and foundation for their companies. Large companies have multiple departments and one or more business managers that are responsible for each

Household and Personal Products Industry area. Small companies may not have many separate departments as employees will serve multiple roles, but one or more business managers are responsible for each company. Business managers ensure that each department is functioning effectively and to the benefit of the company as a whole. Ultimately, those in business management are responsible for the success or failure of the company. Because of the high level of responsibility, business management jobs require the most experience and education, while also earning the highest salary. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) Marketing Manager Sales Manager Account Manager Human Resources Manager Engineering Manager Product Manager Natural Sciences Manager

Sales and Marketing Sales and marketing is one of the most critical components of the household and personal products industry. Products cannot be sold without successful marketing. Marketing can include media advertising, coupons, sponsorship, or Internet advertising. Although marketing is by its nature very fluid, there are some standard methods of sales and marketing throughout the industry. The first sales and marketing technique is the movement into global markets in search for new product demand. Because most of the products in this industry are staples of the traditional household, there is little room to increase sales of a product in a saturated market. Purchasers in the United States are at the point where their only purchases are for replacing depleted products in the household. Sales and marketing departments, therefore, are refocusing their efforts on global markets that have not yet reached their saturation points. Sales and marketing departments are also focusing their efforts on major core brands and letting peripheral products fail. Unilever, for example, has reduced its number of brands from

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sixteen hundred to four hundred in order to focus its efforts. This refocus allows the company to direct all of its resources to a central location, rather than spreading it to thinly amongst too many products. Another development in the sales and marketing of household and personal products is the movement to more eco-friendly or green products. Sales and marketing employees have taken advantage of the global green movement in order to promote products that are created with organic or allnatural components and packaging. Companies have found that something as simple as new green packaging for an existing product can increase sales. Somewhat related to the green movement is the importance of innovation in the creation of new products. Sales and marketing departments focus a large amount of effort into developing new products, creating a novel concept, or improving existing products or packaging. A stagnant product can quickly fade away in such a market, unless it has already been deeply established. Even these established products, though, are facing pressure to innovate and evolve in order to maintain their foothold. The Internet has also changed the importance of marketing, as smaller niche companies are more able to reach target customers than ever before. Facebook pages for specific products have become increasingly utilized as a method to reach the consumer. Employees within this area must be flexible, creative, innovative, and have excellent communication skills in order to develop strong relationships. They must know their customers and be able to devise methods for connecting with them. They create brand identity so that each product is unique and recognizable by the public. Sales and marketing occupations may include the following: ■ ■ ■

■

■ ■

Art Director/Artwork Coordinator Graphic Designer Public Relations/Communications Coordinator Business Development Manager/ Coordinator Sales Consultant/Representative Brand Manager

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Facilities and Security The household and personal products industry includes businesses with facilities for any combination of preparing, manufacturing, packaging, or selling of products, in addition to corporate offices. These buildings require some level of maintenance and possibly security. Individuals in these job roles do not necessarily need specific expertise in the industry itself and instead require only knowledge of their job duties. These job roles do not make up a large portion of the industry and are among the lowest paid, but they also require the least amount of education. Facilities and security occupations may include the following: ■ ■ ■ ■ ■

Custodian/Janitor Maintenance Supervisor Maintenance and Repair Worker Security Supervisor Security Guard

Technology, Research, Design, and Development Technology, research, design, and development are crucial components of the household and personal products industry. Research and development personnel create the products and product innovations that are so important for the sales and marketing department. The two departments often work in close collaboration in order to achieve success. For example, while the sales and marketing department is responsible for selling the idea of a green product, it is the technology, research, design, and development department that is responsible for developing products that are green. This type of innovation, in particular, has become important as a result of recent environmental and health concerns. The focus on green products is expected to continue through 2015. The household and personal products industry is highly competitive, and technology, research, design, and development are the sources and keys of that competitiveness. Companies strive to become the first to release a new product so that they may gain footholds in new market segments. This competition has led to thousands of new products flooding the market each year, but only 15 percent of those new products succeed. Research and development personnel develop

Lipstick and eyeshadow are available in many colors. For example, Revlon’s Super Lustrous lipstick comes in seventytwo shades, and Ulta offers more than ninety shades of eyeshadow. (©Francisco Caravana/Dreamstime.com)

new products, which could be either brand new or modifications of existing products. Stagnant products can easily fade in the saturated contemporary market, and successful research and development departments are responsible for the evolution of the company’s products. Many of the largest companies in the industry began with single products that evolved and expanded to help grow their companies into global entities. Research and development job roles can be extremely specialized and require advanced expertise in technology, life science, pharmaceutical science, or social science. Employees may be required to hold engineering degrees, master’s degrees, doctorates, or postdoctoral degrees. As a result, these positions are generally well paid. Technology, research, design, and development occupations may include the following: ■ ■

Information Technology Specialist Computer Systems Analyst

Household and Personal Products Industry ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Systems Administrator Data Manager Chemist Biochemist Chemical Technician Raw Material Specialist Project Engineer Package Engineer Chemical Engineer Industrial Engineer Chemical Engineering Technician Industrial Engineering Technician

Production and Operations Whereas the technology, research, design, and development area develops and invents products and the sales and marketing area pushes the products to consumers, the production and operations area manufactures and sells products. Individuals in these job roles are responsible for the products consumers see on the shelves and consume in their households. Unfortunately, job roles in this area have been taken up by machines and computers as technology has advanced. As companies try to increase their efficiency and decrease their operating costs, this is the area that has been most affected. Just as the automotive industry was hit hard by mechanical and computerized automation, so, too, has the household and personal products industry. All of the major companies in this industry have cut jobs in this area while maintaining the same wage level. Employees in this area may be required to work with raw materials in the creation of their products but are most often utilized in the operation of machinery. Although they will be working with very specialized products and components, employees in this area do not necessarily require special knowledge of the industry, instead requiring knowledge of machine and computer operations. Individuals are also required to maintain the heavy equipment and machinery. Production and operations occupations may include the following: ■ ■ ■ ■ ■

Plant Director Team Assembler Chemical Equipment Operator Mixing and Blending Machine Operator Packaging and Filling Machine Operator

■ ■ ■ ■ ■ ■ ■ ■

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Industrial Machinery Mechanic Maintenance and Repair Worker Quality Inspector Production Worker/Shift Technician Store Manager Assistant Manager Retail Salesperson Stock Clerk

Distribution Distribution personnel move products from manufacturing locations to selling locations. After products are manufactured and packaged individually, they must be packaged for shipping, generally on pallets or in crates. Much of this packaging is automated, but the loading and unloading of the materials is still manual. After a product is ready for distribution, it is picked up by an industrial truck for loading and shipping. This truck can be owned by the manufacturer, the seller of the product (if it is a secondary seller), or an independent trucking company. The product may be delivered to a distribution center for the manufacturing company or selling company, or directly to a retail store. Employees in this area do not require specialized knowledge of the industry. In the case of some distribution methods, some employees, such as truck drivers, may not even be employed within the industry. These positions are generally not highly paid and do not require advanced education. Distribution occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Industrial Truck and Tractor Operator Heavy Truck Driver Light Truck Driver Equipment Operator Material Mover/Handler Packer and Packager Warehouse Manager Shipping and Receiving Clerk Dispatcher

Human Resources The human resources department is responsible for all the employees within the company. It does not work with the products in the industry, instead focusing on tasks related to the employees themselves. Human resources personnel prepare

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and distribute employment evaluations; facilitate new employee orientation, training, and education; and maintain employment records pertaining to personal information, earnings, absences, and performance. They also administer employee benefits, such as vacation and insurance, and are responsible for the recruitment of new employees. Human resources positions do not make up a large portion of the industry, but they exist in nearly every company. Large companies have large departments focused only on human resources issues, but a small company may have a single person who managers human resources in addition to numerous other tasks. These positions do not generally require specialized knowledge of the industry, but can require advanced education, specifically for human resources managers, who earned an average of $91,570 in 2009. Individuals in this area must work well with people and understand the workings of the company and its benefits. They must be patient and able to convey information in an effective manner. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■

Human Resources Manager Human Resources Assistant Human Resources Specialist Human Resources Professional Recruitment Officer Training Officer

Business and Financial The business and financial department is responsible for all financial dealings within a company. Large companies, especially, have welldeveloped business and financial departments to handle the monetary activity of the company. Companies within the household and personal products industry perform complex financial transactions that can require a large department to execute and track. Financial tracking and reporting are exceedingly important in informing future directions of the company and providing background for future transactions. Because of the variety of purchases that go into this industry (such as raw materials, equipment, buildings, staff, and trucks), the business and financial activities can become very numerous and complex.

Positions within this area generally require advanced education, but they also offer a generous pay scale. The average annual wage for someone in this department was $64,780 in 2009. Business and financial occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Purchasing Agent Business Operations Specialist Accountant Auditor Financial Analyst Logistician Budget Manager Accounts Payable Clerk Accounts Receivable Clerk Tax Manager

Office and Administrative Support Although these positions do not receive the recognition or salary of the more technical job roles within the industry, office and administrative support staff are crucial to the day-to-day functioning of businesses. Because of the numerous products involved, a large amount of paperwork and tracking must be maintained. As a result, these positions make up a significant portion of the industry. A single large company may employ thousands of individuals to serve these roles alone. Employees in these job roles can have a multitude of tasks, such as answering phones, filing, making travel reservations, organizing meetings, and processing paperwork. Employees must have strong organizational and communication skills, and pay attention to detail. The accurate retention of records within a company is a good indicator of its success. Office and administrative support occupations may include the following: ■

■ ■ ■ ■ ■ ■ ■ ■

Bookkeeping, Accounting, and Auditing Clerk Customer Service Representative Receptionist Production and Planning Clerk Shipping and Receiving Clerk Stock Clerk Executive Assistant Secretary Office Clerk

Household and Personal Products Industry INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise domestically and globally. However, this industry has oversaturated certain markets, and to continue to generate revenue, more targeted marketing and group-specific products are needed, such as products designed for men only or teenagers. Furthermore, the market experienced a minor downturn in 2009 caused by economic fluctuations domestically and globally, with people purchasing value items instead of brand-name items. However, it is projected that growth will resume shortly. Globally, import and export levels have been inconsequential to the market over the last five years. According to IBISWorld, “in 2008 exports at $6.79 billion were at their highest level since 1997 but even then accounted for just 13 percent of industry revenue.” In the wake of the recession, export revenue declined to $6.30 billion, and the market did not regain its lost ground in exports in 2010. Local manufacturers have begun to target more specific international markets in an attempt to boost production and sales. Within the industry, there are multiple jobs, ranging from cashiers at storefronts who need no advanced degrees and receive on-the-job training to cosmetic chemists who need advanced degrees to work in labs that work on testing and developing new products. According to the BLS, the industry has higher earnings on average than other manufacturing industries, with over half the jobs going to workers “involved in production and in installation, maintenance, and repair.” There are multiple segments within the chemical manufacturing industry, which is where most of the household and personal product industry resides. Production occupations range from plant operators to machine maintenance to packing and product movers. Some 12 percent of the workforce is in professional or related occupations, which include chemists, researchers, chemical engineers, and the like—those people who are most closely associated with product research and development. Some 11 percent of industry workers fill positions in office and administrative support, while 10 percent work in management, business, and financial occupations, including engineering managers and sales managers.

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While the market is expected to make a comeback and is on a slight rise, employment is not expected to improve within the industry and is in fact in decline. There will be a great deal of competition for these jobs. The decline is due to the global economic slump. Furthermore, with rapid advancement and improvement in production technology, there is a reduced need for workers in the areas of production, installation, maintenance, and repair. However, it will be important to have an understanding and level of comfort with technology in order to work in this field. Meanwhile, overall, companies, to save costs, are merging or consolidating to remove duplicate tasks and to move overseas where production and operating costs are lowest. East Asia and Latin America are the expected recipients of many U.S. companies. Employment in this industry will be difficult to obtain, especially for those who are entering this industry for the first time. According to the BLS, For production jobs, opportunities will be best for those with experience and continuing education. For professional and managerial jobs, applicants with experience and an advanced degree should have the best prospects. In addition, some job opportunities will arise from the need to replace workers who transfer to other occupations or who retire or leave the labor force for other reasons.

Employment Advantages Even though the household and personal products industry is facing declining employment, despite the industry itself being on the rise, individuals who have higher education, especially doctorates in chemistry or cosmetic chemistry, and who are also interested in environmentally safe and healthy products and production should consider joining this industry. The trend on the rise for the foreseeable future will be for sustainable production and environmentally friendly products. The decline in hiring means competition will be high for positions, and those students who excel academically and who are capable of thinking outside the box and being creative will have better chances for employment within this industry: The industry is always looking for new products to sell to old and established markets, as well as to new demographics. Training and advancement within the industry vary based on the categories of occupations.

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Household and Personal Products Industry

Annual Earnings Globally, the household products portion of the industry has a forecasted value of $95.1 billion in 2013, which represents a 15.1 percent increase in the market since 2008, while the personal products sector is forecast to be worth $424.1 billion by 2013, which represents an increase of 17.4 percent since 2008. Domestically, the industry’s value is forecasted to increase from $51.75 billion in 2010 to $60.55 billion in 2015.

RELATED RESOURCES FOR FURTHER RESEARCH American Cleaning Institute 1331 L St. NW, Suite 650 Washington, DC 2005 Tel: (202) 347-2900 Fax: (202) 347-4110 http://www.cleaninginstitute.org COSMETIC NEWS, Communications International Group 12-14 rong-point des Champs Elysees 75008 Paris France Tel: 33-1-53-53-16-67 Fax: 33-1-53-53-14-00 http://www.cosmeticnews.com CosmeticsDesign.com, Decision News Media Le Belem 355, rue Vendemiaire 34 000 Montpellier France Tel: 33-4-99-53-28-70 Fax: 33-4-99-52-28-75 http://www.cosmeticsdesign.com HAPPI Rodman Publishing 70 Hilltop Rd. Ramsey, NJ 07446 Tel: (201) 825-2552 Fax: (201) 825-0553 http://www.happi.com

ABOUT

THE

AUTHORS

Michelle Marie Martinez is an assistant professor and librarian at Sam Houston State University. She is a 2007 graduate of the University of North Texas Graduate School of Library and Information Sciences and a 2005 graduate of Sam Houston State University where she earned an M.A. Her research includes a wide variety of topics including Shakespeare, feminist literature, and film studies. She has presented research and papers at multiple conferences, including “Incest, Sexual Violence, and Rape in Video Games,” presented at Oxford University. Tyler Manolovitz is the digital resources coordinator and an assistant professor at Sam Houston State University. He earned an M.A. from the University of North Texas Graduate School of Library and Information Science in 2006. His research interests are varied and have included classic and contemporary literature, mythology, film studies related to Alfred Hitchcock and John Hughes, and sexual violence in video games. Manolovitz continues to research, write, and present at conferences internationally on a variety of topics.

FURTHER

READING

Betton, C. I. Global Regulatory Issues for the Cosmetics Industry. Vol. 1. Norwich, N.Y.: William Andrew, 2007. Boyd, Lydia. “Brief History of Beauty and Hygiene Products.” Duke University Libraries Digital Collections. http://library.duke.edu/ digitalcollections/adaccess/cosmetics.html. Dowd, Timothy John. The U.S. Market for Natural and Organic Personal Care Products. New York: Packaged Facts, 2005. Household and Personal Products Industry. “The International Top Thirty.” http:// www.happi.com/articles/2006/08/theinternational-top-30. Jones, Geoffrey. Beauty Imagined: A History of the Global Beauty Industry. Oxford, England: Oxford University Press, 2010. Key Note Publications. The Toiletries and Cosmetics Industry. Teddington, Richmond Upon Thames, England: Author, 2010.

Household and Personal Products Industry Packaged Facts and Netscribes. The U.S. Market for Home Fragrance Products. New York: Packaged Facts, 2004. Purifoy, Jennifer. “History of Twentieth Century Fashion: Understanding the History of Cosmetics.” http://www.digitalhistory.uh.edu/ do_history/fashion/Cosmetics/cosmetics .html. Richardson, Arna. “IBISWorld Industry Report 32562: Cosmetic and Beauty Products Manufacturing in the U.S.” Santa Monica, Calif.: IBISWorld, 2010. _______. “IBISWorld Industry Report 44612: Beauty, Cosmetics, and Fragrance Stores in the U.S.” Santa Monica, Calif.: IBISWorld, 2010. Snyder, Sophia. “IBISWorld Industry Report 32561: Soap and Cleaning Compound Manufacturing in the U.S.” Santa Monica, Calif.: IBISWorld, 2010.

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_______. “IBISWorld Industry Report 44611: Pharmacies & Drug Stores in the U.S.” Santa Monica, Calif.: IBISWorld, 2010. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Willett, Julie A. The American Beauty Industry Encyclopedia. Santa Barbara, Calif.: Greenwood Press, 2010.

©Dreamstime.com

Industrial Design Industry

INDUSTRY

SNAPSHOT

General Industries: Architecture and Construction; Arts and Entertainment; Information Technology; Manufacturing; Science, Technology, Engineering, and Math; Entertainment Career Clusters: Arts, A/V Technology, and Communications; Science, Technology, Engineering, and Math Subcategory Industries: Commercial Art and Illustration; Product Design; Strategic Consulting Related Industries: Advertising and Marketing Industry; Apparel and Fashion Industry; Automobiles and Personal Vehicles Industry; Computer Hardware and Peripherals Industry; Computer Software Industry; Furniture and Home Furnishings Industry; Household and Personal Products Industry; Motion Picture and Television Industry; Museums and Cultural Institutions Industry; Plastics and Rubber Manufacturing Industry; Scientific and Technical Services; Sports Equipment Industry; Textile and Fabrics Industry; Themed Entertainment Industry; Toys and Games Industry; Watches and Jewelry Industry Annual Domestic Revenues: $59.2 billion (Access Engineering, McGraw-Hill, 2009) Annual International Revenues: $20.8 billion (Access Engineering, McGraw-Hill, 2009) Annual Global Revenues: $90 billion (Reina and Tulacz, Engineering News Record, 2006) NAICS Number: 541

INDUSTRY

DEFINITION

that delight the customer and meet end users’ needs. The industrial design industry is at the interface between technology and human tastes, related equally to the arts and engineering in its focus on both the utility and efficiency of using the device or product for its intended purpose and the creativity of external appearance and expression. People in this industry exhibit creativity, flexibility, and the

Summary Industrial design is the professional service of creating and developing concepts and specifications that optimize the function, value, and appearance of products and systems. Industrial designers turn technological solutions into market products 952

Industrial Design Industry ability to turn ideas into pleasing and practical forms. The portfolios of industry-leading companies include projects in urban construction, manufacturing, industrial plant and project design, and often in strategic redesign of entire corporations. History of the Industry The idea of adding aesthetic value to functional tools has existed for several thousand years. From prehistoric times, weapons, tools, pottery, metal vessels, lamps, and furniture have displayed features that were added to make the items look better, as well as to provide functional improvements over prior versions. The artistic talents of the designer were integrated with the skills of the producer. Early patronage of the arts was mostly from royal or ruling families, including kings and religious leaders such as popes. The Renaissance in Europe brought a tradition of adding ornamental features to machinery. By the eighteenth and nineteenth centuries, the Industrial Revolution had brought mass manufacturing, replacing large numbers of artists and craftspeople with machines. Captains of industry realized that, all else being equal, the most artistic product would win in the market, and they added ornamental features to machinery to provide a distinctive look for competitive advantage. The School of Design at Lyons, France, was cited as an influence that gave French industrial products an advantage in the marketplace. By the middle of the nineteenth century, the British government had funded several schools of art and galleries. At the same time, a school of thought arose that held that the addition of art to machines often reduced their functionality. By the beginning of the twentieth century, the British government sought to establish common standards for product design, integrating functionality with aesthetic objectives. Scandinavian and German reactions to the ornamental style of machine design drove designs toward functionality and simplicity. American approaches to design combined elements of the British and German approaches. In the early twentieth century, the automobile, electrical appliances, and a flurry of new inventions provided opportunities for industrial designers to make these products more attractive to buyers. The Great Depression cut the price of labor and resulted in a great deal of creative genius, like that of mechanical engineer Frederick Winslow Taylor,

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being applied toward improving the efficiency of products. In the 1930’s and 1940’s, increasing aircraft speeds and the idea of drag reduction by streamlining caught the public fancy. Products ranging from railway engines and automobiles to toasters and fountain pens exhibited streamlining. The advent of metal-plating methods and of plastics made from inexpensive fossil hydrocarbons enabled low-cost, mass-produced durable forms to make machinery look highly polished. Raymond Fernand Loewy (1983-1986) is one of the most famous personalities in American industrial design. His contributions can be seen in cigarette packaging, refrigerators, buses, locomotives, and the livery of the Air Force One presidential aircraft. Richard Teague (1923-1991) and Charles Eames (1907-1978) and Bernice “Ray” Eames (19121988) are famous for their creations in the automobile industry, and Jonathan Ive (born 1967) for his in the computer industry. In Europe, Alvar Aalto (1898-1976) designed furniture, textiles, and glassware. The need for standardization and international recognition spawned professional societies. The International Council of Societies of Industrial Design (ICSID) was formed in 1957. In 1965, the American Society of Industrial Design, the Industrial Design Education Association, and the Industrial Designers Institute merged to form the Industrial Designers Society of America. The World Intellectual Property Organization (WIPO) was created in 1967 and serves to encourage creativity by promoting the protection of intellectual property throughout the world. It is useful to note that WIPO protects the intellectual property of industrial designers because this is the part of the design that contributes to the aesthetics, not the function, of the product. In the 1960’s and beyond, electronics products made in Germany and then in Japan began to dominate the marketplace, gaining a reputation for top quality. Sony Corporation’s Yasuo Kuroki (19322007) and Norio Ohga (born 1930) led the design efforts for cofounder Akio Morita. Soichiro Honda (1906-1991), son of a weaver and a blacksmith and rejected for military service because he was colorblind, brought his experience of bike repair, racing, education in metallurgy, and a philosophy that “engineering without personality does not have much value” to one of the world’s great automobile

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companies, known for tasteful designs and superlative quality. Japanese automobiles, popular in the East but initially viewed as cheap alternatives to large and luxurious American cars in the United States, eventually gained a well-earned reputation as attractive, functionally refined, and mechanically reliable vehicles as fuel efficiency became important and customers recognized their value. The quality movement, which started with American industrial engineering research, was heartily adopted by the Japanese kaizen (continuous improvement) movement and led to amazing advances in product quality, combined with excellent robotics engineering. American manufacturers, focused on aesthetics and advertising, and Europeans, focused on handworked exclusivity, could not match the quality of highly automated but well-run Japanese production. Tasteful Japanese designs such as those applied to the products of Sony, Nikon, Canon, Seiko, and the major Japanese automakers left no

doubt about the reasons these companies became world leaders. In the 1980’s, personal computing entered the world marketplace. Apple Computer invited revolutionary industrial designers to redesign the strategy for the whole corporation, applying lessons from Japanese electronics companies that had helped with early product components. These examples showed the value of industrial designers in developing not just the exterior forms of products but also the entire strategic plan and organizational structure of the corporation. Top industrial design houses became strategic consultants in addition to creating product designs under contract. Thus, modern industrial design became integrated into product design, starting with the conceptual planning stage. Computer-aided design (CAD) and graphic design software tools made possible virtual reality simulations of form and visual surface texture, enabling designers to build and modify realistic soft-

Computer-aided design and graphic design software tools enable designers to build and modify realistic software models of their creations. (©Dreamstime.com)

Industrial Design Industry ware models of their creations. Color laser printers, computer graphics, and laser holography made presentations much more realistic. Computer-generated forms for numerical machines and injection molding made model building precise and repeatable. Stereo lithography, derived from a printing process in which successive layers were cured and laid over each other to form threedimensional solid objects, revolutionized rapid prototyping. The first stereo lithograph was demonstrated in 1986. This methodology sharply reduced the time needed to make and refine models that were essentially generated from the same numerical mold as the final products. Although hand finishing and creativity based on hand-molded and sculptured models have certainly not disappeared, computer-aided methods have brought a large increase in the demand for technical skills as a part of the education of aspiring industrial designers. The Industry Today Industrial design has become a truly global enterprise. Since the automobile and electronics revolution in Japan and the economic boom in Asia in the 1980’s and 1990’s, technology-intensive manufacturing has grown in these nations. After the opening of trade with the People’s Republic of China and as labor costs have risen along with the standard of living in Japan and the Asia-Pacific nations, mass manufacturing has shifted to China. The world trade agreements of the 1990’s, combined with the growth of the Internet and mobile phone infrastructure around the world, have enabled the flow of products and ideas across continents. With this globalization comes the imperative of designing products using multinational teams, often working through Internet-based collaboration. It is common to find design teams working together in real time across continents and time zones, competing with other such teams to meet tight deadlines. Most successful industrial design companies in the United States and Europe participate heavily in international ventures, and many of the most successful design teams in Asia were able to expand their local ventures through collaboration with foreign enterprises. The industrial design industry is spread out over the entire spectrum of the world marketplace. Therefore, it is not surprising that the numbers cited by various sources differ widely. The U.S. Bu-

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reau of Labor Statistics (BLS) estimated that more than 44,000 people were working as industrial or commercial designers in 2009. Of these, some 24,600 were industrial designers, working in more than 11,200 establishments. The Industrial Designers Society of America lists sixty-one schools accredited to teach industrial design. Europe has a very large base of industrial designers and schools. The People’s Republic of China, Japan, South Korea, Taiwan, India, and Singapore have strong and growing presences in this field. Of the top two hundred international industrial design companies (rated by their 2007 revenue from outside their home countries), seventy-six are in the United States or Canada, fifty-seven are in Europe, forty are in Asia, and ten are in Australia or New Zealand. In the United States, more than 30 percent of industrial designers describe themselves as selfemployed, working as consultants and independent designers. Many others are employed as in-house designers in large engineering corporations. In Europe, there are several large design houses, employing strong workforces of designers. The modern American school of design is thought to focus more on innovation and function, whereas the European school is associated with bringing art into industrial design. Some of the largest customers of industrial design services have been in the Middle East. Some of these massive undertakings involved the design of entire urban neighborhoods and of industrial projects related to the petroleum and petrochemicals industry, the supply of drinking water, and wastewater and sewage treatment from the start to completion. However, Chinese industrial customers may be overtaking Middle Eastern customers as the demand for creative design in huge Chinese manufacturing enterprises grows rapidly. University curricula in industrial design are often associated with colleges of arts and architecture rather than engineering. However, many people working as industrial designers have engineering credentials, and many people managing engineering divisions have industrial designer credentials. More than 50 percent of industrial design professionals have a bachelor’s degree, 25 percent have an associate’s degree, and fewer than 20 percent have some college experience but no degree. Modern industrial design education involves a strong grounding in mathematics and science, as well as

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ended. For example, green lighting may use low-energy light-emitting diodes (LEDs), which consume only a fraction of the energy that incandescent lightbulbs consume. The approach known as simplexity (a term highlighting the relationship between simplicity and complexity) entails devices that integrate many complex functions but are intuitive and approachable, meaning that users can learn to use them quickly and with minimal frustration. Handheld multifunctional, touch-sensitive communications and computing devices—such as smart phones—are examples of devices subject to simplexity in design. There is Smart phones are examples of devices subject to simplexity in design. also a growing need for sophisticated (©Dreamstime.com) home medical equipment for an aging population, devices that can accommodate or correct for physical tremors (such as shakin art. Good problem-solving skills are expected of ing hands), arthritis, and declining eyesight. designers, and they must also have a good eye to Although simplexity makes a complex device predict what will be attractive to customers. Many seem simple, ornamentation makes a plain item industrial designers concentrate on a narrow area appear more elaborate. Although the vogue for of specialization, but the people at the top of the mechanical products with an exterior appearance major design houses are excellent generalists as that reflects a minimalist aesthetic has increased, well. home furnishings have trended in the opposite At the high school level, the student needs to direction—moving toward increasing ornamenstudy studio art, business, computer-aided drafting tation made possible by high-quality computer and design, physics, geometry, and other mathegraphics and printing. matics, at least to the precalculus level. The univerPersonalization and mass imperfection both sity curriculum for industrial design includes the seek to add individuality to mass-produced items. history of the field, computer-aided design, marPersonalization has the goal of allowing end users keting, materials and processes, packaging, visual to apply a measure of their own individuality to communication, prototyping, and multimedia techmass-produced products such as shoes without inniques. Design students exhibit their work at camcurring the steep cost of individually tailored depus, local, national, and international competisigns. Personalized products give consumers a tions. measure of freedom and an opportunity to exerA number of trends are evident in the industrial cise their creativity and express their individuality, design industry, as summarized by Forbes magazine. and these products attract larger markets. In mass Some trends reflect the greater society and others imperfection, some differences among items are target specific customers or employ particular dedeliberately introduced in an otherwise mass-prosign elements. One trend is designing for a cause, duced batch in order to convey uniqueness. Such such as for environmental friendliness; green deimperfections, as long as they do not affect funcsign must take into consideration the use of biodetionality, can make the item appear handmade or gradable or recyclable materials, efficient uses of custom crafted. A similar trend is the revival of artienergy that minimize carbon emissions during the san-crafted products, marketed as limited-edition production and lifetime of the device or system bepieces in a market flooded with mass-produced ing designed, and the impact of the materials from products. which the item is made after its useful life has

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that can meet marketing goals and hence business Globalization—specifically, the participation of realities. a broad variety of designers and their colleagues from around the world—has had a huge impact on industrial design. People from around the world can participate in the design, production, and disINDUSTRY MARKET tribution of a given product. For example, automoSEGMENTS biles, despite their brand names, are impossible to identify as having been manufactured in any single Small Industrial Design Firms nation. A General Motors (GM) automobile might Potential Annual Earnings Scale. In the United have an engine designed and built in one country, States, industrial designers working as employees an interior from another, tires from a third, and in very small companies typically earn less than electrical equipment from a fourth; it may be as$50,000, although studio owners often are more sembled in a fifth. The United States—where GM is highly compensated. In companies employing up based—may be one, or none, of these participating to six hundred people, designer salaries can reach nations. Globalization applies equally well to toy $67,000. However, in China, a starting designer designers, who must consider family and diverse may be paid the equivalent of $5,200. Salaries in cultural values from around the world in designing Europe are comparable to those in America. their creations. Clientele Interaction. Industrial designers must Several design trends strive to create products interact with clients, especially if they work for small for specific groups of people. Pink design adapts businesses. Unlike most engineers or scientists, deproducts previously associated with male users to signers are at the mercy of subjective evaluations of the tastes and needs of women. Polarization of detheir work. Small firms in particular must enter sign creates innovations to reach consumers in their creations in exhibitions or competitions to both the very high-priced and the very low-priced make themselves known to potential clients, generrange of products rather than the middle-priced ate new contacts, and gain new business. To win range. When designers “focus on the other 90 percent,” they strive to create products that can reach the vast majority of the human population, whom are not reached by the middle-class consumer product array. Professor Hartmut Esslinger of frog design (a leading design company with clients such as Apple Computer and Sony Electronics) classifies designers into four types. Classic designers, such as German Dieter Rams and Italian Mario Bellini, balance an appeal to the heart with an appeal to the mind. Artistic designers create products with spectacular visual appeal. Internal corporate design teams, probably best exemplified by those in major Japanese and American corporations, create products that can be identified because they have a particular look, however subtle. Strategic designers incorporate technologies as well as social Automotive design has been affected by globalization, one of the trends in and ecological needs into products industrial design. (©Dreamstime.com)

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space at exhibitions and enter competitions, they must convince event organizers of the merit of their work. This requires excellent presentation and client interaction skills. Many small firms may depend primarily on local contacts, but others are specialized enough that they must seek business around the nation and across the world. They may win subcontracts to join international design teams working on major products. Because the primary assets in this industry are ideas and small businesses may not be able to afford teams of specialists in intellectual property agreements and other legal matters, employees must learn how to deal with clients coming from large organizations and successfully negotiate such issues. Amenities, Atmosphere, and Physical Grounds. The workplace of a small industrial design company is likely to be a studio. This may be a loft apartment, a suite in an urban high-rise, or a small office in a commercial building or residence. Being near large potential customers and small businesses that can provide needed external services is advantageous, so the workplace is usually in the downtown area of a city or in an office park. Typical Number of Employees. More than 50 percent of U.S. companies describing themselves as industrial design firms have revenues of less than $1 million per year and have ten or fewer employees. Another 40 percent have revenues under $10 million and have from ten to fifty employees. The national average revenue per employee in this industry is between $75,000 and $100,000. Traditional Geographic Locations. Industrial design companies are typically located close to their largest customers because of the importance of frequent human interaction, although the increasingly global nature of design has substantially changed this tradition. For example, when Apple Computer selected the German firm frog design to help design its corporate strategy in the 1980’s, one condition was that frog design relocate its headquarters from Germany to California’s Silicon Valley, where it has remained. In the United States, concentrations of design firms correlate well with areas in which large corporations are headquartered and industrial manufacturing and artistic endeavor are concentrated. These include parts of California, Texas, Ohio, New York, Florida, Michigan, New Jersey, Illinois, Pennsylvania, Wisconsin,

North Carolina, Missouri, Indiana, Massachusetts, and Connecticut. Pros of Working for a Small Industrial Design Company. It is not surprising that half of all American industrial design companies are small businesses, given the individualistic nature of designers and that the industry is idea based. One notable feature of this industry is that 74 percent of companies have been in business for more than ten years. Therefore, many of these firms offer the benefit of working with experienced teams in addition to the traditional advantages of being employed by a small business. In a small firm, an employee may work in a small team environment with familiar coworkers, gain experience in many aspects of the business (because of the need to fill multiple roles), participate to a greater extent in client interaction, and directly interact with top management. More often than not, the team is closely led by the company’s top designer, which enables young employees to learn at an intensive pace. For those with immense creative drive and the willingness to take risks, the small business environment is a good fit because it affords much greater opportunity and freedom to propose one’s ideas and even carry them out. Working in a small design firm often means coming into contact and working with a wide variety of people and companies because such collaboration is central to doing each project. This is an excellent experience for designers starting out in their careers because they can build a strong network that pays off richly if they decide to change employers or start their own firm. For instance, the designer in a small company may have a chance to discuss a design with a leading architect from another firm, who may have ideas for other projects and want to discuss other opportunities. The rewards of success can be substantially greater for an employee in a small design company than one in a large conglomerate. Cons of Working for a Small Industrial Design Company. Much more than with other professions, the designer is judged by subjective rather than objective criteria. In a small business, this means that the demands can be intense. Pay scales are likely to be lower than in the larger companies, and routine financial benefits are substantially lower. Small companies cannot afford the same level of technical investment that large companies can, and therefore, the opportunity to work with

Industrial Design Industry new equipment and software will be less than in large companies, making it difficult to compete in projects in which expensive and specialized technology must be used to create models and prototypes. Although decisions to proceed along given directions may come swiftly, delays may result from having to send out work to shops that have equipment and skills not available in-house. The small size of the company and direct participation by top management may mean that designers have less freedom than they might enjoy in a larger organization, unless they have the confidence and the ear of the owner, especially if the owner is an individualistic designer. Intellectual property and noncompete agreements may be more stringent than those used by a larger company, in that patent rights may be closely held by the company owner who is also likely to be part of the inventing team. Costs Payroll and Benefits: Pay scales in small companies are lower than in large ones. Payroll is a dominant expense, and benefit expenses are a large strain on company resources. Supplies: Artwork and model building take many different types of materials and supplies. These constitute a substantial expense, especially since smaller companies usually have neither the storage space nor the money to maintain the large and diverse inventory that creative design demands. External Services: Proposal preparation is a large expense for small industrial design businesses. It is crucial for small industrial design businesses to have access to many external services that can build models, try out processes and ideas, and produce high-quality graphics. Preparing presentations and advertisements may involve working with print media and video commercial production companies, which can be large expenses with no guarantee of payback. Utilities: Typically, utility costs are not high because the primary facilities are offices. However, office leases may create a strain on the company’s resources, especially in lean times. Taxes: Taxes on small industrial design firms are primarily payroll social security taxes. One problem in design firms is that revenue, typically received after project completion, usually takes

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the form of lump-sum payments rather than installments, which can lead to sharp variations in income and therefore taxes unless multiyear averaging of revenue can be performed. Other Expenses: Travel and presentation models and graphics are large expenses for small industrial design businesses. Midsize Industrial Design Firms Only about 5 percent of U.S. industrial design companies generate between $10 million and $100 million in annual revenue. The scarcity of these midsize companies suggests how hard it is for them to survive in this industry. Perhaps this is because such companies can neither move with the speed and flexibility of a small company nor bring to bear the immense and diverse resources of a large company. Many midsize companies are outgrowths of family-owned businesses that retained control of their intellectual properties and specialized in certain skills and types of markets. Others remain midsize because they are world-renowned specialists that have learned to succeed through collaboration with others. These firms maintain only a select team of experts and support staff as employees. Midsize industrial design companies have much in common with the industrial design department at a top research university. Facilities may include a machine room, an assembly room, a spray room, and a materials room. Metal-, plastic-, and woodforming equipment are usually available, and a wide variety of model-making materials are also used. Designers have access to commercial design and graphics software packages. Other types of midsize companies where industrial designers work may be architectural firms or businesses producing some specialized product that employ a small inhouse design team. Potential Annual Earnings Scale. Salaries for industrial designers in midsize companies range from $40,000 to $70,000. Clientele Interaction. Although the tasks performed by each employee are more narrowly defined at a midsize company than at a smaller company, each employee should still expect some level of client interaction. Midsize companies are likely to win contracts from very large commercial enterprises, which will insist on having in-depth interactions with the smaller company before and during the contract. Employees in the design department

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of midsize manufacturing companies must interact and often negotiate and debate with employees from other departments such as engineering and the production line to refine and articulate their ideas. Amenities, Atmosphere, and Physical Grounds. Midsize industrial design establishments are usually in stand-alone buildings in business parks or large sections of high-rise buildings. They have studios, workshops for building models, computer-aided design and drafting workstations, graphics facilities, presentation/exhibit space, and conference rooms in addition to offices and cubicles. If the facility is the design department of a manufacturer, the designer potentially has access to excellent skills and equipment for making models that approach production versions. Typical Number of Employees. Midsize industrial design companies have 250 to 1,000 employees. However, many designers working in midsize companies may be working for large engineering, manufacturing, and construction corporations. The automobile, computer, and consumer electronics industries are major employers and customers of industrial designers and consulting firms. A few midsize companies are specialized design houses in specific fields. Traditional Geographic Locations. Midsize industrial design firms are likely to be located in major metropolitan areas such as Silicon Valley or the Los Angeles basin, Detroit, New York, Orlando, or Miami in the United States or in Berlin, Stuttgart, London, Paris, Marseilles, Tokyo, Osaka, Kobe, Shanghai, Singapore, Seoul, Taipei, Mumbai, New Delhi, Chennai, Bangalore, and Sydney. Pros of Working for a Midsize Industrial Design Company. Midsize industrial design companies are mostly global in their business reach and work with clients who are at the top of their fields. The products that they design often have markets worth billions of dollars and are recognized by people all over the world. Because contracts come from all over the world, employees should expect some interaction with people from different cultures and a certain level of travel. Midsize companies must invest heavily in technology to be competitive, so workers can expect to work with leading-edge equipment and software. One very strong advantage of working as a designer inside a manufacturer is that one can refine one’s ideas

quickly and ensure that they will work in the production environment. Many companies, especially after the quality revolution of the 1990’s, place their designers in close proximity to the production line for better integration and communication. Cons of Working for a Midsize Industrial Design Company. The industrial design business at every level is extremely competitive and subject to intense pressures. Often projects will be canceled because of circumstances unrelated to the merits of the projects or the people working on them. Demand for industrial design services is correlated with consumer demand, and new design efforts often suffer first when large companies cut back. Costs Payroll and Benefits: Payroll and benefits are the dominant costs of a midsize industrial design business. Supplies: Artwork and model building require numerous types of materials and supplies. Midsize companies may stock some materials and supplies and may even have an employee who takes care of the stockroom, but they have neither the storage space nor the money to maintain all materials required by designers. However, a midsize company engaged in production of goods may offer its designers access to various supplies that are on hand for other purposes or easily available. External Services: Proposal preparation is a large expense. Midsize industrial design businesses may prefer to use their in-house resources for many services that a small or large business might outsource, such as building models, trying out processes and ideas, and producing high-quality graphics. To prepare presentations and advertisements, midsize firms are likely to work with companies that specialize in producing presentations or advertisements in various media, including print, film, and television. These types of expenses can be substantial and may never result in revenue generation. Utilities: The cost of utilities usually is not high because the primary facilities are offices, with some workshops. Certainly, if the design division is part of a larger company engaged in manufacturing, there will be high utility costs. Taxes: Taxes are primarily payroll social security taxes, real estate taxes, and local corporate taxes.

Industrial Design Industry Other Expenses: Travel, presentation models, and presentation graphics are large expenses for all industrial design businesses. Getting new business usually involves making presentations at the corporate offices of potential customers using detailed solid models of proposed concepts presented in an attractive environment, along with informational multimedia presentations. Preparing these presentations is often done under extreme time pressure and consumes many hours of work by skilled experts. Large Industrial Design Firms Potential Annual Earnings Scale. In large companies, industrial designers’ salaries range up to $80,000. The corporations that employ industrial designers can be large, dedicated industrial design firms but usually are large companies with a small design division that handles in-house product design. Large corporations with in-house design departments include the automakers Honda Motor Company, Ford Motor Company, and General Motors. Industrial design is central to the success of these companies’ products, and designers work on concepts that form the basis of future products. Sometimes large corporations, such as consumer electronics and computer companies, hire design consultants from specialized design houses to work with their in-house employees. Large industrial design firms are much rarer but do exist. Clientele Interaction. In large industrial design businesses, there is substantial compartmentalization. Generally, designated employees handle all interactions with clients. Designs are closely held secrets, and some companies may wish to shield designers from too much direct interaction with clients, although designers often interact with internal departments and divisions. For example, they may use market data generated by the company’s research department to create their designs. Developed concepts may be displayed only to very select audiences for business or advertisement purposes or at industry exhibitions, where carefully controlled concepts are unveiled to gauge or create public and media reaction. Amenities, Atmosphere, and Physical Grounds. Large industrial design businesses have well-established facilities and nicely appointed workplaces; however, these may be located inside

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heavily industrial areas or, in the case of standalone design firms, in downtown high-rise buildings. These businesses are able to provide environments tailored to the needs of highly creative individuals and teams, enabling them to function at their fullest potential. Although many companies and employees still favor the cubicle-maze approach to design departments, some have unusual layouts. The quality revolution of the 1990’s advanced the idea of open workplaces without walls as a means of enhancing the flow of ideas. Some companies have adopted the notion of active walls to promote an exchange of ideas. Employees record their ideas and draw sketches on paper-covered walls or dry-erase boards, and the expressed ideas are discussed and recorded. Some large companies, reputedly including Hewlett-Packard, have placed their designers in a glass-walled, soundinsulated complex surrounded by the company’s production lines to encourage real-time communication and relevance to the realities of production. Many large design firms are capable of numerous design functions and seek the lucrative role of being the system integrator. Therefore, they have projects and resources in architecture, construction, engineering, business analysis, and market research in addition to traditional artistic and industrial design functions. These work environments vary substantially, but because designers often work in different departments and at client work sites, they can expect to experience many of these environments. Typical Number of Employees. Large industrial businesses have one thousand to ten thousand employees and annual revenues from $250 million to more than $1 billion. Traditional Geographic Locations. Large industrial design businesses have their headquarters in major metropolitan areas. However, they establish local offices near major clients, and often, the workplace that an employee commutes to may be that of a client. Pros of Working for a Large Industrial Design Company. Young employees in the design departments of large manufacturing companies can expect intensive training in their first years, followed by the experience of working on projects that have immense significance. Large businesses specializing in industrial design are elite establishments. Employees can expect to work on projects

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that have global significance, but they must generally undergo fairly long periods of something similar to an apprenticeship, as part of a small team, before being allowed more freedom. However, as proposals are constantly being generated and presentations continually being made, new employees will quickly find themselves part of teams that go out to meet potential customers and hence have considerable responsibility. Experience in a large firm usually means formal training in the standards, practices, and expectations of the profession, which will help employees in later life if they choose to become independent or obtain a faculty position at a university. They may find much more opportunity to participate in the activities of professional societies and in fact to move up to positions of recognition in these societies through association with their employer’s high profile. They may also find themselves working closely with world-famous designers. Large businesses have substantial in-house research operations and are able to get the best equipment and tools for their design teams. The workplace is likely to be global. Vacation time and other benefits may be much better than what a small company can offer. Cons of Working for a Large Industrial Design Company. A large business is by nature more impersonal than a small business, and this may be especially difficult for the highly individualistic, independent, artistically sensitive, and creative people who aspire to become industrial designers. A general observation is that large companies become large by learning to be good at turning whatever they do into a commodity; they reduce everything to a standard, predictable network of operations that results in products reaching the largest number of customers with the greatest speed and efficiency at the lowest cost to the company. This is not an environment that tolerates much experimentation, radical change, or numerous different ways of doing things. Therefore, although large companies often state that they value innovation, employees often find that cost reduction takes precedence over everything else, and most ideas are rejected as being too expensive to try. A rule of thumb used in the American automobile industry in the 1980’s was that if an innovation added more than $5 to the total cost per automobile of a model year, it would be rejected. Each car produced added $5 to the cost of the innovation, and

with so many cars being produced, few innovations could generate enough revenue to justify the costs. In large businesses, young employees may expect a longer period of apprenticeship, during which they have limited freedom and authority. Although they may find themselves nominally responsible for project segments worth several million dollars, they will have several layers of management above them. Young designers are also likely to experience frustration because of the time required to get approval from multiple layers of management, especially in a subjective area such as design, where the opinions of successively higher levels of management may be based on different levels of understanding of the purpose, constraints, and philosophy of the design. What a young employee proudly considers a brilliant design and what receives the endorsement of colleagues and immediate superiors may languish for months without anyone in upper management giving an opinion or taking action, or it may be suppressed by middle managers. Costs Payroll and Benefits: Payroll and benefits are the dominant costs of a large industrial design business. Supplies: Artwork and model building require various types of materials and supplies and constitute a substantial expense. The large business will spend heavily on materials and supplies and have stockrooms with substantial inventory because they assign high cost to the delay incurred if creative employees have to wait for supplies. Clients tend to expect large design houses to be able to respond very quickly, and competitors often compete on the basis of speed. External Services: Proposal preparation is a large expense. Large industrial design businesses have substantial in-house resources and usually prepare for presentations entirely in-house. Sometimes, they bring in top-notch outside service providers to build models, test processes, or produce high-quality graphics. If media or filmtelevision production companies become involved in production of presentations or advertisements, the expense can be substantial, and these costs may never be recovered. Utilities: The cost of utilities usually is not high because the main facilities tend to be offices. If the

Industrial Design Industry company is primarily engaged in manufacturing and design is a division, utilities can be a large expense. Taxes: Taxes are primarily payroll social security taxes. One issue is that income is likely to take the form of lump-sum payments received as projects are completed, and this can lead to sharp variations in income and therefore taxes due unless multiyear averaging can be performed. Other Expenses: Travel and presentation models and graphics are large expenses for all industrial design businesses. Taking models across national boundaries usually is expensive because of customs duties and the cost of completing the complex paperwork and obtaining the required approvals, as well as legal expenses.

and it is becoming beyond the reach of even the large manufacturers to do everything in-house. The departmental organization of a large industrial design firm may be along the following lines of specialty: concept and research; financial, accounting, and purchasing; consumer electronics; media and entertainment; construction; communications; medical; consumer software; brand identity; Web site strategy and development; consumer products; retail; environmental; energy; business software; and computer products. The typical career paths in the industrial design industry have been categorized by the School of Industrial Design at the Georgia Institute of Technology. ■

ORGANIZATIONAL STRUCTURE AND JOB ROLES ■

There are two types of organizations in which people can pursue careers in industrial design. The first, which accounts for the vast majority of such positions, is a company that is engaged in the design, development, and production of some product but is not primarily a design company. In these companies, the design department is a small but vital component, one among many. The organizational structure of such a company is specific to its field of business. For instance, a software company such as Microsoft may be very different in structure and job roles from companies such as General Electric or United Technologies, which offer a variety of products and services, or an automobile company, which focuses on specific model lines. Industrial designers can find rewarding careers in any of these corporations, as well as in smaller companies in many different fields. The second type of company is one that specifically focuses on industrial design. These companies offer products and services to a wide array of corporate customers. The discussion of organizational structure and job roles that follows refers to such specialized industrial design companies and is based on the practices of some of the leading companies in this field. Such specialized design houses are increasing in number globally because design has become a worldwide, connected team activity,

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Design academics obtain doctorates in design at an institution of higher learning; they work on the history, theory, trends, and future possibilities of the industry and teach others the rigorous core of knowledge in the field. Design researchers pursue social, technical, and design research. They seek to better understand, organize, and improve how industrial design is performed as well as to stay ahead of developing trends. Observing human behavior and understanding tastes is a part of design research. Design educators teach design at the college level. This role may vary substantially between design schools that are part of art and trade schools and research universities. Corporate designers work within a corporation as in-house experts designing products. Examples include people working in the design departments of automobile, electronics, media, or toy companies. Consulting designers work within consulting firms but undertake projects for client companies or government organizations. Design entrepreneurs embark on starting a business, typically a design firm. Design advocates are designers who promote design and make advocacy their primary mission. They may work closely with artists and exhibitors, industry leaders, and media personnel. Social designers are designers who dedicate themselves to solving social problems through design.

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The range of services provided by designers, according to the Carnegie Mellon School of Industrial Design, includes consumer and recreational product design, medical equipment design, transportation design, information technology design, industrial/manufacturing equipment design, materials/color consulting, design research and design education, and human factors (ergonomic) design. The following umbrella categories typical of many other industries apply to the organizational structure of industrial design companies as well: ■ ■ ■ ■ ■

■ ■ ■

Business Management Customer Services Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources

Business Management A design company has the usual designations of corporate officers. It usually has a president or chief executive officer and may also have a chief financial officer, a chief operating officer, a senior vice president, and vice presidents of finance and human resources. However, the firm’s main business consists of creative professionals who identify new opportunities and ways of marketing new concepts and solutions. To be good at this, they must have excellent research and development and market analysis departments. Accordingly, such a company might list position titles such as the following:

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■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Customer Services Fundamentally, the business of an industrial design firm is to please the company for which it is creating the design of a particular device or system. The Mercedes-Benz slogan, Only the Best, applies to the expectations of its customers as well as everything that is done by the company. The services of the customer services department can include conceptualizing long-term strategy for the customer and developing implementation plans, developing brand logos and identity, setting up Web pages, developing advertisement programs, assisting in designing products, choosing materials, planning for product safety, and developing end-user feedback that leads to product improvement. In addition, the company must have excellent points of contact for resolving problems in projects, products, and contracts. These are handled by customer service professionals or passed on to specific program and account managers. Unique job titles that indicate the central role of customer service include the following: ■ ■

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Chief Creative Officer Chief Development Officer Chief Marketing Officer Vice President, Global Delivery (heading program management) Vice President of Creative (expanding into new markets) Executive Creative Director (for areas such as brand innovation, global user research, digital products, user experience strategy, or software) General Manager

Executive Director of Program Management Senior Program Manager Account Director Executive Assistant Corporate Counsel Desktop Administrator Front-Desk Manager Associate Financial Controller Production Director Software Program Management Director Financial Analyst

Principal Strategist Senior Strategist

Sales and Marketing Sales of products from industrial design companies are usually handled as contracts following specific products. Accordingly, the title of vice president of creative shows the level at which sales and marketing are planned. The most significant longterm relationships with major corporations are set up through interactions at the very top of the company, at the chairman or mentor level. Below this are a number of client interaction positions, proposal development positions, and contract execu-

Industrial Design Industry OCCUPATION

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PROFILE

Industrial Designer Considerations

Qualifications

Description

Conceptualizes and develops products and systems that maximize function, appearance, and value.

Career cluster

Arts, A/V Technology, and Communications

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

AES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

tion positions. Marketing involves a considerable amount of travel to potential customer sites and conferences, along with making polished presentations and answering questions. Facilities and Security Apart from the usual concerns about the physical security of facilities, the major concern of design companies is the protection of intellectual property. Accordingly, several positions are filled by patent attorneys. Industrial designs qualify for intellectual property protection because of the unique, mainly aesthetic features of the design. Therefore, every new design must apply for a design patent or other mechanism of protection. This process requires a tremendous amount of paperwork and attention to detail. Likewise, major design houses must protect not only their own design ideas but also the plans, ideas, and technology prototypes given to them by their customers to develop proposals. Therefore, security of their data and models is a growing concern.

Technology, Research, Design, and Development The core function of the design company is executed in research, design, and development. Typical tasks executed by employees in these areas include preparing sketches of ideas, making detailed drawings and illustrations, and talking with engineering, marketing, production, and sales departments and with customer organizations to evaluate design concepts for products. Employees may coordinate fabrication of models or samples and draft working drawings and specification sheets from sketches. They then evaluate the feasibility of designs, considering safety in addition to functionality and the cost of production. Once the concept is developed, it has to be presented to customers for approval or modification. The work environment is intensely competitive, as it depends on preparing proposals that win customer approval over competing proposals from other designers. One special position is that of an interaction designer, who applies a range of skills in user research, con-

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Industrial Design Industry

sensus building, prototyping, and balancing business requirements. This type of designer focuses on a human-centered design process, which answers real human needs in the context of everyday living. Occupations within the technology, research, design, and development area may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■

Program Analyst Mechanical Engineer Mechanical Designer Design Researcher Product Engineer Design Engineer Product Designer Product Development Engineer

Production and Operations In companies whose focus is industrial design (as opposed to the industrial design departments of product-focused manufacturing companies in other industries), production lines are rare because the “product” is concepts, models, and demonstrations or presentation packages. Attempts to come out with shrink-wrapped software products to automate the creative process of industrial design have generally not been successful.

Principal Industrial Designer Creative Director Senior-Level Creative Leader Associate Creative Director Senior Visual Designer Visual Designer Senior Interaction Designer Technical Architect Associate Technology Director Technologist

OCCUPATION

PROFILE

Industrial Engineer Considerations

Qualifications

Description

Designs and develops products and systems that maximize function, appearance, and value.

Career clusters

Agriculture, Food, and Natural Resources; Manufacturing; Science, Technology, Engineering, and Math; Transportation, Distribution, and Logistics

Interests

Data; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

EIR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Industrial Design Industry Distribution Like production, distribution is not mass scale but specific to each customer. Human Resources Finding and retaining top-notch creative talent, and people to support them in world-beating efforts, is a highly specialized task. Spotting creative talent itself takes substantial amounts of creative talent, which is not a trait typically associated with human resources departments. Recruiters in this field must also learn to deal with the large egos and insecurities, or the opposite extremes in attitudes, that are typical of many first-rate artists. In addition to dealing with the company’s own employees, human resources professionals in industrial design companies may be called on to help recruit and manage the many people whom the company needs to model, sample, and test their designs. Sensitive dealings with such people call for special skills. Some job titles in this department are as follows: ■ ■ ■

Talent Acquisition-Senior Recruiter Recruiter Human Resources Studio Partner

INDUSTRY

OUTLOOK

Overview A striking feature of modern design firms is that the leaders strive to expand out of specialty designing. They seek to become one-stop sources prepared to go into the highly lucrative and risky business of undertaking projects in totality, encompassing every aspect of the customer company if possible. Therefore, a large part of the revenue of the top firms comes not from traditional industrial design tasks but from major international projects undertaken on a turnkey basis, assuming responsibility for all aspects. The firms subcontract out the various specialized tasks, which in turn creates an immense project management and communications responsibility. Designers see creative freedom in this approach. Americans spent nearly a trillion dollars a year on durable goods in 2004. In 2005 and 2006, the global construction boom was peaking and resulted in very large increases in business for indus-

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trial designers. Strategic planners at many of the top firms already had predicted that the construction bubble would soon burst, as it did. Many large infrastructure projects were canceled after 2007. Even the petroleum-rich Middle East business economies have sharply reduced construction and consumer spending. At the end of 2010, consumer markets around the world were showing strong growth in several sectors, despite a prevailing economic downturn and economic distress in several nations that saw sharp spending booms in the prior decade. The experience of the Great Depression shows that periods of economic downturn give birth to revolutions in creativity as it becomes harder to sell large numbers of the same product. These are followed by strong demand for innovative products that make the previous generations of consumer products obsolete. Thus, whether the economic distress of 2010 deepens or leads to recovery, there is a bright future for the creative designer in the coming decades. This future inevitably will be global, and every project in every country can conceivably be opened up to bidding from all over the world. On the other hand, every company in every country can conceivably benefit from all the resources that they can bring to bear from all around the world, and therefore, local companies with smart leadership should have a strong advantage in winning work in their own neighborhoods. This is an evolving situation, logically arising from the intensive efforts of Western leaders to force nations all over the world to open up their markets to imports from the West. In return, as communication technology advanced, nations all over the world found that they could conduct sophisticated technical and business dealings from offices within their own borders and still export services across the world. This is especially relevant to the design field. Some major corporations reasoned that they could keep their own top technological capabilities to themselves and retain the highly lucrative business of doing the strategic planning and design integration while outsourcing tasks that were not cost-effective to perform in their home countries. This model, however, may come under increasing stress as the nations that are now doing the bulk of these tasks become more experienced in production and manufacturing. As the young

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people in these nations learn to succeed in the business of innovation and obtain formal credentials in industrial design, they will form local design houses that will move up the knowledge pyramid toward system integration and strategic planning. The examples of traditional family-held design houses in Europe and elsewhere that have formed alliances with local manufacturing firms to keep their local economies thriving demonstrate creative responses to such challenges. With the Internet and personal communication devices opening up the world and the mutual dependence of nations big and small through the World Trade Organization, it is unlikely that governments and political leaders will be able to regress to the age of national protectionism with closed economies and still be able to compete in the world. The major feature of the industrial design industry in the twenty-first century is the explosive growth of the Asian sector. China’s immense strength in manufacturing has translated to rising demand and opportunities for local creative design services. This is summarized by the idea that the proud Made in China label that became globally prevalent since the 1990’s must change to Created in China. This drive has spawned sharp growth in the number of design schools in China; however, these are still under the control of the government and do not appear to have an open presence on the Internet outside China. The city of Shenzen, bordering Hong Kong, was designated as a United Nations Educational, Social, and Cultural Organization City of Design in 1980. By 2009, this city of 13 million people with an average age under thirty-one and more than two thousand square kilometers of creative industrial clusters had onesixth of the total number of the people with doctorates in China, and more than six thousand design firms, employing more than 100,000 people. The city leads China in the design of light industrial products, as well as in packaging, graphics, architectural, fashion, and interior design. Surrounding nations in Asia are also experiencing growth in design services and education, driven by the growing demand and need to compete. India is transforming from a rapidly growing middle-class consumer market and outsourcing destination to becoming a creative design powerhouse, associated with several top companies and excellent engineering,

arts, and business schools. In Europe, many traditional design houses are moving to tighter integration with their production customers to keep their products competitive. This trend is likely to propagate worldwide as a counter to the Internetspawned mass-outsourcing corporate culture of the early twenty-first century. Top design house experts point out that the greatest successes are produced by tightly knit teams of local designers and production companies. Thus it may well be that once the playing field is leveled somewhat by the new capabilities for global communications, some level of parochialism will return in the search for uniqueness. The ability to commoditize a wide spectrum of products and services that were previously specialized or designer products is a feature of the early twenty-first century. Commercial success is predicated on the ability to flood the global market with a product much faster than any competitor can and thereby collect a large profit despite a rapidly declining profit margin per unit. Industry reports cite the extreme challenges of maintaining cohesion between teams spread out across the world, especially in tackling large and complex projects. Against this, small teams focused on excellence may come up with creative ways to generate products that use efficient manufacturing and distribution networks but win a competitive advantage by demonstrating some measure of exclusivity and thereby command high profit margins. As new schools of design traditions and philosophy from the previously ignored Eastern and African markets come up in global prominence, one may expect product design to undergo a huge change. The revolution in materials technology predicts the advent of a wide range of innovations. This may drastically affect the size and shape of many products that have not changed substantially for decades. The familiar tube-and-wing shape of airliners is an example that may be headed for obsolescence. Robots may take over many humanpowered and human-attended machines, including lawn mowers, vacuum cleaners, and even automobiles. Active materials could revolutionize even furniture. Another imminent revolution is in reducing energy use, adapting to low-power renewable resources, and cutting carbon emissions while enhancing standards of living.

Industrial Design Industry Employment Advantages The first advantage of working in the industrial design industry is that one is always engaged in creative endeavors. The second is that industrial design caters to the creative person who is good at the quantitative sciences but also has a great creative urge to do things differently. The third is that the designer gets to work on products that may have world-changing potential. Many jobs involve working with people across the world and often traveling to other countries. Annual Earnings On average, an American industrial design firm generates between $75,000 and $100,000 per employee per year. This is lower than the earnings per employee of major corporations in the defense, aerospace, medical, and other fields of mass production, but the environments are completely different. Given the relatively small number of employees who formally describe themselves as industrial designers, this accounts for less than 10 percent of the gross revenue of the industry. This is because industrial design firms employ many people other than industrial designers and also because firms engaged in industrial design now take on the responsibility for revenue-producing projects that extend beyond traditional industrial design. Data from 2006 show several trends about the top one thousand firms that have international business, of which the top two hundred account for most of the revenue. The top firms earned $48.8 billion of revenue from domestic projects in their home nations, and $33.1 billion from international projects outside their home nations, for a total of $81.9 billion. They undertook diverse projects. Construction projects (such as shopping malls, urban areas, high rise buildings) accounted for 12.7 percent; projects for manufacturing companies, 2 percent; petroleum-related projects, 33.5 percent; water projects, 5.9 percent; sewer and waste treatment projects, 4.7 percent; electric power projects, 8.3 percent; and telecommunications, 0.6 percent. Formal industrial design projects were only 8 percent of the total. The companies that undertook these international projects were located in Canada, with 8.1 percent of the total revenue; United States, with 11.7 percent; Latin America, 4.3 percent, Caribbean islands, 6 per-

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cent; Europe, 27.2 percent; Asia and Australia together, 20.4 percent; and Africa, 8.1 percent. A very important caution is that Western reports include only a few firms from the People’s Republic of China. The Chinese domestic market must be huge, but numbers are not easily accessible.

RELATED RESOURCES FOR FURTHER RESEARCH American Institute of Graphic Arts 164 5th Ave. New York, NY 10010 Tel: (212) 807-1990 Fax: (212) 807-1799 http://www.aiga.org The Design Society University of Strathclyde Design, Manufacture & Engineering Management (DMEM) 75 Montrose St. Glasgow G1 1XJ United Kingdom Tel: 44-141-548-3134 Fax: 44-141-552-0557 http://www.designsociety.org Industrial Designers Society of America 45195 Business Ct., Suite 250 Dulles, VA 20166-6717 Tel: (703) 707-6000 Fax: (703) 787-8501 http://www.idsa.org International Council of Societies of Industrial Design 455 St-Antoine Ouest, Suite SS10 Montreal, QC H2Z 1J1 Canada Tel: (514) 448-4949 Fax: (514) 448-4948 http://www.icsid.org

ABOUT

THE

AUTHOR

Narayanan M. Komerath is a professor in the Daniel Guggenheim School of Aerospace Engi-

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Industrial Design Industry

neering at Georgia Institute of Technology. He heads the experimental aerodynamics and concepts group and teaches, among other courses, conceptual design of flight vehicles as a means of introducing aerospace engineering students to their field.

FURTHER

READING

Esslinger, Hartmut. A Fine Line: How Design Strategies Are Shaping the Future of Business. San Francisco: Jossey-Bass, 2009. Hiesinger, Kathryn B., and George H. Marcus. Landmarks of Twentieth-Century Design: An Illustrated Handbook. New York: Abbeville Press, 1993. Kawasaki, Guy. The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything. New York: Portfolio, 2004. Meikle, Jeffrey L. Twentieth Century Limited: Industrial Design in America, 1925-1939. 2d ed. Philadelphia: Temple University Press, 2001. bmae, Ken’ichi. The Mind of the Strategist: The Art of Japanese Business. 1983. Reprint. New York: McGraw-Hill, 1992. Qu, Min, and Ran Li. “Industrial Design: Impetus

from ‘Made-in-China’ to ‘Created-in-China.’” In Proceedings: 2009 International Symposium on Computational Intelligence and Design— Changsha, China, 12-14 December 2009, by IEEE Computer Society, et al. Los Alamitos, Calif.: IEEE Computer Society, 2009. Read, Herbert. Art and Industry: The Principles of Industrial Design. 1954. Reprint. London: Faber, 1964. Reina, Peter, and Gary J. Tulacz. “The Top Two Hundred International Design Firms.” Engineering News-Record 257, no. 4 (2006): 32-35. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Welsbacher, Anne. Earth-Friendly Design. Minneapolis: Lerner, 2009.

Insurance Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Finance Career Cluster: Finance Subcategory Industries: Agencies, Brokerages, and Other Insurance Related Activities; Claims Adjusting; Direct Life, Health, and Medical Insurance Carriers; Direct Property and Casualty Insurance Carriers; Direct Title Insurance Carriers; Insurance Carriers; Other Direct Insurance Carriers; Reinsurance Carriers; Third Party Administration of Insurance and Pension Funds Related Industries: Banking Industry; Business Services; Medicine and Health Care Industry; Retail Trade and Service Industry Annual Domestic Premiums: $1.24 trillion USD (Swiss Re, 2008) Annual International Premiums: $3.03 trillion USD (Swiss Re, 2008) Annual Global Premiums: $4.27 trillion USD (Swiss Re, 2008) NAICS Number: 524

INDUSTRY

it offers protection to individuals and businesses from potential financial risks through automobile, casualty, disability, health, home, liability, life, and property insurance. In exchange for a sum of money—called the premium— policyholders receive the promise of reimbursement from insurers for small and large losses due to a variety of hazards, including car accidents, property theft, fire damage, medical ailments, and loss of income resulting from disability or death. The insurance industry is regulated in most cases by state governments rather than the federal government. The insurance industry offers full- and part-time employment in several occupations at different levels.

History of the Industry Although the concept of risk management can be traced as far back as the third millennium b.c.e. among Chinese merchant traders attempting to encourage the safe arrival of goods, the practice of insuring officially began in the United States in the seventeenth century. Great Britain and its American col-

DEFINITION

Summary The business of insurance affects nearly every transaction that can be quantified in the world, as 971

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Insurance Industry

known as the first property insurance company in the American Colonies. Franklin had personal experience with fire and wanted to ensure protection for others. The contributionship now includes five subsidiaries that still specialize in property insurance but cover much more than the loss of homes by fire. Franklin also organized the first life insurance company—the Presbyterian Ministers’ Fund—in 1759. Insurance offers protection to individuals and businesses from potential financial From the eighteenth cenrisks through automobile, casualty, disability, health, home, liability, life, and proptury forward, insurance comerty insurance. (©Alain Lacroix/Dreamstime.com) panies became common business ventures in America. The industry diversified greatly in onies were heavily involved in commercial trade of the United States during the nineteenth and twenspices, tea, sugar, dyes, fabrics, and other goods. tieth centuries. For example, lenders required Given the treacherous seas, Britain developed a sysfarmers to take out crop insurance when securing tem of insuring the risks of loss of, or damage to, mortgages on their property to obtain crop loans. cargoes through Lloyd’s of London. Additionally, the invention of the automobile led In 1688, Edward Lloyd opened a coffee shop to the need for automobile insurance. that attracted many shipowners and merchants. In many cases, purchasing insurance is not volThese traders began to transact business in the untary. Mortgage lenders require homeowners to shop, so Lloyd also began offering marine insurinsure their property as a condition of lending ance. By the end of the eighteenth century, Lloyd’s them money. Similarly, states require drivers to had become the first modern-day insurance compurchase automobile insurance. On the other hand, life insurance is usually voluntary. pany. Today, Lloyd’s is still a leader in the internaMany societal factors have contributed to the tional insurance market, providing specialist serevolution of the insurance industry, including the vices to businesses in more than two hundred passage of workers compensation laws and the adcountries and territories. Another branch of the insurance industry also vent of the Industrial Revolution. Quite possibly the biggest growth area in the insurance industry developed in Great Britain and America during has been in medical services and health insurance. the same period. Fire represented a growing danTechnology has prompted many developments in ger in urban areas, where there was no running medicine, and the population has continued to water and many structures were constructed of grow. Both situations have increased the cost of wood. In particular, the Great Fire of London, which devastated more than thirteen thousand health care, creating the need for a middleman to houses in 1666, prompted a more serious interest manage its utilization. Further, an aging populain protecting buildings against this risk. Mutual fire tion has sprouted new needs, such as long-term protection services, in which residents and busicare insurance. Health insurance will continue to nesses pledged to help fight local fires, began to change as a result of the Patient Protection and Affordable Care Act (PPACA) of 2010 and the Health form. Care and Education Reconciliation Act of 2010. In 1752, Benjamin Franklin and a group of Besides new coverage options, the standard polprominent citizens started the Philadelphia Conicy language across most of the segments of the intributionship for the Insurance of Houses from surance industry has also changed through the Loss by Fire in South Carolina, which became

Insurance Industry years. Insurance coverage for some kinds of tangible losses is generally clear, but gray areas and exclusions remain that are decided on a case-by-case basis. So as long as there are transactions between members of society, there will always be insurance to minimize an individual’s or a business’s risk. The Industry Today There are a great many insurance companies in the United States today, and the insurance industry has grown to be one of the top five industry sectors in the twenty-first century. Some insurance companies have strong national presences, while others are regional businesses. Some offer all types of insurance, while others specialize. The industry is still mostly regulated at the state level, and even the PPACA designates the states as the primary regulators of the health insurance exchanges. For the most part, the concept of insuring has not changed. An insurer agrees to shoulder a risk on behalf of an individual or business (the insured) for a set fee (a premium). Through the underwriting process, the insurer evaluates the circumstances surrounding the measurable risk and produces a policy, or contract, stating the risks it will insure against and how much it will guarantee as a reimbursement to the insured if the risk occurs. Policies also include lists of exclusions, or things that are not insured against, and these policies can be quite complex. Another complicated aspect of insurance is calculating the premium. Insurers aim to profit overall, so total premiums received from all insured clients must be greater than the approved claims paid

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Inputs Consumed by the Insurance Industry Input

Value

Energy Materials Purchased services Total

$0.6 billion $7.7 billion $224.8 billion $233.1 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

out to those clients in a given year. Not all events are equally likely, so accurately determining the probability of a given event’s occurrence is difficult. The insurance industry includes insurance carriers, agencies, and brokerages, which together account for the majority of industry jobs. Insurance carriers are mainly the large companies that issue policies and assume their risks, often employing 250 workers or more. Agencies and brokerages sell individual polices on behalf of carriers and often employ fewer than 20 workers. Many agencies and brokerages are independent and sell a variety of policies, rather than working for only one carrier. Insurance companies come in all sizes, ranging from a handful of employees to thousands of workers. Many other establishments within the industry provide special insurance-related services, such as claims adjustment and processing. Insurance is a worldwide industry, and employment in the United States is not limited by The Insurance Industry’s geography. The most common segments of the Contribution to the U.S. Economy industry are property and casualty insurance (for automobiles, homes, and busiValue Added Amount nesses), health insurance, and life insurGross domestic product $464.0 billion ance. Until the 1950’s, each U.S. company Gross domestic product 3.2% was restricted to selling only one type of Persons employed 2.322 million insurance. Today, firms can underwrite Total employee compensation $192.9 billion several insurance types each. Beyond the main areas of coverage, inSource: U.S. Bureau of Economic Analysis. Data are for surance protection can be purchased for 2008. just about any measurable risk. Insurance companies generally fall into two catego-

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Insurance Industry

ries—life insurance or nonlife insurance. Life insurers sell life insurance, annuities, and pension products, while nonlife companies sell all other types of coverage. Disability insurance provides financial assistance to individuals when they are unable to work because of a disabling illness or injury. Similarly, workers’ compensation insurance—purchased by employers—replaces all or part of emloyees’ lost wages and accompanying medical expenses after job-related injuries. For businesses, disability overhead insurance reimburses for the overhead expenses experienced by businesses when their owners are unable to work. Casualty insurance protects both people and property against unforeseen incidents, such as fraud and burglary. On properties, people can purchase supplemental protection policies tied to certain hazards, such as fire, flood, or earthquake. Liability insurance is another broad area. Individuals can purchase insurance to cover another party’s losses and protect themselves against legal claims. Liability insurance is included in auto and property insurance policies, but there are other types of liability insurance. Some other optional and specific types of coverage are pet and travel insurance. Travel insurance has been around since the 1950’s, but it grew in

popularity after the terrorist attacks of September 11, 2001. More than 30 percent of Americans used travel insurance in 2009. Pet insurance take-up rates, however, continue to be less than 1 percent. A more unusual type of coverage, for example, is terrorism insurance, which also grew after September 11, 2001. Terrorism insurance was purchased by approximately 60 percent of U.S. businesses in 2005. Again, if a risk can be quantified and measured, it can be insured against. Many insurance companies have expanded their traditional products and now offer services in partnership with financial firms, such as banks. A number of companies sell securities, mutual funds, and various retirement plans. This growth in services has contributed to industry and job growth. In fact, distinctions among the banking, investment, and insurance industries have diminished. Most major insurance firms refer to themselves as financial groups and offer a wide range of services to customers. Reinsurance, the practice of sharing risks with other insurers, also has a large presence in today’s industry. In exchange for a share of premiums, insurers agree to transfer portions of their risk portfolios to other parties, lowering the likelihood that the insurers will have to pay large claims. A party that diversifies its insurance portfolio is referred to

A car in flood waters. Casualty insurance protects both people and property against unforeseen accidents. (©Dreamstime.com)

Insurance Industry

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though some customers still prefer to do so. Further, software upgrades have automated some jobs, such as that of an underwriter. The ability to compare rates online and identify the cheapest rate has also increased competition within the industry. Jobs in the insurance industry range from agents and brokers to appraisers to underwriters to claims adjusters to actuaries, again working across several insurance coverage types. In addition to these industryspecific roles, there are administrative and executive opportunities in the industry. Overall job growth within the industry has been slowed by inSome insurance companies, such as Progressive, are offering pet injury covdustry consolidation, corporate downerage as part of auto collision coverage. However, this Jack Russell remains sizing, new technology, and increasing an authorized driver. (©Dreamstime.com) direct mail, telephone, and Internet sales. In particular, the recession of 2007-2009 caused declining revenues, investment as a ceding party, while a party accepting a potenlosses, and credit rating downgrades, as it did in tial obligation is a reinsurer. many other industries. Besides developments in society leading to In 2008, the insurance industry employed nearly greater coverage niches and industry opportuni2.3 million wage and salary workers, mostly within ties, several outside factors have changed the modinsurance carriers. As of January, 2010, insurance ern-day insurance market. For example, technolemployment was down to 2.2 million. However, the ogy has had both negative and positive effects on insurance industry is expected to stabilize and rethe insurance industry. Customers can use Web build its capital. Demand for insurance will conbrowsers to access account and billing informatinue to increase, especially as the population tion, submit claims, view insurance quotes, and keeps growing and aging, stimulating demand for purchase policies. Communication among sales all types of insurance and increasing claims. agents, adjusters, and insurance carriers has also improved through the Internet. These functions may reduce paperwork and allow companies to keep better track of their customers, thus increasINDUSTRY MARKET ing productivity and decreasing costs. Claims adSEGMENTS justers may no longer need to visit the site of their customer’s damage; instead, they can rely on satelThe mainstays of the insurance industry are lite imagery to evaluate claims. property and casualty insurance, health insurance, At the same time, the availability of information and life insurance. Many companies sell several and services on the Internet has adversely affected types of insurance coverage and may even fall into some insurance occupations, such as insurance all three of these categories. To sell any insurance sales agents, who may be less necessary to busitype, companies employ brokers or agents, or they nesses that can make sales online. Insurance offerwork with independent contractors. Establishments ings for property, casualty, and automobiles are range in size. Although the majority of insurancerelatively straightforward, and online resources alrelated home and regional offices are located near low customers to compare and purchase insurance large, urban cities, companies can be found all products on their own. They thus eliminate the over the country and, agents and brokers spend need to meet face-to-face with a live agent, almuch of their time working outside the office,

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meeting with customers or communicating via the Internet and telephone, so travel time varies depending on a person’s role in the insurance industry. In addition to a state insurance license needed to work in the industry, some other special licenses may be required. Most workers specialize in one type of insurance, although there are multiline agents as well. Property and Casualty Insurance Property and casualty insurers offer protection against loss or damage to any property in the case of unforeseen occurrences, such as fire, theft, accident, or natural disaster. Many insurance products fall within the property branch of this segment, as individuals and businesses face a variety of catastrophic risks on a daily basis. The basic physical items protected under this umbrella are houses, cars, boats, airplanes, commercial buildings, and personal possessions as small as jewelry. However, the scope of coverage can be complex. Casualty and liability insurance protects policyholders from legal or financial responsibility for directly or indirectly causing loss or damage to other people, businesses, or their property. Legal liability falls under the casualty branch. Beyond these products, some insurers have begun offering financial planning products and protection. Potential Annual Earnings Scale. On average, nonsupervisory workers in the property and casualty insurance sector earned $52,300 as of December, 2009. However, insurers are found in every part of the country—including small cities—so geography plays a role in earnings potential, as does business size and market presence. According to the U.S. Bureau of Labor Statistics (BLS), in 2009, insurance underwriters working in the direct insurance field, excluding life, health, and medical insurance, earned an average of $63,020. Claims adjusters, examiners, and investigators earned an average of $59,130. Financial managers earned an average of $122,300. Clientele Interaction. Property and casualty insurance is a broad category, and an insurer may work with people or with businesses. Individuals usually deal with specific insurance agents or adjusters one-on-one, while complex business transactions may require a team of representatives from an insurer to meet with a team of representatives from a potential or existing insured. In general, in-

surance occupations are divided between those that have little or no interaction with clients and those that spend much of their workdays interacting with clients. Amenities, Atmosphere, and Physical Grounds. Insurance companies are located in commercial offices. Small companies or branches may occupy offices within larger buildings, while large companies and main headquarters may occupy entire buildings. Agents and brokers provide minor amenities for clients, such as coffee or welcoming decorations, since they conduct sales in their offices. Carriers are likely to have more utilitarian facilities, and any amenities provided will be for the benefit of the staff rather than customers. Typical Number of Employees. As of August, 2008, there were approximately 489,200 direct property and casualty insurers in the United States. A person can work independently as an insurance agent or can work in a company with thousands of employees, such as State Farm Insurance or Farmers Insurance Group. Traditional Geographic Locations. Insurance companies exist nationwide. Headquarters of large companies are usually located in major cities, while branches and smaller companies are located in regional cities throughout the country. Some cities, such as Hartford, Connecticut, and New York City, are known as major centers of the insurance industry, where many headquarters are located. Offices also exist in rural areas, especially those that serve the insurance needs of agricultural businesses and workers. Pros of Working in Property and Casualty Insurance. Most products in the property and casualty insurance category, such as auto insurance, are mandatory under state law. Thus, an agent need not convince a person to buy insurance; potential clients only need to be convinced to purchase their insurance through the agent. In addition, property and casualty insurers sell many different products, providing their employees with some variety in their jobs. Claims adjusters, appraisers, and examiners are especially important in the property and casualty insurance segment. Persons interested in assessing damages on behalf of insurance companies may wish to specialize in such an occupation within this segment. Auto damage appraisers need not have college educations, but they need some formal

Insurance Industry technical training, such as that provided by vocational colleges. Some insurance companies have expanded their businesses by opening their own repair facilities, making appraisals easier. Because of advances in technology, too, adjusters can sometimes rely on satellite imagery to view the site of a customer’s damage, decreasing the need for travel on the job. Cons of Working in Property and Casualty Insurance. The variety of insurance products and exclusions within property and casualty policies can make insurance agents’ jobs more complex. Unless an employer focuses solely on one type of insurance, employees may need to know about and understand several different types of policies. Additionally, laws and regulations governing this insurance segment vary by state, so employees serving clients in multiple states need to keep track of the differences among the states. Insurance always deals with loss, but in this segment the loss can sometimes be devastating because of the personal connections between people and their property. Customers making claims on their insurance policies are typically emotional and can be dissatisfied with the results of their claims. Policies are generally complicated and incorporate many exclusions. Employees must break the bad news to clients when their claims are denied. Another pitfall of working in property and casualty insurance is the unpredictability of natural disasters. Losses from catastrophic events can surge in particularly bad years, resulting in decreases in capital for most property and casualty insurers. Continued growth in the use of the Internet may affect property and casualty workers the most, since premiums for car insurance are the highest, and trends show that people are increasingly relying on the Internet to obtain the best prices. Costs Payroll and Benefits: Insurance companies may pay hourly wages or salaries, depending on the position. Sales employees may work on commission. Benefits are generally offered by large companies and include health insurance, sick leave, vacation, and retirement plans. Smaller companies may or may not offer such benefits. According to 2006 data, total annual payroll for all U.S. life insurance carriers was $34.33 billion.

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Supplies: Insurance companies require standard office supplies and equipment, including computer hardware and software, copiers, telephones, fax machines, printers, and consumables. Field workers need cell phones or other mobile communication devices. External Services: Insurance carriers may contract independent brokers, as well as payroll and pension services. They may also contract lobbyists, public relations firms, technical support, maintenance and cleaning services, landscaping and snow removal, and security as necessary. Utilities: Insurance companies pay for general utilities, such as water, garbage, electricity, gas or oil, telephone, and Internet access. Taxes: Insurance companies are required to pay local, state, and federal income taxes based on the net premiums they receive, as well as property taxes on their physical buildings. Health Insurance Health insurance covers the costs of medical care, as well as loss of income due to illness or in-

Insurance claim folders line the wall at this office. (©Darryl Brooks/Dreamstime.com)

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jury. Dental care and long-term disability also fall under the umbrella of health insurance. Health insurance coverage varies from the most basic (covering only catastrophic events, or what used to be called “major medical”) to the most comprehensive (covering preventive, inpatient, and outpatient care). The amount of coverage determines a person’s premium, deductible, and coinsurance. Under the PPACA and its companion legislation, the Health Care and Education Reconciliation Act of 2010, health insurance will be required of most Americans beginning in 2014. Health insurance is offered through the private and public sectors and by both for-profit and nonprofit private entities. Potential Annual Earnings Scale. A health insurer in a nonsupervisory position earned an average of $49,600 per year as of December, 2009. The BLS does not provide separate statistics for the health insurance segment. However, within the general category of insurance carriers that includes health insurance carriers, the average annual salary of an insurance underwriter in 2009 was $64,440. Claims adjusters, examiners, and investigators earned an average of $57,890 per year, and financial managers earned an average of $123,970 per year. Clientele Interaction. In the health insurance business, a worker may deal with an individual purchasing insurance or a business purchasing coverage for its workforce. Many insurers specialize in either group policies or individual policies, in both the private and public sector. As the PPACA is implemented, the business of providing health insurance is bound to change. The act aims to make insurance more affordable and easier to purchase for both individuals and businesses. Amenities, Atmosphere, and Physical Grounds. Insurance companies are located in commercial offices. Small companies or branches may occupy offices within larger buildings, while large companies and main headquarters may occupy entire buildings. Agents and brokers provide minor amenities for clients, such as coffee or welcoming decorations, since they conduct sales in their offices. Carriers are likely to have more utilitarian facilities, and any amenities provided will be for the benefit of the staff rather than customers. Typical Number of Employees. As of 2008, there were 449,000 direct health and medical insurance carriers in the United States. A person can

work independently as an insurance agent or can work in a company with thousands of other employees, such as Cigna or UnitedHealth Group. Traditional Geographic Locations. Insurance companies exist nationwide. Headquarters of large companies are usually located in major cities, while branches and smaller companies are located in regional cities throughout the country. Some cities, such as Hartford, Connecticut, and New York City, are known as major centers of the insurance industry, and many headquarters are located there. Offices also exist in rural areas, especially those that serve the insurance needs of agricultural businesses and workers. Lack of health insurance is more prevalent in poorer communities, including both rural areas and impoverished communities within major cities. As the PPACA is phased in, there may be greater demand for qualified health insurance agents in those locations. Also, while some large providers are national, others, such as Kaiser Permanente, are concentrated in specific geographic locations. Pros of Working in Health Insurance. Growth is probably the biggest advantage in the health insurance segment. The PPACA will increase the market for health insurance by roughly 30 million people, opening a number of new opportunities for insurance agencies. The law’s nationwide mandate to purchase health insurance will also increase sales. Industry reports indicate that approximately 5 percent of health insurers plan to increase the number of full-time employees on their payrolls by more than 20 percent. Increasing life expectancy has had a positive impact on health insurance and will continue to do so in the future. This trend creates a greater need for health and long-term care insurance. Coupled with new discoveries and developments in medical care, the health insurance segment remains very dynamic. Another pro is the niche found in the health insurance segment. As in the property and casualty insurance segment, claims examiners play an important and unique role, offering a specialty in the field. These workers review claims to see whether costs are reasonable based on their corresponding services and diagnoses. A second specialty is in the actuary career path. Actuaries help companies develop health and long-term-care insurance policies

Insurance Industry by predicting the likelihood of occurrence of heart disease, diabetes, stroke, cancer, and other chronic ailments among particular groups of people, such as those living in a certain area or sharing a family history of illness. Actuarial work can be beneficial to both consumers and companies because the ability accurately to predict the probability of a particular health event among a certain subgroup ensures that premiums are assessed fairly based on the risk to the organization. Cons of Working in Health Insurance. The PPACA poses a number of challenges for the health insurance industry. Health insurance will become more regulated as the law is phased in. In addition to the individual insurance mandate and the mandate for companies to provide insurance, the law restricts the behavior of health insurance companies. Companies will no longer be allowed to deny coverage or charge higher fees because of preexisting medical conditions, and they will be required to offer particular levels of coverage if they wish to offer plans to individuals through insurance exchanges. All health plans will be required to cover preventive care. Although these changes are being phased in over a ten-year period, the industry will look very different at the end of the process than it did before the reforms were passed. Thus, working in the health insurance segment may become more complicated, especially in the short term. Also, because medical care is always changing, coverage issues arise easily. Health insurance policies differ tremendously, and it is difficult for customers to read the fine print. It may be difficult even for insurance agents to keep up with all the changes. Costs Payroll and Benefits: Insurance companies may pay hourly wages or salaries, depending on the position. Sales employees may work on commission. Benefits are generally offered by large companies and include health insurance, sick leave, vacation, and retirement plans. Smaller companies may or may not offer such benefits. In 2006, health insurers paid a total of $27.09 billion in combined payroll. Supplies: Insurance companies require standard office supplies and equipment, including computer hardware and software, copiers, telephones,

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fax machines, printers, and consumables. Field workers need cell phones or other mobile communication devices. External Services: Insurance carriers may contract independent brokers, as well as payroll and pension services. They may also contract lobbyists, public relations firms, technical support, maintenance and cleaning services, landscaping and snow removal, and security as necessary. Utilities: Insurance companies pay for general utilities, such as water, garbage, electricity, gas or oil, telephone, and Internet access. Taxes: Insurance companies are required to pay local, state, and federal income taxes based on the net premiums they receive, as well as property taxes on their physical buildings. Beginning in 2018, an excise tax will be levied on all health insurance policies that cost more than a set amount (beginning at $23,500 for a family policy) that will increase annually with inflation. Life Insurance Life insurance protects against uncertainties in life, primarily death. Coverage provides money to beneficiaries, such as spouses and dependent children, upon the insured person’s death, in order to cover the costs of a funeral, debts, and future living expenses. An insurer’s liability is usually limited in cases of suicide and war. Generally speaking, the insured purchases either term insurance (coverage during a specified period) or whole life insurance (coverage lasting as long as premiums are paid, also known as ordinary or permanent insurance). Overall, while health and property or casualty insurance are seen as necessities, life insurance is generally seen as optional. Many employers offer some life insurance as part of their benefits packages. People typically accept this benefit as their only source of life insurance. However, some purchase additional coverage, either by augmenting their employer-sponsored benefits or by purchasing additional policies outside of those benefits. Those who are not offered coverage through a job often seek coverage for themselves and their families, while others have no life insurance at all. Overall, life insurance company employees need to be more sales-oriented and persuasive than employees in other segments. Potential Annual Earnings Scale. Dependent on the location and size of the company, the aver-

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age annual income for a life insurer was $52,000 as of December, 2009. The BLS does not provide separate statistics for the life insurance segment. However, within the general category of insurance carriers that includes life insurance carriers, the average annual salary of an insurance underwriter in 2009 was $64,440. Claims adjusters, examiners, and investigators earned an average of $57,890 per year, and financial managers earned an average of $123,970 per year. Clientele Interaction. As with health insurance, a client may be a business purchasing a group policy for its workers, or it may be an individual seeking a life insurance policy. Amenities, Atmosphere, and Physical Grounds. Insurance companies are located in commercial offices. Small companies or branches may occupy offices within larger buildings, while large companies and main headquarters may occupy entire buildings. Agents and brokers provide minor amenities for clients, such as coffee or welcoming decorations, since they conduct sales in their offices. Carriers are likely to have more utilitarian facilities, and any amenities provided will be for the benefit of the staff rather than customers. Traditionally, life insurance was sold door-to-door, but as with the entire insurance industry, much of the business is now conducted via the telephone and the Internet. Typical Number of Employees. As of 2008, there were 804,000 direct life and health insurance carriers in the United States. A person may be employed independently as a life insurance agent or may work among thousands of other employees at large companies, such as Nationwide Mutual Insurance. Traditional Geographic Locations. Insurance companies exist nationwide. Headquarters of large companies are usually located in major cities, while branches and smaller companies are located in regional cities throughout the country. Some cities, such as Hartford, Connecticut, and New York City, are known as major centers of the insurance industry, and many headquarters are located there. Offices also exist in rural areas, especially those that serve the insurance needs of agricultural businesses and workers. Pros of Working in Life Insurance. The life insurance segment is a little more straightforward than the other segments of the insurance industry.

While there is some variability among policies, they tend not to be too complex. Additionally, some career opportunities exist only in this segment. For example, life insurance actuaries help companies develop annuity and life insurance policies for individuals by estimating how long someone is expected to live. Insurance agents and claims examiners also have some special duties. For example, agents may help set up physical examinations to screen potential customers for policies, and examiners review causes of death and review qualifications within applications. Claims examiners need to investigate the details of insured persons’ deaths. Cons of Working in Life Insurance. As with the other segments, customers make claims while dealing with loss—in this case, the death of a loved one. Beneficiaries often first see the relevant policies after the holders are deceased, which can cause some confusion. In some cases, there may be conflict among family members about who the beneficiary of a policy is or should be. When insured persons die of causes not covered by their policies, such as suicide, employees must tell their beneficiaries that they cannot receive their benefits. Life insurance is seen as more of a luxury than a need by many people. In contrast to automobile or homeowner’s insurance, life insurance may be difficult to sell. While it has proven to be advantageous to those left behind to cover medical bills or funeral costs, people still do not readily seek out life insurance. Millions of Americans lack life insurance. Few even wish to discuss the matter, making an agent’s job somewhat difficult. Costs Payroll and Benefits: Insurance companies may pay hourly wages or salaries, depending on the position. Sales employees may work on commission. Benefits are generally offered by large companies and include health insurance, sick leave, vacation, and retirement plans. Smaller companies may or may not offer such benefits. Payrolls of life insurance companies totaled $26.34 billion in 2006. Supplies: Life insurance offices require computers, printers, copy machines, fax machines, and other general office supplies. Field workers need cell phones or other mobile communication devices.

Insurance Industry External Services: Insurance carriers may contract independent brokers, as well as payroll and pension services. They may also contract lobbyists, public relations firms, technical support, maintenance and cleaning services, landscaping and snow removal, and security as necessary. Utilities: Insurance firms with physical offices pay typical utilities, such as water, garbage, gas or oil, electricity, telephone, and Internet access. Taxes: Life insurance companies pay local, state, and federal taxes on their net premiums and property taxes on their offices.

ORGANIZATIONAL STRUCTURE AND JOB ROLES In 2008, the insurance industry employed 2.3 million wage and salary workers, up 2.9 percent from 2007. The jobs available in the insurance industry are similar across all types of insurance (property and casualty, health, and life). However, the knowledge, training, and functions needed for the varying roles may differ. Some insurance workers work with only one type of insurance, while others work with multiple insurance products. Some 61 percent of industry jobs are within insurance carriers, while 39 percent are within insurance agencies and brokerages. Larger organizations often do business in more than one insurance segment, and they offer a wide range of position types, including office and administrative, sales, and management and executive-level jobs. Other companies provide insurance-related services, such as claims processing. Many individuals work independently as agents in the industry. The most common jobs in the insurance industry, such as insurance agent positions, have no specific academic requirements, although state licensure is necessary. When seeking higher-level sales or management positions, a college degree or background in business or sales can be helpful. Local insurance offices and banks in rural areas are the best starting points for people interested in working in the insurance industry. Unlike other fields, there is no set path for advancement. Instead, workers control their own advancement, and many companies expect that their workers will seek further training on their own.

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The following umbrella categories apply to the organizational structure of businesses within the insurance industry: ■ ■

■ ■ ■ ■

Office and Administrative Support Management, Business, and Financial Operations Sales Medical, Legal, and Actuarial Staff Information Technology Human Resources

Office and Administrative Support Office and administrative support roles account for 42.2 percent of jobs in the insurance industry. These personnel help make the overall business of insurance run smoothly. For the most part, they work traditional forty-hour workweeks, completing routine clerical functions, such as filing, and providing information to customers via telephone or e-mail. Some jobs allow more flexibility, such as temporary employment or part-time, evening, or weekend shifts. Individuals who work in office and administrative roles possess at least a high school diploma and come from many professional backgrounds. Some of them have two-year postsecondary business degrees. On-the-job training to learn the mechanics of the insurance industry is important to continued success. Skill in communications, math, business, computer use, typing, and customer service are helpful. Duties can vary, but many support personnel spend a significant amount of time on the telephone with customers, entering data, and filing. Bookkeepers and accountants handle a company’s basic financial transactions. Insurance claims and policy-processing clerks have numerous duties, including processing new policies, making modifications to existing policies and claims, reviewing application forms for completeness, compiling customer data, reviewing insurance policies to determine coverage details, preparing forms, providing customer service for filing claims, keeping records organized, paying small claims, transmitting claims for payment, processing applications for, changes to, reinstatement of, and cancellation of insurance policies, corresponding with insured persons and agents, and letting agents know of policy cancellation. Insurance companies offer internships to stu-

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dents and others seeking practical experience and training in return for labor. Often, interns take care of insurers’ office and administrative duties. Annual salaries in this job category range from $32,000 to $41,000, according to 2008 data. Office and administrative support occupations may include the following:

they are called in property and casualty insurance) determine coverage, investigate claims, and review settled claims. When negotiating claims settlements, they review the extent of their insurance companies’ liabilities. In this process, claims adjusters must communicate with multiple parties— including medical specialists in the case of health claims and police and witnesses in the case of ■ Secretary property or casualty claims—in order to gather all ■ Administrative Assistant available information related to the claim. If a set■ Bookkeeper tlement cannot be negotiated, adjusters may rec■ Accountant ommend litigation. Adjusters look for overpay■ Auditing Clerk ments, underpayments, and other irregularities. ■ Claims and Policy-Processing Clerk They require licensing by each state in which they ■ Customer Service Representative are employed. According to the BLS, the median ■ Intern salary for claims adjusters, examiners, and investigators in 2009 was $57,130. Insurance appraisers are unique to property Management, Business, and Financial and casualty insurance, particularly in the case of Operations automobile damage. Appraisers calculate the value Management, business, and financial personnel of damage done to vehicles, houses, and other account for 29.1 percent of insurance jobs. These property to determine the cost of repairs that will personnel are among the most important employbe paid in a claim settlement. They also calculate ees to an insurance company, and they require parreplacement value of property that has been stoticular skills. In most cases, they require master’s len or damaged beyond repair. The median salary degrees in business administration or related fields. of automobile insurance appraisers in 2009 was Some training programs offer certification in rele$55,390. vant areas that may substitute for advance degrees Underwriters review applications to evaluate in some cases. the degree of risk involved based on each appliClaims adjusters, appraisers, and examiners (as cant’s financial standing and the condition of the property being insured. They determine whether to write a given policy, for how much, and under what terms. They decline excessive risks in order to preserve their companies’ profits. Job prospects for underwriters are growing more slowly than some other industry positions because computer software has been developed to minimize the time it takes to assess risk. In 2009, the median salary of insurance underwriters was $57,820. Management analysts, or loss control representatives, conduct studies and evaluations to assess various risks for insurers and make recommendations. They inspect A claims adjuster examines a damaged car. (AP/Wide World Photos) the business operations of appli-

Insurance Industry OCCUPATION

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PROFILE

Insurance Claims Adjuster and Examiner Considerations

Qualifications

Description

Analyzes and investigates insurance claims and determines damages.

Career clusters

Business, Management, and Administration; Finance

Interests

Data; people

Working conditions

Work inside; work outside; work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

ESC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

cants and look for potential hazards, such as unsafe conditions. The 2009 mean annual salary of management analysts in the insurance industry was $70,920. Management, business, and financial occupations may include the following: ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Vice President of Compliance Vice President of Public and Government Relations General Counsel Marketing Manager Claims Director Claims Adjuster/Appraiser/Examiner Underwriting Manager Underwriter Insurance Investigator Senior Insurance Investigator

■

Management Analyst/Loss Control Representative

Sales As with all sales jobs, the abilities to persuade and promote are keys to success. Insurance salespeople sell services rather than goods. They may sell to individuals, or they may direct or manage the sale of business-related services. Sales personnel account for 16.5 percent of the jobs in the insurance industry. Insurance sales jobs require college degrees— mainly in business, finance, or economics—and strong oral and written communication skills. Salespersons require licenses from each state in which they work. Frequently, insurance companies and brokerage firms send employees to obtain extensive training beyond their education. The insurance industry has also expanded its scope to include financial planning services. As a result, many

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Insurance Industry OCCUPATION

PROFILE

Actuary Considerations

Qualifications

Description

Predicts the likelihood of occurrence of heart disease, diabetes, stroke, cancer, and other chronic ailments among particular groups of people, usually for insurance purposes.

Career cluster

Finance

Interests

Data

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

ISE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

insurance salespeople have also become licensed to sell securities, such as mutual funds or annuities. Insurance agents work irregular hours, usually totaling more than forty hours per week. They work outside the office and travel often, and they must be available for clients experiencing emergencies twenty-four hours per day. Most sales agents and managers are assigned to specific territories—from a single metropolitan area to several states in size. Approximately 50 percent of insurance agents work for agencies and brokerages, 21 percent work directly for insurance carriers, and 22 percent work independently. Independent contractors may perform work for two or more insurance firms. Individuals often specialize in the sale of specific insurance products, but they can cross-sell. The main role of an insurance agent is to assist customers (whether individuals or businesses) in selecting policies. Agents explain the details of the products they sell, help applicants fill out necessary forms,

and write agreements between insured entities and insurers. Some agents may also be in charge of calculating premiums and receiving payments. Beyond working with current customers, agents must also seek out new business prospects and set up networking appointments for this purpose. Insurance brokers also sell insurance but do not work for a specific insurance company. Instead, they review all the available policies and match each customer’s needs with the appropriate company and product. Most agents and brokers work on commission. In 2009, the mean annual income of insurance sales agents was $61,210 for those employed by carriers and $61,660 for those employed by agencies and brokerages. Insurance sales managers earned an average of $113,710. Sales occupations may include the following: ■ ■ ■

Sales Manager Insurance Agent Insurance Broker

Insurance Industry Medical, Legal, and Actuarial Staff Some 11.4 percent of insurance personnel are members of companies’ medical and legal staff. Lawyers represent their companies in litigation, responding to suits and bringing actions against clients and other companies as necessary. Doctors and nurses advise insurance companies in managed care health plans. Actuaries represent a small portion of insurance employment but are essential. An actuary is an insurance professional who calculates probabilities for the purpose of setting policy premiums, providing statistical data for records, and developing new products for a company. This occupation is considered one of the top one hundred fastest-growing jobs. Actuaries have degrees in actuarial science, mathematics, statistics, or business-related fields and must take a series of national exams to attain full professional status, which takes five to ten years. Most actuaries work traditional workweeks of forty hours. In 2009, the mean annual salary for actuaries was $96,080 for those employed by carriers and $98,630 for those employed by agencies and brokerages. Medical, legal, and actuarial occupations may include the following: ■ ■ ■ ■ ■ ■

Actuary Attorney/Counsel Title Examiner/Abstractor/Searcher Paralegal Nurse Physician

an average of $77,010 and database administrators earned an average of $78,160. IT occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Chief Technology Officer (CTO) Chief Information Officer (CIO) Information Technology Manager Computer Systems Analyst Database Administrator Network Administrator Software Engineer Computer Programmer Computer Support Specialist Help Desk Staff

Human Resources Human resources departments become more important in larger health insurance companies. Firms such as Progressive or Aetna, for example, employ a number of human resources personnel to handle the hiring and firing processes, oversee payroll, and administer benefits. However, in smaller firms, the administrative staff may be solely responsible for these duties, as is common in other industries as well. Insurance company human resources managers earned an average of $113,500 in 2009, while human resources assistants earned an average of $38,290. Human resources occupations may include the following: ■ ■ ■

Information Technology Information technology (IT) personnel provide technical support for insurance companies. They include computer system analysts and network administrators, as well as help desk workers who assist with day-to-day operations. IT personnel may start with associate’s degrees and gain further certification and training, or they may already have professional experience working in IT departments in other industries. In addition to general IT jobs, insurance companies require specialists in medical records and health information, who work with electronic health records and design databases to organize them. In the insurance industry in 2009, the mean annual salary for computer support specialists was $51,900, while systems analysts earned

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■ ■ ■ ■ ■

Human Resources Manager Human Resources Director Human Resources Coordinator Human Resources Assistant Human Resources Generalist Payroll Clerk Benefits Specialist Administrative Assistant

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise. As with most industries, performance is linked to the economy and turmoil in the financial markets. In the wake of the recession of 2007-2009, the U.S. insurance market is expected to grow. In some ways, the insurance industry is recession-

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sary workforce, as fewer employees can accomplish more. While the Internet prompts quicker automation of processes and better customer service, it could also reduce the need for insurance workers and increase competition for jobs. Most of the processes in the insurance business will never be completely automated, however. The Internet will affect property and casualty workers the most, since premiums for car insurance are the highest and consumers can use the Internet to determine the best price for their needs. Other factors may fuel growth in the insurance industry. Health care reform and the changing face of health insurance will create new opportunities for health insurers. Advances in the medical and pharmaceutical fields will also affect health insurance, inspiring new coverage options. The aging of the American population will result in more people needing insurance for longer periods of time. The resulting greater demand will apply to all areas of insurance, including health and automobile coverage. In addition to growth, employment opportunities exist because of continuous turnover. Companies will always need to replace PROJECTED EMPLOYMENT workers who leave or retire. FOR SELECTED OCCUPATIONS Another area of expansion for insurance companies is the ability Insurance Carriers and Related to offer broader financial services. Activities Consumers may appreciate the convenience of purchasing finanEmployment cial and insurance products at the 2009 Projected 2018 Occupation same time from a single company, or of purchasing additional prod198,140 220,300 Claims adjusters, examiners, and ucts from a company they already investigators trust. Thus, bundling noninsur57,180 58,000 First-line supervisors/managers ance services with insurance may of office and administrative help drive additional business to support workers diversified companies. In 2009, several occupations 211,150 220,200 Insurance claims and policy within the insurance industry were processing clerks listed among the one hundred 309,360 366,800 Insurance sales agents jobs with the most openings in the United States. Each year, on aver86,220 86,900 Insurance underwriters age, there are openings for nearly 64,500 insurance sales agents, Source: U.S. Bureau of Labor Statistics, Industries at a Glance, 42,250 insurance claims clerks, Occupational Employment Statistics and Employment and 42,250 insurance policyProjections Program. processing clerks. Actuaries were named as one of the one hundred

proof, because the need for insurance coverage persists, and the need for some kinds of insurance—for example, health insurance—may increase in weak economies, in which consumers are less able to bear the direct costs of health care. In other segments, consumers may downsize to one car rather than two, or shy away from purchasing a new house, but most insurance needs still exist through a recession. In 2008, the insurance industry employed approximately 2.3 million wage and salary workers. Employment in the industry is projected by the BLS to increase slowly from 2008 to 2018. Industry jobs will increase by 3 percent during that time, compared to an average across all industries of 11 percent growth. Beyond economic conditions, another obstacle to long-term growth in the insurance industry is technology. Both the Internet and new software have increased the productivity of workers in the insurance industry, and this trend will continue. Greater productivity reduces the size of the neces-

Insurance Industry fastest-growing jobs in 2009, with a 23.7 percent growth rate. From 2008 to 2009, earnings increased for most jobs in the insurance industry, except claims adjusters. In fact, according to a report by the Ward Group and the Jacobson Group, nearly 63 percent of insurance companies were expected to experience revenue increases in 2010, compared with 54 percent that expected such increases in 2009. Business growth was expected to foster job growth. In total, 44 percent of insurers said they planned to increase their staffs in 2010, up from 34 percent in 2009, while only 13 percent of firms said they expected staff decreases in 2010. Overall, the report predicted a 1.96 percent increase in insurance industry employment during 2010, translating to 26,500 new jobs. Employment Advantages The insurance industry is a good starting point for almost anyone entering the workforce, no matter where a person lives. Because many entry-level positions offer internal training and do not require college degrees, candidates can be hired with little education or experience and can begin to work their way up through the ranks and try out different roles. Insurance is not a difficult field to get into, especially since there are several types of insurance products across the nation, but advancing one’s career requires persistence and determination. Another advantage is the variety within the industry. Not only are there different insurance products but there are also diverse job functions. There is rarely a dull moment in the insurance industry because of all the tasks needed for daily operations. Flexibility is another high point in the industry. Many jobs can be part time or temporary, providing options to those who want to have a family or already have one. None of the jobs is overly demanding of time. Most full-time insurance workers complete their work in a traditional forty-hour workweek. Opportunities in the insurance industry exist nationwide and worldwide, in big cities and small towns, and they will continue to grow in the foreseeable future. Annual Earnings In 2008, insurance companies earned $1.24 trillion in premiums in the United States and $4.27 trillion globally. Allowing for some corrections

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caused by the global financial crisis, these figures are expected to grow. Anticipated growth in domestic business volume is expected to translate to job growth for almost 50 percent of U.S. insurance firms. This growth will primarily be due to expansion of business and new markets. Further, there will be fewer staff reductions. The international and global insurance markets are expected to experience similar trends. Competitive pricing, innovative services, and increasing regulation all play a role, as does the recovering economy. Among countries outside the United States, China and India appear to have the largest potential for industry growth.

RELATED RESOURCES FOR FURTHER RESEARCH American Council of Life Insurance 101 Constitution Ave. NW, Suite 700 Washington, DC 20001-2133 Tel: (202) 624-2000 http://www.acli.com American Insurance Association 2101 L St. NW, Suite 400 Washington, DC 20037 Tel: (202) 828-7100 Fax: (202) 293-1219 http://www.aiadc.org American Risk and Insurance Association 716 Providence Rd. Malvern, PA 19355 Tel: (610) 640-1997 Fax: (610) 725-1007 http://www.aria.org Independent Insurance Agents and Brokers of America 120 S Peyton St. Alexandria, VA 22314 Tel: (800) 221-7917 Fax: (703) 683-7556 http://www.iiaba.net Insurance Information Institute 110 William St. New York, NY 10038

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Tel: (212) 346-5500 http://www.iii.org

reer counselor for new graduates and low-income and homeless adults. She has a bachelor of arts degree in English and Spanish.

National Association of Insurance and Financial Advisors 2901 Telestar Ct. Falls Church, VA 22042 Tel: (877) 866-2432 http://www.naifa.org National Association of Insurance Commissioners 444 N Capitol St. NW, Suite 701 Washington, DC 20001 Tel: (202) 471-3990 Fax: (816) 460-7493 http://www.naic.org National Association of Professional Insurance Agents 400 N Washington St. Alexandria, VA 22314 Tel: (703) 836-9340 Fax: (703) 836-1279 http://www.pianet.com Society of Actuaries 475 N Martingale Rd., Suite 600 Schaumburg, IL 60173 Tel: (847) 706-3500 Fax: (847) 706-3599 http://www.soa.org

ABOUT

THE

AUTHOR

Patrice La Vigne is a health care writer who identifies the most important news and research across multiple therapeutic areas and writes educational summaries to be disseminated to physicians, pharmaceutical representatives, patients, and other health care professionals. She has also written for newspapers and magazines and has worked as a ca-

FURTHER

READING

Grossman, Michael, Björn Lindgren, and Avi Dor. Pharmaceutical Markets and Insurance Worldwide. Bingley, West Yorkshire, England: Emerald, 2010. Parker, Philip M. The 2009-2014 World Outlook for Automobile Insurance. San Diego, Calif.: ICON Group, 2008. Preker, Alexander S., et al. Global Marketplace for Private Health Insurance: Strength in Numbers. Washington, D.C.: World Bank, 2010. Swiss Re. “Sigma: World Insurance in 2008.” http://media.swissre.com/documents/ sigma3_2009_en.pdf. Thomsett, M. Insurance Dictionary. Jefferson, N.C.: McFarland, 1989. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Labor. The Big Book of Jobs. 2009-2010 ed. New York: McGraw-Hill, 2010. Ward Group and Jacabson Group. “Insurance Labor Market Study.” February, 2010. http:// www.wardinc.com/research-center/strategicstudies-detail.php?id=50. Zevnik, R. W. The Complete Book of Insurance. Naperville, Ill.: Sphinx, 2004.

Internet and Cyber Communications Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Information Technology Career Clusters: Arts, A/V Technology, and Communication; Information Technology Subcategory Industries: Application Hosting; Custom Web Page Design Services; Internet Entertainment Sites; Internet Publishers; Internet Service Providers; Social Networking Sites; Video and Audio Streaming Services; Web Hosting; Web Search Portals Related Industries: Advertising and Marketing Industry; Broadcast Industry; Computer Hardware and Peripherals Industry; Computer Software Industry; Computer Systems Industry; Publishing and Information Industry; Telecommunications Equipment Industry; Telecommunications Infrastructure Industry Annual Domestic Revenues: $23.4 billion USD (IT Facts, 2008; for Internet advertising) Annual Global Revenues: $65.2 billion USD (IT Facts, 2008; for Internet advertising) NAICS Numbers: 518, 517919, 519130, 541511

INDUSTRY

e-mail, and social networking has changed how humankind interacts and communicates. The Internet offers businesses and individuals instant access to digital information. Employees and entrepreneurs working in this industry create the content that, as of 2008, attracted 1.7 billion people worldwide according to Miniwatts Marketing Group. The number will only rise as developing countries continue to gain an increasing online presence. Internet advertising, paid online services, and online database publishing represent the leading revenue streams for the Internet industry.

History of the Industry The evolution of the Internet represented an incredible leap forward in human interconnectivity. When programmers took their first tentative steps toward the information network that would become the Internet, there were only ten thousand computers in the entire world. In 1962, J. C. R. Licklider, head of the new military computer research program at the Advanced Research Projects Agency (ARPA), first

DEFINITION

Summary From businesses and schools to individuals and governments, the rise of Web sites, e-commerce, 989

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envisioned an “intergalactic network” that would give people instant access to digital information. He began collaborating with scientists and researchers across the country to investigate the possibility of forming new communication networks. By 1963, the National Aeronautics and Space Administration (NASA) had launched its first communications satellite. The development of communications satellites, first proposed by science-fiction author Arthur C. Clarke, played an important role in the development of the Internet. Meanwhile, scientists at the Massachusetts Institute of Technology (MIT), the RAND Corporation, and the National Physical Laboratory began researching ways to allow computers to exchange information in small units known as packets. This technology was called packet switching, and it remains the basis for most modern Internet communications. By 1965, ARPA researchers were able to connect a computer in Massachusetts to a computer in California using a telephone line. This connection constituted the world’s first wide-area network. Former NASA scientist Bob Taylor became head of ARPA’s computer research department in 1966, and he quickly began working with researchers around the world to develop a communications network utilizing packet-switching technology. This network became ARPANET, the first real precursor to the modern Internet. After years of experimentation, scientists at the University of California, Los Angeles (UCLA), ARPA, Stanford University, and the University of

California, Santa Barbara, successfully connected to the ARPANET for the first time in 1969, and the Internet was born. Scientists quickly began to connect via the ARPANET, and by 1970, the network was growing by one new computer system, or “node,” per month. As the ARPANET grew, researchers continued to experiment with new ways of exchanging information through the network. In 1972, Ray Tomlinson, a researcher at BBN Technologies, created the world’s first e-mail program. After years of testing and development, scientists unveiled the ARPANET at the 1972 International Conference on Computer Communication (ICCC). They attracted the attention of even more scientists, and by 1973, thirty nodes were connected via the ARPANET. New networks were also created, including Packet Radio, which utilized radio waves to connect seven computer systems in Hawaii. In Europe, scientists used satellite communication systems to connect two computers in Norway and the United Kingdom. By 1977, ARPA had become absorbed into the U.S. Department of Defense and was renamed the Defense Advanced Research Projects Agency (DARPA). Vint Cerf and Bob Kahn, two researchers working for DARPA, become the first scientists to send information across multiple networks utilizing the APRANET, Packet Radio, and satellite communications. They called the process “internetting.” This was an important precursor to the modern Internet, in which computers and digital devices are able to connect through telephone lines, mobile broadband networks, wireless access points, and satellite Internet services. Once the ARPANET experiment was officially concluded in 1978, researchers at various universities continued to experiment with networking. By 1979, Steve Bellovin, a scientist at the University of North Carolina, developed USENET in an attempt to share information with his fellow researchers at Duke University. USENET allowed users to exchange e-mail, files, news, and information The evolution of the Internet represented an incredible leap forward in human and attracted many new online interconnectivity. (©Alain Lacroix/Dreamstime.com) visitors.

Internet and Cyber Communications Industry At this time, the burgeoning growth of the earliest modern personal computers, led by Apple and International Business Machines (IBM), led to a revolution in computer technology. Governments, companies, universities, organizations, and individuals soon recognized the usefulness of connecting computers through a stable network, and the International Organization for Standards (ISO) created a universal standard for exchanging information over the Internet in 1982. By 1984, universal standard domains such as .com, .org, .gov, .edu, and .net were adopted. However, it was not until Internet pioneer Tim BernersLee developed hypertext in 1989 that computers running different operating systems were able to connect easily via the World Wide Web. Working alongside collaborator Robert Cailliau, BernersLee created the world’s first browser and developed the Hyper Text Markup Language (HTML), which is still used by millions of Web sites around the world. Between 1962 and 1992, available network bandwidth increased by a factor of more than 20 million. By 2004, more than 873 million users were online, and by 2008 there were more than 80 million Web sites. Instant access to news, entertainment, and personal information has proven an extremely valuable commodity to people and organizations across the world. The Internet has created a robust and growing online economy, and low start-up costs have allowed savvy entrepreneurs to form many successful businesses. The Internet and cyber communications industry employs countless people worldwide, including Webmasters, graphic designers, and software engineers. Many others use the Internet to earn a second income, often through blogging, e-commerce, or running their own Web sites devoted to their personal interests and hobbies. The Industry Today Throughout the 1990’s and into the early twenty-first century, the rapid rise of the Internet economy created a massive

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speculative bubble. The skyrocketing growth of Internet users led to a rush of new dot-com companies hoping to attract customers, with venture capitalists investing an estimated $106 billion in start-up Internet firms by 2000. By 2001, the bubble burst, as investors and shareholders rushed to abandon tech companies, many of which had never realized a profit. The collapse of the dotcom bubble left many thousands of people unemployed and many investors with significant—often devastating—losses. Despite these challenges, some companies founded during the 1990’s survived. These included eBay, Amazon, and Yahoo!. In addition, the Internet infrastructure set up during the dotcom bubble opened up Web access on a global scale, making it possible for the next generation of Internet companies to prosper. Internet companies formed after the dot-com bubble are usually founded with much more modest budgets, but many have been able to attract users and become profitable. Many Web sites, including such well-known sites as Twitter and Facebook, can take years to earn a profit. However, Internet advertising can help bring in valuable revenues right from the start. Web sites can earn advertising revenues through several different methods. Google, for example, allows advertisers to bid for the right to appear in a

Many Web sites, including such well-known sites as Twitter, can take years to earn a profit. (AP/Wide World Photos)

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The Web site for eBay claims it has 90 million active users globally. (AP/Wide World Photos)

small box labeled “Sponsored Links” that appears alongside certain search results. Thus, when users search for “sneakers,” for instance, they see a selection of shoe stores and department stores beside their search results. Advertisers are charged every time a user clicks on a link. Sites can also earn revenues by selling banner ads. A Web site focusing on political news and commentary, for example, might sell banner ads to politicians running for office. Such sites may charge advertisers a flat rate or charge a fee every time a user clicks on an ad, a practice known as click-thru advertising. Internet advertising has proven a reliable profit stream for many established Web sites, including Google, which made more than $1.65 billion in profits in the third quarter of 2009 alone. In fact, Google earned 97 percent of its total 2008 revenues through advertising. Some Web sites also charge users a premium to use certain services, while others collect donations and sell merchandise to offset costs. There are many different ways Web sites attract visitors. Many new Web sites allow people to create

their own content—a phenomenon known as “Web 2.0.” YouTube, for example, has gained a significant following by allowing users to post their own videos. Social networking Web sites take this concept a step further, allowing users to share not just photos and videos, but also personal information about their lives. Other Web sites offer original content produced by employees, while some, such as Digg and Delicious (formerly del.icio.us), succeed by allowing users to collate and rank Web pages, providing users with centralized access to information, pictures, and videos that might interest them. Sites may also provide travel services, such as discounted airline tickets, car rentals, or hotel reservation rates, while others offer reviews of local businesses, including restaurants, repair shops, and doctors’ offices. Web sites such as Amazon and eBay have grown into thriving e-commerce companies with tens of thousands of employees. Meanwhile, hosting companies such as DreamHost offer customers easy, inexpensive ways to publish their Web sites online. In addition, there are many Web-based companies

Internet and Cyber Communications Industry that focus exclusively on the business and financial needs of their customers, offering job postings, stock trading, accounting, or database services. In fact, most businesses, large or small, have their own Web sites and social networking accounts. Many outsource their Internet needs to Web designers and consulting firms, while others hire part-time or full-time employees to handle their online presence. A new development in the Internet and cyber communications industry is the growth of cloud computing. Companies such as Apple, Microsoft, and Google all offer robust cloud computing services that allow businesses and individuals to access programs and documents from a decentralized system of servers. By dispersing data off-site, users can securely back up their data and easily collaborate across long distances. Businesses can also cut costs by outsourcing expensive server operations. According to a Global Study report, in 2009 more than half of businesses surveyed were utilizing cloud computing, an evolving technology that offers many new opportunities for growth. Start-up costs for Web sites have become extremely low in recent years, in part because of the popularity of free open-source software. Entrepreneurs working from home have founded many successful Internet businesses. For example, Mark Zuckerberg launched Facebook from his dorm room while a sophomore at Harvard. First started as a hobby, Facebook has grown into one of the most popular sites on the Internet, with more than 300 million users worldwide as of 2009.

INDUSTRY MARKET SEGMENTS The Internet and cyber communications industry includes small, midsize, and large businesses, as well as individuals engaged in full-time or part-time contract work. Small Businesses Since start-up costs for online business have fallen considerably, many new entrepreneurs are attracted to launching Internet businesses. Freelance consultants and Web designers also conduct much of their business through the Internet. In addition, community leaders with proven track rec-

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ords of founding successful Internet businesses often continue to launch small new start-ups or invest in promising new companies. Many entrepreneurs, freelancers, and small businesses in this industry attract visitors to their own Web sites, while others focus on providing Web advertising, Web design, Web hosting, database management, search engine optimization (SEO), or social networking services for other businesses and individuals. Since most Internet-based businesses do not require physical warehouse space and server needs can easily be outsourced, even extremely high profile companies may have very small staffs of fewer than one hundred employees. Web-based businesses at this stage normally focus on providing new, often experimental features and attracting new visitors and clients. Potential Annual Earnings Scale. Most small Internet start-ups do not earn a profit for the first few years. However, once a successful Internet company begins to sell stock or is purchased by a larger company, early employees can sometimes reap large financial rewards. Others launch their own Web sites as a hobby or a part-time second job, and in these cases, what revenue they earn may barely cover expenses. Many small businesses and freelance consultants also specialize in building Web sites, often for local businesses. According to the U.S. Bureau of Labor Statistics (BLS), such Web designers could expect to earn between $47,000 and $71,500 per year as of 2007. Clientele Interaction. In small Internet companies, employees take a very hands-on approach to interacting with clients, often via e-mail or other means of cyber communication. Freelance Web designers and employees at small Web design firms usually meet directly with clients to ensure that their Web sites fulfill their expectations. Even top executives often interact directly with clients. Amenities, Atmosphere, and Physical Grounds. Many Web sites are launched from home, often starting out as a hobby before earning a profit. Promising start-ups often attract investors and venture capitalists, allowing entrepreneurs to rent office locations, hire employees, and improve their Web sites’ capabilities. The atmosphere at small Internet start-ups is normally much more relaxed than in other industries, often encouraging a sense of playfulness during late-night programming and brainstorming sessions. At small Web de-

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sign and consulting firms, in contrast, a sense of professional decorum is usually required, since employees must frequently engage directly with business clients. Freelance Web designers and online consultants usually work from home, but they must also be prepared to visit clients in professional settings. Typical Number of Employees. Freelance Web developers and consultants usually work alone, and most small Internet start-ups are launched by just one or two people. Even after gaining a significant client base, it is not uncommon for Web-based businesses and consulting firms to employ a staff of fewer than fifty. Well-known sites such as Craigslist and Twitter, for example, each had thirty employees or fewer as of 2009. Traditional Geographic Locations. A Webbased business can be launched from anywhere in the world, and many Web designers and small consulting firms focus on local area businesses. However, many Internet companies are concentrated in major metropolitan areas, especially Silicon Valley in California’s San Francisco Bay Area. Because Silicon Valley has a long history of supporting leading technology companies, many talented programmers, investors, and venture capital firms are located in the area. This can make it easier for Internet start-ups to obtain funding and compete for the most qualified employees. Pros of Working for a Small Internet Company. Freelance Web designers, consultants, and entrepreneurs running their own Web sites have the freedom to pick which projects to work on and which clients to accept. They can also determine how much to charge for their services and set their own advertising rates, and they often make their own schedules. Employees for small firms may also enjoy greater creative input, since they can usually take their ideas directly to the owner or manager. Internet start-ups, in particular, offer a relaxed, laid back communal atmosphere with many new challenges and opportunities as the business grows. They may also enjoy generous stock options or other opportunities to invest in their companies, and early employees may reap great financial rewards if a company goes public or is bought up by a larger firm. Cons of Working for a Small Internet Company. Since freelance Web designers, consultants, and entrepreneurs work for themselves, they are

completely responsible for attracting new clients and Web site visitors. This can take a certain amount of luck, as well as tireless efforts and many long hours. They may hold down day jobs in unrelated fields for years before they attract enough clients or advertisers to make a living through their Web-based businesses. Income can also vary widely year-to-year, or even month-to-month, since online trends can change rapidly. Employees at small start-ups may also face job insecurity, since many start-ups may take years to earn a profit and investors can abandon a company at any time. At small, established firms, employees are often expected to work long hours, with programming sessions that can last late into the night. At the same time, unexpected crashes may result from hacking attacks, server malfunctions, or simply too many people trying to log on at the same time. Employees at these companies are expected to continue working until the issue is resolved, no matter how long it takes. Costs Payroll and Benefits: Freelance Web designers and online consultants often work on a contract basis and usually receive no benefits. The same holds true for entrepreneurs first launching their own Web sites. However, established Webbased companies and start-up firms with sufficient capital usually offer generous benefits in order to attract talented employees. Benefits often include stock options, insurance, and paid sick days. Supplies: Individuals and small Internet businesses require up-to-date computer systems, software, and other office supplies. Depending on the size and scope of the business, they may also have their own servers. External Services: Small start-up Internet firms, freelance Web designers, consultants, and individual entrepreneurs launching their own Web sites typically outsource their Web hosting and server needs. They may also hire accountants on a contractual basis and sometimes hire external marketing firms to help grow their business. Utilities: Individuals working from home typically have to pay for high-speed Internet access, as well as normal household utilities and expenses. Small businesses with office locations must pay rent, which may include water and sewage, as

Internet and Cyber Communications Industry well as electricity, which may be a significant cost depending on the number of computers and servers located on the property. They also have to pay for high-speed Internet access and may require a dedicated T-1 line to handle high bandwidth requirements. Taxes: Individuals and small businesses must pay all applicable local, state, federal, and property taxes. Midsize Businesses Most midsize businesses in the Internet and cyber communications industry are well established, with hundreds of thousands of regular visitors, significant investors, and profitable revenue streams. They usually maintain their own on-site servers and may have multiple offices. Since successful midsize Internet-based companies already enjoy large followings, employees must focus on introducing innovative new features, preventing outages, and ensuring visitors enjoy an extremely reliable level of service. Potential Annual Earnings Scale. Midsize Webbased businesses hire people for many different kinds of positions, ranging from highly paid executives to Web developers, database administrators, programmers, and human resources workers, as well as public relations and marketing personnel. Database administrators can expect to earn between $70,250 and $102,000 per year, while programmers may earn between $55,250 and $90,250 per year, according to the BLS in 2007. Web developers earn between $54,750 and $81,500 per year. Clientele Interaction. Most employees at midsize Internet companies do not physically interact directly with customers, although they may exchange e-mails with Web-site visitors or engage in conversations via forums, message boards, or instant messages. Company representatives may also attend conferences or conventions several times a year. In addition, employees focused on public relations and marketing will often meet with prospective advertising firms and business partners. Amenities, Atmosphere, and Physical Grounds. Midsize Web-based companies usually have a single main headquarters, but they may also have satellite offices in various parts of the world. Satellite offices may contain Web-hosting servers, technical support operations, and sales and marketing offices. The atmosphere at companies in

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this industry varies greatly depending on the business, as well as the individual department. Programmers and Web developers, for example, often enjoy a more relaxed, easygoing environment than do employees working in sales and business development. Additionally, employees at midsize firms often enjoy many perks and amenities, including free food and beverages, child care, a casual dress code, and flexible working hours. They may also have the option of telecommuting. Typical Number of Employees. By the time a Web-based business reaches a medium size, it may employ between one hundred and one thousand people. Employees normally work full time, although some midsize firms occasionally hire consultants, designers, or marketing firms on a contract basis. Traditional Geographic Locations. Midsize Internet firms are highly concentrated in hightech areas, especially Silicon Valley; Los Angeles, California; Portland, Oregon; and Seattle, Washington. Silicon Valley in particular has long been a home for many of the most well known midsize Internet businesses. Start-up Web sites launched elsewhere often move their headquarters to Silicon Valley in order to seek new investors and attract top talent. Facebook, for example, is a midsize business with more than nine hundred employees launched from a Harvard University dorm room in Cambridge, Massachusetts, by Mark Zuckerberg. In 2004, as the social media site began to attract new visitors and advertisers, Zuckerberg moved the company to Palo Alto, California, a high-tech hot spot in Silicon Valley. Pros of Working for a Midsize Internet Company. Most midsize Internet companies are stable and well established. They often have multiple offices and may have international headquarters, which can give employees added mobility. They are also small enough that the companies can retain a sense of close camaraderie that may be lost in larger companies. Midsize companies may also offer employees more opportunities to experiment with new designs and features. Compared with smaller companies and Web-based start-ups, midsize firms may offer more job security and can often provide more generous salaries and benefits. Cons of Working for a Midsize Internet Company. Midsize companies can be relatively stressful places to work. Employees may occasionally

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work late into the night in the case of outages or when rolling out new features. Midsize firms are also more likely to be purchased by larger companies, which can often result in layoffs as parent companies streamline operations after an acquisition. In addition, employees at midsize firms may not be able to obtain the generous stock options and investment opportunities offered to employees at small start-up companies. Costs Payroll and Benefits: Midsize companies usually offer employees generous salaries and full benefits, including health and life insurance, stock options, paid sick days, and optional telecommuting opportunities. Supplies: Most midsize firms must purchase basic office supplies, and they usually require specialized high-end computer systems. They also usually own and operate their own Web-hosting servers, with multiple backup systems to prevent downtime or data loss. External Services: While midsize firms usually hire full-time employees for most aspects of their core business, they usually contract out all cleaning and office-maintenance services, as well as catering services as needed. They occasionally hire consulting firms and often depend on contracts with advertising firms specializing in Web ads to bring in additional revenues. Utilities: Since midsize firms frequently own and operate their own Web-hosting servers, electricity is often a major expense. They also normally require dedicated fiber optic data lines to handle high-bandwidth Internet operations. Additional utilities include telephone services and rent, which may include water and sewage. Taxes: Midsize companies must pay all usual taxes, including state, local, federal, and property taxes. If they have a significant international presence, they may also pay additional taxes for their overseas operations. Large Businesses By the time an Internet company has grown into a large, established business, it normally receives millions of visitors every day, generating large advertising and sales revenues. Several of the world’s most popular Web sites, social networking sites, search engines, and e-commerce companies are

large enough to fit into this category, including Amazon, eBay, Google, and Yahoo!. Potential Annual Earnings Scale. Large Internet companies often pay very competitive wages in order to attract top talent. They tend to hire experienced workers for full-time positions, including software engineers, Web designers, sales and marketing representatives, public relations specialists, and executive officers. According to 2009 BLS figures, highly qualified software engineers may earn up to $119,770 per year, while executives can expect to earn more than $145,600 per year, though some top executives can earn more than $1 million per year. Clientele Interaction. Many employees at large Internet companies interact with clients. These firms often have significant technical support and customer service departments, where employees respond to questions and requests from Web site visitors, customers, and advertisers. They also employ public relations representatives, marketers, advertising executives, and sales representatives who interact with journalists, clients, and government workers. Although direct face-to-face interaction with customers is rare, large companies in this industry often participate in conventions and conferences. Amenities, Atmosphere, and Physical Grounds. Large businesses often have luxurious, campus headquarters, such as the Googleplex in Mountain View, California, a part of Silicon Valley. The Googleplex serves as the primary headquarters for Google, one of the largest, most successful Internet search engines in the world. The campus features two swimming pools, several cafeterias, a full gym, and even a volleyball court, among other amenities. Large companies such as Google and Amazon may also have both domestic and overseas satellite offices and warehouses, often including large data-storage facilities, sales and advertising departments, technical support locations, and software development centers. Typical Number of Employees. Large, established Internet-based businesses require many employees spread across various departments. They often employ tens of thousands of people in locations across the world. Many work as sales and marketing representatives, software engineers, technical support specialists, human resources officers, and Web designers. For example, Amazon, one of

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PROFILE

Electronic Commerce Specialist Considerations

Qualifications

Description

Designs and analyzes Web sites to market products, produces online advertising, and analyzes online sales.

Career clusters

Business, Management, and Administration; Information Technology; Marketing, Sales, and Service

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest score

ECA

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

the largest e-commerce sites in the world, was launched in 1995 and had a staff of more than twenty thousand as of 2009. Traditional Geographic Locations. Most large Internet companies have multiple locations around the world. They often have international headquarters located in major cities overseas, as well as Web hosting sites, data centers, and off-site datastorage facilities. In addition, they usually maintain large campus headquarters in high-tech hot spots, especially Silicon Valley and Seattle, Washington. Pros of Working for a Large Internet Company. Employees at large Internet companies often enjoy many benefits, including high salaries, increased job security, many opportunities for advancement, and the ability to transfer to other locations. Employees often have the chance to work on multiple projects and experiment with new ideas. They also benefit from having a large, creative team of coworkers, representing the best and the brightest in the industry. Working for large, well-

known firms is also very prestigious and may make it easier to find work in the future. Employees may also utilize the knowledge and business connections they gain at large, successful firms to later launch their own start-up companies. Cons of Working for a Large Internet Company. Finding work at a large Internet company can be extremely challenging. Competition for open positions is fierce. Candidates need to have significant experience in the field and often have degrees from top universities such as Stanford, Massachusetts Institute of Technology, and Harvard. While employees have more opportunities to advance than they might have at smaller companies, they face significant competition, both internally and externally. The workloads at these companies can be extremely stressful and demanding, and with so many employees, the sense of camaraderie often experienced at smaller firms and Internet start-ups can be lost. In addition, since most of these companies already have established busi-

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nesses models and a devoted following, it may be difficult to propose radical changes, although that may depend on the atmosphere of the individual company. Costs Payroll and Benefits: Employees at large Internet companies usually enjoy generous salaries and many benefits, often including health care, life insurance, vacation time, sick days, and stock options. They may also enjoy gym memberships, on-site exercise facilities, and even child-care services. Supplies: Large Web-based companies usually have extensive on-site Web hosting servers and massive data storage facilities. E-commerce companies may also have warehouse facilities full of merchandise ready for distribution. Companies must maintain state-of-the art computer systems for their employees, especially those involved in Web design, software development, and content creation. External Services: Full-time employees perform most duties at large Internet companies. However, these companies often hire external vendors to maintain their facilities, including cleaning and landscaping services. They may also occasionally sign contracts with external firms to handle advertising sales and sometimes hire consultants or outsource accounting, technical support, or Web-design duties, especially for their overseas operations. Utilities: Large companies typically have extensive data storage and Web hosting facilities. These facilities have very expensive electricity requirements and require dedicated fiber optic data lines. Google’s electricity needs are so great that the company has explored purchasing electricity wholesale from power plants and bypassing utility companies. Large businesses must also pay mortgages or rent for their facilities, as well as paying for water, sewage, and telephone services. Taxes: Large companies in the Internet and cyber communications industry must pay all required local, state, federal, and income taxes. Since many large companies have a significant international presence, they may be required to pay additional taxes for their overseas operations. Depending on state and local laws, e-commerce companies may be required to charge sales tax.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Companies in the Internet and cyber communications industry share similar organizational structures, although in smaller firms a single person may handle many tasks that are overseen by several different departments in larger firms. In the case of a single freelancer or an entrepreneur launching his or her own site, one person may handle nearly every single aspect of the business while, outsourcing Web hosting and data storage needs to other firms. The following umbrella categories apply to the organizational structure of businesses in the Internet and cyber communications industry: ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Web Design and Development Software Development Sales and Marketing Information Technology Human Resources Technical Support Administrative Staff

Executive Management Most Internet executives have advanced degrees. Entrepreneurs who launch successful online firms can reap large financial rewards once a company goes public or is purchased by a larger firm. In addition, many of the executives at today’s largest Web-based businesses have previously helped launch online firms. Executives in this industry usually focus on leading employees and creating and promoting innovative ideas that will attract more Web-site visitors, sales, and advertisers. They are usually the highest-paid employees in their companies, often earning between $58,230 and $128,580 per year, not including stock options, bonuses, or other perks, according to the BLS. Executive management occupations may include the following: ■ ■ ■ ■ ■

Board Chair Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Technology Officer (CTO) Chief Information Officer (CIO)

Internet and Cyber Communications Industry ■ ■ ■

Vice President Legal Counsel Project Manager or Managing Director

■ ■ ■ ■

Web Design and Development Web developers usually focus on testing and implementing new Web-site features and layout designs. They may engage in beta testing and usually work closely with software engineers, project managers, technical support specialists, and public relations personnel to ensure that new innovations match user expectations. They also focus on the day-to-day operations required to keep Web sites up and running. Web design and development occupations may include the following: ■ ■ ■ ■ ■

Web Designer Webmaster Graphic Designer User Interface Engineer Product Tester

Software Development As opposed to Web developers, who focus on layout designs and user features, software engineers design the underlying architecture that allows Web sites to function on a more basic level. This usually involves writing the code to create the tools that Web developers and advertisers use to update content or implement layout changes or new features, as well as the programs and applications that individual users may utilize online or download to their computers. Web sites such as Facebook, for example, offer downloadable applications that help users more easily share photos or information, allowing programs such as iPhoto to upload photos directly from users’ computers to their online profiles. Software engineers also play a major role at companies specializing in Web hosting, since they create the programs that allow users easily to upload their Web sites and make them available for online viewing. According to 2009 BLS figures, software engineers usually earn between $62,830 and $98,470 per year. Software development occupations may include the following: ■

Computer Applications Software Engineer

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Computer Systems Software Engineer Sales Engineer Data Analyst Database Administrator

Sales and Marketing Employees in the sales and marketing departments of Internet companies are normally responsible for attracting new visitors, forming Internet advertising partnerships, and helping spread awareness about their companies. Public relations employees, meanwhile, usually interact with journalists and keep users informed about new developments. This may include launching viral marketing campaigns, buying and selling Web banner ads, collecting user comments on upcoming changes, and increasing e-commerce sales. According to 2007 BLS figures, advertising managers earn approximately $73,060 per year, while sales managers earn $91,560 per year, and public relations managers may earn $82,180 per year. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■

Marketing Manager Sales Executive Sales Manager Marketing Strategist Public Relations Specialist

Information Technology The information technology (IT) staff at companies in the Internet and cyber communications industry are responsible for maintaining the extensive computer networks and data-storage hardware facilities needed to ensure visitors have access to Web sites. Normally, they also provide technical support for employees. They are usually responsible for cyber security needs within an organization, which may include preventing hackers from accessing sensitive user information, protecting against viruses, fighting back against denial-ofservice attacks, and securing both external and internal computer networks. They are usually highly trained, most commonly earning bachelor’s or master’s degrees at a minimum. IT occupations may include the following: ■ ■

Network Specialist Computer Systems Analyst

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Internet and Cyber Communications Industry OCCUPATION

PROFILE

Computer Security Specialist Considerations

Qualifications

Description

Plans, implements, and coordinates security for information systems to protect the data contained within them.

Career clusters

Information Technology; Science, Technology, Engineering, and Math

Interests

Data

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; volunteer work; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

IRC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

■ ■

■

Information Technology Director Information Technology Support Specialist Computer Security Specialist

Human Resources Human resources (HR) personnel are responsible for the well-being of employees. They recruit and train new employees and executives, facilitate their payment, and administer their benefits. In small companies, the HR department may consist of just a single employee, while larger firms may employ hundreds of HR representatives and recruiters. Most HR representatives and recruitment officers hold bachelor’s or master’s degrees in human resources or labor relations. HR managers can expect to earn between $67,710 and $114,860, according to the BLS. Human resources occupations may include the following: ■ ■

Human Resources Manager Human Resources Representative

■ ■

Training Specialist Recruitment Officer

Technical Support At Internet companies, most technical support representatives contact clients via e-mail, although they may also interact with customers over the phone, on message boards, or in chat rooms. They often work closely with Web developers, software engineers, and IT personnel in resolving customer complaints and assisting during service outages. They may answer hundreds of e-mails per day. Technical support departments often offer entrylevel positions. Since many firms promote from within, technical support employees may advance within their companies. They usually require an associate’s or bachelor’s degree or technical certification. Prospective employees must be adept at problem solving and providing excellent customer service. They usually earn between $32,110 and $53,640 per year, according to the BLS. Technical support occupations may include the following:

Internet and Cyber Communications Industry ■ ■ ■

Technical Support Specialist Help Desk Specialist Customer Service Representative

INDUSTRY

1001

OUTLOOK

Overview Since the first researchers successfully conAdministrative Staff nected two computers together through a simple The administrative staff is usually responsible phone line in 1965, the Internet has grown into a for scheduling meetings and appointments, proconstantly evolving communications medium that viding accounting services, keeping financial reccontinues rapidly to integrate countless aspects of ords, greeting visitors, and assisting executives. society. As increasing numbers of people use the Small firms, freelancers, and individual entrepreInternet as their primary source for information, neurs may outsource administrative services on a older forms of media, including television, films, contractual basis, especially accounting. The educanewspapers, and radio, are rushing to get their tion requirements for members of the administraproducts online. This trend will only continue as tive staff vary depending on the individual position. the number of people with Internet access skyrockFor example, it is not uncommon for accountants ets on a global scale. While users in developed to earn advanced bachelor’s or master’s degrees, countries such as the United States switched to while receptionists or administrative assistants may high-speed broadband service at a rate of 11 percent in 2008, the greatest number of new Internet have just a high school diploma. Income may also vary widely depending on the individual’s position users will be found in developing countries such as and training. According to the BLS, accountants India and China. As of 2009, there are twice as can expect to earn between $42,520 and $71,960 many Internet users in Asia as in North America. per year, while receptionists may earn between By 2008, the total number of Internet users $18,800 and $28,100. worldwide reached more than 1.59 billion, with Administrative occupations may include the fol14.7 percent of all users located in China. In fact, lowing: according to the Computer Industry Almanac, China boasts 860,000 more Internet users than the United ■ Administrative Assistant States. Despite those impressive figures, only 22 ■ Accountant percent of the Chinese population has access to ■ Receptionist the Internet, compared with 75 percent in the U.S. population. Such disparities are part of the reason that future overseas Internet growth is expected to far surpass domestic trends. Both Yahoo! and Google have launched many new services that allow overseas users to access the Internet in their native languages. In fact, new domain names featuring non-Latin characters, in such languages as Arabic and Japanese, have recently been approved for the first time by the Internet Corporation for Assigned Names and Numbers (ICANN), the main regulator of Internet protocols. Analysts expect a surge of Internet access through cellular phones and other nontraditional devices. Mobile devices such as Apple’s iPhone and Android, an operating system designed by Google and used on Motorola’s Droid, which features an Motorola’s Droid, allows smart phone users to easily access the Internet. operating system designed by Google, (©Dreamstime.com) are revolutionizing the way customers

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use cell phones. The growth of reliable cellular broadband services allows customers to access the Internet while away from their computers. Many new mobile phones even allow users to connect their computers to the Internet wirelessly via their phones, a process known as “tethering.” The growth in the number of wireless access points at businesses, homes, schools, libraries, government facilities, and even entire cities and neighborhoods has made high-speed broadband freely available to more people than ever before. Hospitals, schools, and governments are all expanding their online services, allowing users easily to access medical records, school records, and government documents. These developments have helped exponentially grow the number of Internet users, creating many new opportunities for entrepreneurs to launch new businesses. By 2013, analysts predict there will be more than 600 million new Internet users, and people are expected to exchange eight times as many messages via e-mail, instant message, and social networking as they did in 2009. Meanwhile, the growth of cloud computing allows businesses and individual users to archive digital information such as pictures, documents, music, and programs online, often for backup purposes but also to gain access to these files from multiple computers or other devices capable of accessing the Internet. Criminal activity on the Internet has also grown. According to Security Watch, criminal activity online had become a $1 trillion industry by 2009, surpassing even drug trafficking in total global revenues. Businesses, schools, governments, and individual users must focus on Internet safety as they become more dependent on the Web for their daily information needs. According to Carnegie Mellon University, there were 137,592 reported security incidents in 2008, including hacker attacks, denial-of-service attacks, and computer viruses. The Internet is a constantly evolving marketplace of ideas and information, and this fluid environment allows users to create their own environments. Users at Twitter, for example, have created new tools to allow them to organize and repost information. In turn, the company has taken these ideas and incorporated them into its own designs for the site. Amazon allows users to create their own public online wish lists and write their own reviews for the products they own, and Facebook allows users to

review and comment on all major proposed privacy changes before they are implemented. Meanwhile, Web sites such as Second Life allow users to create their own virtual online worlds, complete with financial transactions and commercial property purchased by advertisers. More people are launching their own Web sites than at any time in the past. While some of these are founded for business purposes, many more are launched to share information with family and friends or to support hobbies and connect with like-minded individuals. As people establish online identities, the amount of information exchanged through the Internet will continue to grow. This trend has helped raise demand for Web hosting services, software programmers, and Web designers. Web pioneers with unique ideas have rapidly grown companies from start-ups to large, established businesses worth millions of dollars. Because of free open-source software, decreasing costs for computer hardware, and the rise of affordable Web hosting services, any idea has the potential to gain a strong following and, eventually, commercial success. Employment Advantages Internet usage has continued to expand, creating numerous opportunities for job growth. In addition, established businesses in every industry have increased their use of the Internet. From local businesses hiring Webmasters to build and maintain their sites to large, established companies hiring consulting firms to increase their Web presence, the future of businesses is on the Internet. The BLS expects employment for computer specialists such as Web designers and database administrators to grow by 37 percent by 2016, which is much higher than the national average for growth in other industries. At the same time, significant competition for work in this field is expected. Prospective candidates should expect to earn a bachelor’s or master’s degree, depending on the position the are seeking. Since much of the growth of the Internet is expected to take place overseas, employees who speak other languages will also gain a considerable advantage. Annual Earnings As the number of Internet users grows, the amount of money exchanged through Internet

Internet and Cyber Communications Industry transactions will continue to grow dramatically. Analysts predict that the Internet commerce industry will be worth $13 trillion by 2012, with more than twice the current number of users exchanging goods and services online. Internet traffic is expected to continue its exponential growth, with experts predicting that users will exchange more than 1 trillion gigabytes of information through the Web by 2015. In addition, the cloud computing industry is still in its infancy, and as companies such as Apple, Microsoft, and Google enter this emerging field, Gartner expects 2009 revenues to grow by 21.3 percent to 56.3 billion, although IDC expects more modest growth of $42 billion by 2012. In contrast, by 2011, Merrill Lynch predicts soaring revenues of $160 billion. As the Internet continues to become more fully integrated into daily life, it will continue to evolve and expand. The tremendous expected growth of the Internet and cyber communications industry will give future entrepreneurs many opportunities to launch new businesses and will also allow many established Internet firms to continue to attract new customers and advertising partners.

Fax: (310) 823-8649 http://www.icann.org Internet Engineering Task Force 48377 Fremont Blvd., Suite 117 Fremont, CA 94538 Tel: (510) 492-4080 Fax: (510) 492-4001 http://www.ietf.org Internet Society 1775 Wiehle Ave., Suite 201 Reston, VA 20190-5108 Tel: (703) 439-2120 Fax: (703) 326-9881 http://www.isoc.org Software and Information Industry Association 1090 Vermont Ave. NW, 6th Floor Washington, DC 20005-4095 Tel: (202) 289-7442 Fax: (202) 289-7097 http://www.siia.net

ABOUT RELATED RESOURCES FOR FURTHER RESEARCH Association for Computing Machinery 2 Penn Plaza, Suite 701 New York, NY 10121-0701 Tel: (800) 342-6626 Fax: (212) 944-1318 http://www.acm.org Institute of Electrical and Electronics Engineers 3 Park Ave., 17th Floor New York, NY 10016-5997 Tel: (212) 419-7900 Fax: (212) 752-4929 http://www.ieee.org Internet Corporation for Assigned Names and Numbers 4676 Admiralty Way, Suite 330 Marina del Rey, CA 90292-6601 Tel: (310) 823-9358

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THE

AUTHOR

Elizabeth Fernandez began working in the computer industry in 2002, serving as a Webmaster and a hardware and software repair specialist. For the past ten years, she has also worked as a writer and editor specializing in computer science and technology trends. She has been published online, in newspapers, and in local magazines, and she has edited several books focusing on the computer, aviation, and transportation industries. She graduated with a degree in journalism from the University of Central Florida.

FURTHER

READING

Amazon.com. “About Amazon.” http:// www.amazon.com/Careers-Homepage/ b?ie=UTF8&node=239364011. Aspray, William, and Paul E. Ceruzzi, eds. The Internet and American Business. Cambridge, Mass.: MIT Press, 2008. Campbell-Kelly, Martin, and William Aspray.

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Computer: A History of the Information Machine. 2d ed. Boulder, Colo.: Westview Press, 2004. Computer History Museum. “Internet History.” http://www.computerhistory.org/ internet_history. Discovery Institute. “U.S. Internet Traffic Projected to Grow Fifty-fold over Next Five Years.” January 29, 2008. http://www .discovery.org/a/4444. Kador, John. Internet Jobs! The Complete Guide to Finding the Hottest Internet Jobs. New York: McGraw-Hill, 2000. Lacy, Sarah. Once You’re Lucky, Twice You’re Good: The Rebirth of Silicon Valley and the Rise of Web 2.0. New York: Gotham Books, 2008. Singel, Ryan. “Google Profits up 27 Percent in Q3.” Wired, October 15, 2009. http:// www.wired.com/epicenter/2009/10/googleprofits-up-3q-200. Sorid, Daniel. “Writing the Web’s Future in Numerous Languages.” The New York Times, December 30, 2009. Stair, Lisa, and Stair, Leslie. Careers in Computers. 3d ed. Chicago: VGM Career Books, 2001. Stibel, Jeffrey M. Wired for Thought: How the Brain Is Shaping the Future of the Internet. Boston: Harvard Business Press, 2009. Twitter. “Working at Twitter.” http://twitter .com/jobs.

U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Computer and Information Systems Managers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos258.htm. _______. “Computer Support Specialists and Systems Administrators.” In Occupational Outlook Handbook, 2010-2011 ed. http:// www.bls.gov/oco/ocos268.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Warman, Matt. “Macworld 2009: Apple’s Cloud Computing Plans Will Threaten Google and Microsoft.” The Telegraph, January 7, 2009. http://www.telegraph.co.uk/technology/ apple/4160043/Macworld-2009-Applescloudcomputing-plans-will-threaten-Googleand-Microsoft.html.

Landscaping Services ©Lisa Cora Reed/Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Architecture and Construction Career Cluster: Architecture and Construction Subcategory Industries: Arborist Services; Cemetary Plot Care Services; City Planning Services; Garden Care and Maintenance Services; Garden Planning Services; Golf Course Planning Services; Industrial Land Use Planning Services; Interior and Exterior Plant Maintenance Services; Landscape Architectural Services; Landscape Care and Maintenance Services; Landscape Installation Services; Landscape Planning Services; Lawn Care and Maintenance Services; Lawn Supply Stores; Nurseries and Garden Centers; Seasonal Property Maintenance Services, Including Snow Plowing; Ski Area Planning Services; Tree Services Related Industries: Building Architecture Industry; Building Construction Industry; Civil Services: Planning; Natural Resources Management; Real Estate Industry Annual Domestic Revenues: $49.928 billion USD (IBISWorld, 2010) NAICS Numbers: 444220, 541320, 561730

1005

DEFINITION

Summary Landscaping services enhance the built environment, both commercial and residential. Landscaping may commence with design services. Exterior and interior landscaping services involve site preparation and installation of plant materials, including lawns, shrubs, trees, and gardens, followed by maintenance. During winter months, exterior landscape maintenance of plant materials and weed control may be unnecessary in areas with colder climates and landscaping service providers may plow snow and remove ice instead. Interior plant maintenance within buildings is required year-round. Landscaping services include ancillary activities, such as installation of irrigation and drainage systems; lighting planning and installation; and construction of outdoor structures, retaining walls, walkways, and built accents known as hardscape. History of the Industry Humans have tamed the natural landscape since ancient times. Early examples of such landscaping include the Hanging Gardens of Babylon, in which elaborate irrigation systems were maintained. In addition, Japanese gardeners have designed and maintained medita-

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Landscaping Services

Landscaping may commence with design services. (©Dreamstime.com)

tive Zen gardens since the fifth century. Introduction of built features into the natural landscape was also a service provided by early landscapers, and the Great Wall of China is such a feature. Slaves often provided the labor necessary to complete such ancient landscaping projects. The practice of landscaping began to evolve during the Roman era. Wealthy Romans and Greeks maintained formal gardens for decorative purposes that were based on rigid, geometric designs. Letters written by Pliny the Younger describe the landscape at his Tuscan estate as consisting of trimmed boxwood hedges maintained to segment the landscape into precise geometric shapes. In addition, archaeologists have found several examples of formal gardens that include landscaping features such as water fountains. Although landscape design and services were of little consequence during the early part of the Middle Ages, the Renaissance of the sixteenth and seventeenth centuries prompted a reemergence of formal gardening in the West, especially in France and Italy. Many monasteries had gardens that were maintained by members of monastic communities.

Wealthy persons’ gardeners, such as those employed to maintain the Tivoli Gardens or the classical French gardens of Versailles, sculpted plant materials into topiary animals and maintained elaborate water, walkway, trellis, arbor, and wall features to enhance the designs and further complement the surrounding architectural estates. The English revived informal landscapes in the eighteenth century with English cottage gardens that often overflowed with flowers. As gardens became less formal and smaller, members the general populace provided their own landscaping services or began to engage gardeners to maintain agricultural plants, medicinal herbs, and fruit trees that not only served practical purposes but also enhanced aesthetics. The landscaping of grounds surrounding estates became more informal and natural, influenced by the Romantic movement and landscape art, and parklands were created for the public. The English gave birth to the profession of landscape architecture. In the United States, lawn installation and maintenance emerged as a dominant component of landscaping services, influenced by nineteenth

Landscaping Services and twentieth century landscape and park designers such as Frederick Law Olmsted. Olmsted incorporated open lawns in many of his designs, including the 1869 layout of the Chicago suburb of Riverside. Public landscaping services to establish and maintain parks, cemeteries, golf courses, and related facilities were provided by municipalities, states, and the federal government. Urban planners encouraged the wedding of nature with the humanmade environment. Edwin Budding invented the lawn mower in 1830, promoting the growth of landscaping in suburbs and increasing the need for landscaping services, which were no longer limited to the rich. Private landscaping services began to thrive as more private property owners designed lawns and planted other plant materials to beautify their homes. In addition, commercial landscaping services grew rapidly during the twentieth century, as owners of commercial and institutional buildings used plant materials and incorporated landscape features into their overall designs for aesthetic and marketing purposes. Maintenance of such plant materials and built landscape features is now a mainstay of the landscaping services industry.

1007

The Industry Today Twenty-first century landscaping serves many purposes, such as providing functional and relaxing living spaces, mostly outdoors; creating specific moods and first impressions through the deployment of plants and constructed materials; and enhancing property values. Landscapers and landscape architects improve many portions of the human built environment, including residential, commercial, and institutional buildings, such as educational facilities, hospitals, and museums; highways; airports; land subdivisions; and shopping malls. Public and private open spaces, including parks, playgrounds, recreational areas, golf courses, athletic fields, and cemeteries are also part of the constructed landscape developed and maintained through landscaping services. Many of the twenty-first century’s landscaping services are the same as those that have been employed in the past, but the methods for providing these services have been enhanced by technology and invention, starting with the lawn mower in 1830. Most landscapers use small hand or power tools and equipment to perform a variety of tasks that might involve digging, cutting, raking, water-

Exterior and interior landscaping services involve site preparation and installation of plant materials, including lawns, shrubs, trees, and gardens, followed by maintenance. (©Lisa Cora Reed/Dreamstime.com)

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Landscaping Services

ing, and spraying. Shovels, rakes, saws, trimmers, clippers, pruners, loppers, shears, and blowers are typical tools used by landscape maintenance workers and groundskeepers. Landscapers, especially contractors, may also use larger equipment for installation and maintenance, such as tractors, grading implements, seeders, sprayers, sod cutters, trenchers, portable irrigators, and vacuums to remove water from playing fields. They may also work with dangerous chemicals, herbicides, pesticides, and fertilizers that require careful usage and training to prevent harm due to exposure. Today’s landscape practitioners plan, install, care for, and maintain landscaping features of exterior and interior spaces. Activities such as site preparation; planting of trees, shrubs, plants, vines, and flowers—including native, imported, and ornamental materials; seeding lawns; laying sod and turf; and hydroseeding to control erosion are part of landscape installation. In providing these services, a landscaper may need to engage surveyors to

stake out the layout of a plan before installation. Installing plant materials also involves carefully preparing beds, pits, and other planting locations with proper soil, fertilizers, and drainage. It may require erosion control, staking of young plants until they are established, and construction of treeprotection grates, especially in urban areas. Once plant materials have been installed, groundskeepers and gardeners see to their maintenance and care. They prune and trim exterior trees and shrubs; fertilize and spray to control insects and diseases; control weeds; mow, edge, thatch, and aerate lawns; mulch surfaces with bark, wood chips, and other natural materials; care for cemetery plots; maintain gardens, parks, playgrounds, and athletic fields; and care for interior plants and shrubs in places such as office buildings, hotels, commercial malls, and botanical gardens. Arborists may be called upon to maintain trees and larger shrubs through pruning and trimming. Because arborists have special knowledge of tree diseases,

Maintenance of plant materials and built landscape features is a mainstay of the landscaping services industry. (©Dreamstime.com)

Landscaping Services

1009

they may also be required to clear diseased trees, remove diseased limbs and branches, treat tree wounds, and spray to control tree pests and diseases. Landscaping service providers may also be called upon to remove plant materials to maintain rights of way through clear cutting and line slashing, mow along highways, and remove tree branches close to overhead utility lines. Modern sports arenas may employ groundskeepers to maintain playing fields and turf, whether natural or artificial. Landscaping may A paver installs a walkway; paved walkways and similar elements are known as be a seasonal industry in many hardscape. (©Dreamstime.com) locales. During the spring, summer, and fall seasons, services accurate readings of soil moisture, such as that inmay include cleanup after the winter, installation volved in maintenance of golf courses. Some of and maintenance of plants, and raking of leaves. the irrigation systems that might be installed and During winter months, landscaping services may maintained by landscape service providers include be limited to snow and ice removal. sprinklers, drip or trickle systems, and newer techLandscape service providers also introduce nologies including subsurface irrigation distribuhuman-made features, known as hardscape, and tion systems. Landscape management also insome natural, nonplant materials into landscapes. cludes control of water and proper drainage. In addition to designing such features, they may Landscape workers may install and maintain drainconstruct and install them. Hardscape and related age systems designed by civil engineers that inlandscape features include paved walkways and clude everything from drainage tiles to simple driveways; retaining walls; fencing; decks and outFrench drains. door living spaces; water features such as fountains The nursery industry is also a sector of the landand ponds; lighting; and other natural, structural, scaping services industry. Landscape service proand masonry landscape elements, including rock viders may grow their own plant materials or create walls, boulders, outdoor fireplaces, arbors, treltheir own natural landscaping materials, such as lises, pagodas, gazebos, built-in furniture, garden wood chips and mulch, but they also partner with art, containers, birdbaths, and birdhouses. Service nurseries to provide such materials, and nurseries providers may also be called upon to clean, paint, themselves provide advice and labor in addition repair, and replace hardscape materials periodito simply selling garden materials and supplies, cally; to turn on water features in the spring and thereby providing some level of landscaping serwinterize them in the winter; and to sweep walks vice. A landscaper may also rely on a horticulturaland driveways. ist to provide information on the best plant materiDrainage and irrigation systems are also imporals for a particular climate or to resist locally tant features of landscape management. Landprevalent diseases and pests. scape contractors, landscape architects, and reComplex and even noncomplex landscape delated professionals analyze soils and water tables to signs are typically provided by licensed landscape determine the types of plant materials that can or architects, who may be employed by architecture should be installed in a given location and the irrifirms or by landscape services firms. In either case, gation levels necessary to sustain them. Some landscapers may use sophisticated equipment to obtain architects work both with building architects and

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Landscaping Services

Installing plant materials for a garden landscape such as this involves carefully preparing beds, pits, and other planting locations with proper soil, fertilizers, and drainage. (©Dreamstime.com)

contractors and with landscaping contractors to design and deploy features that meet the needs of clients and also fit well with the overall grounds of which they will be part. Some larger landscaping companies have begun to offer a more comprehensive range of services that include building maintenance and security in addition to landscape installation and maintenance.

INDUSTRY MARKET SEGMENTS Landscaping services may be provided by selfemployed individuals, such as gardeners, groundskeepers, or sole practioner landscape architects, or they may be provided by large companies with multiple offices across the country. Indeed, large companies must spread themselves out geographically much more than companies in most other industries, because landscaping services by their very na-

ture cannot be centralized in the way many other businesses can be. Both large and small businesses may specialize in a specific component of landscape services, although large companies are better equipped to provide more comprehensive service than are smaller ventures. Small businesses may act as contractors, working on a portion of a larger project, or they may concentrate on tasks to which small concerns are well suited, such as residential lawn and garden maintenance. Small Businesses The thousands of small landscaping service companies account for the highest percentage of revenues in the overall industry. Small landscaping businesses are often owner-operated and offer limited services, mainly associated with plant material installation and maintenance for residential and commercial properties. Often, individuals who have worked as laborers for landscaping companies start their own businesses once they have ob-

Landscaping Services tained sufficient experience in the field. Many small business operations are seasonal and employ part-time workers. Small businesses are the most likely to include wintertime snow and ice removal among their services. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary of a landscape architect in 2009 was $66,400, while the average salary of those employed specifically in the landscape services field was $59,580. Soil and plant scientists earned average salaries of $53,990. Landscaping and groundskeeping workers earned an average of $24,670, while tree trimmers and pruners earned an average of $30,830. In 2007, the total average annual earnings by a small landscaping business employing one to four persons was $133,011. Clientele Interaction. Although marketing can be accomplished by placing advertising signs on completed landscaping projects, small landscaping companies rely heavily on referrals to grow their businesses. Moreover, repeat business, encouraged by providing quality service, is important to small landscaping businesses. Therefore, good client interaction is paramount. The task of interacting with clients is usually carried out by the owner of a small business. Owners often have multiple roles within their companies, including management and sales. Because owners may spend significant amounts of time securing contracts and negotiating with clients, much dayto-day client interaction may fall to other employees. In conducting sales, a small-business owner normally negotiates with homeowners and owners of small commercial establishments, institutional facilities, and office buildings. Interaction involves not only making sales but also responding immediately to clients’ questions and following up with clients upon job completion to ensure repeat business. Some small companies may have field supervisors to answer customers’ questions on job sites, but all owners of small landscaping businesses should develop guidelines for employees to follow when working with clients to ensure they behave in a professional manner. Amenities, Atmosphere, and Physical Grounds. For individuals who enjoy working mainly outdoors with plant materials and landscape features, owning and operating a small landscaping company provides a perfect opportunity.

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The purpose of a small landscaping business is to beautify homes and businesses, so the work atmosphere is mostly pleasant. Landscaping work is physically strenuous, however. Outdoor work may involve uncomfortable heat during summer months and attacks by swarming and nesting insects. Small landscaping businesses may employ workers only part time as a result of the influence of the weather and other factors. Both owners and employees should be able to work with hand and power tools in a safe manner. Those working for a small landscaping business spend most of their time installing and maintaining lawns and plant materials surrounding residential and commercial properties. Work activities include mowing lawns, digging and planting, raking grass and leaves, watering, mulching, and trimming hedges and trees. Some owners of small landscaping businesses have found a niche market in the installation and care of indoor plantings in office buildings and commercial facilities, such as malls and hotels. All landscaping businesses require workers to travel to job sites. Travel may take place in employee vehicles, but businesses generally have at least one vehicle—owned by the company or its owner directly—to transport tools, equipment, landscaping materials, and employees. Thus, a driver’s license and ability to drive a truck may be a requirement for obtaining a landscaping job, especially in a small company. Typical Number of Employees. Most small landscaping businesses are run by their owners— and, in many cases, the owner’s family members. Employees often include seasonal, part-time, contract, and day laborers who are employed on an asneeded basis to minimize costs. The typical small landscaping business has one to four employees. Traditional Geographic Locations. Because landscaping mainly involves outdoor work, landscaping businesses are most often located in areas with year-round growing conditions, and the greatest number of U.S. companies are in the Southeast. However, landscaping businesses thrive throughout the globe, wherever residential and nonresidential development exists, albeit not always on a year-round basis, and almost all areas of the country have some landscaping businesses. Pros of Working for a Small Landscaping Business. Landscaping providers work with plants

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and spend much of their time outdoors. In addition, most workers do not require training or college degrees to obtain entry-level positions, although they may need specialized training and licensure or certification if they are involved in tasks such as applying pesticides. Most training takes place on the job. In a small business, workers may have substantial responsibility for carrying out jobs on their own, as there may not be a supervisor on site. Workers, however, must be self-motivating, as timeliness is important in meeting contract obligations and ensuring that plant materials do not suffer damage from delays in replanting. Landscape architects are able to exercise a great deal of creativity and may be relatively well compensated. While architects at small firms are unlikely to win major city-planning-related contracts, they may compete successfully for a wide range of other sorts of contracts, from residential remodeling and construction projects to planning and design of large commercial and nonprofit institutional properties. Cons of Working for a Small Landscaping Business. Work in small landscaping businesses may be seasonal, is often part time, and can involve high rates of turnover due to factors such as the strenuous nature of the work. Wages for entry-level positions are low, and working conditions require substantial physical labor and repetitive bending and lifting movements. Based on BLS figures, landscaping laborers suffer an above-average rate of work-related injury and illness relative to workers in other industries. Costs Payroll and Benefits: Landscaping businesses usually pay manual laborers hourly wages. Because they are seasonal businesses, payrolls may be highest in the summer months, when the demand for landscaping services is at its peak. Landscaping workers, often part-time, rarely receive benefits such as vacation or sick leave. Owners of such businesses—including landscape architects at small or one-person firms— must pay themselves out of their companies’ profits, after all other financial obligations are met. If a company has no profits in a given month, its owner or partners may receive no pay. Supplies: Landscape maintenance crews require small hand tools and power equipment, as well

as seeds or seedlings; soil, compost, or fertilizer; and, usually, a company vehicle. Standard equipment includes lawn mowers, leaf blowers, power and hand saws, rakes, pruning shears, hedge trimmers, weed wackers, rototillers, and fertilizer spreaders. Contractors and installers may require heavier machinery, including tractors or bulldozers, as well as hardscape materials such as cement, asphalt, paving stones, and so forth. Landscape architects require drafting supplies, including professional-grade computer software. External Services: Because contracting for services is an important component of any landscaping business and compliance with environmental laws may also be a factor, legal services are likely to be one of the main external service requirements of a small landscaping business. Landscapers may also contract accountants or tax preparation experts and computer support services. They may rent the equipment needed for a particularly large or unusual job, rather than purchasing equipment they are unlikely to employ regularly. Landscapers and landscape architects also frequently work with one another, and either one may represent an external vendor from the point of view of the other. Utilities: Because landscaping work is completed on the property of others, there are not many utility costs directly assessed to the landscaping business. Costs that do exist, such as paying to move a utility line, are usually included in the contract. Businesses that maintain offices, however, require electricity and other standard utilities, including telephone and Internet service. Businesses run out of owners’ homes may be able to pay a portion of the owners’ utility costs, treating them as business expenses. Mobile phones are also necessary so owners and workers can communicate with one another and with clients while on, or traveling to, job sites. Taxes: Landscaping businesses must pay payroll and unemployment taxes on employee income, as well as property taxes as appropriate. Small businesses may pay corporate taxes, or owners may instead pay personal income and selfemployment taxes on their profits. Some states levy sales taxes on landscaping services, and businesses are responsible for collecting and paying those taxes as well.

Landscaping Services Midsize Businesses Midsize landscaping businesses are involved in many of the same residential and nonresidential installation and maintenance activities as are small companies. However, the scale of such services can be greater, encompassing larger sites as, as well as a greater number of clients per business. Midsize businesses may also offer more specialty services, such as those provided by arborists, horticulturalists, and landscape architects. Potential Annual Earnings Scale. In 2007, the average midsize landscaping business earned revenues of $756,132. According to the BLS, the average annual salary of a landscape architect in 2009 was $66,400, while the average salary of those employed specifically in the landscape services field was $59,580. Soil and plant scientists earned average salaries of $53,990. Landscaping and groundskeeping workers earned an average of $24,670, and tree trimmers and pruners earned an average of $30,830, while their supervisors earned an average of $41,990. Clientele Interaction. Professional client interaction is the driving force behind midsize businesses’ success, as it is for small businesses as well. A midsize company is more likely to employ collegeeducated, dedicated sales and customer-relations personnel to manage and process contracts. Although the owner of a midsize business may still be involved in finding new customers, the tasks of following up on new leads and customer retention fall to other employees. Field supervisors are available on job sites to respond directly to customer questions and needs. Amenities, Atmosphere, and Physical Grounds. Most midsize landscaping companies have autonomous commercial facilities separate from their owners’ homes. These facilities include business offices, where management and support staff work, as well as storage and maintenance facilities for tools, equipment, and machinery. Some midsize landscaping companies produce their own plant or landscaping materials, such as mulch, and incorporate small greenhouse and nursery facilities into their business complexes. The majority of employees work outside, stopping in their companies’ offices only briefly or rarely to coordinate activities and interact with colleagues as necessary. In addition to their typical landscaping installation and weekly maintenance

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duties, on-site laborers may be involved in more complex landscaping work, such as grading and terracing property or installing and maintaining lighting, hardscape features, and irrigation systems. Some workers have certifications in pest and disease control and use larger equipment and machinery, such as small tractors, to carry out their tasks. Typical Number of Employees. Midsize landscaping companies rely on more full-time employees than do small companies. Although lower-paid seasonal and part-time workers are employed during the busiest seasons, midsize businesses are better equipped financially to maintain a full-time core staff. Midsize landscaping businesses generally have between five and nineteen employees. Traditional Geographic Locations. All landscaping businesses are located where there is sufficient residential and commercial development to establish a demand for their services. It is estimated that more than 25 percent of homeowners now utilize the services of a landscaping company, so areas experiencing residential growth, such as the southern United States, are prime locations for successful landscaping businesses. Midsize companies compete with smaller companies to provide landscaping services to residential homeowners and nonresidential business, institutional, and commercial properties. However, because midsize businesses often have more specialized staff, they are also able to secure contracts from utility companies and governmental entities to service public spaces. Thus, midsize companies may help maintain road and utility rights-of-way, parks, playgrounds, and recreational facilities, and they may be located anywhere such services are needed. Midsize landscaping companies may also fill specific niches, such as maintaining golf courses and athletic fields. Pros of Working for a Midsize Landscaping Business. Midsize companies employ more fulltime workers than do small companies, which rely on part-time labor, so they can offer their employees greater job stability. In addition, midsize businesses often employ foremen and other supervisors to coordinate workers in the field, so they are better able to maintain control of job sites. These supervisors reduce the amount of responsibility placed on low-wage workers and increase the level of service provided to clients. Midsize companies are also able to complete more ambitious projects than are small companies.

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Cons of Working for a Midsize Landscaping Business. Landscapers working for midsize businesses must still perform strenuous physical labor outdoors in all types of weather conditions, and they still face the risk of injury or illness. They may also feel constrained by the presence of supervisors on site. Costs Payroll and Benefits: Midsize landscaping businesses pay most field workers hourly, and those employed on a part-time or seasonal basis are not likely to receive benefits. Support and management staff are likely to work full time and receive salaries. They usually receive at least some benefits, such as vacation and sick leave, and they may receive health insurance and bonuses as well. Supplies: Landscape maintenance crews require small hand tools and power equipment, as well as seeds or seedlings; soil, compost, or fertilizer; and, usually, a company vehicle. Standard equipment includes lawn mowers, leaf blowers, power and hand saws, rakes, pruning shears, hedge trimmers, weed wackers, rototillers, and fertilizer spreaders. Contractors and installers may require heavier machinery, including tractors or bulldozers, as well as hardscape materials such as cement, asphalt, paving stones, and so forth. Landscape architects require drafting supplies, including professional-grade computer software. Midsize businesses are better able to afford the cost of purchasing, maintaining, and repairing more power tools and larger equipment, including tractors and twin-axle vehicles, rather than renting or leasing such equipment. They are likely to have more than one company vehicle as well, facilitating workers’ transportation to multiple job sites simultaneously. External Services: Midsize landscaping businesses are more likely than small businesses to handle accounting and computer services in-house, but legal services typically remain external. As companies increase their supply and use of equipment and machinery, so too will their needs for external maintenance and repair services increase. Utilities: Midsize companies, like small companies, require water, electricity, telephone, and

Internet services. However, because midsize companies are more likely to have their own office and storage facilities, the cost of some utilities is part of such businesses’ overhead expenses and is not included in customer contracts. Taxes: Midsize companies are required to pay property taxes on any business offices or storage facilities they own, as well as local, state, and federal income, payroll, and unemployment taxes for employees. Landscaping contracts in some states may also include a tax on the price of the services provided. Large Businesses The fifty largest landscaping service companies generate about 15 percent of the industry’s revenue. Although these large businesses provide services to practically all of the industry’s largest customers, such as utility companies and recreational complexes, small and midsize landscaping companies are able to compete effectively with large companies because labor and equipment costs are mostly fixed, depending on the geographic location of the business. In fact, large, national landscaping companies need to establish small, local offices in order to compete with the smaller companies. Some of the large companies specialize in one service, such as the Davey Tree Expert Company, which provides mainly tree services, or TruGreen, which specializes in lawn care. Potential Annual Earnings Scale. In 2007, the average annual earnings of large landscaping services companies ranged from $3,193,196 to $485,692,126. According to the BLS, the average annual salary of a landscape architect in 2009 was $66,400, while the average salary of those employed specifically in the landscape services field was $59,580. Soil and plant scientists earned average salaries of $53,990. Landscaping and groundskeeping workers earned an average of $24,670, and tree trimmers and pruners earned an average of $30,830, while their supervisors earned an average of $41,990. Company chief executives earned an average of $144,960, while general and operations managers earned $84,270. Clientele Interaction. Retention of large accounts is necessary to sustain a large landscaping business. The owners of large companies have little day-to-day contact with customers, however, and

Landscaping Services rely on sales and customer-service employees to provide the bulk of client interaction. Large companies are usually compartmentalized, devoting entire departments to managing client relationships and contracts. Client interaction may include not only initially assessing customer needs but also following up at the end of a job to ensure satisfaction. Customer-service and other clientrelations staff may administer customer satisfaction surveys as part of continuing quality control operations. Amenities, Atmosphere, and Physical Grounds. Large landscaping companies often concentrate on one main service, such as tree or lawn care, pesticide control, or line-clearing for utilities. However, approximately 70 percent of their business still remains residential and commercial landscape installation and maintenance. Large landscaping firms must compete with small and midsize companies for this business. Large landscaping companies have a greater number of support staff working out of central business offices than do smaller companies. The local branches of large companies, though, still employ mainly field laborers who provide exterior landscaping services. Large companies exercise greater control over job sites than do smaller companies, deploying supervisors and inspectors and using sophisticated computer software to manage jobs. Large landscaping businesses also have betterequipped facilities for storage, maintenance, and repair of equipment and machinery, and they are more likely to produce their own landscaping materials or to own subsidiary nursery and landscapesupply companies. Landscape laborers in large companies may be involved in more complex landscaping tasks, such as following design plans for grading and terracing property; installing lighting, retaining walls, walkways, and patios; and implementing irrigation and sprinkler systems. Some workers have certifications in pest and disease control. Professional turf and field management is normally the purview of large landscaping companies and requires employees to conduct soil analysis, install proper drainage structures, aerate and vacuum sports fields, and periodically replace turf. Typical Number of Employees. Large landscaping companies employ more than 20 people, and some employ more than 250. Although sea-

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sonal and part-time workers are still employed in local branches of large landscaping businesses, more employees work full time, especially in the main office. Traditional Geographic Locations. Large landscaping companies have at least one central office to manage the work of several smaller branch offices, which may be located throughout the United States and even internationally. Branch offices operate in a manner similar to the single offices of small and midsize companies, with facilities located in areas where there is residential and nonresidential growth and a corresponding high demand for their services. Large landscaping companies are more likely to secure long-term contracts for landscaping and related services, thus guaranteeing both seasonal and nonseasonal work. Their most profitable branch offices are located in affluent areas with temperate climates that require year-round residential and commercial lawn and landscaping services. Pros of Working for a Large Landscaping Business. Some employees of large landscaping businesses are assigned specialized duties associated with landscape design, pest and disease control, plant hybridization, construction of sophisticated landscape features, or installation of complex irrigation systems and water features. Large companies are more likely to provide specialty employees with training and educational benefits. Large landscaping companies generally enjoy financial stability, increasing their ability to withstand economic downturns. They are able to provide greater job opportunities than are smaller companies, including full-time employment, higher wages, potential for job growth, and nonseasonal work. Cons of Working for a Large Landscaping Business. Economic decline may have a substantial impact on a large landscaping business, especially one that is tied to the construction industry, resulting in numerous layoffs. With many branch offices, coordination of business activities becomes more complex and requires the additional expense of employing management personnel. Although specialists can be found in large landscaping companies, such companies also employ low-paid laborers who work at repetitive jobs and carry out overlapping duties, including performing strenuous tasks outdoors in all types of weather conditions.

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Costs Payroll and Benefits: Large landscaping companies employ more professional, full-time, salaried workers. These employees are likely to receive benefits such as health and life insurance, as revenues tend to be more stable in the larger companies, despite the seasonal nature of the landscaping industry. Hourly laborers are more likely to be full time as well and to receive vacation pay and sick leave. Many receive other benefits, such as health insurance. Supplies: Large landscaping businesses have multiple inventories of basic tools and equipment, enabling them to serve many customers. Each branch office, however, is unlikely to have any more tools, equipment, or machinery than a small or midsize company, except when the local office is involved in specialty work. Specialty equipment might include graders, forklifts, bucket trucks, and turf vacuums. Large landscaping companies also maintain large fleets of company vehicles. External Services: Large landscaping companies contract fewer services externally than do smaller companies. They have in-house professional staffs, including accountants, landscape designers, estimators, legal personnel, and computer technicians. They may still need some external services, such as legal and accounting services, as well as advertising services for major campaigns. Branch offices, moreover, may need to engage local professionals when central offices’ staffs are unable to meet their needs. Large landscaping businesses are more likely to employ personnel to maintain and repair equipment, but in smaller branch offices this function may be outsourced. Utilities: Job site utility needs for a large landscaping company are usually charged to or provided by customers. These include water and electricity. Utility services such as telephone and Internet access are part of business overhead. In addition, central offices and branch offices incur utility costs. Taxes: Large landscaping businesses are required to pay property taxes on business offices and storage facilities. Labor costs present the greatest investment of a landscaping company, and these include payment of local, state, and federal income, payroll, and unemployment taxes

for employees. Some states also have a tax on landscaping services sales related to maintenance.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The typical landscaping services company includes business management, sales, marketing, and customer relations personnel. The majority of employees, however, are the laborers who carry out the actual landscaping services. In smaller companies, many of which are family-owned, one person or a few family members may be responsible for most if not all of the job roles. Arborists, horticulturalists, and landscape designers, including landscape architects, are some of the specialists that might be involved in a landscaping services business. Job categories within the landscaping services industry vary from highly paid management and marketing personnel, who are often college-educated, to unskilled laborers, who earn low wages and may be employed part time or on a seasonal basis. Not all landscaping services companies require personnel in all job categories, especially specialists. However, throughout the industry, the major tasks involved in running business operations remain largely the same. The following umbrella categories apply to the organizational structure of businesses in the landscaping services industry: ■ ■ ■ ■ ■

■ ■ ■ ■ ■

Business Management Customer Service Sales and Marketing Equipment, Facilities, and Security Technology, Research, Design, and Development Site Supervision Landscape Work Tree Trimming Pest Control Human Resources

Business Management Landscape business managers must appreciate all aspects of the landscaping business, from familiarity with plant materials and the pests and dis-

Landscaping Services eases that affect them to knowledge of landscaping equipment and its operation. Management roles include supervising and directing employees directly or through field supervisors and coordinating all aspects of a business. Contracting with clients is an important component of any landscaping services business, and management roles could include the preparation and review of contracts. Financial planning, budgeting, and asset management to keep a company solvent are also necessary tasks associated with landscape management. Because landscaping services involve some use of chemicals and pesticides, managers must also be familiar with governmental regulations and environmental laws that apply to the use and storage of such products. Managers remain current with industry advances through membership in professional associations and trade organizations. Managers within the landscaping services industry usually have two- or four-year college degrees in landscape management or business fields, with course work in related fields such as horticulture and landscape architecture. A well-rounded manager should also have taken courses in finance, accounting, management operations, computer applications, business communications, and personnel management. Average annual salaries for landscape managers vary widely, from under $30,000 to over $60,000, depending on the size and location of the company. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Owner/Company Manager Chief Financial Officer (CFO) Controller Department Manager Project Manager Production Manager General Counsel

Customer Service Landscaping is a service industry, and customer relations is very important for sustaining a company. Customer service personnel assist management in preparing estimates and production budgets, writing specifications, conducting site evaluations, negotiating contracts, and, where necessary, ensuring contract compliance in a timely manner. Land-

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scaping companies may need to engage the services of professionals, such as attorneys and accountants, to assist in contracting and budgeting tasks. Larger landscaping companies may employ some of these professionals. Customer service personnel must be able to communicate and work with people, as often their jobs require addressing and resolving customer complaints. Employees need to coordinate with management, sales and marketing, and human resources staff to ensure that customers are satisfied. Although all landscaping companies must manage customer contracts, larger companies rely more heavily on computer software applications to support this task, which may be the responsibility of those in customer service. In larger landscaping companies, most customer service employees have college degrees in areas such as business communications, consumer psychology, and English. Finance, accounting, and law degrees may also be valuable to those involved in contract processing and management. Smallbusiness owners who have multiple responsibilities and no college degrees must learn how to manage customer service through experience. Wages within this category are dependent on the exact job title, with those involved in contract management and financial matters receiving average pay in excess of $50,000, while the average starting salary of a chief estimator in a midsize construction company is around $45,000. Customer service occupations may include the following: ■ ■ ■ ■ ■ ■

Customer Service Manager Customer Service Representative Contract Supervisor Chief Estimator Cost Estimator Specification Writer

Sales and Marketing Although some sales and marketing functions, such as advertising, may be outsourced to consultants, all companies must have personnel who sell their services, even if just on a part-time basis. In small landscaping companies, owners may conduct most of the sales and marketing. Because referrals are a main source of business in this industry, sales and marketing managers must ensure that their

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companies’ work is of high quality by conducting site inspections. Moreover, salespeople may use finished landscaping projects as examples of their companies’ work. They may keep portfolios of pictures and schematics of such projects, use them as locations for advertising shoots, or even take potential clients to the sites. Sales and marketing employees may have several related functions, depending on the sizes of their companies. They may submit landscaping proposals to existing and potential clients and make bids to government agencies. They work with customer service staffs to maintain good working relationships with existing clients, and they use leads and client referrals to obtain new customers. Salespeople may also attend lawn and garden shows, and they may join and speak at community organizations and local service clubs and associations in order to promote their companies. Sales and marketing personnel are likely to have college degrees in marketing and sales, especially in larger landscaping companies that cater to commercial enterprises. Many salespeople are paid on a commission basis, and marketing personnel and salespeople have high earning potential in larger companies in the industry. Although earnings vary widely depending on the location and size of the company, an average starting salary is around $30,000, before commissions. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■

Sales Director Marketing Director Sales Representative Marketing Assistant Advertising Director Site Inspector

Equipment, Facilities, and Security Landscaping companies need to protect the major investments they make in tools, equipment, and landscaping materials. Equipment, facilities, and security personnel purchase, operate, maintain, and provide security for company assets, mainly equipment and tools. Security staff may protect against destruction and theft of equipment, tools, and materials at job sites, in addition to guarding their companies’ own facilities. Some companies outsource the maintenance of major equipment.

All landscaping companies require storage facilities for equipment, tools, and materials. Smaller landscaping companies that operate from home offices are not likely to hire separate personnel to provide security for storage facilities. Larger companies with business offices are more likely to employ personnel to provide building maintenance and security services, or they may outsource such services. As landscaping services companies rely more heavily on computer software applications to manage landscaping contracts, the need for computer security personnel increases. Some security and procurement jobs may require two- or four-year college degrees. In most cases, jobs such as equipment operators and maintenance supervisors require only work experience and special training. Earnings in this category are not as high as for some jobs in this industry. The average annual wage for equipment maintenance and security personnel is about $35,000, and equipment operators earn an average of $30,000. Equipment, facilities, and security occupations may include the following: ■ ■ ■ ■ ■ ■

Equipment Procurement Manager Equipment Operator Security Guard Computer Technician Building Maintenance Supervisor Building Maintenance and Repair Worker

Technology, Research, Design, and Development Much of the technology and research in the landscaping services industry comes from universities. However, private chemical and equipment companies that cater to landscaping services also operate research facilities. Larger landscaping companies may have a few employees who act as liaisons to research and technology establishments, and specialists such as arborists and horticulturalists may be employed to improve soil conditions; develop disease-resistant plants, hybrids, and ornamentals; provide services to control landscape pests and diseases; and propagate existing and new plant materials. Smaller companies are unlikely to have job opportunities within this category and may contract for many of these services.

Landscaping Services Landscaping design services are provided most often by licensed landscape architects, employed either by architecture firms or by landscaping service firms. Planning and design of landscaping features are crucial components of the industry, and any company that provides installation services must either employ or maintain business relationships with landscape architects so they will have projects to install. Subindustries within landscaping services, such as lawn and turf management, have spawned technological growth in the landscaping industry. Larger and specialty landscaping companies may be involved in the development of new products, application techniques, and equipment designs, especially related to pesticides, plant disease control, reliable automated equipment, or the greening of industry. Specialists such as horticulturalists and arborists have the highest-paying jobs within this sector and usually have two- or four-year college degrees. The average annual wages for horticulturists are

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$36,000, and arborists can earn over $40,000 per year. Laborers who may assist in carrying out some of these specialties must have high school degrees and may need technical degrees, training, or some experience. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Horticulturist Horticulture Therapist Arborist Lawn Care Specialist Soil and Plant Scientist Landscape Architect Architectural Drafter Landscape Designer Chemical Technician

Site Supervision First-line supervisors oversee on-site landscaping operations. Supervisors direct and coordinate

OCCUPATION

PROFILE

Landscape Architect Considerations

Qualifications

Description

Plans and designs parks, recreational areas, and land surrounding buildings and complexes.

Career clusters

Agriculture, Food, and Natural Resources; Architecture and Construction

Interests

Data; people; things

Working conditions

Work both inside and outside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; volunteer work; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

AIR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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landscaping and groundskeeping workers and other laborers as they plant and maintain plant materials; trim and prune trees and shrubs; apply pesticides and fertilizers; and develop hardscape amenities such as walkways, walls, patios, and irrigation systems. Supervisors should be able to read and interpret landscape design plans and contracts, as they are responsible for job management in the field. Necessary skills include the ability to organize and to motivate workers to ensure high-quality work. First-line supervisors are also involved in scheduling; determining workforce needs; and customer relations, especially responding to customer questions and communicating with other company personnel should there be a need for contract changes. First-line supervisors in larger landscaping companies are likely to have degrees from two- or four-year college programs, but supervisors in smaller landscaping companies may have only high school educations with substantial experience. As of May, 2009, according to the BLS, the

OCCUPATION

median hourly wage for landscaping field supervisory jobs was $18.77. Site supervision occupations may include the following: ■ ■

First-Line Supervisor Foreman

Landscape Work Landscape workers are the backbone of the landscaping services industry. Landscaping and groundskeeping laborers provide the demanding physical labor required to install landscape designs, both plant materials and hardscape, while groundskeepers maintain what has been installed. Personnel may use hand tools and power equipment in activities such as caring for lawns, laying sod, raking, digging, and watering. Landscape workers do not need college educations and do not need any experience to obtain many entry-level jobs. Most landscaping companies require at least a high school education or

PROFILE

Gardener and Groundskeeper Considerations

Qualifications

Description

Installs garden and landscape elements and maintains them.

Career clusters

Agriculture, Food, and Natural Resources; Architecture and Construction

Interests

Things

Working conditions

Work outside

Minimum education level

No high school diploma; on-the-job training; apprenticeship

Physical exertion

Medium work; heavy work

Physical abilities

Unexceptional/basic fitness; strength may be required

Opportunities for experience

Part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

CRS; RCE; RCI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Landscaping Services OCCUPATION

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SPECIALTIES

Gardeners and Groundskeepers Specialty

Responsibilities

Landscape laborers

Assist landscape gardeners by moving soil, equipment, and materials; digging holes; and performing related duties.

Landscape specialists

Keep the grounds of city, state, or national parks and playgrounds clean and repair buildings and equipment.

Yard workers

Perform a combination of maintenance duties to keep the grounds of private residences in neat and orderly condition.

GED. As of May, 2009, the median hourly wage for landscaping workers was $11.23. Landscape work occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Crew Chief Landscaping Worker Groundskeeper Gardener Irrigation Technician Interior Landscape Technician Cemetery Worker Golf Course Manager Greenskeeper Turf Manager Lawn Service Worker

Tree Trimming Tree trimmers cut, trim, and prune plants. They use hand and power saws, shears, and clippers to conduct activities such as removing dead branches from trees, maintaining utility and road rights-ofway, creating topiaries in formal gardens, and working with arborists to control plant pests and diseases. Some of this work may take place from truck-mounted lifts. A high school education is usually all that is required for these jobs. As of May, 2009, the median hourly wage for tree trimmers and pruners was $14.18. Tree trimming occupations may include the following: ■ ■

Tree Trimmer Plant Pruner

Pest Control Pest control workers require the most specific training of front-line landscaping laborers, although a college education is usually not required. Their tasks may involve mixing, spraying, and applying chemical dusts and vapors to vegetation. These chemicals kill plant pests, insects, and fungi, and many pesticide handlers must obtain special state or federal certifications. Other pest control workers may specialize in organic pest control methods. These methods involve spraying plants with organic chemicals, including bacteria, that target or discourage common pests. They also commonly involve using natural predators, such as ladybugs and parasitic miniature wasps, to attack pests that harm plants. As of May, 2009, the median hourly wage for pest control workers was $12.43. Pest control occupations may include the following: ■ ■ ■ ■ ■

Pesticide Handler Pesticide Sprayer Pesticide Applicator Pest Control Worker Organic Gardener

Human Resources Labor is the major cost within a landscaping services company, and human resources personnel spend much of their time advertising for new employees, reading resumes and interviewing, and providing employee training and fringe benefits, although most benefits are limited in smaller landscaping companies. Because of the high turnover

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rates and seasonal nature of the industry, human resources personnel are often kept quite busy finding and retaining qualified full-time and part-time employees. In addition, these personnel must understand the rights of employees, including those provided by federal and state laws and regulations governing minimum wages, overtime pay, privacy, family leave, discrimination, and workers’ compensation. Human resources personnel also provide education and training to employees, such as sexual harassment training, and they must stay abreast of the latest personnel issues by completing certification courses in human resources. Human resources personnel may have to terminate employees, and they usually conduct exit interviews for employees who are leaving or retiring. Other tasks include establishing wage ranges for various job categories, developing employee handbooks, and conducting grievance proceedings. Some human resources personnel also assist in conducting employee evaluations, develop programs to motivate employees, seek to reduce absenteeism, or work with security personnel to adopt and implement security measures to control theft of company tools and equipment. Most human resources directors and managers have college degrees in human resources or related fields. Depending on the size and location of the company, the annual salary for human resources directors may start around $20,000 and reach an average wage of $60,000. Administrative personnel receive lower wages and may require only high school educations. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Human Resources Generalist Payroll Clerk Benefits Specialist Administrative Assistant

INDUSTRY

OUTLOOK

Overview The outlook for the landscaping industry shows it to be on the rise. Although the recession of 20072009 and resulting growth in unemployment have

resulted in a downward trend since 2007, and individuals and companies may have less disposable income for landscaping services, the landscaping services industry is expected to grow. This growth will be slow at first, but the rate will increase, both domestically and internationally, as the global economy continues to improve and building construction increases. The BLS projects that landscaping services will be one of the fastest-growing industries between 2006 and 2016. In addition, forecasters have placed the landscaping services industry in the development/growth phase of its life cycle, implying that there will be plenty of room for growth in the future. A good indicator of the favorable growth in the landscaping services industry is the fact that franchising of this industry in the United States and internationally is on the rise. Approximately fifty large companies in the United States generate about 15 percent of the total revenue in the landscaping services industry. Worldwide, landscaping companies are highly affected by economic downturns. In addition, the landscaping services industry is very dependent on weather, and a company’s revenues may vary depending on the weather conditions and the season of the year. The industry also suffers from higherthan-average turnover, the result of both its seasonal nature in some locales and also the physical demands placed on workers. Owners of institutional facilities, commercial developments, shopping malls, and office buildings continue to recognize the importance of presenting a positive visual image through landscaping, so the demand for landscaping services will continue to rise in line with nonresidential development, some of which is increasing in nations with fast-growing economies, including China and India, and in major construction locales, such as Dubai. Moreover, the increase in the number of elderly homeowners who are no longer able to maintain the landscapes around their homes, the need for many working householders to hire landscapers because they lack the time to provide the labor themselves, the desire of homeowners to better utilize and beautify their outdoor living spaces, and the continuing development of suburbs are factors that will contribute to future growth in residential landscaping services. Economic conditions in the United States and globally have hampered public funding for many government landscaping projects. However, once

Landscaping Services the economy recovers, governments are expected to continue to install and maintain plant materials to enhance urban environments and to develop additional public, landscaped open spaces. Utility companies also continue to provide ample growth opportunities for the landscaping services industry. Landscapers are engaged by public utilities not only to trim trees and prune plants to avoid power outages but also to prevent and control plant diseases and pests. The greening of industry, also known as the environmental horticulture movement, has also favorably affected the growth of the landscaping services industry. In a study concerning the economic impact of the overall green industry in the United States, Hall, Hodges, and Haydu estimated that in 2002 the landscaping services sector had the greatest favorable impact on the economy in terms of employment, value added, and labor income. Thus, the landscaping services industry will continue to enjoy growth in the future, as more companies and individuals embrace the green movement and require the services of landscape workers and other related services. Employment Advantages The BLS has predicted that employment for groundskeeping and landscaping workers, which encompassed more than 1.2 million of the 1.5 million jobs in the landscaping services industry in 2006, will grow faster than the average rate of growth for all occupations during the period between 2006 and 2016. It has also been predicted that domestic groundskeeping jobs will increase by 27.43 percent between 2008 and 2018 and that overall employment for all occupations within this industry will increase by 26.74 percent during the same period. Although wages are low for entrylevel positions and the work is physically demanding, this is the perfect job for individuals who enjoy outdoor work. Most workers do not require training or college degrees, so younger workers may be able to find entry-level positions in the landscaping services industry. Moreover, because employment opportunities may be seasonal in some areas, the industry also provides part-time summer employment for students and others seeking seasonal jobs. Depending on the size of employees’ companies, they may enjoy job diversity, from providing installation

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and maintenance services for commercial and residential properties, to managing public and private recreational facilities, to maintaining lines for public utility companies. Annual Earnings The economy, and for some locations the season of the year, have significant effects on earnings in the landscaping services industry. Even when the economy is good, earnings in this industry are low compared to those of other industries. In a 2007 study conducted by Entrepreneur Magazine, at a time of economic decline, the average revenue for a landscaping services company was $869,740, which represented a 2.4 percent decrease from 2004. However, the top-performing 10 percent of landscaping companies enjoyed average revenues of $2.7 million, representing a 27.8 percent increase from 2004. A 2010 study by IBISWorld showed revenues of $49.928 billion per year for U.S. companies in the landscaping services industry. The average revenue generated by employees is another good indicator of an industry’s earnings. Based on the Entrepreneur Magazine study, the average revenue generated per employee in the landscaping services industry declined between 2004 and 2007. In 2004, an employee in a top-performing company generated an average of $86,066, but in 2007 the average had fallen to $85,204. For an employee in a lesser-performing company, the average 2004 revenue of $87,403 decreased to $81,442 by 2007. A 2009 First Research study showed annual revenues per employee in the overall industry to be closer to $70,000.

RELATED RESOURCES FOR FURTHER RESEARCH American Nursery and Landscape Association 1000 Vermont Ave. NW, Suite 300 Washington, DC 20005 Tel: (202) 789-2900 Fax: (202) 789-1893 http://www.anla.org American Society of Landscape Architects 636 Eye St. NW Washington, DC 20001-3736

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Tel: (202) 898-2444 Fax: (202) 898-1185 http://www.asla.org LAWN AND LANDSCAPE Magazine, GIE Media 4020 Kinross Lakes Parkway Richfield, OH 44286 Tel: (800) 456 0707 Fax: (330) 659-0823 http://www.baumpub.com Professional Landcare Network (PLANET) 950 Herndon Parkway, Suite 450 Herndon, VA 20170 Tel: (703) 736-9666 Fax: (703) 736-9668 http://www.lawnandlandscape.com Tree Care Industry Association 136 Harvey Rd., Suite 101 Londonderry, NH 03053 Tel: (603) 314-5380 Fax: (603) 314-5386 http://www.treecareindustry.org

ABOUT

THE

AUTHOR

Carol A. Rolf has a bachelor of science degree in landscape architecture from Pennsylvania State University and more than twenty years of professional experience in landscape design and implementation. She has been a member of the American Society of Landscape Architects and has designed and assisted in the development of state parks for state governments, reviewed land subdivisions for municipal governments, and implemented residential and commercial landscape designs for private industry. With her law degree from Suffolk University, she has worked for over twenty years with private and public clients to ensure compliance with environmental laws that preserve the landscape.

FURTHER

READING

Camenson, Blythe. Careers for Plant Lovers and Other Green Thumb Types. 2d ed. New York: McGraw-Hill, 2004.

_______. Opportunities in Landscape Architecture, Botanical Gardens, and Arboreta Careers. New York: McGraw-Hill, 2007. Craul, Timothy A. and Phillip J. Craul. Soil Design Protocols for Landscape Architects and Contractors. New York: John Wiley & Sons, 2006. Davidson, Harold, Roy Mecklenburg, and Curtis Peterson. Nursery Management: Administration and Culture. 4th ed. Upper Saddle River, N.J.: Prentice Hall, 1999. Garner, Jerry. Careers in Horticulture and Botany. 2d ed. New York: McGraw-Hill, 2006. Giles, Floyd. Landscape Construction Procedures, Techniques, and Design. 4th ed. Champaign, Ill.: Stipes, 1999. Hall, Charles R., Alan W. Hodges, and John J. Haydu. Economic Impacts of the Green Industry in the United States, Final Report to the National Urban and Community Forestry Advisory Committee. Knoxville: University of Tennessee, Extension Service, 2005. Hannebaum, Leroy G. Landscape Operations: Management, Methods, and Materials. 3d ed. Upper Saddle River, N.J.: Prentice Hall, 1998. Hensley, David L. Professional Landscape Management. 2d ed. Champaign, Ill.: Stipes, 2004. Hoovers. “Landscaping Services.” http:// www.hoovers.com/landscaping-services/— ID__194—/free-ind-fr-profile-basic.xhtml. Ingels, Jack E. Landscaping Principles and Practices. 7th ed. Clifton Park, N.Y.: Delmar Cengage Learning, 2009. _______. Ornamental Horticulture: Science, Operations, and Management. 3d ed. Clifton Park, N.Y.: Delmar Cengage Learning, 2000. LaRusic, Joel. Start and Run a Landscaping Business. North Vancouver, B.C.: Self-Counsel Press, 2005. Pigeat, Jean-Paul. Gardens of the World: Two Thousand Years of Garden Design. Paris: Flammarion, 2010. Simonds, John O. and Barry Starke. Landscape Architecture: A Manual of Land Planning and Design. 4th ed. New York: McGraw-Hill Professional, 2006. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg.

Landscaping Services _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data

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and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Wasnak, Lynn. How to Own and Operate a Financially Successful Landscaping, Nursery, or Lawn Service Business. Ocala, Fla.: Atlantic, 2009. Williams, George S. Nursery Crops and Landscape Designs for Agribusiness Studies. 2d ed. Vero Beach, Fla.: Vero Media, 1984.

©iStockphoto.com

Legal Services and Law Firms

viduals, groups, and corporations. By engaging in legal research, preparing and filing legal documents, General Industry: Law, Public Safety, and Security drafting contracts, giving advice, Career Cluster: Law, Public Safety, and Security petitioning courts, attempting to Subcategory Industries: Corporate Law Offices; Criminal persuade opposing parties, litigatLaw Offices; Estate and Tax Law Offices; Family Law ing, and appealing adverse judgOffices; Intellectual Property Law Offices; Labor Law ments, lawyers use many diverse Offices; Law Firms; Legal Aid Services; Notary Offices; tools to help their clients. Law Paralegal Services; Process Servers; Public Interest Law firms predominantly employ atOffices; Title Abstract and Settlement Offices torneys, paralegals, and adminisRelated Industries: Civil Services: Public Safety; Criminal trative assistants and range in size Justice and Prison Industry; Environmental Engineering from multinational corporations and Consultation Services; Federal Public employing thousands globally, to Administration; Local Public Administration; Political solo practitioners doing business Advocacy Industry; Public Health Services in small towns. Lawyers in private Annual Domestic Revenues: $251 billion USD (U.S. law firms usually charge clients for Census Bureau, 2007) the legal services they provide, alAnnual Global Revenues: Over $1 trillion USD (Harvard though some types of lawyers are Law School Center on Lawyers and the Professional paid only by opposing parties when Services Industry, 2007) they win judgements at trial that NAICS Number: 5411 include legal fees, and many lawyers represent select clients for free (pro bono). A law firm’s success is largely dependent on its financial stability. In this respect, it is very similar to INDUSTRY DEFINITION any other private business. The legal services industry is substantially simiSummary lar in function to law firms. Hundreds of legal serThe law firm and legal services industry provides vice organizations exist in the United States alone. legal advice, assistance and representation to indiINDUSTRY

SNAPSHOT

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Legal Services and Law Firms They range from small, local offices in rural areas to large international organizations with offices globally. Much like law firms, these organizations provide legal services for clients, but their fee structure and business goals are drastically different. Legal service organizations seek to assist individuals who otherwise may not be able to afford legal representation and, accordingly, legal service providers generally charge reduced fees. They may also provide pro bono legal representation. Instead of focusing on profits, many of these organizations are nonprofit; they solicit and accept donations from the public, the government, and business owners in order to cover their overhead costs. History of the Industry The legal industry has existed, in some form, for thousands of years. In ancient times, many coun-

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tries and religions developed their own sets of rules, which were essentially common laws: laws that are not written out in books but that are implicitly adopted by society over generations of legal practice. In ancient Greece, common citizens argued legal matters on behalf of other citizens, notwithstanding the absence of formal training. They were not allowed, officially, to accept fees for their representation. Ancient Rome developed a much more comprehensive legal system under which attorneys practiced law as a vocation and could accept fees for their representation. This system was the genesis of the modern practice of law. Notably, however, neither Roman lawyers nor the judges they practiced before had formal legal educations. The practice of law became more regulated in the first few centuries of the Byzantine Empire (330-1453). By the sixth century, a course of study

Trial lawyers spend most of their time outside the courtroom, preparing for trial by doing research and interviewing witnesses and clients. (©Rich Legg/iStockphoto.com)

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Legal Services and Law Firms

was required in order to be admitted to the practice of law. By the thirteenth century, many other countries had followed suit, requiring some formal education and an oath of admission in order to practice. The United States developed many of its laws, as well as the traditions and customs surrounding the practice of law, based on the English model. By the time the United States had declared its independence from Great Britain, English legal scholars had drafted important treatises concerning, among other things, principles of property law, civil law, and criminal law. These treatises helped form both U.S. common law and, later, the country’s statutory body of laws. The first dedicated law school in the United States was the Litchfield Law School, established in 1784 in Litchfield, Connecticut, by American lawyer Tapping Reeve. At that time, no official law degree was required in order to practice law; to the contrary, individuals became lawyers by apprenticing with practicing attorneys. This form of appren-

ticeship existed into the 1890’s, when the newly formed American Bar Association (ABA) strongly encouraged states to begin requiring potential lawyers to receive formal education in order to be considered attorneys. The first American law firms employing multiple attorneys appeared just prior to the Civil War (1861-1865). In 1906, the Association of American Law Schools (AALS) adopted a rule that law students must receive three years of study to earn their degrees. By 2008, there were approximately 199 ABA-accredited law schools, though a very small portion of those schools, most of them new, were only provisionally accredited. In order to attend law school, most state laws require applicants to have completed undergraduate degrees, to have achieved satisfactory grade point averages (GPAs), and to have successfully completed the Law School Admissions Test (LSAT). In order to be admitted as an attorney, an applicant must satisfactorily complete law school, must fill out a comprehensive application (including a

Law books line the walls of this law office conference room. Increasingly, legal codes, cases, and forms are available in electronic versions. (©Lane Erickson/Dreamstime.com)

Legal Services and Law Firms

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globally—who combine skills, resources, and revenue and who work under a shared name. Some law firms practice in only certain areas of law in which the attorneys have particular expertise. For instance, it Value Added Amount is very common to find small personal inGross domestic product $209.6 billion jury litigation firms, or small plaintiffs Gross domestic product 1.5% firms, which are law firms that represent Persons employed 1.186 million victims of car crashes, slip-and-falls, and Total employee compensation $112.8 billion other personal injury claims. The attorneys in this type of firm have particular exSource: U.S. Bureau of Economic Analysis. Data are for pertise in plaintiffs’ injury litigation, and 2008. they often provide very efficient and effective representation in this area of the law. In contrast, many larger firms advertise themselves as full-service firms. This descomplete job history and criminal background ignation suggests that the firms are capable of hancheck), and must successfully pass the state’s bar dling any legal question or issue with which a client examination, which is traditionally administered is concerned. Traditionally, individual attorneys at twice each year. large firms retain expertise in one or two areas of A large proportion of newly admitted attorneys— the law, meaning that each attorney is not a general approximately half—enter into private practice at practitioner. When the attorneys and their diverse law firms. Law firms may employ anywhere from fields of expertise combine forces at a large firm, one to thousands of attorneys and staff, located in however, the firm is able to handle most legal issues. one small office or spread throughout dozens of ofIn general, particular legal practice areas include fices in major cities around the world. A small percivil personal injury litigation, criminal cases, concentage of attorneys chooses to practice at legal sertract negotiation, property and real estate law and transactions, estate and probate law, intellectual vice organizations, such as local legal aid offices or property, patents and trademarks, mergers and acnongovernmental organizations (NGOs) such as quisitions, administrative law, and appellate law. Amnesty International. Much like law firms, these At law firms, newly admitted attorneys are comorganizations run the gamut from operating as monly referred to as first-year associate attorneys. small businesses to, in the case of Amnesty InternaDepending on the particular firm, they may carry tional, functioning as national or multinational orthat title for as little as one year or as many as eight ganizations with significant influence and lobbying power. There are many other areas in which an attorney can seek employment. For example, attorneys are Inputs Consumed by the employed at nearly every corporation as in-house counsel. Similarly, federal, state, and local governLegal Services Industry ments employ attorneys as prosecutors and judges. Furthermore, most every governmental agency Input Value employs staff attorneys who work on general legal Energy $0.9 billion matters within the agencies’ spheres of influence, Materials $3.7 billion and legislatures employ legal counsel to aid in inPurchased services $72.8 billion vestigations and to produce the legal language Total $77.4 billion from which new laws are crafted.

The Legal Services Industry’s Contribution to the U.S. Economy

The Industry Today A law firm is composed of a group of attorneys— anywhere from one individual to thousands

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

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Legal Services and Law Firms

years. After an associate’s required service, the partners (part-owners) of the law firm vote to decide whether an associate will become a partner. The partners evaluate, among other things, associates’ performance, work habits, and the amount of business they bring to the firm. Not only is the receipt of a partnership both a promotion and a recognition that an associate has performed well for the firm, but it is also financially rewarding. As a part-owner, the partner earns a share of the firm’s annual revenue, rather than just a set salary with the potential for a bonus—simply stated, when the firm succeeds financially, so do the partners. Partners’ shares at the largest American law firms can be several hundred thousand dollars per year. It is also important to note, however, that if the firm loses money, partners also share in the losses. In order to gain their part shares, moreover, the partners must buy into the partnership, so the promotion requires an outlay of capital on the part of the employee. In addition to partners and associates, law firms employ paralegals, administrative assistants, and a host of other employees to assist the firm. Hundreds of legal service organizations exist in the United States alone. Although these organizations may receive some state or federal funding, many are private organizations. They seek to provide legal services for those who cannot ordinarily afford to hire an attorney. Commonly, legal service providers provide assistance in the following areas: civil and criminal law, property law (especially landlord-renter disputes and foreclosure cases), immigration law, administrative proceedings, and constitutional issues involving civil rights and liberties. An example of the latter might be assisting a high school student who wrote a controversial school newspaper article and was subsequently disciplined by school administrators in a freedom of speech case. Some legal service providers are able to provide services free of charge for clients who satisfy certain financial eligibility rules. Others provide services and representation at rates that, when compared to comparable fees at private law firms, are drastically reduced. Traditionally, many legal service providers receive assistance from the federal or state government and seek donations from individuals and corporations to help cover overhead costs. Additionally, the operating costs of a legal service

provider are significantly lower than those of a law firm, because the salaries paid to employees are often lower. Most legal service providers are local or operate within one particular state. Other legal service providers, such as the American Civil Liberties Union (ACLU) and the National Right to Work Legal Defense Foundation, operate on the national level.

INDUSTRY MARKET SEGMENTS Both law firms and legal service organizations can range in size from individual practitioners to national and international entities. Many specialize in particular types of law. Even large, full-service firms have specialized departments or teams who concentrate on particular types of cases or particular levels. For example, litigators who represent clients at trial rarely represent the same client on appeal. Instead, appellate specialists take over the representation of the client in higher courts. If the appellate team is able to win a new trial for a client, the client may once again be represented by the original litigation attorney. Small Law Firms and Legal Service Providers Small firms generally employ between one and ten attorneys. They usually handle relatively few cases at a time, although some branches of legal practice require a heavier caseload in order to earn sufficient income. In addition, sole practitioners may be “of counsel” to firms, meaning that they are neither associates nor partners but they are contracted by the firms to help with specific cases as necessary. Potential Annual Earnings Scale. A sole practitioner could earn, generally, between $30,000 and $100,000 per year. In 2004, the average annual income of a sole practitioner was $46,000 according to the American Bar Association Young Lawyer Division. A ten-attorney firm could generate well over $1 million in annual revenue. Many legal service organizations are nonprofit organizations and, accordingly, do not generate revenue in the sense that a private law firm does. Clientele Interaction. One hallmark of small law firms is the importance of client interaction. When a firm employs only a handful of attorneys,

Legal Services and Law Firms the attorneys are generally very accessible to clients. To be sure, some small firms do not employ full-time administrative assistants or paralegals. When a client dials the main phone number or emails an attorney at such a firm, it is probable that the attorney him- or herself will answer the phone or personally respond to the e-mail. Thus, the degree of client interaction can be very high, as the buffer between the client and the firm is greatly reduced. Many clients feel reassured by this heightened interaction and believe that they can better track how their legal issues are being resolved. The buffer between client and counsel at a legal service provider is also relatively small, as these organizations seek to keep costs down while providing efficient and effective service. Amenities, Atmosphere, and Physical Grounds. Small firms and small legal service providers often struggle to find office space suitable for their needs. Unlike major law firms, which typically occupy multiple floors or even entire buildings, small law firms operate like many small businesses—they seek to find affordable space sufficient for their needs. Accordingly, many small firms lack the aesthetics of large firms. Often, the proprietors of small firms finance their office leases and must consider rent or ownership as direct overhead costs that detract from the firms’ profits. While waiting rooms for clients in large firms may have amenities such as coffee bars, plush leather sofas, and a bevy of magazines for perusal, the waiting room in a small firm may consist of no more than a small space with a few chairs. In a small firm or in a legal service provider that operates as a nonprofit, the emphasis is on client contact and cost-effective representation, not glitz and glamorous surroundings. To that end, the physical grounds of a small firm could be a former house that has been converted into a law office, rented space in an office building, or simply an office with an administrative assistant that is shared by other solo practitioners. Whereas in large law firms, interior and exterior maintenance typically are outsourced to specialized businesses, the attorneys at small firms concerned with overhead costs may spend their Saturdays cutting their firms’ lawns and attempting basic maintenance repairs, much as they might at their personal residences. It may also be common for attorneys to share office space in an effort to save rent. That being said, the

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physical grounds of most small firms generally present a very professional atmosphere, much like those of large firms. Typical Number of Employees. Small firms and legal service providers may consist of only a solo practitioner or they may employ from two to ten attorneys. Aside from their attorneys, firms usually employ a few paralegals and administrative assistants to assist with the preparation and maintenance of files. Such firms are usually owned by just one or two individuals, so there exists an incentive to keep the number of employees relatively low. As long as the work is getting done in a timely and professional manner, hiring additional employees will only take away earnings from the rest of the office. Traditional Geographic Locations. Small firms and legal service organizations may be found anywhere where people are in need of legal representation, and they can be found in most communities, both large and small, throughout the United States. Although there may exist a stereotype that small firms are only located in sparsely populated communities, this is not true, as small firms are just as likely to be located in large cities. Similarly, legal aid organizations often are located in cities because that is where the greatest need for low-cost or free representation is. If given a choice, proprietors of small firms may choose to locate their businesses near the courthouses in which they most regularly practice. Because the cost and time of travel to court hearings eventually gets passed on to the client, and because most small firms and legal service providers are concerned with keeping the costs of their representation competitive, it may be beneficial to be located within walking distance of court. Pros of Working for a Small Firm. Small-firm owners are their own bosses, and they may not be expected to work the grueling hours that so-called big law attorneys are expected to work. Accordingly, many nights and weekends are free, and for some the job resembles a traditional forty-hourper-week occupation, thus allowing attorneys to have lives outside of work. Additionally, for those who view client contact as particularly important, operating a small firm may be a great fit, as clients who can easily communicate with their lawyers are likely to feel that they are receiving better representation. Finally, small firms can be very successful financially. Like any small business, a small firm is built on trust and reputation; after establishing the

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Legal Services and Law Firms

trust of a community, life in a small firm can be emotionally and financially satisfying. Similarly, attorneys running small legal service organizations generally find the work to be both important and rewarding—both professionally and financially. Cons of Working for a Small Firm. Although there are many benefits associated with running a small firm, there are also opportunity costs. First and foremost, the opportunity for financial success can be limited. Because the owner of a firm is responsible for paying salaries, rent, utilities, and a host of other bills, if the firm has a slow month, there may not be enough money left for the owner to pay her- or himself. Additionally, owners of small firms and legal service providers may find themselves working several hours per week on nonlegal matters, such as building maintenance or personnel issues, thus detracting from their ability to represent clients and build the business of their firms. Finally, the owners of small firms must decide what benefit packages to provide to their employees. Providing health care and a retirement plan can be very costly and can significantly detract from profit margins. Though an attractive benefit package can entice qualified employees into accepting offers of employment, the cost of providing benefits can be difficult for small businesses to afford. In legal service organizations, the benefits are generally very good, but often the attorneys in charge of these organizations sacrifice the potential for high salaries. Although they may love their work, they are often compensated at lower rates than those in the private sector. Costs Payroll and Benefits: The proprietors of small firms are responsible for paying the salaries of and providing benefits to their employees. This is likely to be the largest cost associated with operating a small business. In a legal service organization, it is possible that the state or federal government, or even individual private donors, may provide some funding to help offset the costs of providing salaries and benefits. Supplies: Small firms and legal service providers must be equipped with, at a minimum, computers, Internet access, printers, fax machines, and telephones. In order to research legal issues for clients, they must also purchase law books or subscribe to an Internet-based legal research

provider. These are costly investments, but they can save attorneys significant time. Additionally, most firms subscribe to law journals and trade magazines, as well as to newspapers and other periodicals, primarily for use by attorneys seeking to keep abreast of the law. External Services: Small firms may contract lawn care and external building maintenance, as well as interior cleaning and maintenance services. Some attempt to take care of reasonable maintenance and lawn care on their own. Utilities: Small firms must pay for electricity, heat, and sewage and trash-removal services, among other utilities. Taxes: Traditionally, law firms pay their associates’ state employment taxes associated with holding a license to practice law. If they own their office space, they must pay any state and local property taxes. Moreover, small firms must pay corporate income taxes. Legal service providers may be nonprofit entities, in which case their business tax liability, as well as other financial burdens associated with private practice, may be less significant. Midsize Law Firms and Legal Service Providers Midsize law firms generally employ between ten and fifty people. They are usually local or regional in nature, serving clients predominantly in one general locale. Midsize firms almost always have associates in addition to partners, whereas small firms may consist solely of partners. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the mean annual salary for a lawyer in 2008 was $124,750. The mean annual salary for a paralegal or legal assistant was $48,790. All other things being equal, employees of midsize firms can generally be expected to earn salaries in line with these averages. Clientele Interaction. Midsize law firms and legal service providers place importance on client interactions. However, because there are more attorneys, paralegals, and administrative assistants in midsize firms than in small ones, there is likely to be less direct contact between attorneys and clients, as some of the client-relations tasks will be handled by these other employees. Additionally, corporations can also be clients of midsize firms,

Legal Services and Law Firms and it is often possible to handle certain legal needs of a corporation with less face-to-face contact than an individual client would expect. Consequently, depending on the nature of the services the midsize firm or legal service organization provides, there is likely to be a somewhat lower degree of interaction with clients than experienced at small firms and organizations. Amenities, Atmosphere, and Physical Grounds. Midsize firms generally employ anywhere from ten to fifty attorneys, in addition to several paralegals and administrative assistants, whose services are often shared among attorneys. As a result, the office space needed by a midsize firm is greater than that needed by a small firm. In fact, some midsize firms may need two or more offices, especially if their clientele is spread across a larger geographic area. Depending on the size of the business, a firm may have its own freestanding building, or it may share space in a larger office building. Because the appearance of the building and grounds is important to generating business, larger firms may pay more attention to their physical grounds, amenities, and atmosphere. For instance, clients at a midsize firm may notice an elegant waiting room and may be offered coffee or tea as they await legal assistance. In a ten-attorney firm, shared office space or a renovated single-family house may be sufficient for the firm’s needs. With fifty attorneys, paralegals, and administrative assistants, however, a firm would likely need several thousand square feet of office space and may be inclined to have its own freestanding building or an entire floor in a large office building. Maintenance, including lawn work, plumbing, and electric repairs, is likely to be outsourced to private companies, as the larger a firm is, the lower the ownership interest is among the most senior attorneys. Typical Number of Employees. Firms that employ between ten and fifty attorneys are generally categorized as midsize. If a firm has only ten attorneys, it may be able to get by with just a few paralegals and administrative assistants, as well as a receptionist. The total number of employees at a ten-attorney firm, then, might be somewhere between fifteen and twenty. If the firm employs fifty attorneys, the demand for legal and administrative support will be much greater. Such a firm might have a total staff of well over one hundred.

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Legal service providers, such as legal aid offices, often operate under fixed budgets. Despite the great demand for their services, the resources often do not exist to hire all the personnel necessary to maximize the efficiency of the firm. In a legal service provider, attorneys may perform some of the same tasks that traditionally would be assigned to paralegals or administrative assistants at private firms. Traditional Geographic Locations. As with small firms, midsize firms may be located anywhere there are clients and business to attend to. Cities, suburbs, and rural communities all host midsize firms. Pros of Working for a Midsize Firm. With a sufficient number of attorneys, a midsize firm may truly be a full-service organization, effectively representing clients in nearly every type of legal dispute. Whereas sole practitioners and small firms often concentrate on one or two areas in the law, a midsize firm can practice in all areas, thus increasing both its clientele and its revenue. Additionally, because the firm is larger, each partner may carry fewer nonlegal burdens than they do at small firms. Midsize firms should generate more revenue and, consequently, have fewer cash-flow problems. Because their cash flow is generally higher, the opportunity for increased compensation should also exist. As with small firms, many midsize firms offer a good quality of life to their employees. Their benefit packages may be very competitive, but attorneys may not be required to work as many hours in order to succeed as are their counterparts at large firms or multinational corporations. Cons of Working for a Midsize Firm. Although midsize firms and legal service organizations often provide excellent benefits and allow the attorneys to have a life outside the office, the potential earnings of managing partners pale in comparison to those of managing partners at large firms. Additionally, the owner or managing partner of a midsize firm often faces the same concerns as the owner of a small firm. Depending on the success of the firm, there could be cash-flow issues, employee termination issues, and issues affecting the firm’s reputation in the community. Though these are important concerns, they are just as important as client responsibilities and the traditional day-today practice of the law necessary to generate revenue. Finally, as with small firms, the cost of provid-

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ing benefits for employees and their dependents is difficult for many midsize firm owners. It is usually necessary to offer benefits (sometimes including paying the new associate’s bar examination and study course fees) in order to attract top talent, but the return on investment for the firm may not be seen for some time. Moreover, while attorneys at midsize firm may work fewer hours than those at major corporations, they still must work far more than forty hours per week. Because benefits and support staff represent significant expenses, many firms hire one new attorney instead of two, paying the attorney a high salary and expecting at least eighty hours of work per week in exchange. The firm thereby saves money by paying for only one benefits package and one secretary, even if the salary itself is equivalent to the combined salaries of two lawyers who are expected to work forty-hour weeks. Costs Payroll and Benefits: The single largest expense in a midsize law firm or legal service organization is payroll and benefits. Because associate attorneys typically earn higher salaries as the size of their firms increase, the overhead at midsize firms can be very high. Additionally, the benefits packages offered to these employees can be very attractive—but costly for the owner to provide. Supplies: As the size of a law firm increases, so do the costs of supplying employees with the necessary day-to-day materials. Computers, software, paper, pens, and phones all combine to represent large costs that must be borne by the firm. External Services: The larger a firm, the more likely it is to outsource services such as lawn care, maintenance, and even marketing or public relations, should those services be necessary. Additionally, as the number of attorneys increases, the degree of ownership or responsibility a managing partner may feel decreases proportionally. Utilities: Just as with small firms, midsize firms and legal service providers are required to pay their electric, heat, Internet, mortgage or rent, and other costs. Taxes: Law firms usually pay the yearly taxes and fees that their attorneys are required to pay in order to practice law in a given state. They also pay corporate income taxes, payroll taxes, and

property taxes. Legal service providers may be tax-exempt nonprofit entities, but they must still pay payroll taxes on employee income. Large Law Firms and Legal Service Providers Large law firms employ more than fifty attorneys, sometimes far more. The largest are multinational for-profit entities and nonprofit NGOs that practice on multiple continents and represent the interests of their clients across national borders. Potential Annual Earnings Scale. According to the BLS, the mean annual salary for a lawyer in 2008 was $124,750. The mean annual salary for a paralegal or legal assistant was $48,790. At large firms, each associate attorney earns somewhere between, generally, $90,000 and $160,000, and the highest-earning partners earn more than $1 million. The American Lawyer has reported that in 2007, the five largest law firms in the United States each reported revenues of between $1.38 billion and $2.17 billion. Clientele Interaction. Attorneys at the largest law firms typically have less interaction with their clients than do attorneys at smaller firms. For example, it is common for associate attorneys to work on files for dozens of clients without ever meeting one. Traditionally, associates receive assignments from partners, complete the requested work, and then returns the relevant files to the partners who gave them the assignments. It is the partners who then meet with clients, if necessary, or attend court hearings. Because many clients are sophisticated entities, rather than individuals, it is sometimes not even necessary to meet face-to-face with clients or client representatives. At big firms, attorneys are paid solely to do legal work. There are hosts of paralegals, administrative assistants, and secretaries to do everything else. Additionally, when clients call, they reach attorneys’ assistants, not the attorneys themselves. Amenities, Atmosphere, and Physical Grounds. The largest law firms cater to the wealthiest and most sophisticated clients, who can afford to pay the highest fees in exchange for the best legal representation. Accordingly, most large law firms are lavish when compared to their small and medium counterparts. The grounds are well kept, the offices are large and well equipped with the newest technology, and it is not uncommon to find art adorning the walls. Because attorneys are paid

Legal Services and Law Firms to bill hours, on-site incentives exist to keep them inside, such as on-site coffee bars, dry-cleaning services, and even meal and car services for those attorneys who stay after hours to work. The largest law firms and legal service providers require ample office space. Consequently, they often occupy multiple floors in skyscrapers or other defining buildings. Many of the firms are also multinational, and some individual locations may employ hundreds of people, taking into account all levels of attorneys, paralegals, and administrative support. Typical Number of Employees. Firms employing fifty or more people are generally considered to be large firms. While fifty attorneys could be housed in one central in-state office, one thousand attorneys must be spread throughout several offices. Large firms and legal service organizations generally have the financial resources necessary to hire the proper number of attorneys and administrative personnel to enable the firm to operate at maximum productivity. A single big law firm may employ thousands of people worldwide. Traditional Geographic Locations. The most successful law firms often have offices in large U.S. cities such as New York, Boston, Chicago, Los Angeles, and Washington, D.C., as well as in international metropolises such as London and Tokyo. Additionally, many firms have smaller offices in smaller cities that are commonly referred to as satellite offices. These regional offices do not employ as many attorneys and administrative support staff, but they help build and maintain the national and international presence of the firm. Large legal service providers, such as legal aid agencies, are traditionally located in large cities, as such locations provide the greatest service to the largest number of individuals in need of representation. Pros of Working for a Large Firm. Those in charge of large firms are among the most well compensated attorneys in the world. They are partners and, accordingly, get a share of the success of an extremely large business. In the largest firms, most partners earn over $1 million annually, including bonuses. Partners are treated very well within the firm, as they have several associate attorneys working on their files and reporting to them; they have wealthy and successful clients; and they enjoy a high standard of living. For other attorneys, and even administrative employees, compensation at

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these firms is very competitive, as are the benefit packages. Though the work may be difficult and the hours long, employees are compensated for these sacrifices. In fact, large firms pay bonuses to associates and will even assist with bar exam fees, relocation expenses, and other professional fees associated with the practice of law. Cons of Working for a Large Firm. The life of a partner in a large firm is not without sacrifice. The hours spent at the office can be grueling. As a general rule, attorneys at large firms are required to bill a minimum of eighteen hundred hours per year. The term “billing” does not refer to all time spent at work, however. Rather, this term describes only time that can legitimately be billed to clients; that is, time actually spent on files, including such activities as researching, writing, deposing a witness, or attending court. Furthermore, there are often limits for certain projects. As a result, while an attorney may spend ten hours working on a particular project, he or she may only be able to bill five or six of those hours toward his or her annual billable goal. After vacation and holidays, a typical billable requirement averages around forty billed hours per week. Since not all time spent at work is billable, big firms’ attorneys are at work many more than forty hours per week (seventy-, eighty-, and even onehundred-hour work weeks are not unheard of in big firms). This leaves little time for a social life or a family. Additionally, the environment is often stressful. Attorneys’ work products are carefully scrutinized and, if not satisfactory to their superiors, must be perfected. Finally, attorneys must wait several years at large firms before learning whether they will become partners. In large firms, the wait is often at least seven years. Costs Payroll and Benefits: Despite the requirement to bill a certain number of hours, most attorneys are paid salaries. They may also earn bonuses, however, and each employee at a large firm is offered a very competitive, and expensive, benefits package. In order to attract top graduates from the best law schools, firms will offer to pay many nonlegal expenses. For example, some firms offer a onetime bonus (up to $50,000) to reward and attract associates who, following their graduation from law school, served for a

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Corporate lawyers ensure that business transactions are legal. According to PayScale.com, a little more than two-thirds of corporate lawyers are men. (©Endostock/Dreamstime.com)

year as a law clerk for a prominent judge or at a high-level appeals court. Supplies: Large firms and multinational legal service providers must have an integrated network, through which an attorney in New York can communicate with an attorney in Tokyo. Accordingly, state-of-the-art computer and phone systems, printers, fax machines, and network capabilities for thousands of employees are necessities. Firms also require vast amounts of paper, pens, copiers and copying supplies, and other general office supplies and equipment. As technology changes, the largest firms must constantly adapt to keep pace with their competitors. External Services: Big firms outsource almost everything unrelated to the practice of law. In addition to traditional services such as building maintenance and groundskeeping, these businesses may even outsource such functions as public relations and litigation management. They may also hire experts to help with such functions as jury selection or to act as consul-

tants in cases requiring expertise, such as those involving the precise effects of exposure to particular chemicals. Because many of these costs eventually are absorbed by wealthy clients—clients who expect their attorneys to work only on legal issues—big firms can afford to outsource and hire experts. Utilities: Even multinational corporations must pay for building usage, electricity, heat, and other associated costs. With so many employees in several different buildings, such costs can be extensive. Before deciding to open new offices, firms must be sure that the demand for their services in that particular geographic area is sufficient to overcome the overhead costs. Taxes: Like any other business, big firms and their employees must pay taxes on income. Further, it is almost a given in big firms that the firm pays the cost of its attorneys’ employment-related taxes, such as bar licensure fees and any other mandatory fees attorneys must pay in order to practice law in a particular jurisdiction.

Legal Services and Law Firms ORGANIZATIONAL STRUCTURE AND JOB ROLES Any size law firm or legal services provider will need to account for activities in the following areas. In smaller companies and firms, one person often holds several roles within several groups. In larger companies, specialists generally fulfill unique requirements in specific groups. Regardless of size and scope, the functions must be fulfilled. The following umbrella categories apply to the organizational structure of law firms and legal service providers: ■ ■ ■ ■ ■ ■

Legal Practice Law firms and legal service providers exist primarily to practice law and to assist individuals or corporations in need of legal advice. At large firms, there may exist several categories of attorneys and administrative staff who do the work necessary to satisfy and retain clients and to earn revenue. Attorneys research the law, attend and argue at court hearings and trials, advise their clients, and draft documents, among other responsibilities. Administrative staff assist the attorneys in any number of ways, from helping keep files up to date to researching the law and drafting memoranda. Legal occupations may include the following: ■

Legal Practice Business Management Customer Service Sales and Marketing Facilities and Security Human Resources

■ ■ ■ ■ ■

OCCUPATION

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Managing Partner Partner Senior Associate Attorney Associate Attorney First-Year Associate Attorney Staff Attorney

SPECIALTIES

Lawyers Specialty

Responsibilities

Corporate lawyers

Advise corporations on legal rights, obligations, and privileges in accordance with the constitution, statutes, decisions, and ordinances.

Criminal lawyers

Specialize in legal cases dealing with offenses against society or the state, such as theft, murder, and arson. They are responsible for preparing a case for trial, examining and cross-examining witnesses, and summarizing the case to the jury.

District attorneys

Conduct prosecutions in court proceedings for a city, a county, a state, or the federal government; also known as prosecuting attorneys, city attorneys, or solicitors.

Environmental lawyers

Specialize in the policies of environmental law and help their clients follow those statutes. They may help clients properly prepare and file for licenses and applications and represent parties such as interest groups and construction firms in their dealings with the U.S. Environmental Protection Agency.

Patent lawyers

Specialize in patent law and advise clients such as inventors, investors, and manufacturers on whether an invention can be patented, as well as on other issues, such as infringement on patents, validity of patents, and similar items.

1038 ■ ■ ■ ■ ■ ■ ■ ■

Legal Services and Law Firms

Of Counsel Attorney Law Clerk Intern Paralegal Administrative Assistant Legal Secretary Receptionist Volunteer (at nonprofit legal service providers)

practices. Although managing partners are attorneys first and are still focused on the practice of law, a large portion of their time may be spent on nonlegal endeavors related to their firms’ overall success. Business management occupations may include the following: ■ ■

Business Management Business managers are responsible for the dayto-day operations of their firms. Typical responsibilities include directing the litigation in which the firm is involved, establishing the vision for the firm, maintaining relationships with important clients, and managing the employees and finances. Management at a firm is typically the job of the managing partner or partners, traditionally the most senior attorneys at the firm and those with particular expertise in the legal market in which the firm

OCCUPATION

Managing Partner Partner

Customer Service Unlike most industries, in which customers can call a 1-800 number to reach customer service, customer service at law firms is relatively individualized. There is not a dedicated team of employees fielding calls from across the world; rather, clients in need of service call the attorney or paralegal handling their matter directly. Customer service occupations may include the following:

PROFILE

Paralegal Considerations

Qualifications

Description

Prepares legal documents under the direction of a lawyer.

Career clusters

Business, Management, and Administration; Law, Public Safety, and Security

Interests

Data; people

Working conditions

Work inside

Minimum education level

On-the-job training; junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

SEC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Legal Services and Law Firms ■ ■ ■ ■ ■

Attorney Paralegal Administrative Assistant Secretary Receptionist

Sales and Marketing Because law firms are composed, for the most part, of attorneys and assistants who also have some degree of legal training, there often is not a dedicated sales and marketing department. Law firms in need of advertising and marketing assistance often enter into contracts with public relations or marketing businesses to provide those services. That being said, attorneys—and especially partners—bear a responsibility to bring in, and keep, clients. Commonly referred to in the legal industry as “making rain,” the business of attracting clients is extremely important to the continued success of the firm. At some point, all attorneys bear a level of responsibility for helping their firms attract and retain clients. Sales and marketing occupations may include the following:

Human Resources The scope and role of a legal human resources department depends on the size of a given firm or service provider and its needs. For example, many national and international law firms have a dedicated human resources department to review applications submitted by prospective employees. At small and midsize firms—and especially at nonprofit legal service providers—managing partners and partners often act as de facto human resources officers. They typically solicit for, collect, and sort through applications, conduct the interviews, negotiate employment contracts, and assist new employees with issues related to their benefits packages. Occupations in this business area depend on the size of the firm and its status as either a forprofit business or a nonprofit legal service provider. Human resources occupations may include the following: ■ ■ ■

■ ■ ■ ■ ■

Managing Partner Partner Senior Associate Attorney Associate Attorney Of Counsel Attorney

Facilities and Security Depending on the size and location of a given law firm, certain facilities and security services may, in part, be provided to the firm as part of a lease agreement if, for example, the firm rents one floor in a skyscraper owned by another party. Otherwise, facilities and security concerns for a law firm or legal service provider are no different from those for any other corporation. The firm or service provider will either directly employ security personnel, or it will outsource such services. Facilities and security occupations may include the following: ■ ■ ■ ■

■

Security Manager Security Agent/Officer Building Maintenance and Repair Worker Heating, Ventilation, and AirConditioning (HVAC) Technician Computer Security Specialist

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■ ■

Human Resources Manager Human Resources Generalist Benefits Specialist Managing Partner Partner

INDUSTRY

OUTLOOK

Overview Like many other industries, the law firm and legal services industry rises and falls, to an extent, as the economy rises and falls. This was the case when the United States faced a significant economic downturn beginning in late 2007. As a result of larger national and global economic problems, attorneys at most levels noticed a negative change in the years 2008 and 2009. When significant numbers of clients and potential clients are themselves are being laid off or are having their wages and hours reduced, they are less inclined to seek legal counsel. With less money to spend, individuals are less likely to purchase property, enter into complex contracts, or engage in other activities that may traditionally require the service of lawyers. Similarly, corporations that have experienced financial losses and that have had to reduce their workforce are less likely to engage in mergers and acquisitions of new businesses, and they may be less

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likely to make complex employment decisions— ventures that traditionally would require the services of employment attorneys. Attorneys may always be terminated for poor performance. Industry-wide layoffs, however, are usually relatively rare. In 2009, though, some of the largest—and traditionally the most successful— law firms undertook unusual measures aimed at surviving the tough economy. Some firms laid off attorneys, while others instituted pay cuts or froze wages. Finally, some firms delayed the traditional fall hiring of the new class of first-year associates. Though new attorneys still gained positions with these firms, they had to wait six months, or even a year, before beginning their employment and earning a paycheck. Positions at legal services providers may be more stable than positions in law firms during economic downturns. Because many of the former entities are nonprofits, their bottom line is not associated solely with finances. Additionally, the salaries of attorneys, paralegals, and administrative assistants employed by legal service providers are traditionally lower than the salaries of those same positions at large law firms. To underscore this point, a staff attorney at a legal service provider, such as a legal aid agency, may earn approximately $60,000 annually. A first-year associate attorney at one of New York’s largest law firms earns approximately $160,000 annually. When a for-profit firm struggles economically, it is an easier decision to lay off the attorney making $160,000, than it is for the legal aid agency to lay off an attorney making $60,000. Nevertheless, the long-term outlook for both the legal services and the law firm segments of the industry is encouraging. In the period from 2006 to 2016, the BLS estimates that there will be an 11 percent increase in the number of lawyers in the United States, as well as a 22 percent increase in the number of paralegals and administrative assistants. The national average percentage increase for all occupations in the United States in this time period is projected to be 10.36 percent. When the numbers for the legal profession are compared to the national averages, it becomes clear that the need for attorneys will be both stable and growing and, equally as important, the need for administrative support positions and paralegals is expected to grow at more than twice the national average rate. For those considering a career in the law firm and

legal services industry, these statistics should be encouraging. Employment Advantages The U.S. law firm and legal service industry has been consistently stable since the country’s inception. Individuals who enjoy solving problems, interacting with people, conducting research, writing, and public speaking should consider a career in this industry. Moreover, becoming a licensed attorney does not limit one’s employment prospects, should one decide later not to practice law in the traditional sense. Many people with law degrees work in business, marketing, academia, government, and many other employment sectors. Similarly, the skills of a paralegal and administrative assistant are easily transferable to other industries, and they provide excellent work experience for people who decide to attend law school and become attorneys. Notwithstanding economic difficulties, as evidenced by the 2007-2009 global recession, there are always parties and corporations that need legal advice and assistance. This industry has persisted for centuries and is an ingrained segment of society, business, and the economy. For those who enjoy challenging and intellectually stimulating work, and those who desire to make a difference in their clients’ lives, a legal career may be rewarding. Annual Earnings As of May, 2009, there were approximately 1,003,000 people employed nationally in the legal industry. This figure includes practicing attorneys, judges, paralegals, and other legal support workers. According to the U.S. Census Bureau, the industry’s total U.S. revenues in 2007 were $251 billion. According to the BLS, the average wage in the profession in 2008 was $92,270 annually, while the average wage for lawyers in particular was $124,750. Approximately half of those in the legal profession worked as attorneys, while over 250,000 were paralegals and administrative assistants. The average wage of a paralegal or administrative assistant was $48,790 annually. The outlook is strong for the law firm and legal services industry. The percentage increase output in terms of chained dollars (a method of adjusting real dollar amounts for inflation over the course of time) is expected to be 3.4 percent for the time period 2006-2016, slightly above the national aver-

Legal Services and Law Firms age of 2.9 percent. Although no industry appears to be immune from economic downturns, the BLS expects the legal industry to outperform more than half the other industries in the United States in the long term.

RELATED RESOURCES FOR FURTHER RESEARCH American Association for Justice 777 6th St. NW Washington, DC 20001 Tel: (800) 424-2725 http://www.justice.org American Bar Association 321 N Clark St. Chicago, IL 60654-7598 Tel: (800) 285-2221 http://www.abanet.org American Civil Liberties Union 125 Broad St. New York, NY 10004 Tel: (212) 507-3300 http://www.aclu.org Amnesty International USA 5 Penn Plaza New York, NY 10001 Tel: (212) 807-8400 http://www.amnestyusa.org Legal Aid Society 199 Water St. New York, NY 10038 Tel: (212) 577-3300 http://www.legal-aid.org National Association for Law Placement 1025 Connecticut Ave. NW, Suite 1110 Washington, DC 20036-5413 Tel: (202) 835-1001 http://www.nalp.org National Association of Criminal Defense Lawyers 1660 L St. NW, 12th Floor Washington, DC 20036

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Tel: (202) 872-8600 http://www.criminaljustice.org National Legal Aid and Defender Organization 1140 Connecticut Ave. NW, Suite 900 Washington, DC 20036 Tel: (202) 452-0620 http://www.nlada.org

ABOUT

THE

AUTHOR

Andrew Walter is an attorney licensed to practice in the state of Connecticut. He received a bachelor of arts degree in international management, with a minor in English, from Gustavus Adolphus College in St. Peter, Minnesota, and a juris doctorate from Roger Williams University School of Law in Bristol, Rhode Island. After having served as a law clerk for the judges of the Connecticut Superior Court, he is currently employed as an attorney at the Connecticut Supreme Court, engaging in a variety of civil and criminal issues before that court.

FURTHER

READING

Anderson, Wayne, and Marilyn Headrick. The Legal Profession: Is It for You? Cincinnati: Thomson Executive Press, 1996. Echaore-McDavid, Susan. Career Opportunities in Law and the Legal Industry. New York: Facts On File, 2002. Feuer, Alan. “A Study in How Major Law Firms Are Shrinking.” The New York Times, June 5, 2009. Friedman, Lawrence M. American Law in the Twentieth Century. New Haven, Conn.: Yale University Press, 2002. Furi-Perry, Ursula. Fifty Unique Legal Paths: How to Find the Right Job. Chicago: American Bar Association, 2008. Harvard Law School Program on the Legal Profession. “Analysis of the Legal Profession and Law Firms.” http://www.law.harvard.edu/ programs/plp/pages/statistics.php. Hazard, Geoffrey C., and Angelo Dondi. Legal Ethics: A Comparative Study. Stanford, Calif.: Stanford University Press, 2004.

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Munneke, Gary. Careers in Law. 3d ed. New York: McGraw-Hill, 2003. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Lawyers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos053.htm. _______. “Paralegals and Legal Assistants.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos114.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://

www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Williams, Sean, and David Nersessian. Overview of the Professional Services Industry and the Legal Profession. Cambridge, Mass.: Harvard Law School Program on the Legal Profession, 2007. http://www.law.harvard.edu/programs/ plp/pdf/Industry_Report_2007.pdf.

Libraries and Archives Industry ©iStockphoto.com

INDUSTRY

SNAPSHOT

General Industry: Government and Public Administration Career Cluster: Government and Public Administration Occupations Subcategory Industries: Archives; Bookmobiles; Centers for Documentation; Circulating Libraries; Film Archives; Lending Libraries; Libraries; Motion Picture Film Libraries and Archives; Music Archives; Reference Libraries Related Industries: Local Public Administration; Publishing and Information Industry Annual Domestic Revenues: $1.9 billion USD (U.S. Census Bureau, Economic Census, 2007) Annual International Revenues: $43.3 billion USD (International Federation of Library Associations, 2003) Annual Global Revenues: $45.2 billion USD (International Federation of Library Associations, 2003) NAICS Number: 51912

INDUSTRY

the “finished products” are then housed in libraries. Both of these institutions exist for the primary purposes of collecting and preserving materials, making these available to interested parties, and using them to answer questions. In addition, libraries offer such services as public use of computers and the Internet, borrowing privileges for a range of media (books, films, compact discs, and so on), and in-person classes, all of which are free of charge at public libraries.

History of the Industry Archaeological evidence indicates that archives and libraries have existed since ancient times, with sites in what used to be the empires of Sumeria, Babylonia, and Assyria. The most important and well known of these early libraries was that of Alexandria in Egypt. Handwritten clay tablets and papyrus rolls, made from reeds, were typical of this era. Literature arose with the Greek and Roman civilizations. Wealthy citizens amassed impressive private holdings of epics, poetry, and the like by such classical greats as Sophocles and Euripides, while

DEFINITION

Summary An archive is a repository of original documents, such as diaries, manuscripts, photographs, and letters. Historians and other researchers use this “raw material” to write books and articles for magazines; 1043

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Libraries and Archives Industry

in what is now Germany, produced the now famous Bible of 1455. With mass production of books possible, their cost diminished considerably, giving rise to increased demand, which led to the establishment of private libraries. Members of royalty, not to be outdone, often donated their monumental collections to found public libraries. Influential individuals, such as Martin Luther, became advocates for libraries and encouraged their founding and maintenance. The Enlightenment in the Libraries and archives may be one-person operations or may be institutions with eighteenth century was a furhundreds of employees. (©William Britten/iStockphoto.com) ther impetus to the growth of libraries and archives throughout Europe and the British colonies temples to the various gods contained public recin the new world. It was also at this juncture that arords and official histories. Reading materials conchives and libraries became separate institutions. sisted of scrolls of parchment, made from the skins Up to this time, documents, records, books, and of sheep or goats, and vellum, a more durable subperiodicals had been housed in single repositories. stance created from unsplit lambskin, kidskin, or With the turmoil of the French Revolution, the calfskin. value of preserving national heritage through The end of the Roman Empire in 476 c.e. historic documents and public records was recbrought with it marauding bands of Vandals, ognized. In 1789, the Archives Nationales were Goths, Huns, and other barbarian tribes, who founded in France. Their underlying model, in burned and pillaged cities and the libraries they which the state is responsible for collecting and harbored. This destruction was offset by other depreserving important papers, was soon copied by velopments, principally the rise of monasteries other governments around the world. throughout Europe and especially in Ireland. The With the nineteenth century came the establishmonks of these bastions of faith scoured the counment of national repositories, such as the British tryside for ancient manuscripts and laboriously Library and the Library of Congress in the United copied them by hand. States. Library and archive administration also beParalleling this trend was the establishment of came professionalized during that century. In 1876, universities, which, like the monasteries, were unthe American Library Association was founded, der the purview of the church. In large cities such and Melvil Dewey created his decimal classification as Paris, Oxford, and Heidelberg, with stable social system, which is still in wide use today. This period structures and economies, more people were enalso saw the creation of specialized schools for the couraged to matriculate, so the demand for books training of librarians and archivists. By the twentiincreased, and college libraries were established. eth century, library construction and maintenance By this time, paper had been introduced via the in the United States was furthered by such philantrade routes from China, and a primitive form of thropists as steel magnate Andrew Carnegie and by the book, known as the codex, was displacing governmental foresight. The Library Services and parchment and vellum. Construction Act of 1964, for example, helped ensure that just about any school or town of any size The Renaissance saw the advent of printing with had a library that it could call its own. movable type, when Johann Gutenberg of Mainz,

Libraries and Archives Industry The Industry Today Archives and libraries have evolved considerably from what they were in the past, namely, warehouses for papers and books run largely by clerks. Today, they reflect not only advances in technology but also the wishes of the clientele they serve, and they are administered by highly trained professionals. In the United States, the majority of librarians possess undergraduate degrees in the liberal arts and master’s degrees in library science from schools accredited by the American Library Association. Archivists must also possess master’s degrees, and, while a few institutions of higher learning offer archival studies or archival science programs, it is much more common for archivists to hold master’s degrees in history or library science, with course work in such areas as records management, materials preservation, and so on. Over time, libraries and archives have increased greatly in number and in the process have become

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quite specialized. According to the American Library Directory, 2009-2010, there are 29,880 libraries in the United States. Some of these are legal libraries at law firms, in which librarians must also be familiar with the law, oftentimes holding juris doctor degrees. Others are medical libraries at hospitals, where librarians need to understand medical terminology and procedures. Corporate libraries are located at the headquarters of Fortune 500 companies, and academic libraries exist on college campuses across the country. By far the most common type of library, however, is the public library, which can be found in the smallest towns and the largest metropolitan areas. Funded by appropriations from local governments, these institutions are often regarded as among the best uses of taxpayer dollars. The services they offer are many, varied, and generally free of charge. Libraries today offer their visitors traditional services with a modern-day emphasis on conve-

Petaluma, California, is the site of a Carnegie library, built in 1906. Andrew Carnegie donated $12,500 of the $20,000 needed to build the structure, which served as a library until 1976, when it was converted into a museum. (©Richard Brookes/ Dreamstime.com)

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nience and expediency. A cornerstone of public librarianship, for example, has been reference service. Traditionally stationed at a reference desk or information desk, reference librarians receive customers, known in the profession as “patrons,” or sometimes as “users” or “borrowers.” Patrons may ask for information on any topic, from the telephone number of a local business to how plants harness the rays of the sun in the process known as photosynthesis. While patrons may pose their queries in person or over the telephone as they have in the past, alternative time-saving options now abound. Virtual reference allows patrons to communicate with librarians over the Internet via real-time chat software. This process allows patrons the luxury of receiving answers regardless of location or time of day, assuming that they have Internet access. The rise of the Internet itself and, more particularly, of freely available search engines such as Google, has been something of a double-edged sword for the profession, as many individuals now choose to do their own research, meaning that demand for this service has diminished somewhat. However, the questions posed, while fewer in number, have increased in complexity. For example, a patron may want to know if a book written in, say, French, has ever been translated into English and, if so, when it was published, whether it is available for loan, and from which library. Archives, too, have harnessed the World Wide Web to enhance service to their customers. Historically, those who wished to view public records or other documents had to do so in person. Many archives have digitized their holdings or are in the process of doing so, allowing researchers to view items of interest at any time of the day or night, without the expenditure of time and travel necessary to visit the archive in person. Today, archivists work in a variety of locations. Many are employed by government, such as those at the National Archives and Records Administration (NARA). Academia represents another generator of archivist jobs, as many college and university departments are responsible for preserving one-of-akind documents and objects. Some archivists are employed by private firms, while still others may make a living at state and local historical societies. Classes on a variety of topics are held at libraries. Newly arrived immigrants may take English as a sec-

ond language (ESL), the unemployed may learn how to navigate the World Wide Web to search for jobs or polish their resumes, and senior citizens may learn new hobbies such as birdwatching or quilting. Because there has always been a teaching element to this profession, these classes are generally taught by librarians themselves, especially if they happen to have personal knowledge of the subjects. At the same time, librarians can recommend to their students relevant books, magazines, and other materials that their libraries have in their collections. With the onset of the recession of 2007-2009, library usage increased dramatically, as people canceled magazine subscriptions, bought fewer books, and unplugged their home computers. Because library budgets remained flat or even declined, however, long waits for computer stations or for copies of popular novels became more common. Safety and security concerns at libraries have increased, especially at large facilities located in major metropolitan areas. Some libraries have resorted to having uniformed police officers patrol the aisles, while others have hired private security firms for this purpose. While violent incidents are still rare, the threat of unpleasant occurrences can dissuade people from visiting their local libraries, and managers are loathe to have unflattering coverage of their facilities appear in local newspapers or on television. Libraries have been affected by a continuing shift from print to electronic and digital resources. Many reference books are now being purchased as part of electronic databases, which may be accessed remotely via the Internet. Novels have been available on compact disc for some time, and they are now becoming available as downloadable e-books, which can be read on personal computers; dedicated e-book readers, such as Amazon’s Kindle and Barnes and Noble’s Nook; or multipurpose mobile devices, such as tablet computers, handheld computers, and smart phones.

INDUSTRY MARKET SEGMENTS Libraries and archives may be one-person operations or may be institutions with hundreds of employees, such as the Library of Congress or the National Archives. They serve patrons from all walks

Libraries and Archives Industry of life, from members of the public to academics pursuing professional research. The following discussion gives specifics about small, midsize, and large institutions. Small Institutions Libraries typically reflect their surrounding geographic and physical locations. Therefore, a rural community may have a single room set aside in its city hall as its designated library, with a single employee, known as a “solo librarian.” A small library is defined as a facility serving a population of from ten thousand to twenty-five thousand. Libraries in this category generally have a minimal selection of materials and only a handful of public-access computers for Internet searching. Potential Annual Earnings Scale. The average salary for a solo librarian varies with geographic location and the supply-to-demand ratio of librarians in the vicinity. The U.S. Bureau of Labor Statistics (BLS) reports that as of May, 2009, the median annual wage of all librarians was $53,710. The median annual wage of all archivists was $46,470. More precise figures can be found by consulting the most recent edition of the American Salary and Wages Survey, which is available in many libraries. For librarian positions specifically, the single best source of salary information is the ALA-APA Salary Survey: A Survey of Library Positions Requiring an ALA-Accredited Master’s Degree, which is published annually by the American Library Association. According to this document, the median annual salary of a nonsupervisory librarian working in a small library is $43,519. Clientele Interaction. Relationships between librarians or archivists and their patrons generally are informal and relaxed. At small libraries especially, patrons make weekly or even daily visits, and librarians get to know them on a first-name basis. Through long experience with these frequent visitors, librarians learn their favorite authors and literary tastes, and they begin to make suggestions to patrons regarding the arrival of new titles or upand-coming writers whose work is in a similar vein to that of authors the patrons already enjoy. This kind of personal service, which is becoming increasingly rare in today’s corporatized society, is very much appreciated on the part of the public. The goodwill engendered pays dividends in public advocacy of neighborhood libraries when elected

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officials attempt to curtail hours or close library branches altogether. Amenities, Atmosphere, and Physical Grounds. Small libraries come in a variety of guises. Some are almost invisible, as they are housed in buildings serving other functions. For example, a small-town city hall may have one room set aside for the community library, while other areas contain offices, meeting rooms, and the like. It is not uncommon for small libraries to be found in historic structures that have been rehabilitated for their new use, such as former churches, fire halls, or schools. Small archives, on the other hand, are usually found within the confines of college libraries or historical society basements. As small libraries and archives invariably have small budgets, materials and equipment available for use by visitors are minimal and fairly basic. A small library may have only a handful of computer stations for Internet use, two dozen or so films on digital video disc (DVD), and perhaps a few hundred books available for checkout. All the traditional services of larger libraries or archives are generally available, but taking advantage of them may be less convenient, involving longer wait times for material to arrive as a result of the small library’s distance from a main branch or urban center. Regardless of size or budget, maintenance of the building and grounds is almost always contracted out, so that private firms are responsible for snow removal, lawn care, and so forth. Typical Number of Employees. Small libraries may have only one employee, but they will always employ full-fledged librarians or archivists. In some cases, a paraprofessional may also be on hand, such as a library clerk or page, to perform routine tasks, such as unloading books from book drops and putting out current copies of local newspapers. These clerks free librarians to answer reference questions and solve patron problems. Traditional Geographic Locations. Small libraries are most frequently located in small towns and rural areas. They are stand-alone facilities serving the local population and most commonly are political subunits of the local government. However, large metropolitan areas can also have small libraries, although in such cases, they are small branches of larger library networks or systems. Such city-administered library networks generally have central or main branches located downtown.

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Pros of Working for a Small Library or Archive. Librarians and archivists derive a deep sense of satisfaction from being able to answer questions or solve problems for their patrons. Because of the more intimate working relationship, helping someone find just the right book or document goes beyond merely doing one’s job; on the part of both the professional and the patron, it seems more personal than that, as if the former were doing the latter a favor. The fact that the staff of a small library or archive is limited to one or two people generally makes service more responsive to requests, since patrons need not go through various levels of management or be shunted from one department to another, as might be the case at larger institutions. Cons of Working for a Small Library or Archive. The one or two employees of a small library or archive must handle all necessary tasks related to running their institution, from shelving books and documents to fielding questions from visitors to opening the daily mail. The job may therefore involve a good deal of stress, as the workday is a constant balancing act between providing personal attention to users and still performing all requisite daily tasks. Because small libraries and archives are not as heavily used as are larger institutions, they are often open fewer hours each week. They are generally open for business only during weekdays, and even then probably less than the standard eight hours per day. The resulting short shifts translate into reduced earning potential for their employees. Costs Payroll and Benefits: Librarians and archivists, by virtue of their professional education and job duties, are salaried. Some employees, such as assistant librarians and library clerks, are represented by unions, such as the American Federation of State, County, and Municipal Employees (AFSCME), as a majority of public libraries are governmental entities. Therefore, these employees are entitled to vacation and sick leave, prorated if they work less than full time. Supplies: Libraries and archives require books and other media, as well as shelving on which to store them. They need computers, printers, photocopiers, consumables such as paper and toner, other basic office supplies, and some cleaning supplies.

External Services: Building maintenance, groundskeeping, and janitorial service are almost always provided by private contractors. Repair and maintenance of photocopiers and other equipment are managed by the companies leasing that equipment. Utilities: Libraries must pay for broadband Internet service, telephone, electricity, water, and sewage service. Taxes: The majority of libraries are local government entities and therefore enjoy tax-exempt status, although they must still pay employee payroll taxes. Midsize Institutions A midsize public library is defined as a facility serving a population of from 25,000 to just under 100,000. Midsize libraries typically are housed in buildings constructed for that specific purpose or are part of multifunction spaces, such as structures that also contain indoor parks, health and fitness centers, and community meeting rooms. These are often found in suburban areas. Potential Annual Earnings Scale. Salaries vary with geographic location and the supply-to-demand ratio of librarians in the vicinity. The BLS reports that as of May, 2009, the median annual wage of all librarians was $53,710. The median annual wage of all archivists was $46,470. According to the ALAAPA Salary Survey, a department head or senior manager earns approximately $55,000 annually, while a manager or supervisory librarian earns $48,616 per year. Clientele Interaction. Midsize libraries are often de facto community centers, the modern-day versions of town squares, where citizens come not just to acquire their reading material but also to meet friends, conduct business in a meeting room, or purchase coffee in one of the interior coffee shops that are becoming increasingly common in newer libraries. Therefore, librarians’ interactions with individual patrons are likely to be limited to answering questions, checking out materials, and conducting other business that takes only a few minutes. In the world of academia, archivists are more likely to confer with department heads and professors on campus than with members of the public. Amenities, Atmosphere, and Physical Grounds. The stereotype of the silent library, where a middle-aged woman with her hair in a bun

Libraries and Archives Industry tells people to be quiet, is a thing of the past. Today, midsize libraries are considered to be “working libraries.” They host high-spirited high school students who talk as much as they study, mothers with squalling infants in tow, and other frenetic patrons of all ages. This level of chaos is akin to rush hour on the freeway and occurs about the same time, late afternoon. There is a definite rhythm to the workday, however, and lulls occur at mid-morning and after lunch. A varied selection of films on DVD, audio books, large print novels, current newspapers and magazines, and other materials is available to the public. Typical Number of Employees. Midsize libraries can have variable staffing levels, depending on the square footage of the establishment and the gate count (number of people entering the premises). However, five to ten librarians, library clerks, and shelvers is typical for this category. Archives follow a similar pattern, sometimes hiring additional staff during busy periods. They may take on interns, who earn credits in lieu of a paycheck, as they gain on-the-job experience. Traditional Geographic Locations. Midsize libraries are usually located in suburban areas surrounding cities and major metropolitan areas. Many are deliberately sited along or near major highways, freeways, or other arterial thoroughfares to make entrance and exit convenient for those who live in bedroom communities. Archives in this category can often be found on the campuses of colleges and universities, where their efforts support both the curricula and the missions of their host institutions. Pros of Working for a Midsize Library or Archive. Employees of midsize institutions get to meet people from all walks of life. Dealing with such a diverse clientele helps them grow professionally, since the variety of questions and requests they receive almost invariably involves research and study. Thus librarians and archivists learn much in the course of their work. The fast-paced nature of the workday makes the time seem to go by quickly. Because there are more positions and job openings available at midsize facilities than at small facilities, there are greater opportunities for career advancement. Cons of Working for a Midsize Library or Archive. The hectic pace of most days does not lend itself to forming lasting or meaningful relationships, such as may be formed at small libraries and

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archives. By the same token, there is usually little time to interact with coworkers. Library jobs can be hectic and stressful, involving people waiting in line at the reference desk, telephones ringing, and random interruptions such as photocopiers malfunctioning, all at once. Because facilities of this size are generally open evenings and weekends, librarians must expect to spend at least some of these hours away from home and family. Archivists may also work evening and weekend hours in order to accommodate students facing deadlines for term papers, reports, and other research projects. Costs Payroll and Benefits: Librarians and archivists, by virtue of their professional education and job duties, are salaried. Some employees, such as assistant librarians and library clerks, are represented by unions, such as the American Federation of State, County, and Municipal Employees (AFSCME), as a majority of public libraries are governmental entities. Therefore, these employees are entitled to vacation and sick leave, prorated if they work less than full time. Supplies: Libraries and archives require books and other media, as well as shelving on which to store them. They need computers, printers, photocopiers, consumables such as paper and toner, other basic office supplies, and some cleaning supplies. External Services: Building maintenance, groundskeeping, and janitorial service are almost always provided by private contractors. Repair and maintenance of photocopiers and other equipment are managed by the companies leasing that equipment. Utilities: Libraries must pay for broadband Internet service, telephone, electricity, water, and sewage service. Taxes: The majority of libraries are local government entities and therefore enjoy tax-exempt status, although they must still pay employee payroll taxes. Large Libraries and Archives Large libraries and archives can be state or federal government entities, such as the Library of Congress or the National Archives, both of which are located in Washington, D.C. Other large libraries serve as central or main branches of multi-

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branch systems in major metropolitan areas. Generally speaking, a large public library serves a population of from 100,000 to just under 500,000. National libraries serve the entire nation, albeit in a less direct fashion. Potential Annual Earnings Scale. Salaries vary with geographic location and the supply-to-demand ratio of librarians in the vicinity. The BLS reports that as of May, 2009, the median annual wage of all librarians was $53,710. The median annual wage of all archivists was $46,470. According to the ALAAPA Salary Survey, directors of a large facility earn median annual salaries of $102,871. Deputy or assistant directors earn median salaries of $73,219 per year, and department heads and senior managers earn median salaries of $59,635. Clientele Interaction. Because large institutions are physically vast and employ a wide range of positions, many of their employees do not interact

with the public. Many positions, such as catalogers, work behind the scenes in rooms reserved for staff. They enter and exit the building through employeeonly doors and interact only with other library employees, vendors, and related professionals. The public face of a large library is presented by its circulation and reference staff. Circulation personnel assist patrons with checking out and returning library materials, setting up accounts for library cards, and other routine matters. Reference staff answer questions, help patrons find books and other materials, lend assistance with library equipment (such as public computer stations), and respond to other special requests. Because large libraries serve large populations, they are quite busy, and interactions between librarians and patrons are generally brief and businesslike. Amenities, Atmosphere, and Physical Grounds. Large libraries tend to function as cen-

The ceiling of the Library of Congress. (©Nick Cannella/Dreamstime.com)

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The main branch of the New York Public Library, the Stephen A. Schwarzman Building, is one of the city’s eighty-seven branch libraries and four research libraries. (©Dreamstime.com)

tral or main branches of multibranch systems and are frequently located in the downtown cores of major metropolitan areas. The buildings they occupy may be historic structures of significant architectural value. The main branch of the New York Public Library, in New York City, is a prime example. Conversely, major architects may be employed to design new “library monuments” designed to impress the public and elected officials in order to increase patron traffic and operating budgets. The city of Minneapolis, Minnesota, caused a stir with its I. M. Pei-designed central library, which is notable for its glass curtain walls and silvery metallic “wing” jutting from the edge of the roof. Ample square footage and hefty budgets ensure that the maximum amount of material will be available for patrons. Large libraries are destinations, in that patrons make special trips to these facilities, as it is well known that they have the best selections of books, films on DVD, audio books, and the like. Large libraries also have the greatest number of

public computer stations. Free Internet access is a major driver of traffic at all libraries, but this is especially true of large facilities, as many people cannot afford to purchase access for their own homes. Large libraries also offer many special features and comforts that are beyond the reach of smaller facilities with limited budgets. Overstuffed chairs for comfortable reading, fireplaces to create warm and cozy corners, meeting rooms available for community groups or quiet study, and coffee shops for refreshment are just some of the amenities available in this market segment. Special events, too, play a role in large libraries, as well-known authors make appearances there to read from their latest novels and sign books. Classes on various topics are held at regular intervals for the edification of interested parties on such topics as gardening in cold climates or how to navigate the electronic databases that the library offers. Typical Number of Employees. Large libraries employ ten or more people, sometimes many

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Libraries and Archives Industry

more. There is a wide range of staffing needs among these institutions, depending on factors such as square footage, location, and demand for services. Traditional Geographic Locations. Most often, large libraries are located in the downtown cores of large cities, although suburban areas may also have them. It is not uncommon for these facilities to be part and parcel of historic quarters or otherwise be considered landmarks. Frequently nestled among theaters, museums, and other cultural attractions, these facilities help draw traffic to the downtown area and in return receive many visitors drifting in from other nearby destinations. Pros of Working for a Large Library or Archive. The relatively large workforce of this type of establishment affords greater opportunities for career advancement, since there is more turnover in personnel and more positions of responsibility. Also, the many operational areas of large institutions, such as reference work, cataloging, information technology, and so forth, present learning opportunities for ambitious librarians. Pay tends to be higher and fringe benefits more generous, owing to larger institutional budgets and the bargaining power of unions. Cons of Working for a Large Library or Archive. Employees of large institutions tend to have narrower, more specialized sets of duties. Many of their tasks can therefore become repetitive and routine, leading to on-the-job burnout. Contact with coworkers and members of the public may be perfunctory and impersonal as a result of employees’ hectic work schedules and compartmentalization. Costs Payroll and Benefits: Librarians and archivists, by virtue of their professional education and job duties, are salaried. Some employees, such as assistant librarians and library clerks, are represented by unions, such as the American Federation of State, County, and Municipal Employees (AFSCME), as a majority of public libraries are governmental entities. Therefore, these employees are entitled to vacation and sick leave, prorated if they work less than full time. Supplies: Libraries and archives require books and other media, as well as shelving on which to store them. They need computers, printers, photocopiers, consumables such as paper and

toner, other basic office supplies, and some cleaning supplies. External Services: Building maintenance, groundskeeping, and janitorial service are almost always provided by private contractors. Repair and maintenance of photocopiers and other equipment are managed by the companies leasing that equipment. Utilities: Libraries must pay for broadband Internet service, telephone, electricity, water, and sewage service. Taxes: The majority of libraries are government entities and therefore enjoy tax-exempt status, although they must still pay employee payroll taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Administratively, libraries fulfill their duties to the public by allocating labor into three broad categories: User services include reference, reader’s advisory (which provides help and advice on what to read), circulation, and interlibrary loan. Technical services encompass information technology (IT), acquisitions, and cataloging staff. Administrative services comprise library directors, managers, and other supervisory personnel who solve problems, create policy, and generally run their establishments. At small libraries, a single person may fulfill all of these tasks. Archives, on the other hand, being generally much smaller both physically and in terms of staff, are much more flexible in regard to organization and job roles. A hypothetical state historical society, for example, might have such job titles as collections assistant, government records specialist, and state archivist. The following umbrella categories apply to the organizational structure of institutions in the libraries and archives industry: ■ ■ ■ ■ ■ ■ ■

Management Reference Services Reader’s Advisory Interlibrary Loan Circulation Information Technology Acquisitions

Libraries and Archives Industry ■ ■ ■ ■ ■ ■ ■ ■

Serials Cataloging Public Relations Administrative Support Children’s Services Special Collections Government Documents Outreach Services

Management Management has overall responsibility for the operation of a library or archive. Managers set policy, resolve and respond to disputes and complaints, supervise employees, establish budgets, solve problems, and plan for the future. In the case

OCCUPATION

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of new construction or the renovation and expansion of existing facilities, managers also act as contractors, in that they hire architects, approve plans, and manage the fund-raising and budgeting for these projects. In addition to holding master’s degrees in library science (from institutions accredited by the American Library Association), managers oftentimes have taken additional course work in supervision, accounting, and other topics regarding the running of an operation. Management occupations may include the following: ■ ■

Library Director Deputy Director

SPECIALTIES

Librarians Specialty

Responsibilities

Acquisitions librarians

Select and order books, periodicals, articles, and audiovisual materials on particular subjects.

Bibliographers

Work in research libraries and compile lists of books, periodicals, articles, and audiovisual materials on particular subjects.

Branch or department chief librarians

Coordinate the activities of a library branch or department; train, assign duties to, and supervise staff; and perform librarian duties.

Catalogers

Describe books and other library materials.

Children’s librarians

Manage library programs for children and select books and other materials of interest to children for the library to acquire. They plan and conduct programs for children to encourage reading, viewing, listening to, and using of library materials and facilities.

Classifiers

Classify materials by subject.

Information scientists

Design systems for storage and retrieval of information and develop procedures for collecting, organizing, interpreting, and classifying information.

Reference librarians

Assist groups and individuals in locating and obtaining library materials.

Special collections librarians

Collect and organize materials on select subjects used for research.

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Library Manager Assistant Manager

Reference Services Every library, regardless of size, offers reference service free of charge. Anyone may ask any question about almost any topic and expect to receive an answer. These services are provided by reference librarians, who by virtue of formal education and experience are familiar with all manner of reference books, Internet searching, electronic databases, and other information sources. Ethically, a reference librarian would refuse a request on how to construct an atomic bomb or anything else that might be construed as dangerous or illegal. Typically, librarians conduct what are known as “reference interviews” with requestors, whether the transaction is in person, on the telephone, or via virtual reference. Often, requestors are not entirely certain of what they want to know, so a series of questions is asked of them in order to arrive at the heart of the matter. It is not uncommon, especially in academic libraries, for reference librarians to be experts in specific subjects by dint of holding additional master’s degrees beyond the master of library science. Reference services occupations may include the following: ■ ■ ■

Head of Reference Supervising Reference Librarian Reference Librarian

patrons, so they need not travel about in search of the reading material they desire. Formerly taking up much time and paperwork, interlibrary loan has become largely automated with the advent of computers and the Internet. Closely allied to interlibrary loan is document delivery, which refers to the acquisition of photocopied individual articles from within periodicals in other libraries. Because the delivered documents are photocopies (or other facsimiles), they need not be returned. Interlibrary loan occupations include the following: ■

Circulation Circulation is the library department responsible for handling the checking in and checking out of library materials, issuing library cards to patrons, levying fines for overdue or damaged materials, and ensuring that materials are returned to their proper place on the shelves. Many positions in this category are part time, also known as fulltime equivalent, or FTE, positions. For example, two people each working twenty hours per week are considered equivalent to one full-time (fortyhour) worker. Circulation occupations may include the following: ■ ■

Reader’s Advisory Known as RA for short within the profession, reader’s advisory staff provide consultation services to help patrons find and enjoy books they might not find on their own. RA staff may suggest authors whose work is similar to authors a patron already likes, or they may simply answer questions about titles in a series of which a patron has read only part. Reader’s advisory occupations include the following: ■

Reader’s Adviser

Interlibrary Loan Interlibrary loan refers to the lending of books from one library to another for the benefit of

Interlibrary Loan Librarian

■ ■ ■

Head of Circulation Library Clerk Library Technician Library Page Shelver

Information Technology Computers and the Internet are integral parts of any library, regardless of size. Information technology, or IT, comprises computer acquisition, maintenance, and repair; firewall installation and maintenance; Internet connectivity; software upgrades; and automated equipment, such as self-checkout machines and receipt printers. IT occupations may include the following: ■ ■ ■

Systems Technician Chief Information Officer (CIO) Database Administrator

Libraries and Archives Industry OCCUPATION

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PROFILE

Library Technician Considerations

Qualifications

Description

Compiles records, sorts and shelves books, and issues and receives library materials, such as books, films, slides, and phonograph records.

Career cluster

Education and Training

Interests

Data; people

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma/technical training; junior/technical/community college

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

CSE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Acquisitions Acquisitions staff oversee the purchase and receipt of library materials. In addition to acquiring newly released materials, libraries must regularly replace popular titles, which experience significant wear and tear through constant circulation, as well as being lost and stolen outright. Libraries are high-volume purchasers, so they often receive discounts from vendors. Acquisitions occupations may include the following:

sions bundled to physical subscriptions. Often, articles from back issues are also available online. Many libraries do not keep back issues for more than about two years because they take up so much shelf space and their content tends to become dated quickly. Others bind together each year’s worth of a given periodical, providing those issues with hardcover protection. Serials occupations may include the following: ■ ■

■ ■

Head of Acquisitions Acquisitions Librarian

Serials Also known as periodicals, serials are magazines, journals, quarterlies, and other print materials that are published at regular intervals. With the advent of the Internet, many titles come with online ver-

Serials Librarian Binding Technician

Cataloging All incoming material must be classified, described, added to the library catalog, and processed, which entails applying protective material (such as a mylar cover over the dust jacket of a book), antitheft devices and stamps, and identification or shelf stickers. Catalogers typically work

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Libraries and Archives Industry OCCUPATION

SPECIALTIES

Media Specialists Specialty

Responsibilities

Audiovisual librarians

Coordinate the availability of audiovisual materials, such as films, video tapes, and cassettes, in a library, and they assist patrons in selecting materials. They evaluate materials, considering their technical, informational, and aesthetic qualities, and select materials for library collections.

Institutional librarians

Plan and direct library programs for residents and staff of extended-care facilities, such as mental institutions and prisons.

Music librarians

Classify and file musical recordings, sheet music, original arrangements, and scores for individual instruments.

in staff-only work areas and normally do not have contact with the public. However, the results of their labors are immediately apparent to anyone who uses the Online Public Access Catalog (OPAC), the modern-day electronic version of physical card catalogs. Catalogers typically take specialized courses in this field, as their work is considered a specialty of librarianship, just as cardiology and gastroenterology are specialties of medicine. Cataloging occupations include the following: ■

Cataloger

Public Relations Every library needs to engage its public. This engagement can take the form of author readings, classes, special events, used book sales, other fundraisers, or any other modes of generating positive publicity. While flyers, banners, newspaper notices, and other traditional means are still used, the major forms of communication have become electronic. Libraries publish calendars of events on their Web sites, and they often send e-mail notifications or even full electronic newsletters to patrons who sign up to receive them. Public relations occupations may include the following: ■ ■

Public Relations Librarian Webmaster

Administrative Support Paperwork and forms are an ever present requirement of any organization, and libraries are no exception. Invoices must be paid, timesheets must be tabulated, and orders must be placed. These tasks are handled by administrative staff. Generally, such staff members’ offices are housed in the main or central branch of a library system. In addition to clerical personnel, these areas also house the offices of library management teams and contain storage areas for office supplies, photocopiers, and other office equipment. Administrative support occupations may include the following: ■ ■ ■ ■

Receptionist Clerk Secretary Office Manager

Children’s Services Most libraries have areas set aside just for children. These may include one corner of a small library or an entire wing of a larger facility. Children’s areas are staffed by dedicated children’s librarians, who are well versed in literature for young people. Special services include regularly scheduled story times, in which librarians read story books to children; show and tell sessions, in which various objects are presented for discussion; and furnishings built low to the floor for the com-

Libraries and Archives Industry fort of youngsters. Very often, books are arranged by reading level, for ease of selection. It is also not uncommon for stuffed toys, puzzles, and other amusements to be available for those children who may have short attention spans. Children’s services occupations include the following: ■

Children’s Librarian

Special Collections Special collections is an all-encompassing category that can include material not easily stored on shelves, such as pamphlets housed in file cabinets, or material of a significant nature, such as local history books, photographs, or artifacts. In a sense, a special collection is an archive housed within a library. Special collections occupations may include the following: ■ ■

Special Collections Director Special Collections Librarian

Government Documents While publications are produced by many political subdivisions, such as city councils and county boards, the majority of such documents come from the federal government. So prolific a publisher is the federal government, in fact, that a separate classification system has been devised to organize its documents, the Superintendent of Documents, or SUDOCS. Large libraries in the United States are known as “depository libraries,” and these institutions automatically receive every book, pamphlet, map, or document printed by the government in Washington, D.C. Because of the amount and complexity of this material, special areas of large libraries are set aside for government documents, and librarians in charge of these areas must have specialized training. Government documents occupations include the following: ■

Government Documents Librarian

Outreach Services Many people cannot physically come to the library, including disabled persons and incarcerated convicts. Libraries reach out to these persons in or-

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der to serve their needs. Most libraries, for example, have homebound services, in which couriers deliver library materials to disabled persons’ residences. Bookmobiles, essentially libraries on wheels, make regular stops in the neighborhoods of large cities. Libraries also have programs dedicated to loaning books and other materials to prisoners. Outreach services occupations include the following: ■

Outreach Services Librarian

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be stable. According to the 2010-2011 edition of the BLS’s Occupational Outlook Handbook, employment for librarians is predicted to rise by 8 percent between 2008 and 2018, slightly less than the average of 11 percent for all industries. Two countervailing trends are at work: On one hand, the workforce is aging as the U.S. population as a whole ages. In a March, 2002, article titled “Reaching Sixty-Five: Lots of Librarians Will Be There Soon,” American Libraries magazine warned of a possible shortage of librarians caused by impending retirements. On the other hand, the recession of 2007-2009 affected both the budgets of libraries and the retirement funds of librarians. As a result, fewer librarians will retire in the near term, and fewer retirees will be replaced, than would occur in a more robust economy. Also affecting the industry outlook are younger librarians who are just entering the profession. The American Library Association runs an active recruitment campaign to entice college students to choose librarianship as a career. Anecdotal evidence suggests that many librarians made midcareer switches, having found that their bachelor’s degrees in one of the humanities, such as English or history, led to less-than-satisfying career paths. While library careers may not be particularly remunerative, there are many positive factors that lead people to abandon their former occupations to become involved with books and people. Entirely apart from the issue of incoming and outgoing individuals within the profession is the topic of funding. The vast majority of librarians

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Libraries and Archives Industry

work in public libraries and are therefore at the mercy of the political winds. During times of economic distress, elected officials look for easy targets to cut budgets, and libraries are usually at the top of the list of potential victims. The irony is that it is during these same periods that library usage spikes, as the unemployed flock to their neighborhood branches to use public Internet stations to look for work and to take classes in resume writing and other job-related skills. Librarians are nothing if not innovative, however, and many are entering nontraditional employment. The more entrepreneurial are going into business for themselves as consultants and information brokers. They charge hourly fees to search for information and hard-to-find documents or to, say, analyze the competition for a particular business or industry. Still others engage in teaching at library schools, or in writing books on topics of interest to other librarians. Employment Advantages Those who enjoy literature and learning are able to indulge their twin passions as librarians, since to a large degree the profession involves being familiar with works of the past and present, from classics to contemporary best-selling novels. Librarianship is a helping profession, and in that regard it shares much with teaching and nursing. Librarians may derive satisfaction from matching people with the books they wish to read and from helping them discover new authors and works. The work of librarians is intellectual, rather than physical. Librarians typically work in comfortable surroundings and are stimulated both by their association with patrons asking questions and by their interactions with colleagues who share their love of learning. Annual Earnings In the wake of the global financial crisis of 20072009, depressed conditions continue to be a drag on earnings for the libraries and archives industry. The industry’s annual domestic revenues totaled $1.9 billion according to the 2007 Economic Census conducted by the U.S. Census Bureau. Some librarians, such as those covered by union contracts, will fare better than average, as collective bargaining has proven to be of benefit to workers generally. According to the BLS, in 2009 the middle 50

percent of U.S. librarian salaries ranged from $42,980 to $66,750. The middle 80 percent ranged from $33,480 to $82,450. Librarians employed by the federal government, which tends to be highly unionized, earned substantially higher average salaries than those employed in other sectors: the mean annual salary of all librarians in 2009 was $55,670, while the mean annual salary of those working for the federal government was $79,550. Salary figures for archivists are similar. The BLS reports that, for the same period, the middle 50 percent of U.S. archivist salaries ranged from $35,150 to $61,180, and the middle 80 percent ranged from $27,050 to $78,680. The mean annual salary of all archivists was $49,600, while the mean annual salary of federally employed archivists was $78,760—above the ninetieth percentile of earners. Internationally, the library and archive industry would appear to be robust, having generated $43.3 billion in revenue in 2003, according to figures supplied by the International Federation of Library Associations (IFLA). Taken together with the United States, the annual global revenue totals $44.9 billion.

RELATED RESOURCES FOR FURTHER RESEARCH American Archivist 527 S Wells St., 5th Floor Chicago, IL 60607 Tel: (312) 922-0140 Fax: (312) 347-1452 http://www.archivists.org American Association of School Librarians 50 E Huron St. Chicago, IL 60611-2729 Tel: (800) 545-2433, ext. 4382 Fax: (312) 280-5276 http://www.ala.org/aasl American Library Association 50 E Huron St. Chicago, IL 60611-2729 Tel: (800) 545-2433 Fax: (312) 440-9374 http://www.ala.org

Libraries and Archives Industry LIBRARY JOURNAL Reed Business Information 360 Park Ave. South New York, NY 10010 Tel: (646) 746-6400 Fax: (646) 746-7431 http://www.libraryjournal.com Society of American Archivists 17 N State St., Suite 1425 Chicago, IL 60602-3315 Tel: (312) 606-0722 Fax: (312) 606-0728 http://www.archivists.org

ABOUT

THE

AUTHOR

Mike Bemis holds a master’s degree in library and information science (2006) from the College of St. Catherine in St. Paul, Minnesota. His book reviews appear regularly in a number of professional publications, including American Reference Books Annual, Reference and User Services Quarterly, and Library Journal. A member of the American Library Association and the Reference and User Services Association, Bemis currently serves as chair of the latter association’s Materials Reviewing Committee. He makes his living as a reference librarian at Washington County Library in Woodbury, Minnesota.

FURTHER

READING

Battles, Matthew. Library: An Unquiet History. New York: W. W. Norton, 2003. Bogart, Dave, ed. Library and Book Trade Almanac, 2009. 54th ed. Medford, N.J.: Information Today, 2009. Camenson, Blythe. Opportunities in Museum Careers. New York: McGraw-Hill, 2007. Cox, Richard J. Archives and Archivists in the Information Age. New York: Neal-Schuman, 2005.

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Eberhart, George M. The Whole Library Handbook 4. Chicago: American Library Association, 2006. Grady, Jenifer, and Denise M. Davis. ALA-APA Salary Survey—Librarian—Public and Academic: A Survey of Library Positions Requiring an ALAAccredited Master’s Degree. Chicago: American Library Association, 2009. Information Today. American Library Directory. 62d ed. Medford, N.J.: Author, 2009. International Federation of Library Associations and Institutions. “Global Library Statistics, 1990-2000.” The Hague, Netherlands, 2003. http://archive.ifla.org/III/wsis/wsisstats4pub_v.pdf. Lynch, Mary Jo. “Reaching Sixty-Five: Lots of Librarians Will Be There Soon.” American Libraries 33, no. 2 (March, 2002). Simkin, Joyce P. American Salary and Wages Survey. 10th ed. Farmington Hills, Mich.: Gale Cengage, 2009. Society of American Archivists. “So You Want to Be an Archivist: An Overview of the Archival Profession.” http://www2.archivists.org/ profession. Spear, Martha J. “The Top Ten Reasons to Be a Librarian.” American Libraries 33, no. 9 (October, 2002). U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Librarians.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos068.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. _______. Statistical Abstract of the United States: 2010. 129th ed. Washington, D.C.: Author, 2009. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

©Dreamstime.com

Light Machinery Industry

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing; Office Machinery Manufacturing; Photographic and Photocopying Equipment Manufacturing; Power-Driven Handtool Manufacturing; Turbine and Turbine Generator Set Units Manufacturing Related Industries: Hand Tools and Instruments Industry; Household and Personal Products Industry Annual Domestic Revenues: $122.7 billion USD (U.S. manufacturing corporations seasonally adjusted after-tax profits; U.S. Census Bureau, 2010) NAICS Numbers: 333112-333313, 333315, 333611, 333991

INDUSTRY

equipment such as lawn mowers, rototillers, and snow blowers also are produced by this industry. Office equipment, such as photocopiers and fax machines, also makes up a large segment of the light machinery industry. Many companies in this industry also produce heavy equipment as well as products for other industries. Virtually every industrialized nation on the planet has a significant light machinery industry employing individuals in a wide variety of careers.

History of the Industry Sectors of this industry either markedly expanded or appeared during the Industrial Revolution, which began in the eighteenth century in Europe. It was marked by major changes in manufacturing, mining, agriculture, manufacturing, and transport; this phenomenon had a profound impact on socioeconomic and cultural conditions. However, the use of light equipment began in ancient times in Egypt, Greece, and Rome. In 1400 b.c.e., the lathe was developed. Two persons were required to operate this device: One would turn a length of wood with a rope while the other manipulated a

DEFINITION

Summary Light equipment either reduces or replaces manpower to accomplish a task. This equipment can be human powered, powered by electricity, or powered by an internal combustion engine (usually gasoline but rarely diesel). An example is the lawn mower, which can be hand propelled, gasoline powered, or electrically powered. Garden 1060

Light Machinery Industry pointed tool to shape the wood. The Romans improved the machine with the addition of a turning bow. The British, French, and Germans used similar lathes a few centuries later. In the middle ages, the addition of a foot pedal allowed the operator to propel the lathe while holding a carving tool in both hands. Mechanization of the lathe occurred during the Industrial Revolution; lathes were powered by water wheels and steam engines. By the end of the nineteenth century, electric motors appeared. Benjamin Franklin’s investigations into the properties of electricity in the mid-nineteenth century served as a foundation for the accomplishments of his successor Thomas Alva Edison. Edison invented the electric lightbulb in 1879; in 1892, he established the first electric plant in New York City. Precursors of today’s batteries also were developed in that century. In 1859, the lead-acid battery was produced; this type of rechargeable battery is used in today’s automobiles. Electric motors allowed for the development of

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stationary and portable power tools in the late nineteenth century. Robert Bosch (Stuttgart, Germany), founded by Robert Bosch in 1886, initially produced electrical components for automobiles. Bosch subsequently became a pioneer in the power tool industry; in 1932, the company introduced its first power drill. In 1923, the American inventor Raymond DeWalt introduced the first radial-arm saw. The Makita Corporation (founded in Japan in 1915) focused its attention on cordless, batterypowered tools; in 1978, the company introduced its cordless handheld drill. At the heart of the garden equipment industry is the lawn mower. English engineer Edwin Budding developed the reel-type mower. Budding was working in a textile mill that used a shearing machine to trim the nap of velvet. He realized that the device could replace the scythe he used to mow his lawn. His mower, which consisted of a series of blades arranged around a cylinder, is similar to the handpowered mower used today.

Office equipment, such as photocopiers and fax machines, makes up a large segment of the light machinery industry. (©Stephen Coburn/Dreamstime.com)

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Light Machinery Industry

A mainstay of any business office is the copy machine. The device was invented by the Scottish inventor James Watt in 1779. His device physically transferred a special type of ink from a letter or drawing to a moistened piece of paper using a press. The American inventor Chester Carlson is credited with inventing photocopying in 1938. He produced multiple copies of a document using a zinc plate covered with sulfur. However, at that time, carbon paper was a more popular method of making copies. This industry segment began to flourish in 1949 when Xerox Corporation (Wilsonville, Oregon) introduced its first copier. Subsequently, the term “Xeroxing” became synonymous with “photocopying.” In addition to electricity, the assembly line fueled the development of the light equipment industry. Before 1900, machinery was produced at one location, one unit at a time. Although the origin of the assembly line is often linked with Henry Ford, Ransom Olds patented the assembly line

concept, which he implemented in his Olds Motor Vehicle Company factory in 1901. The concept was improved a few years later by Ford, who moved the work from one worker to another until a product was complete; these units were then moved to a final assembly line, which produced the finished product. As a result of Ford’s improvements, an automobile came off the line every three minutes. Previous assembly lines had produced vehicles at a rate of about two an hour and required significantly more manpower. Furthermore, Ford implemented safety procedures such as assigning each worker to a specific location rather than allowing them to roam about the work area; this dramatically reduced the rate of injury. The Industry Today The light machinery industry is dominated by large, multinational companies that produce a wide range of products for the home, workshop, and garden; these products are mainly powered by elec-

The lawn mower is at the heart of the light machinery industry. (©Dreamstime.com)

Light Machinery Industry

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One large segment is power tools, such as electric hedge trimmers. (©Wisconsinart/Dreamstime.com)

tricity. An increasing number of battery-powered products are appearing on the market. Major subindustries supported by the light machinery industry are maintenance and repair, sales, leasing, engine manufacturing (electric and internal combustion), and battery manufacturing. Many of these companies also manufacture products for other industries, such as the heavy machines industry, the office products industries, and the computer industry. In some instances, most of the products manufactured by a company are for another industry. For example, generators for home and recreational use represent a small percentage of generators available on the market. Most are large machines designed for industrial use. In addition to manufacturing their products, many companies sell, lease, and repair the equipment. A major segment of this industry is focused on the manufacturing of hand and power tools. Products include chain saws, drills, impact wrenches, jigsaws, nail guns, riveting guns, routers (woodshaping tools), sanders, buffers, and power-driven

screwdrivers. Battery-powered tools are extremely popular for both contractors and nonprofessionals. They have proven to be extremely useful at outdoor work sites where electrical power is unavailable or unreliable. Major companies in this industry are Husqvarna (Huskvarna, Sweden), Stanley Black & Decker (New Britain, Connecticut), Techtronic Industries Company (New Territories, Hong Kong), Makita Corporation (Anjo, Japan), Bosch (Stuttgart, Germany), and Craftsman (a subsidiary of Sears Holdings Corporation, Hoffman Estates, Illinois). Companies such as these are highly susceptible to fluctuations in the rate of economic growth. Much of their equipment is designed for construction; thus, when new construction slows, the companies are affected. Husqvarna has a similar product line. The company produces snow throwers, ice augers, and work clothing. Stanley Black & Decker has three product lines: construction and do-it-yourself (DIY) hand tools and power tools; industrial and automotive repair tools and infrastructure solutions; and secu-

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Light Machinery Industry

Golf carts, as well as garden tractors and riding law mowers, are part of this industry’s output. (©Dreamstime.com)

rity and health care products. Techtronic Industries Company produces power tools, outdoor products, and floor-care products. Techtronic is the parent company of Milwaukee Electric Tool Corporation (which produces heavy-duty power tools), AEG (power tools), Ryobi (power tools for the home market), Homelite (outdoor power equipment such as trimmers, chainsaws, pressure washers, generators, and water pumps), and three lines of floor-care products (Hoover, Dirt Devil, and Vax). Makita Corporation manufactures industrial power tools that run on rechargeable batteries. Bosch markets high-end power tools, automotive goods (for example, gasoline and diesel systems, brakes, electronics, and steering systems), home appliances, and many other products for the home and industrial markets. It also operates gasoline/diesel vehicle garages and diagnostic centers. A well-known brand in the light machinery industry is Craftsman, which was launched by Sears (now Sears Holdings Corporation) in 1927. Craftsman tools have a reputation for quality and durability and are backed by a lifetime warranty. The company primarily manufactured basic hand tools such as hammers and screwdrivers before progressing to power tools. Today, Craftsman is one of the

top-selling power tool producers. Craftsman tools are sold in Sears, Kmart, and Orchard Supply Hardware stores (all three are subsidiaries of Sears Holdings); they also are sold in Fastenal, U.S. military post exchanges, and Ace Hardware stores. Through the years, Craftsman tools have been produced for Sears by a variety of manufacturers, including New Britain, Moore Drop Forge, Stanley, Easco Hand Tools, the Danaher Corporation, and Western Forge. While a number of the aforementioned companies market some products for the home garden and farm use, other companies focus primarily on those product lines. One such manufacturer is Deere & Company, whose main product line is focused on the agricultural and construction industry (such as tractors, combines, tillers, and harvesters). Another major portion of its product line is devoted to smaller equipment: golf carts, lawn mowers (walking and riding) and other home garden equipment, snow blowers, and home workshop products. Photographic and photocopying equipment manufacturing is another significant segment of this industry. Products include aerial cameras, blueprint equipment, cameras (nondigital), devel-

Light Machinery Industry oping equipment, film editing equipment, enlargers, light meters, and photocopiers. As of 2010, the five market leaders were Fujifilm Holdings Corporation (Tokyo), Canon Europa (Amstelveen, Noord-Holland), Olympus Corporation (Tokyo), Nikon Corporation (Tokyo), and Eastman Kodak Company (Rochester, New York). Although this segment of the light equipment industry comprises nondigital equipment, these companies have transitioned to the digital age and also market digital photographic products. Even venerable Eastman Kodak, a pioneer in film cameras, has embraced digital photography. Typical of global companies manufacturing light equipment, these companies have subsidiaries in related industries. Fujifilm Holdings Corporation is the holding company for three companies: Fujifilm Corporation, Fuji Xerox Company, and Toyama Chemical Company. Canon Europa primarily manufactures cameras, photocopiers, and optical equipment for both personal and industrial (including medical) use. The Nikon

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Corporation has a similar focus. In addition to digital products, these companies also market products for the computer industry. An example is the all-in-one printer, which combines a printer, photocopier, scanner, and fax machine into one compact piece of equipment. In addition to photocopiers, many pieces of light machinery are designed for the business office. These include adding machines; binding and bundling equipment; calculators; cash registers; check writing machines; coin/currency counting machinery; coin wrapping machinery; collating machinery; dictating machinery; envelope stuffing, sealing, and addressing machinery; hole punchers; incoming mail handling equipment; letter folding, stuffing, and sealing machinery; postal machines; stenography machinery; typewriters; and word processors. Most light equipment is produced by automated processes somewhat similar to automobile assembly lines. Small companies tend to be less auto-

Photographic equipment makers have transitioned to the digital age with products such as this camera. (©Tezzstock/ Dreamstime.com)

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Light Machinery Industry

mated than midsize or large companies. In many cases, the manufacturing process involves shaping metal (usually steel) into a framework, then assembling the components. Aluminum and plastic also are molded into housings and components for appliances. Painting often is part of the assembly process.

INDUSTRY MARKET SEGMENTS While some smaller companies with less than one thousand employees compete in the marketplace, this industry is dominated by large, global companies. Small Businesses Small light machinery manufacturers usually offer specialty products designed for niche markets. They may offer a single product or a line of several related products. These products are primarily small appliances. Some small businesses produce unique products, while others manufacture products similar to those made by larger companies. Since the beginning of the twenty-first century, some small companies have flourished and experienced significant growth. Potential Annual Earnings Scale. The average income for a small-business owner varies from region to region and usually is less than $100,000 annually. Clientele Interaction. Small businesses tend to favor more interaction with customers, and the personal touch can foster consumer satisfaction. However, clientele interaction can vary widely. The owner might have direct contact with his or her customers or market the product over the Internet with contact limited to the telephone and e-mail. A Web site is essential to a small business. The Web site can not only market the product but also offer technical advice and serve as a vehicle for customer feedback. Amenities, Atmosphere, and Physical Grounds. Amenities of small businesses often are limited. Inasmuch as the owner has extensive control over the business, the working environment can be tailored to personal taste and budget. An owner interested in a favorable working environment might have a facility with extremely pleasant

working conditions; however, most facilities are utilitarian, no-frills structures. Typical Number of Employees. The number of employees can range from one to several dozen. A small business could consist solely of an owner and family members who manufacture and market the product. Traditional Geographic Locations. Geographic locations of small businesses are unlimited. They are usually located near, or even in, the owner’s home. Pros of Working for a Small Light Machinery Business. The owner is often responsible for all operational decisions. The owner might consult with staff members regarding these decisions or have complete autonomy. A staff member usually has a closer working relationship with the owner than in a larger company. Part-time employment and flexible hours usually are easier to arrange than they would be in a larger company. A smallbusiness owner can control waste and unnecessary expenditures to a greater degree than a larger company because all expenditures are subject to his or her approval. If the company fosters teamwork and group decision making, employees can be more involved in the company’s growth. In some cases, partnership opportunities exist for exceptional employees. If the company flourishes, the company might grow in size and profit margin; this could lead to expansion or purchase by a larger company. Cons of Working for a Small Light Machinery Business. The light machinery industry is extremely competitive. Even if a small company produces a good product, it might not be able to compete successfully with a large company that can produce a comparable product at a lower price. A small business is less resilient when faced with an unexpected major expense, such as a lawsuit or major equipment replacement. This situation could bankrupt a small business. At a small company, the owner and staff generally will not have the variety of skills that the staff and management of larger companies will possess. For example, the staff may have technical expertise but lack marketing skills. Furthermore, with a small staff, the owner and employees are responsible for a wider range of duties. Costs Payroll and Benefits: Small companies often place all employees on an hourly wage and usu-

Light Machinery Industry ally do not provide the same level of benefits as a large company; these benefits are at the discretion of the owner and include sick pay, health insurance, and vacations. Supplies: Supplies usually cost more for smallbusiness owners than for large businesses, which can buy in bulk and thus negotiate lower prices. External Services: Costs for external services for a small business typically are minimal and might include such things as Web site development/ maintenance and billing services. If a small business becomes involved in a legal dispute, an attorney must be retained. In this situation, the small-business owner might incur significant costs. Utilities: Utilities may be comparable to that of a home; however, the manufacturing of some equipment might involve significant usage of electricity or natural gas. Taxes: Small businesses are obligated to pay local, state, and federal taxes. Midsize Businesses Like small manufacturers in this industry, midsize light machinery manufacturers tend to favor niche markets and limited product lines. These products may compete with those produced by large businesses. Some produce products that complement the product lines of the large businesses. Midsize manufacturing businesses often started as small businesses and flourished and expanded. Other midsize companies are offshoots or former divisions of larger companies. Like small businesses, they tend to favor small appliances tailored to niche markets. Retail sales facilities consist of a single store or several facilities. An example of a small company that has grown into a midsize business is Bench Dog (Maple Grove, Minnesota). The company was founded by two people in 1995 and has grown to a midsize business that markets a line of router tables, tools, and accessories for contractors and nonprofessionals. The products are available from a number of retailers, including Amazon and Lowe’s. Potential Annual Earnings Scale. Salaries vary from region to region; however, a typical salary for a mechanical engineer is $32 per hour; sales representatives earn about $28 per hour and might receive commissions for sales; first-line supervisors/ managers of production and operating workers

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earn about $26 per hour; tool and die makers earn about $21 per hour; machinists earn about $18 per hour; computer-controlled machine tool operators (metal and plastic) earn about $17 per hour; inspectors, testers, sorters, samplers, and weighers earn about $17 per hour; welders, cutters, solderers, and brazers earn about $16 per hour; cutting, punching, and press machine setters, operators, and tenders (metal and plastic) earn about $14 per hour; and team assemblers earn about $14 per hour. Incomes for managers in a company’s manufacturing arm vary widely from less than $50,000 to more than $100,000 annually. Clientele Interaction. Vendors can foster longterm relationships, which can generate repeat business. All midsize businesses will have a Web site for both marketing and clientele interaction. The site will offer customer service, technical support, and often provide copies of user manuals for download. Amenities, Atmosphere, and Physical Grounds. Manufacturing facilities are customarily spartan and utilitarian. Typical Number of Employees. A manufacturing facility consists of a management staff, assembly supervisors, and assemblers. Traditional Geographic Locations. Manufacturers of small appliances can be situated in a wide range of locations; however, their facilities typically are in industrial areas. Manufacturers of larger equipment such as riding lawn mowers are commonly located in areas near rail or ocean cargo service. Retail outlets can be located in any area with sufficient population to generate adequate sales. Pros of Working for a Midsize Light Machinery Business. The owner of a midsize manufacturing business often has more control over operational decisions than he or she would in a large company. Employee-management interaction also often is greater than at a large company. Midsize manufacturing businesses can employ individuals with a variety of skills; these employees include technicians, assemblers, and marketing personnel. These companies typically have one or only a few locations; thus, an employee who prefers to remain in one location usually will not be confronted with the threat of a transfer to a distant location. Cons of Working for a Midsize Light Machinery Business. Many midsize businesses produce limited product lines or specialty products. In times of economic downturn, these companies are

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Light Machinery Industry

more susceptible to failure. The limited number of management positions in a midsize company decreases opportunities for advancement, particularly those commanding a high salary. Costs Payroll and Benefits: Midsize companies usually can offer benefits comparable to those of a large company; these benefits include sick pay, health insurance, and vacations. Supplies: Midsize companies often can negotiate discounts from suppliers; however, the unit production cost may be higher than the cost for a comparable product produced by a large company. External Services: Manufacturing companies often use accounting services and billing services; however, they also might have employees on staff who can perform these tasks. Midsize companies also often use outside legal services rather than in-house counsel. Utilities: Manufacturing of light equipment sometimes involves significant costs for utilities, particularly gas and electricity. Taxes: Midsize businesses must pay local, state, and federal income taxes as well as applicable property taxes. Almost all businesses in the United States are incorporated; thus, they pay state and federal taxes at the corporate level. They also must collect state sales taxes for retail sales. Large Businesses Large light machinery manufacturers market their products internationally. The large companies in the United States compete directly with companies whose headquarters are in other nations. For example Deere & Company—headquartered in Moline, Illinois—maintains facilities in Canada, Europe, China, Australia, South America, and Russia; Makita Corporation—headquartered in Tokyo, Japan—maintains facilities throughout Asia, as well as in the United States, Canada, Australia, South America, the Middle East, and Russia. These companies often market a variety of products, including heavy equipment and products in other market segments. They profit from brand recognition. Potential Annual Earnings Scale. Salaries vary from region to region and the salaries for top management positions, such as a chief executive officer (CEO) can be well over $1 million per year. The

typical annual salary for a mechanical engineer is $32 per hour; sales representatives earn about $28 per hour and may receive commissions for sales; first-line supervisors/managers of production and operating workers earn about $26 per hour; tool and die makers earn about $21 per hour; machinists earn about $18 per hour; computer-controlled machine tool operators (metal and plastic) earn about $17 per hour; inspectors, testers, sorters, samplers, and weighers earn about $17 per hour; welders, cutters, solderers, and brazers earn about $16 per hour; cutting, punching, and press machine setters, operators, and tenders (metal and plastic) earn about $14 per hour; and team assemblers earn about $14 per hour. Many large companies also have franchised dealerships. A motivated individual with capital to invest has an opportunity to develop a dealership into a multimillion-dollar business. These dealerships can operate with a high degree of autonomy, provided that they generate adequate revenues to the parent company. Clientele Interaction. Vendors can foster longterm relationships, which can generate repeat business. All large businesses will have a Web site for both marketing and clientele interaction. The site will offer customer service, technical support, and often provide copies of operator manuals for download. Amenities, Atmosphere, and Physical Grounds. Manufacturing facilities are customarily spartan and utilitarian. Retail outlets range from simple to luxurious. Corporate headquarters typically are luxurious and modern. Typical Number of Employees. The number of individuals employed in the light machinery industry declined from 2009 to 2010 amid the global economic downturn. For example, Deere & Company reported a 10 percent drop in its workforce from 2008 to 2009. However, some companies bucked the trend. For example, Stanley Black & Decker reported a 2.7 percent increase in employment from 2008 to 2009. As of early 2010, the company employed 16,700 people, nearly 8,200 of whom were in the United States. Traditional Geographic Locations. Corporate headquarters can be located in virtually any large or small city; large retail outlets also can be located in any area with reasonable population density. Manufacturing facilities are typically in industrial areas near rail or ocean cargo service.

Light Machinery Industry Pros of Working for a Large Light Machinery Business. A wealth of career opportunities exists within large companies in this industry. Positions include high-paying management positions, technical/engineering opportunities, information technology, marketing, and sales. Upper management positions can be extremely lucrative in regard to salaries, bonuses, and retirement benefits. Even lower-level employees may be entitled to generous bonuses and retirement benefits. Large corporations offer summer internships for college students and training for employees who wish to advance. Lateral transfers also are possible. For example, a marketing employee might transfer to a management position in human resources. Large manufacturers offer a wide range of products; thus, they are more likely to survive economic downturns than smaller companies. Cons of Working for a Large Light Machinery Business. Despite a company’s attempt to foster employee-management relations, an employee might have a sense that his or her opinion does not matter and that his or her position could be readily filled by another individual. Upper management personnel might be urged to relocate to another state or even another country at regular intervals to ensure a promotion. Performance goals sometimes imposed on employees, even those in lower positions, might be a source of extreme stress. Large businesses are profit-driven and top executives must answer to a board of directors and shareholders. If a company loses market share or profitability, the CEO might be terminated. The same holds true of the manager of one of the company’s departments if revenue drops.

lihood of a production slowdown in the event of a supply chain disruption. For example, the 2010 volcanic eruption in Iceland delayed air shipment of many products. External Services: Large companies usually have in-house departments for most services, which include accounting, payroll, legal, and even urgent-care medical services. Utilities: Manufacturing of light equipment often entails significant costs for utilities, particularly gas and electricity. Taxes: Large businesses, both manufacturing plants and dealerships, must pay local, state, and federal income taxes as well as applicable property taxes. These businesses are incorporated; thus, they pay state and federal taxes at the corporate level. They must also collect state sales taxes for retail sales.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Large businesses have departments for each division of their organization. Midsize companies often have a department or at least an individual focused on each division. The following umbrella categories apply to the organizational structure of businesses in the light machinery industry: ■ ■ ■ ■

Costs Payroll and Benefits: Large companies usually offer many benefits; these benefits include sick pay, health insurance, vacations, and parental leave. Supplies: Large companies can achieve economies of scale because they purchase supplies in large quantities. However, because they need constant replenishment of many items, a breakdown in the supply chain can slow or halt production. Large companies often strive for justin-time delivery of supplies (supplies arrive when needed to avoid maintaining a large inventory); this policy, however, increases the like-

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■ ■ ■ ■

■ ■ ■ ■

Business Management Customer Services Legal Services Medical Services Sales and Marketing Information Technology Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources Payroll

Business Management Management of a light equipment company usually consists of hundreds of top-level individuals; however, some midsize companies might have

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a few dozen top positions. A large company will consist of a hierarchy headed by the chief executive officer, below whom are upper-management personnel who are in charge of operations at regional facilities. Below these upper-management positions are middle-management positions and lowlevel managers. A large dealership may have a similar hierarchy. Individuals in the upper-management positions command high salaries ranging from several hundred thousand to well over a million dollars a year. These individuals have college degrees and usually majored in a business-related curriculum. Most also have master of business administration (M.B.A.) degrees. These high positions usually are achieved by motivated individuals who work their way up the corporate ladder. In some cases, after achieving a high level in one company, a manager will be recruited to work for a rival company or a company with another focus. Included in management are assistants such as secretaries and clerks. Occupations in this area of the business may include the following: ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Controller Administrative Assistant Secretary

■ ■ ■ ■ ■

Legal Services Large companies incur significant expenses for legal services. Legal issues can arise with companies of any size and can include product liability, copyright infringement, employee issues, and disputes over business practices. Large companies have more vulnerability to large settlements because of their financial standing. Small and some midsize businesses must retain outside attorneys when they face lawsuits or other legal matters. Larger companies maintain in-house counsel (a full-time attorney employee) or a team of attorneys. The attorneys must specialize or have some expertise in the following areas: mergers and acquisitions, patents, contracts, and labor law. When a company is exploring a merger or dissolution of a business segment, the in-house counsel is involved in the negotiations. The legal services department also comprises assistants such as legal secretaries and paralegals. Occupations in this area of the business may include the following: ■

Customer Services Customer services are essential to a company’s operations. Individuals working in this capacity must possess excellent people skills. When a customer issues a complaint, customer service personnel must handle it in a competent and pleasant manner. The customer may be an individual or a representative of another company that may purchase thousands of units annually. A large company may employ managers, assistant managers, and representatives who communicate with customers via telephone or the Internet. Customer services usually are augmented by automated telephone messages and Web-based services. It is imperative that these services be well designed and capable of handling many common customer service issues. Occupations in this area of the business may include the following:

General Manager Assistant Manager Supervisor Customer Service Representative Webmaster

■ ■ ■

General Counsel Paralegal Legal Secretary Administrative Assistant

Medical Services Large companies might maintain in-house health care professionals who can handle urgent care issues such as job injuries. This department might also promote preventive health care including weight loss and smoking cessation programs. Occupations in this area of the business may include the following: ■ ■ ■ ■ ■ ■

Physician Nurse Practitioner Registered Nurse Physician Assistant Medical Assistant Administrative Assistant

Light Machinery Industry OCCUPATION

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PROFILE

Industrial Machinery Mechanic Considerations

Qualifications

Description

Maintains and repairs production machinery, cranes, pumps, engines, conveyor systems, and other mechanical equipment used in factories.

Career clusters

Manufacturing; Transportation, Distribution, and Logistics

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

REI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Sales and Marketing Manufacturing companies maintain a staff of vendors: salespeople who call on businesses or individuals to promote their product line. Vendors also meet with retailers to promote the company’s products over those of competitors. Marketing is conducted by advertising in print, broadcast, and Internet media. The Internet is a particularly common vehicle for promoting products. Potential customers can obtain product specifications, compare, and purchase products (either on the company’s Web site or by referral to a retailer). The marketing department includes graphic designers who can develop illustrations for Web sites, print advertisements, and other promotional materials. This department also includes photographers, videographers, and writers who prepare text for publications. Public relations (PR) specialists prepare press releases announcing new products and other news about the company. Large companies

will employ specialists in the aforementioned areas. Smaller companies will outsource that work. Occupations in this area of the business may include the following: ■ ■ ■ ■ ■ ■ ■ ■

General Manager Assistant Manager Secretary Administrative Assistant Web Designer Photographer Videographer Sales Representative

Information Technology All businesses will have individuals familiar with computer maintenance and operation. Computer networks are involved in many aspects of a business, including inventory, payroll, sales, and production. A breakdown in a computer network can

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Light Machinery Industry OCCUPATION

SPECIALTIES

Small Engine Mechanics Specialty

Responsibilities

Gas engine repairers

Maintain and repair gas-driven, internal-combustion engines that power electric generators, compressors, and similar equipment.

Motorcycle repairers

Overhaul and repair motorcycles, motor scooters, and other similar motor vehicles. They may also repair or replace other parts of the motorcycle, such as the frame, brakes, spring fork, headlight, horn, handlebar controls, gas and oil tanks, mufflers, and wheels.

Outboard motor mechanics

Check out and adjust or repair electrical and mechanical systems of outboard motors. They may change or replace parts such as gears and propellers, or they may install and repair steering and throttle controls.

Power saw mechanics

Repair and maintain portable saws.

bring production or sales to a halt. The information technology (IT) department consists of individuals with college degrees in computer science as well as technicians with training from vocational schools or community colleges. These lower-level positions include installation, wiring, and maintenance of computer equipment. Occupations in this area of the business may include the following:

surveillance and entry into restricted areas. Dealerships also often have video monitoring. Larger establishments will maintain an on-site security force during nonbusiness hours. Occupations in this area of the business may include the following: ■ ■ ■

■ ■ ■ ■ ■

General Manager Assistant Manager Information Technologist Technician Data Entry Clerk

Facilities and Security Maintenance of larger facilities requires housekeeping personnel, painters, and repairmen. Large manufacturing corporations often have large security departments headed by one or more managers. Security personnel are responsible for preventing unwanted entry to areas where research and development is being conducted. They also are responsible for ensuring safety of the personnel by guarding against entry by individuals who could pose a threat. Security personnel monitor video

■ ■

General Manager Assistant Manager Security Guard Housekeeper Custodian/Janitor

Technology, Research, Design, and Development Ongoing research and development is a vital element of a light machine construction company. Even midsize businesses must devote time in this arena to remain competitive. Although engineers and technicians are primarily responsible for the development of a new product, this department also includes a large number of support personnel. Before a new machine is ready for the production line, an extensive process of creation and testing must be completed. For complicated equipment, this process can take several years. Engineers with a variety of specialties are employed by this department. Me-

Light Machinery Industry chanical engineers design the machine’s moving parts. They also oversee the work of technicians, who run tests on materials and parts before they are assembled into the final product. After assembly, this department tests products before they are released to the marketplace. Equipment is run through repeated duty cycles, knobs are twisted, buttons are pushed, and doors are slammed. If a mechanical defect is discovered after a product is released, the company might be forced to issue a costly recall. Electrical and electronics engineers are required for the development of machines with complicated electric or electronic systems; these engineers also assist in the design and testing process. The responsibility of industrial engineers is to optimize production of the product; they determine how to best allocate the factory’s resources. Once the design process and testing are complete, draftsmen prepare the plans that production workers use for assembly of the machine. For each part, draftsmen provide specifications and diagrams; they also produce assembly instructions for the final product.

OCCUPATION

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Occupations in this area of the business may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Engineering Manager Engineer Manager Supervisor Technician Mechanical Drafter Production Worker Assembly Worker

Production and Operations Production is overseen by managers, assistant managers, and supervisors. The bulk of the workforce consists of a hierarchy ranging from experienced workers with expertise in one or more production areas to inexperienced new hires. Large companies offer training programs to help workers advance. Large and many midsize companies assemble their products on a production line similar to that of an automobile company. Robots are in-

PROFILE

Office Machine Repairer Considerations

Qualifications

Description

Inspects, adjusts, and repairs office machines such as ATMs, digital copiers, and computer systems.

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma/technical training

Physical exertion

Light work; medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Recommended

Employment outlook

Decline expected

Holland interest score

RES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Light Machinery Industry

creasingly being employed in light equipment manufacturing. These devices replace workers; however, personnel are still required to control them. Employee safety is a major concern. Specialized clothing and goggles may be required for workers. Small companies often have fewer than a dozen workers responsible for the entire production process. However, large companies often have a multistage production process, consisting of separate teams of workers for design and testing, parts manufacturing, and product assembly. Despite this segmentation, considerable interaction takes place between the teams. Occupations in this area of the business may include the following: ■ ■ ■ ■ ■ ■

Manager Assistant Manager Supervisor Assembler Wireman Maintenance and Repair Worker

OCCUPATION

Distribution Light machinery companies own or lease distribution centers to warehouse and distribute products. Because many companies are global in nature, they have distribution centers located in various areas around the world. These centers are often located near rail lines, ports, and the interstate highway system. Distribution centers are overseen by managers who are in charge of a workforce consisting primarily of warehousemen who move products in and out of the facility. Managers also must ensure that inventory remains at an appropriate level. The distribution center may employ truck drivers or contract with a trucking company for transporting items. Occupations in this area of the business may include the following: ■ ■ ■ ■

Manager Assistant Manager Supervisor Dispatcher

PROFILE

Mechanical Engineer Considerations

Qualifications

Description

Researches, develops, designs, manufactures, and tests tools, engines, machines, and other mechanical devices.

Career clusters

Architecture and Construction; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service; part-time work

Licensure and certification

Required

Employment outlook

Slower-than-average growth expected

Holland interest score

RIS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Light Machinery Industry ■ ■ ■

Warehouse Worker Truck Driver Freight Loader/Unloader

Human Resources The human resources department of a manufacturing company or retail outlet is responsible for all personnel. It handles employee hiring and dismissal, employee relations, benefits, and training. The human resources department is involved with recruiting employees through forums such as Internet job advertising and interviews on college campuses and at job fairs. Managers are typically college graduates. Clerical personnel and assistants with less educational experience also are employed in this department. Occupations in this area of the business may include the following: ■ ■ ■ ■ ■

Manager Assistant Manager Administrative Assistant Secretary Interviewer

Payroll The payroll department often is overseen by a certified public accountant (CPA) with management experience. Other CPAs, clerical personnel, and assistants also are employed. Large companies have a computerized, automated system to generate paychecks; however, some human intervention on a daily basis is required. Occupations in this area of the business may include the following: ■ ■ ■ ■

Payroll Manager Assistant Manager Administrative Assistant Secretary

INDUSTRY

OUTLOOK

Overview The economic downturn has adversely affected the light machinery industry. However, in September, 2010, The Wall Street Journal reported that the Institute for Supply Management, which surveys U.S. purchasing managers, had noted a slight in-

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crease in the manufacturing index from July to August, 2010. The Wall Street Journal also reported that new orders for factory goods rose in July, 2010, and the U.S. trade deficit decreased. Positive economic indicators such as these make it more likely that hiring will increase. Many companies reduced their number of employees between 2008 and 2010, through hiring freezes, layoffs, and incentives for early retirement. Augmenting this process were improvements in efficiency made possible by robotics and other technologies that reduced the demand for manpower. Regardless of the state of the economy, openings will occur because of the need to replace workers who retire or move to other industries. Production workers account for more than 50 percent of the workers in this industry; those with greater technical skills will have a significant advantage in obtaining and maintaining positions. The presence of midsize and small businesses will most likely decrease. If the economic downturn continues, many of these companies either will disappear or be acquired by other companies. Furthermore, mergers and acquisitions will result in an increase in size of the dominant companies. Large companies also will look to expand their international reach to weather the instability. One sector of the industry will profit if an economic downturn continues: the repair sector. In this economic situation, consumers will be much more likely to have existing equipment repaired rather than replacing it with a new one sporting state-of-the-art features. Robotics will increase for manufacturing. This increase may be hampered by labor union representation, which will fight to preserve job positions. A number of manufacturing plants outside the United States utilize robotics to a greater degree. This situation increases their profit margin, thus giving these companies a competitive advantage over those in the United States. High-tech features will also increase with the introduction of new products. Power tool production is likely to increase in all industrialized nations because they are becoming more technology driven. Lighter, more powerful, and long-lasting batteries will appear on the market, thus increasing the popularity of cordless power tools. The charging time of these batteries, which initially was measured in hours, has been reduced to minutes.

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Light Machinery Industry

Considerable research is focused on increased energy efficiency and reduced emissions for products such as the power lawn mower. Gasoline engines are being replaced by electric motors (particularly battery powered). As new “greener” products are released on the market, end users ranging from companies to individuals will be motivated to purchase machines that are more efficient and less polluting. Employment Advantages According to the Bureau of Labor Statistics, “machinery manufacturing has some of the most highly skilled—and highly paid—production jobs in manufacturing.” Even though this industry has experienced a decline, it is still a worthwhile career choice. Light equipment is essential to any industrialized nation; demand for it always will exist, and over time, components will fail. Most light machinery companies are large, global, and produce a wide variety of products; thus, they offer a degree of stability not found in smaller companies and those that do not produce essential products. The industry can support a wide variety of careers, including managerial, technical, and sales. Annual Earnings The near-term outlook for the light machinery industry is unclear. Most companies reported a decline in net sales between 2008 and 2009. For example, net sales declined 16 percent for Stanley Black & Decker from 2008 to 2009. Deere & Company experienced a 26 percent decline during that period, while Makita Corporation experienced a 13 percent decline. Directly affecting the light machinery industry is the stagnation of new home construction since 2009. Some building resumed in the first quarter of 2010; however, the trend did not continue through the next two quarters. The economy also improved to a degree during the first quarter of 2010; however, consumer spending for all products in the United States fell 1.2 percent from April to May, 2010. In 2010, the U.S. economy was faring somewhat better than the European economy. However, American companies face ever-increasing competition from Asian manufacturers. A significant portion of the light machinery industry is based in Asia. Japanese and Korean manufacturers hold a significant market share in the United States; how-

ever, a greater threat is posed by China, which not only exports light machinery but also manufactures products for American companies. The light machinery industry in the United States is likely to face increasing competition from China in the near future.

RELATED RESOURCES FOR FURTHER RESEARCH Deere & Company Deere & Company World Headquarters 1 John Deere Place Moline, IL 61265 Tel: (309) 765-8000 Fax: (309) 765-7283 http://www.deere.com EQUIPMENT WORLD 3200 Rice Mine Rd. Tuscaloosa, AL 35406 Tel: (800) 633-5953 Fax: (205) 349-3765 http://www.equipmentworld.com Institute for Supply Management P.O. Box 22160 Tempe, AZ 85285 Tel: (480) 752-6275 or (800) 888-6276 Fax: (480) 752-7890 http://www.ism.ws Komatsu 2-3-6 Akasaka, Minato-ku Tokyo 107-8414 Japan Tel: 81-3-5561-2616 http://www.komatsu.com Makita USA 14930 Northam St. La Mirada, CA 90638 Tel: (714) 522-8088 Fax: (714) 522-8133 http://www.makita.com Robert Bosch LLC 38000 Hills Tech Dr. Farmington Hills, MI 48331

Light Machinery Industry Tel: (877) 267-2499 or (248) 876-1000 Fax: (248) 876-1116 http://www.boschtools.com Techtronic Industries North America 1428 Pearman Dairy Rd. Anderson, SC 29625 Tel: (864) 226-6511 Fax: (864) 226-9435 http://www.ttigroupna.com

ABOUT

THE

AUTHOR

Robin L. Wulffson, M.D., is a board-certified specialist in obstetrics and gynecology. In 1997, he transitioned to a writing career. He has written analytic reports of major corporations and industries. He also has analyzed hospital systems and medical device manufacturers. He is familiar with the light machinery industry in the United States, Europe, and Asia. For the past fifteen years, he has closely followed the business sector in both the United States and the international arena.

FURTHER

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READING

Abraham, Edward. Competitive Assessment of the United States Power Tool Industry. Washington, D.C.: Industrial Trade Administration, 1992. Institute for Career Research. Careers in the Machine Trades: Precision Machinist, Tool and Die Maker. Chicago: Author, 2009. Paz, Emilio Bautista, et al. A Brief Illustrated History of Machines and Mechanisms. New York: Sprinter, 2010. Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010. Stearns, Peter N. The Industrial Revolution in World History. 3rd ed. Boulder, Colo.: Westview Press, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

©Dreamstime.com

Livestock and Animal Products Industry

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Agriculture and Food Career Cluster: Agriculture, Food, and Natural Resources Subcategory Industries: Bee Production (Apiculture); Beef Cattle Ranching and Farming; Dairy Cattle and Milk Production; Fur-Bearing Animal and Rabbit Production; Hog and Pig Farming; Horses and Other Equine Production; Poultry and Egg Production; Sheep and Goat Farming Related Industries: Farming Industry; Fishing and Fisheries Industry; Food Manufacturing and Wholesaling Industry; Veterinary Industry Annual Domestic Revenues: $154 billion USD (U.S. Census of Agriculture, 2007) Annual International Revenues: $510 billion USD (Organization for Economic Cooperation and Development-Food and Agriculture Organization Agricultural Outlook, 2007-2016) Annual Global Revenues: $664 billion USD (Organization for Economic Cooperation and Development-Food and Agriculture Organization Agricultural Outlook, 20072016) NAICS Numbers: 1129, 1121-1124

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DEFINITION

Summary The livestock and animal products industry produces farm animals and processes animal products for food. Livestock include dairy and beef cattle, hogs, sheep, horses, and poultry, as well as minor domesticated and farm animals such as rabbits, goats, and bees. Fish farms and other forms of aquaculture are included in the fishing and fisheries industry rather than the livestock industry. The animal products industry includes slaughterhouses and establishments that further process meat and other animal products. The industry has trended toward large production and processing firms, which are concentrated in distinct regions of the country and the world. Since the 1950’s, farms with livestock have become more specialized as they have become industrialized, with a tendency to raise just one species of livestock. History of the Industry The world livestock industry had its beginnings when humans ceased to be hunters and gatherers, settled down into communities, and started agriculture. Sheep were domesticated between eleven thousand and fifteen thousand years ago in the mountains of south-

Livestock and Animal Products Industry eastern Europe and central and southwestern Asia. They were raised for wool and meat. Cattle were domesticated around between ten thousand and fifteen thousand years ago near the boundary of Europe and Asia or southwestern Asia. Cattle were used for meat, milk, and draft labor. Horses were domesticated approximately five thousand years ago in eastern Europe and western Asia. Although originally used for meat and milk, horses became primarily useful as pack and draft animals. Goats were domesticated around eight thousand or nine thousand years ago in western Asia. Goats were used for meat and milk. Chickens were domesticated more than three thousand years ago in China and Southeast Asia. Chickens were raised for eggs and meat. Turkeys were more recently domesticated in middle North America and were raised primarily for meat. The U.S. livestock industry had its beginnings with the European exploration of the New World. During colonial times, livestock was dependent on free grazing in forests and fields. Boston became a market town in the seventeenth century. The establishment of slaughterhouses provided an outlet for farmers’ animals and for the purchase of fresh

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meat by residents. Other markets developed in Pennsylvania, New York City, and the Carolinas. When the United States expanded westward, the Ohio Valley became the center of the livestock industry, although the South and Northeast remained important livestock areas. Preservation of meat in the time before refrigeration was a major challenge, and much was wasted. The livestock industry experienced a large expansion after the Civil War. As the western frontier opened, economics favored the production of large numbers of cattle, eventually reaching 5 million in the two decades after the Civil War. The Great Plains region, stretching north from Texas to the Canadian border, saw the establishment of huge cattle ranches to accommodate the equally huge demand for beef from eastern cities. The animals were driven to railheads to be transported by rail to slaughterhouses located in Chicago, Kansas City, St. Louis, and other midwestern cities. The development of refrigerated railcars helped in the distribution of meat products. Five companies dominated the meatpacking industry: Swift, Philip and Simeon Armor, Nelson Morris, Cudahy Packers, and Schwarschild and Sulzberger. This domi-

Cow dogs retrieve a wayward calf. Beef cattle businesses are still predominantly small family farmers and ranchers. (©Cynthia Baldauf/iStockphoto.com)

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Livestock and Animal Products Industry

tivity than was possible in previous years. Greater productivity results in fewer producers and fewer production jobs, but it also results in more jobs in other areas of the industry. The beef cattle businesses are still predominantly small family farmers and ranchers, but the industry’s activity is highly consolidated among the few large operations. Ranches with fewer than fifty cows constitute 63 percent of cattle owners but account for only 13.6 percent of the nation’s cattle. Ranches with more than one thousand cattle, by contrast, constitute less than 1 percent of owners but account for 22.7 percent of cattle. American beef productivity increased by 80 percent between 1955 and 2007. Currently, the total U.S. beef herd comprises 97 million animals at any given time and produces 26.4 billion pounds of beef per year. However, changes in consumer preferences resulted in a decrease in beef demand of nearly 50 percent between 1980 and 1988. Cow-calf operations graze cattle primarily on range or pasture. Cattle feedlots finish cattle. Feedlots are concentrated primarily in the Great Plains but are also important in the Corn Belt, the Southwest, and the The Industry Today Pacific Northwest. The current livestock and animal products inMore than sixty thousand dairy farms in the dustry is characterized by large operations, inUnited States produce milk, cheese, yogurt, and creased consolidation, and much greater producother dairy products. Around 99 percent of all dairy farms are family owned and operated, but, similar to the situation in other livestock sectors, large farms produce the bulk of dairy products. The majority of dairy farms have less than one hundred cows, but farms with more than one hundred cows produce 77 percent of the milk. The top dairy-producing states are California, Wisconsin, New York, Pennsylvania, and Idaho. Cheese and fluid milk use most of the milk supply, but yogurt, butter, and ice cream are also made in processing plants. Horses (and mules) have traditionally been considered livestock, although they are rarely More than sixty thousand dairy farms in the United States produce milk, cheese, yogurt, and other dairy products. (©Dreamstime.com) used for meat in the United nance led the Department of Justice to conduct a series of antitrust investigations. Poor working conditions in the meatpacking industry also resulted in an active labor movement and the passage of the Fair Labor Standards Act of 1938. Major changes in the livestock and meatpacking industry took place after World War II. Improvements in transportation and refrigerated trucks meant that slaughterhouses could be located closer to the places where livestock were raised. This decentralization led to the decline of the major slaughterhouses. Large numbers of cattle came to be fed in feedlots, since grain feeding resulted in higher-grade beef than pasture feeding. The dairy industry also experienced large changes in the 1940’s. Automatic milking machines were invented, and milk was handled in bulk tanks. There was an astonishing increase in milk productivity per animal, so that dairy cattle numbers declined from 25.6 million animals in 1944 to around 9.2 million animals today, with no decrease in total milk produced.

Livestock and Animal Products Industry

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Cowboys in Wyoming drive horses, assisted by a dog. More than 702,000 people are employed directly in the horse industry. (©David Mathies/iStockphoto.com)

States. They are used for recreation, showing, racing, farm and ranch work, carriage work, and polo. The American Horse Council states that the United States has 9.2 million horses and that almost 702,000 people are employed directly in the horse industry. The swine industry continues to show steady improvements in pigs produced per sow. The number of hog farms declined from over 1 million in 1965 to around eighty thousand in 2001. Small hog farms of less than one hundred animals are rapidly disappearing. Large hog farms of more than five hundred animals, on the other hand, keep getting bigger. In 2002, nearly half of the hogs in the United States were owned by operations with more than fifty thousand head. Total U.S. hog inventory has remained stable at around 60 million head. It has become practically a necessity for a hog farm to be large in order for it to be profitable. Hog slaughterhouses are also showing a steady trend toward being larger and fewer in numbers. These trends are likely to continue.

The geographical area of hog production is shifting somewhat away from the Midwest toward North Carolina, which has developed a better system, and toward Oklahoma, Colorado, and Utah, which have the advantages of being away from rain and population centers. Hog production has increasingly adopted the vertical integration business model, increasing from 6.4 percent in 1994 to about 87 percent in 2010. In vertical integration, one company assumes control of all aspects of procurement, production, processing, and marketing of a product. In the hog industry, one type of vertical integration contract entails growers producing a given number of hogs in a company’s facilities for a fee. These contracts accounted for 55 percent of all hogs produced in 2000. Growing under contract raises total productivity by 20 to 23 percent. Although the size of hog operations is an important factor in lowering production costs, the managerial ability of individual hog producers is equally important. Since the 1970’s, an increasing number of hogs have been raised in total

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farms primarily for eggs and only secondarily for meat, mostly for the farm families. New technologies and management methods permitted a rapid expansion and specialization of the industry. Currently, most chicken meat found in retail stores comes from young chickens, termed broilers in the industry. Broiler production is centered in the southeast states, with most growers under contract in the vertical integration system of management. Turkey production is similar in location and management, but with more independent producers and more production in the midwestern states. Egg producers use specialized breeds, with practically all flocks kept confined in cages. Fur farming is in decline as a reSmall hog farms of less than one hundred animals are rapidly disappearing, sult of the activities of animal rights while large hog farms are increasing in number. (©Martine De Graaf/ organizations and a decrease in deDreamstime.com) mand. Worldwide, about 31 million mink and fox pelts are raised on fur ranches. Other animals raised for fur inconfinement. Hog production operations have beclude chinchilla, fitch, finnraccoon, lynx, bobcat, come more specialized. Instead of growing hogs and nutria. According to Fur Commission USA, in from farrow (birth) to finish on the same farm, 2008 three hundred farms produced 2.79 million more farms are specializing in just a portion of the mink pelts with a total value of $115 million. Mink growth cycle. Feed efficiency on hog farms imfarming is concentrated in the northern states, as a proved by 20 percent from 1992 to 1998, while lacold climate is important to produce thick coats. bor efficiency increased by 60 percent during this The United States is the fifth greatest producer of time period. minks. Rabbits as farm animals are raised primarily The number of sheep in the United States has for meat, as their hides are of relatively poor qualdeclined, from a high of 56 million in 1942 to 6.2 ity. Roughly 2 million rabbits were slaughtered for million in 2007. Australia and New Zealand now meat in 2001, representing around $8 million in provide 50 percent of the consumer lamb supply. sales. Sheep are still grown largely on pastures, either unimproved in the West, or on improved pastures followed by feedlots in the midwestern and eastern states. Lamb meat is the mainstay of the industry, INDUSTRY MARKET but milk for production of cheeses and yogurt is beSEGMENTS coming important. Although wool was a primary reason to raise sheep, it is now of minor imporLivestock and animal products businesses range tance, as the market for wool has shrunk as a result in size from small producers that gain only a porof competition from other natural and artificial fition of their income from the enterprise to large, bers. integrated firms that control all aspects of producThe poultry industry did not develop signifition and marketing. The following sections procantly until the mid-1940’s. Prior to that time, vide a comprehensive breakdown of each of these chickens and other poultry were raised on most different segments.

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ers and their employees interact with the managers Small Businesses and owners of retail outlets and with individual Small livestock and animal product businesses consumers at farmers markets. They must be able have gross sales of less than $100,000. Operators to communicate effectively the value of their prodtypically have other sources of income, either ucts, to negotiate prices, and to deliver products at other farming activities or off-farm employment. agreed-upon times. Grazing animals such as beef cattle, sheep, and Amenities, Atmosphere, and Physical goats are the most common livestock, because they Grounds. Small farmers and ranchers care not require low investment and labor expenditures. only for the animals on their land but also for the Recently, the growth of organic and value-added land itself. They often attempt to keep their propproducts has provided a new niche for small liveerty neat and attractive, in part so that its real estate stock producers. value is maintained. They may improve the value of Potential Annual Earnings Scale. Income detheir property by clearing land, establishing neat rived from small livestock businesses can vary pastures, exhibiting attractive livestock, and so on. greatly depending on the type of operation and the Consideration of physical grounds is essential objectives of the operator-owner. The U.S. Departbefore launching a small livestock business. The ment of Agriculture (USDA) estimated in 2007 necessary infrastructure may already be in place that the average small farm family income was if the business is located on an existing or prior around $63,000, quite similar to national family infarm. Physical facilities include pens, gates and comes. However, most of that income was not proshelters, and land for pastures and possibly for duced by farming: The average income derived growing forage. from farm activities was only around $4,900. More Supplying a niche market such as specialized than one-half of small livestock businesses have a dairy products could be a successful business apnegative profit margin. A small livestock producer proach. Dairy sheep and goats are smaller and recannot compete with large producers for standard quire less space and maintenance than dairy cattle, products, since the small business lacks economies and they can provide cheese and yogurt for a growof scale and must accept a very low profit margin ing consumer market. A building appropriate for per unit of product. If profits are expected, a small milking and processing dairy products would be livestock producer must produce a more valuable necessary. If producers intend to sell fresh meats, product for a specialty market. One example could they may have to slaughter animals themselves, as be an organic, grass-fed approach in which livestock are raised without antibiotics or hormones. A consumer who adopts the organic philosophy might be willing to pay a premium price for meat, especially if it had a better taste. Another example of a value-added product is specialized breeding stock, such as miniature cattle. Clientele Interaction. Most small producers sell their animal products to family and friends, rather than a traditional clientele. The nonmarket value of these products may be the main justification for an operation. Some products may be sold to consumers at farmers markets, Egg producers use specialized breeds of chickens, with practically all flocks kept to local grocery stores, or to restaurants. In these cases, producconfined in cages. (©Ryan Beiler/Dreamstime.com)

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local slaughterhouses that accept small numbers of animals can be hard to find. The sale of farmslaughtered meat is usually carefully restricted. Egg production may be an easy business to enter and can be profitable if there is no other local supplier of fresh, naturally produced eggs. Typical Number of Employees. Small livestock and animal products farms and ranches usually draw all necessary labor from their owners and the owners’ partners and family members. They do not usually hire full-time employees. Traditional Geographic Locations. Small livestock and animal products businesses are located throughout the country, primarily in rural areas that have the necessary support businesses and markets to sustain them. Pros of Working on a Small Farm or Ranch. For the health-conscious person, providing fresh, high-quality animal products is a major benefit of working in a small livestock business. The animals can be raised free of drugs, antibiotics, or feed additives. Most owners of these businesses like animals and the lifestyle associated with raising them. Raising livestock can be complementary to other farm or rural activities. Moreover, the USDA, through its “Know Your Farmer, Know Your Food” program, is providing funding to expand and develop the infrastructure necessary to support small and midsize farms. As a result, there may be funding available to those seeking to help build that infrastructure, such as by starting a small slaughterhouse, and the expansion of the infrastructure may increase the chances that a small business can be profitable. Cons of Working on a Small Farm or Ranch. Small livestock businesses are noted for their low financial returns. Despite the expanding infrastructure, this situation is likely to continue. Livestock require care every day, so it is difficult to plan trips or vacations that require leaving one’s property. Owners and producers must be adaptable and versatile in order to solve problems as they arise without recourse to outside consultants, and they must be creative in finding ways to keep expenses at a minimum. Costs Payroll and Benefits: Small family businesses may not pay standard wages. Instead, owners and workers share in any profits according to agree-

ments worked out in advance. In such situations, workers also do not receive benefits. Supplies: Livestock businesses require animals, feed, feeders, waterers, and medications. Dairies require equipment for milking and for processing milk, including bottling it for direct consumption and turning it into butter and cheese. External Services: Livestock businesses may require the services of veterinarians, as well as county extension agents, who can provide lowcost assistance in subjects in which an owner lacks expertise. They may also require such maintenance experts as electricians or plumbers on occasion. Utilities: Small farms and ranches require utilities for commercial facilities, as well as for owners’ and other residences located on the property. These include water, electricity, and telephone service. Livestock usually do not need a heat source. Taxes: Often, properties can be classified for agricultural use if they meet certain criteria. Such agricultural properties can receive a substantial reduction in local property taxes, but small livestock businesses may not qualify. In that case, they must pay full property taxes, and owners and their partners must pay income taxes, including self-employment taxes. Midsize Businesses Midsize livestock businesses have gross sales of between $100,000 and $250,000. These businesses, particularly the larger ones, are usually the primary source of income for their operators. They are typically family farms. Midsize businesses tend to be more diverse than large businesses in terms of the types of livestock raised, but the primary livestock kept are beef and dairy cattle. Potential Annual Earnings Scale. As is the case with small farms and ranches, workers on midsize family farms do not necessarily receive regular wages. Instead, they share in profits, which can range from $15,000 to $100,000 per year, with an average income per business of $34,000. It is very difficult to estimate annual earnings for a livestock business because tremendous variables are involved. Size of farm, weather, health of the animals, overall economy, and many other factors can determine income in any given year. Midsize farms

Livestock and Animal Products Industry may be organized as sole proprietorships, partnerships, or family corporations. Clientele Interaction. Most interactions with clients take place off the farm. Clients include agents, auction houses, retail store managers, and the like. At times, livestock buyers may visit farms, especially if they are purchasing breeding stock. Retail customers may visit farms to purchase specialty animal products, such as eggs, dairy products, wool, and garments made from the farm’s wool. Midsize farms often have modest retail stores or rooms reserved for sales to visitors. Farmers that sell products at retail may also interact with customers at local farmers markets. Amenities, Atmosphere, and Physical Grounds. Livestock must appear clean, healthy, and vigorous, and their housing and grounds should be clean, neat, and appropriate. The type of livestock being raised on a given farm or ranch determines the nature of the physical grounds needed. Grazing animals such as beef or dairy cattle, sheep, or goats require extensive pasture, as well as land for growing forage. Dairy cattle need more extensive housing that includes milking parlors and milk houses, while more simple housing can suffice for other grazing animals. Poultry and, to a lesser extent, swine are often kept largely in confinement, so housing is primary. When a midsize livestock business is part of a diversified operation, its owner may have the resources needed to adopt an integrated farm management plan. Livestock being well cared for in a humane manner is an integral part of farm activities, which include crop nutrition and management, waste utilization, energy efficiency, and landscape and wildlife improvements. In this type of system, all components complement one another and little is wasted. Typical Number of Employees. Often, all labor in a midsize livestock business is supplied by family members. Farmworkers may be hired, but only about 10 percent of the total labor hours in midsize livestock businesses come from hired labor. Traditional Geographic Locations. Beef cattle are raised throughout the United States, typically on land that is not suitable for crop production. Sheep are raised on native or unimproved pasture lands in the western states and on smaller, improved pastures and in feedlots in the midwestern

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or eastern states. Hog and poultry operations are most often large businesses. Midsize hog and poultry businesses are often diverse farms that raise hogs and poultry alongside other animals and crops, and they may be located almost anywhere that farms are located in general. Pros of Working on a Midsize Farm or Ranch. Midsize family farms enjoy certain advantages over small and large livestock enterprises. A small business may not have all the components available to make an integrated farm management plan work efficiently, while large livestock businesses may demand more resources or generate more waste than can be supplied or used effectively by a complementary farm. People in the livestock business may enjoy working with animals and the outdoors environment. Producers have a lot of variety in their work, and time schedules are not too rigid. Cons of Working on a Midsize Farm or Ranch. It has become increasingly difficult for midsize family farms to survive, as increasing costs of production have been coupled with lower prices received for livestock and animal products. Livestock production and income is always a risk, as it is prey to many unpredictable factors, including weather, diseases, and uncertain market prices. Costs Payroll and Benefits: Owners and family members working on midsize livestock farms generally share in profits rather than receiving traditional wages. Some midsize farms may hire one or two workers, who may be paid hourly, weekly, or monthly. Workers may receive benefits including health insurance, holidays, vacations, and even living quarters on the farm. Supplies: Livestock businesses require animals, feed, feeders, waterers, and medications. Dairies require equipment for milking and for processing milk, including bottling it for direct consumption and turning it into butter and cheese. Farms may also require silos and grain storage structures, tractors and loaders, or trucks and stock trailers for transporting livestock. External Services: Midsize livestock businesses may contract accountants or tax preparation experts, as well as veterinarians. Extension agents can serve as valuable resources for family farms. Utilities: Midsize farms and ranches require utilities for commercial facilities, as well as for owners’

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and other residences located on the property. These include water, electricity, and telephone service. Livestock usually do not need a heat source. Taxes: A property may be assessed for agricultural use if it meets certain criteria in terms of acreage, income generated, and number of livestock. Qualifying properties are taxed at lower rates than most residential and commercial properties. Regardless, farmers and ranchers must pay some property taxes, as well as personal income and self-employment taxes on their farm-related income. They must also withhold income and payroll taxes from any employees. Large Businesses Large livestock businesses have gross sales greater than $250,000. They include larger family farms and nonfamily farms run by corporations, cooperatives, or hired managers. Corporations often follow a business model employing vertical integration. These businesses usually specialize in one type of livestock, with hogs and poultry showing strong representation. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual income of farmers and ranchers in 2009 was $52,050, although the relative standard error attaching to this estimate was nearly 20 percent, indicating a high degree of unreliability. The BLS provided a much more reliable estimate of annual salary for farm and ranch managers, whose average 2009 earnings were $63,140. Animal breeders earned an average of $36,770, while farmworkers handling farm and ranch animals earned an average of $23,250. Clientele Interaction. Due to increasing risks in the marketplace, most poultry and swine producers sign contracts with vertical integration corporations. In these cases, company representatives visit farms to discuss contracts with producers. Sales and service representatives of integrated companies interact with distributors, retailers, and restaurant managers that purchase their animal products. Amenities, Atmosphere, and Physical Grounds. Large livestock enterprises are characterized by large investments in buildings for confinement rearing of animals. Typically, only one type of livestock is kept and often only one stage of

production is managed. Examples would be farms producing only weaning piglets or stocker cattle. Some large operations still raise crops, but often the amount of waste generated can be greater than the capacity of the fields to effectively utilize it, leading to a waste problem. The land required for a beef cattle business depends on the type of operation. Extensive operations grow cattle by grazing, so more land is needed. Often, especially in the western states, cattle can be grazed on public lands, reducing the investment cost to the producer. Feedlots are confinement operations that are used for the final growing and fattening phase prior to slaughter. Although less land is needed than grazing operations, an infrastructure is often needed for thousands of animals. Feedlots have no attached farms and often create significant waste problems. Vertical integration companies can have office buildings that are located away from production facilities, which have a typical infrastructure. Typical Number of Employees. Over one-half of the labor is performed by hired labor. Two farm managers and five hired farm laborers is the average. Traditional Geographic Locations. Most hogs have traditionally been grown in the Midwest, although North Carolina, Oklahoma, Colorado, and Utah have recently shown increases. Chicken meat (broiler) production is concentrated in the southeastern states, from Delaware to Arkansas. The top egg-producing states are Iowa, Ohio, Pennsylvania, Indiana, and Texas. The top turkey-producing states are Minnesota, North Carolina, Missouri, Arkansas, and Virginia. Feedlots are common for finishing cattle in large operations. The cattle are fed grain and other concentrates to produce high-quality beef prior to slaughter. Feedlots are common in the Great Plains and are also important in parts of the Corn Belt, Southwest, and Pacific Northwest. The most important dairy states are California, Wisconsin, New York, Pennsylvania, Idaho, Michigan, New Mexico, and Vermont. Since milk is a perishable product, dairies are located within a convenient distance to retail stores (usually within one hundred miles). Pros of Working for a Large Livestock Business. Large livestock businesses are often run by vertical integration corporations. These corpora-

Livestock and Animal Products Industry tions can provide a large variety of specialized job opportunities. Employees who prefer to devote their energies and creativity in a specialized niche of the industry can thrive. Being an employee in a large corporation can provide income stability and job security. Cons of Working for a Large Livestock Business. Managers of large corporations (particularly in the animal products industry) must remain keenly aware of government safety and quality regulations. Labor relations can also be an ongoing concern. It can be difficult to finance a large independent operation, since the typically low and variable returns can make it difficult to repay loans. Often, large livestock farms are family owned and result from the growth of midsize farms. Costs Payroll and Benefits: Large livestock businesses are more likely to hire managers and workers, who are usually paid on a monthly basis, often with benefits that can include housing. Vertical integration companies can have a large number of employees, who are compensated on an hourly or salary basis. Benefits typically include paid vacations and holidays, as well as health insurance. Supplies: Livestock businesses require animals, feed, feeders, waterers, and medications. Dairies require equipment for milking and for processing milk, including bottling it for direct consumption and turning it into butter and cheese. Farms may also require silos and grain storage structures, tractors and loaders, or trucks and stock trailers for transporting livestock. Large businesses’ feeding systems are more likely to be automated, especially for poultry. Feedlots for cattle require extensive fencing, trucks, and distribution systems for feeding. Large dairy farms are normally not confinement operations, but they still require large additional investments in milking parlors and bulk milk handling. Egg farms require a room and machinery for egg handling and grading. Large companies have their own feed mills with their own requirements for feed grinding, mixing, and distribution. Poultry companies can have their own hatcheries, requiring incubators and other specialized equipment. Independent producers need to purchase foundation or replace-

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ment stock. Examples could be the purchase of calves or weaning piglets from breeders, or dayold chicks from hatcheries. External Services: External services can include veterinarians, extension agents, representatives that service contracts, electricians, and plumbers. Utilities: In addition to water, electricity, and telephone, large businesses need high-speed Internet and a source of heat, usually natural gas or oil. Taxes: Large vertically integrated companies are most likely set up as corporations. They must pay corporate income taxes and property taxes, although properties where livestock are produced are likely to qualify for reduced rates as agricultural properties. Corporate offices must pay standard property tax rates.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Most livestock businesses must fulfill the same basic functions, regardless of size. Only large companies, however, are likely to engage in significant division of labor. Small family businesses generally assign most job roles to their owners, and any other employees may need to perform multiple tasks as well. The following umbrella categories apply to the organizational structure of businesses in the livestock and animal products industry: ■ ■ ■ ■ ■ ■

■ ■

Business Management Customer Service Quality Assurance Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Human Resources

Business Management Business management personnel are concerned with the efficient and effective overall operation of their businesses. They plan, organize, direct, and control both individual departments and overall

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organizations. On small and midsize family farms, owners are the only managers. Larger companies may have extensive management staffs. Accountants prepare financial reports, such as balance sheets and profit/loss statements, that are essential to evaluate the financial health of a company and to prepare budgets and plan future cash flows. Operations managers report to senior management about production and statistical data related to company operations. Financial analysts monitor financial documents and accounts to ensure their accuracy and report trends to management. They also perform credit investigations on new accounts, monitor credit status on existing accounts, and prepare and resolve any issues with invoices, payments, pricing, and proofs of delivery. Procurement managers monitor and analyze trends in company spending and inventories in order to make future recommendations and to identify potential areas for cost savings. They also develop and implement purchasing policies for services and equipment. Purchasing agents work

with members of other departments such as marketing and production in order to determine their needs. They must have in-depth knowledge of the goods and services their organizations need and how they will be used, and they negotiate prices with suppliers of necessary goods and services. Business management personnel of large companies require at least a bachelor’s degree in business administration or accounting. Many executive managers have a master of business administration, and accountants usually need to be qualified as Certified Public Accountants. According to the BLS, the average salary for an agricultural chief executive in 2009 was $161,700; the average salary for an agricultural operations manager was $94,130; the average salary for a farm or ranch manager was $63,140. Business management occupations may include the following:

OCCUPATION

■ ■

Farmer/Farm Owner President/Chief Executive Officer (CEO)

PROFILE

Meat Cutter Considerations

Qualifications

Description

Reduces animal carcasses into small pieces of meat suitable for sale to customers.

Career clusters

Agriculture, Food, and Natural Resources; Human Services

Interests

Things

Working conditions

Work inside

Minimum education level

On-the-job training; apprenticeship

Physical exertion

Light work; medium work; heavy work

Physical abilities

Unexceptional/basic fitness; strength may be required

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

RSE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Livestock and Animal Products Industry ■ ■ ■ ■ ■ ■

Chief Financial Officer (CFO) Administrative Assistant Procurement Manager Financial Analyst Operations Manager Farm/Ranch Manager

Customer Service Customer service representatives provide the primary communication link between companies and their customers. They attempt to handle requests or complaints from customers to their complete satisfaction. Representatives work closely with sales and marketing, and they must understand all products and programs that their companies offer in order to explain benefits to potential customers and create interest for company products. They must inform customers of the means by which their problems or concerns will be addressed. Customer service managers oversee their departments, review policies and procedures, and develop action plans to effect improvements. According to the BLS, agricultural customer service representatives earned an average of $33,890 in 2009. Customer service occupations may include the following: ■ ■

Customer Service Representative Customer Service Manager

Quality Assurance Quality assurance personnel ensure that government regulations and customer expectations regarding food safety and quality are met. Supervisors, in consultation with senior managers, establish and implement systematic procedures to meet both internal and external quality standards. They must be knowledgeable in animal product processing procedures and have management skills. Quality coordinators identify problems and issues involving these procedures and initiate actions to improve them. Process engineers evaluate production processes with an eye to improving them by reducing costs while maintaining or improving product quality. Starting salaries in quality assurance can range from $24,000 to $45,000, while supervisors can earn around $90,000. Quality assurance occupations may include the following:

■ ■ ■ ■

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Farmhand Quality Assurance Supervisor Quality Assurance Coordinator Process Engineer

Sales and Marketing Marketing professionals analyze statistical data in order to develop strategies to increase market share of existing products and to identify and penetrate markets for new products. Marketing managers oversee all marketing, advertising, and promotional staff and activities. Sales personnel must understand their companies’ products in order to communicate their uses and benefits to clients. They call on grocery supervisors and small, local customers and attempt to convince these potential customers to carry or purchase their companies’ products. They perform sales activities at the store level, including merchandising, displays, set-ups, order writing, distribution, and stock management. Directors of business development manage business relationships and keep attuned to market needs in order to identify new opportunities. Market research analysts and sales analysts monitor and coordinate statistical information relating sales achievements to sales goals and previous years’ achievements. They assist in the sales planning process based on market intelligence. Packaging graphics specialists design appealing packaging. Marketing managers earn average annual salaries of $98,580 according to the BLS, while sales representatives earn an average of $63,810. Livestock dealers work for farmers and ranchers, selling their livestock. Livestock brokers, on the other hand, work for packers, buying animals for meat products. The two jobs require the same skills but have opposing interests, as dealers seek the highest prices for farmers, while brokers seek the lowest prices for packers. Workers in either job need a complete knowledge of the type of livestock they work with and their grades and quality, as well as a keen sense of current market conditions. Dealers and brokers may work on commission or receive a portion of the purchase price. They typically earn between $40,000 and $90,000 per year. Sales and marketing positions normally require bachelor’s degrees and strong verbal and written communication skills. Specialization in animal science and marketing is a good academic background for these positions.

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Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Sales Manager Sales Representative Marketing Manager Pricing Director Business Development Director Market Research Analyst Field Sales Consultant Sales Account Manager Packaging Graphics Specialist Livestock Dealer/Broker

velop technical design specifications, monitor system performance, and initiate corrective action when necessary. Package design engineers must have a thorough knowledge of the package development process, from concept through commercialization. Depending on the position, a degree in engineering or in food or dairy technology is needed. Agricultural engineers earned $70,100 on average in 2009, while food scientists and technologists earned an average of $47,900. Technology, research, design, and development occupations may include the following: ■

Facilities and Security Security is very important to maintain animal health, particularly for large swine and poultry operations where thousands of animals can be kept in large buildings. Visitors and suppliers to these facilities are always asked if they have visited other farms that day and are not permitted to enter animal facilities unless they don protective clothing and footwear. They may even be required to shower. All of these procedures are designed to prevent the introduction of diseases that could have devastating consequences to herds or flocks. Guidelines and procedures are developed within each organization and assigned to production managers for implementation. Facilities and security occupations may include the following: ■ ■

Live Production Manager Flock Supervisor

Technology, Research, Design, and Development Research and development personnel identify new technological advances in meat, dairy, and egg production and determine whether their companies would benefit by adopting them. They seek to develop new products, to maintain and improve the quality of existing products, and to evaluate product shelf life and safety. Systems engineers seek continuous improvements to plants and businesses by optimizing system performance and product quality. Their goal is to maximize productivity and capacity of systems while reducing waste and costs. Systems engineers construct, configure, install, test, and maintain system software. They de-

■ ■ ■

Food Technologist Dairy Technologist Systems Engineer/Analyst Packaging Design Engineer

Production and Operations Personnel in production and operations are involved in livestock production on the farm and processing of meat and animal products. Livestock producers are the entrepreneurs who design, invest in, start up, and oversee animal product businesses. They are also known by such titles as rancher and herdsman. On small farms, they can assume the roles of manager and livestock worker. Livestock managers must be very knowledgeable of the livestock operation, pay attention to detail, and have an innate sense of what is important. They invest in the people under their charge, empowering them to succeed and praising them when they do. Farm and ranch livestock workers perform a large variety of duties, including feeding, watering, herding, castrating, branding, debeaking, weighing, catching, and loading animals. They may maintain records, examine animals for diseases and injuries, assist in birth deliveries, and administer medications. They clean and maintain animal housing. Hired farmworkers make up less than 1 percent of all wage and salary workers. They make up 30 percent of all farmworkers (the remaining workers are family members). Production managers supervise workers in processing lines in slaughterhouses and in the further processing of animal products. They require an essential understanding and control of the production process. These managers ensure that production resources, including materials, equipment, and human resources, are available as needed to

Livestock and Animal Products Industry OCCUPATION

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PROFILE

Industrial Hygienist Considerations

Qualifications

Description

Conducts health programs in industrial plants or governmental organizations to recognize, eliminate, and control occupational health hazards and diseases.

Career clusters

Manufacturing; Science, Technology, Engineering, and Math; Transportation, Distribution, and Logistics

Interests

Data; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; military service

Licensure and certification

Recommended

Employment outlook

Average growth expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

maintain production schedules. They are able to inspire teamwork, and they check daily production orders to ensure fulfillment of customer orders. They also ensure accurate shipments, rotation of inventory, and proper identification of products. They plan, organize, and direct preventive maintenance programs; monitor inventory and purchasing programs; and direct training and safety programs. They ensure that all product quality and safety processes are followed, and they define the best practices used in the production processes. Some positions may require foreign language skills, especially Spanish, in order to interact with workers. Managerial positions usually require a B.S. degree, particularly in animal science, although experience can be very important. Livestock managers receive a starting salary ranging from $25,000 to $37,000, increasing to around $50,000 for experienced managers. Animal breeders apply principles of genetics to

develop and improve lines or breeds of livestock. They must decide whether to have registered purebred animals or commercial animals. Although registered cattle are more valuable, they require more investments, care, and management. Breeders select and breed animals according to their genealogy, desirable characteristics, and offspring. They compile extensive data on animal characteristics that are used in the selection process. Livestock breeders should have bachelor’s degrees in animal science, and often doctoral degrees in genetics are necessary to work at major breeding companies. Poultry hatchery managers supervise the activities of workers and assign tasks. They monitor incubators and other equipment and maintain records. They interact with buyers for the sale of baby poultry and eggs. Production and operations occupations may include the following:

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Livestock and Animal Products Industry

Farmer/Rancher Operations Specialist Supervisor of Processing Production Team Leader Plant Safety Manager Livestock Production Manager Livestock Producer Feed Mill Supervisor Poultry Hatchery Manager Animal Breeder Livestock Worker

Human Resources The human resources staff recruits, staffs, trains, and develops employees. They administer payroll and benefits and oversee employee relations, including addressing employee grievances. Human resources managers predict hiring needs and monitor appraisal systems for promotions, transfers, and dismissals of employees. The primary tasks of human relations personnel are to perform new employee orientation; assist employees when they become eligible for benefits; track employee activity (including vacation, sick leave, accidents, and attendance); and establish, track, and monitor employee training and development. They work with the top management staff to plan, develop, implement, and evaluate human resource activities. The staff must be informed about equal employment opportunity and affirmative action policies, government regulations, and labor relations. Human resources managers can receive salaries of around $75,000. Human resources occupations may include the following: ■ ■ ■

Human Resources Manager Human Resources Specialist Human Resources Assistant

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be stable. Employment in the livestock industry is expected to experience little change between 2008 and 2018. Employment in all industries, however, is expected to increase, so the livestock industry’s lack of growth will equate to a decline relative to

other industries. Consolidation, resulting in fewer but larger farms, is expected to continue over that period, but at a slower pace than in previous years. The remaining farms will be more productive. As a result, the number of livestock workers will remain about the same. The number of livestock managers will rise, though, as more owners transfer their responsibilities to managers, particularly owners who do not live on their land. The number of livestock managers is expected to rise by only about 6 percent, however, which is still below the average growth projected for all professions. U.S. meat and poultry production will show declines through 2011 because of declining consumer demand and higher grain and soybean-meal prices. The reduced domestic per capita consumption will continue through 2012. The result will be lower production at higher meat prices, resulting in improved net returns and incentives for moderate expansion. Poultry production will show the greatest growth over the 2010’s, as poultry are the most efficient converters of feed to meat. Milk production will rise, but at a lower rate than it did at the beginning of the twenty-first century. Consumption of cheese will increase, while fluid milk consumption will decrease. Livestock production in the United States is now often considered to be an agribusiness, as producers largely survive with very high volumes of product and very low profits per animal. The only way small livestock producers can survive in this environment is to supply a niche market with a value-added product. Increased awareness among consumers has allowed marketing features such as taste and texture differences, antibiotic-free status, and animal welfare issues, such as being raised on pasture. Natural and organic beef still represents only 1.4 percent of all fresh beef sold, so it is a small market. Retail organic beef products averaged $5.19 per pound in 2005, compared with $3.56 per pound for all beef products. However, for an animal product to be labeled “organic,” there are stringent requirements. For animal products to be labeled “natural” requires fewer measures by producers. “Natural” refers only to the product, not to how the animal was raised. The product must contain no additives, artificial flavors, colors, or preservatives. Large-scale vertical integration now provides 87 percent of the hogs produced, following a trend adopted much earlier in the poultry industry. With

Livestock and Animal Products Industry vertical integration, all aspects of hog production, from farrowing to final packing in retail counters, are controlled by one company. As a result of vagaries in the hog market, the majority of producers have felt compelled to sign contracts with vertical integration companies just to survive. Of the remaining 13 percent of hogs sold on the open market, the producers of only about 3 to 5 percent actually set the price for the commodity. This has resulted in a steady downward pressure in prices paid for live hogs. The U.S. beef herd was 97 million head in 2007, producing 26.4 billion pounds of beef. The figure demonstrates a productivity increase of 80 percent since 1955, and the United States is now the most efficient producer in the world. Many factors have led to this increase in productivity, such as ionophore supplements, growth-promoting implants, genetic selection, and vaccinations for multiple diseases. Beef demand declined significantly during the global recession. People bought fewer high-end cuts and reduced their patronage of restaurants and other prepared food vendors outside the home. Although demand for hamburgers has remained high, this demand does not benefit the U.S. cattle industry, since the fast food industry relies heavily on beef imports. Beef and dairy production will need to double by 2050 to supply global demand. Employment Advantages According to the BLS, the number of selfemployed farmers and producers is expected to decline moderately between 2008 and 2018, as technological advances lower profit margins and continue to favor large-scale production. However, opportunities are increasing for value-added and organic small farms. Moderate growth of 6 percent for farm managers is expected. Support services, such as farm labor contracting and farm management, will show a growth of around 18 percent as livestock farms grow larger. Vertically integrated corporations and very large farms will provide steady employment in a variety of positions. Students with an interest and background in livestock will continue to have many employment and business opportunities. Students with a background in animal science could consider entering into production or development of new animal products. Students with communication skills can write for livestock publications, newspapers, adver-

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tising agencies, and public relations companies. Talented persons with advanced degrees can find rewarding careers in nutrition and disease research. Graduates in animal science can find openings teaching vocational agriculture at the secondary school level. Students with a farm background could find rewarding careers working as county agents with the Cooperative Extension Service. Annual Earnings The total value of livestock sales in the United States in 2007 was $154 billion, consisting of $61.2 billion in beef, $44 billion in broilers, $18 billion in hogs, and $31.7 billion in dairy products. Predictions for 2010 show an overall increase of $11.5 billion in livestock receipts, largely due to increases in processing of milk, beef, hogs, broilers, eggs, and turkeys. There will be declines in the number of dairy cows and hogs and small increases in veal, broilers, and eggs. World exports of meat are predicted to increase by 1.8 percent per year. Rising per capita incomes combined with population growth will drive the global meat demand. World trade in major livestock products was around $664 billion in 2010, including $200 billion in beef, $192 billion in pork, $160 billion in poultry, $32 billion in lamb, and $77 in dairy products. The global recession of 20072009 resulted in a drop in U.S. exports of meat by more than 7 percent. As the economy grows, exports are projected to rise and to account for a growing share of U.S. meat use. U.S. poultry and meat consumption is expected to decline through 2011, with modest increases through 2019. Global livestock numbers and value of animal products is predicted to rise around 10 percent by 2016. This would increase global trade earnings to around $73 billion. The increases would be due to increasing population and increasing affluence of developing countries.

RELATED RESOURCES FOR FURTHER RESEARCH Food and Agriculture Organization of the United Nations Viale delle Terme di Caracalla 00153 Rome Italy

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Tel: 39-6-5705-3625 Fax: 39-6-5705-3360 http://www.fao.org National Institute for Animal Agriculture 13570 Meadowgrass Dr., Suite 201 Colorado Springs, CO 80921 Tel: (719) 538-8843 Fax: (719) 538-8847 http://www.animalagriculture.org U.S. Department of Agriculture, Economic Research Service 1800 M St. NW, Room S2032 Washington, DC 20036 Tel: (202) 694-5100 Fax: (202) 694-5646 http://www.ers.usda.gov

ABOUT

THE

AUTHOR

David A. Olle holds a master of science degree in biochemistry, a bachelor of science degree in agriculture, and certificates in medical writing and editing. He has worked as a freelance writer since 1995 on a variety of projects, including more than sixty articles on cancer treatments, revisions of chapters for a medical text, essays for a medical encyclopedia, a review of an oncology text, and various online science writing projects. He has also worked as an animal nutritionist and on veterinary drug development.

FURTHER

READING

Dunn, Barry. “Characteristics of Successful Ranch Management.” National Cattlemen: Producer Education 22, no. 5 (Fall, 2007): 6. Available at http://www.beefusa.org/uDocs/NC_ProED _Fall_07.pdf. Food and Agriculture Organization of the United Nations. The State of Food and Agriculture. Rome: Author, 2009. Available at http://www.fao .org/docrep/012/i0680e/i0680e00.htm. Gegner, Lance. Hog Production Alternatives. Fayetteville, Ark.: ATTRA-National Sustainable Agriculture Information Service, 2004.

Available at http://attra.ncat.org/attra-pub/ PDF/hog.pdf. Henkel, Keri, ed. Occupational Guidance for Agriculture. Minneapolis: Finney, 2002. Key, Nigel, and William McBride. The Changing Economics of U.S. Hog Production. Economic Research Report Number 52. Washington, D.C.: U.S. Department of Agriculture, Economic Research Service, 2007. Available at http://www.ers.usda.gov/publications/err52/ err52.pdf. McBride, William D., and Catherine Greene. “Organic Dairy Sector Evolves to Meet Changing Demand.” Amber Waves 8, no. 1 (March, 2010): 28-33. Available at http:// www.ers.usda.gov/AmberWaves/march10/ PDF/OrganicDairySector.pdf. McBride, William D., and Nigel Key. Economic and Structural Relationships in U.S. Hog Production. Agricultural Economic Report AER818. Washington, D.C.: U.S. Department of Agriculture, Economic Research Service, 2003. Available at http://www.ers.usda.gov/ publications/aer818. MacDonald, James M., and William D. McBride. The Transformation of U.S. Livestock Agriculture: Scale, Efficiency, and Risks. Economic Information Bulletin EIB-43. Washington, D.C.: U.S. Department of Agriculture, Economic Research Service, 2009. Available at http://www.ers.usda.gov/Publications/EIB43. National Academy of Sciences. Changes in the Sheep Industry in the United States. Washington, D.C.: Author, 2008. Organization for Economic Cooperation and Development and Food and Agriculture Organization of the United Nations. OECDFAO Agricultural Outlook, 2009-2018. Paris: Authors, 2009. Perry, Janet, David Banker, and Robert Green. Broiler Farms’ Organization, Management, and Performance. Agriculture Information Bulletin AIB748. Washington, D.C.: U.S. Department of Agriculture, Economic Research Service, 1999. Available at http://www.ers.usda.gov/ Publications/AIB748/. U.S. Bureau of Labor Statistics. “Agriculture, Forestry, and Fishing.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/cg/cgs001.htm.

Livestock and Animal Products Industry _______. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Agriculture. Economic Research Service. USDA Agricultural Projections to 2019. Report OCE-2010-1. Washington, D.C.: Author, 2010. Available at http://

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www.ers.usda.gov/publications/oce101. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. University of California Cooperative Extension. Structure of the Cattle Business. Livestock and Natural Resources Publication 31-609. Berkeley: Author, 1996.

©Stephen Coburn/Dreamstime.com

Local Public Administration

states and towns. Employees working for state and local government in a nonmilitary capacity are often General Industry: Government and Public Administration referred to as “civil servants” and Career Cluster: Government and Public Administration are employed in virtually every Occupations employment category. They adSubcategory Industries: Combined Executive and vise governors and mayors conLegislative Offices; Independent Administrative cerning public policy issues, prosAgencies; Justice, Public Order, and Safety Activities; ecute and defend lawsuits against Legislative Bodies; State and Local Executive Offices cities and towns, research and colRelated Industries: Civil Services: Planning; Civil Services: lect data on important social isPublic Safety; Federal Public Administration; Political sues, and formulate and manage Advocacy Industry; Public Health Services state and municipal budgets and Annual Domestic Revenues: Taxes only: approximately workforces. $1.28 trillion USD (The Tax Foundation, 2008) State and municipal public adNAICS Number: 921-926 ministration is funded in large part by tax revenues collected by states and towns and paid by residents and landowners. Additionally, a portion of federal tax dollars is returned to INDUSTRY DEFINITION states and towns to help fund local government programs. Goals associated with state and local Summary public administration include serving members of Those working in the state and local public adthe public in need of assistance, providing that asministration industry are responsible for the daysistance in a timely and efficient manner, and using to-day operation of the executive, legislative, and resources to provide services utilizing the fewest judicial branches of state, county, and municipal tax dollars. Careers in state and local public admingovernments. The industry encompasses millions istration are comparable to similar careers in the of civil service employees employed by the various private sector and often offer competitive wages governmental levels and branches, who impleand benefit packages. However, some employees ment the policies and programs of their respective INDUSTRY

SNAPSHOT

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Local Public Administration may find that both compensation and the opportunity for career advancement can be limited in the local public administration industry. Despite recent downturns in the U.S. economy, this industry as a whole has remained relatively stable and likely will continue to be a steady source of employment in the foreseeable future. History of the Industry Each state, county, and municipality has its own unique systems, rules, and procedures governing its public administration. These rules and regulations have developed over decades and, in some cases, centuries of trial and error, in an effort to maximize efficiency and minimize the waste of taxpayer dollars. States and towns must also follow certain uniform rules, such as paying employees the federally enacted minimum hourly wage set by the U.S. Congress, observing certain workplace safety standards that have been enacted by the U.S. Occupational Safety and Health Administration (OSHA), and adhering to federal employment discrimination laws when making hiring, disciplinary, and termination decisions. While other employment standards and rules differ greatly from jurisdiction to jurisdiction, states and towns share a common ancestry in terms of their public administration schemes. Long before states, cities, and towns had established multilayered forms of local government and systems governing public employment, the U.S. federal government first enacted the system of civil service upon which nearly all state and local public administration systems are based. The federal sys-

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Inputs Consumed by State and Local Governments Input

Value

Energy Materials Purchased services Total

$37.9 billion $273.3 billion $476.7 billion $787.9 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

tem, however, was not the creation of the founding fathers. To the contrary, the federal system had its basis in ancient societies, some dating back thousands of years. Ancient Egypt and Greece, as well as the Roman Empire, all had forms of public administration. Centuries later, England became one of the first countries to require completion of a specialized course of education and passage of an exam in order to enter into a career in public administration. The U.S. federal government drew from these early public administration systems when enacting its own civil service system. The early American public administration system, however, was not without its problems. Initially, the United States became mired in what is referred to as the “spoils system,” a corrupted form of patronage. Under the spoils system, the vast majority of public administration positions were awarded to individuals that had supported a winning political candidate for office. As a consequence of the spoils system, indiState and Local Governments’ viduals most qualified for a particular government position were unlikely to be Contribution to the U.S. Economy hired unless they happened to support the candidate that gained, or kept, a pubValue Added Amount lic office. Patronage created at least two Gross domestic product $1.275 trillion undesirable results: inefficient governGross domestic product 8.8% ment offices operated by people who Persons employed 19.682 million were not necessarily qualified for their Total employee compensation $1.103 trillion positions and the frequent turnover of important positions when politicians eiSource: U.S. Bureau of Economic Analysis. Data are for ther failed to win reelection or were un2008. able to run again. The Civil Service Commission, estab-

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lished in 1883, and the Office of Personnel Management and the Merit Systems Protection Board, both established in 1978, were designed to remedy these perceived problems. They enacted a meritbased selection process for the vast majority of federal public administration positions to ensure that the most qualified applicants—and not political allies—were being considered and hired. Currently, the president has a direct role in appointing only approximately two thousand federal positions— most being high-level agency heads, federal judges, and other senior employees—out of a total of approximately 1.8 million federal civilian employees. Both the federal government’s early reliance on the spoils system and its subsequent move to a merit-based selection system are generally representative of the chronological journey of most states’ public administration systems. For example,

the Illinois Civil Service Commission was established in 1905, but its initial jurisdiction extended only to employees working in the penal system, welfare organizations, and certain charitable institutions. It was not until 1957 that Illinois developed a personnel code and the Civil Service Commission became a watchdog for both the state and its employees, ensuring that state hiring procedures complied with relevant laws and regulations. To further its mission, the Illinois Civil Service Commission was composed of a bipartisan staff, helping depoliticize decisions. Similarly, Louisiana was mired in the spoils system until the 1940’s, when that state’s first civil service legislation was enacted. In Louisiana, the Civil Service Commission consists of seven members charged with, among other duties, eliminating waste and inefficiency inherent in the patronage system, governing personnel practices, ensuring equal pay, and requiring that appointments be made on the basis of qualifications.

Peoria State Hospital, closed in 1976, was one of many state hospitals charged with housing the mentally ill. (©Dreamstime.com)

The Industry Today According to the U.S. Census Bureau, in 2007 state governments employed approximately 3.7 million full-time workers and approximately 1.4 million part-time workers. The largest general employment categories within state service were education (accounting for 1.3 million employees), state-operated hospitals (381,000 employees), and the corrections system (464,000 employees). Local governments—including counties, cities, townships, special districts, and school districts—employed approximately 10.9 million full-time workers and approximately 3.2 million part-time workers in 2007. Within local government, the largest categories of employment were education (6.2 million employees), police protection (787,000 employees), and hospitals and related institutions (494,000 employees). In total, state and local governments have approximately 14.6 million full-time employees and an additional 4.6 million part-time employees, considerably more than the federal government’s 1.8 million workers. Indeed, state and local govern-

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ments employ approximately seven times as many full-time workers as does the federal government. State and local public administration careers offer benefits. First, the wages paid to state and municipal employees generally are competitive with wages earned by those performing similar work in the private sector. Additionally, many public administration positions offer set schedules, which is attractive to individuals with families. The benefit packages associated with state and municipal work are also competitive with—and often exceed— packages offered in the private sector. Categories of employment range beyond education, law enforcement, and health care. For example, hundreds of thousands of people are employed in areas such as parks and recreation, water supply, public welfare, and judicial and legal employment. Generally, if an occupational category exists in the private sector, there is a high likelihood that it also exists within state or local government. The County of Los Angeles Fire Department not only fights fires but also performs Within the confines of state swift water rescues during periods of flooding. (AP/Wide World Photos) and municipal employment, several distinct agencies exist, all staffing civil service employthe Governor’s Office, the Legislative Auditor, the ees. For example, there are dozens of state agenState Lottery, the Department of Natural Recies and offices in Minnesota. In 2007, Minnesota sources, and the Public Defender’s Office. One had approximately sixty-four thousand full-time would expect to find comparable agencies in each state employees and seventy-eight thousand partstate in the country. time employees, according to the U.S. Census BuThere are also significant career opportunities reau. The largest categories of state employment in at the municipal level. For example, the City of Minnesota were education, highways, and hospiNew York employs approximately 300,000 individtals. Some of the larger state agencies include the uals in nearly seventy different agencies. Specific Department of Agriculture, the Attorney General’s agencies in New York City include the Department Office, the Department of Commerce, the Department of Education, the Department of Employee of Transportation, the Department of City Planning, the Department of Environmental ProtecRelations, the Office of Management and Budget,

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tion, the Department of Buildings, the Campaign Finance Board, the Administration for Children’s Services, the Department of Citywide Administrative Services, and the Civilian Complaint Review Board. Similarly, small towns employ civil service personnel to manage the business of the towns and to aid residents and members of the public in need of assistance. For example, in the small town of Simsbury, Connecticut, job categories exist within the Assessor’s Office, the Engineering Department, the Finance Department, the Human Resources Office, the Police Department, the Public Library, the Probate Court, the Recreation Department, and the Office of the Town Clerk. As is evident from an examination of the employment categories at the state, city, and local levels, a wide variety of opportunities are available to individuals with many different educational and experiential backgrounds. State and local agencies and offices differ in fundamental ways from their counterparts in the private sector. Primarily, these agencies perform public services and do not generate profits; public administration offices are not accountable to shareholders, as publicly traded companies are. Because they are not part of the private sector, competition does not exist as it does among private businesses. Aside from these operational and business differences, the similarities between the work performed in public administration and that performed in the private sector are strong. Civil service positions exist for all employees, from entry-level hourly employees to high-level executives. With the exception of positions such as judges and agency heads, who may be appointed by governors or mayors, the vast majority of civil service positions are filled through a merit-based selection system. Under this system, the strongest candidate from the field is hired for the job. Because governmental agencies must comply with federal and state laws relating to the hiring, retention, and discipline of employees, the selection process is designed to be inherently fair to applicants. Federal and state laws prohibit discrimination on the basis of such immutable characteristics as race, gender, ethnicity, religion, national origin, disability, or age. Such offices also must provide reasonable accommodations for handicapped or disabled employees. Finally, most public administration positions are permanent or career-oriented

positions, and the benefits packages, including health care and retirement, are comparable to benefits packages offered to employees in the private sector.

INDUSTRY MARKET SEGMENTS There is no individual ownership element associated with state and local public administration. The state or localized government is the entity that controls the means of production. The government sets the pay scales, the hours of operation, the duties associated with each position, and the benefits available to public employees. No one individual or professional organization can own or operate a government office. Additionally, unlike private businesses, which must generate profits in order to achieve financial success, profit is not a goal or a primary expectation of public administration. Public administration offices are funded largely through taxpayer dollars and, in some instances, through federal grants to aid in specific projects. These are important differences that separate local and state public administration generally from private businesses. Similarly, there are noteworthy differences that distinguish small, medium, and large state and local public administration offices or entities. Small State and Local Agencies and Offices Small agencies and offices may be rural offices of large state departments, or they may be the central governmental entities of small localities. Potential Annual Earnings Scale. Potential earnings for an employee often depend on the type of work to be performed, not necessarily on the size of the office or the stature of the agency. Geographic location may also factor into an employee’s pay scale; some governmental entities may compensate an employee at a slightly higher rate for work performed in a location that has a relatively high cost of living. According to the U.S. Bureau of Labor Statistics (BLS), the average aggregate salary for all state employees in 2009 was $49,240, while the average aggregate salary for all local employees was $45,090. Those averages obscure a wide differential between various types of occupations, from munici-

Local Public Administration pal data entry clerks, who earned an average of $32,340; to civil engineers, who earned an average of $80,190; to state chief executives, who earned an average of $104,510; to state-employed crossing guards, who earned an average of $26,900. Clientele Interaction. Clientele interaction varies widely on the basis of the position and the work to be performed. There are some positions that, by their nature, are individual and do not require much interaction. A state park ranger may interact with park visitors and campers but does not deal with nearly as many people as does a court clerk or receptionist at a small state or municipal courthouse. Notwithstanding this distinction, it may be generally said that smaller agencies’ employees enjoy a greater level of interaction with the public than do larger agencies’ employees. If there are fewer employees to carry out the work, more duties and responsibilities will fall on the shoulders of each employee. To be sure, a satellite office (the term used to describe smaller, oftentimes rural offices of larger agencies) may staff only a few employees, as the portion of the population to be served by that office is relatively small. Amenities, Atmosphere, and Physical Grounds. The working atmosphere of a state or local public administration office is often not as appealing as those of any counterpart businesses in the private sector. Because the money necessary to update and renovate municipal buildings must be funded largely through taxes, buildings and offices sometimes are not updated until necessary. Further, legislation, such as a special act passed by a local governmental body, may be needed to release the funds necessary for renovation or for the construction of a new facility. There are also standards that must be complied with. For example, government buildings must provide access for handicapped or disabled employees and clientele. Regardless, reasonable accommodations are made for the comfort of public administration employees regarding the performance of their jobs and their navigation of the office environment. Even small state and local public administration offices have the necessary technology and tools satisfactorily to perform their duties. Internet access and telecommunication technology, such as phone and fax systems, as well as other necessary office supplies are provided to most employees, and the technology is updated as necessary. In general, al-

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though the buildings and grounds may be aesthetically lacking when compared to private businesses, the amenities will be suitable for the work that is to be accomplished. The physical grounds of a small local public administrative agency range from a small section within a larger government building to leased office space owned by a private individual or business. The size of the office space depends on the work to be performed. A park ranger may need only a small office, whereas a physician employed by the state may require more space to accommodate necessary medical equipment. Grounds are properly maintained, including lawn care and building maintenance. These buildings are an official representation of the state, city, or town and are cared for accordingly. Typical Number of Employees. Although parent agencies themselves may be large, totaling hundreds or thousands of employees, small satellite offices are designed to provide services to the public at the lowest cost to the taxpayers. In one extreme, for instance, the office of a town building inspector may comprise only that individual and an administrative assistant. Together, these two employees help residents obtain building permits and ensure that work has been satisfactorily and legally completed. On the other hand, small satellite offices of larger agencies or offices may employ several individuals, if necessary, to serve the public effectively. Even a rural medical office operated by a state likely will have at least one or two physicians, as well as physician assistants, nurses, and receptionists. Traditional Geographic Locations. State, county, city, and town public administrations are located everywhere in the United States. Each state has its own civil service system, and each city and town has its own form of municipal government. Accordingly, all states, cities, and towns have offices that must be staffed by government employees. Even very rural areas must have some system of government to preside over local affairs and to manage important business. There is no state, city, or town—no matter how small—that does not have a system of government and government employees. Pros of Working for a Small State or Local Agency. There are numerous advantages associated with careers in state and local civil service. First and foremost, most positions offer a competi-

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tive salary and excellent benefits. The majority of employees work a set schedule and, if overtime is occasionally required, they may be compensated for their extra effort. These positions generally offer an appealing work-to-life balance—that is, employees may find their careers fulfilling, but not at the expense of full, enriching lives outside the office. Moreover, salary information is made public to employees. They know in advance when they are scheduled for a raise, as well as the monetary value of that raise. There are few surprises in terms of compensation, which allows employees to plan their finances accordingly. Small offices in particular may offer increased opportunities for advancement. If there are fewer employees in the office, one who performs well may quickly rise in stature when there are job openings. If one enjoys interacting with others, one may be well suited for small state or local employment, as employees in a small agency or office may have more direct contact with the public simply because there are fewer employees in the office. Additionally, in many state and local government offices, job openings often are posted internally—that is, they are posted to current employees—before they are posted to the public. Governments, and even private businesses, often engage in this practice, believing that current employees require less training and already are acclimated to the work environment, as compared to external candidates. If current employees are qualified for internal postings, they may have “first rights” to the jobs. Cons of Working for a Small State or Local Agency. Some government employees may be compensated at lower rates than their colleagues engaged in similar work in the private sector. For example, a state attorney may earn a lower salary than an attorney employed by a small private practice law firm. Additionally, the opportunities for advancement and increased compensation may be limited. If employees are categorized as accountants, for example, after a certain period of years, their salaries may reach a maximum level. Aside from periodic cost-of-living increases, they will be ineligible to earn a raise until they progress to other positions or the published salary schedule of their employment changes. Conversely, in a private business, depending on the working environment and the success of the business, funds sometimes are available to give raises in recognition of

exemplary performance or just to prevent an employee from being tempted to seek employment elsewhere. In a small office of a state agency in particular, employees may feel disconnected from the business that happens at the state level. The head of the agency likely will work in the state’s capital, as it often is necessary for that person to remain in close proximity with other important state employees. If an employee reports to a small satellite office, that employee may feel disconnected from the agency (including its goals and mission). Costs Payroll and Benefits: State and local governments pay salaries to most full-time employees, as well as usually generous benefits. It is common for benefits to be above average relative to the private sector, while salaries may be above or below average, depending on the specific job category. Most salary grades are determined by legislative action at the appropriate level and require further action to be modified. Supplies: State and local agencies require traditional office supplies and equipment, but they often do not require or obtain up-to-date equipment. Computer systems and software, for example, while required of all agencies, may be relatively old and even seem obsolete by the standards of private industry. In addition to these general requirements, specialized agencies may require highly specialized equipment, such as scientific testing supplies or secure communications devices. External Services: State and local governments may contract a host of external services from a wide range of vendors, depending on the size of the government and its budget. For example, they may employ outside legislative consultants when seeking federal grants or awards, and they may even hire external security agencies to guard local buildings, rather than assigning city security officers. Custodial and maintenance services are often contracted, as are uniform services for uniformed personnel. Localities that do not have their own police forces typically do not engage paid forces. Rather, the county or state police force in whose jurisdiction such a town is located provides police and public safety services to its residents.

Local Public Administration Utilities: Local and state governments consume all standard utilities, including electricity, gas, telephone service, and Internet access. Taxes: State and local agencies are generally exempt from taxation by their own governments, but they may still need to pay some federal taxes, particularly employer-paid payroll taxes. Midsize State and Local Agencies and Offices Midsize agencies include many city agencies and offices, as well as some state entities. Smaller states’ largest agencies may be midsize, whereas large cities may have agencies that far exceed those of such states. Potential Annual Earnings Scale. Potential earnings for an employee often depend on the type of work to be performed, not necessarily on the size of the office or the stature of the agency. Geographic location may also factor into an employee’s pay scale; some governmental entities may compensate an employee at a slightly higher rate for work performed in a location that has a relatively high cost of living. According to the BLS, the average aggregate salary for all state employees in 2009 was $49,240, while the average aggregate salary for all local employees was $45,090. Those averages obscure a wide differential between various types of occupations, from municipal data entry clerks, who earned an average of $32,340; to civil engineers, who earned an average of $80,190; to state chief executives, who earned an average of $104,510; to state-employed crossing guards, who earned an average of $26,900. Clientele Interaction. The nature of state and local civil service positions differs greatly. As a result, it is difficult accurately to gauge the degree of clientele interaction that one may expect in a midsize state or local public administrative agency. As the size of an agency or office increases, however, the degree of interaction between employees and the public may decrease. Certain state and local employees, as a result of their positions, must make their livings on the basis of their clientele interactions. Physicians and employees of a state’s department of motor vehicles, for example, maintain constant patient and customer contact. Amenities, Atmosphere, and Physical Grounds. Those working in midsize public administration agencies generally work in similar atmo-

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spheres as those working in small state and local public administration agencies. Because the agencies primarily serve the public, the amenities and atmosphere are substantially similar regardless of agency size. The services that must be provided to the public are the same. As more employees and associated resources are required for the business of an agency, the special needs of the organization will increase accordingly. The headquarters of a state agency are usually located in the state’s capital, while midsize satellite offices are often spread throughout the state. A good example of such a system is the state court system. A state’s supreme court, traditionally located in the capital, is the head of its judiciary. Because it is necessary for citizens to have easy and open access to courts, courthouses are located in most midsize towns and cities. Many states and cities own large municipal government buildings that house several agencies and offices, and midsize offices and agencies may share office space. Typical Number of Employees. Depending on the nature of the services to be provided, a midsize office of a state or local agency may employ approximately ten to fifty employees. Courthouses in midsize cities require judges, court clerks, bailiffs, law librarians, administrative assistants, and law clerks. Conversely, public libraries in the same cities may have only ten full-time employees and a few part-time employees. Finally, some agencies have unpaid student interns and volunteers to help with administrative work. Traditional Geographic Locations. All states, cities, and towns have some form of government and, accordingly, opportunities generally exist in all locations for careers in local public administration. Pros of Working for a Midsize State or Local Agency. Midsize agencies often have greater turnover due to retirement and resignations than do small agencies. As a result, their employees may have greater opportunities for advancement or promotion. Another important benefit sometimes associated with state and local public service is the retirement incentive package (sometimes referred to as a “golden handshake”). When governments need to cut costs, workers who are eligible to retire based on their years of government service may be offered financial incentives to do so. Retirement checks to former civil servants reflect a percentage

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of the employee’s final salary, which is based on years of service. To motivate their most expensive employees to retire, agencies may offer the financial equivalent of additional years of service in their retirement paychecks as incentives. Retirement incentive packages exist in the private sector as well, but they are more common in the public sector and usually are highly publicized when they are proposed. Cons of Working for a Midsize State or Local Agency. Some employees of local governments may find that their opportunities for advancement and salary increases are limited. In a midsize agency or office, employees may find that the level of bureaucracy is higher than in a small office. Additionally, when the economy is in a period of turbulence and it is necessary to downsize the workforce, layoffs in state and local government are carried out in a different manner than are layoffs in the private sector. Many civil service workers are members of unions, which often negotiate action plans with the government in the event that layoffs are necessary. In the private sector, underperforming employees generally may be the first to go, as their perceived value is relatively low. In the governmental context, however, employees with the least seniority are often the first to be laid off, regardless of their production or value. At such times, government employees may feel that they have little control over their own fates. Costs Payroll and Benefits: State and local governments pay salaries to most full-time employees, as well as usually generous benefits. It is common for benefits to be above average relative to the private sector, while salaries may be above or below average, depending on the specific job category. Most salary grades are determined by legislative action at the appropriate level and require further action to be modified. Supplies: State and local agencies require traditional office supplies and equipment, but they often do not require or obtain up-to-date equipment. Computer systems and software, for example, while required of all agencies, may be relatively old and even seem obsolete by the standards of private industry. In addition to these general requirements, specialized agencies may require highly specialized equipment,

such as scientific testing supplies or secure communications devices. External Services: State and local governments may contract a host of external services from a wide range of vendors, depending on the size of the government and its budget. For example, they may employ outside legislative consultants when seeking federal grants or awards, and they may even hire external security agencies to guard local buildings, rather than assigning city security officers. Custodial and maintenance services are often contracted, as are uniform services for uniformed personnel. Localities that do not have their own police forces typically do not engage paid forces. Rather, the county or state police force in whose jurisdiction such a town is located provides police and public safety services to its residents. Utilities: Local and state governments consume all standard utilities, including electricity, gas, telephone service, and Internet access. Taxes: State and local agencies are generally exempt from taxation by their own governments, but they may still need to pay some federal taxes, particularly employer-paid payroll taxes. Large State and Local Agencies and Offices The largest state and local governments have budgets in the billions of dollars, and their largest agencies and offices may be massive by most standards, employing thousands of people to execute complex and crucial mandates. Potential Annual Earnings Scale. Potential earnings for an employee often depend on the type of work to be performed, not necessarily on the size of the office or the stature of the agency. Geographic location may also factor into an employee’s pay scale; some governmental entities may compensate an employee at a slightly higher rate for work performed in a location that has a relatively high cost of living. According to the BLS, the average aggregate salary for all state employees in 2009 was $49,240, while the average aggregate salary for all local employees was $45,090. Those averages obscure a wide differential between various types of occupations, from municipal data entry clerks, who earned an average of $32,340; to civil engineers, who earned an average of $80,190; to state chief executives, who earned an average of $104,510; to state-

Local Public Administration employed crossing guards, who earned an average of $26,900. Clientele Interaction. As the size of the office increases, the degree to which its employees interact with the public may decrease. At a state agency’s headquarters, for example, one may find that more resources are devoted to intraoffice meetings and contact with other state departments than are devoted to contact with the public. Additionally, certain buildings—such as a state’s legislative chamber, capitol building, and supreme court— may function as tourist destinations for citizens, travelers, and students. Groups commonly visit these buildings and receive guided tours. Accordingly, not only do important business and government transactions occur in these buildings, but they also serve as official representations of state agencies to the public. Amenities, Atmosphere, and Physical Grounds. Large state and local administrative agencies are often headquartered in historic build-

1105

ings, partly to underscore their importance and partly because it is costly to build new structures. Work spaces and amenities for average employees are usually substantially similar, regardless of whether the agency is large or small and regardless of whether the employee is working at a headquarters or a small satellite office. The services that must be provided to the public are the same in a large office as they are in a small office, and the amenities and atmosphere are likely to be substantially similar. The physical grounds of an agency’s headquarters may be aesthetically superior to those of a smaller office within that agency. Because the headquarters is the official representation of the agency to taxpayers, the media, and tourists, its grounds are likely to be very well maintained, including the landscaping and the building’s exterior. These buildings are open to the public, host numerous events and meetings, and are photographed for books and postcards. Thus, agencies,

The Iowa state capitol building, built between 1871 and 1886, houses the governor’s office as well as the state legislature and many other state offices. (©Walter Arce/Dreamstime.com)

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as well as the governments they represent, have an interest in maintaining their grounds. Typical Number of Employees. The number of persons employed by a large state or local government depends on the population that must be served. For instance, according to its Department of City Planning, New York City had a population of about 8.3 million people in 2008, and it employed nearly 300,000 people to serve them. This number does not take into account the thousands of state and federal employees who also work in New York City. At the state level, for example, the California State Controller’s Office reports that the state employed 215,000 people full time in 2009. More than 11,000 of those employees worked for the California Highway Patrol. Traditional Geographic Locations. Large state administrative agency headquarters are traditionally located in the state’s capital. Having differ-

The California Highway Patrol employs 11,000 people. (AP/Wide World Photos)

ent agencies headquartered close to one another creates efficiency, as it often is necessary for key employees and heads of different agencies to meet with one another. Proximity reduces transportation costs and saves time. In large states, such as California and Texas, agencies have large offices spread throughout the state. Similarly, with respect to large cities, it makes sense to have key city employees work near one another—or even in the same large municipal building—so they can effectively collaborate when necessary. Pros of Working for a Large State or Local Agency. Employees working at an agency’s headquarters may find their work more rewarding or interesting. This is the building where the key employees report for duty, where important visitors come, and where crucial policy decisions are made. Moreover, because the number of employees in the agency’s headquarters is very large, there may be an increased opportunity for advancement through internal job postings and the natural attrition of employees. Cons of Working for a Large State or Local Agency. Large agencies and offices tend to have the greatest level of bureaucracy. In some agencies, promotions and prime work assignments are not always given to deserving employees but to employees who have good relationships with those making the employment decisions. An additional disadvantage to working in a state’s capital or downtown in a large city is that the cost of living may be higher than it is in a smaller city or rural area. The government may compensate employees at a slightly higher rate to offset the higher cost of living, but this is by no means guaranteed. Costs Payroll and Benefits: State and local governments pay salaries to most full-time employees, as well as usually generous benefits. It is common for benefits to be above average relative to the private sector, while salaries may be above or below average, depending on the specific job category. Most salary grades are determined by legislative action at the appropriate level and require further action to be modified. Supplies: State and local agencies require traditional office supplies and equipment, but they often do not require or obtain up-to-date equipment. Computer systems and software, for ex-

Local Public Administration ample, while required of all agencies, may be relatively old and even seem obsolete by the standards of private industry. In addition to these general requirements, specialized agencies may require highly specialized equipment, such as scientific testing supplies or secure communications devices. External Services: State and local governments may contract a host of external services from a wide range of vendors, depending on the size of the government and its budget. For example, they may employ outside legislative consultants when seeking federal grants or awards, and they may even hire external security agencies to guard local buildings, rather than assigning city security officers. Custodial and maintenance services are often contracted, as are uniform services for uniformed personnel. Localities that do not have their own police forces typically do not engage paid forces. Rather, the county or state police force in whose jurisdiction such a town is located provides police and public safety services to its residents. Utilities: Local and state governments consume all standard utilities, including electricity, gas, telephone service, and Internet access. Taxes: State and local agencies are generally exempt from taxation by their own governments, but they may still need to pay some federal taxes, particularly employer-paid payroll taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES In small offices or satellite offices, one person may fulfill more than one role. In larger agencies and offices, specialists fulfill unique requirements in specific groups. Regardless of agency size and scope, all functions must be performed in order for the agency to operate efficiently. The vast majority of state and local public administration employees work in the executive branch of government. The legislative and judicial branches, by contrast, employ comparatively few people. The following umbrella categories apply to the organizational structure of state and local administrative agencies:

■ ■ ■ ■ ■ ■ ■ ■

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Executive Management Legal/Legislative Affairs Information Technology Public Affairs Human Resources Facilities Security General Administrative Employment

Executive Management Executive managers of a state or local agency bear ultimate responsibility for the success or failure of the agency. They are charged by law with carrying out the business of the agency and likely report to the governor, mayor, or county board of supervisors. Senior managers and other key employees report directly to department heads. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Governor Supervisor Mayor Commissioner Deputy Commissioner Administrator Secretary

Legal/Legislative Affairs An office of legal and legislative affairs provides legal advice to agency heads and, in some cases, litigates matters to which the agency is a party. Day-to-day duties may include reviewing and drafting contracts, evaluating human resources issues, responding to right-to-know requests (per the Freedom of Information Act, or FOIA), or analyzing constitutional issues raised by prisoners. Legislative affairs professionals also liaise with legislative staffs and elected officials in state legislatures and city councils. They seek to represent the interests of their departments before these bodies and collaborate in drafting legislation. Legal and legislative affairs occupations may include the following: ■ ■ ■ ■

Legal Affairs Director Attorney Human Resources Assistant Paralegal

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Local Public Administration OCCUPATION

PROFILE

Public Administrator Considerations

Qualifications

Description

Directs agencies engaged in developing monetary policy, collecting taxes, overseeing custody and disbursement of funds, and administering debts and investments.

Career clusters

Business, Management, and Administration; Government and Public Administration; Hospitality and Tourism; Transportation, Distribution, and Logistics

Interests

Data; people

Working conditions

Work inside; work both inside and outside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

ESA

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Information Technology In an increasingly complex technological era, information technology (IT) personnel provide government employees with support in acquiring, designing, installing, and using computer, communication, and other technological systems. They may build proprietary systems or use off-the-shelf systems as appropriate, and they must ensure that personnel understand not only how their systems work but also the formal protocols governing their use of those systems. IT occupations may include the following: ■ ■

■ ■ ■

Deputy Commissioner of Administration Information Systems Management Director Chief Technology Officer (CTO) Chief Information Officer (CIO) Information Technology Supervisor

■ ■ ■ ■ ■ ■ ■ ■

Information Technology Analyst Information Technology Technician Help Desk Staff Audiovisual Technician System Administrator Database Administrator Network Specialist Computer Security Specialist

Public Affairs Public affairs employees communicate to the public the business of their agencies, responding to inquiries from the public and the media, and coordinating with other departments and offices as necessary. They seek to ensure that the public, department personnel, and other interested parties are accurately informed about department business in a timely manner. Positions in this area require communication skills, the ability to write and

Local Public Administration speak persuasively, and the ability to interact with other employees and departments concerning sensitive manners. Public affairs occupations may include the following: ■

■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Deputy Commissioner for Public/ External Affairs Public and Media Relations Director Legislative Liaison Freedom of Information Supervisor Standards and Policy Captain Audiovisual Production Technician Press Secretary Press Assistant Communications Director Web Designer Speechwriter

Human Resources Any state or local department must have a dedicated team of human resources employees, who seek to attract, hire, and retain the candidates they believe can best assist their agencies in meeting their goals. Additionally, human resources personnel help evaluate, promote, train, and discipline most employees. They administer payrolls and benefits and respond to employee grievances. Some key employees of an agency may be outside the scope of its human resources department, as their hiring and termination may be coordinated by the head of the executive branch, such as a governor or mayor. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Deputy Commissioner of Administration Human Resources Director Principal Human Resources Specialist Human Resources Specialist Human Resources Assistant Payroll Clerk Benefits Specialist

ties. They also ensure compliance with standards set by the OSHA and certain environmental guidelines. Facilities occupations may include the following: ■ ■

■ ■ ■ ■

Deputy Commissioner of Administration Director of Engineering/Facilities Management Services Facility Manager Chief Custodian Custodian/Janitor Maintenance and Repair Worker

Security Security personnel protect the employees, property, and proprietary information of their agencies and governments. They coordinate their activities with all relevant law enforcement agencies, as well as the attorneys general and district attorneys with jurisdiction over crimes they encounter, and they may aid in investigations of those crimes. Security occupations may include the following: ■ ■ ■ ■ ■

Security Director Warden Officer Security Guard Corrections Officer

General Administrative Employment All agencies and offices require administrative support to fulfill their missions. Administrative employees, such as secretaries and receptionists, work actively with both agency employees and the public. These are important positions that must be performed properly in order for an agency to operate effectively. General administrative occupations may include the following: ■ ■

Facilities Any state or local department must efficiently manage its real estate and offices. Accordingly, facilities personnel design, approve, and supervise development projects, as well as overseeing the repair and maintenance of existing facili-

1109

■ ■ ■ ■ ■ ■

Secretary Administrative Assistant Paralegal Receptionist Telephone Representative Customer Service Representative Intern Volunteer

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Local Public Administration INDUSTRY

OUTLOOK

Overview The outlook for the state and local public administration industry shows it to be stable. As with employees of businesses and industries in the private sector, civil service employees are not immune to economic downturns. The United States experienced a significant economic downturn beginning in 2007. Although civil service jobs are generally secure, some states and cities faced such severe financial trouble that they instituted layoffs, suspended hiring of new employees, and, in some cases, forced employees to take regular unpaid furlough days. Furlough days and hiring freezes are designed to protect existing jobs, while simultaneously saving states and cities money. Even the federal government decreased the rate of federal civil service pay raises for 2010. Despite any short-term downturn in the national and international economies, statistical evidence supports the conclusion that the future for state public administrative service is stable, and the industry is expected to grow in certain areas. The BLS forecasts that, between 2006 and 2016, there will be a 0.2 percent increase in the number of state government employees. This rate of growth corresponds to the creation of approximately fortythree hundred jobs. Some sectors are projected to grow at very different rates than others, however. For instance, there is expected to be a 32.5 percent increase in the number of network systems and data communications analysts. Similarly, the number of correctional officers and jailer positions is expected to increase by 17.8 percent. Other occupations are expected to experience large declines, including file clerks, telephone operators, and administrative support workers. Some tasks that once had to be performed by a person are now becoming automated, and specific administrative duties may be absorbed by other job classifications. Many of the occupations that are declining within the public sector are declining in the private sector as well. The BLS projects substantially greater growth in local government jobs. Over the same 20062016 period, these are projected to increase by 11 percent, representing 612,300 new jobs. Particular occupations that are expected to increase dramatically include network systems and data

communications analysts (which will grow by 51 percent), forensic science technicians (34.8 percent), and lawyers (34.8 percent). Specific occupations that are expected to decrease include word processors and typists, information and record clerks, meter readers, and file clerks. As with the state government projections, many forms of clerical work are expected to decrease in demand as a result of automation and improvements in technology. Employment Advantages Certain career categories in state and local public administration are expected to decrease by large margins through 2016. It is probable that some of these expected decreases do not represent a temporary reduction in demand but rather will begin a permanent trend toward the elimination of specific occupations that, largely as a result of technological developments, will no longer be necessary. Dedicated individuals seeking satisfying careers, interesting job responsibilities, the opportunity for growth, and the stability of working for a governmental entity likely will find state or local civil service careers rewarding. One need not travel far to find a state or local agency or office seeking qualified individuals. Once hired, employees may choose careers in public service, receiving pay increases and promotions, or may choose to stay in public service only long enough to gain valuable skills before moving on to careers in the private sector. As the population ages, more public employees will become eligible to retire. Although it is impossible to forecast exactly when these employees will end their careers, a very large segment of the working population will reach the age of retirement over the next twenty years, give or take. As these workers retire, they will leave openings for new state and local employees to begin careers, as well as opportunities for current employees to be promoted to higher-level positions within the government. Annual Earnings Because the government operates based primarily on tax dollars paid by its citizens, the industry of government does not earn revenue in the sense that a private corporation does. State and local government earnings come directly through taxes and fees, as well as through grants made by

Local Public Administration the federal government to supplement local governments’ budgets. Using figures provided by the federal government, the Tax Foundation has calculated that the total average state and local tax burden in the United States in 2008 was $4,283 per capita. With a population of roughly 300 million in that year, the total tax-generated revenues of all state and local entities were around $1.28 trillion. The federal government’s revenues the previous year were $2.6 trillion. Earnings for an individual employee vary according to the nature of the work to be performed, as well as the educational background necessary to qualify for a position. In some career areas, public sector and private sector employees are, on average, compensated similarly. For example, according to the BLS, in 2007, licensed practical nurses earned only 3.3 percent more working in the private sector than they did working for state governments—$38,033 compared to $36,349. Conversely, there are positions where an employee is, on average, compensated much better in the private sector. The average salary of all attorneys in 2009 was $129,020, while attorneys employed by state governments earned an average of $82,750. Regardless of any temporary setbacks in the U.S. economy, careers in state and local public administration will continue to offer stable, rewarding careers for individuals of all backgrounds and degrees of education. Additionally, in uncertain times, careers in local and public administration offer a degree of security and stability that is second to none.

RELATED RESOURCES FOR FURTHER RESEARCH American Society for Public Administration 1301 Pennsylvania Ave. NW, Suite 840 Washington, DC 20004 Tel: (202) 393-7878 http://www.aspanet.org Association for Public Policy Analysis and Management 1029 Vermont Ave. NW, Suite 1150 Washington, DC 20005 Tel: (202) 496-0130 http://www.appam.org

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California State Personnel Board 801 Capitol Mall Sacramento, CA 95814 Tel: (916) 653-1705 http://www.spb.ca.gov City of Houston P.O. Box 1592 Houston, TX 77251 Tel: (713) 837-0311 http://www.houstontx.gov National Association of Schools of Public Affairs and Administration 1029 Vermont Ave. NW, Suite 1100 Washington, DC 20005 Tel: (202) 628-8965 http://www.naspaa.org National Conference of State Legislatures 444 N Capitol St. NW, Suite 515 Washington, DC 20001 Tel: (202) 624-5400 http://www.ncsl.org

ABOUT

THE

AUTHOR

Andrew Walter is an attorney licensed to practice in the state of Connecticut. He received a bachelor of arts degree in international management, with a minor in English, from Gustavus Adolphus College in St. Peter, Minnesota, and a juris doctorate degree from Roger Williams University School of Law in Bristol, Rhode Island. After serving as a law clerk for the judges of the Connecticut Superior Court, he became employed as an attorney at the Connecticut Supreme Court, dealing with a variety of civil and criminal matters.

FURTHER

READING

American Federation of Teachers. Compensation Survey: A Survey of Professional, Scientific, and Related Jobs in State Government Prepared by AFT Public Employees. Washington, D.C.: Author, 2009. Available at http://archive.aft.org/ salary/2009/PubEmpsCompSurvey09.pdf. Baxter, Neale, and Mark Rowh. Opportunities in

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Government Careers. Rev. ed. Chicago: VGM Career Books, 2001. Frederickson, H. George, and Kevin B. Smith. The Public Administration Theory Primer. Boulder, Colo.: Westview Press, 2003. Goldsmith, Stephen, and William D. Eggers. Governing by Network: The New Shape of the Public Sector. Washington, D.C.: Brookings Institution Press, 2004. Lane, Jan-Erik. Public Administration and Public Management: The Principal-Agent Perspective. New York: Routledge, 2005. Morgan, Douglas F., et al. Foundations of Public Service. Armonk, N.Y.: M. E. Sharpe, 2008. Morphet, Janice. Modern Local Government. Thousand Oaks, Calif.: Sage, 2008. Office of Citizen Services and Communications. “Statistics at the State and Local Levels.”

February 25, 2010. http://www.usa.gov/ Government/State_Local/Statistics.shtml. PublicServiceCareers.org. “Building a Professional Career in Public Service.” http:// www.publicservicecareers.org/index .asp?pageid=515. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

SURVEY OF

American Industry and Careers

SURVEY OF

American Industry and Careers Volume 4 Logging Industry—Postal and Package Delivery Services

The Editors of Salem Press

Salem Press Pasadena, California

Hackensack, New Jersey

Editorial Director: Christina J. Moose Project Editor: Rowena Wildin Manuscript Editors: Stacy Cole, Andy Perry Acquisitions Manager: Mark Rehn Administrative Assistant: Paul Tifford, Jr.

Research Supervisor: Jeffry Jensen Photo Editor: Cynthia Breslin Beres Design and Layout: James Hutson Additional Layout: William Zimmerman

Cover photo: ©moodboard/CORBIS

Copyright ©2012, by Salem Press, A Division of EBSCO Publishing, Inc. All rights in this book are reserved. No part of this work may be used or reproduced in any manner whatsoever or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without written permission from the copyright owner except in the case of brief quotations embodied in critical articles and reviews or in the copying of images deemed to be freely licensed or in the public domain. For information, address the publisher, Salem Press, at [email protected]. ∞ The paper used in these volumes conforms to the American National Standard for Permanence of Paper for Printed Library Materials, X39.48-1992 (R1997). Library of Congress Cataloging-in-Publication Data Survey of American industry and careers / The Editors of Salem Press. v. cm. Includes bibliographical references and indexes. ISBN 978-1-58765-768-9 (set : alk. paper) — ISBN 978-1-58765-769-6 (vol. 1 : alk. paper) — ISBN 978-158765-770-2 (vol. 2 : alk. paper) — ISBN 978-1-58765-771-9 (vol. 3 : alk. paper) — ISBN 978-1-58765-772-6 (vol. 4 : alk. paper) — ISBN 978-1-58765-773-3 (vol. 5 : alk. paper) — ISBN 978-1-58765-774-0 (vol. 6 : alk. paper) 1. Business—Vocational guidance—United States. 2. Industries—United States. 3. Occupations— United States. 4. Vocational guidance—United States. I. Salem Press. HF5382.5.U5S87 2012 331.7020973—dc23 2011019601 First Printing

printed in the united states of america

Contents Complete List of Contents. . . . . . . . . . . . . . . . . . . . . lxxxv List of Tables and Sidebars . . . . . . . . . . . . . . . . . . . . lxxxix Logging Industry . . . . . . . . . . . . . . . . . . . . . . . . . . 1113 Mass Transportation Vehicles Industry . . . . . . . . . . . . . . 1131 Medicine and Health Care Industry. . . . . . . . . . . . . . . . 1151 Metals Manufacturing Industry . . . . . . . . . . . . . . . . . . 1169 Mining Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . 1187 Motion Picture and Television Industry. . . . . . . . . . . . . . 1204 Museums and Cultural Institutions Industry . . . . . . . . . . . 1225 Music Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . 1241 National and International Security Industry. . . . . . . . . . . 1260 Natural Resources Management. . . . . . . . . . . . . . . . . . 1276 Nuclear Power Industry . . . . . . . . . . . . . . . . . . . . . . 1297 Outdoor Recreation Industry . . . . . . . . . . . . . . . . . . . 1312 Paper Manufacturing and Products Industry . . . . . . . . . . . 1332 Passenger Transportation and Transit Industry . . . . . . . . . 1351 Personal Services . . . . . . . . . . . . . . . . . . . . . . . . . . 1369 Petroleum and Natural Gas Industry . . . . . . . . . . . . . . . 1384 Pharmaceuticals and Medications Industry . . . . . . . . . . . . 1403 Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry . . . . . . . . . . . . . . . . . . . . . 1423 Plastics and Rubber Manufacturing Industry . . . . . . . . . . . 1440 Political Advocacy Industry . . . . . . . . . . . . . . . . . . . . 1458 Postal and Package Delivery Services . . . . . . . . . . . . . . . 1476

lxxxiii

Complete List of Contents VOLUME Contents . . . . . . . . . . . . . . . . . . . . . . v Publisher’s Note . . . . . . . . . . . . . . . . . vii Contributors . . . . . . . . . . . . . . . . . . . xi Complete List of Contents . . . . . . . . . . . xiii List of Tables and Sidebars . . . . . . . . . . xvii Accounting Services . . . . . . . . . . . . . . . 1 Advertising and Marketing Industry . . . . . . 19 Airline Industry . . . . . . . . . . . . . . . . . 36 Alternative Power Industry . . . . . . . . . . . 54 Animal Care Services . . . . . . . . . . . . . . 74 Apparel and Fashion Industry . . . . . . . . . 86 Automobiles and Personal Vehicles Industry . . . . . . . . . . . . . . . . . . . 105

1

Banking Industry . . . . . . . . . Batteries and Fuel Cells Industry Beverage and Tobacco Industry. Biofuels Industry . . . . . . . . . Broadcast Industry . . . . . . . . Building Architecture Industry . Building Construction Industry . Business Services . . . . . . . . .

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125 141 159 177 197 215 233 252

Casino Industry. . . . . . . Chemicals Industry. . . . . Civil Services: Planning . . Civil Services: Public Safety

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2

Contents . . . . . . . . . . . . . . . . . . . . xxxv Complete List of Contents . . . . . . . . . xxxvii List of Tables and Sidebars . . . . . . . . . . . xli

Day-Care Services. . . . . . . . . . . . . . . . 503 Defense Industry . . . . . . . . . . . . . . . . 523 Dental and Orthodontics Industry . . . . . . 541

Coal Mining Industry . . . . . . . . . Complementary and Alternative Health Care Industry . . . . . . . . Computer Hardware and Peripherals Industry . . . . . . . . . . . . . . . Computer Software Industry . . . . . Computer Systems Industry . . . . . . Construction Equipment Industry . . Corporate Education Services . . . . . Counseling Services . . . . . . . . . . Criminal Justice and Prison Industry .

Electrical and Gas Appliances Industry . . . . 559 Electrical Power Industry . . . . . . . . . . . 578 Environmental Engineering and Consultation Services . . . . . . . . . . . . 593

. . . . 345 . . . . 362 . . . . . . .

. . . . . . .

. . . . . . .

. . . . . . .

379 397 414 432 452 469 485

Farming Industry . . . . . . . . . . . . Federal Public Administration . . . . Financial Services Industry . . . . . . Fishing and Fisheries Industry. . . . . Food Manufacturing and Wholesaling Industry . . . . . . . . . . . . . . . Food Retail Industry . . . . . . . . . .

VOLUME Contents . . . . . . . . . . . . . . . . . . . . . lix Complete List of Contents . . . . . . . . . . . lxi List of Tables and Sidebars . . . . . . . . . . . lxv

. . . .

. . . .

. . . .

. . . .

613 631 648 663

. . . . 681 . . . . 704

3

Food Services . . . . . . . . . . . . . . . . . . 721 Freight Transport Industry . . . . . . . . . . 742 Funerary Industry . . . . . . . . . . . . . . . 760 lxxxv

Survey of American Industry and Careers Furniture and Home Furnishings Industry . . . . . . . . . . . . . . . . . . . 775 Hand Tools and Instruments Industry . . Health and Fitness Industry . . . . . . . . Heavy Machines Industry . . . . . . . . . Higher Education Industry . . . . . . . . Highway, Road, and Bridge Construction Industry . . . . . . . . . . . . . . . . . Home Maintenance Services . . . . . . . Hospital Care and Services . . . . . . . . Hotels and Motels Industry . . . . . . . . Household and Personal Products Industry . . . . . . . . . . . . . . . . .

. . . .

. . . .

793 808 825 844

. . . .

. . . .

863 881 899 918

Industrial Design Industry . . . . . . . . . . . 952 Insurance Industry . . . . . . . . . . . . . . . 971 Internet and Cyber Communications Industry . . . . . . . . . . . . . . . . . . . 989 Landscaping Services . . . . . . Legal Services and Law Firms . Libraries and Archives Industry Light Machinery Industry . . . Livestock and Animal Products Industry. . . . . . . . . . . . Local Public Administration . .

. . . .

. . . .

. . . .

. . . .

1005 1026 1043 1060

. . . . . . . 1078 . . . . . . . 1096

. . . . .

4

Paper Manufacturing and Products Industry. . . . . . . . . . . . . . . . Passenger Transportation and Transit Industry. . . . . . . . . . . . . . . . Personal Services . . . . . . . . . . . . Petroleum and Natural Gas Industry . Pharmaceuticals and Medications Industry. . . . . . . . . . . . . . . . Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry . Plastics and Rubber Manufacturing Industry. . . . . . . . . . . . . . . . Political Advocacy Industry. . . . . . . Postal and Package Delivery Services .

Logging Industry . . . . . . . . . . . . . . . 1113 1131 1151 1169 1187 1204

. . 1225 . . 1241

National and International Security Industry. . . . . . . . . . . . . . . . . . . 1260 Natural Resources Management . . . . . . . 1276 Nuclear Power Industry . . . . . . . . . . . 1297

VOLUME

. . . 1332 . . . 1351 . . . 1369 . . . 1384 . . . 1403 . . . 1423 . . . 1440 . . . 1458 . . . 1476

5

Publishing and Information Industry . . . . 1572

Contents . . . . . . . . . . . . . . . . . . . . cvii Complete List of Contents . . . . . . . . . . . cix List of Tables and Sidebars . . . . . . . . . . cxiii Printing Industry . . . . . . . . . . Private Education Industry . . . . . Public Elementary and Secondary Education Industry . . . . . . . Public Health Services . . . . . . .

. . . .

Outdoor Recreation Industry . . . . . . . . 1312

Contents . . . . . . . . . . . . . . . . . . . lxxxiii List of Tables and Sidebars . . . . . . . . . lxxxix

. . . . .

. . . .

. . 937 VOLUME

Mass Transportation Vehicles Industry . Medicine and Health Care Industry . . . Metals Manufacturing Industry . . . . . Mining Industry . . . . . . . . . . . . . . Motion Picture and Television Industry . Museums and Cultural Institutions Industry. . . . . . . . . . . . . . . . . Music Industry . . . . . . . . . . . . . .

. . . .

Real Estate Industry. . . . . . . . . Rental and Leasing Services . . . . Residential Medical Care Industry . Restaurant Industry . . . . . . . . . Retail Trade and Service Industry .

. . . . . 1495 . . . . . 1515 . . . . . 1537 . . . . . 1554

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

1588 1606 1626 1644 1664

Scientific and Technical Services . . . . . . 1682 lxxxvi

Complete List of Contents Scientific, Medical, and Health Equipment and Supplies Industry . Shipbuilding, Submarines, and Naval Transport Industry. . . . . . . . . . Space Exploration and Space Science Industry. . . . . . . . . . . . . . . . Spectator Sports Industry. . . . . . . .

Sports Equipment Industry. . . . . . . . . . 1783 . . . 1703 . . . 1722 . . . 1741 . . . 1762

Telecommunications Equipment Industry. . . . . . . . . . . . . . . . . . . 1799 Telecommunications Infrastructure Industry. . . . . . . . . . . . . . . . . . . 1819

VOLUME

6

Contents . . . . . . . . . . . . . . . . . . . cxxxi Complete List of Contents . . . . . . . . . cxxxiii List of Tables and Sidebars . . . . . . . . cxxxvii

Waste Management Industry . . . . . . . . . 1981 Watches and Jewelry Industry . . . . . . . . 1999 Water Supply Industry . . . . . . . . . . . . 2017

Textile and Fabrics Industry . . . . . . Theater and Performing Arts Industry Themed Entertainment Industry . . . Toys and Games Industry. . . . . . . . Travel and Tourism Industry. . . . . .

Employment by Industry, 2008 and Projected 2018 . . . . . . . . . . . Fortune 500 Companies by Industry, 2009. . . . . . . . . . . . . . . . . Bibliography. . . . . . . . . . . . . . Electronic Resources . . . . . . . . .

. . . . .

. . . . .

. . . . .

1839 1859 1877 1893 1910

Veterinary Industry . . . . . . . . . . . . . . 1927 Video, Computer, and Virtual Reality Games Industry . . . . . . . . . . . . . . 1947 Warehousing and Storage Industry . . . . . 1964

lxxxvii

. . . . 2037 . . . . 2044 . . . . 2060 . . . . 2129

Industries by Career Cluster . . . . . . . . . 2161 Jobs and Careers . . . . . . . . . . . . . . . 2164 Subject Index . . . . . . . . . . . . . . . . . 2181

List of Tables and Sidebars Accommodation Industry’s Contribution to the U.S. Economy, 920 Accountant: Occupation Profile, 12 Accountants and Auditors: Occupation Specialties, 4 Activities Therapist: Occupation Specialties, 1636 Actor: Occupation Specialties, 1871 Actuary: Occupation Profile, 984 Advertising Account Executive: Occupation Profile, 25 Advertising Agent: Occupation Specialties, 27 Aerospace Engineer: Occupation Profile, 1756 Aerospace Engineer: Occupation Specialties, 1755 Agricultural Scientist: Occupation Specialties, 627 Agriculture: Projected Employment for Selected Occupations, 628 Air Transportation: Projected Employment for Selected Occupations, 51 Aircraft Mechanic: Occupation Profile, 48 Airline Industry’s Contribution to the U.S. Economy, 39 Ambulatory Health Care Services’ Contribution to the U.S. Economy, 1153 Amusement Parks: Projected Employment for Selected Occupations, 1889 Animal Caretaker: Occupation Profile, 81 Animal Caretaker: Occupation Specialties, 82 Apparel Industry: Projected Employment for Selected Occupations, 102

Apparel Worker: Occupation Specialties, 92 Architect: Occupation Profile, 225 Architect: Occupation Specialties, 228 Archivist and Curator: Occupation Profile, 1235 Archivist and Curator: Occupation Specialties, 1237 Athletic Trainer: Occupation Profile, 1773 Auditor: Occupation Profile, 14 Automobile Salesperson: Occupation Profile, 112 Automotive Technician: Occupation Specialties, 119 Bank Teller: Occupation Profile, 135 Barber: Occupation Profile, 1374 Bellhop/Bell Captain: Occupation Specialties, 931 Beverage and Tobacco Product Manufacturing: Projected Employment for Selected Occupations, 174 Bindery Worker: Occupation Specialties, 1510 Biomedical Engineer: Occupation Profile, 1714 Biomedical Equipment Technician: Occupation Profile, 1716 Boilermaker: Occupation Profile, 191 Brickmason/Stonemason: Occupation Profile, 247 Broadcast Technician: Occupation Specialties, 210 Broadcasting and Telecommunications Industries, inputs consumed by the, 201 Broadcasting and Telecommunications lxxxix

Industries’ Contributions to the U.S. Economy, The, 201 Broadcasting: Projected Employment for Selected Occupations, 212 Budget Analyst: Occupation Profile, 262 Bulldozer Operator: Occupation Specialties, 873 Bus Driver: Occupation Profile, 1364 Business Services Industry’s Contribution to the U.S. Economy, 254 Camera Operator: Occupation Profile, 1220 Career/Technology Education Teacher: Occupation Profile, 464 Chemical Engineer: Occupation Specialties, 299 Chemical Equipment Operator: Occupation Specialties, 300 Chemical Manufacturing: Projected Employment for Selected Occupations, 302 Chemical Products Industry’s Contribution to the U.S. Economy, 289 Chemist: Occupation Profile, 190 Chemist: Occupation Specialties, 189 Child-care Worker: Occupation Profile, 518 Chiropractor: Occupation Profile, 370 Cinematographer: Occupation Profile, 1217 Civil Engineer: Occupation Specialties, 311 Clergy: Occupation Profile, 1435 Clothes Designer: Occupation Profile, 98

Survey of American Industry and Careers College Faculty Member: Occupation Profile, 859 Compositor and Typesetter: Occupation Profile, 1509 Computer and Electronic Product Manufacturing: Projected Employment for Selected Occupations, 394 Computer and Electronic Products Industry’s Contribution to the U.S. Economy, 381 Computer-Controlled Machine Tool Operator: Occupation Profile, 443 Computer-Controlled Machine Tool Operator: Occupation Specialties, 440 Computer-Controlled Tool Programmer: Occupation Profile, 442 Computer Engineer: Occupation Profile, 391 Computer Programmer: Occupation Profile, 408 Computer Security Specialist: Occupation Profile, 1000 Computer Systems Analyst: Occupation Profile, 426 Computer Systems Industry’s Contribution to the U.S. Economy, 416 Construction and Building Inspector: Occupation Specialties, 243 Construction Industry: Projected Employment for Selected Occupations, 250 Construction Industry’s Contribution to the U.S. Economy, The, 234 Construction Manager: Occupation Profile, 874 Contribution of Apparel and Leather Manufacturers to the U.S. Economy, 87 Contribution of Food, Beverage, and Tobacco Product Manufacturing to the U.S. Economy, 685

Contribution of Food Services and Drinking Places to the U.S. Economy, The, 1646 Contribution of Funds, Trusts, and Other Financial Vehicles to the U.S. Economy, The, 651 Contribution of Hospital, Nursing, and Residential Care Facilities to the U.S. Economy, 902 Contribution of Personal Services to the U.S. Economy, 1371 Contribution of Securities, Commodity Contracts, and Investments to the U.S. Economy, The, 650 Contribution of Textile and Textile Produce Mills to the U.S. Economy, The, 1841 Contribution to the U.S. Economy of Scientific, Technical, and Miscellaneous Professional Services, 1683 Cook/Chef: Occupation Profile, 1656 Cook/Chef: Occupation Specialties, 1657 Copywriter: Occupation Profile, 30 Corrections Officer: Occupation Profile, 494 Corrections Officer: Occupation Specialties, 493 Cosmetologist: Occupation Specialties, 1375 Cost Estimator: Occupation Specialties, 1507 Counter and Rental Clerk: Occupation Profile, 1619 Couriers and Messengers Industry: Projected Employment for Selected Occupations, 1492 Dancer/Choreographer: Occupation Profile, 1872 Dancer/Choreographer: Occupation Specialties, 1873 Dental Hygienist: Occupation Profile, 554 xc

Dental Laboratory Technician: Occupation Specialties, 555 Dentist: Occupation Specialties, 553 Dietician and Nutritionist: Occupation Specialties, 819 Dispatcher: Occupation Profile, 1489 Drafter: Occupation Specialties, 313 Education Administrator: Occupation Specialties, 1527 Educational Counselor: Occupation Specialties, 1549 Educational Services: Projected Employment for Selected Occupations, 1551 Electrical and Electronics Engineer: Occupation Profile, 572 Electrical Equipment, Appliance, and Component Manufacturing: Projected Employment for Selected Occupations, 575 Electrical Equipment, Appliances, and Components Industry’s Contribution to the U.S. Economy, 561 Electrical Line Installer and Repairer: Occupation Specialties, 588 Electromechanical Equipment Assembler: Occupation Profile, 573 Electronic Commerce Specialist: Occupation Profile, 997 Elementary School Teacher: Occupation Profile, 1547 Energy Conservation and Use Technician: Occupation Profile, 607 Energy Conservation and Use Technician: Occupation Specialties, 608 Engineering Technician: Occupation Specialties, 1689 Environmental Engineer: Occupation Profile, 606

List of Tables and Sidebars Fabricated Metal Product Manufacturing: Projected Employment for Selected Occupations, 1183 Farmer/Farm Manager: Occupation Specialties, 625 Farming Industry’s Contribution to the U.S. Economy, 614 Federal Government’s Contribution to the U.S. Economy, The, 633 Federal Law Enforcement Agent: Occupation Specialties, 336-337 Finance and Insurance Industry: Projected Employment for Selected Occupations, 139 Firefighter: Occupation Profile, 1565 Fishing Industry: Projected Employment for Selected Occupations, 677 Fitness Trainer and Aerobics Instructor: Occupation Profile, 818 Flight Attendant: Occupation Profile, 46 Food and Beverage Service Worker: Occupation Profile, 736 Food and Beverage Stores: Projected Employment for Selected Occupations, 718 Food Manufacturing: Projected Employment for Selected Occupations, 700 Food Service Manager: Occupation Profile, 733 Food Services and Drinking Places: Projected Employment for Selected Occupations, 739 Forester and Conservation Scientist: Occupation Specialties, 1288 Forestry Worker: Occupation Profile, 1122 Forklift Operator: Occupation Profile, 1977

Funeral Director: Occupation Profile, 771 Furniture and Related Product Manufacturing: Projected Employment for Selected Occupations, 790 Furniture Manufacturing Industry’s Contribution to the U.S. Economy, 776 Gambling Industry: Projected Employment for Selected Occupations, 286 Gardener and Groundskeeper: Occupation Profile, 1020 Gardener and Groundskeeper: Occupation Specialties, 1021 Geologist and Geophysicist: Occupation Profile, 356 Hazardous Waste Manager: Occupation Profile, 1994 Health Care and Social Assistance Industry: Projected Employment for Selected Occupations, 1166 Health Information Technician: Occupation Profile, 910 Heavy and Civil Engineering Construction: Projected Employment for Selected Occupations, 877 Heavy Equipment Service Technician: Occupation Profile, 839 Highway Maintenance Worker: Occupation Profile, 875 Home Appliance Repairer: Occupation Profile, 888 Hospitals Industry: Projected Employment for Selected Occupations, 915 Hotel/Motel Manager: Occupation Specialties, 927 Hotels Industry: Projected Employment for Selected Occupations, 934 Housekeeper: Occupation Specialties, 1376 xci

Industrial Designer: Occupation Profile, 965 Industrial Engineer: Occupation Profile, 966 Industrial Hygienist: Occupation Profile, 1091 Industrial Machinery Mechanic: Occupation Profile, 1071 Inputs Consumed by Ambulatory Health Care Services, 1154 Inputs Consumed by Food Services and Drinking Places, 1646 Inputs Consumed by Funds, Trusts, and Other Financial Vehicles, 651 Inputs Consumed by Hospital, Nursing, and Residential Care Facilities, 902 Inputs Consumed by Manufacturers of Food, Beverages, and Tobacco Products, 685 Inputs Consumed by Personal Services, 1371 Inputs Consumed by Scientific, Technical, and Miscellaneous Professional Services, 1684 Inputs Consumed by Securities, Commodity Contracts, and Investments, 650 Inputs Consumed by State and Local Governments, 1097 Inputs Consumed by Textile Mills and Textile Product Mills, 1842 Inputs Consumed by the Accommodation Industry, 921 Inputs Consumed by the Airline Industry, 39 Inputs Consumed by the Apparel and Leather Manufacturing Industry, 88 Inputs Consumed by the Broadcasting and Telecommunications Industries, 201 Inputs Consumed by the Business Services Industry, 254

Survey of American Industry and Careers Inputs Consumed by the Chemical Products Industry, 289 Inputs Consumed by the Computer and Electronic Products Industry, 381 Inputs Consumed by the Computer Systems Industry, 416 Inputs Consumed by the Construction Industry, 234 Inputs Consumed by the Electrical Equipment, Appliances, and Components Industry, 562 Inputs Consumed by the Farming Industry, 614 Inputs Consumed by the Federal Government, 634 Inputs Consumed by the Furniture Manufacturing Industry, 776 Inputs Consumed by the Insurance Industry, 973 Inputs Consumed by the Legal Services Industry, 1029 Inputs Consumed by the Machinery Manufacturing Industry, 830 Inputs Consumed by the Mining Industry, 1191 Inputs Consumed by the Motion Picture and Sound Recording Industries, 1209 Inputs Consumed by the Motor Vehicle Industry, 107 Inputs Consumed by the Oil and Natural Gas Extraction Industry, 1387 Inputs Consumed by the Paper Products Industry, 1335 Inputs Consumed by the Pipeline Transportation Industry, 1388 Inputs Consumed by the Plastics and Rubber Products Industry, 1443 Inputs Consumed by the Primary Metals Manufacturing Industry, 1172

Inputs Consumed by the Printing Industry, 1499 Inputs Consumed by the Publishing Industry, 1575 Inputs Consumed by the Real Estate Industry, 1590 Inputs Consumed by the Rental and Leasing Industry, 1607 Inputs Consumed by the Retail Trade Industry, 1666 Inputs Consumed by the Transit and Ground Passenger Transportation Industry, 1353 Inputs Consumed by the Truck Transportation Industry, 744 Inputs Consumed by the Utilities Industries, 581 Inputs Consumed by the Warehousing and Storage Industry, 1967 Inputs Consumed by the Waste Management Industry, 1984 Inputs Consumed by the Water Transportation Industry, 1725 Inspector and Compliance Officer: Occupation Profile, 167 Inspector and Tester: Occupation Specialties, 533 Insulation Worker: Occupation Profile, 894 Insurance Carriers and Related Activities: Projected Employment for Selected Occupations, 986 Insurance Claims Adjuster and Examiner: Occupation Profile, 983 Insurance Industry’s Contribution to the U.S. Economy, 973 Interior Designer: Occupation Profile, 229 Jeweler and Watch Repairer: Occupation Profile, 2009 Journalist: Occupation Specialties, 1583 xcii

Landscape Architect: Occupation Profile, 1019 Laundry/Dry Cleaning Machine Operator: Occupation Specialties, 1373 Lawyer: Occupation Specialties, 1037 Legal Services Industry’s Contribution to the U.S. Economy, 1029 Librarian: Occupation Specialties, 1053 Library Technician: Occupation Profile, 1055 Locomotive Engineer: Occupation Profile, 1365 Logging Industry: Projected Employment for Selected Occupations, 1128 Lumber Production Worker: Occupation Specialties, 1124 Machinery Manufacturing Industry’s Contribution to the U.S. Economy, The, 829 Machinery Manufacturing: Projected Employment for Selected Occupations, 841 Machinist: Occupation Profile, 803 Mail Carrier: Occupation Profile, 1490 Mail Clerk and Messenger: Occupation Specialties, 1491 Management Analyst and Consultant: Occupation Specialties, 264 Management of Companies and Enterprises: Projected Employment for Selected Occupations, 267 Manufacturers Representative: Occupation Profile, 694 Marine Biologist: Occupation Profile, 1289 Marine Engineer and Architect: Occupation Profile, 1735 Marine Engineer and Architect: Occupation Specialties, 1734

List of Tables and Sidebars Marriage Counselor: Occupation Profile, 473 Meat Cutter: Occupation Profile, 1088 Mechanical Engineer: Occupation Profile, 1074 Media Specialist: Occupation Specialties, 1056 Medical and Health Services Manager: Occupation Specialties, 911 Medical Records Administrator: Occupation Profile, 1637 Medical Scientist: Occupation Profile, 1566 Medical Social Worker: Occupation Profile, 478 Medical Technologist: Occupation Specialties, 1567 Merchandise Displayer: Occupation Profile, 1671 Metal/Plastic Working Machine Operator: Occupation Profile, 1144 Metallurgical/Materials Engineer: Occupation Specialties, 1180 Millwright: Occupation Profile, 697 Mining and Geological Engineer: Occupation Specialties, 1198 Mining and Quarrying: Projected Employment for Selected Occupations, 1201 Mining Industry’s Contribution to the U.S. Economy, 1190 Motion Picture and Sound Recording Industries’ Contribution to the U.S. Economy, 1209 Motion Picture, Video, and Sound Recording Industries: Projected Employment for Selected Occupations, 1222 Motor Vehicle Manufacturing: Projected Employment for Selected Occupations, 122 Motor Vehicles Industry’s Contribution to the U.S. Economy, The, 107

Museums, Historical Sites, and Similar Institutions: Projected Employment for Selected Occupations, 1238 Music Therapist: Occupation Profile, 480 Musical Instrument Repairer: Occupation Specialties, 1254 Musician and Composer: Occupation Profile, 1252 Musician and Composer: Occupation Specialties, 1251 Nuclear Engineer: Occupation Profile, 1306 Nuclear Engineer: Occupation Specialties, 1307 Nuclear Quality Control Inspector: Occupation Profile, 1308 Nurse Practitioner: Occupation Profile, 1638 Nursing and Residential Care Facilities: Projected Employment for Selected Occupations, 1641 Occupation Profile: Accountant, 12 Occupation Profile: Actuary, 984 Occupation Profile: Advertising Account Executive, 25 Occupation Profile: Aerospace Engineer, 1756 Occupation Profile: Aircraft Mechanic, 48 Occupation Profile: Animal Caretaker, 81 Occupation Profile: Architect, 225 Occupation Profile: Archivist and Curator, 1235 Occupation Profile: Athletic Trainer, 1773 Occupation Profile: Auditor, 14 Occupation Profile: Automobile Salesperson, 112 Occupation Profile: Bank Teller, 135 Occupation Profile: Barber, 1374 xciii

Occupation Profile: Biomedical Engineer, 1714 Occupation Profile: Biomedical Equipment Technician, 1716 Occupation Profile: Boilermaker, 191 Occupation Profile: Brickmason/Stonemason, 247 Occupation Profile: Budget Analyst, 262 Occupation Profile: Bus Driver, 1364 Occupation Profile: Camera Operator, 1220 Occupation Profile: Career/ Technology Education Teacher, 464 Occupation Profile: Chemist, 190 Occupation Profile: Child-care Worker, 518 Occupation Profile: Chiropractor, 370 Occupation Profile: Cinematographer, 1217 Occupation Profile: Clergy, 1435 Occupation Profile: Clothes Designer, 98 Occupation Profile: College Faculty Member, 859 Occupation Profile: Compositor and Typesetter, 1509 Occupation Profile: ComputerControlled Machine Tool Operator, 443 Occupation Profile: ComputerControlled Tool Programmer, 442 Occupation Profile: Computer Engineer, 391 Occupation Profile: Computer Programmer, 408 Occupation Profile: Computer Security Specialist, 1000 Occupation Profile: Computer Systems Analyst, 426 Occupation Profile: Construction Manager, 874 Occupation Profile: Cook/Chef, 1656

Survey of American Industry and Careers Occupation Profile: Copywriter, 30 Occupation Profile: Corrections Officer, 494 Occupation Profile: Counter and Rental Clerk, 1619 Occupation Profile: Dancer/ Choreographer, 1872 Occupation Profile: Dental Hygienist, 554 Occupation Profile: Dispatcher, 1489 Occupation Profile: Electrical and Electronics Engineer, 572 Occupation Profile: Electromechanical Equipment Assembler, 573 Occupation Profile: Electronic Commerce Specialist, 997 Occupation Profile: Elementary School Teacher, 1547 Occupation Profile: Energy Conservation and Use Technician, 607 Occupation Profile: Environmental Engineer, 606 Occupation Profile: Firefighter, 1565 Occupation Profile: Fitness Trainer and Aerobics Instructor, 818 Occupation Profile: Flight Attendant, 46 Occupation Profile: Food and Beverage Service Worker, 736 Occupation Profile: Food Service Manager, 733 Occupation Profile: Forestry Worker, 1122 Occupation Profile: Forklift Operator, 1977 Occupation Profile: Funeral Director, 771 Occupation Profile: Gardener and Groundskeeper, 1020 Occupation Profile: Geologist and Geophysicist, 356

Occupation Profile: Hazardous Waste Manager, 1994 Occupation Profile: Health Information Technician, 910 Occupation Profile: Heavy Equipment Service Technician, 839 Occupation Profile: Highway Maintenance Worker, 875 Occupation Profile: Home Appliance Repairer, 888 Occupation Profile: Industrial Designer, 965 Occupation Profile: Industrial Engineer, 966 Occupation Profile: Industrial Hygienist, 1091 Occupation Profile: Industrial Machinery Mechanic, 1071 Occupation Profile: Inspector and Compliance Officer, 167 Occupation Profile: Insulation Worker, 894 Occupation Profile: Insurance Claims Adjuster and Examiner, 983 Occupation Profile: Interior Designer, 229 Occupation Profile: Jeweler and Watch Repairer, 2009 Occupation Profile: Landscape Architect, 1019 Occupation Profile: Library Technician, 1055 Occupation Profile: Locomotive Engineer, 1365 Occupation Profile: Machinist, 803 Occupation Profile: Mail Carrier, 1490 Occupation Profile: Manufacturers Representative, 694 Occupation Profile: Marine Biologist, 1289 Occupation Profile: Marine Engineer and Architect, 1735 Occupation Profile: Marriage Counselor, 473 xciv

Occupation Profile: Meat Cutter, 1088 Occupation Profile: Mechanical Engineer, 1074 Occupation Profile: Medical Records Administrator, 1637 Occupation Profile: Medical Scientist, 1566 Occupation Profile: Medical Social Worker, 478 Occupation Profile: Merchandise Displayer, 1671 Occupation Profile: Metal/ Plastic Working Machine Operator, 1144 Occupation Profile: Millwright, 697 Occupation Profile: Music Therapist, 480 Occupation Profile: Musician and Composer, 1252 Occupation Profile: Nuclear Engineer, 1306 Occupation Profile: Nuclear Quality Control Inspector, 1308 Occupation Profile: Nurse Practitioner, 1638 Occupation Profile: Occupational Therapist, 515 Occupation Profile: Office Machine Repairer, 1073 Occupation Profile: Online Merchant, 941 Occupation Profile: Packer/ Packager, 1905 Occupation Profile: Painting/ Coating Machine Operator, 1904 Occupation Profile: Paralegal, 1038 Occupation Profile: Park Ranger, 339 Occupation Profile: Parole and Probation Officer, 495 Occupation Profile: Pharmaceutical Sales Representative, 1416 Occupation Profile: Pharmacist, 1410

List of Tables and Sidebars Occupation Profile: Plumber and Pipefitter, 892 Occupation Profile: Precision Assembler, 535 Occupation Profile: Prepress Technician, 1584 Occupation Profile: Principal, 1546 Occupation Profile: Production Coordinator, 1812 Occupation Profile: Professional Athlete, 1774 Occupation Profile: Public Administrator, 1108 Occupation Profile: Public Relations Specialist, 1470 Occupation Profile: Quality Control Inspector, 1795 Occupation Profile: Range Manager, 1290 Occupation Profile: Real Estate Sales Agent, 1601 Occupation Profile: Recreation Program Director, 1324 Occupation Profile: Recreation Worker, 1325 Occupation Profile: Refuse Collector, 1995 Occupation Profile: Research Assistant, 857 Occupation Profile: Retail Salesperson, 715 Occupation Profile: Retail Store Sales Manager, 1675 Occupation Profile: Riveter, 1145 Occupation Profile: Robotics Technician, 804 Occupation Profile: Science Technician, 154 Occupation Profile: Secondary School Teacher, 1531 Occupation Profile: Ship Loader, 755 Occupation Profile: Software Designer, 409 Occupation Profile: Soil Scientist, 1291 Occupation Profile: Solar Energy System Installer, 69

Occupation Profile: Stationary Engineer, 1811 Occupation Profile: Teacher Assistant, 1532 Occupation Profile: Technical Sales Representative, 1715 Occupation Profile: Telecommunications Installer and Repairer, 1834 Occupation Profile: Telephone Installer and Repairer, 1813 Occupation Profile: Textile Machine Operator, 1852 Occupation Profile: Tool and Die Maker, 2012 Occupation Profile: Upholsterer, 788 Occupation Profile: Urban and Regional Planner, 319 Occupation Profile: Veterinary Assistant/Technician, 1939 Occupation Profile: Water and Wastewater Engineer, 2029 Occupation Profile: Water Treatment Plant Operator, 2030 Occupation Profile: Wholesale Sales Representative, 170 Occupation Profile: Wind Energy Engineer, 71 Occupation Profile: Woodworker, 789 Occupation Specialties: Accountants and Auditors, 4 Occupation Specialties: Activities Therapist, 1636 Occupation Specialties: Actor, 1871 Occupation Specialties: Advertising Agent, 27 Occupation Specialties: Aerospace Engineer, 1755 Occupation Specialties: Agricultural Scientist, 627 Occupation Specialties: Animal Caretaker, 82 Occupation Specialties: Apparel Worker, 92 Occupation Specialties: Architect, 228 xcv

Occupation Specialties: Archivist and Curator, 1237 Occupation Specialties: Automotive Technician, 119 Occupation Specialties: Bellhop/Bell Captain, 931 Occupation Specialties: Bindery Worker, 1510 Occupation Specialties: Broadcast Technician, 210 Occupation Specialties: Bulldozer Operator, 873 Occupation Specialties: Chemical Engineer, 299 Occupation Specialties: Chemical Equipment Operator, 300 Occupation Specialties: Chemist, 189 Occupation Specialties: Civil Engineer, 311 Occupation Specialties: Computer-Controlled Machine Tool Operator, 440 Occupation Specialties: Construction and Building Inspector, 243 Occupation Specialties: Cook/ Chef, 1657 Occupation Specialties: Corrections Officer, 493 Occupation Specialties: Cosmetologist, 1375 Occupation Specialties: Cost Estimator, 1507 Occupation Specialties: Dancer/ Choreographer, 1873 Occupation Specialties: Dental Laboratory Technician, 555 Occupation Specialties: Dentist, 553 Occupation Specialties: Dietician and Nutritionist, 819 Occupation Specialties: Drafter, 313 Occupation Specialties: Education Administrator, 1527 Occupation Specialties: Educational Counselor, 1549

Survey of American Industry and Careers Occupation Specialties: Electrical Line Installer and Repairer, 588 Occupation Specialties: Energy Conservation and Use Technician, 608 Occupation Specialties: Engineering Technician, 1689 Occupation Specialties: Farmer/ Farm Manager, 625 Occupation Specialties: Federal Law Enforcement Agent, 336337 Occupation Specialties: Forester and Conservation Scientist, 1288 Occupation Specialties: Gardener and Groundskeeper, 1021 Occupation Specialties: Hotel/ Motel Manager, 927 Occupation Specialties: Housekeeper, 1376 Occupation Specialties: Inspector and Tester, 533 Occupation Specialties: Journalist, 1583 Occupation Specialties: Laundry/Dry Cleaning Machine Operator, 1373 Occupation Specialties: Lawyer, 1037 Occupation Specialties: Librarian, 1053 Occupation Specialties: Lumber Production Worker, 1124 Occupation Specialties: Mail Clerk and Messenger, 1491 Occupation Specialties: Management Analyst and Consultant, 264 Occupation Specialties: Marine Engineer and Architect, 1734 Occupation Specialties: Media Specialist, 1056 Occupation Specialties: Medical and Health Services Manager, 911 Occupation Specialties: Medical Technologist, 1567

Occupation Specialties: Metallurgical/Materials Engineer, 1180 Occupation Specialties: Mining and Geological Engineer, 1198 Occupation Specialties: Musical Instrument Repairer, 1254 Occupation Specialties: Musician and Composer, 1251 Occupation Specialties: Nuclear Engineer, 1307 Occupation Specialties: Packer/ Packager, 1906 Occupation Specialties: Pharmacist, 1409 Occupation Specialties: Police Officer, 341 Occupation Specialties: Power Plant Operator, 587 Occupation Specialties: Precision Assembler, 534 Occupation Specialties: Property and Real Estate Manager, 1600 Occupation Specialties: Psychologist, 471 Occupation Specialties: Public Relations Specialist, 1469 Occupation Specialties: Rail Transportation Worker, 752 Occupation Specialties: Recreation Worker, 1326 Occupation Specialties: Renewable Energy Technician, 70 Occupation Specialties: Reservation and Ticket Agent, 1920 Occupation Specialties: Science Technician, 1694 Occupation Specialties: Small Engine Mechanic, 1072 Occupation Specialties: Special Education Teacher, 1548 Occupation Specialties: Sports Instructor/Coach, 1772 Occupation Specialties: Telecommunications Equipment Installer/ Repairer, 1833 xcvi

Occupation Specialties: Textile Machine Operator, 1853 Occupation Specialties: Travel Agent, 1921 Occupation Specialties: Veterinarian, 1938 Occupation Specialties: Welder, 1144 Occupational Therapist: Occupation Profile, 515 Occupations in Pharmaceutical and Medicine Manufacturing: Projected Employment for Selected Occupations, 1420 Office Machine Repairer: Occupation Profile, 1073 Oil and Gas Extraction Industry’s Contribution to the U.S. Economy, 1387 Oil and Gas Extraction: Projected Employment for Selected Occupations, 1400 Online Merchant: Occupation Profile, 941 Packer/Packager: Occupation Profile, 1905 Packer/Packager: Occupation Specialties, 1906 Painting/Coating Machine Operator: Occupation Profile, 1904 Paper Manufacturing: Projected Employment for Selected Occupations, 1347 Paper Products Industry’s Contribution to the U.S. Economy, 1335 Paralegal: Occupation Profile, 1038 Park Ranger: Occupation Profile, 339 Parole and Probation Officer: Occupation Profile, 495 Performing Arts: Projected Employment for Selected Occupations, 1874 Personal and Laundry Services: Projected Employment for Selected Occupations, 1382

List of Tables and Sidebars Petroleum and Coal Products Manufacturing: Projected Employment for Selected Occupations, 1401 Pharmaceutical Sales Representative: Occupation Profile, 1416 Pharmacist: Occupation Profile, 1410 Pharmacist: Occupation Specialties, 1409 Pipeline Transporation Industry’s Contribution to the U.S. Economy, The, 1388 Plastics and Rubber Products Industry’s Contribution to the U.S. Economy, 1443 Plastics and Rubber Products Manufacturing: Projected Employment for Selected Occupations, 1455 Plumber and Pipefitter: Occupation Profile, 892 Police Officer: Occupation Specialties, 341 Postal Service Industry: Projected Employment for Selected Occupations, 1493 Power Plant Operator: Occupation Specialties, 587 Precision Assembler: Occupation Profile, 535 Precision Assembler: Occupation Specialties, 534 Prepress Technician: Occupation Profile, 1584 Primary Metal Manufacturing: Projected Employment for Selected Occupations, 1184 Primary Metals Manufacturing Industry’s Contribution to the U.S. Economy, 1172 Principal: Occupation Profile, 1546 Printing and Related Support Activities: Projected Employment for Selected Occupations, 1512 Printing Industry’s Contribution to the U.S. Economy, 1499

Production Coordinator: Occupation Profile, 1812 Professional Athlete: Occupation Profile, 1774 Professional, Scientific, and Technical Services: Projected Employment for Selected Occupations, 1700 Projected Employment for Selected Occupations: Agriculture, 628 Projected Employment for Selected Occupations: Air Transportation, 51 Projected Employment for Selected Occupations: Amusement Parks, 1889 Projected Employment for Selected Occupations: Apparel Industry, 102 Projected Employment for Selected Occupations: Beverage and Tobacco Product Manufacturing, 174 Projected Employment for Selected Occupations: Broadcasting, 212 Projected Employment for Selected Occupations: Chemical Manufacturing, 302 Projected Employment for Selected Occupations: Computer and Electronic Product Manufacturing, 394 Projected Employment for Selected Occupations: Construction Industry, 250 Projected Employment for Selected Occupations: Couriers and Messengers Industry, 1492 Projected Employment for Selected Occupations: Educational Services, 1551 Projected Employment for Selected Occupations: Electrical Equipment, Appliance, and Component Manufacturing, 575 xcvii

Projected Employment for Selected Occupations: Fabricated Metal Product Manufacturing, 1183 Projected Employment for Selected Occupations: Finance and Insurance Industry, 139 Projected Employment for Selected Occupations: Fishing Industry, 677 Projected Employment for Selected Occupations: Food and Beverage Stores, 718 Projected Employment for Selected Occupations: Food Manufacturing, 700 Projected Employment for Selected Occupations: Food Services and Drinking Places, 739 Projected Employment for Selected Occupations: Furniture and Related Product Manufacturing, 790 Projected Employment for Selected Occupations: Gambling Industry, 286 Projected Employment for Selected Occupations: Health Care and Social Assistance Industry, 1166 Projected Employment for Selected Occupations: Heavy and Civil Engineering Construction, 877 Projected Employment for Selected Occupations: Hospitals Industry, 915 Projected Employment for Selected Occupations: Hotels Industry, 934 Projected Employment for Selected Occupations: Insurance Carriers and Related Activities, 986 Projected Employment for Selected Occupations: Logging Industry, 1128

Survey of American Industry and Careers Projected Employment for Selected Occupations: Machinery Manufacturing, 841 Projected Employment for Selected Occupations: Management of Companies and Enterprises, 267 Projected Employment for Selected Occupations: Mining and Quarrying, 1201 Projected Employment for Selected Occupations: Motion Picture, Video, and Sound Recording Industries, 1222 Projected Employment for Selected Occupations: Motor Vehicle Manufacturing, 122 Projected Employment for Selected Occupations: Museums, Historical Sites, and Similar Institutions, 1238 Projected Employment for Selected Occupations: Nursing and Residential Care Facilities, 1641 Projected Employment for Selected Occupations: Oil and Gas Extraction, 1400 Projected Employment for Selected Occupations: Paper Manufacturing, 1347 Projected Employment for Selected Occupations: Performing Arts, 1874 Projected Employment for Selected Occupations: Personal and Laundry Services, 1382 Projected Employment for Selected Occupations: Petroleum and Coal Products Manufacturing, 1401 Projected Employment for Selected Occupations: Pharmaceutical and Medicine Manufacturing, 1420 Projected Employment for Selected Occupations: Plastics and Rubber Products Manufacturing, 1455

Projected Employment for Selected Occupations: Postal Service Industry, 1493 Projected Employment for Selected Occupations: Primary Metal Manufacturing, 1184 Projected Employment for Selected Occupations: Printing and Related Support Activities, 1512 Projected Employment for Selected Occupations: Professional, Scientific, and Technical Services, 1700 Projected Employment for Selected Occupations: Publishing Industries, 1585 Projected Employment for Selected Occupations: Rail Transportation, 1147 Projected Employment for Selected Occupations: Real Estate Industry, 1603 Projected Employment for Selected Occupations: Real Estate Rental and Leasing, 1604 Projected Employment for Selected Occupations: Religious, Grantmaking, Civic, Professional, and Similar Organizations, 1437 Projected Employment for Selected Occupations: Rental and Leasing Services, 1623 Projected Employment for Selected Occupations: Restaurants, 1660 Projected Employment for Selected Occupations: Retail Trade Industry, 1679 Projected Employment for Selected Occupations: Scenic and Sightseeing Transportation, 1922 Projected Employment for Selected Occupations: Securities, Commodity Contracts, and Related Activities, 661 xcviii

Projected Employment for Selected Occupations: Social Assistance, 520 Projected Employment for Selected Occupations: Specialty Trade Contractors, 897 Projected Employment for Selected Occupations: Sporting Goods, Hobby, Book, and Music Stores, 1796 Projected Employment for Selected Occupations: Support Activities for Mining, 1399 Projected Employment for Selected Occupations: Support Activities for Transportation, 1367 Projected Employment for Selected Occupations: Telecommunications Industry, 1832 Projected Employment for Selected Occupations: Textile Mills, 1851 Projected Employment for Selected Occupations: Textile Product Mills, 1854 Projected Employment for Selected Occupations: Transit and Ground Passenger Transportation, 1366 Projected Employment for Selected Occupations: Transportation Equipment Manufacturing, 1147 Projected Employment for Selected Occupations: Truck Transportation, 757 Projected Employment for Selected Occupations: Utilities Industry, 590 Projected Employment for Selected Occupations: Warehousing and Storage, 1978 Projected Employment for Selected Occupations: Waste

List of Tables and Sidebars Management and Remediation Services, 1997 Projected Employment for Selected Occupations: Water Transportation, 2031 Projected Employment for Selected Occupations: Wood Product Manufacturing, 230 Property and Real Estate Manager: Occupation Specialties, 1600 Psychologist: Occupation Specialties, 471 Public Administrator: Occupation Profile, 1108 Public Relations Specialist: Occupation Profile, 1470 Public Relations Specialist: Occupation Specialties, 1469 Publishing Industries: Projected Employment for Selected Occupations, 1585 Publishing Industry’s Contribution to the U.S. Economy, 1574 Quality Control Inspector: Occupation Profile, 1795 Rail Transportation: Projected Employment for Selected Occupations, 1147 Rail Transportation Worker: Occupation Specialties, 752 Range Manager: Occupation Profile, 1290 Real Estate Industry: Projected Employment for Selected Occupations, 1603 Real Estate Industry’s Contribution to the U.S. Economy, 1590 Real Estate Rental and Leasing: Projected Employment for Selected Occupations, 1604 Real Estate Sales Agent: Occupation Profile, 1601 Recreation Program Director: Occupation Profile, 1324

Recreation Worker: Occupation Profile, 1325 Recreation Worker: Occupation Specialties, 1326 Refuse Collector: Occupation Profile, 1995 Religious, Grantmaking, Civic, Professional, and Similar Organizations: Projected Employment for Selected Occupations, 1437 Renewable Energy Technician: Occupation Specialties, 70 Rental and Leasing Industry’s Contribution to the U.S. Economy, 1607 Rental and Leasing Services: Projected Employment for Selected Occupations, 1623 Research Assistant: Occupation Profile, 857 Reservation and Ticket Agent: Occupation Specialties, 1920 Restaurants: Projected Employment for Selected Occupations, 1660 Retail Salesperson: Occupation Profile, 715 Retail Store Sales Manager: Occupation Profile, 1675 Retail Trade Industry: Projected Employment for Selected Occupations, 1679 Retail Trade Industry’s Contribution to the U.S. Economy, 1666 Riveter: Occupation Profile, 1145 Robotics Technician: Occupation Profile, 804 Scenic and Sightseeing Transportation: Projected Employment for Selected Occupations, 1922 Science Technician: Occupation Profile, 154 Science Technician: Occupation Specialties, 1694 Secondary School Teacher: Occupation Profile, 1531 xcix

Securities, Commodity Contracts, and Related Activities: Projected Employment for Selected Occupations, 661 Ship Loader: Occupation Profile, 755 Small Engine Mechanic: Occupation Specialties, 1072 Social Assistance: Projected Employment for Selected Occupations, 520 Software Designer: Occupation Profile, 409 Soil Scientist: Occupation Profile, 1291 Solar Energy System Installer: Occupation Profile, 69 Special Education Teacher: Occupation Specialties, 1548 Specialty Trade Contractors: Projected Employment for Selected Occupations, 897 Sporting Goods, Hobby, Book, and Music Stores: Projected Employment for Selected Occupations, 1796 Sports Instructor/Coach: Occupation Specialties, 1772 State and Local Governments’ Contribution to the U.S. Economy, 1097 Stationary Engineer: Occupation Profile, 1811 Support Activities for Mining: Projected Employment for Selected Occupations, 1399 Support Activities for Transportation: Projected Employment for Selected Occupations, 1367 Teacher Assistant: Occupation Profile, 1532 Technical Sales Representative: Occupation Profile, 1715

Survey of American Industry and Careers Telecommunications Equipment Installer/Repairer: Occupation Specialties, 1833 Telecommunications Industry: Projected Employment for Selected Occupations, 1832 Telecommunications Installer and Repairer: Occupation Profile, 1834 Telephone Installer and Repairer: Occupation Profile, 1813 Textile Machine Operator: Occupation Profile, 1852 Textile Machine Operator: Occupation Specialties, 1853 Textile Mills: Projected Employment for Selected Occupations, 1851 Textile Product Mills: Projected Employment for Selected Occupations, 1854 Tool and Die Maker: Occupation Profile, 2012 Transit and Ground Passenger Transportation Industry’s Contribution to the U.S. Economy, 1353 Transit and Ground Passenger Transportation: Projected Employment for Selected Occupations, 1366

Transportation Equipment Manufacturing: Projected Employment for Selected Occupations, 1147 Travel Agent: Occupation Specialties, 1921 Truck Transportation Industry’s Contribution to the U.S. Economy, 744 Truck Transportation: Projected Employment for Selected Occupations, 757 Upholsterer: Occupation Profile, 788 Urban and Regional Planner: Occupation Profile, 319 Utilities Industries’ Contribution to the U.S. Economy, 580 Utilities Industry: Projected Employment for Selected Occupations, 590 Veterinarian: Occupation Specialties, 1938 Veterinary Assistant/Technician: Occupation Profile, 1939 Warehousing and Storage Industry’s Contribution to the U.S. Economy, 1966

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Warehousing and Storage: Projected Employment for Selected Occupations, 1978 Waste Management and Remediation Services: Projected Employment for Selected Occupations, 1997 Waste Management Industry’s Contribution to the U.S. Economy, 1983 Water and Wastewater Engineer: Occupation Profile, 2029 Water Transportation Industry’s Contribution to the U.S. Economy, 1724 Water Transportation: Projected Employment for Selected Occupations, 2031 Water Treatment Plant Operator: Occupation Profile, 2030 Welder: Occupation Specialties, 1144 Wholesale Sales Representative: Occupation Profile, 170 Wind Energy Engineer: Occupation Profile, 71 Wood Product Manufacturing: Projected Employment for Selected Occupations, 230 Woodworker: Occupation Profile, 789

SURVEY OF

American Industry and Careers

Logging Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Natural Resources Career Cluster: Agriculture, Food, and Natural Resources Subcategory Industries: Cutting Timber; Piling Timber; Pulpwood Logging Camps; Rough Wood Rails Manufacturing; Stump Removal; Transporting Timber; Wood Chipping in the Field Related Industries: Biofuels Industry; Building Construction Industry; Farming Industry; Natural Resources Management; Paper Manufacturing and Products Industry Annual Domestic Revenues: $30 billion USD (First Research, 2008) Annual Global Revenues: $270 billion USD (World Bank, 2008) NAICS Number: 1133

INDUSTRY

manufacturing, and construction. The industry employs hundreds of thousands of workers throughout the world. It forms an important part of the economies of countries throughout the world, including industrialized nations.

History of the Industry The logging industry owes its roots to some of the earliest human civilizations. Archaeologists have found evidence of the extensive use of wood in early architecture, furniture making, and other ancient crafts and industries—at sites in Jericho (in Israel) and in many sites in what is now Turkey—dating as far back as the Neolithic period, or New Stone Age (approximately 9500 b.c.e.). Neolithic civilizations originally used the trees closest to them for construction, but large settlements quickly exhausted that supply and obtained more wood by harvesting great numbers of trees from nearby mountain ranges. They used this wood in building foundations, walls, and rooftops, as well as in furniture and decorations. In ancient China, wood was also harvested during the late Neolithic period. The Chinese also began clearing forests in

DEFINITION

Summary The logging industry is an international business that utilizes an important natural resource for commercial purposes. The myriad wood products of logging and forestry have an equally wide range of uses, and logging serves a number of other important industries, such as papermaking, furniture 1113

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Logging Industry

The logging industry provides wood supplies that are crucial for construction and papermaking. (©Joseph Gough/ Dreamstime.com)

order to establish farms along the Yellow River around 5500 b.c.e. During the third millennium b.c.e., the first examples of the logging industry came into being. Ancient Egypt, lacking an adequate volume of local trees, looked to Byblos (modern-day Lebanon) to meet its growing demand for wood. The first pharaoh of Egypt’s fourth dynasty, Snefru (or Sneferu), ordered forty ships filled with cedar from Byblos. Snefru and his successors saw a constant need to import wood, which they used to build and maintain the Egyptian fleet. The availability of major wood resources in the Near East played a major role in the desire of ancient civilizations to build durable ships and buildings. In fact, wood was considered precious, accorded a value similar to that of gold and silver. In the twenty-third century b.c.e., Mesopotamian king Sargon of Akkad claimed that the god Dagan gave him a vast territory to rule that included a number of heavily forested areas, implying that

those forests were part of his wealth. Some of Sargon’s successors made similar claims. The Roman Empire—like many other civilizations—used Middle Eastern lumber for shipbuilding, construction, and other important endeavors. Additionally, the Roman Empire expanded its resources to include ceramics, advanced weaponry, and other technologies. The vast empire’s needs for wood and wood-based fire to fuel those technologies were great. In fact, the forests of the Lebanese mountains were not enough to satisfy the Romans’ needs. Rather, many of the Romans’ operations had to be moved to the heavily forested regions of what is now Germany. By the advent of European colonialism in the fifteenth and sixteenth centuries, Europe had become extremely developed, and its forest resources were dwindling rapidly. When explorers came to the shores of the New World, they recognized its enormous potential for logging. The landscape was tremendous and untapped. Soon, ships travel-

Logging Industry ing back to Europe contained large quantities of timber. The birth of the United States in the late eighteenth century continued this trend, as northern New England continued to be logged, both to build American houses and ships and to export timber to Europe. The significance of the burgeoning logging industry was soon symbolized on the Massachusetts State House: A large golden pine cone was placed atop the building’s dome as an homage to the importance of Maine (which was at the time part of the Massachusetts Bay Colony) and its successful logging industry. Maine (in particular, the city of Bangor) had become the largest logging center in the world, moving over 8 trillion feet of timber between 1832 and 1838. During the mid-nineteenth century, Maine and the rest of the northeastern United States saw the rise of another industry—papermaking— that added to the enormous demand for wood and logging. The logging industry was long a linchpin of the American economy, and it became part of the new nation’s cultural heritage. As Americans moved westward, much of their culture developed alongside logging. For example, the stories of Paul Bunyan, a giant lumberjack, and his pet ox Babe were part of the American mythology during its early years. As American movement westward continued, New England was joined by other major logging operations. In particular, the Pacific Northwest had become an important center for the industry by the early twentieth century, producing nearly 8 billion board feet in 1926. Washington State replaced Maine as the country’s top lumber-producing state, sending exported wood as far away as China and Australia. The Industry Today The logging industry is a global, multibillion-dollar business. It provides wood supplies that are crucial for construction, papermaking, and other uses. Countless types of wood are collected in the myriad forested areas around

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the world. The list of leading wood- and timberexporting nations varies in rank based on the type of product being exported, such as fiberboard, paper, plywood, and other materials. The United States is both a major exporter and a major importer of certain types of wood products. Among the other leaders are Southeast Asian countries such as Malaysia, Vietnam, and Myanmar, as well as Russia and Canada. One of the benefits of wood as a natural resource is that it is found in nearly every part of the world. Although highly developed, the United States still contains large forests, much of which have been purchased for the purposes of logging. Canada, Russia, and many European countries also contain considerable forested areas dedicated to

A logging operation uses water to transport and cure logs. (©Dreamstime.com)

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Logging Industry

logging. A significant proportion of these industrialized nations’ forest resources is at least somewhat sustainable. When trees are harvested, they are also replaced with tree farms and nurseries. Such practices ensure that this vital natural resource is not completely eradicated. The same care is not taken in many developing countries. Often, these countries lack viable manufactured products, crops, or other natural resources to drive economic development, so they have turned to timber. Logging has been both beneficial and harmful to these countries. The industry provides jobs, creates products for domestic and foreign sale, and increases the acreage of arable land. However, the logging pursuits of many developing countries have not been planned or executed in a sustainable fashion. In places such as Haiti, Brazil, Africa, and Southeast Asia, forest resources have been heavily logged without replacement. In Haiti, this practice has left a once highly forested nation barren of trees, while the country remains extremely poor. In regions with large rain

forests, the removal of trees for short-term economic gain has generated considerable controversy among environmentalists concerned with the depletion of the ozone layer. The logging industry may be separated into three major components. The first of these segments harvests timber. Cutters, traditionally known as lumberjacks, travel deep into forests and begin their work—first removing branches and large limbs, and then sawing down the large trunks of trees. This part of the industry is one of the most dangerous, as lumberjacks need to climb high into trees and use heavy and light machinery that can cause serious injury. Furthermore, the location of the work performed is often far from the nearest hospital, adding to the physical risks when accidents occur. The industry’s second segment transports timber. Workers pick up felled trees and move them to locations for processing. The felled timber may be transported by flatbed trucks or floated down rivers on barges or as makeshift rafts assembled by bundling the logs themselves. The latter practice, one of the longest-used tactics in logging, is also one of the most efficient and inexpensive options. The third component of the industry processes trees into usable commodities. Timber has myriad uses. Some is cut down into boards and blocks of varying shapes and dimensions, while other quantities of it are processed into pulp for paper or into concentrated packs for fireplace logs. Mills and processing plants have long constituted the economic lifeblood of many small communities located in rural, forested areas. The logging industry remains strong in the early twenty-first century. While the increased use of computers and Internet technology has significantly reduced paper use, logging continues to thrive overall as a global business. Demand remains strong for wood and wood-based products on virtually every economic level.

INDUSTRY MARKET SEGMENTS

A crane lifts cut logs. (©Terrance Emerson/Dreamstime.com)

Logging companies vary significantly in size. Some small concerns specialize solely in felling or transporting timber on property owned by others. By contrast, large, vertically integrated companies

Logging Industry may purchase and maintain forests, fell trees within them, and process those trees into products that the company then markets. Forestry or forest management is an important part of the long-term business of such large businesses, while smaller companies may simply provide labor in the service of a forest-management plan produced by others. Small Logging Companies Small logging companies employ fewer than one hundred persons. They are generally local companies, felling timber in a particular forest or forested region. As a result, their fortunes may be tied to those of their region to a greater extent than is the case for larger companies. Potential Annual Earnings Scale. The average earnings for employees of small logging companies vary based on the work performed and the volume of work available, as well as the number of employees at the company. Budgets tend to be very tight for these companies in the light of these factors. According to the U.S. Department of Labor, the average annual wage in the logging industry in 2007 was an estimated $34,387. Loggers comprise the bulk of a small company’s payroll and typically earn between $31,000 and $37,000 per year according to Salary.com. Clientele Interaction. The level of client interaction within the logging industry varies based on the position involved. At a small company, employees are more likely to interact with clients than they would be at a larger firm since jobs may be directly negotiated between the loggers and their customers. Payments for such jobs are made immediately following their completion. Amenities, Atmosphere, and Physical Grounds. Logging and much processing takes place outdoors, in forests. Loggers must work in all types of weather and conditions, living at times in logging camps deep in the forest rather than commuting to work from home. As a result, there is often a general spirit of camaraderie among loggers, especially given the high level of physical risk that accompanies their occupation. Typical Number of Employees. Some small logging companies employ as few as two people, while others may employ up to one hundred fulltime workers. For large jobs, some small companies may hire temporary personnel to augment the fulltime staff and enable them to complete the jobs.

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Traditional Geographic Locations. Small logging companies operate in areas where large concentrations of harvestable lumber are found, typically small, rural communities adjacent to or within highly forested areas. Such locations facilitate not just logging but also transport to and from logging sites, both of which are conducted with minimal expense to the customer and the company alike. Pros of Working for a Small Logging Company. Small logging companies offer their employees a degree of comfort and independence that may not be found at larger companies. Employees work closer to home than they would at larger firms, and they are less likely to be required to travel for work. Additionally, a company’s customers themselves are often based nearby and are typically familiar with the company and its employees, developing a stronger relationship than exists between larger companies and their clients. Cons of Working for a Small Logging Company. Small logging companies are capable of performing only relatively small jobs. As a result, they may not have consistent revenue streams and may therefore be forced to branch out into other types of work. Small firms’ limited budgets also limit the amount of wages they can pay, which are generally below the industry average. They may not be able to afford training for their employees, which can increase the prevalence of on-the-job injuries. Furthermore, many companies are so small that their employees cannot afford full health insurance, so any injuries they incur may be costly. Finally, when economic conditions deteriorate, small companies do not have the ability to adapt and reorganize in the same manner that larger companies can; company closures occur frequently, as do job losses. Costs Payroll and Benefits: Pay and benefits for small logging companies depend largely on the jobs involved. Generally, pay for employees of small logging companies is below average, in large part because of the limited scope of work performed by a small number of workers. Workers are typically paid by the job as opposed to earning a salary or hourly wages. Benefits are typically limited by a company’s small workforce and budget. Supplies: Small logging companies require a number of important tools and pieces of hardware.

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Logging Industry

Among them are motorized saws, axes and similar cutting equipment, climbing equipment, and towing equipment. Additionally, they may require modified trucks, cranes, backhoes, and other heavy machinery in order to remove and transport felled trees and limbs. If they own their own equipment, they must also have smaller tools and oil on hand to maintain this equipment. External Services: Many small logging companies do not own their own equipment. Instead, they rent equipment from vendors. Additionally, they may need accountants to manage their finances and taxes and Internet marketing consultants to develop and maintain Web sites. They may also need to contract mechanics to fix broken machinery and vehicles. Utilities: Among the utilities used by small logging companies are gasoline and oil, used to power and maintain heavy and light equipment, as well as trucks and similar vehicles. If they have their own office space, such companies may pay for telephone lines and electricity as well. Taxes: Small logging companies must collect and report employee income taxes, as well as pay their own corporate income taxes. If these companies have the minimum number of employees to meet the standards of state or regional government requirements, they may be liable for unemployment insurance. If they own their own business space, they must also pay property taxes. Midsize Logging Companies Midsize logging companies employ between 100 and 250 persons. While less tied to a specific location than are small companies, they are often still largely regional entities, cultivating and dependent upon local relationships and infrastructure. Potential Annual Earnings Scale. According to the U.S. Department of Labor, the average annual wage in the logging industry in 2007 was an estimated $34,387. Loggers themselves earn between $31,000 and $37,000 per year according to Salary.com. Midsize companies are likely to pay wages in accord with the industry average. Clientele Interaction. The level of clientele interaction experienced by a midsize logging company employee depends largely on the employee’s position. A company’s owners or business manag-

ers will speak and coordinate directly with clients, as will administrative personnel, who may answer phones, take orders, and maintain records. Cutters and haulers may have little, if any, interaction with clients. Amenities, Atmosphere, and Physical Grounds. Midsize logging companies operate in two types of environments. The first is the main office environment, in which records are kept, vehicles are stored and maintained, and sales are conducted. This environment is professional, with personnel performing a range of pertinent tasks to support the work being done on site. The second environment is the field, the forests in which logging camps are located. Loggers in the field experience unpredictable working conditions, involving variable weather conditions and physical dangers. Employees in both environments must remain in close contact with one another in order to ensure that each job is managed professionally while the safety and well-being of loggers is maintained. Typical Number of Employees. Midsize logging companies have from 100 to 250 full-time employees. This number may be quite variable at a given company, fluctuating with the demand for the company’s services. Traditional Geographic Locations. Midsize logging companies may be found in municipalities in or near heavily forested areas in order to facilitate cost-effective logging and hauling. However, some companies maintain headquarters in larger cities and communities from which they coordinate logging activities in the field. While on a job, loggers reside in forested areas, operating out of logging camps and similar venues. Pros of Working for a Midsize Logging Company. Employees of midsize logging companies are able to work on a diverse number of projects, from commercial logging to clearing and landscaping. They often have more consistent work opportunities than do employees of smaller companies. Additionally, the larger volume of available work may entail more competitive pay and benefits. Midsize companies, by virtue of having larger budgets, may also be able to afford better equipment and training for employees, which can help reduce the risk of injury. Cons of Working for a Midsize Logging Company. Although the pay and benefits for midsize

Logging Industry

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A lumberjack at work in the woods. (©Martin Fischer/Dreamstime.com)

logging company employees is competitive, the physical risk remains, especially given the fact that these companies may perform larger, more dangerous jobs than do smaller companies. Additionally, the logging industry as a whole is still subject to significant ebbs and flows, which can result in work stoppage and workforce reductions. Midsize companies may also have a competitive disadvantage in comparison to larger companies that can offer better machinery and more personnel. Costs Payroll and Benefits: Midsize companies have more diverse pay scales than smaller companies. In addition to loggers, truck drivers, and field workers, these companies employ senior managers, who command higher salaries, and lowerlevel administrative personnel. Supplies: Midsize logging companies use office supplies such as stationery, business cards, accounting and filing materials, and telecommunication equipment. Logging operations re-

quire heavy equipment, such as cranes and backhoes; light equipment, such as chain saws and trimmers; parts and tools to maintain and repair the equipment; hand tools; and transport vehicles. External Services: Midsize logging companies have more resources than do small companies, so they may address many of their needs internally. However, they may still rent equipment or vehicles and hire outside maintenance services. Additionally, many outsource accounting, Web site design, marketing, and advertising. Utilities: Midsize logging companies use a large amount of gasoline and oil to fuel heavy and light logging equipment, as well as transportation vehicles. Additionally, they require electricity and telephone services for their headquarters, as well as cellular phones for on-site personnel. Taxes: Like most companies, midsize logging companies must withhold income taxes from employees, as well as reporting their own corporate

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Logging Industry

income taxes. If they own their own headquarters or storage space, they must pay commercial real estate taxes. In many areas, companies must pay taxes to fund health insurance programs and unemployment insurance pools. Large Logging Companies Large logging companies have more than 250 employees. Rather than being tied to a particular region, a large company is likely to have multiple operations in multiple regions, while being headquartered in an urban center removed from those operations. It may even be based in a different country from those in which its operations are carried out. Large companies are more likely to be involved in every aspect of logging, including the processing of timber into wood and paper products. Potential Annual Earnings Scale. The employees of larger logging companies, by virtue of the generally larger volume of high-value jobs on hand, have a greater potential to earn competitive salaries. However, larger companies also have more diverse employee groupings. The highest end of a company’s pay scale will be occupied by its salaried executives, while field workers and administrative employees are usually paid hourly and at lower wages. Clientele Interaction. The level of interaction between a large logging company employee and the company’s clients depends largely on the position held by the employee. Much client interaction is left to those employees who manage jobs from the corporate headquarters, including administrative personnel who oversee accounting and client relationships. Moreover, during the course of prospecting, business development managers have a high degree of interaction with potential new clients. Amenities, Atmosphere, and Physical Grounds. Logging workers in the field must deal with certain risks and dangers, long hours, and physically demanding work. These workers tend to work closely with other cutters and lumber industry personnel. Personnel employed at a corporate headquarters or regional office must work together to ensure the safety and effective teamwork of those in the field. In both cases, personnel must act in a particularly tight group dynamic in order to complete their projects effectively.

Typical Number of Employees. Large logging companies have anywhere from 250 to thousands of full-time employees. For example, Canada’s AbitibiBowater, one of the world’s largest logging and paper companies, employed about 18,000 workers before it declared bankruptcy in 2009. Traditional Geographic Locations. Large logging companies are often international corporations. They have headquarters in major cities, along with subsidiary offices and facilities in or near forested areas, with logging camps and mills established within each region of operation. In some cases, these businesses are multinational companies, conducting logging, processing, and transferring operations in and among various countries while maintaining their home bases elsewhere. Pros of Working at a Large Logging Company. Employees of a large logging company are part of a sizable network that potentially offers a wide range of work options, leading to work diversity and opportunities for advancement. In addition, because such a company’s contracts tend to be lucrative, worker pay and benefits are often better than at midsize and small logging companies. Large firms tend to have more buying power, enabling them to equip workers with the best trade tools. They can also afford to train employees in the use of their equipment. Furthermore, in the event of an economic downturn, large companies are often more resilient, able to downsize or reorganize rather than folding completely. Cons of Working for a Large Logging Company. Because many large logging companies are multinational and not specific to a certain region, workers may be transferred to job sites and subsidiary locations away from home or even out of the country. Employees do not necessarily have a chance to cultivate familiarity with a given region or forest and to help steward its continued sustainability. Additionally, large companies’ broad operational reach leaves them susceptible to broad economic issues. For example, when stocks fall or national economies falter, larger companies with stakes in foreign countries may suffer as well. Costs Payroll and Benefits: Pay and benefits for employees of large logging companies are among the most competitive in the industry. Executives

Logging Industry earn the highest industry salaries, while administrative and hourly employees tend to earn lower base pay. Those working on at-risk job sites may also enjoy greater health, disability, and life insurance benefits than would employees working for small or midsize firms. Supplies: Large logging companies require a great deal of equipment, both heavy and light, as well as the means and materials to maintain it. They also need large vehicles of all kinds to facilitate the transfer of harvested lumber. They also need factory equipment and materials to process lumber into commodities. Furthermore, they require a considerable quantity of office supplies, computer hardware, and software at corporate locations to maintain contact with worksites and subsidiaries, generate new business, and conduct internal operations. External Services: Although much of the operations conducted by large logging companies are managed internally, these companies may still require the services of a number of external vendors. One of the largest external services is transportation—from trucking to rail to air and water shipping companies. Additionally, many large companies contract public relations companies and legal representation, as well as lobbyists to advance their agendas at state, regional, and national capitols. Utilities: Large logging companies, particularly those with large corporate headquarters and regional offices, use a large quantity of utilities. Among these utilities are electricity and other energy resources. Large companies also require extensive telephone and Internet services in order to generate new business, as well as for internal communications among regional offices and with remote worksites. Taxes: Large logging companies are required to withhold employee income taxes, as well as to report their own corporate income taxes on state, regional, and national levels. Many are also required to contribute to public unemployment insurance and health insurance pools. Because of these companies’ multinational operations, many national and international leaders are seeking to increase the taxes levied for global logging operations in an effort to curtail those operations in order to combat global warming.

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ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of the logging industry constitutes a diverse network centered on the felling, clearing, transportation, and processing of timber. Many logging companies perform different jobs: Some clear trees primarily to use as raw materials for commercial manufacturing, while others clear them to make room for land development or agriculture. There is thus significant variation in the composition and goals of different logging companies. The logging industry does, however, contain a number of general organizational consistencies. The following umbrella categories apply to the organizational structure of businesses in the logging industry: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Business Development Manufacturing Transportation Maintenance and Engineering Lumberjacks Public Relations Legal Counsel Marketing Human Resources Accounting Administrative Support

Executive Management At the top of a logging company is its executive team, which is charged with managing the overall operations and endeavors of the business. This group is responsible for ensuring that all activities of the company run smoothly, from business development to project completion to the distribution of the final product. Executive managers head a company’s various departments, overseeing special projects and proposals as well as day-to-day operations. Executive management is responsible for setting corporate goals and strategies; assessing, approving, or passing on requests for business; and developing and implementing budgets. Executive managers and personnel are generally highly experienced individuals with strong educational backgrounds. They may have secondary, under-

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Logging Industry OCCUPATION

PROFILE

Forestry Worker Considerations

Qualifications

Description

Performs a variety of tasks to reforest and protect timber tracts and maintain forest facilities.

Career cluster

Agriculture, Food, and Natural Resources

Interests

Data; things

Working conditions

Work outside

Minimum education level

On-the-job training; high school diploma/technical training; junior/technical/community college

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

RES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

graduate, and graduate degrees in business administration, forestry, marketing, or other related fields. However, training and experience are the most important aspects of executives’ qualifications, giving them strong familiarity with the work being conducted and the processes by which that work may be performed. Executive management occupations may include the following: ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) Chief Information Officer (CIO) Vice President of Marketing

Business Development The business development department is responsible for securing new jobs and business partners. The logging industry relies heavily on contracts from clients seeking logging services for both

timber collection (to be used in wood-based products) and landscaping purposes. The business development department is responsible for seeking out clients and designing work plans and schedules that will meet the needs of those clients. Business development personnel have considerable experience with and knowledge of their companies’ operations. They must be well-organized and capable of developing strong proposals that meet the budget and operational needs defined by their customers. Business development personnel are usually college educated, although some are former field workers who, by virtue of their logging experience, can apply extensive and comprehensive knowledge to the proposal at hand. Business development occupations may include the following: ■ ■

Vice President of Business Development Business Development Manager/ Coordinator

Logging Industry ■ ■

Sales Manager Recruiter

Manufacturing The logging industry is strongly linked to a number of other industries, including manufacturing. In many cases—and in particular, those cases in which the company is large or multinational in size—logging companies themselves contain manufacturing wings that process the materials they harvest into products that are sold on the market or delivered to middlemen for distribution. The manufacturing side of the logging industry often involves arduous operations. Personnel are exposed to dangerous heavy machinery and toxic chemicals. Although manufacturing personnel may not have education beyond secondary schooling, in the light of these dangers, they are expected to have vocational training that may be obtained in school or on the job. They must be skilled with tools and heavy equipment and be able to adapt quickly to the often high-speed environment of a factory or processing mill. Manufacturing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Quality Assurance Manager Engineer Digester Operator Foreman Forklift Operator Inspector Line Worker

Transportation occupations may include the following: ■ ■ ■ ■

Truck Driver Crane Operator Forklift Operator General Contractor

Maintenance and Engineering The maintenance and engineering department is responsible for all equipment and systems utilized by a logging company. Personnel are usually based near the company’s main equipment depots, although they may be called into worksites and subsidiary organizations to perform field repairs and upkeep. Maintenance and engineering personnel must be familiar with all the equipment with which they are assigned to work. They are well trained in the repair and maintenance of a broad range of logging-related equipment. Some of their training comes from general vocational and engineering training in the classroom (many will have equipment certification from accredited programs), although their understandings of specific equipment, both heavy and light, may predominantly come from on-the-job training. Maintenance and engineering occupations may include the following: ■ ■ ■ ■

Transportation The logging industry relies heavily on personnel who are skilled in operating the heavy trucks and equipment that are used to move and transport felled trees to processing plants and manufacturing facilities. These workers operate large vehicles such as bulldozers, tree clamps, and cranes to help fell trees and place them on the backs of trucks. Others drive the trucks themselves once the wood has been loaded. Logging vehicle drivers may not have formal education, but they must be experienced in operating large trucks that carry extremely heavy loads. They must be able to operate their vehicles in adverse weather and environmental conditions, as well as on the open road, as worksites are typically located off major roads.

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Truck Mechanic Engineer Equipment Repair Specialist Systems Engineer

Lumberjacks At the heart of any logging company are the people responsible for felling trees. So-called lumberjacks, or timber cutters, are teams of individuals who, in careful fashion, remove trees from a forested area. Each individual has a role (or series of roles) to play in bringing down and removing timber, from climbing tall trees and trimming branches, to removing limbs, to felling trunks and removing stumps. Lumberjacks may not receive much classroom training but rather obtain their experience in the field. Many come from logging families and learn the trade from peers and family members. Many loggers receive their training from the companies

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for which they work. Loggers must be proficient with the tools of logging and be able to use such equipment at significant heights, as well as in all types of weather. They must be physically strong and able to work closely together as a team. Lumberjacking occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Cutter Logging Tractor Operator Dogger Barker Tree Trimmer Tree Faller Rigging Slinger Chaser Logging Operations Inspector Deckhand Log Grader/Scaler Choke Setter Bucker Cable Puller

OCCUPATION

Public Relations Although many midsize and small logging companies use external public relations services (if any), many large logging companies have their own public relations departments. These departments manage all external communications, press statements, interviews, promotions, and other forms of public information dissemination. Public relations personnel are charged with promoting the interests and activities of their companies to the general population, as well as to targeted media outlets. A logging company’s public relations department is the primary vehicle by which the company establishes its official position or responds to emergency situations, political and environmental issues, and other time-sensitive matters. Public relations personnel must be effective communicators, as well as professionals able to react quickly to sensitive issues in an evenhanded, diplomatic manner. In many cases, a logging company’s political endeavors, such as lobbying and government relations, are conducted through this department.

SPECIALTIES

Lumber Production Workers Specialty

Responsibilities

Buckers

Trim branches and tops off trees and then cut the logs into specified lengths.

Chainsaw operators

Trim limbs, tops, and roots from trees and saw logs to predetermined lengths using chain saws.

Cruisers

Hike through forests to assess logging conditions and estimate the volume of marketable timber.

Fallers

Cut down trees with chain saws or other mechanical felling equipment.

Log graders

Inspect logs for defects, determine their quality and volume, and estimate their market value.

Log markers

Determine the points at which logs will be sawed into sections.

Logging supervisors

Manage one or more crews, usually consisting of four or fewer workers.

Rivers

Split logs to form posts, pickets, stakes, and other objects.

Tree cutters

Fell trees of specified size and species, trim limbs from trees, and cut trees into lengths for firewood, fence posts, or pulpwood, using axes, measuring tools, and chain saws.

Logging Industry

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Public relations personnel are typically college educated, and many have advanced degrees in such fields as public relations, communications, public affairs, law, and public policy. They must be professionally experienced in the logging industry, demonstrating a strong understanding of the issues faced by the industry, as well as how each such issue relates to their companies’ stated goals and activities. Public relations occupations may include the following: ■ ■ ■

■ ■ ■

Public Relations Director External Affairs Coordinator Government Relations Manager/Lobbyist Event Planner Marketing Manager Administrative Assistant

Legal Counsel Logging companies (particularly midsize and large corporations) often employ (or retain) teams of fulltime legal experts to advise them. One of the most important roles legal counsel plays is reviewing contracts to ensure that a company’s best interests are served by them. Additionally, lawyers are frequently called upon to review local, state, regional, and national regulatory or statutory A truck hauls spruce tree logs on a snowy road. (©Kelly Boreson/ changes that may affect their compaDreamstime.com) nies. They may also facilitate or respond to employee complaints, negologging industry as well, giving them insight into tiate employee contracts with collective bargaining relevant legal and regulatory issues. They must also representatives, and litigate external civil suits conhave extensive understanding of how the laws in a cerning their companies’ work. given region affect the activity of their companies Legal counsel must be fully versed in the law. in that region. They must know federal and local laws pertaining Legal occupations may include the following: to environmental regulation and forestry, and they must also carefully observe local ordinances. In the ■ Chief Counsel light of the complexities of legal statutes and regu■ Staff Attorney lations, legal counsel must pay an extraordinary ■ Associate Attorney amount of attention to detail. ■ Paralegal Legal counsel team members must have ad■ Administrative Assistant vanced degrees in law. Most are experienced in the

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Marketing Logging companies must advertise themselves in order to generate business. For smaller and midsize companies, such efforts may enable them to compete with better-established and betterknown companies. The responsibility for this area of operations falls to a company’s marketing department. Marketing personnel put together promotional brochures, create advertising campaigns and strategies, and even establish mutual partnership connections with other companies and trade associations in order to generate the maximum amount of visibility. Marketing personnel must therefore be very well educated not only in such endeavors but also in the industry itself, ensuring that any marketing materials distributed are delivered to the right media, groups, and individuals. Marketing personnel at a logging company must have extensive experience in both the industry and in advertising. They also tend to have undergraduate and advanced degrees in such fields as marketing, advertising, communications, and business management. Marketing occupations may include the following: ■ ■ ■ ■ ■

Marketing Director Marketing Manager Marketing Coordinator Communications Specialist Administrative Assistant

Human Resources Logging companies must seek out the most experienced and capable employees in order to ensure that the work performed will generate return business and spread the company’s positive reputation. To this end, logging companies of all sizes have a human resources and recruitment department, or at least a person skilled in this capacity. Human resources personnel are charged with recruiting, hiring, and terminating employees. They help organize employee benefits packages, insurance programs, and training programs for full-time employees. They may also be involved in conducting background checks to ensure that potential employees are not and have not been connected with any criminal activity. In the event that a logging company is competing with other compa-

nies for contracted business, human resources personnel play an active role on proposal teams, reviewing the best internal and external personnel for contract positions and, if the proposal is accepted, applying them to the stated positions. Furthermore, human resources managers are called upon to work with collective bargaining units when dealing with union employees. Human resources professionals are highly conversant in issues pertaining to federal and state employment practices, as well as protocols for hiring and terminating employees. They are typically college educated, and many have advanced training or degrees in business management, human resources, and similar fields. Human resources occupations may include the following: ■ ■ ■ ■ ■

Human Resources Director Vice President of Human Resources Human Resources Coordinator Recruitment Manager Administrative Assistant

Accounting The responsibility of overseeing financial operations, including accounts payable (money that is owed by the company) and accounts receivable (money that is owed to the company) falls to a logging company’s accountant or accounting department. This area of the company must carefully review and record employee expenses within the context of a given project, as well as in terms of overall company operations. Accounting departments are extremely vital elements of often budget constrained logging companies, especially in the light of the fact that clients are usually equally sensitive to budgets. Employees in a logging company’s accounting department must be extremely organized and show strong attention to detail, taking into account a wide range of expenses, including maintenance, procurement, vehicle rentals, and payroll. Accountants also prepare annual and quarterly tax reports and filings. Accountants are typically college educated, while some have advanced degrees in related fields. In the United States, most such personnel have licenses as certified public accountants (CPAs) as well. Accounting occupations may include the following:

Logging Industry ■ ■ ■ ■

Accounts Payable Manager Accounts Receivable Manager Accounting Director Office Manager

Administrative Support Logging companies (particularly midsize and large companies) need personnel to perform administrative tasks in a variety of departments and as part of the company’s overall operations. Administrative personnel answer a company’s main telephone lines and redirect calls, organize accounting records, take meeting minutes, and coordinate visitor protocols. Administrative support personnel in the logging industry must have strong organizational skills, as well as an ability to communicate effectively with internal and external personnel. They must also quickly become familiar with office computer, telephone, and filing systems. Many have high school diplomas, although some administrative support personnel are relatively new to the workforce, having recently graduated from undergraduate programs. Administrative support occupations may include the following: ■ ■ ■

Receptionist File Clerk Administrative Assistant

INDUSTRY

OUTLOOK

Overview In many societies, the logging industry has long had a degree of nobility attached to it. In lands with rich forests, including the United States and Canada, those who engaged in the felling of trees projected an image of strength and courage. Today, loggers retain that image, as their line of work continues to require great physical strength and fearlessness. The logging industry has undergone a steady evolution, however, during a period of change that coincided with the need to sell a viable natural resource. In developing countries, the wood trade has skyrocketed, spurring the creation of multinational corporations that remove large swaths of forest in regions with delicate ecosystems (as well as illegal deforestation and logging operations).

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Southeast and southern Asia, for example, have long been rich with rain forests and tropical timber, and the market for their wood products on the international stage has been consistently strong. By the end of the twentieth century, it is estimated that more than 4.2 million people were employed as loggers in the Asia-Pacific region, part of over seventy-six hundred commercial enterprises in that area. The largest logging country at the time was Malaysia, employing about 206,000 workers. The increasingly unsustainable clearing of tropical forests in particular has generated a political backlash, especially in the light of growing concerns about global warming and climate change. Forest conservation has seen considerable growth as an industry, while logging has remained stagnant. Conservation was long part of the overall logging industry since loggers were often called upon to clear overgrown forest areas. Political concerns are not the only factor causing stagnation in the logging industry. Logging has benefited from the appearance of improved technologies. Modern technology has rendered the dual saw and the axe obsolete, replacing them with high-powered chain saws and other equipment that can fell trees with greater speed and efficiency and with fewer personnel. Furthermore, the increased use of the Internet and computer-based communications has caused a reduced demand for paper. Additionally, the increased number of large, multinational companies has reduced the number of midsize and smaller companies, as these larger companies have either absorbed the smaller ones or put them out of business. Another element playing a major role in the logging industry’s malaise is the global economy. Logging and forestry are industries that rely on demand. As housing and building construction declined at the start of the 2007-2009 recession, so too did the need for a wide range of hardwoods and other materials. The logging industry has thus suffered a major blow as a result of the economic downturn, and it does not appear that it will reverse that downward trend in the near future. In addition to the politically generated and technological shifts that have created a reduction in logging jobs and production in many locations, another trend is having a significant impact on the industry as a whole. In European and North American forest regions, logging is heavily regulated and

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Logging Industry PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Logging Industry Employment 2008

Projected 2018

1,600

1,800

500

400

Occupation Conservation scientists and foresters Fallers

estimates that illegal logging drains $10 billion each year from the global market as well as $5 billion in tax revenues. It drives prices down by as much as 16 percent. This growing trend, which shows no sign of abatement, will likely continue negatively to affect the legitimate logging industry’s growth in the foreseeable future.

Employment Advantages Employees in the logging in6,700 6,900 Forest, conservation, and logging dustry, particularly those who are workers employed to cut and transfer tim200 200 Forest fire inspectors and ber, are potentially offered a great prevention specialists deal of excitement and adventure. They work predominantly in 1,700 1,500 Logging equipment operators the outdoors in often picturesque 1,120 1,600 Sawing machine setters, operators, environments. Those who seek and tenders, wood to use their strength and familiarity with a wide range of tools find Source: U.S. Bureau of Labor Statistics, Industries at a Glance, logging work to be extremely satOccupational Employment Statistics and Employment isfying. Projections Program. The logging industry has suffered a decline over the last several years as a result of economic and environmental concerns, as well as illegal logging activities and changes in techcarefully monitored. This regulation can increase nology. Despite declines in the number of loggers the price of logging operations. The considerably and companies operating successfully in the induslower cost of felling and manufacturing timber and try, the logging industry still remains global and related products in developing countries is causing profitable. many operations to move to those countries. A Although much debate continues over unsusnine-year survey of hardwood production from tainable and illegal logging’s impact on the envi1999 to 2008 revealed a reduction of more than 2 ronment, the legitimate logging industry enables billion board feet during that period. That survey workers to respond to one of the world’s most vital suggests that this trend will likely continue in the and longest-standing natural resource needs. Wood short term, continuing another trend as well: the meets an abundance of demands—from energy to reduction in available jobs for forestry and hardconstruction materials to paper—and those enwood workers. gaged in this global industry work to meet that deAdding to the challenges facing the logging and mand. timber industry is the fact that illegal logging has grown exponentially, particularly in the aforemenAnnual Earnings tioned developing countries. Illegal logging entails Overall, the global logging and forest-products crews clearing undesignated areas or failing to reindustry generates an estimated $270 billion per port income to tax agencies. According to the year. In the United States, which is both a major World Wide Fund for Nature (WWF; formerly the producer of timber and a major wood-products imWorld Wildlife Fund), the practice is extensive. In porter, that figure was about $30 billion in 2008, alBulgaria, for example, 45 percent of the entire timthough revenues have been declining since 2006. ber harvest is illegally obtained. The World Bank

Logging Industry The greatest growth in the industry comes from East and Southeast Asian countries, where a wide range of high-demand woods and wood products is being exported by both legitimate, taxpaying businesses and illegal operations whose revenue figures are difficult to determine. Illegal logging has a significant impact on industry revenues. According to a 2008 study, if illegal operations ceased, countries with little illegal logging (such as the United States and Canada) would experience almost a doubling in their logging revenues, while worldwide inventories of harvestable forest would increase. In an increasingly global economy, an important factor in discussing the performance of the logging industry is the quantity of wood and wood products exported by a given nation. Canada, for example, has long stood as the largest exporter of wood and wood products, with nearly $18 billion in exports in 2004. The European Union (EU) generated just over $10 billion during that same year, although that figure does not include trade between EU member countries. Indonesia’s export market has increased significantly, while the U.S. export market hovered around the $6 billion mark in revenues between 2000 and 2004.

RELATED RESOURCES FOR FURTHER RESEARCH American Forest and Paper Association 1111 19th St. NW, Suite 800 Washington, DC 20036 Tel: (202) 463-2700 http://www.afandpa.org European Biomass Industry Association Renewable Energy House Rue d’Arlon 63-55 B-1040 Brussels Belgium Tel: 32-2-400-10-20 Fax: 32-2-400-10-21 http://www.eubia.org Forest Industry Network 300-1585 Bowen Rd. Nanaimo, BC V9S IG4 Canada

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Tel: (877) 755-2762 Fax: (866) 758-8665 http://www.forestindustry.com. International Tropical Industry Association International Organizations Center, 5th Floor Pacifico-Yokohama 1-1-1, Minato-Mirai Nishi-ku, Yokohama 220-0012 Japan Tel: 81-45-223-1110 Fax: 81-45-223-1111 http://www.itto.int Truck Loggers Association 725-815 W Hastings St. Vancouver, BC V6C 1B4 Canada Tel: (604) 684-4291 Fax: (604) 684-7134 http://www.tla.ca

ABOUT

THE

AUTHOR

Michael P. Auerbach has over sixteen years of experience in government, international development, and public policy. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He is the author of a comprehensive annotated bibliography on environmental awareness campaigns for USAID and has written papers about environmental policy and bureaucracy. He is a veteran of state and federal government, having worked for seven years in the Massachusetts legislature and for four years as a federal government contractor.

FURTHER

READING

Adams, Darius M., and Richard W. Haynes, ed. Resource and Market Projections for Forest Policy Development: Twenty-five Years of Experience with the U.S. RPA Timber Assessment. New York: Springer, 2007. American Forest and Paper Association. “Our Industry—Forestry.” http://www.afandpa.org/ forestry.aspx.

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Baldwin, Richard F. Maximizing Forest Product Resources for the Twenty-first Century: New Processes, Products, and Strategies for a Changing World. San Francisco: Miller Freeman Books, 2000. Huber, Tim. “Timber Trouble: Hard Times Are Hitting the Timber Industry.” Desert News (Salt Lake City), April 9, 2008. Iannone, Don. “Industry Profile: Timber Operations.” Economic Development Futures Journal, January 23, 2006. http:// www.libertyparkusafd.org/lp/Jefferson/ timber%20companies%5CProfile%20Timber %20Operations.htm. Kallen, Stuart A., ed. Managing America’s Forests. Detroit: Greenhaven Press, 2005. PayScale.com. “Logging Workers, All Other Job Descriptions.” http://www.payscale.com/ Job_Description/Logging_Workers, _All_Other. Rae, Stephen. “North American Forestry Outlook.” In ForestBook, 2006. http:// www.forestindustry.com/static/ForestBook/ 09outlook.html. Ruhong, Li, et al. “Long-Term Effects of Eliminating Illegal Logging on the World Forest Industries, Trade, and Inventory.” Forest Policy and Economics 10 (October, 2008): 480490.

Solomon, Barry D., and Valerie A. Luzadis, eds. Renewable Energy from Forest Resources in the United States. New York: Routledge, 2009. Talwar, Himanshu. “Wood Industry.” 2009. http: //www.economywatch.com/world-industries/ wood-industry-timber-industry.html. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Forest, Conservation, and Logging Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos178.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Agriculture. An Economic Overview of the United States Solid Wood Industry. Washington, D.C.: Author, 2007. http:// www.fas.usda.gov/ffpd/Economic-Overview/ An_Economic_Overview_of_the_U.S_Solid _Wood_Industry.pdf. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Mass Transportation Vehicles Industry ©Jordan Tan/Dreamstime.com

INDUSTRY

INDUSTRY DEFINITION

SNAPSHOT

General Industry: Manufacturing Career Clusters: Manufacturing; Science, Technology, Engineering, and Math; Transportation, Distribution, and Logistics Subcategory Industries: Bus Body Manufacturing; Motor Vehicle Parts Manufacturing; Railroad Rolling Stock Manufacturing; Ship and Boat Building and Repairing Related Industries: Freight Transport Industry; Passenger Transportation and Transit Industry; Shipbuilding, Submarines, and Naval Transport Industry; Travel and Tourism Industry Annual Domestic Revenues: Shipbuilding (ferries and water taxis): $60.7 million USD; light rail, passenger train, and subway rolling stock: $3.9 billion USD; bus manufacturing: $1.5 billion USD (IBISWorld, 2010) Annual International Revenues: Shipbuilding (ferries and water taxis): $737.4 million USD; light rail, passenger train, and subway rolling stock: $14.9 billion USD; bus manufacturing: $28.9 billion USD (IBISWorld, 2010) Annual Global Revenues: Shipbuilding (ferries and water taxis): $798.1 million USD; light rail, passenger train, and subway rolling stock: $18.8 billion USD; bus manufacturing: $30.4 billion USD (IBISWorld, 2010) NAICS Numbers: 3363, 336211, 3365-3366

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Summary The mass transportation vehicle industry manufactures intercity (IC), commuter rail, subway, and light rail cars, as well as trolleys, buses, ferries, and water taxis. It is an international industry that employs people in design, quality assurance, engineering, planning, testing, and managing positions. Mass transportation manufacturing serves the needs of commuters, point-to-point travelers, and tourists. In addition to manufacturing, maintaining, and refurbishing both land vehicles and water vessels, the industry partners with other industries that build and maintain tunnels; bridges; elevated train lines; railways; terminals; ferry docks; waterways and related infrastructure, such as dredging and buoys; and bus, train, and boat stations. History of the Industry As urban areas grew in the United States, mass transit began to develop. In the early 1820’s in New York, Phila-

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more than one hundred railcar manufacturers in the late nineteenth and early twentieth centuries. Rapid transit cars were initially designed with vestibules and doors only at either end, making boarding and detraining large groups of passengers slow processes. The development of side doors greatly improved logistics. Steam locomotives were disguised in car bodies, called “dummy cars,” to avoid scaring horses. The locomotives became larger, heavier, and faster. Passenger cars were heated with coal stoves. Oil, and later gas lamps, provided lighting. With the advent of electricity, horsecars eventually gave way to trolleys, or streetcars. Richmond, Virginia, had the first electric trolley line in 1889. By 1902, 94 percent of city public rail and trolley transportation was electric. As streets became unbearably congested, New Yorkers began moving to New Jersey and Brooklyn, where ferries across the Hudson and East Rivers provided faster transportation. Intercity Most of Chicago’s L (or El) train is elevated, although the Red Line does go understeam trains were used by ground. (©Victor Pelaez Torres/Dreamstime.com) wealthier patrons to connect “bedroom communities” to the nearby metropolises. While horse-drawn vehicles delphia, Boston, and Baltimore, stagecoaches were were smelly and noisy, so were the steam trains, modified to become horse-drawn omnibuses. Primiwhose noisy engines spewed ash along their routes. tive and uncomfortable, they were only marginThe search for functional underground subally faster than walking. By 1832, horsecars with ways or elevated trains as alternatives to street transwooden wheels that ran on street-mounted rails portation began in the 1850’s. Throughout the late were in use in several cities. These modes of trans1800’s, many schemes were designed and proportation were run by private companies. posed for both subterranean and elevated rail The first railroad cars were of wooden constructransport, including Alfred Ely Beach’s undertion, built by small independent companies. By the ground pneumatic tube system (1849) and James end of the nineteenth century, advances in iron H. Swett’s elevated railway (1853). Various inand steel technology made the use of wood for pasventors tried monorail systems, cable and other senger cars obsolete. Iron and steel cars were safer, steam-powered systems, and even suspended rail being fireproof while wood was not. There were

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and New Jersey began operating in 1811. There cars. By 1873, cable-car propulsion, a cleaner mode were even horse-driven ferries on Lake Champlain of transportation, was invented by Andrew S. in the nineteenth century. Diesel engines have now Hallidie. Cable cars use underground cables, driven replaced steam engines. Regulated by the U.S. by central, stationary steam engines. In 1876, New Coast Guard, some ferries operate as part of urban York City completed the first elevated “rapid tranmass-transit systems, such as the Staten Island Ferry sit” train line, carrying people between fixed-point (carrying only passengers since 2001) in New York stations. Cable was replaced with electric traction City. Washington State has an extensive ferry sysby 1890, with the notable exception of San Frantem that carries cars as well as passengers. Water cisco, where cable cars still operate today. Monttaxis are smaller water vessels, usually employed in gomery, Alabama, had the first city-wide electrified transportation system by 1886. Electrified third rails or overhead power lines, called catenaries, were used to provide power to the cars. Mass-transit subway trains are generally selfpropelled. Locomotives pull or push rail cars while also supplying auxiliary power for lighting; heating, ventilation, and airconditioning (HVAC); doors; and other systems. Steam was used to power locomotives until the 1940’s, when more efficient diesel engines, sometimes combined with electrical power, were adopted. Rail was the most common mass transportation system until the 1940’s. Despite a spike during World War II, passenger rail service was practically defunct by the 1960’s, having lost ridership to automobiles and airlines. In the mid-1990’s, manufacturers developed lighter, more efficient, less expensive railcars. Selfpropelled diesel railcars were adopted in North America in the mid-1990’s. Contemporary ferries and water taxis use marine diesel engines and are built in shipyards. They are designed by naval architects and marine engineers. Although a small ferry was in operation in Connecticut as early as 1655, the first steam ferry between New York Cable cars are still being used in San Francisco. (©Dreamstime.com)

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urban areas. Most follow a set route and make multiple stops, operating similarly to buses. Such urban water taxis can carry up to 150 passengers. (Some small vessels are literally water taxis: They take individual fares door to door. Venice, Italy, for example, employs such private, door-to-door water taxis.) Bus mass transit began in the late nineteenth century, when the Gillig Corporation began modifying horse-drawn buggies and carriages. Entrepreneurs adapted personal vehicles to carry several passengers at a time. Carl Eric Wickman began transporting workers to mines in a seven-seat Hupmobile in Hibbing, Minnesota, in 1914. His company became Greyhound Corporation in 1930. Automobile manufacturers began building vehicles capable of carrying large numbers of passengers. Truck manufacturers started building chassis specifically for buses in the 1920’s. Better roads, paved with concrete, enabled manufacturers to build heavier and longer buses that could accommodate more passengers. In 1921, the Hall-Scott Motor Car Company was the first to build a vehicle specifically designed to be a bus. Before that, wagon, automobile, and coach builders had just adapted their vehicles. That same year, Safety Coach of Muskegon, Michigan, manufactured the first Greyhound intercity bus, so named for its grey paint and sleek design. It had seven rows of four seats each. As the highway system grew, regional lines flourished. By the late 1920’s, buses were manufactured with metal bodies. Many automobile companies, such as Studebaker, Packard, and Pierce-Arrow, began to manufacture buses. Horse and electric power gave way to gasoline engines with advances in internal combustion engines. While rail flourished in the Northeast, buses were more prevalent in the Midwest and the South. The first buses were not enclosed, so both passengers and luggage were exposed to the elements. By 1925, design of buses had developed a center aisle with seats on both sides and a single-entry side door. Other bus manufacturers included the Thomas Built Buses, founded by Perley A. Thomas in North Carolina in 1916. Thomas took over a failed streetcar company and became the main manufacturer of streetcars in the United States. With the advent of automobiles, however, streetcars were becom-

ing obsolete. In 1936, he retooled the business to manufacture school buses. Western Flyer began as Western Auto and Truck Body Works in 1930, and in 1941 it produced the first front-engine intercity bus. Most buses used gasoline-powered engines until Gillig introduced the first rear-engine diesel-powered bus in 1959, and the first bus powered by liquified natural gas (LNG) entered production in 1992. In the early 1970’s, automatic transmissions began to replace manual transmissions. In the 1980’s, Ontario Bus produced the first buses powered by compressed natural gas (CNG). Buses grew in length, from thirty-foot buses to sixty-foot, articulated buses in the mid-1980’s. Low-floor models were introduced as well. Passenger capacity increased, and by the 1950’s buses were able to accommodate over forty passengers each. In 2003, the first diesel-electric hybrid buses entered production. The Industry Today Today, mass-transit systems include subways, light-rail intercity and high-speed trains, water taxis, fast ferries, buses, and—in a few cases—trackless trolleys. Using clean fuels that create less pollution and relying less on fossil fuels in general are two of the most important challenges mass-transit vehicle designers and manufacturers face in the twenty-first century. However, these goals must be met if congestion and air and noise pollution are to be reduced. The commuter and intercity rail manufacturing industry is overseen and regulated by the Federal Railroad Administration (FRA), part of the U.S. Department of Transportation (DoT), while transit authorities create their own specifications based on the Code of Federal Regulations (CFR). Water taxis and ferries are overseen by the Coast Guard, now part of the U.S. Department of Homeland Security (DHS). In 1996, the Surface Transportation Board (STB) succeeded the Interstate Commerce Commission (ICC) as the overseeing authority for regulating and resolving railroad fees and service. In 2000, the Federal Motor Carrier Safety Administration (FMCSA) was established to oversee safety in the bus industry. These federal agencies monitor everything from construction standards to safety regulations to requirements for training and licensing operators. Ferries have evolved from using steam to using

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This Metro Local bus in Los Angeles, California, is powered by natural gas. (©Publicimage/Dreamstime.com)

marine-diesel or gas-turbine power, with waterjet propulsion. They have increased in speed, are often built of aluminum, and often use a catamaran hull design. Fast ferries may be hydrofoils or hovercraft and use propellers, turbo fans, or waterjets for propulsion. They may carry cars as well as passengers and make trips that last only a few minutes or overnight. Some overnight ferries provide amenities such as guest rooms, casinos, and other entertainment on board. They may carry from two or three to over two hundred vehicles and up to twenty-five hundred passengers. Shipyards build hull infrastructures and may then partner with boat builders to build superstructures such as pilot houses and passenger cabins, or they may partner with other shipyards to construct vessels’ sides, called “curtain plates.” For example, the large Todd Shipyards has contracted with Nichols Brothers Boat Builders and Everett Shipyard, both much smaller companies, to complete a project for the Washington State Ferry. Ferry designers and builders are developing

cleaner-burning engines to lower air and water emissions in an attempt to reduce harm to marine animals. High fuel prices could have a negative impact on the industry, as today’s fast ferries were developed in the 1980’s, when fuel prices were relatively low. These vessels are fuel inefficient by today’s standards: They require expensive fuel and lack modern fuel-saving technologies. There are several types of fast boat hulls that need further research and development to ensure passenger comfort. Monohulls, catamarans, hovercraft, and hydrofoils lack stability in high seas. Perfecting these types of ships will be a goal for fast-ferry designers and builders. Buses today often use clean-air technology. Many are hybrids that can use electric batteries and either diesel fuel or natural gas. Articulated buses are longer than traditional buses but bend in the middle in order to negotiate city streets. Low-floor models were introduced in the 1980’s. Partner industries include manufacturers of tires, engines, seating, windows, and signage. Chassis manufac-

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turers may partner with engine manufacturers such as Cummins, Ford, or Caterpillar. Future buses may have doors on both sides for quicker boarding and unloading and may use CNG and other clean fuels. Fuel-cell-powered buses may be developed. Such cells would be superior to leadacid batteries, resulting in cleaner energy use. Ethanol-diesel, hydrogen, other alcohols and biofuels, and synthetic fuels are all possible fuels for buses, which have proven to be useful prototype vehicles for such new technologies, since there are fewer of them in each production run, so fewer need be purchased to justify manufacturers’ production costs. New lightweight construction and propulsion systems will change bus design and manufacture to work with the Global Positioning System (GPS) and bus rapid transit (BRT). With new propulsion systems and magnetic guidance, steering mechanisms will change. Speed can be automatically controlled. Many such systems are already in use. Acela Express, built by a consortium of Alstom and Bombardier, is a high-speed intercity train service that was introduced into service by Amtrak in 2000, running between Boston and Washington, D.C. These trains use advanced tilting technology to allow high speed on curves. Using new propulsion equipment, energy normally lost in friction braking is recovered and transformed back into electricity to be used by other trains, a process known as regenerative braking. Diesel-electric locomotives are now more powerful and more efficient than they once were, and they, along with electric traction motor technology, have made the industry greener. Computer technology has been used to reduce noise pollution as well. All-electric zero-emissions locomotives may replace dieselelectric trains. Computerization of signal and communication systems began in the early twenty-first century. Diesel-electric light-rail vehicles running without overhead wires have also been developed. Subindustries include manufacturers and distributors of wheels, communication equipment, seating, windows, toilets, paints and coatings, and flooring. Modern streetcars are different from light-rail cars in that their tracks are embedded in streets that are also traveled on by automobiles, rather than being installed on dedicated rights of way. They are similar to buses, but streetcars can accom-

modate up to 170 passengers, more than even articulated buses, which have an 80-passenger capacity. Magnetic levitation (maglev) is an emerging technology that is being tested and coming into use. In 2001, the FRA investigated using maglev for a Baltimore to Washington, D.C., train. In 2005, the FRA authorized publication of a study regarding implementation of a maglev project in Pennsylvania. Projects have also been proposed in Georgia and California, but the technology has thus far been too expensive to implement in the United States. Maglev is capable of reaching speeds above 300 miles per hour, and maglev trains are in operation in Shanghai and Germany. Adopting the technology in the United States would require making enormous changes, not only to the transportation infrastructure but also to railcar manufacturing facilities. Today’s mass-transit manufacturing industry is computer driven from conception to design to maintenance. The tools for technicians are as likely be laptop computers as they are to be wrenches or screwdrivers.

INDUSTRY MARKET SEGMENTS The mass transportation vehicles industry is segmented among water, road, and rail transportation. Its customers are municipal transportation authorities and private companies. Ancillary industries manufacture parts and furnishings to outfit and maintain vessels and vehicles. Water Transportation Vessels Shipyards that build ferries and water taxis are a specialized subsector of the shipbuilding industry. Revenues from ferry construction represent only about 6 percent of all shipbuilding revenues in the United States. Some shipyards are small, familyowned businesses, while others are international companies. Many of the larger ferry builders began as family operations. The quantity of vessels built is very small compared to the number of railcars and buses built in the industry’s other segments. Potential Annual Earnings Scale. Wages at shipyards vary according to the job and skills level required for any position. According to 2008 figures of the U.S. Bureau of Labor Statistics (BLS)

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Office of Employment Statistics (OES), average managers’ salaries vary between technical and office positions. For example, benefits managers earned, on average, $38.69 per hour, or $80,480 annually, while human resources managers earned average wages of $44.44 per hour, or $92,430 annually. Engineering managers’ average hourly wages were $52.21, or $108,000 per year. There is a wide range of salary scales among technicians, naval architects, drafters, and mechanical engineers. While mechanical engineering technicians earned an average of $20.31 per hour in 2008, A car boards a ferry. (©Paula Fisher/Dreamstime.com) mechanical engineers earned $38.10. Most other installation and repair jobs paid between $17 and $28 per example is Derecktor’s shipyard, which occupies hour. three acres on Long Island Sound and is accessible Clientele Interaction. Most shipyard employto airports, railways, and highways in the New York ees have no interaction with clients (who are often City metropolitan region. transit authorities). Those who do are most often Typical Number of Employees. The number personnel whose primary functions involve client of employees in ferry shipyards depends on the size negotiation and satisfaction, such as sales staff and of the company and the vessels. Kvichak Marine Inwarranty support staff. Maintenance workers who dustries and Nichols Brothers run small shipyards travel to customers to service their vessels also benear Seattle, Washington. They hire laborers for long in this category. In addition, some executives each contract rather than maintaining a permaand design or engineering personnel are likely to nent corps of employees. Even though they are discuss large contracts with clients, especially if small, they are able to obtain contracts to build ferthose contracts involve customization of the vessels ries for large agencies. to be delivered. During construction, a customer’s Derecktor is a private company with shipyards representatives are generally present for periodic for commercial vessels in New York and Connectitests conducted by the manufacturer on the vessel. cut. It employs approximately 180 people between Once the vessel has reached construction compleboth yards and typically realizes sales revenues of tion, it undergoes static testing of its operating sysabout $33 million. The Gladding-Hearn Duclos tems, followed by dynamic testing, known as sea triCorporation builds steel and aluminum fast ferals, at the manufacturer’s facility. Once the vessel ries, monohulls, and catamarans, as well as water has successfully passed these tests, it is inspected taxis, for both public and private companies. Based and accepted for service. Training, maintenance, in Massachusetts, it has customers in many different and parts contracts may be provided as deliverstates. It has built over thirty-five ferries since 1985. ables, if specified in the contract. Gladding-Hearn employs over one hundred peoAmenities, Atmosphere, and Physical ple, including naval architects, marine engineers, Grounds. Shipyards are located on the water, usushipfitters, welders, and office personnel. Both it ally in industrial zones. Smaller shipyards may be and Derecktor offer health insurance and retirement benefits to their employees, and Gladdingclose to towns. Cranes, dry docks, and machine Hearn offers profit sharing. shops are the main components of shipyards. One

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Todd Shipyards, a corporation that began as a family business in 1916, has about 550 employees and is traded on the New York Stock Exchange, realizing annual sales revenues of about $113.5 million. Crowley Marine integrates manufacturing and transit management through its vessel construction and architecture service, which maintains ownership of the vessels it constructs and charters vessels for use in lines that the company operates. Crowley is a privately owned international company employomg forty-three hundred people. VT Halter Marine is an international, publicly held subsidiary of a larger corporation. With eight shipyards in the United States, it builds ferries for transit authorities and private companies both in the United States and abroad. From 1989 to 1999, it built over thirty ferries and earned revenues of over $1 billion. Individual shipyards may employ as few as fifty people. Traditional Geographic Locations. Shipyards are always located on water. Shipyards may be located on rivers, lakes, or oceans, as long as the water is deep enough for the vessels under construction. For example, Gladding-Hearn Duclos is located in a deepwater port on the Taunton River, in southeastern Massachusetts. Direcktor is located on Long Island Sound in New York. There are shipyards on the Mississippi Gulf Coast, as well as the Puget Sound and rivers in the state of Washington. Pros of Working for a Ferry Manufacturer. Shipyards are always on the water, most often in industrial areas. Such locations can be quite pleasant in nice weather. The maritime industry is unique in its products and procedures and represents a potentially interesting career choice. Anticipated technical advancements may add to the allure of a career building ferries. Cons of Working for a Ferry Manufacturer. As in other segments of transportation manufacturing, shipyards may operate twenty-four hours per day, and second- and third-shift crews must adapt to these unusual hours. Most of the work at such facilities is performed outside, in all weather conditions. While coastal facilities may be pleasant in nice weather, they can be quite unpleasant during inclement weather. Spaces on the vessels under construction may be small or awkward to get into. Workers must also climb over uneven gangways and climb ladders to perform their jobs.

Costs Payroll and Benefits: The salary structures of large companies are complicated, because they employ many different people in many different kinds of positions. International corporations may need offices in the United States to process payroll and comply with local, state, and national regulations and taxes. Technicians may be paid on an hourly basis, while administrators may be salaried. Benefits include vacation time and sick time, although it is becoming more common for companies to give personal time off in lieu of either sick or vacation time. Some companies are unionized or have a mix of union and nonunion jobs, while others have no union positions at all. Some employees must be treated in accord with federal and state regulations governing wages, while others, generally those in management positions, are exempt from Fair Labor Standards Act (FLSA) rules. Supplies: Ferry construction companies require materials, machinery, and parts, as well as supplies to service and maintain such equipment. Field offices require basic office equipment (computers, phones, cell phones, and paper), as well as basic supplies for employee use, such as coffeemakers and water. Companies may have microwaves and refrigerators for employee use as well. External Services: Ferry construction companies may contract some core production tasks rather than employing permanent staff to perform these duties, and they may lease machinery rather than purchasing it. They may also contract uniform laundry services, custodial services, industrial trash and waste removal, security, information technology support, legal counsel, or accounting and payroll services. Utilities: In the field, utilities must be set up through local companies on each site and may include water and sewage, electricity, gas or oil service, telephone, and Internet access. Taxes: Payroll taxes must be withheld from all employees and paid to the federal, state, and local governments as required by each locality. Companies must also pay corporate income and property taxes, as well as international taxes and tariffs as appropriate.

Mass Transportation Vehicles Industry Railroad Vehicles The core of the mass transportation vehicle industry is the manufacture of railcar rolling stock for passengers, which includes long-distance intercity rail, commuter rail, light rail, and subway cars. There are no small manufacturers of railroad rolling stock, although suppliers of parts may be small or midsize companies. Most manufacturers are international, with plants around the globe. The railcar manufacturing process is generally overseen by a company known as an integrator. This railcar manufacturer must integrate all systems to complete the vehicle, beginning with the car body. Bombardier Transportation, Kawasaki Rail, Siemens, and Alstom are the leading international manufacturers of passenger railcars that function as integrators. Research and development is concerned with new designs for car bodies and exterior structures, as well as noise reduction, aerodynamics, and bogies (or trucks). Computerassisted design and computer-assisted manufacturing (CAD/CAM) are used to design new sys-

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tems. Robotics may be used for some production operations. After a railroad sends specifications to a qualified manufacturer, the integrator puts together a package with subcontractors while negotiating parts of the specs and contracts with the customer. It then presents a best and final offer (BAFO) to the railroad. Upon acceptance of the offer, the manufacturer usually builds a prototype, or pilot car, that undergoes qualification testing before final production begins. First, a railcar’s body is manufactured, beginning with a frame that may be made from either aluminum or steel. This frame is bolted or welded together. Windows, insulation, flooring, and the outer shell are installed. After the car bodies have been constructed, the integrator, working with subcontractors, arranges and supervises delivery and installation of the following systems in an assembly plant: trucks (wheel and axle sets upon which the cars sit, also known as bogies); brakes; propulsion; HVAC; toilets; interior and exterior

The New York City subway average weekday ridership was 5.1 million in 2009. (©Jordan Tan/Dreamstime.com)

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communication systems; and automatic train control (ATC), which includes auto-signaling and train control (monitoring and limiting speed). Employees in the plant include assemblers, welders, pipefitters, electrical technicians, testing technicians, and quality assurance technicians. United Streetcar, in Oregon and Washington State, is a subsidiary of Oregon Iron Works, which is where the streetcar production takes place. Modern streetcars have low floors like those of modern buses, allowing for wheelchair, carriage, and bicycle access. Streetcars generally operate only within a city, while light rail may have longer routes. Streetcars are also lighter than light rail vehicles. Potential Annual Earnings Scale. According to the BLS, industrial production managers in railcar manufacturing facilities earned an average of $39.74 per hour, or $82,650 per year, in 2008. Operations managers earned an average of $55.73 per hour, or $115,920 per year. Engineers of various types earned averages between $33.36 and $39.03 per hour. Nonsupervisory production and installation workers earned averages between $14.00 and $23.88 per hour, depending on the level of skill required by their particular jobs. Clientele Interaction. Warranty support is generally part of railcar contracts. Such support provisions require managers, supervisors, and technicians to maintain, repair, and support successful implementation and operation of the cars. Interaction is between the manufacturer’s representatives and the customer, usually a public transit company. During construction, the customer’s representatives are generally present for periodic tests conducted by the manufacturer on the ordered equipment. These include static tests of operating systems, followed by dynamic tests on tracks at the manufacturer’s facility. Once the car has successfully passed these tests, it is inspected and accepted for shipment to the customer’s facility. Usually, there is additional testing (static and dynamic) in the environment where a rail system is to be operated. Once that final testing is complete, the car is conditionally accepted by the customer (pending open issues, modifications, and punch list completion) and placed into revenue service. The manufacturer may also provide other deliverables, such as training, maintenance, engineering support, and parts support.

Amenities, Atmosphere, and Physical Grounds. There are few amenities in a rail yard, or even in an assembly plant. There may be a cafeteria or lunchroom. Indoor facilities have bathrooms, but there may only be portable toilets on the grounds. In the field, the manufacturer may have offices in a trailer, with electricity and plumbing. Rail yards are busy and potentially dangerous with trains moving through. Workshops must comply with Occupational Safety and Health Administration (OSHA) standards for safety. Typical Number of Employees. Small suppliers may have fewer than ten employees, while about three or four hundred or more may work in an assembly plant or rail yard. Traditional Geographic Locations. Manufacturing sites are most often located in or near small towns, away from large metropolitan areas, while repair and maintenance facilities and yards are in or near urban areas where the trains run revenue service. Pros of Working for a Railroad Manufacturing Company. Some 90 percent of all railcar manufacturing is concentrated in the fifty largest companies, which makes employment more likely in a large manufacturer. Cons of Working for a Railroad Manufacturing Company. Railcar manufacturing is very cyclic. While peak production times offer very good employment opportunities, the low periods can be devastating. Rail yards are noisy and dangerous. Production requires work with grease and oil. There may be fumes from paints and chemicals, and work may be dirty. Costs Payroll and Benefits: Wages are usually hourly, with benefits such as vacation, health care, sick time, and often education as added costs. Supplies: Manufacturers purchase raw materials, including steel products, which may represent 70 percent of the cost of producing a railcar. Equipment is a large expense, including maintenance and replacement, as are parts. Standard office supplies, as well as computers and furniture, are a basic cost. External Services: Companies may contract out payroll services to specialized companies rather than processing payrolls in-house. Depending on the size and revenues, a company may con-

Mass Transportation Vehicles Industry tract out computer services, vending machines, or dining facilities. Other contracted services may include building and grounds maintenance, machine maintenance, security, or industrial trash and waste disposal and removal. Utilities: Utilities may include water and sewage, electricity, gas or oil service, telephone, and Internet access. Taxes: Payroll taxes are withheld from all employees, and paid to the federal, state, and local governments as required by each locality. Companies must also pay corporate income and property taxes, as well as international taxes and tariffs as appropriate. Buses A mass-transit bus is defined as a rubber-tired vehicle with its own engine that runs on a road, rather than on tracks. As in the rail industry, bus manufacturers integrate components and systems from subcontractors, including propulsion systems, suspension systems, drive trains, seating, wheels, and tires. The integrated chassis is assembled in a plant and then shipped to a production facility, where the engine, seats, axles, and electrical heat and air-conditioning systems are installed and vehicles are tested. There are small, midsize, and large subsegments of the bus manufacturing segment of the mass transportation vehicles industry. Gillig Corporation, established in California in 1890, is privately owned and employs about seven hundred people. It offers retirement, education, and health benefits. As the second-largest bus manufacturer in North America, it produces between twelve hundred and thirteen hundred vehicles per year. New Flyer is a midsize, publicly traded company, employing about twenty-four hundred people in two plants in Minnesota and one in Winnipeg, Canada. New Flyer produces over twenty-two hundred buses per year. El Dorado National is a subsidiary of the publicly traded Thor Company. It builds buses in both California and Kansas. Champion Bus is another Thor subsidiary and builds over twelve hundred midsize buses in its plant in Michigan. Champion’s 250 nonunion employees work in a 194,000-squarefoot plant on a 73-acre site. Daimler Buses North America has over twelve hundred employees and sells over forty thousand buses worldwide. Its

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Oriskany, New York, plant for assembly and manufacturing occupies 206,000 square feet. Potential Annual Earnings Scale. According to the BLS, machine operator supervisors in bus manufacturing facilities earned an average of $14.26 per hour in 2008, while industrial engineers earned an average of $29.55 per hour. At an average of $667 per week, these wages were high compared to all manufacturing jobs. Industrial production managers earned, on average, $40.17 per hour, or $83,550 annually, while engineering managers earned $44.78 per hour, or $93,140 per year. Clientele Interaction. Employees in sales or customer support interact with clients, but most workers in the plants themselves do not. Amenities, Atmosphere, and Physical Grounds. Bus manufacturing facilities are indoor spaces, unlike shipyards or rail yards, so weather does not affect working conditions. Typical Number of Employees. Companies may employ from 250 to over 1,000 workers. The size of the company, the facility, and the stage of the production process all impact the size of the workforce. Traditional Geographic Locations. Assembly plants and manufacturing facilities are usually located away from urban areas. Most bus manufacturing is located in the Midwest, but that is changing as plants open in California and the South. Pros of Working for a Bus Manufacturing Company. Less than half of motor vehicle parts manufacturing jobs are found in small- and midsize companies. Cons of Working for a Bus Manufacturing Company. Less than 16 percent of motor vehicle and parts manufacturing is involved in bus chassis manufacturing. Almost half of all bus manufacturers are large businesses with over five hundred employees. Although offices are typically clean and modern, workers on assembly lines have to tolerate noise, fumes, grease, and higher-than-average injury rates. Newer facilities mitigate these problems with modern, ergonomic assembly lines. Costs Payroll and Benefits: In times of high production, overtime wages for hours in excess of forty per week are 1.5 times the normal rate, or double for work performed on Sundays or holidays. Most bus manufacturers provide health, retire-

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ment, and education benefits and may provide life and accident insurance, especially if they are union shops. Supplies: Standard office supplies as well as computers and furniture are a basic cost. Manufacturers purchase raw materials, including steel products, which may represent 70 percent of the cost of producing a bus. Equipment is a large expense, including maintenance and replacement. External Services: Manufacturers may contract out accounting services or payroll services. Computer service companies may be used for maintaining and upgrading hardware and software. Larger companies may have in-house divisions for these needs. Grounds and machinery maintenance are costs, whether contracted out or not. Utilities: Companies that own facilities must pay for electricity, water, sewage, telephone, and Internet access. Taxes: Payroll taxes are withheld from all employees, and paid to the federal, state, and local governments as required by each locality. Companies must also pay corporate income and property taxes, as well as international taxes and tariffs as appropriate.

The following umbrella categories apply to businesses in the mass transportation vehicles industry: ■ ■ ■

■ ■ ■

Business Management Corporate officers, or executive managers, oversee the highest-level operations of vehicle manufacturing companies, but they are often somewhat detached from day-to-day operations. On-site managers, including shipyard managers and rail yard managers, oversee and coordinate production and ensure that projects proceed on time and within budget. Managers must also ensure that safety regulations are followed and enforced. Business management occupations may include the following: ■ ■ ■ ■

ORGANIZATIONAL STRUCTURE AND JOB ROLES

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The mass transportation vehicles industry can be divided into three segments: bus, rail, and water. All are subject to federal and international environmental and safety regulations, which vary by segment. All employ technical and mechanically hands-on workforces, as well as experts in specific types of engineering. Employees in each segment who serve in managerial and supervisory roles usually have advanced degrees in design, engineering, or business administration. While smaller shipyards may have owner-operators, the industry is, for the most part, large, and corporate officers are not likely to participate in a hands-on manner. Both bus manufacturers and railroad rolling stock manufacturers are large, often international companies, although they may contract out specific parts of vehicles to smaller, more specialized companies.

Business Management Facilities and Security Technology, Research, Design, and Development Production and Operations Sales and Distribution Human Resources

■ ■ ■

President/Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) Chief Technology Officer (CTO) Vice President Production Manager General or Operations Manager Project Manager Engineering Manager Project Engineer Project Coordinator

Facilities and Security Shipyards can range in size from 130,000 to 225,000 square feet, and rail and bus manufacturing plants can reach the same size, although some may be smaller. Construction plants are often secure facilities, requiring identification badges for entry and monitored by guards and surveillance systems. Some companies contract security services to external vendors, but others prefer to hire their own security crews. Guards often have backgrounds in law enforcement or military service and must be proficient with weapons, as well as able to enforce security protocols governing both employees and visitors. Some security jobs may also re-

Mass Transportation Vehicles Industry quire technical proficiency with computer or security systems. In addition, facilities must be maintained and cleaned regularly. Cleaning and maintenance crews are employed both in administrative offices and in production plants, and they also maintain and repair extremely heavy machinery. Facilities and security occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Security Guard Security Manager Custodian/Janitor Maintenance and Repair Worker Mechanic Network Security Specialist Custodial Services Manager Maintenance Supervisor

need postsecondary education, such as associate’s degrees. Engineers may earn close to $40 an hour, or between $45,000 and $55,000 a year if they have a postsecondary or associate’s degree. Licensing as a professional engineer (PE) generally requires a bachelor’s degree from an ABET-accredited engineering program, as well as formal testing and certification by a state entity. Technology, research, design, and development occupations may include the following: ■

■ ■ ■ ■ ■ ■

Technology, Research, Design, and Development Engineers and other specialists design, test, and oversee construction of vehicles and vessels. They design not only entire vehicles and vessels, including necessary parts, but also production machinery required to construct their companies’ products. As a result, they also help coordinate production workflow, especially as it relates to the systems they have designed. Technology and development personnel may work with vendors to determine specifications and pricing of parts their companies have decided to purchase rather than construct. They often require degrees in very specialized fields, such as marine engineering, naval architecture, or railroad engineering, as appropriate. They must also understand the practical business side of the industry and the relationship between their designs and the full process required to bring those designs to fruition. Commercial and industrial designers often work with computer design systems instead of models. Mechanical engineers design and improve on working parts, such as engines and transmissions. Electrical and electronics engineers design electrical and electronic systems and components and may work with robotic equipment for vehicle assembly. Industrial engineers may design the plan and oversee assembly-line production, including quality control. Engineering technicians usually

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■ ■ ■ ■ ■ ■

Vice President of Research and Development Marine Chief Engineer Marine Engineer Naval Architect Railroad Engineer Vehicle Engineer Industrial Engineer Mechanical Engineer Electrical Engineer Environmental Engineer Engineering Technician Project Engineer Engineering Manager

Production and Operations Production and operations personnel perform the work of actually creating and assembling parts, vehicles, and vessels. They may be skilled or unskilled, and most companies employ a mixture of both. Shipyard crews must have working knowledge of marine equipment, including diesels and hydraulics, and have a basic understanding of the theory and practice of internal combustion engines. They may need welding skills as well. Most require at least a high school or vocational school education. Some are required to have experience in the field or to have completed approved technical training, which might include electrical or electronics training. They must be able to use an extensive assortment of tools. Some shipyard positions require the ability to read and follow blueprints, as well as to use computers. Color vision may also be a requirement. Some railcar production workers need to be able to use multimeters, which measure voltage, current, and resistance; advanced multimeters, which measure capacitance, inductance, and current gain of transistors for troubleshooting and diagnosis; and

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Mass Transportation Vehicles Industry OCCUPATION

SPECIALTIES

Welders Specialty

Responsibilities

Arc welders

Join metal parts using electric welding equipment.

Combination welders

Use arc, gas, or resistance welding equipment on the same project, depending on the materials and type of welding needed.

Gas welders

Use an intense gas flame to join metal parts.

Production line welders

Join metal parts on a production line using previously set up gas or arc welding equipment.

OCCUPATION

oscilloscopes, as well as traditional hand tools. Equipment installers generally work indoors in well-lit areas and are less prone to injury than are workers who must frequently lift heavy equipment. Electrical and electronics repairers and installers may earn anywhere from $13 to $39 hourly, depending on the level of experience required and the complexity of the task. Job growth in this subsector is expected to be slower than average, or about 4 percent a year. Suppliers to railcar manufacturers may be located in or near the assembly plants. This might include major systems propulsion, brakes, HVAC, doors, and communications. These suppliers support the integration of the systems during production.

PROFILE

Metal/Plastic Working Machine Operator Considerations

Qualifications

Description

Runs machines that produce thousands of parts that are used in automobiles and nearly every other manufactured product.

Career cluster

Manufacturing

Interests

Things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; part-time work

Licensure and certification

Recommended

Employment outlook

Decline expected

Holland interest score

RCE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Mass Transportation Vehicles Industry OCCUPATION

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PROFILE

Riveter Considerations

Qualifications

Description

Operates different types of machines that fasten together pieces of metal for assembling such articles as aircraft, space vehicles, or fabricated parts.

Career cluster

Manufacturing

Interests

Things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Decline expected

Holland interest score

RSE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

About 25 percent of jobs in the heavy vehicles manufacturing industry are unionized, a somewhat higher figure than in other industries. At peak production times, workers may be paid 1.5 to 2 times their hourly wage if working on weekends or holidays. Hourly workers may earn between $15 and $30 per hour, depending on the skill and education level required in any position. Many aspects of assembly are now automated, but people are needed both to operate and guide the machines and to perform tasks too small or too complicated to be automated. Jobs in the electrical or electronics field usually require certification and associate’s degrees. Some companies provide training, maintenance, and parts to their clients, based on terms specified in contracts. Operations staff at such companies must travel to their clients’ facilities to train their personnel and to perform maintenance and repairs on vessels, railcars, rail systems, or buses.

Production and operations occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Project Engineer Project Manager Production Manager Production Supervisor Electrical Engineer Fabrication Supervisor Marine Diesel Mechanic Marine Electrician Marine Estimator Marine Pipefitter Marine Welder Marine Mechanical/Piping Engineer Marine Painter Sandblaster Rigger Lofter Joiner

1146 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Mass Transportation Vehicles Industry

Metalworker Assembly Worker/Team Member Fabricator/Fabrication Team Member Electrician Industrial Machinery Mechanic Machine Operator Machinist Material Mover/Handler Painter/Coater Welding, Soldering, and Brazing Worker Grinder/Polisher Tester, Sorter, Sampler, and Weigher Field Technician Millwright Tool and Die Maker

Sales and Distribution Sales and distribution personnel secure contracts from customers, maintain relationships with those customers (keeping them apprised of developments in the design and production process), and ensure delivery of finished products. Ferry shipyards and rail yards sell vessels and vehicles directly to transit authorities and other customers. They do not sell through dealers or other intermediaries. Bus manufacturers may sell their products directly as well, or they may employ dealers to conduct sales. Sales and distribution occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Vice President of Sales Sales Manager Sales/Customer Representative Distribution Manager Truck Driver Pilot Shipping and Receiving Clerk

Human Resources Human resources personnel recruit, hire, orient, train, promote, and fire employees. They also administer payroll and benefits, coordinate safety training, and monitor company compliance with federal, state, and local work rules. They resolve workplace disputes and respond to employee grievances. Managers generally have degrees in human resources administration. Human resources occupations may include the following:

■ ■ ■ ■ ■ ■ ■

Human Resources Manager Human Resources Assistant Human Resources Generalist Benefits Specialist Administrative Assistant Payroll Clerk Training Manager

INDUSTRY

OUTLOOK

The future of the mass transportation vehicle industry is best examined through a look at three areas: water vessels, rail vehicles, and buses. Ferry and water taxi construction represent a small part of the large shipbuilding industry. While the U.S. industry grew by about 10 percent between 2006 and 2009, it is projected to decrease production slightly thereafter. Orders for new vessels from public transportation agencies are expected to fall as public expenditures decrease in the wake of the recession of 2007-2009. The BLS projects employment of marine engineers and architects at the manufacturing level to decrease by almost 10 percent between 2008 and 2018, while some other industry jobs are projected to decline by as much as 28 percent. Until tracks and overhead catenaries are updated, the United States will continue to lag behind the rest of the world in true high-speed train service capable of competing with regional air service in both cost and speed. However, several impetuses exist for such development. After the September 11, 2001, terrorist attacks, train travel became more desirable, involving fewer security headaches for passengers than air travel (although train tracks are easier to sabotage than is the sky). Trains also have the advantage of being able to provide downtown-to-downtown service. As a result, railcar manufacturing has been growing steadily since 2005. The American Recovery and Reinvestment Act of 2009 should increase this growth as it allocates $8.4 billion in new funds for public transportation and $9.3 billion for intercity and high-speed rail. In 2009, United Streetcar received $50 million worth of new orders, and it anticipated growth as eighty cities were considering streetcar implementation in the future. Bus transportation is the largest mode of public transportation. Buses continue to adopt cleaner

Mass Transportation Vehicles Industry

as greenhouse-gas emissions, are likely to improve the outlook for the bus industry. Demand for buses is projected to grow, as fuel prices for automobiles rise and urban congestion increases.

PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Transportation Equipment Manufacturing Employment 2009

Projected 2018

Occupation

53,700

48,300

Machinists

29,610

30,000

Mechanical engineers

171,230

167,900

46,120

45,700

Team assemblers Welders, cutters, solderers, and brazers

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

energy technologies, such as parallel hybrid propulsion, electric propulsion, and fuel-cell power. Future developments may include intelligent vehicles, accident-avoidance technology, and wireless communication. Concerns in urban areas over massive traffic, gridlock, and air pollution, as well

PROJECTED

EMPLOYMENT

Employment Advantages Water Vessels. In 2008, there were only eighty-five hundred marine engineer and naval architect jobs in the United States. Nevertheless, employment prospects in this field are good because a limited number of students are pursuing these occupations. The median income of these positions, moreover, is high at $74,000. Overall, the number of jobs in the industry is estimated to decline by 11 percent, with the greatest decline among upper management, human resources personnel, drafters, maintenance workers, and administrative support staff. Rail Vehicles. According to the BLS, employment opportunities in rail manufacturing are expected to grow, but at only about 4 percent per year, slower than the average for all industries. Those job seekers with associate’s degrees, technical certification, and experience will be most successful. However, automation and robotics are expected to eliminate some production jobs. Although welding jobs are expected to de-

FOR

SELECTED

OCCUPATIONS

Rail Transportation Employment 2009

Projected 2018

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Occupation

41,850

49,700

Locomotive engineers and operators

12,040

13,500

Rail car repairers

22,450

25,400

Railroad brake, signal, and switch operators

37,380

39,600

Railroad conductors and yardmasters

10,530

11,900

Rail-track laying and maintenance equipment operators

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

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cline, employment prospects remain positive for those with the latest training and certification. Declines will be most severe among unskilled positions. The BLS projects a decline of almost 40 percent in employment across the entire spectrum of jobs in manufacturing rolling stock between 2008 and 2018. With federal stimulus money and new streetcar projects on the horizon, however, some job prospects may improve. Buses. Employment opportunities in bus manufacturing are expected to decline overall, according to the BLS, even as demand for buses increases. The decline will be most severe among unskilled workers. As factories automate, there will be jobs for those who service and repair robotic equipment. Management opportunities will decline, as there will be fewer employees to supervise. As in the rail industry, production may be cyclical. The BLS projects a decline in employment of about 8 percent between 2008 and 2018, with upper management, support services such as cleaning and maintenance, and drafting experiencing the highest rates of decline. Annual Earnings Water Vessels. Shipbuilding revenues for ferry and water taxi construction in 2009 were $60.7 million, a substantial increase from $50.8 million in 2006. Rail Vehicles. Rail rolling stock revenue in the United States in 2009 was $3.896 billion. Both the rail rolling stock industry and the bus industry rely in some part on public policy and public funding. If a company receives direct funds from government agencies, it will be affected by the financial state of those agencies. For example, when states face fiscal crises, mass-transit budgets are cut, delaying or halting orders for new cars. After steadily increasing annual revenues between 2006 and 2009, revenues are projected to decline to about $3.712 billion in 2010. Buses. Bus manufacturing revenues in the United States were $1.52 billion in 2009, a large decrease from 2006 earnings of $2.826 billion. Growth was predicted to rise slightly in 2010, to about $1.579 billion.

RELATED RESOURCES FOR FURTHER RESEARCH American Boat Builders and Repairers Association 50 Water St. Warren, RI 02885 Tel: (401) 247-0318 Fax: (401) 247-0074 http://www.abbra.org American Bus Association 700 13th St. NW, Suite 575 Washington, DC 20005-5923 Tel: (202) 842-1645 Fax: (202) 842-0850 http://www.buses.org American Public Transportation Association 1666 K St. NW, Suite 1100 Washington, DC 20006 Tel: (202) 496-4800 Fax: (202) 496-4324 http://www.apta.com American Society for Engineering Education 1818 N St. NW, Suite 600 Washington, DC 20036 Tel: (202) 331-3500 Fax: (202) 265-8504 http://www.asee.org American Society of Mechanical Engineers 3 Park Ave. New York, NY 10016 Tel: (800) 843-2763 Fax: (973) 882-1717 http://www.asme.org Federal Transit Administration, U.S. Department of Transportation East Building, 4th Floor 200 New Jersey Ave. SE Washington, DC 20590 http://www.fta.dot.gov

Mass Transportation Vehicles Industry Institute of Electrical and Electronics Engineers 3 Park Ave., 17th Floor New York, NY 10016-5997 Tel: (212) 419-7900 Fax: (212) 752-4929 http://www.ieee.org Institute of Industrial Engineers 3577 Parkway Ln., Suite 200 Norcross, GA 30092 Tel: (800) 494-0460 Fax: (770) 441-3295 http://www.iie2net.org National Bus Rapid Transit Institute, Center for Urban Transportation Research 4202 E Fowler Ave., CUT100 Tampa, FL 33620-5375 Tel: (813) 974-9833 Fax: (813) 974-5168 http://www.nbrti.org National Council of Examiners for Engineering and Surveying P.O. Box 1686 Clemson, SC 29633 Tel: (800) 250-3196 Fax: (864) 654-6033 http://www.ncees.org National Society of Professional Engineers 1420 King St. Alexandria, VA 22314 Tel: (703) 684-2800 Fax: (703) 836-4875 http://www.nspe.org Railway Supply Institute 50 F St. NW, Suite 7030 Washington, DC 20001 Tel: (202) 347-4664 Fax: (202) 347-0047 http://www.rsiweb.org SAE International 400 Commonwealth Dr. Warrendale, PA 15096 Tel: (724) 776-4841

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Fax: (202) 463-7319 http://www.sae.org Society of Naval Architects and Marine Engineers 601 Pavonia Ave. Jersey City, NJ 07306 Tel: (800) 798-2188 Fax: (201) 798-4975 http://www.sname.org Transportation Research Board, the National Academies 500 5th St. NW Washington, DC 20001 Tel: (202) 334-2934 Fax: (202) 334-2519 http://www.trb.org

ABOUT

THE

AUTHOR

Jane Brodsky Fitzpatrick is a librarian at the Graduate Center of the City University of New York (CUNY). She worked at the State University of New York (SUNY) Maritime College for ten years. She earned a bachelor of arts degree from Lake Forest College in 1969, a master’s degree in library science from Simmons College, in Boston, in 1994, and a second master’s degree in liberal studies from the CUNY Graduate Center in 2006.

FURTHER

READING

American Public Transportation Association. 2009 Public Transportation Fact Book. Washington, D.C.: Author, 2009. Brown, Betty J. Transportation. Vol. 2 in Encyclopedia of Business and Finance, edited by Burton S. Kaliski. 2d ed. Detroit: Macmillan Reference, 2006. Cheape, Charles W. Moving the Masses: Urban Public Transit in New York, Boston, and Philadelphia, 1880-1912. Harvard Studies in Business History 31. Cambridge, Mass.: Harvard University Press, 1980. Cudahy, Brian J. Cash, Tokens, and Transfers: A History of Urban Mass Transit in North America. New York: Fordham University Press, 1990.

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Mass Transportation Vehicles Industry

Karr, Ronald Dale. Railroads. Vol. 2 in Encyclopedia of American Urban History. New York: Sage Reference, 2007. Levinson, Herbert S. “Bus Transit in the Twentyfirst Century: Some Perspectives and Prospects.” Transportation Research Record: Journal of the Transportation Research Board 1760, no. 1 (2001): 42-46. http://trb.metapress .com/content/q073w13683w14255. McHoes, Ann McIver. Computer Sciences: Railroad Applications, edited by Roger R. Flynn. Vol. 3. New York: Macmillan Reference, 2002. Meier, Albert E. Over the Road: A History of Intercity Bus Transportation in the United States. Upper Montclair, N.J.: Motor Bus Society, 1975. Middleton, William D. Metropolitan Railways: Rapid Transit in America. Bloomington: Indiana University Press, 2003. Miller, John A. Fares, Please! A Popular History of Trolleys, Horse-Cars, Street-Cars, Buses, Elevateds, and Subways. New York: Dover, 1960. Parker, Jeffrey A. “Private Financing of Mass Transit.” In Private Innovations in Public Transit, edited by John C. Weicher. Lanham, Md: University Press of America, 1988. U.S. Bureau of Labor Statistics. Career Guide to

Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Bureau of Transportation Statistics. National Transportation Statistics, 2009-2010 ed. http:// www.bts.gov/publications/national _transportation_statistics. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Wallace, Jonathan. Railroads. Vol. 3 in Encyclopedia of Science, Technology, and Ethics, edited by Carl Mitcham. Detroit: Macmillan Reference, 2005. Walsh, Margaret. Making Connections: The LongDistance Bus Industry in the United States. Burlington, Vt.: Ashgate, 2000. Wang, J., and S. McOwan. “Fast Passenger Ferries and Their Future.” Maritime Policy and Management: The Flagship Journal of International Shipping and Port Research 27, no. 3 (2000): 231.

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Health Science Career Cluster: Health Science Subcategory Industries: Family Planning Centers; Freestanding Ambulatory Surgical and Emergency Centers; HMO Medical Centers; Home Health Care Services; Kidney Dialysis Centers; Medical and Diagnostic Laboratories; Nurses’ Offices (Centers, Clinics); Offices of Physicians; Offices of Podiatrists; Outpatient Clinics and Care Centers Related Industries: Complementary and Alternative Health Care Industry; Counseling Services; Dental and Orthodontics Industry; Health and Fitness Industry; Hospital Care and Services; Pharmaceuticals and Medications Industry; Public Health Services; Residential Medical Care Industry; Scientific, Medical, and Health Equipment and Supplies Industry Annual Domestic Revenues: $1.75 trillion USD (U.S. Census Bureau, 2008) Annual Global Revenues: $4.7 trillion USD (World Health Organization, 2006, estimate) NAICS Numbers: 6211, 62132, 62149-6216, 62139-62141

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DEFINITION

Summary The medicine and health care industry is dedicated to the prevention, diagnosis, treatment, and management of disease and the preservation of health through services provided by trained medical and allied health care professionals. These professionals usually have specific educational degrees, as well as certifications and licensure, qualifying them to provide care. Health care providers include medical doctors (M.D.s), dentists, nurses, dieticians, physical therapists, occupational therapists, speech therapists, recreational therapists, audiologists, chiropractors, optometrists, and mental health professionals. Many of these providers, however, may also be categorized in other industries. For example, dentists work in the dental and orthodontics industry, chiropractors work in the complementary and alternative medicine and health care industry, and mental health professionals work in the counseling services industry. History of the Industry The practice of caring for the sick in the United States predates the American Revolution. In 1751, Pennsylvania Hospital, chartered by Thomas Bond and Benjamin Franklin,

©Monkey Business Images/Dreamstime.com

Medicine and Health Care Industry

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Medicine and Health Care Industry

A physician and surgeon review an X ray. (©James Steidl/Dreamstime.com)

cared for the poor, sick, and insane from the streets of Philadelphia. To launch this institution, Franklin pursued political support and private donors. Public welfare through almshouses included basic health care. Americans supported dependent people through public taxes and lotteries. The American colonies had few educated physicians and many health care needs. Poor sanitation practices, such as pouring waste into local streams, bred infectious diseases. Doctors had little formal training, often limited to knowledge of stabilizing broken bones and administering herbs and liquors. In 1765, the College of Pennsylvania founded the first medical school in the United States, modeled after the school at the University of Edinburgh. Courses included basic anatomy, and students received experience in bedside care at the Pennsylvania Hospital. Historically, care of the sick was delegated to women with little training. Generations passed down various folk remedies. In the late 1800’s, nurses, sponsored by charitable organizations and churches, delivered care in the homes of new

mothers and people with infectious diseases. Following the standards of Great Britain’s pioneering Florence Nightingale, American nurses established a professional training process through schools of nursing. By the early 1900’s, nurses were licensed and credentialed by the states. In 1909, Jane Delano established the American Red Cross Nursing Service to complement the Army Nurse Corps. The need for nurses expanded during World Wars I and II, so the federal government funded nursing education and provided stipends. For years, physicians held a place of respect and power in America. Central to both medical practice and its reputation is the belief that physicians have a moral obligation to act as healers. Traditionally, they valued the sanctity of life and embraced the unique nature of the patient-physician relationship. Physicians were viewed as selfless professionals putting the welfare of their patients before any other concerns. However, over time physicians became central figures in the business of health care in order to be paid for their services. Physician practices and the business of medicine

Medicine and Health Care Industry

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are linked to the formation of health insurance have escalated alongside increased diagnosis and companies to guarantee payment for services. In treatment of preventable diseases. Americans have 1929, Dr. Michael Shadid formed a health care cobeen encouraged to take an active part in their operative for farmers in Oklahoma, requiring a prehealth, and portions of the industry are transitiondetermined fee to receive services. Baylor Hospital ing from thinking of themselves as providing sickin Dallas, Texas, began a prepaid health care plan ness care to instead providing health and wellness. called Blue Cross to provide hospital services for Living healthful lifestyles remains the most costteachers. Physicians joined this plan as Blue Shield effective solution to the many complications and to cover the cost of their services, forming Blue adverse outcomes of sickness and disease, as far Cross Blue Shield. These examples represent the more than half of all U.S. health care dollars are beginning of insurance and managed care to secure spent to treat and manage illnesses that can be prepayment for medicine and health care services. vented or reduced through lifestyle change. With advanced technology and disease manThe U.S. Surgeon General’s Healthy People: The agement, the life expectancy of Americans inSurgeon General’s Report on Health Promotion and Discreased, resulting in more seniors needing health ease Prevention (1979) contained recommendations care. In 1965, the federal government enacted for Americans to follow. These recommendations landmark legislation, establishing Medicare and were updated in 1990 as Healthy People, 2000; in Medicaid. Medicare was a federal government2000 as Healthy People, 2010 ; and in 2010 as Healthy funded program designed to pay for basic mediPeople, 2020. States, communities, businesses, and cal care for Americans over sixty-five years old. professional groups have adopted these plans to Medicaid, funded with federal dollars but manimprove the health of Americans and lower the aged by the states, paid for basic health care sercost of medical and health care. vices for indigent citizens and children. Key goals of Healthy People, 2010 were increased For many years, Americans received health care quality and length of life and elimination of health under fee-for-service plans provided through emcare disparities. This government initiative deployer insurance. In these plans, physicians charge fined twenty-eight focus areas, including access to separate fees for each service performed. Usually, quality health care, injury and violence prevention, patients pay a portion of each bill while their insurhealthy communication, community-based educaance companies pay another portion. tion and supporting programs, safety of medical The last three decades of the twentieth century products, occupational safety, and environmenwitnessed the growth of managed care programs tal safety and health. Target diseases for prevensuch as health maintenance organizations (HMOs) tion and improved treatment included diabetes, and preferred provider organizations (PPOs), decancer, chronic kidney disease, arthritis, chronic signed to save health care dollars. Still, millions back conditions, osteoporosis, human immunoderemained uninsured and health care costs skyrocketed. It remained a challenge to provide access to medicine and Ambulatory Health Care Services’ health care services at reasonable cost for all citizens. Contribution to the U.S. Economy The Industry Today In the twenty-first century, many new advances have been made in diagnosis, treatment of illness, and disease management. The health care industry continues to offer a wide range of services and products to prevent, treat, and manage disease, as well as to promote wellness. Emphasis on healthy lifestyle choices has heightened, as U.S. health care costs

Value Added

Amount

Gross domestic product Gross domestic product Persons employed Total employee compensation

$485.9 billion 3.4% 5.697 million $366.2 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

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Medicine and Health Care Industry

ficiency virus (HIV), heart disease, stroke, infectious disease, respiratory disease, sexually transmitted disease, nutrition, obesity, oral health, and mental health. Other focus areas were maternal, infant, and children’s health, as well as disability, tobacco use, substance abuse, hearing, vision, immunizations, food safety, and the public health infrastructure. The top ten leading indicators of health in America were defined, in order, as physical activity, overweight and obesity, use of tobacco, substance abuse, responsible sex, mental health, violence and injury, quality of environment, immunization, and access to health care. Another major project that has significant implications for medicine and health care practice is the Genome Project. This international project began in 1990 and was completed some thirteen years later in 2003. The purpose of this work was to discover and review the projected twenty thousand to twenty-five thousand human genes. The program studied the sequence of some three thousand units of deoxyribonucleic acid (DNA). Knowledge of DNA sequencing can enable scientists to crack the code of human genetics and treat and prevent devastating infectious and inherited diseases. These discoveries are especially important to understand the human immune system and to predict how each person will take in and utilize medications; this level of genetic analysis is expected to produce a future field of personalized medicine, in which care will be tailored meticulously to the genetically determined needs of each individual body. One day, these discoveries may also assist people to stay

Inputs Consumed by Ambulatory Health Care Services Input

Value

Energy Materials Purchased services Total

$4.6 billion $82.3 billion $194.7 billion $281.6 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

well by uncovering the secrets in the human genes that enhance health. Although ethical dilemmas surround this type of health science research, the benefits could prove useful to decrease disease and to manage human health, greatly affecting the medicine and health care industry. Medical and health care services today are provided by a diverse group of providers in various settings. In the past, the majority of services were delivered within health care institutions such as hospitals. Today, many procedures and treatments once limited to inpatient settings have moved to outpatient settings and to patients’ homes. Ambulatory health care services help patients remain in their residences within their communities, decreasing costs and improving patient satisfaction. Many medical procedures can be performed safely in physician or dentist offices. Physical, speech, and occupational therapists offer their services in outpatient centers, rehabilitation centers, and patients’ homes. Innovative medical equipment allows patients to remain outside the walls of institutional care facilities such as hospitals. Ambulatory outpatient settings include mental health and substance abuse centers, family planning centers, kidney dialysis centers, and surgical centers. Medical and diagnostic laboratories play an important role in patient care, as do diagnostic imaging centers. Although many hospitals offer these services through dedicated department staff and high-technology equipment, laboratories and diagnostic imaging establishments are becoming more available in the ambulatory health care setting. The improved technology of these services allows more options for diagnosis and treatment than ever before in health care history. Traditional medicine still remains primary in patient care management; physicians and nurses provide the majority of care. However, many people have also adopted alternative practices to enhance wellness and treat illness. Specialists such as optometrists, chiropractors, podiatrists, homeopaths, acupuncturists, hypnotherapists, and naturopaths offer Americans additional choices for medical and health care services. Consultants in nutrition and fitness provide services to support lifestyle changes for disease prevention and wellness. Health care professionals work as educators as well as care providers to improve patients’ quality of life.

Medicine and Health Care Industry

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to business of providing health insurance benefits contributed to the falling wages of American workers. In March, 2010, the federal government passed the Patient Protection and Affordable Care Act (PPACA), which was designed to expand greatly the availability of affordable medicine and health care services. The provisions of the act were to be phased in over the course of the 2010’s, with most provisions beginning in 2014. The law is projected by the Congressional Budget Office to result in more than 30 million Americans gaining health insurance, but more than 20 million U.S. residents (including undocumented immigrants) will still lack insurance according to these projections.

INDUSTRY MARKET SEGMENTS

Medical and diagnostic laboratories play an important role in patient care, as do diagnostic imaging centers. (©Yuri Arcurs/Dreamstime.com)

Today, Americans enjoy many options for hightechnology, sophisticated drug therapies and advanced medical and health care services. However, millions remain uninsured. Attempts to address this problem have resulted in incremental improvements, as the costs of medicine and health care services have continued to rise. Individuals and families pay higher prices each year for health care coverage and copayments, as insurers raise rates to cover their increasing costs. The promise of managed care as a cost-efficient way to decrease costs without lowering quality of care has not been fulfilled. By 2010, the United States was spending 17.6 percent of its gross domestic product (GDP) on health care. While health costs were rising dramatically, real wages were falling. Some economists linked the two trends, asserting that the rising costs

The U.S. medicine and health care industry includes more than 595,700 establishments, varying in size, services, and location. Ambulatory (outpatient) health care services are provided either directly or indirectly. These services constitute about 87.3 percent of all health care establishments. Ambulatory care includes outpatient care centers, home health care services, medical and diagnostic laboratories, radiology services, and offices of physicians and other health care professionals. The U.S. Bureau of Labor Statistics (BLS) notes that hospitals account for only 1 percent of these establishments, but they account for 35 percent of jobs in the industry. Similarly, outpatient health care providers may be divided into small, midsize, and large businesses based on the percentage of establishments and of jobs that they represent. This principle is used in the following section to discuss various segments of the industry. Small Businesses Small health care businesses include diagnostic laboratories, where ambulatory outpatients have their blood samples drawn and analyzed and secure other clinical tests. These laboratories represent 2.4 percent of all medical and health care establishments and employ about 1.6 percent of all health care workers. Potential Annual Earnings Scale. Medical and diagnostic laboratory outpatient services offer both salaries and hourly wages. Laboratory operations

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managers earn an average of about $109,660 per year, whereas service administrators earn an average of $78,360. The hourly rates for clinical technologists and technicians vary based on education and training, as well as certifications. Clinical laboratory technologists earn an average of $53,360 annually, and clinical laboratory technicians earn an average of $32,630. The American Society for Clinical Pathology differentiates hourly wages further by specialty; specialized occupations include cytotechnologist, histotechnologist, medical technologist, histotechnician, medical technician, and phlebotomist. Clientele Interaction. Delivery of medical and diagnostic laboratory services requires direct oneon-one interaction with patients. Patient contact begins prior to the laboratory visit, when patients make appointments for their blood to be drawn. When a patient arrives at a laboratory, a receptionist registers the patient and documents the laboratory tests to be performed, as well as the insurance plan that will pay for them. The patient is called back to the collection room, where a technician takes the blood samples. Afterward, a patient report is sent to the patient’s health care provider, and a copy may be sent to the patient upon request. Amenities, Atmosphere, and Physical Grounds. Medical and diagnostic laboratory centers may be located in business or medical office buildings, or they may occupy their own freestanding buildings. They have reception areas, where patients check in and document insurance and health information. They may provide patients with comfortable chairs and reading material in their waiting areas. The better medical and diagnostic laboratories are located in clean and safe neighborhoods and have attractive landscaping outside. Multistory buildings should have elevators, as medical laboratories may serve patients who have trouble climbing stairs. Patient treatment areas provide clean, sanitary conditions for blood collection, as well as sinks where gloved technicians can wash their hands between patients. Laboratories attempt to provide adequate parking with good lighting and area security. Typical Number of Employees. The number of employees in a medical and diagnostic laboratory center varies based on size, geographic location, and number of specialties. Some centers have as few as five employees, while larger ones may have

sixty, including directors, medical technologists and technicians, pathologists, and microbiologists. Staffing needs may be calculated through the College of American Pathologists’ (CAP) method of recording workload, a common practice in hospitals. A minimum staff includes a medical and diagnostic laboratory manager, a receptionist, and sufficient clinical technologists or technicians to cover the average number of patients and tests performed at the center. Medical records and billing services are also required, but these may be outsourced by small labs. Traditional Geographic Locations. Medical and diagnostic laboratory centers can be in freestanding buildings or located in office space close to hospitals or to concentrations of health care practices for the convenience of patients and providers. They are usually established in more populated areas close to medical centers. A given medical and diagnostic laboratory business may operate multiple collection centers in various geographic locations. Pros of Working for a Small Medical Business. Small medical businesses provide excellent employment opportunities in various settings and geographic locations. Employees participate as part of patient care teams. Their workload may be lighter than at larger businesses, with fewer patients spaced throughout the workday, and employees may experience less stress as a result. Medical and diagnostic laboratory employees usually work daytime hours only, and they can close for lunch. Cons of Working for a Small Medical Business. Small medical businesses have fewer employees, so workers may need to cover for one another when one is ill or absent. Small businesses tend to offer fewer employee benefits. Medical businesses such as diagnostic laboratories may be certified or accredited. When the effort to compete those processes falls on fewer employees, it can increase their workload and stress levels. Despite wearing gloves and taking other precautions, employees who draw blood specimens and work with human fluids may experience accidental exposure to bacteria, viruses, or fungi and contract laboratoryacquired infections. Costs Payroll and Benefits: Medical and diagnostic laboratory employees are generally hired at hourly

Medicine and Health Care Industry wages, while managers are salaried. Depending on the size of the agency, employees may receive benefits such as health insurance; vacation and sick time; education, tuition, and licensure reimbursement; dental, long-term disability, basic life, and accidental death insurance; retirement benefits; or a relocation package upon employment. Supplies: Small medical businesses require specialized supplies, as well as general office supplies and equipment, including folders, papers, desk supplies, postage supplies, computers, copiers, and telephones. Diagnostic laboratories require such supplies as analyzers, reagents, stains, microscopes and slides, and tourniquets, as well as consumable and disposable supplies such as syringes, gloves, capillary tubes, lancets, swabs, and applicators. External Services: Small medical businesses may contract billing and record-keeping services, as well as financial management, accounting, cleaning, maintenance, and technical support. They may also use couriers and other external delivery systems beyond the U.S. Postal Service. Utilities: Typical utilities for a small business include water, sewage, electricity, telephone, and Internet access. Taxes: Medical and diagnostic laboratory centers must pay local, state, and federal corporate and property taxes, as well as payroll taxes. Midsize Businesses Home health care agencies make up around 3.7 percent of all health care establishments and employ 7.2 percent of all health care workers. They provide cost-effective, skilled and unskilled health care services in patient residences, allowing patients to remain at home. Home care is especially useful for patients recently discharged from hospitals or after outpatient procedures. Some home care agencies also offer hospice care. Their annual revenues can vary from $500,000 to $10 million depending on size and geographic location. They may be challenging to operate, however, because they are primarily reimbursed by the federal government through Medicare payments that are subject to changing guidelines and reimbursementrate cuts. Potential Annual Earnings Scale. Home health care agencies employ a team approach to patient

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care. Each member has a different pay scale. The average earnings for a home care agency administrator range between $60,000 and $85,000, depending on the size of the agency, its geographic location, and the experience level of the manager. Professional home health nurses’ national annual salaries average from $58,740 to around $66,000. Physical therapists average $39.36 per hour, or $81,870 annually. Medical social workers at home care agencies receive salaries in the range of $35,550 to $57,690, with an average salary of $46,930. While home health aides are employed by some home health agencies for about $7.75 per hour, the average wage ranges from $8.62 to $11.69 per hour, or about $16,000 to $24,000 annually, depending on agency size and location. General nonsupervisory office staff are paid in the same salary range as they are in other health care industries based on geographic market; the national average wage for this group is $16.17 per hour. Clientele Interaction. Home health care agencies depend on patient referrals from hospitals, skilled nursing facilities, and physician offices. Most patients are recovering from illness or surgery, have chronic diseases with or without disabil-

Home health care nurses manage patient care after patients are discharged from hospitals. (©John Keith/Dreamstime.com)

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ity, or have terminal illnesses. Care is primarily short term but can be ongoing when skilled medical services are needed. Patients are the focus of the service, along with their families or caregivers. Home care personnel interact with patients and families in their residences from once a week to daily, depending on the level of service needed. When a patient is receiving extensive therapy, such as intravenous treatment, a registered nurse (RN) may visit the home to provide treatment more than once a day. However, the average home care patient receives visits twice each week from one or more care providers. The same patient may be seen by a nurse, a therapist, and a home health aide. Care providers communicate by phone with patients and their families throughout the week, and home care agencies provide answering services and oncall personnel twenty-four hours per day, seven days per week. Establishing rapport and a positive patient-provider relationship are critical to care planning and successful treatment in the home. Amenities, Atmosphere, and Physical Grounds. A home care agency’s office houses its administrator and office staff, with cubicle space allocated for professional caregivers to plan their days. Offices generally include computers and telephones and have multipurpose rooms for team meetings and staff education. Medical storage areas house basic home care supplies, while other areas house patient files and other medical records. Many home care agencies are located on lower floors of their office buildings to facilitate the transport of equipment and supplies from their offices to staff members’ cars for patient use. Some agencies are in freestanding buildings. Because care is delivered outside the office, most home care agency offices are relatively utilitarian and lack amenities. Typical Number of Employees. The number of employees at a midsize medical business varies depending on size and the types of service provided. At a minimum, the agency requires an administrator, an RN, a physical therapist and other therapists, a medical social worker, and home health aides, as well as medical record, secretarial, financial management, and human resources personnel. Some services, such as billing, can be contracted or outsourced depending on the size of the agency and its geographic location. Traditional Geographic Locations. Home care agencies may be located within or close to a hospi-

tal, or they may be freestanding within the community. Home health care is provided in all geographic locations, most often in densely populated cities. Rural care is usually available, but services may be more limited. Proximity to interstates and highways is a concern, as time management and driving distance are key factors to consider when managing home care visit costs. Pros of Working for a Midsize Medical Business. Work at midsize businesses such as home care agencies is likely to remain plentiful, as the population ages and greater numbers of elderly persons enter the health care system needing health care services at home. Private insurance programs and Medicare provide reimbursement for services. Unlike the situation at hospitals, where one provider is typically assigned many patients to care for at the same time, home care professionals make one home care visit at a time, focusing on only one patient at a time. Providers have the freedom and responsibility to schedule each visit based on their time availability, as well as the needs of each patient. Providers who enjoy working outdoors may find home health care desirable, as much time during the day is spent in travel and in the community. Home health care practice may appeal to providers who enjoy autonomy, team work, and one-on-one patient interaction. Cons of Working for a Midsize Medical Business. Home health care has some disadvantages, such as the need to have a working car and automobile insurance in order to make home visits reliably. Providers must carry supplies to patients, and they must sometimes work in less than optimal conditions within patients’ homes. Patient visits must be made regardless of adverse weather conditions, and patients’ homes may be in challenging locations, including high-crime areas that require security escorts. This environment is less controlled than are institutional settings. Home care typically requires completing many forms and other paperwork in order to receive payment and to maintain legally required documentation, especially when reimbursements are being made through Medicare. Providers must also recognize that patients may be more likely to exercise their rights not to comply with prescribed therapy when they are at home than they would be within institutional settings. Thus, to achieve the best care outcomes, patients may require education, and providers

Medicine and Health Care Industry may have to invest more effort to establish positive patient-provider rapport. Costs Payroll and Benefits: Home care providers are generally hired at hourly wages, while administrators are salaried. Agencies often use contract providers to handle the flexible needs of the patient census. Depending on the size of the agency, employees will receive benefits such as health insurance; vacation and sick time; education, tuition, and licensure reimbursement; dental, long-term disability, basic life, and accidental death insurance; cell phone stipends; and 403(b) plans with employer contributions. Supplies: Midsize medical businesses require specialized supplies, as well as general office supplies and equipment, including folders, papers, desk supplies, postage supplies, computers, copiers, and telephones. Home health care agencies require medical supplies for patient care, hand sanitizer to be used between patients, and cell phones or other mobile communication devices. Skilled service providers may use electronic medical records, requiring handheld documentation devices to record notes during care. External Services: Midsize medical businesses may rent medical equipment and other durable supplies. They may contract answering services, staffing agencies, financial management, billing services, security services, storage facilities, cleaning, or maintenance, and they may also hire some health care providers on a contract basis. Utilities: Typical utilities for a midsize business include water, sewage, electricity, gas or oil service, telephone and cell phone service, and Internet access. Taxes: Taxes can vary depending on whether the business is nonprofit or for-profit. Nonprofit businesses are exempt from many taxes, but they must still pay payroll taxes. For-profit businesses must pay local, state, and federal corporate and property taxes. Medical businesses may also maintain accreditation from various review boards, adding to their business costs. Large Businesses About 36 percent of all health care establishments are physician offices, employing 17 percent of health care workers. Most physician offices in-

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clude several physicians who practice as a group and hire diverse professionals and nonprofessional staff to support the practice. Most physicians see group practice as a way to share overhead expenses and to ensure that their patients will be covered when they take time off from work. Another benefit of group practice is quick access to peers for patient care consultations. Potential Annual Earnings Scale. The earnings of employees of group medical practices vary depending on the medical specialties and number of physicians in the practice. The most common specialty of physicians in private practice is internal medicine; these specialists earn an average of $87.98 per hour, or $183,080 per year. By contrast, oncology physicians earn an average of $335,000 and neurosurgeons average more than $500,000 per year. Among other physician office employees, office managers typically earn between $60,000 and $100,000 per year. Nurse practitioners earn an average of $82,590, while physician assistants earn an average of $80,440. RNs earn an average of $31 per hour, or $66,000 per year. Physical therapists in physician offices average $35.83 per hour, or $74,530 per year. General, nonsupervisory office staff are paid in the same general salary range as are other health care support staff. Administrative assistants, for example, average about $27,000 per year. Clientele Interaction. Employees of private medical practices have extensive one-on-one contact with patients. Various employees speak to patients on the phone, make appointments, greet patients when they arrive at the office and help them fill out paperwork, conduct measurements of baseline vital signs such as blood pressure and pulse rate, and otherwise prepare patients to meet with their physicians. Physician-patient interaction forms the heart of most medical practices. Other support staff such as medical technicians and nurse practitioners interact with patients before and after they see their doctors, taking blood and administering radiological scans, for example. After they have completed their visits, patients may meet with billing staff to clarify their insurance information. Amenities, Atmosphere, and Physical Grounds. Physician group practices may be in office buildings or in freestanding structures. Offices generally include reception areas where staff members check in patients and document their insur-

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ance and health information, as well as waiting areas with comfortable chairs, reading material, and sometimes a television. The better offices are located in clean and safe neighborhoods and have attractive landscaping outside. Multistory buildings have elevators. Treatment rooms are fitted with examining tables, basic vital signs equipment, and privacy gowns for patient use. Exam rooms have sinks where physicians can wash their hands between patients. Emergency equipment is standard within physician offices. Physician offices may be located in crowded areas such as medical centers, which can pose a challenge to patients who prefer adequate parking with good lighting. Typical Number of Employees. The number of employees in a physician group practice office varies based on size, geographic location, and number of specialties. The positions needed may include an office manager, nurses, physician assistants, nurse practitioners, laboratory technicians, billing and business office workers, receptionists, housekeeping staff, and sometimes radiology technicians. Practices may outsource services such as transcription, cleaning, and other nonmedical office services. Traditional Geographic Locations. Group practices can be in freestanding buildings, in medical or professional office buildings, or in office towers of hospitals. They are often located near at least one hospital for the ease of patients and the convenience of physicians who may need to make hospital rounds. Physician offices may have more than one location for the convenience of patients in different parts of a city. They are usually located in more populated areas for easier access to patients. Pros of Working for a Large Medical Business. Physician practices may enjoy more up-todate technology and more adequate personnel to share workloads than do diagnostic labs or home health care businesses. Offices are usually open only during business hours, which may be attractive to those seeking to avoid the more grueling schedule of a hospital or other emergency establishment. Physicians and other health care professionals in group practice can share on-call duties and have more coverage availability in case of illness, family emergency, or vacation or while securing continuing education. Cons of Working for a Large Medical Business. Physician office practices may or may not of-

fer benefits to the workers, depending on the business’s size and specialty. The workday can be extremely busy and may include overtime hours. Some employees, such as RNs, may be paid less than they would be in hospitals. Working with sick people can mean increased exposure to infectious and viral illnesses. Costs Payroll and Benefits: Physician offices generally hire staff members at hourly wages, while physicians and office administrators are salaried. Depending on the size of the practice, employees may receive benefits such as health insurance, vacation and sick time, and the costs of continuing education. Some offices may use contract services to decrease labor costs. Supplies: Private practices require routine office supplies and equipment, such as folders, paper, desk supplies, computers, copiers, telephones, and cell phones. They also need durable and disposable medical supplies and equipment, pharmacological supplies, and basic laboratory testing equipment. External Services: Medical practices may contract some or all laboratory tests beyond the most basic, or they may simply send patients to independent laboratories to have their tests done. They may also contract record storage, courier services, accounting and tax preparation, maintenance, and cleaning, including laundry.

Magnetic resonance imaging is a powerful diagnostic tool. (©Tomas Hajek/Dreamstime.com)

Medicine and Health Care Industry Utilities: Typical utilities include water, sewage, electricity, gas or oil, telephone, and Internet access. Offices may incur additional expenses related to operating testing equipment such as magnetic resonance imaging (MRI) or computed tomography (CT) scans. Taxes: Physician offices may pay taxes related to business operations, or the partners may pay business-related taxes on their personal returns, in which case they must also pay self-employment taxes. Offices must pay payroll taxes. Some offices need accreditation from various review agencies if they offer certain services, such as laboratory testing. Such accreditation can require additional expenses.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of the medicine and health care industry is usually based on the size and function of the establishment. Job roles within the organization will vary by title and function, demonstrating the diversity in this industry. In smaller to midsize health care businesses, some employees may perform more than one function depending on the needs of the organization. An example is a referral coordinator who also works as a marketing representative a few days a week. Another is the receptionist or administrative assistant who doubles as a customer service representative. Certain tasks may be outsourced, such as information technology, billing, facility management and security, housekeeping, and maintenance. However, large health care businesses may have entire departments that manage these functions. The following general job categories can be found in some form in small, midsize, and large health care businesses:

Business Management Managers oversee the general and specific operations of medicine and health care businesses. They help define and support the mission of their businesses and set strategic goals for operational success. A board of directors is legally responsible for the compliance of the establishment with accreditation and business regulations, which may vary between nonprofit and for-profit agencies. The management team is accountable to the board for hiring the best employee for each position, developing an environment where employees can excel in their jobs, creating energy that motivates middle managers and employees to do their best, and monitoring progress toward organizational objectives. They articulate and model the values of their organizations. Many industry leaders have advanced degrees and demonstrated experience in their business areas. Some common educational backgrounds of health care leadership include health care administration, business administration, and clinical services administration. Executives are salaried employees and usually earn higher wages than staff employees. They are responsible and accountable for every aspect of their businesses, from human resource management to service delivery to financial management. Business management occupations may include the following: ■ ■ ■ ■ ■

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Business Management Customer Service Sales and Marketing Professional Staff Support and Allied Staff Human Resources Billing and Payments

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Sole Practitioner/Owner Partner Chief Executive Officer (CEO) Chief Financial Officer (CFO) Administrator of Home Health Care Services Physician Office Administrator/ Manager Director of Clinical Services Director of Medical Records Director of Business Office Director of Sales and Marketing Director of Outpatient Services Director of Medical and Diagnostic Laboratories Director of Medical Equipment Services Director of Diagnostic Imaging Director of Physical Therapy Services

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Customer Service Customer service is critical to any business, including those in the medicine and health care industry. All employees play roles in promoting good customer service. In the health care industry, most department employees interface with patients and family members in some way, so excellent customer service is important. Employees should remember that patients may be ill or stressed when seeking or receiving health care services and need special patience and attention. For example, many older adults use the diverse departments of ambulatory health care services. They may be slower or walk with an assistive device or be hard of hearing and need to make certain adjustments to come to a physician’s office or medical and diagnostic laboratory. Sensitivity to such patients can go a long way in customer satisfaction, which results in repeat business. Health care industry employees who have direct effects on customer service are front-line secretaries, administrative assistants, and receptionists. These employees, usually paid lower wages than professional staff members, often represent the first contact that patients and their families have with their health care establishments. Because these employees answer the phone and take messages, they should have positive and pleasant voices and be able to take messages accurately and deliver them in a timely fashion. Speaking clearly and transferring calls without dropping callers are important. Training on how to listen to customer concerns and complaints without reacting in a negative or defensive manner is essential for conflict resolution. Knowing which manager to call when conflict arises may help defuse frustration on the part of the customer. These front-line employees usually have a minimum of a high school diploma, and some hold college degrees. They often have special skills, such as word processing and database management, but acquire advanced skills, such as project management, through on-the-job training. Receptionists in physician offices earn an average of $12.20 per hour, or $25,400 annually, for full-time employment. Administrative assistants earn an average of $31,000. In larger health care businesses, full-time customer service representatives may be hired to respond to customer concerns and queries. These employees are usually trained on the job and average salaries of about $29,000 to $30,000 per year.

Customer service occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Customer Service Representative Receptionist Administrative Assistant Executive Secretary Department Secretary Medical Records Secretary Business Office Secretary

Sales and Marketing The sales and marketing staff of any establishment can make or break the business. In the medicine and health care industry, not every business has a sales force, but each staff member is a salesperson through the quality of service provided. In smaller establishments, marketing may consist of making calls and mailing materials to possible referral sources. Some agencies or offices have a multipurpose role, such as referral coordinator, that includes making visits to current and potential referral sources to explain new or added services. A midsize firm may have only one part-time or fulltime sales and marketing staffer, or it may have a team of positions dedicated to building its business. Large establishments often have sales and marketing departments that call on referral bases daily and may even be responsible for writing marketing materials and developing their companies’ branding strategies. Several health care businesses, such as general medical equipment and supply providers, pharmacy and biotech companies, and home equipment and infusion therapy providers, lend themselves to more aggressive marketing approaches. These are niche businesses that offer products and services that complement patient care and may be part of a health care business’s diversification strategy. Sales and marketing excellence are critical to the success of these businesses. Employees with detailed technical knowledge of the services their companies offer may be promoted to sales and marketing positions despite having little or no previous sales or marketing training. In health care, RNs and other health care professionals are recruited to sales and marketing. The average starting salary for new college graduates with marketing degrees is about $43,000. Sales and marketing managers generally need a bacca-

Medicine and Health Care Industry laureate or master’s degree in business administration, with an emphasis in marketing, as well as experience in the business service area. These managers generally earn between $100,000 and $175,000 based on the type and size of the company, geographic location, education, and experience. Sales and marketing staff spend most of their time outside the office in their communities, building the referral bases of their companies. They travel various distances, based on the geographic locations of the referral bases. They may work long hours, evenings, and weekends. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■

Marketing Director Marketing Coordinator Sales Representative Referral Coordinator Business Development Manager/ Coordinator

Professional Staff The medicine and health care industry is a service business that relies heavily on the professional staff who provide skilled patient care services. Many jobs are available for those seeking a career in this industry. Most professional staff roles require a college education with a minimum of a baccalaureate degree. Some, such as physicians and nurse practitioners, require graduate and postgraduate education and internships. Additional certifications are available for health care professionals desiring specialization or economic enhancement. Many professional roles require licensure by state boards. If providers move to a different state, they may need to apply for new licenses to continue practicing. Just as education varies from job to job, wages and salaries vary as well. General practice physicians in rural areas may earn incomes of $100,000, while urban neurosurgeons may earn $500,000. Pay, practice parameters, and patient base depend on the selected area of practice, size of the business, and geographic location. Physicians are regulated by the states where they are licensed and work, and they may be required to complete continuing education to keep current on their chosen specialty areas.

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RNs make up the largest segment of health care professionals, with around 6.2 million positions in the United States. Their basic educational path may be through two-year associate’s degrees, threeyear diploma degrees, or four-year baccalaureate degrees. Additional education to the master’s or doctoral level offers more career opportunities. RNs can work in diverse settings, as almost all medicine and health care establishments utilize these health care professionals. They offer assessment, treatments, health teaching, resource referral, and support for patients and families. Nurses are licensed under the regulations of the states where they live and work, and they may be required to complete continuing education to keep current on their chosen areas of practice. Their work environment depends on the setting where they work. Annual salaries for staff RNs range from around $57,000 to $68,000. Salaries may also vary based on the shifts nurses work, as evening and night shifts usually pay a differential. Advanced degree nurses, such as nurse practitioners, earn

A physical therapist works with a patient. (©Lisa F. Young/ Dreamstime.com)

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$80,000 to $85,000 or more depending on the place of employment. Continued rehabilitation therapy is needed by many Americans in the course of their illness, or after injury or surgery, to restore function and return to the activities of daily living. Common health care professionals who provide these therapies are physical, occupational, and speech therapists. The work options for these professionals are diverse, with good opportunities for employment. Education necessary for these roles includes a minimum of a baccalaureate degree and a further degree from an accredited program in a specialty area. Annual salaries range from $72,800 to $78,000 for physical therapists, $60,00 to $75,000 for occupational therapists, and $58,000 to $79,000 for speech therapists, but they may be higher depending on the work setting and level of experience. As health care delivery changes under new reimbursement guidelines and more Americans acquire insurance, new jobs may emerge, while traditional ones may evolve into new roles. Job seekers would be wise to research thoroughly roles of interest and contact someone in the field for further discussion before committing the time and financial investment necessary to achieve these occupations. Professional occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Physician Nurse Practitioner Physician Assistant Registered Nurse Physical Therapist Speech-Language Therapist Occupational Therapist Audiologist Recreational Therapist Industrial Therapist Respiratory Therapist Radiation Therapist Optometrist Podiatrist

consists of health care technologists and technicians. Education requirements for these positions usually include baccalaureate degrees with one to two years of additional training and licensure or certification. Examples of jobs in these areas include clinical laboratory technologists and technicians, radiologic technicians, medical records and health record technicians, dental hygienists, and diagnostic medical sonographers. Salaries depend on the setting and specialty area of practice. Medical or health record technicians can expect to earn between $26,000 and $47,000, dental hygienists between $55,000 and $79,000, and radiologic technicians between $42,000 and $63,000. Many health care industry support jobs require high school diplomas, associate’s degrees, specialized vocational training, or on-the-job training. The BLS has stated that most health care jobs require less than a four-year college degree. For example, licensed practical or vocational nurses require one year of dedicated training and earn $35,000 to $45,000. Other allied health jobs include opticians ($20,000 to $43,000), medical assistants ($25,000 to $30,000), medical transcriptionists ($14.50 per hour to $17.00 per hour), and home health aides ($7.65 per hour to $13.93 per hour, or $15,620 to $28,980 annually). Support and allied staff occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

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Support and Allied Staff Allied health care providers are important to the delivery of services in the medicine and health care industry. Their specialized skills support patients in many settings. A growing group of health care providers with increasing job opportunities

Licensed Practical Nurse Physical Therapist Assistant Clinical Technologist Clinical Technician Nuclear Medicine Technologist Surgical Technologist Diagnostic Medical Sonographer Radiologic Technician Home Health Aide Optician Medical Record and Health Information Technician Medical Transcriptionist Medical Assistant

Human Resources The medicine and health care industry is primarily a service business that employs many and diverse workers. Critical to the success of any business is hiring the most qualified and motivated

Medicine and Health Care Industry workers possible. The link between service delivery and employment is best managed by human resource managers. Although the title may vary based on the focus and size of the health care business, these employees play important roles in the medicine and health care industry. Administrative duties of human resources managers include developing job descriptions; recruiting, interviewing, and hiring organizational workers; developing employee policies; monitoring federal and state employment regulations; maintaining consistent, fair, and equitable hiring practices; and conducting strategic planning with health care executives, department directors, and area managers. Human resources managers can help health care businesses promote employee productivity, minimize costly job turnover, increase retention, and provide employee education. In smaller health care businesses, a worker such as a staffing coordinator or manager may have divided duties that include some human resources functions. Human resources managers are challenged to stay current on regulation and licensure requirements of professional and allied health care workers. They may be responsible for checking the licenses of their employees and keeping employment files up to date. This role is important to the accreditation process because review bodies such as the Joint Commission on Accreditation of Health Care Organizations (JCAHO) and the Centers for Medicare and Medicaid Services (CMS) require employee licenses to be current as a condition of accreditation. Human resources managers also develop policies that assist businesses in meeting federal standards enforced by such agencies as the Occupational Safety and Health Administration (OSHA) and the United States Equal Employment Opportunity Commission (EEOC). Human resources professionals generally must have bachelor’s degrees in business administration, social sciences, behavioral sciences, or human resources management. Advanced degrees may prove useful, especially degrees in labor and industrial relations. Pay scales vary among health care businesses, but human resources managers generally earn between $75,000 and $125,000; some may earn up to $163,000. Human resources occupations may include the following:

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Human Resources Director Human Resources Coordinator Human Resources Manager Human Resources Generalist Benefits Specialist Administrative Assistant Payroll Clerk Staffing Coordinator Staffing Manager

Billing and Payments Billing and payments personnel manage health care businesses’ accounts receivable and payable. Smaller businesses may outsource business functions but may retain a billing clerk within the medical records area to secure payments based on the service codes used by the insurance industry and Medicare claims officers. These workers can expect to make between $12 and $18 per hour. In some larger businesses, an entire department may be responsible for these functions. Billing and payment occupations may include the following: ■ ■ ■ ■ ■

Billing Manager Billing Clerk Accounts Receivable Clerk Accounts Payable Clerk Collections Coordinator

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise. The medicine and health care industry has a long history of positive employment and economic growth. In 2008, a recession year, the BLS reported that the industry employed 14.3 million people. On the bureau’s list of the twenty fastestgrowing occupations, half were in the medicine and health care industry. The BLS has projected that 3.2 million new jobs will be created in the industry between 2008 and 2018, more than in any other industry. Although the medicine and health care industry will continue to offer many job opportunities, several factors may influence these growth predictions and affect the wages and salaries of health care employees. The PPACA is projected to enable

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Medicine and Health Care Industry PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Health Care and Social Assistance Industry

and cleaning assistants. Regardless of changes, people will continue to need health care services, making this industry a good career choice.

Employment Advantages The health care industry has a long Employment history of employment growth offering good to excellent wages and benefits. 2009 Projected 2018 Occupation Work environments are generally posi899,980 1,296,600 Home health aides tive. Most health care employees receive access to health insurance and other 623,210 764,100 Licensed practical and benefits such as retirement plans. Some licensed vocational nurses claim that this industry is recession222,450 251,000 Medical and health proof, as, even in economic decline, services managers people need and seek health care services. Some sectors, such as nursing, are 1,317,360 1,559,200 Nursing aides, orderlies, usually in a state of shortage to meet and attendants the country’s needs. The choice of vo2,225,330 2,729,000 Registered nurses cations available is diverse, with new roles evolving yearly to meet developing Source: U.S. Bureau of Labor Statistics, Industries at a needs. Economic challenges encourage Glance, Occupational Employment Statistics and creative thinking and allow variations Employment Projections Program. on traditional approaches to care. Workers can choose among various settings, from institutional to community-based businesses. Skills are sometimes transferable to other settings or industries and allow for up to 32 million Americans currently lacking insuradvancement. For example, businesses may hire ance to be added to the health insurance rolls. It is occupational health care nurses. Although profesalso designed to decrease the rate of inflation sional health care providers usually require fourwithin the health care industry, bringing it closer year college degrees or higher education and to the overall U.S. inflation rate and making health training, most roles in the health care field require care more affordable. To accomplish this, over the either two-year associate’s degrees, vocational trainlong term, providers will be paid less in real dollars ing, or on-the-job training, minimizing the educaper patient or per service than they would othertional investment costs to support staff and other wise have been paid. At the same time, more panonphysician workers. tients will see providers, so the total spent on health care will increase. Annual Earnings With revenues per patient decreasing, medical The overall health care industry accounts for businesses will need to rethink how they spend about one-sixth of the total U.S. economy, or more their limited resources. More people entering than $2.5 trillion. This figure includes pharmaceuMedicare and Medicaid, coupled with less funding tical manufacturing, hospital services, and other for providers, will challenge businesses to create related industries. According to the U.S. Census less expensive ways to care for patients. This may reBureau, in 2008 the medicine and health care insult in capped payments for the work of highly edudustry alone experienced revenues of $1.75 trilcated, extensively trained professional health care lion. The industry, moreover, is growing faster providers. Opportunities will increase for workers than the rate of inflation—one of the primary facwho can gain skills through on-the-job training, intors motivating passage of the PPACA—but one of cluding nursing aides, home health aides, medithe most important provisions of the new law decal assistants, dental assistants, and housekeeping

Medicine and Health Care Industry signed to reduce health care inflation (an excise tax on very expensive health insurance plans) will not kick in until 2018. As a result, health care revenues not only will increase in absolute terms but also are very likely to increase as a percentage of GDP through 2020.

RELATED RESOURCES FOR FURTHER RESEARCH American Medical Association 515 N State St. Chicago, IL 60654 Tel: (800) 621-8335 http://www.ama-assn.org American Nurses Association 8515 Georgia Ave., Suite 400 Silver Spring, MD 20910 Tel: (301) 628-5000 Fax: (301) 628-5001 http://www.nursingworld.org American Society for Clinical Laboratory Science 6701 Democracy Blvd., Suite 300 Bethesda, MD 20817 Tel: (301) 657-2768 Fax: (301) 657-2909 http://www.ascls.org Center for Health Care Strategies 200 American Metro Blvd., Suite 119 Hamilton, NJ 08619 Tel: (609) 528-8400 Fax: (609) 586-3679 http://www.chcs.org Centers for Medicare and Medicaid Services 75 Security Blvd. Baltimore, MD 21244 Tel: (877) 267-2323 http://www.cms.hhs.gov National Association for Home Care and Hospice 228 7th St. SE Washington, DC 20003

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Tel: (202) 547-7424 Fax: (202) 547-3540 http://www.nahc.org

ABOUT

THE

AUTHOR

Marylane Wade Koch is a registered nurse with a master of science in nursing degree and has been a health care professional for more than thirty-five years. She serves as adjunct faculty for Loewenberg School of Nursing, University of Memphis. She has written several health care books; has contributed to books published by Elsevier-Mosby, Harcourt Health Sciences, Delmar/Thompson-Cengage, F. A. Davis, Salem Press, and Jones and Bartlett; and has published many professional articles. She works as both an editor and a coach for private clients, including physicians and health care professionals. A member of the American Medical Writers Association, she also serves as faculty for an annual Memphis-area writing workshop run by the American Christian Writers.

FURTHER

READING

Dill, Monda. “A Brief History of Health Care in America.” Associated Content, August 13, 2007. http://www.associatedcontent.com/article/ 339640/a_brief_history_of_health_care_in _america.html. Dillon, Tamara. “Health Care Jobs You Might Not Know About.” Occupational Outlook Quarterly, Summer, 2008. Available at http:// www.bls.gov/opub/ooq/2008/summer/ art03.pdf. Fried, Bruce, and James A. Johnson, eds. Human Resources in Health Care: Managing for Success. Washington, D.C.: AUPHA Press/Health Administration Press, 2002. Jonas, Steven, Anthony R. Kovner, and James Knickman. Jonas and Kovner’s Health Care Delivery in the United States. New York: Springer, 2008. Koss, W., and T. Sodeman. “The Workload Recording Method: A Laboratory Management Tool.” Clinical Lab Management Review 12, no. 2 (June, 1992): 337-50. Kotlikoff, Laurence J. The Health Care Fix: Universal Insurance for All Americans.

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Cambridge: Massachusetts Institute of Technology, 2007. Merrit-Hawkins. Physician Salary, Compensation, and Practice Surveys. http://www.merritt hawkins.com/compensation-surveys.aspx. Plunkett, Jack W. Plunkett Health Care Industry Update. Houston, Tex.: Plunkett Research, 2010. Stevens, Rosemary, Charles E. Rosenberg, and Lawton R. Burns. History and Health Policy in the United States: Putting the Past Back In. New Brunswick, N.J.: Rutgers University Press, 2006. Swanson, Barbara M. Careers in Health Care. 5th ed. New York: McGraw Hill, 2005.

U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Health and Human Services. Office of Disease Prevention and Health Promotion. Healthy People. http:// www.healthypeople.gov/. World Health Organization. “Health Financing Policy.” http://www.who.int/health _financing/functions/functions/en.

Metals Manufacturing Industry ©John Casey/Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Alumina and Aluminum Production and Processing; Electrometallurgical Ferroalloy Product Manufacturing; Foundries; Iron and Steel Mills; Nonferrous Metal (Except Aluminum) Production and Processing; Steel Product Manufacturing from Purchased Steel Related Industries: Building Construction Industry; Chemicals Industry; Mining Industry Annual Domestic Revenues: $250 billion USD (First Research, Primary Metals Manufacturing, 2009); steel: $60.6 billion USD (American Iron and Steel Institute, 2008), $70 billion USD (IBISWorld, 2009) Annual International Revenues: Steel: $488 billion USD (estimate based on data from Iron and Steel Institute and U.S. Geological Survey, 2009) Annual Global Revenues: Steel: $558 billion USD (estimate based on data from Iron and Steel Institute and U.S. Geological Survey, 2009) NAICS Number: 331

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DEFINITION

Summary The metal processing and manufacturing industry converts raw or scrap materials into finished metals, ready for use as materials in other industries. Primary processing involves the smelting of metals from their ores to produce such things as liquid metal or metal ingots, whereas secondary processing consists of transforming liquid metal or ingots into sheets, bars, wires, and other forms. Workers create other metal products by pouring molten metal into casts or molds. The metals manufacturing industry includes companies engaged in smelting both ferrous metals and such nonferrous metals as aluminum and copper. The industry also creates many alloys, or amalgams of two or more metals. Because such mixed products have valuable properties, they have become an essential part of the industry; steel, which is an alloy of iron and carbon, is a prime example. History of the Industry Metals manufacturing has prehistoric roots. Evidence exists that copper was smelted in Europe in the Chalcolithic and early Bronze ages (2200 to 700 b.c.e.). Scholars often credit the Hittites, in eastern Anatolia, with being the first to successfully smelt iron from its ores between

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Metals Manufacturing Industry

modern chemistry began when Antoine Lavoisier replaced the phlogiston theory with his oxygen theory, according to which metals are elemental and calces are compounds of a metal plus oxygen. In this interpretation, when iron ore is smelted with charcoal, the heated mixture reacts, leading the carbon of the charcoal to bond with the oxygen in the ore. The compound escapes as the gas carbon dioxide, thus isolating the iron. In the early nineteenth century, Humphry Davy used elecSteel pipe at a steel mill in Indiana. (©Cheng Zhong/Dreamstime.com) tricity to discover several new metals, including such alkali metals as sodium and potassium and such alkaline1900 and 1600 b.c.e. This development marked earth metals as calcium, barium, strontium, and the end of the Near Eastern Bronze Age and the magnesium. Other chemists discovered still more start of the Iron Age. The ancient Greeks, who, by metals, and Dmitri Mendeleyev proposed that trial and error, advanced smelting techniques, atthese metals, as well as all other elements, could be tributed great religious and astrological signifiorganized into a useful table, where the properties cance to the seven basic metals: gold, silver, iron, of the elements, including the metals, were perimercury, tin, copper, and lead. These metals were odic functions of their atomic weights. He was even also known to other peoples because of their natuable to predict that new metals would be found, for ral occurrence or the ease with which they could be instance, “eka-aluminum,” which would account isolated from ores. Alchemists of the ancient and for an empty space in his table; the discovery of this medieval periods were profoundly interested in metal, now known as gallium, as well as others, did metals, especially those that might help them dismuch to cement the popularity of Mendeleyev’s cover the so-called Philosopher’s Stone that would periodic table. enable them to transmute less valuable metals into The Industrial Revolution transformed the ways gold. Their quest proved to be quixotic, but they in which metals were manufactured. The blackwere able to refine methods for producing metals smith’s forge and bellows were replaced by everand many other useful chemical compounds. larger blast furnaces and rolling mills. When an exDespite their ignorance about the scientific tremely rich iron-ore deposit was discovered in the principles underlying the smelting of metals and Mesabi Range of upper Minnesota, new techniques the manufacture of metallic products, artisans were developed so that this fine-dust ore would not were able, because of the empirical knowledge clog the circulatory systems of blast furnaces. For built up in their craft traditions, to manufacture exexample, pelletizing involved rolling the ore in a cellent daggers, swords, and other metallic objects. cylindrical drum to form small balls, later hardWith the development of the phlogiston theory in ened by heat; sintering involved mixing the Mesabi the eighteenth century, Europeans had an explanores with coke across a moving heated grate to atory system that could account for metals and form lumps suitable for charging the blast furnace. their manufacture. According to this theory, metals By 1900, the Mesabi ores supplied three-quarters of were combinations of their ores (called “calces,” or the needs of the American iron and steel industries. powdery minerals) and phlogiston (the principle In the Bessemer process, invented by Sir Henry of combustibility that also accounted for the shininess of metals). According to some historians, Bessemer and perfected by the American Alexan-

Metals Manufacturing Industry

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der Holley, a pear-shaped converter removed unnological timidity” in not keeping production facilwanted impurities in molten pig iron by blowing ities abreast of innovative technologies. Still others air through it. The process made it possible to manblamed government policies that allowed inexpenufacture high-quality steel inexpensively in Ensive steel from foreign countries to deluge the gland and the United States. The resulting availAmerican market. Often, the steel from Japan, Euability of large quantities of cheap steel led to the rope, and Brazil was cheaper and of higher quality expansion of railroads in the second half of the than American products. nineteenth century. In the early decades of the twentieth century, The Industry Today American steel production grew at a rate of 7 perThe modern metals manufacturing industry cent (compared with 6 percent in Germany, a prinowes much to the discoveries of physicists and cipal competitor). This significant growth was due chemists and to the ingenuity of engineers. For exto abundant sources of raw materials, innovative ample, the American physicist Josiah Willard Gibbs technologies, and such other factors as a highly efformulated an equation expressing the relationficient transportation system. During this period, ship between the number of component chemicals the United States was the world’s largest, most effiin a system, the phases of matter in that system, and cient, and cheapest producer of steel. the number of independent intensive properties During the Great Depression years of the 1930’s, in the system. One consequence of Gibbs’s phase U.S. steel production varied from a low of 13.9 milrule is that it reveals the conditions under which lion metric tons of raw steel in 1932 to a high of certain microstructural constituents, including cer51.4 million metric tons of raw steel in 1937. Durtain alloys, can exist. In this way, the quality of steel, ing World War II, annual production increased sigan alloy of iron and carbon, could be predicted nificantly, reaching a high of 81.3 million metric based on scientific evidence rather than on such tons in 1944. During the late 1940’s and through trial-and-error observations as the appearance of the 1950’s, production soared to over 100 million fractures in a sample. The next stage in the scienmetric tons, followed by declines in the early 1960’s tific understanding of metals and alloys involved and a recovery in the late 1960’s. By the 1970’s, the determination of the actual arrangements of American steel producers discovered to their chaatoms or ions within crystals of metals or alloys grin that they were losing market share domestithrough the process of X-ray diffraction. cally and internationally to a variety of companies. Sparrows Point was making steel with antiquated openhearth furnaces, while the Europeans and Japanese were using the superior basic-oxygen process. Reluctance to embrace new technologies and other poor decisions by American steel executives led to bankruptcies and mergers. Some scholars have described the 1980’s as a period of near anarchy in the American steel industry. Some observers blamed greedy managers who placed short-term profits ahead of long-term advantages. Managers in turn blamed avaricious union leaders for negotiating ultimately unrealizable and overly generous A man grinds steel in a metal fabrication factory. (©John Casey/Dreamsbenefits packages. Others blamed time.com) engineers and technicians for “tech-

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Metals Manufacturing Industry

The story of the modern metals manufacturing industry in the United States, especially that of iron and steel manufacturers, has often been told in terms of a rise-and-decline model. The American iron and steel industry was by far the world’s most dominant in the first half of the twentieth century, and its extraordinary productivity during World War II contributed significantly to the Allies’ victory. American inventors and engineers had developed a version of the open-hearth process that was extremely efficient in producing inexpensive, high-quality steel. In the American version of the process, the enclosed-system open-hearth furnace was increased in size, with improved design and better refractories (ceramic materials resistant to high temperatures), and producer gas was replaced by heavy fuel-oil residues. During the decade after the end of World War II, Americans were making steel faster, better, and in greater quantities than anyone else. The situation changed dramatically in the second half of the twentieth century, and the decline of American Big Steel can serve as a paradigm case. By the end of the twentieth century, the United States was no longer the world’s principal producer of steel, and many American steelmakers were closing or downsizing their plants, leading to the vanishing of hundreds of thousands of lucrative jobs. Several authors have tried to make sense of this dispiriting phenomenon. For example, Mark Reutter, in Sparrows Point: Making Steel—The Rise and Ruin of American Industrial Might (1988), used a case study of what was once the world’s larg-

Inputs Consumed by the Primary Metals Manufacturing Industry Input

Value

Energy Materials Purchased services Total

$21.5 billion $138.1 billion $31.0 billion $190.6 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

est steel mill, near Baltimore, Maryland, to argue that executives, devoted to a “bigger is better” policy, inflated steel prices in an increasingly competitive global economy and shortchanged innovative research. Consequently, within three decades Sparrows Point was producing half as much steel as it had at its peak, and the workforce had shrunk from more than twenty-eight thousand to less than eight thousand. Similar problems occurred in other American steel companies, and their executives, aware of the problem, explained their woes as being due to “overpaid” workers and “unfair” foreign competition, but others pointed out that neither federal limits on imports nor union wage concessions had slowed the decline. Sparrows Point was but one example of what was also taking place in the steel manufacturing industry in Buffalo, New York; Gary, Indiana; and Pittsburgh, Pennsylvania. In The Primary Metals Manufacturing The Decline of American Steel (1988), Paul A. Tiffany criticized the role of federal offiIndustry’s Contribution to the U.S. cials in this decline. For example, the poliEconomy cies of the Harry S. Truman administration encouraged plant expansion and Value Added Amount wage increases for steelworkers. Officials Gross domestic product $58.5 billion in Dwight D. Eisenhower’s administration Gross domestic product 0.4% urged international agencies to provide Persons employed 445,000 substantial financial aid to Japan’s steelTotal employee compensation $33.2 billion makers. Other analysts blamed onerous federal environmental regulations for subSource: U.S. Bureau of Economic Analysis. Data are for stantially adding to the cost of making 2008. steel in America. Still others blamed changing technologies and markets. For exam-

Metals Manufacturing Industry ple, the aluminum industry increasingly wrested control over the metal container business away from steel. Other industries were abandoning expensive steel for inexpensive plastics, and the steel content of American automobiles declined while their plastic content increased. The most important technical development in steelmaking in the second half of the twentieth century was the oxygen furnace, which was, in Europe and Japan, largely replacing the open-hearth process. By the year 2000, the basic oxygen furnace accounted for more than half of the steel production in the world. This furnace converted iron ore and pig iron to steel by blowing oxygen through a molten mixture of these compounds, which were intensely heated by a water-cooled steel lance. These furnaces allowed Japanese and German steelmakers to produce 200 tons of steel every 45 minutes, whereas American open hearths required eight hours to produce that much. In an electric arc furnace, carbon electrodes provide the heat to convert the charge (with a high percentage of steel scrap) into high-quality steel. Since these furnaces do not need pig iron or blast furnaces, the cost of making steel is considerably less than it is when utilizing traditional processes. This cost-effective device has led to an increase in the number of mini-mills, which produce steel on a small scale, diverging from the “bigger is better” dogma that so long dominated American steelmaking. These downsized operations generally consist of electric arc furnaces and continuous casting machines for producing plates, bars, rods, or wires. In terms of world metal production, aluminum is second to steel in total tonnage. Because it is a very abundant metallic element in the Earth’s crust, aluminum has become a significant competitor to steel in many products, from airplanes to beverage containers. The most important aluminum ore is bauxite, which is converted to aluminum by an electrolytic process. After bauxite is chemically converted to alumina, electrolytic cells perform the conversion of alumina into metallic aluminum. Similar electrolytic reduction processes exist for other nonferrous metals. In the second half of the twentieth century, researchers became adept at creating new alloys containing aluminum, which helped make the aluminum manufacturing industry a dominant force among metal producers.

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Liquid iron from the smelting stove. (©Oleg Fedorenko/ Dreamstime.com)

Alloys have become significant parts of both the steel and the aluminum industry. An early example of an influential alloy is manganese steel. Because of the great strength of this and other alloys, they have been in high demand for armor plate for ships and tanks. A steel alloyed with tungsten and molybdenum proved to be an excellent product for high-speed cutting tools. Stainless or rust-resistant steels are generally alloyed with chromium, nickel, and manganese. Stainless steels have been used in tableware as well as in the pharmaceutical, chemical, and military industries. Superalloys involve amalgams of such elements as iron, cobalt, and nickel, but several other elements can be present, such as molybdenum, tungsten, aluminum, titanium, and zirconium. The first superalloys to be developed were iron-based, but in the quest to create alloys that could operate without corrosion at high temperatures, cobalt-based superalloys were developed. Manufacturers have used these superalloys in jet engines and gas turbines.

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Metals Manufacturing Industry INDUSTRY MARKET SEGMENTS

Throughout the history of metals, differences in the scale of manufacturing concerns have existed, from the bloomeries of blacksmiths to the blast furnaces of early industries, from “maxi-mills,” such as open-hearth furnaces, to mini-mills with their electric arc furnaces. The following sections illustrate some of these small, midsize, and large businesses for a sample of various metals manufacturers within the metals manufacturing industry. Small Businesses With nearly seventy known metals, the metal processing industry varies considerably in business size, which is often related to the specific metal produced. For example, the total world production of tin and titanium is much less than 1 percent of that of iron and steel. Differences also exist in the cost of producing a given quantity of metal; in the case of tin and titanium, the respective costs are twenty and twenty-six times that of producing an equivalent amount of steel. The United States has not mined or smelted tin for some time, but several firms produce tin from secondary sources. In 2006 this amounted to 15,000 metric tons. Using the average price on the New York market, this constituted a value of $137,261,250. Evenly dividing this among 25 firms gives a very rough estimate of over $5 million per firm. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), in 2009, the average annual income of production workers in the nonferrous, nonaluminum metals manufacturing industry, which includes tin and titanium, was $37,110. The most common production position, extruding and drawing machine operator, earned an average of $35,100, while production supervisors earned an average of $55,250. Sales representatives earned an average of $74,020, industrial engineers earned an average of $71,530, and materials engineers earned an average of $79,530. General and operations managers earned an average of $132,070. Salaries at small firms such as those making tin products are likely to be below these averages. Clientele Interaction. Since China, Indonesia, Malaysia, and Bolivia are some of the chief producers of tin, U.S. firms deal with these and other pro-

ducers. Most major imports of tin enter the United States duty free. The United States also has the Defense National Stockpile Center, which operates a sales program offering tin to firms under longterm negotiated contracts. With increased emphasis on environmental quality, recycled tin has been entering American processing plants in increasing amounts. Many American companies using tin or tin alloys tend to deal with American rather than foreign suppliers. Amenities, Atmosphere, and Physical Grounds. The conversion of ores into metals involves conditions different from the conversion of metals into finished products. In some businesses, especially those with an integrated manufacturing process, the sharp distinction between primary and secondary metals processing no longer holds. The transformation of molten metal into semifinished or fully finished parts largely influences the nature of the workplace. Firms generally have technologies for continuous casting. Sometimes, parts are forged starting with metal powders. Various mechanical machining methods are then used to produce finished products. For example, tin can be used by itself, but, most commonly, it is alloyed with other elements. Bronze, for instance, is an alloy of copper and tin. Although tin alone does not have physiological effects on humans, tin compounds do, and the possible negative health effects of these are of concern in the workplace. In general, metals manufacturing plants are industrial facilities that employ heavy machinery and extreme heat. Production workers must wear basic protective equipment at all times and must follow established safety procedures. Other personnel usually work in standard office buildings that—in small firms—are usually located on the grounds of the production plants, and all employees must generally pass through the same guard stations or checkpoints when arriving at or leaving work. Typical Number of Employees. The employees needed to construct a metal-processing facility differ from those needed to keep it running efficiently once it is established. It is a principal duty of chemical engineers to construct bridges between the scientific knowledge of metals and practical principles governing their economic and efficient production. Initially, a small number of these engineers design equipment and develop processes for small-scale manufacturing. Once a plant

Metals Manufacturing Industry has been set up, workers are hired, generally fewer than one hundred. Engineers and chemical technicians monitor manufacturing methods for efficiency, economy, and safety, as well as for environmental protection. With the increasing cost of labor, engineers also experience pressure to automate and computerize production as much as possible, but trained workers are still necessary to maintain, repair, and run machinery. Traditional Geographic Locations. Metal manufacturing plants are usually located near major highways and railroads, outside cities or in rural areas, where real estate is affordable and industrial manufacturing will not conflict with the needs of homeowners and other residential property owners. Historically, metal processing industries were located near their main sources of ore, but, with the development of improved transportation by land and water, facilities can now be located near transportation hubs. For example, in the United States, business officials deemed it uneconomic to transport tin ores from Alaska, where the deposits were viewed as insignificant. They decided instead to import either tin ore or refined tin from elsewhere in the world. Pros of Working for a Small Metal Manufacturer. The advantages of working at a small metal manufacturer depend on the metal produced and the market conditions governing its use. Chemical engineers often experience satisfaction in making use of their scientific and technological knowledge to set up and monitor a metal-making facility. If the firm has a modest number of employees and they are treated as essential elements in the enterprise, they may enjoy a beneficial spirit of cooperation that causes all employees to feel they have a stake in the progress of the business. Cons of Working for a Small Metal Manufacturer. Small companies tend not to be widely diversified, so they can suffer disproportionately when markets for their metals and alloys shrink or collapse. During such times of economic distress, irresistible pressure may be brought to bear on small firms to merge with large ones. The prices of metals are also subject to political changes in countries where they are produced. For example, prices tend to climb when political upheavals cause a decline in the production of ores or metals from a country that was previously a major supplier. If a metal or metal derivative turns out to have dangerous

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health or environmental effects, this can then lead to a negative effect on a small business producing the metal or its derivatives. Large decreases in the use of a metal typically lead to plant closings and the laying off of workers. Costs Payroll and Benefits: Small metal producers generally pay hourly wages or salaries, depending on the position. They often do not provide health benefits unless they are unionized. Companies outside the United States often need not provide health benefits, as those are provided directly by the government in many nations. Supplies: Small metal manufacturers require ores and raw metals, old and new scrap, and other processing materials such as chemicals. They need heavy machinery, production tools, and production computers, as well as the tools and supplies necessary to maintain their machinery. Manufacturers also require storage, packaging, and transportation equipment, as well as standard office supplies and equipment, including not only business computers but also computer workstations and software for engineers. External Services: Small firms may contract accounting and payroll services, computer and machine maintenance, and food services. Utilities: Modern metal manufacturers, even small ones, need access to abundant water supplies and electricity. Managers, administrative staff, engineers, and researchers also require access to telephones and the Internet. Taxes: Historically, some small metal companies have been given tax breaks in order to keep them competitive with foreign firms, but generally they have to pay local, state, and federal corporate and property taxes and, in some cases, even foreign taxes and tariffs. Midsize Businesses In terms of global manufacture, the processing of such metals as copper and zinc occupies a middle position between the larger companies producing steel and aluminum and the small producers of such metals as tin and titanium. Detailed production data for many metals are not commonly available because certain manufacturers tend to keep such data secret. Nevertheless, it is possible to cate-

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gorize certain subindustries as intermediate between the giant and small producers. Potential Annual Earnings Scale. According to the BLS, in 2009, the average annual income of production workers in the nonferrous, nonaluminum metals manufacturing industry, which includes copper and zinc, was $37,110. The most common production position, extruding and drawing machine operator, earned an average of $35,100, while production supervisors earned an average of $55,250. Sales representatives earned an average of $74,020, industrial engineers earned an average of $71,530, and materials engineers earned an average of $79,530. General and operations managers earned an average of $132,070. Salaries at midsize firms such as those making copper and zince products are likely to be in line with these averages. Clientele Interaction. Because midsize manufacturers of metals depend on the same clientele as small firms, they, too, require interactions with foreign, domestic, and governmental personnel. With larger staffs than those of small firms, midsize companies have more people to deal with customers, government officials, and personnel at other concerns with which they do business. Amenities, Atmosphere, and Physical Grounds. Because the commercialized continuous casting of such metals as copper, lead, and zinc preceded the continuous casting of steel, successful techniques were developed early for casting strips of copper, zinc, and lead. Other casting techniques led to metal slabs or bars. Researchers also discovered that continuous casting was not economically feasible for most alloys because it was too difficult to control the solidification process. In 2003, the United States produced about 8 percent of the world’s zinc (the chief producers were China, Australia, and Peru). The United States does not produce enough zinc from its own ores, and it therefore imports zinc from several countries, principally Canada, Mexico, Peru, and Australia. Zinc is mainly used for galvanizing, a process in which iron or steel is coated with rust-resistant zinc, and for making brass, an alloy of copper and zinc. In the first half of the twentieth century, Waterbury, Connecticut, became home to many midsize firms making brass products. These firms declined in the post-World War II period, though other American midsize companies manufactur-

ing metals and metal derivatives prospered during the second half of the twentieth century. These firms are able to provide amenities such as free parking and access to food services. Typical Number of Employees. The great variety of midsize metal manufacturers is matched by great variation in the size of their labor forces. In general, each company employs hundreds of workers. Market forces also influence the number of employees, as more workers are hired during periods when demand for their particular product is high, and layoffs generally follow market declines. Traditional Geographic Locations. Historically, because of the chemical and noise pollution associated with the manufacture of metals, facilities were often located outside of cities and towns but near transportation hubs to make the influx of raw materials and the output of finished products more efficient. In some countries, midsize industries tend to be more integrated than small firms, so ore is smelted and then the raw metal is finished and made into various products at the same facility. Since countries such as China and Mexico have much more lenient environmental laws than the United States, zinc, copper, and lead can be produced more cheaply in these venues. Pros of Working for a Midsize Metal Manufacturer. By their very nature, midsize metal manufacturers often produce metals and metal derivatives that neither small nor giant firms produce. Therefore, chemical engineers who are skilled in the manufacture of a particular metal may find that midsize firms are the only firms where they can employ their expertise. Some engineers favor the challenges of working in such an environment. Sometimes, they have the opportunity to participate in the design and construction of metal-making facilities; other times, they are hired to oversee production or to participate in research to find ways to improve the economic creation of metal products, both quantitatively and qualitatively. Cons of Working for a Midsize Metal Manufacturer. Midsize companies tend to be more integrated and diversified than small companies, but they, too, tend to suffer when markets for their metals and alloys decline, although diversification usually prevents them from collapse. Because metals are nonrenewable resources, markets for them have been and will continue to be increasingly

Metals Manufacturing Industry competitive, and the market for metals is also subject to great volatility in response to changing political conditions in certain producer countries. Unexpected events such as earthquakes and other natural disasters have also affected markets for metals. Personnel with advanced scientific and technical degrees generally have the best opportunities for weathering unpredictable declines in the marketplace. Costs Payroll and Benefits: Midsize metal manufacturing firms often hire personnel on contract, including engineers and technicians. These contracts usually include health and time-off benefits. Supplies: Midsize metal manufacturers require ores and raw metals, old and new scrap, and other processing materials such as chemicals. They need heavy machinery, production tools, and production computers, as well as the tools and supplies necessary to maintain their machinery. Manufacturers also require storage, packaging, and transportation equipment, as well as standard office supplies and equipment, including not only business computers but also computer workstations and software for engineers. External Services: Midsize metal manufacturers typically contract maintenance and repair of their production machinery and computer systems, as well as accounting and payroll services, on-site food services, and both on- and off-site medical services. Utilities: Besides relying on local water and sewage, electrical power, and heating services, midsize companies sometimes locate near rivers because of their high demand for water, and they also make use of telephone and Internet services. Taxes: Some midsize metal-making firms have been able to negotiate favorable tax arrangements with local and state officials, particularly when these officials want a company to establish itself or remain in a certain community. Regardless, they must pay some local, state, and federal corporate and property taxes. They may also pay foreign taxes and tariffs, when, as is often the case, they have dealings with companies in other countries.

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Large Businesses Worldwide, the two largest metal manufacturing industries make steel and aluminum. The approximate world production of iron and steel is forty-three times that of aluminum. Iron, steel, and aluminum production and use are often seen as basic measures of advanced industrialized societies. Potential Annual Earnings Scale. According to the BLS, the average annual income of a production worker in the iron and steel mill industry in 2009 was $43,810, and the average annual income of a production worker in the aluminum industry was $36,070. In iron and steel mills, the average income of production supervisors was $62,860, the average income of industrial engineers was $78,120, the average income of industrial production managers was $107,270, and the average income of general and operations managers was $133,770. At aluminum manufacturers, the average income of production supervisors was $56,140, the average income of industrial engineers was $71,820, the average income of industrial production managers was $90,380, and the average income of general and operations managers was 116,750. Clientele Interaction. Because of the larger numbers of managers and specialists dealing with clients, such as sales and customer service representatives, interactions with customers are more frequent and extended than is generally the case in small and midsize businesses. Greater investment in advertising, marketing, product promotion, and public relations also fosters greater interaction with clients. Amenities, Atmosphere, and Physical Grounds. Sparrows Point in its heyday was the largest steel manufacturing plant in the world. It produced enough steel to make over 100 million automobiles, manufacture over 400,000 miles of railroad track, and construct over 1,000 skyscrapers the size of the Empire State Building. So large was the industrial landscape at Sparrows Point that the open-hearth department alone occupied about one hundred acres of flatland. During World War II, close to thirty thousand workers produced over 424 million tons of steel, 3.6 times the amount produced by Germany’s Saar region in the same time period. This scene was repeated in Pittsburgh, where many blast furnaces and rolling mills churned out massive amounts of steel.

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In the half century after the war, the workforce at Sparrows Point declined to fewer than eight thousand, and similar declines occurred elsewhere in the United States. This naturally led to fully and partially abandoned facilities in Pittsburgh; Gary; Youngstown, Ohio; and other steel towns. At Sparrows Point, some blast furnaces were dynamited and the scrap was sold, but some open-hearth structures and abandoned coke ovens still remained, as did the company town where families had purchased household goods. In contrast to the decline in steel properties, companies such as Alcoa, A blast furnace at a plant. (©Oleksiy Mark/Dreamstime.com) Reynolds Metal, and Kaiser Aluminum expanded their physical plants to meet the demand for an expanding aluminum Costs container business. Eventually, nearly all beer cans Payroll and Benefits: Large metal manufacturers and about 90 percent of all soft-drink cans were may pay various employees hourly wages, anmade of aluminum. Increasing numbers of emnual salaries, or on a contract basis. They often ployees led to expanded plants for making alumiprovide benefits. num and its alloys, along with such amenities as cafSupplies: Large iron and steel facilities require imeterias and large parking lots. mense amounts of raw materials and lesser Typical Number of Employees. Large metal amounts of fine chemicals in order to manufacmanufacturers each employ thousands of workers. ture metals, alloys, and various finished prodTraditional Geographic Locations. America’s ucts. They also require heavy machinery, spare first major steel city was Pittsburgh because iron parts, and tools; engineering computer workore and coal were both readily available there. stations; office supplies and equipment, includPittsburgh continued its growth because Mesabi ing business computers; and laboratory equipRange iron ore could be efficiently transported to ment and chemicals. its blast furnaces. Other large iron and steel faciliExternal Services: Large companies often sign ties were located in Gary, Youngstown, Buffalo, and contracts with outside firms to handle payroll, Sparrows Point. computer maintenance, and food services on Pros of Working for a Large Metal Manufacsite. Some giant steel facilities, such as Sparrows turer. Large corporations have significant resources Point, fostered the development of steel towns and are likely to weather temporary economic setwith housing and stores for their workers. backs. They provide high salaries, significant opUtilities: Large metal manufacturing companies portunities for advancement, and research budneed massive amounts of electrical power and gets that may enable their engineers to develop water. In the early days of the U.S. steel industry, major new processes and products. little attention was paid to air and water polluCons of Working for a Large Metal Manution, but in the last third of the twentieth century facturer. The decline of the U.S. steel industry governmental regulations have forced these demonstrates that even large manufacturers are companies to control their pollutants. Companot immortal. In addition, large companies have nies also need telephone, cable television, and significant bureaucracies, and employees may feel Internet services. anonymous and distant from the decision-making Taxes: Some large metal-making firms have been process. able to negotiate favorable tax arrangements

Metals Manufacturing Industry with local and state officials, particularly when these officials want a company to establish itself or remain in a certain community. Regardless, they must pay some local, state, and federal corporate and property taxes. They may also pay foreign taxes and tariffs, when, as is often the case, they have dealings with companies in other countries.

only the output of skilled and unskilled laborers in the steel industry but also the productivity of managers. Executive management occupations may include the following: ■ ■ ■ ■

ORGANIZATIONAL STRUCTURE AND JOB ROLES Metal manufacturing companies of different sizes and different ages vary significantly in their internal structures. However, all companies must fulfill the same basic job roles in order to function. Even at small companies in this industry, each role is likely to be performed by a different employee, although some employees will take on multiple roles as necessary. The following umbrella categories apply to the organizational structure of businesses in the metals manufacturing industry: ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Marketing and Sales Customer Service Office and Administrative Support Research and Development Maintenance and Repair Production Information Technology Distribution

■ ■

President/Chief Executive Officer (CEO) General or Operations Manager Chief Financial Officer (CFO) Vice President of Sales and Marketing Engineering Manager Public Relations Manager

Marketing and Sales Marketing and sales personnel find, attract, cultivate, and maintain clients. In the metals manufacturing industry, clients are usually other manufacturing companies who require metals as raw materials. Sales staff must understand both their own corporations’ production processes and those of their clients, and they must be able to negotiate profitable contracts for their firms. Marketing and sales personnel often have at least two-year technical degrees or, more commonly, four-year college degrees. Because many metals manufacturing concerns have foreign customers, particular language skills are necessary for those marketing metal products to a specific country. Marketing and sales occupations may include the following: ■ ■ ■ ■ ■

Executive Management Executive managers oversee all aspects of their companies’ operations. Historically, as exemplified by steel magnate Andrew Carnegie, top executives did not possess technical knowledge and skills in the metals being manufactured; instead, they possessed general business savvy. Modern executives, however, are frequently persons with substantial scientific knowledge and technical expertise and experience. New technologies and changing business patterns have influenced the structure of executive management. Frederick Winslow Taylor, the father of scientific management, studied how to make more efficient not

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■

Marketing Manager Marketing Analyst Sales Manager Sales Representative Business Operations Specialist International Sales Director

Customer Service Because of the great diversity of metals and alloys sold by manufacturing companies, both to individuals and to other firms, customer relations representatives have many tasks to perform. For example, they typically deal with misunderstandings by customers about products, customer complaints, replacements of defective products, and so on. Since they often have to handle detailed questions about various metal products, they need to have the requisite scientific and technical background to deal knowledgeably with customers.

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Customer service occupations may include the following:

■ ■ ■

■ ■

Customer Relations Manager Customer Relations Representative

Office and Administrative Support Large metals manufacturers need relatively large staffs to handle the many clerical and business tasks that keep them running smoothly. Keeping track of raw material inputs and finished product outputs, along with records of sales, requires many office workers. Because much of this information is now computerized, office workers need professional expertise in information management systems. Office and administrative support occupations may include the following: ■ ■ ■ ■

Bookkeeper Accountant Auditor Administrative Assistant

OCCUPATION

■

Secretary Computer Support Specialist Payroll Clerk Human Resources Generalist

Research and Development Most large metals manufacturing companies have research and development personnel to improve traditional products and create new ones. These scientists, engineers, and technicians work with customer relations representatives to handle customer complaints. Many workers in this division have advanced college degrees. Chemists and materials scientists, for example, analyze products to make sure that they live up to industry and governmental standards. They also modify existing metals, develop new alloys, and create new finished products. Chemical engineers, who are often heavily involved in setting up metal-making plants, design equipment and develop various processes for manufacturing metals and alloys on a large scale. Chemical technicians conduct tests for quality control.

SPECIALTIES

Metallurgical/Materials Engineers Specialty

Responsibilities

Extractive metallurgists

Extract metals from ores through processes such as smelting or refining, develop uses for scrap metal and low-grade ores, control temperature, and charge mixture furnaces.

Foundry metallurgists

Conduct research to develop and improve sand-molding, melting, alloying, and metal-pouring methods.

Materials engineers

Evaluate technical and economic factors to recommend engineering and manufacturing strategies to attain the design objectives of products and processes by applying their knowledge of material science and related technologies.

Metallographers

Conduct tests to develop new and improved metals and alloys and improve production methods.

Physical metallurgists

Study the structure of metals in order to develop new alloys, new uses for metals through alloying, and ways to produce alloys commercially.

Welding engineers

Specialize in the development and application of welding equipment and welding techniques for hard-to-weld metal alloys and assemblies.

Metals Manufacturing Industry

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Certain chemists specialize in developing knowledge about the many metals in the periodic table, and other chemists specialize in particular alloys. This knowledge can be beneficial to metals manufacturers concerned with those metals and alloys. Chemical research engineers conduct experiments to discover how most efficiently to transform raw materials into commercial metals and alloys. They perform these experiments not only to improve traditional techniques but also to discover potential new products and processes. Materials engineers concerned with metals and An open-hearth furnace at a plant. (©Oleksiy Mark/Dreamstime.com) alloys may try to develop production techniques for these materials that meet the commercial requirements naces to last about ten years. In advanced steelmakof their employers. They make use of their knowling technologies, basic oxygen furnaces, electric edge of the microstructure of these materials to defurnaces, primary and secondary rolling devices, vise alloys with the desired hardness, electrical rheocasting, and spray-casting devices need to be properties, resistance to fracture or cracking, malmaintained. Repairs are often essential to extendleability, ductility, and other properties. ing the life and efficiency of these new metalResearch and development occupations may inprocessing machines. clude the following: Maintenance and repair occupations may in■ Chemist clude the following: ■ Chemical Engineer ■ Chemical Technician ■ Maintenance and Repair Worker ■ Chemical Engineering Technician ■ Metal-Manipulation Machinery Mechanic ■ Metallurgist ■ Custodian/Janitor ■ Materials Scientist ■ Machinist ■ Materials Engineer ■ Materials Engineering Technician Production ■ Industrial Engineer Contemporary production personnel may be ■ Industrial Engineering Technician skilled or unskilled workers who operate one or ■ Mechanical Engineer more machines in production plants. Some work ■ Mechanical Engineering Technician as part of teams and trade responsibilities among teammates; others specialize in a single, sometimes Maintenance and Repair extremely repetitive task. Production workers may The devices used to manufacture metals require require only high school educations, or they may periodic maintenance and repair. For example, require bachelor’s degrees in a relevant technical open-hearth furnaces are still being used, and, beor scientific field. cause of extensive dust and high temperatures, furProduction occupations may include the follownace parts often need to be cleaned, and occasioning: ally complete replacement of the furnace roof is ■ Industrial Production Manager necessary. Laborers must replace front and end ■ Production Supervisor walls after about one to two hundred cycles. Proper ■ Rolling Machine Setter and Operator maintenance and repairs allow open-hearth fur-

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Metals Manufacturing Industry

Metal-Refining Furnace Operator Metal Pourer/Caster Inspector, Tester, Sorter, Sampler, and Weigher

■ ■ ■ ■ ■

Information Technology Although computer specialists have a role to play in such divisions as administration, sales, and office support, they have also become important to production and floor operations. With the growth of mini-mills in the steel industry came an increase in computer-controlled rolling and casting processes. Automatic control of rolling operations has been necessitated by higher rolling speeds, developed to make greater quantities of high-quality product speedily and efficiently. Uniformity of product is especially valued. As knowledge of various metal-making processes has increased over time, so has the capacity for precise computer control of those processes, with attendant improvements in quality and yield of various metals and alloys. Such computerized control require specialized software, either proprietary software developed in-house or commercial or open-source software that must often be customized in-house. In either case, computer programmers and software engineers must ensure that their companies’ code matches their needs and priorities. Information technology occupations may include the following: ■ ■ ■ ■

Computer Scientist Computer Programmer Computer Technician Software Engineer

Distribution Distribution personnel transport raw materials to manufacturing plants, store both materials and finished metals, and transport finished metals to purchasers. Truck drivers in this industry generally require commercial driver’s licenses, while warehouse workers may require certification on vehicles such as forklifts. College degrees are not usually required for entry-level distribution positions. Distribution occupations may include the following: ■ ■

Heavy Truck Driver Light Truck Driver

Material and Freight Mover Packer and Packager Warehouse Supervisor Dispatcher Shipping and Receiving Clerk

INDUSTRY

OUTLOOK

Overview The metals manufacturing industry is complex, comprising as it does the making of nearly seventy metals and many more alloys. Even a single giant subindustry, such as steelmaking, has several subfields of its own, such as ironmaking and iron products, steelmaking and steel products, and the manufacture of many steel alloys. However, generally speaking, the outlook for the metals manufacturing industry shows it to be in decline. The BLS projects that the steel industry, for example, will shed 13 percent of its jobs between 2008 and 2018. However, the same report indicates that job prospects in the industry are “very good” for engineers and other skilled workers despite this overall decline. In the bureau’s parlance, “very good” means that there will be more open positions than applicants. The steel industry in particular has been in decline for some time. Employment in the U.S. steel industry decreased from over 500,000 workers in 1975 to fewer than 200,000 workers in 1987. In 2008, the steel industry provided about 159,000 salaried jobs. Close to 100,000 workers were employed in iron and steel mills and ferroalloy production, and about 60,000 worked fabricating steel products from purchased steel. The American primary metals industry encompasses approximately four thousand companies, including those producing steel, aluminum, and copper. The fifty largest companies are responsible for more than half of industry revenues. Analysis of manufacturers’ shipments of durable goods suggests that the industry’s decline is due in part to a decline in demand for its products. For example, the demand for primary metals in the first eleven months of 2009 was 17 percent lower than demand during the same period in 2008. Steel demand in December, 2009, was 11 percent less than demand in December, 2008. The demand for aluminum can sheet, a key product in the metals man-

Metals Manufacturing Industry ufacturing industry, declined by 3.7 percent by the start of 2010. The 2009 decline in the U.S. steel industry was its greatest since 1982. Explanations offered for this decline include a decrease in the nation’s gross domestic product, the recession of 2007-2009, and weaknesses in many markets that have traditionally used steel and other metals. Whatever the reason, 2009 witnessed a dramatic fall in the American consumption of steel and steel products. By the late twentieth and early twenty-first century, American steel production was rebounding from its dramatic decline of the 1970’s and 1980’s. Some companies had built new facilities using such new technologies as basic oxygen and electric furnaces, as well as automated rolling mills. This development led to the increased production of highquality steel. In 1997, the United States produced 107.5 million metric tons of raw steel, a more than 20 percent increase over 1991, the decade’s low point. In the decade from 1998 to 2008, the total

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production of crude steel in the U.S. varied from a high of 101.8 million metric tons in 2000 to a low of 90.1 in 2001. The average total production for the decade was 95.7 million metric tons. Some optimists believe that shortsighted managers and union conflicts are things of the past, and that American steelmakers, after having passed through the gauntlet of very hard times, now understand that attention must be paid to the complex interactions among social, economic, technological, and political forces in order for the industry to enter a period of prosperity.

Employment Advantages BLS projections indicate that some occupations within the metals manufacturing industry will be in demand, and those positions are likely to be among the higher-paying positions in the industry. However, employment overall in the industry is in serious decline, which may breed a certain amount of resentment toward in-demand workers within companies. Although jobs in old, giant facilities will decline, employment in mini-mills and automated rolling PROJECTED EMPLOYMENT mills will increase. The very technoloFOR SELECTED OCCUPATIONS gies, such as automation and computerization, that have fostered a small Fabricated Metal Product but more efficient workforce have Manufacturing also increased the need for highly trained computer programmers and Employment maintenance workers. Some analysts even believe that this modernization 2009 Projected 2018 Occupation may lead to a growth in American 62,800 58,300 Cutting, punching, and press steelmaking, with a consequent need machine setters, operators, for more workers at some point in the and tenders, metal and plastic future. A hopeful sign is the increased 61,000 61,400 First-line supervisors/ demand for special metal products managers of production and used in the aerospace industry and by operating workers chemical equipment manufacturers. If the American nuclear industry re120,920 115,900 Machinists vives, steel products will play a role in 75,270 81,400 Team assemblers new plant construction. Employment in the steel industry is 90,620 94,700 Welders, cutters, solderers, sensitive to market conditions, techand brazers nological developments, and domestic as well as international competition. Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Those companies that intelligently Occupational Employment Statistics and Employment and imaginatively adapt to changes in Projections Program. markets, technology, and competition will prosper and have room for

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Metals Manufacturing Industry

like-minded employees. For example, markets are opening in several developing countries, and companies willing to meet the needs of these emerging markets will be helped. Environmental concerns may also foster domestic demand for steel, for example, in the wind turbine industry. Consequently, even with overall declines, opportunities still exist for several occupations, including chemical and materials engineers, metallurgists, and experts familiar with automation and computerization.

PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Primary Metal Manufacturing Employment 2009

Projected 2018

Occupation

12,690

12,400

Cutting, punching, and press machine setters, operators, and tenders, metal and plastic

18,400

18,700

First-line supervisors/ managers of production and operating workers

Annual Earnings 14,460 14,100 Inspectors, testers, sorters, Annual earnings of the entire metsamplers, and weighers als manufacturing industry are diffi14,370 14,800 Metal-refining furnace cult to determine precisely, both beoperators and tenders cause of the large number and variety of companies and because many com13,140 13,600 Molding, coremaking, and panies tend to keep this knowledge casting machine setters, secret or charge large amounts for its operators, and tenders, metal publication and use. First Research and plastic estimates that the domestic primary 13,980 12,000 Rolling machine setters, metals industry earned $250 billion in operators, and tenders, metal revenues in 2009. More accurate inand plastic formation exists about certain metals industries, such as steel. Domestic Source: U.S. Bureau of Labor Statistics, Industries at a Glance, steel revenues are variously estimated Occupational Employment Statistics and Employment at steel: $60.6 billion in 2008 by the Projections Program. American Iron and Steel Institute and $70 billion in 2009 by IBISWorld. Good data exist for the world production of raw steel (it went from 770 million metric tons in 1998 to over 1.25 billion metMay, 2008. For rolling machine operators, the ric tons in 2008). On the other hand, average hourly wage was $16.40. For furnace operators, the wholesale prices for raw steel have varied considerwage was $17.47, and for laborers in stock and ably from country to country and from company to freight, the hourly wage was $10.89. company. Within segments of the steel industry, During its years as a world leader, the U.S. steel earnings and wages vary by the kind of production industry was highly unionized, and its members enand occupation of the worker. joyed excellent benefits, including health insurAccording to the BLS, earnings and wages in the ance, paid vacations, compensated sick leaves, and steel industry for 2008 were higher than the avergenerous pension plans. During the last decades of age earnings in private industry as a whole. The avthe twentieth century and the first decade of the erage weekly salary of production workers in 2008 twenty-first, union membership declined, though was $1,117 in iron and steel mills and $736 in comit remained higher than the average across Ameripanies making steel products from purchased can industries. In 2008, approximately one-quarter steel. The median hourly wages of managers over of steel manufacturing workers were union members (compared to 14 percent in all manufacturall segments of steel manufacturing were $24.25 in

Metals Manufacturing Industry ing). As with production workers, the number of highly trained personnel, such as chemical engineers, has also declined over the past two decades, though earnings of such people in the steel industry tend to be higher than average.

Rochester Institute of Technology, where he is a professor in the Department of Science, Technology, and Society/Public Policy.

FURTHER RELATED RESOURCES FOR FURTHER RESEARCH American Chemical Society 1155 16th St. NW Washington, DC 20036 Tel: (800) 227-5558 Fax: (202) 872-6257 http://www.acs.org American Institute for International Steel 3400 Westpark Dr., 2d Floor McLean, VA 22102 Tel: (703) 245-8075 Fax: (703) 610-0215 http://www.aiis.org American Institute of Chemical Engineers 3 Park Ave. New York, NY 10016-5991 Tel: (800) 242-4363 Fax: (203) 775-5777 http://www.aice.org Minerals, Metals, and Materials Society 184 Thorn Hill Rd. Warrendale, PA 15086-7514 Tel: (800) 759-4867 Fax: (724) 776-3770 http://www.tms.org

ABOUT

THE

AUTHOR

Robert J. Paradowski is a historian of science and technology who specializes in the history of chemistry with a particular emphasis on the life and work of Linus Pauling. He graduated summa cum laude from Spring Hill College, earned a master’s degree in chemistry from Brandeis University, and received a Ph.D. in the history of science from the University of Wisconsin in 1972. He has taught at Brooklyn College, Eisenhower College, and the

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READING

Beddoes, J., and M. J. Bibby. Principles of Metal Manufacturing Processes. New York: John Wiley & Sons, 1999. Creese, Robert C., et al. Estimating and Costing for the Metal Manufacturing Industry. Boca Raton, Fla.: CRC Press, 1992. _______. Introduction to Manufacturing Processes and Materials. New York: Marcel Dekker, 1999. Hoerr, John P. And the Wolf Finally Came: The Decline of the American Steel Industry. Pittsburgh: University of Pittsburgh Press, 1988. Khare, Mukesh, et al. Aluminium Smelting: Health, Environment and Engineering Perspectives. Miami: Ian Randle, 2008. Lankford, William T., Jr., et al. The Making, Shaping, and Treating of Steel. 11th ed. Pittsburgh: AISE Steel Foundation, 1998. McDavid, Richard A., and Susan EchaoreMcDavid. Career Opportunities in Engineering. New York: Ferguson, 2007. Madar, Daniel. Big Steel: Technology, Trade, and Survival in a Global Market. Vancouver: University of British Columbia Press, 2009. Peck, Merton J. The World Aluminum Industry in a Changing Energy Era. Baltimore: The Johns Hopkins University Press, 1988. Preston, Richard. American Steel: Hot Metal Men and the Resurrection of the Rust Belt. New York: Prentice Hall, 1991. Reutter, Mark. Sparrows Point: Making Steel— The Rise and Ruin of American Industrial Might. New York: Summit Books, 1988. Rogers, Robert P. An Economic History of the American Steel Industry. New York: Routledge, 2009. Tiffany, Paul A. The Decline of American Steel: How Management, Labor, and Government Went Wrong. New York: Oxford University Press, 1988. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg.

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U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and

Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. World Steel Association. Steel Statistical Yearbook, 2009. Brussels, Belgium: Committee on Economic Studies, 2010.

Mining Industry ©Brad Sauter/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Natural Resources Career Cluster: Agriculture, Food, and Natural Resources Subcategory Industries: Metal Ore Mining; Nonmetallic Mineral Mining and Quarrying; Support Activities for Metal Mining; Support Activities for Nonmetallic Mineral Mining Related Industries: Batteries and Fuel Cells Industry; Coal Mining Industry; Metals Manufacturing Industry; Nuclear Power Industry; Watches and Jewelry Industry Annual Domestic Revenues: $69.6 billion USD (United States Geological Survey, 2007) Annual International Revenues: $1.592 trillion USD (Research and Markets, 2008) Annual Global Revenues: $1.661 trillion USD (Research and Markets, 2008) NAICS Numbers: 2122-2123, 213114-213115

INDUSTRY

are present in commercial quantities. Miners then either use surface methods, such as dredging, stripping, quarrying, and open pits, for extraction or create underground shafts, tunnels, and large openings known as stopes to reach and remove ore. Miner safety is a major concern, as is the health of the environment. After a mine is closed, the area must be reclaimed for other purposes.

History of the Industry Humans have been extracting valuable substances from the earth since the earliest times. Some of the first substances to be extracted were the harder nonmetallic ones, such as flint, chert, and quartz, which were used in making arrowheads and spear points. Softer nonmetallic substances, such as soapstone and limestone, were used for carving and making utensils. Clay was probably the basis for the first large-scale mineral industry. It could easily be shaped into bricks or tiles that were used for construction or writing. Quarrying of blocks of stone was another major industry involving nonmetallic

DEFINITION

Summary The mining industry extracts useful substances from the earth. These substances include metals, such as copper, silver, and gold, as well as nonmetals, such as gypsum, clay, and gemstones. Exploration determines whether the desired substances 1187

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Mining Industry

The ghost town of Bodi, California, (site of the Bodie gold mine) is a popular tourist destination.

substances. The Egyptian pyramids contain millions of blocks of dressed stone that average 2.5 tons apiece. Decorative stones early attracted the attention of ancient peoples, and several nonmetallic minerals were used to ornament their clothes or burial garments. Color was the characteristic most valued, so that lapis lazuli (azure), carnelian (red), malachite (green), and turquoise (blue) were especially prized, although these are semiprecious stones and not of great value today. The first recorded underground mines were dug in search of gemstones: turquoise mines in the Sinai and emerald mines along the shore of the Red Sea, where the shafts were said to be 820 feet deep. The first metals ancient people used were the socalled native metals. These are found in the pure or uncombined state. Gold attracted attention right away because it had a bright luster. Flakes or nuggets could easily be spotted in streams. Soon, gold was valued because it was malleable and could be shaped into jewelry and coins. Silver and copper were valued too, and some of the first underground metal mines were gold and silver mines in Cassandra, Greece, where miners drove tunnels into the rock along fractures known as faults. Bronze, made by melting tin with copper, was the preferred metal for weapons and implements in early times as it was rigid and did not corrode. Iron did not replace it until around 1000 b.c.e. because

of the difficulty of separating it from its ore, which requires smelting: The crushed ore must be melted with a flux, such as limestone or charcoal, to form a slag that accumulates at the top of the container, permitting the molten iron to be drained off. During the Middle Ages, the variety of minerals that was mined increased, as did the sophistication of the ways of extracting the ore. As late as the 1500’s, however, when the Conquistadores were searching for gold in Arizona, mining methods were still primitive. The mines were lit by candles that were set in wrought iron holders stuck in the tunnel walls. If the rock was soft, the miners used picks and shovels or pointed sticks to loosen it. If the rock was hard, black powder was used when available, or else fires were built against the tunnel walls, which were then doused with cold water to shatter the rock. Carts carried the ore out to rocklined pits called arrastras, where donkeys dragged boulders around in circles, crushing the ore for processing. Today, thanks to the invention of the electric motor and modern steel-making methods, the mining industry has leaped forward with a host of new methods. The Industry Today The mining industry still performs the same functions it always has, namely extracting desirable substances from the surface of the earth or below it, but today’s methods are more technologically

Mining Industry sophisticated than they were in the past. No longer do lonely prospectors trudge into the wilderness with bedrolls strapped to their pack animals to explore for minerals. Today exploration is conducted by trained geologists, probably paired with mining engineers, who travel by four-wheeled vehicles or helicopters. A variety of exploration tools are available, including geologic maps, aerial photographs, and geophysical studies that show the bedrock’s magnetic and electrical variations in the area to be explored. Once a likely mineral prospect has been located, the geologist and mining engineer evaluate the character, shape, size, grade, and prospective tonnage of the ore and estimate its value. The mining methods that are used have changed as well. When the mineral is low-grade, it is generally mined by surface methods. Large pits called quarries are commonly used for mining stone. Flat, sedimentary deposits such as clay and phosphate are strip-mined, provided that the overburden that must be removed is not too thick. Extremely large,

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near-surface accumulations, such as porphyry copper, are worked using huge open pits. The one at Bingham Canyon, Utah, is 4 kilometers (2.5 miles) wide. Here, the ore is excavated using power shovels that can scoop up 98 tons at a time. These move about on benches of rock that circle the pit and spiral downward to the pit’s bottom. Placer mining is another type of surface operation. Giant dredges screen hundreds of cubic yards of gravel per hour as they plow up river beds in search of gold or diamonds. Underground mining methods are used when a mineral of value is too deep to be worked by a surface pit. Entry into the ground is made by means of horizontal tunnels or vertical shafts. From these, workings are driven off laterally in various directions, following the traces of the ore. The workings may extend long distances outward from the entry point, and in the case of one South African gold mine, the total length of these workings is 800 kilometers (500 miles). After the rock is freed by blasting or drilling, it is drawn off through chutes lead-

The Bingham Kennecott copper mine near Salt Lake City. (©Gary Whitton/Dreamstime.com)

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ing down to a train of small ore cars. These carry the ore to a hoisting shaft, where it is lifted to the mill above. Just as mining methods have become more varied and sophisticated, the ways of separating minerals from their ores have become more sophisticated too. Gravity concentration is probably the oldest method, used since earliest times. Miners ran their crushed gold ore through sluice boxes lined with shrubs to collect the heavy particles and then freed the gold from the shrubs by shaking. A more sophisticated method was amalgamation, in which the particles of gold were allowed to combine with mercury, which was then burned off. Today, the milling of gold and silver uses a process known as cyanidation, similar to amalgamation, except that the medium used is potassium cyanide. Minerals are also recovered from their ores by leaching with ammonia or acid, and water is used

The Mining Industry’s Contribution to the U.S. Economy Value Added

Amount

Gross domestic product Gross domestic product Persons employed Total employee compensation

$48.8 billion 0.3% 224,000 $17.3 billion

Note: Includes all mining except petroleum and natural gas. Source: U.S. Bureau of Economic Analysis. Data are for 2008.

to extract salt from underground deposits through drilled holes. Early methods of purifying iron ore by heating were revolutionized in 1856 by the invention of the Bessemer converter, which made possible the production of high-quality steel. Cop-

A train hauls coal. (©Brad Sauter/Dreamstime.com)

Mining Industry per is purified by electrolytic refining. Plates of crudely refined “blister” copper are placed in tanks of acid electrolyte and an electric current is passed through the solution, causing the blister copper to be dissolved off one plate (the anode) and be deposited as pure copper on the other (the cathode). Impurities drop off as sludge. Reclamation of exhausted mines is now mandatory in the United States. Formerly, when a mine was exhausted, the owners simply walked away. Today, that is no longer possible. Stringent federal, state, and local environmental laws govern the closing of mining properties. Contamination of the groundwater and of the soil must be remedied, often at considerable expense. Shafts and tunnel openings must be closed up, and the tailings ponds must be revegetated after contaminants are removed. Even the open pits must be turned into lakes or reshaped with waste rock, on which fresh soil is placed with seed mixtures to start new plant growth.

INDUSTRY MARKET SEGMENTS Mining companies may be small, family businesses or massive multinational ventures. They may concentrate on a single substance (or a single mine), or they may mine any substance of value on the open market. Small Businesses The smallest mines are usually one-family operations, where the owners do the mining themselves, with the help of a few employees. Frequently, the mine is open to tourists as an additional source of revenue. Good examples of these mines are the gemstone mines of North Carolina and the oldtime gold mines in Colorado. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), in 2009 the average overall salary of all workers in the metal ore mining industry was $53,010 and the average overall salary of all workers in the nonmetallic mineral mining industry was $40,730. In the metal ore mining industry, on average, mining and geological engineers earned $78,780, construction and extraction workers earned $49,080, construction and extraction supervisors earned $70,900,

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and general and operations managers earned $145,800. In the nonmetallic mineral mining industry, on average, mining and geological engineers earned $72,040, construction and extraction workers earned $39,660, construction and extraction supervisors earned $58,900, and general and operations managers earned $99,940. Clientele Interaction. If the mine is touristoriented, personal attention to visitors is essential, especially if visits to the gift shop, museum, cafeteria, and other attractions are anticipated. The guides who lead the visitors through the mine must be friendly and able to answer a variety of questions about the mining operation. They will also have to be watchful of small children, as both surface and underground mines have numerous safety hazards. If the mine offers visitors the opportunity to dig for minerals on their own, which is common in the gemstone mines of North Carolina, employees need to be available to answer questions, offer instructions, and help visitors identify their mineral finds. Amenities, Atmosphere, and Physical Grounds. Small mines are generally located in remote areas, often with an attractive mountain setting. Part of the charm of the tourist-oriented ones is that they are so unlike the urban environment from which their visitors come. The approach to the mine will be a narrow dirt road that winds up into wooded hills. At the mine itself, the look is always rustic: signs are hand-painted, the parking lot is unpaved, and the buildings have a weath-

Inputs Consumed by the Mining Industry Input

Value

Energy Materials Purchased services Total

$8.5 billion $22.9 billion $15.3 billion $46.7 billion

Note: Includes all mining except petroleum and natural gas. Source: U.S. Bureau of Economic Analysis. Data are for 2008.

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ered appearance. All the employees wear old clothes or jeans. The tourist-oriented gold mines in Colorado are generally entered through a dark opening in a rock face. After a tour of the underground workings, visitors may be given the opportunity to pan for gold in a nearby stream, or to visit the gift shop, where small rock samples and various books are for sale. The gemstone mines in North Carolina offer more amenities for tourists. After a tour of the mine, which may be underground or just a waterfilled pit from which gravel is extracted, visitors can purchase a bucket and scratch for gems on a hillside covered with loose rock. There is generally a gift shop and sometimes a museum as well, with a display of minerals, old mining equipment, and antique tools. Gemstone mines may also have a lapidary shop, where a visitor’s finds can be turned into attractive cut stones and jewelry. Wire-wrap courses may even be offered. And if the mine has fluorescent minerals, there will be a black-light exhibit and perhaps even a black-light tour of the mine. Several of the North Carolina gemstone mines have evolved into sophisticated commercial operations. They have Web pages, flyers displayed at tourist centers around the state, and offer picnic areas and campgrounds with bathrooms and hot showers. A number of the gemstone mines even have online stores. Typical Number of Employees. The number of employees working in a small mine will depend on whether the mine is tourist-oriented or not. Some of the gold mines in Colorado are operated by their owners without assistants, and visitors must ring a bell or honk the car horn to attract attention if the owner is underground giving other visitors a tour. These gold mines are seasonal because of heavy winter snows, so if owners need tour guides, they will hire high school students. The touristoriented gemstone mines in states such as North Carolina have more employees and may operate on a year-round basis. Full-time personnel, such as the gift shop manager, will probably be family members. High school or college students will be hired in the summer when the number of tourists is large, along with a few local adults who can help visitors identify their finds and perform routine maintenance work. Traditional Geographic Locations. Mines are located where minerals exist to be mined. Most

small mines are located in remote areas, often with attractive mountain scenery. Few people may live in the vicinity of the mine. Pros of Working for a Small Mining Company. The owners and workers in a small mine in many ways resemble an extended family, with persons often being related to each other. This means that the work environment is a collegial one where occasional absences and minor mistakes can be overlooked, and if there is an accident or other misfortune, people can be expected to rally round supportively. Because the owner has total control of the operation, the owner will probably be on the premises daily, which provides an opportunity to ensure that instructions are carried out. Some business and financial skills are needed, of course, as well as knowledge about property maintenance and the legal requirements that come with having an income-producing property with paid employees. If the owner lacks these skills, people will have to be paid to assist with the operation of the mine. Cons of Working for a Small Mining Company. The owner of a small mine must be prepared to mediate conflicts among the employees, as well as to deal with issues that arise in connection with visitors to the mine. If an employee does not show up one day, the mine owner may have to do that employee’s job, whether it is acting as a tour guide, serving as gift shop cashier, or filling in as an amateur plumber. In larger mining operations, managers are available on several levels to handle the various operations related to the business, but in small mines, owners are responsible for all aspects of the business themselves. One of the major problems that the owner of a tourist-oriented mine has in trying to operate the mine profitably is the matter of seasonality. The people who visit the mine come as a vacation activity, and most people take their vacations in the summer. Owners of tourist-oriented mines in Colorado must conduct all their business during an interval of three to four months, and once the snow starts to fly they will have to board up and find some other activity to occupy their time until spring. Although some of the gemstone mines in North Carolina announce that they are open “year round,” the number of visitors that they get in the winter is bound to be small. Owners will have to decide if it is cost-effective to keep the mine open for so little business.

Mining Industry Costs Payroll and Benefits: To keep costs low, the tourist-oriented small mines hire all their workers on a part-time basis and at local hourly wages. Since most workers are generally hired only for the summer months, benefits such as sick leave and vacation time will not be expected. Supplies: Office supplies will be required, including a cash register, telephone, and computer. Cleaning supplies and maintenance items are needed too. If there is a gift shop, it will have to be restocked periodically, and sodas and snacks should be available for purchase by visitors. External Services: Tourist-oriented small mines may contract computer maintenance, credit card processing, vending machine maintenance and stocking, and portable toilet services. Utilities: Electricity will be required if there is an office and a gift shop, and to provide lights in the mine if there are underground tours, but if the mine is small and far from town, an on-site generator may serve this need. Telephone and Internet access are also needed if the mine is tourist-oriented. Water can come from the mine’s own well, and either portable toilets or a bathroom with its own septic tank can deal with waste. Taxes: In addition to property taxes, small mines need to pay any applicable local, state, and federal taxes. Sales taxes on items sold in the gift shop must be collected as well. Midsize Businesses Midsize mining companies will generally have a market capitalization of somewhere between $50 million and $500 million. The company may operate several mines, but these will usually all be located in the same geographic area. The headquarters office for these companies is invariably in Vancouver, Canada, and the company’s stock is always listed on the Toronto Stock Exchange. Potential Annual Earnings Scale. According to the BLS, in 2009 the average overall salary of all workers in the metal ore mining industry was $53,010 and the average overall salary of all workers in the nonmetallic mineral mining industry was $40,730. In the metal ore mining industry, on average, mining and geological engineers earned $78,780, construction and extraction workers earned $49,080, construction and extraction su-

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pervisors earned $70,900, and general and operations managers earned $145,800. In the nonmetallic mineral mining industry, on average, mining and geological engineers earned $72,040, construction and extraction workers earned $39,660, construction and extraction supervisors earned $58,900, and general and operations managers earned $99,940. Clientele Interaction. Midsize mining companies pay a great deal of attention to their current and prospective stockholders because they depend on their interest to keep the price of the company’s stock high. They also hope to generate funds from them through stock offerings to pay the costs of developing new mining prospects. Toward this end, company officials such as the chief executive officer (CEO) and the chief financial officer (CFO) tour the country giving presentations known as “road shows.” These are company-paid luncheons or dinners at exclusive restaurants in cities where current or prospective investors might be found. Boston, New York, Palm Beach, Miami, Houston, and San Francisco are favored. Investment brokers are invited to the luncheons and often bring their wealthy clients with them. No expense is spared. While the guests dine on filet mignon or salmon, company officials present illustrated updates on their companies in hopes that the brokers will encourage their clients to invest. Amenities, Atmosphere, and Physical Grounds. Most midsize mining companies maintain corporate offices in Vancouver, Canada, so this will be the place where the company’s officers live. Because most of these companies’ investors do not live in Vancouver and have no plans to visit it, their corporate offices do not need to be luxurious. Rather, these offices are workplaces where officers can catch up on their mail, direct operations, and interact with one another as they plan future strategies. As the officers are on the road much of the time, support staff manage the business while they are gone. One or more additional offices will also be maintained in the field, close to the mining operations. A company’s investors are never going to see these offices either, so they are unpretentious places where geologists and mining engineers come and go in hard hats and muddy boots as they supervise the company’s day-to-day operations. These operations tend to be in far-off locations, and company

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Mining Industry

personnel may need helicopters to reach these places until the company puts roads in. Typical Number of Employees. The corporate staff of midsize mining companies is generally small: a CEO, a CFO, perhaps a chief operating officer (COO), maybe one or two vice presidents, and a company secretary. There will also be a handful of directors, paid in stock options, whose role is to provide advice. A support staff will be required for the Vancouver office, and at the field offices there will be geologists, mining engineers, and supervisory personnel. The rest of the company’s employees will be hard-hat workers. In total, the company may have just a few hundred employees. Traditional Geographic Locations. For years, Vancouver has been the place where the corporate offices of midsize mining companies are located. This is probably because it is the largest city in western Canada and most of the country’s mines are in the western part of the country. The field offices of midsize mining companies will be wherever the minerals that the company is looking for are found. Pros of Working for a Midsize Mining Company. For the officials of midsize mining operations, a major attraction of the job is the possibility of a large financial payoff when the company is finally sold. Each official owns company stock, often purchased for just a few pennies a share. Stock options, granted in lieu of salary increases, increase their holdings each year. The typical midsize mining company is bought out by a major mining company after a few years, and each company official then pockets a windfall. After that, they may go on to join other midsize companies and repeat the process. The pattern of waiting to be taken over has become so common that many midsize mining companies simply stake out proved reserves and then wait to be taken over without ever mining a single load of ore. Cons of Working for a Midsize Mining Company. Mineral prospects have to be located and then evaluated by mining companies. If these prospects are located in foreign countries, contacts with their governments must be made and matters such as royalties agreed upon. Environmental concerns must be addressed too, no matter where the prospect is located, and good relations must be established with the local people who will be affected by the mining operation. Once the operation be-

gins, facilities must be built, equipment purchased, and specialists and hard-hat workers employed. There are also matters to be addressed back at company headquarters: salaries, loans, financing, shareholder relations, and government relations. The Sarbanes-Oxley Act of 2002 established new standards of accountability for companies in the United States that have greatly increased expenses. Costs Payroll and Benefits: Midsize mining companies pay their officers minimal salaries, augmented by generous stock options, in order to keep costs down. Full-time workers generally receive standard benefits. Supplies: In addition to the usual supplies for the home and field offices, midsize mining companies have significant expenses for vehicles, especially of the all-terrain type. Drilling rigs may be required for exploration, and underground mining brings new costs. A helicopter may also be required. External Services: Midsize companies may contract computer maintenance auditors, legal counsel, a transfer agent and registrar to deal with stockholder issues, and public relations firms to assist with new stock issues and setting up road shows. Utilities: The needs of midsize mining companies for utilities are the same as those for other companies their size, except that electronic communications are especially important because of the widespread nature of the company’s activities. On-site power supplies for mining operations may be needed too. Taxes: In addition to paying local, state, and federal income and property taxes in the country where the home office is located, companies may have to pay taxes in the country or countries where the field offices and the mining operations are conducted. They may also have to pay excise taxes on minerals removed, land leases on land occupied, and other industry-specific taxes and fees. Large Businesses Large mining companies are global behemoths, with market capitalizations that often exceed $100 billion. They run far-flung mining operations spread across several continents and produce a number of different mineral products. Company

Mining Industry headquarters may be located anywhere on the globe, and their stocks are traded on leading stock exchanges. The number of employees is usually in the tens of thousands. Potential Annual Earnings Scale. According to the BLS, in 2009 the average overall salary of all workers in the metal ore mining industry was $53,010 and the average overall salary of all workers in the nonmetallic mineral mining industry was $40,730. In the metal ore mining industry, on average, mining and geological engineers earned $78,780, construction and extraction workers earned $49,080, construction and extraction supervisors earned $70,900, and general and operations managers earned $145,800. In the nonmetallic mineral mining industry, on average, mining and geological engineers earned $72,040, construction and extraction workers earned $39,660, construction and extraction supervisors earned $58,900, and general and operations managers earned $99,940. Clientele Interaction. Because the big mining companies are so large, they will interact with many different types of people, such as purchasers of their mineral products, individuals who live around their mining operations, and governmental representatives from the states or countries where they are located. Relations with stockholders are fairly routine; the annual meeting is attended by only a tiny fraction of the stockholders and management usually gets its way when critical items are up for a vote. Amenities, Atmosphere, and Physical Grounds. A large mining company’s operations are spread around the globe, and there may be more than one corporate office. This office will be a handsome place in a prestige building, always located in a major city. Senior officers will spend most of their time here, providing overall direction for the company’s far-flung enterprises. The entertainment of prospective business partners or purchasers of the company’s products will be a major activity for the top company officials, and for this purpose they will need fine restaurants, a beautiful home in which to entertain, and access to a country club that offers golf as one of its amenities. Field operations will be centered around the company’s mines. These may be surface operations, with enormous open pits, or underground mines with miles of tunnels. If the mine is a metal

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mine, nearby there will probably be a concentrating plant to enrich the ore, a smelter to remove the waste material from it, and a refinery to purify the metal for sale. The mine itself may be in a remote and rugged place. Freeport-McMoRan’s Grasberg Mine, the largest gold mine in the world, is located at a height of over 4,000 meters (14,000 feet) atop a mountain in Papua, Indonesia. Working conditions in such faraway places can be harsh. Grasberg is cold—a glacier is nearby—and many people experience altitude sickness at that elevation. There are other disadvantages as well. Two workers died in landslides in 2000 and two in a 2003 slide; five were also injured in the second slide, and six were reported missing. Separatist rebels are also a problem. Three teachers employed by Freeport, including two Americans, were killed in an ambush on the company road in 2003. Three more died in two separate incidents on the same road in 2009, and six were wounded in an ambush on January 24, 2010. Typical Number of Employees. The number of employees in large mining companies can be huge. Freeport-McMoRan has thirty thousand, and Rio Tinto has thirty-five thousand. Most of these are hard-hat workers. Executive management staffs remain fairly small. Traditional Geographic Locations. The corporate headquarters for large mining companies can be anywhere in the world, perhaps near the company’s first mines, or in a major financial center where the company can obtain financing. Field offices are always located near the company’s mines. Pros of Working for a Large Mining Company. For corporate officers, large mining businesses offer highly paid careers with excellent fringe and retirement benefits. Officers and their families enjoy affluent lifestyles in major metropolitan settings with fine health care and excellent schools. Similar advantages apply for the rest of the corporate office personnel, but on a smaller scale. Managers of field operations may be able to create a comfortable lifestyle for themselves, but for average workers in the company’s far-flung operations, the biggest advantage is a fairly reliable job with an adequate salary and some benefits. If the company provides housing, a store, and other amenities, that will be even better.

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Cons of Working for a Large Mining Company. For a corporate officer, the stress of the job can be considerable. Huge sums of money are at risk every day, and mishaps due to poor judgment or unanticipated economic events may cost officers their jobs. Directors represent stockholders and can terminate CEOs’ tenures at any time. Employees at lower levels may encounter job stresses too. A large mining company is not a supportive, family-type operation. Supervisors can be ruthless because their overall concern is for the “bottom line.” Added to a lack of job security at all levels are the dangers that personnel may face. Corporate officers and managers often travel to remote locations by company jets and mishaps are not unheard of. Hard-hat workers perish in industrial accidents. Costs Payroll and Benefits: Pay scales in large mining businesses are lush for the corporate elite, providing generous bonuses and incentives awards in addition to a salary that may be in the millions. Pay scales for middle-level employees and mine workers will be standard for the industry, with the usual fringe benefits, such as vacation time and sick leave. The skyrocketing cost of health insurance has been a growing concern for all companies and this may result in gradual cutbacks in these benefits in the years ahead. Supplies: Large mining companies require a variety of supplies for the offices and the mines. Each phase of the operation has its special needs. Exploration geologists need helicopters to reach remote destinations and rigs to drill for underground samples. Surface mines need huge power shovels and giant trucks. Underground mines need mechanized drilling equipment and plenty of explosives. Processing of metal ores requires concentrators, smelters, and refineries, each one a large and complex operation in itself. There has to be a company jet so the corporate elite can travel in style. Utilities: The power needs of large mining companies are huge, especially in the underground and ore-processing operations. Telephone, cable, and Internet needs are complex too, in order for the officials at corporate headquarters to keep in touch with distant operations. Taxes: Large companies must pay local, state, federal, and international income and property

taxes, as well as any applicable excise taxes, land leases, and so on.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of the mining industry depends greatly on the size of the operation. In the smallest mines, the owner may handle all the tasks associated with the operation or may be assisted by family members and a few part-time workers. As mining companies increase in size, however, more and more people will be required to do a greater variety of tasks. The following umbrella categories apply to the organizational structure of businesses in the mining industry: ■ Executive Management ■ Administrative Support ■ Information Technology ■ Exploration ■ Surface Mines ■ Underground Mines ■ Mineral Processing ■ Ancillary Job Roles Executive Management A relatively small core of experienced executives will direct and coordinate the daily operations of the company. Their role is to oversee the various subdivisions, many of which may be conducted in other countries, ensure that the company is doing well financially, set goals for the company’s future development, and see that these goals are carried out. Most of the executives will have degrees in business administration, marketing, accounting, or related fields. Their compensation will be generous, with high salaries, stock option grants, and incentive awards for reaching certain targets. They will also have a variety of perks, such as countryclub memberships, travel allowances, company cars, and use of the company jet. A board of directors, which is elected by the stockholders, is the ultimate source of authority for the company. The board meets regularly, picks the company’s CEO, and deals with such matters as the CEO’s compensation and the award of stock options to officers. A large mining company’s executives will have sala-

Mining Industry ries from hundreds of thousands of dollars a year to over a million dollars a year for those in the highest positions. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) President Vice President of Exploration Vice President of Investor Relations Secretary-Treasurer

Administrative Support Because senior officials are out of the office much of the time, either dealing with local issues or visiting the company’s mining operations, a large and highly trained administrative staff is needed to manage the headquarters and regional offices while they are gone. There will be executive secretaries and administrative assistants for company officials, and an office supervisor to direct the large number of clerks, interns, and other personnel doing data entry and other routine chores. Bookkeepers, accountants, and auditors will be on the payroll, and the company will either employ a highpriced legal team or have lawyers on staff. Someone will have to deal with stockholder relations and send the necessary information to a transfer agent. In addition, the company has to communicate its story to the public, so there will be a public relations or media office to send out press releases about company doings and prepare the company’s annual report and other publications. Administrative support staff will be employed full time, with generous fringe benefits. Salaries will range from $40,000 a year to $110,000 a year depending on the position. Administrative support occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Office Supervisor/Manager Executive Secretary Administrative Assistant Bookkeeper Accountant Auditor Public Relations Officer Sales Manager

■ ■

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Purchasing Manager Clerk

Information Technology Computer specialists are needed to build the company’s information technology (IT) networks and maintain the company’s Web site. High-speed and protected networks are required throughout the company, especially if there are numerous overseas operations. Senior officials and managers need to be able to communicate with one another on a moment’s notice regarding developments requiring urgent attention. CEOs may have to reach directors regarding possible takeover threats, and geologists want to inform their supervisors of discoveries before other companies get there first. In the field and overseas, handheld devices are useful, allowing personnel to read their e-mail while away from their desks; information can also be recorded on these devices for later retrieval. In the mines and at ore-processing operations, such devices can enable personnel to digitally record data as procedures take place or send pictures of what is happening to superiors at the office. All these systems need constant attention, so IT personnel are employed full time. Salaries range between $50,000 and $80,000 per year, with excellent benefits. IT occupations may include the following: ■ ■ ■ ■ ■

Information Systems Manager Network Administrator Software Engineer Computer Programmer Computer Support Specialist

Exploration The exploration for new mineral deposits is an essential operation for a mining company because natural resources are not renewable. Once they are removed from the ground, they are gone forever and must be replaced by new reserves elsewhere if the company is to remain viable. This means that the exploration for new mineral prospects is an ongoing activity for mineral companies, and a staff of geologists and other trained personnel is required to perform this activity. Geologists need to study maps and published reports about the area to which they are going before going into the field, and they must collect the necessary equipment and supplies. If the location is in a foreign country, they

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Mining Industry OCCUPATION

SPECIALTIES

Mining and Geological Engineers Specialty

Responsibilities

Design engineers

Design mining and oil-field machinery.

Mine safety engineers

Inspect underground or open-pit mining areas and train mine personnel to ensure compliance with state and federal laws and accepted mining practices designed to prevent mine accidents.

Mining and oil well equipment research engineers

Conduct research to develop improved mining and oil-well equipment.

Mining and oil-field equipment Conduct tests on mining and oil-field machinery and test engineers equipment.

need to learn about the culture and obtain permission from the foreign government before departing. Frequently, the location they are heading for will be so remote that the only way to reach it is by helicopter. When they arrive, they may camp at the site or return each night to the nearest settlement. Drilling equipment may be called for if the prospect is underground and surveyors may be needed to map the prospect’s dimensions. When the potential value of the prospect has been determined, they will send their findings to corporate executives who will decide whether to proceed with mining. Salaries for exploration personnel will range from $40,000 to $110,000 per year, depending on the job description. Exploration occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Exploration Manager Geologist Geological Assistant Mining Engineer Earth Driller Surveyor Drafter Helicopter Pilot

It is said to be the largest human-made excavation on Earth, and astronauts say they are able to see it as they pass overhead in the space station. The mine is roughly circular, with a series of benches that spiral downward to the pit bottom. Ore is loosened from the bench walls by drilling holes and blasting the ore out with explosives. Several blasts take place each day. Following each blast, giant electric power shovels that can scoop up to 98 tons at a time move into the area and load the broken rock on huge haul trucks that cost $3 million apiece. These trucks wind down to the ore crusher where the pieces of rock are reduced to the approximate size of grapefruits. These are then loaded on a conveyor that slopes down to a refinery at the mouth of the canyon. The conveyor belt at Bingham Canyon has a total length of 8 kilometers (5 miles). Salaries for workers in surface mines range from $40,000 to $110,000 per year depending on the position. Surface mine occupations may include the following: ■ ■ ■ ■

Surface Mines Open-pit mines can be huge. The Bingham Canyon copper mine in Utah is 4 kilometers (2.5 miles) across and 1.2 kilometers (0.75 mile) deep.

■ ■ ■ ■

Surface Mine Supervisor Blast Hole Driller Explosives Worker Electric Power Shovel Operator Haul Truck Driver Mobile Heavy Equipment Mechanic In-Pit Crushing Machine Operator Conveyor Operator

Mining Industry Underground Mines The layout of an underground mine is complex. Entrance is provided by means of a horizontal tunnel if the operation is at ground level or by a vertical shaft if the ore is deeper down. From the shaft, horizontal passageways called workings are driven laterally at 160-meter (100-foot) intervals so that miners can follow the veins of ore. In the TauTona Mine in South Africa, there are 800 kilometers (500 miles) of these workings. Mining methods in underground mines depend on the type of mineral being mined. If the mineral is soft, it may be sliced off the tunnel walls or roof by scaling machines. When the bedrock is hard, holes must be drilled and the ore blasted out. By working the vein upward, it may be possible to have the loosened ore slide down through a chute into the car of an ore train known as a “tram.” The tram then carries the ore to a hoist where it is lifted to the surface in “skips” for processing. Timbers may be used to hold up the mine roof as the ore is removed. The deepest under-

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ground mines in the world are the South African gold mines. The TauTona Mine is the deepest of all, with a depth of 3.9 kilometers (12,792 feet). Earth temperatures in this mine are extreme. On the rock face in the lowest workings, the temperature is 60 degrees Celsius (140 degrees Fahrenheit), and air-conditioning is required to bring mine temperatures down to a level of 28 degrees Celsius (82.4 degrees Fahrenheit). Underground mining is a dangerous business, and four men died at this mine in 2008. Salaries in underground mines will vary from $40,000 to $110,000 per year, depending on the position. Underground mine occupations may include the following: ■ ■ ■ ■ ■ ■

Underground Mine Supervisor Mining Machine Operator Mobile Drill Operator Explosives Worker Excavating Machine Operator Loading Machine Operator

An excavator works at a mine. (©Sergey Milovidov/Dreamstime.com)

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■ ■

Mining Industry

Heating, Ventilation, and AirConditioning (HVAC) Specialist Tram Operator Hoist Operator

Mineral Processing Processing methods in the mining industry vary according to the mineral being mined. In some mines, such as those where clay is dug, the mineral is ready to be sent to the consumer, with appropriate packaging, as soon as it comes out of the ground. In metal mines, processing is more complex. When the crushed ore leaves the mine, further reduction in size by grinding may be required. The powdered ore goes to concentrators to remove waste rock, which is known as “gangue.” Concentration methods for the various minerals vary from hand sorting for gemstones and other fragile minerals, to gravity separation for heavy minerals, various flotation methods, or the dissolving of the ore in fluids like potassium cyanide, mercury, and acid. Magnetic and electrostatic concentration methods are used. For metals that are tightly bonded to other elements, additional processing known as smelting may be required. Here the ore is melted in a blast or reverberatory furnace with a flux, which combines with the unwanted elements to form a floating slag. The metal is then drained off at the base of the furnace. Even after smelting, copper must be purified by electrolytic refining in order to produce a product suitable for industrial use. Salaries for personnel in mineral processing will vary from $40,000 to $110,000 per year, depending on the position. Mineral processing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Concentration Mill Supervisor Smelter Supervisor Refinery Supervisor Separating Machine Operator Metal-Refining Furnace Operator Power Plant Operator Industrial Machinery Mechanic Inspector

Ancillary Job Roles Mining companies require a number of departments that are ancillary to the administrative staff. One is a department of human resources, which is

responsible for personnel matters such as hiring and dismissal of employees, their overall supervision, and financial matters affecting employees such as payroll, preparation of W-2 forms, health insurance, benefits, and retirement. Complaints by employees about unfair treatment or sexual harassment are handled by the department of human resources as well. The company will also employ a labor relations specialist to deal with union matters and a compliance officer to be sure that company operations are in accordance with federal, state, and local laws. A security office will be needed to watch over the company’s various operations. Much confidential information is kept in company files, especially at the headquarters office, and must be protected; overseas operations may face threats from local agitators who may oppose the company for political reasons. Freeport-McMoRan’s employees have been fired on several times at its Grasberg mine in Indonesia. Buildings and grounds is another important ancillary department. The company’s image is important, and facilities must look well, especially the headquarters office. Salaries for these personnel will vary from $30,000 to $110,000 per year, depending on the position. Ancillary occupations may include the following: ■ Human Resources Director ■ Labor Relations Specialist ■ Compliance Officer ■ Security Director ■ Security Officer ■ Director of Buildings and Grounds ■ Maintenance and Repair Worker

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be in decline. This is especially true for the mining of metals, which is the predominant segment of the industry. The BLS predicts that employment in the metal mining industry will fall by 10 percent between 2008 and 2018. On the other hand, employment in the mining of nonmetals, which is the smaller segment of the industry, is expected to be stable. The predicted employment drop in metal mining can be attributed to several factors. One is the

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rapid increase in metal prices during PROJECTED EMPLOYMENT the years prior to 2008. The higher FOR SELECTED OCCUPATIONS prices encouraged metal producers to expand their exploration efforts Mining and Quarrying and to ramp up production. In many locations, older mines, which had Employment been closed previously because they 2009 Projected 2018 Occupation were uneconomical, were put back into production. A good example of 10,850 10,400 Continuous mining machine this was the announcement on Januoperators ary 22, 2008, by the American Bo11,420 13,700 Excavating and loading nanza Gold Corporation of Vancoumachine and dragline ver, British Columbia, that it was operators going to reopen Arizona’s Copperstone Mine. This mine had been 215,500 179,400 Extraction workers closed in 1993 because it was deemed 8,450 23,900 First-line supervisors/ uneconomical based on the price of managers of construction gold at that time. The company trades and extraction workers stated that the reason for reopening the mine in 2008 was that the price of 23,090 31,400 Operating engineers and gold had reached $900 per ounce. other construction As prices for gold and other leading equipment operators metals level off in the years ahead, it 13,820 24,200 Truck drivers, heavy and is believed that companies will slow tractor-trailer down their hiring or start cutting back. This, in turn, will reduce the Source: U.S. Bureau of Labor Statistics, Industries at a Glance, demand for new employees in the Occupational Employment Statistics and Employment years leading up to 2018. Projections Program. Data are for 2008. Another factor that will keep employment low in metal mining is that mining companies can no longer ignore environmental concerns. The days when a large company could dig a hole 1.6 kiThe mine generates nearly 700,000 tons of this lometers (1 mile) across and 0.8 kilometers (0.5 waste rock daily, and the only place to put it is mile) deep without permits are over. Not only did around the mine itself. In 2005, the last year for those companies create massive eyesores, but also which accurate figures are available, this waste rock the waste rock was simply dumped in the area surhad accumulated to a depth of 275 meters (900 rounding the mine, and chemical effluents from feet) in some places and covered 8 square kilomethe processing plant flowed into the nearest river. ters (3 square miles) of formerly pristine mountain Today, numerous regulations define the steps valleys. needed before any kind of mining operation can The crushed ore from the mine is in the form of begin in the United States; similar regulations are a slurry composed of ore mixed with water, and it beginning to affect foreign operations as well. goes down a river valley to the concentrators for proAn article in The New York Times for December cessing before it is shipped to the smelters. Chemi27, 2005, describes the environmental impact that cally charged waste from the concentrators, with the Freeport-McMoRan’s Grasberg Mine in Indonesia color and consistency of wet cement, is then spread has had on one of the world’s last untouched landas “tailings” over 230 square kilometers (90 square scapes. About 1 percent of what is dug out of the miles) of former wetlands around the river mouth. mine each day is copper and gold. The remaining The levees surrounding the tailings ponds are 21 99 percent is waste rock that has to be disposed of. meters (70 feet) high and will soon be overtopped.

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Residents say that the river no longer has any fish in it and that drinking water from their wells has a greenish color. The company states that it is following the country’s environmental regulations to the letter, but the country is a 9.3 percent stockholder in the mine and the country’s soldiers are the armed guards that keep unwanted visitors away. Another factor that will contribute to the predicted drop in employment opportunities for workers in metal mining is that many existing mines are now approaching exhaustion. New mineral prospects are needed to replace them, and these are becoming more difficult to find. In addition, the metal mining industry has always provided poor returns for stockholders because metals prices are so cyclical. Freeport-McMoRan earned $2.9 billion in 2006, earned $6.5 billion in 2007 when metal prices peaked, had a loss of $12.7 billion in 2008 when they collapsed, and then earned $6.5 billion in 2009 when prices rose again. Such volatility makes it difficult for mining companies to raise money for new undertakings. The BLS predicts that employment opportunities in nonmetallic mining will remain stable between 2008 and 2018. The nonmetallic minerals that are now being mined on a large scale are sand, gravel, and crushed stone for road building and construction. Large deposits of these substances are available, and provided that the economy remains stable through 2018, these deposits are more than adequate for anticipated needs. Nonmetallic minerals are bulky and heavy, so that their transportation costs are high. This means they are used locally and not shipped overseas. As a result, their prices are not subject to the wide swings of international markets. This makes for stability of prices until 2018 and anticipated stable job opportunities in the industry. Employment Advantages Even though employment in metal mining is predicted to decline between 2008 and 2018, segments of this industry still offer interesting opportunities. The prospect of “striking it rich” is always present when working for a midsize mining company. These companies are constantly prospecting for new mineral deposits, and company stock, which has often been bought for pennies a share or received as an option grant, may suddenly be worth a large sum if a significant metal find is made.

Larger mining companies offer interesting job opportunities too. Persons employed in exploration work, such as geologists and mining engineers, will visit remote and scenic areas in search of new mineral finds, so these jobs are attractive for the adventure-minded with a love of nature. Opportunities for supervisory jobs are also a possibility. Because of retirements, supervisory personnel will be needed at all levels in the mining industry during the years ahead. This will give capable individuals at the lower levels an opportunity to move ahead to more challenging and financially remunerative positions. Job opportunities in the mining of nonmetallic substances such as sand, gravel, and crushed stone are generally part time as these substances are mined from surface operations that may close down when demand is slack, or during the winter months if the climate is severe. Part-time work is also characteristic of the tourist-oriented gem mines, so both fields are well suited to the financial needs of high school and college students. Annual Earnings According to the United States Geological Survey’s Minerals Yearbook, the total nonfuel mineral industry earnings for the United States in 2007 were $69.6 billion, up 6 percent from the $65.5 billion earned by the industry in 2006. These figures are deceptive, however, for 2007 was a boom year for commodity prices. Subsequently, in 2008 and 2009, commodity prices collapsed during a global economic recession. Freeport-McMoRan’s 2009 earnings were down 15.5 percent from its earnings in 2008, for example. During 2010, world economies began to show signs of a recovery. Hopefully, this will be reflected in improved commodity prices and in higher earnings for both the nonmetal and metal mining companies. Such improvement should, in turn, result in more favorable prospects for job opportunities in these industries.

RELATED RESOURCES FOR FURTHER RESEARCH American Institute of Mining, Metallurgical, and Petroleum Engineers 8307 Shaffer Parkway

Mining Industry Littleton, CO 80127-0013 Tel: (303) 948-4255 Fax: (303) 948-4260 http://www.aimehq.org National Mining Association 101 Constitution Ave. NW, Suite 500 East Washington, DC 20001-2133 Tel: (202) 463-2600 Fax: (202) 463-2666 http://www.nma.org National Stone, Sand, and Gravel Association 1605 King St. Alexandria, VA 22314 Tel: (703) 525-8788 Fax: (703) 525-8788 http://www.nssga.org

ABOUT

THE

AUTHOR

Donald W. Lovejoy holds an A.B. degree cum laude in geology from Harvard College and A.M. and Ph.D. degrees in the same subject from Columbia University. He is associate professor and coordinator of the Department of Earth Science/ Oceanography at Palm Beach Atlantic University in West Palm Beach, Florida. Among his many publications are reports on the Rip Van Winkle Gold Mine near Elko, Nevada, the Carrefour Raymond marble near Jacmel, Haiti, and the coquina and shell rock deposits found along the east coast of Florida.

FURTHER

READING

Ali, Saleem H. Treasures of the Earth: Need, Greed, and a Sustainable Future. New Haven, Conn.: Yale University Press, 2009. Bateman, Alan M. Economic Mineral Deposits. 2d ed. New York: John Wiley & Sons, 1950. Bishop, A. C., A. R. Woolley, and W. R. Hamilton. Guide to Minerals, Rocks, and Fossils. Buffalo, N.Y.: Firefly Books, 2005. Bouquet, Tim, and Byron Ousey. Cold Steel: The Multi-Billion-Dollar Battle for a Global Empire. Toronto: Key Porter Books, 2008.

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Burke, D. Barlow, and Robert E. Beck. The Law and Regulation of Mining: Minerals to Energy. Durham, N.C.: Carolina Academic Press, 2010. Dietrich, R. V., and Brian J. Skinner. Gems, Granites, and Gravels: Knowing and Using Rocks and Minerals. New York: Cambridge University Press, 1990. Erlichman, Howard J. Conquest, Tribute, and Trade: The Quest for Precious Metals and the Birth of Globalization. Amherst, N.Y.: Prometheus Books, 2010. Hill, Mary. Gold: The California Story. Berkeley: University of California Press, 1999. Horberry, Tim, Robin Burgess-Limerick, and Lisa J. Steiner. Human Factors for the Design, Operation, and Maintenance of Mining Equipment. Boca Raton, Fla.: CRC Press, 2011. Perlez, Jane, Raymond Bonner, and Evelyn Rusli. “Below a Mountain of Wealth, a River of Waste.” New York Times late ed. (East Coast), December 27, 2005. Thompson, Tamara. Uranium Mining. Detroit: Greenhaven Press, 2010. Tilton, John E., ed. World Metal Demand: Trends and Prospects. Washington, D.C.: Resources for the Future, 1990. United Nations Statistical Division. Statistical Yearbook. 51st ed. New York: United Nations, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Geological Survey. Mineral Commodity Summaries, 2006. Washington, D.C.: U.S. Government Printing Office, 2006. Available at http://minerals.usgs.gov/minerals/pubs/ mcs/2006/msc2006.pdf. _______. Minerals Yearbook, 2007. Washington, D.C.: U.S. Government Printing Office, 2007. http://minerals.usgs.gov/minerals/pubs/ myb.html.

©Isabel Poulin/Dreamstime.com

Motion Picture and Television Industry

INDUSTRY

SNAPSHOT

General Industry: Arts and Entertainment Career Cluster: Arts, A/V Technology, and Communication Subcategory Industries: Cable Broadcasting; Motion Picture and Video Distribution; Motion Picture and Video Exhibition; Motion Picture and Video Production; Postproduction Services; Satellite Television Broadcasting; Television Broadcasting Networks; Television Broadcasting Stations Related Industries: Advertising and Marketing Industry; Apparel and Fashion Industry; Broadcast Industry; Internet and Cyber Communications Industry; Music Industry; Publishing and Information Industry; Theater and Performing Arts Industry; Themed Entertainment Industry; Video, Computer, and Virtual Reality Games Industry Annual Domestic Revenues: Film industry: $9.8 billion USD (Motion Picture Association of America, 2008); television industry: $17 billion USD (MediaBuyerPlanner, 2009) Annual International Revenues: Film industry: $18.3 billion USD (Motion Picture Association of America, 2008) Annual Global Revenues: Film industry: $28.1 billion USD (Motion Picture Association of America, 2008); television industry: $280 billion USD (£194 billion GBP; OFCOM, 2008) NAICS Numbers: 5121, 515120, 515210

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INDUSTRY DEFINITION Summary The motion picture and television industry creates and disseminates audiovisual entertainment, news, sports coverage, documentary material, and other film and video content to viewers worldwide. The industry comprises two major components: The film industry provides small-, medium-, and large-scale productions spanning a wide range of genres. The television industry provides similar entertainment products for broadcast directly to viewers’ homes. Each of these components has seen dramatic growth over the last several decades, and both have enjoyed relative stability. Motion picture and television production constitute a multibillion-dollar industry with visibility in virtually every country in the world. Employing millions of workers across a broad spectrum of professional pursuits,

Motion Picture and Television Industry the industry is perhaps best known for its high profile in Hollywood, New York, Canada, Great Britain, and India. However, it has seen consistent growth into other regions, maintaining a presence in every developed country and in most developing nations as well. History of the Industry The motion picture industry owes its roots to the eighteenth century, when moving projected images were first introduced by the magic lantern. This device, the first slide projector, projected images that had been drawn on glass slides. Some of these slide projectors incorporated levers and other devices to bring simple movements to the screen; for example, in a comic slide, a man’s pants might fall down when the lever was pushed. Magic lanterns remained popular through the mid-1800’s. Even those that did not move helped form the foundation of the later cinema by creating a language for telling stories on a screen. Such cinematic conventions as the establishing shot and

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shot-reverse shot were invented by magic lantern devisers who used them to order the still images from which they formed their narratives. The photographic camera was invented in 1826 and became popular beginning in 1839. In 1879, Eadweard Muybridge developed the zoopraxiscope, a device that created the illusion of motion by projecting a series of still images based on photographs he had taken of people and animals in motion. (Because of the way the device worked, it was necessary to project elongated drawings based on photographs to compensate for the zoopraxiscope’s tendency to shorten images.) The zoopraxiscope was itself based on an earlier device, the phenakistoscope, which similarly created simple moving images that were viewed by individual spectators looking through a series of slits in the side of a spinning disc. In 1888, Muybridge and American inventor Thomas Alva Edison met at Edison’s West Orange, New Jersey, laboratory. The two collaborated on the development of the zoopraxiscope and Edi-

Movie theaters are just one source of revenue for the motion picture industry. (©Alexander Podshivalov/Dreamstime.com)

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son’s groundbreaking phonograph. Edison, however, balked at the notion of full collaboration, looking instead to develop a motion picture system that could both capture and recreate motion directly. Edison introduced the kinetoscope, a peepshow device that was capable of recording and reproducing objects in motion, for which he received a patent in October, 1888. When Edison’s product was unveiled a year later, the search began for a medium by which the new technology might record its images. After exploring several avenues, Edison and his colleagues settled on celluloid film purchased from Eastman. From that point forward, the technology attracted considerable attention. In 1891, kinetoscopes began to appear in the form of coin-operated machines in public parlors in New York and Europe. Edison resisted creating motion picture projectors based on the kinetoscope, however, for simple economic reasons. A coin parlor would purchase six or eight kinetoscopes, so it could serve six or eight

customers at a time. A machine that projected an image onto a screen would serve many more customers, so Edison feared he would sell far fewer of them. In 1895, the development of film technology took a great leap forward when the French brothers Auguste and Louis Lumière introduced their cinematograph, a single portable device that was a camera, film developer, and projector all in one. The Lumières began producing short films for public viewing. One of their most well-known films was L’Arrivée d’un train à La Ciotat (1896; Arrival of a Train at La Ciotat; better known as Train Arriving at a Station). Viewers unaccustomed to moving images reportedly thought the train was coming toward them and reacted with shock at the realism of the image. Over the course of the decade after the Lumière films gained prominence, film production became more standardized and marketed to audiences around the world. With the increased popularity of films in the

There are more than a dozen film studios, as well as nearly a dozen television studios, in greater Los Angeles and Hollywood alone. (©Dreamstime.com)

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Lumière vein, known as “actualities,” filmmakers concurrently sought new ways to develop their technology. In one of the first examples of special effects, for example, French magician Georges Méliès discovered that by stopping the camera mid-scene, rearranging the scene, and starting the camera again, he could cause characters and objects to appear and disappear in a variety of manners. The novelty and creativity that films fostered at the end of the nineteenth century helped lay the groundwork for the industry’s explosive growth during the twentieth century. Films were produced by the hundreds in Europe and the United States, with new techniques being employed to develop characters and scenes. Over the decade from roughly 1907 to 1917, the language of classical cinema was developed and standardized. By the end of the 1910’s, film was both an industry and a medium of standardized communication. Would-be actors flock to film capitals such as Hollywood and New York. During the 1920’s, the industry (©George Mayer/Dreamstime.com) began to move and jell in Hollywood. Large studios were built that could highly lucrative and diverse industry that would produce countless films to meet audience decontinue to grow and revolutionize over the course mands. Grandiose productions such as those of of the next several decades. producer Cecil B. DeMille, comedies featuring the The so-called studio system in Hollywood lasted Keystone Kops and the legendary Charlie Chaplin, roughly from 1917 to 1960. During that time, it was and many artistic pieces appealed to a growing aucommon for creative talent—including actors, dience. Hollywood was not the only place in the writers, directors, costumers, and so on—to work world to produce films, however. From Germany “on contract” at a given studio. These professioncame such classics as Nosferatu (1922) and Metropoals received weekly salaries year-round, and they lis (1927). In France, artistic and avant-garde films worked on whatever project their studio assigned emphasized characters and scenery. The Soviet them. After the end of the studio system, reliable Union used well-crafted and emotional filmmaksalaries independent of a given production being as part of its communist propaganda. came a thing of the past. Instead, creative profesIn 1927, Warner Bros. released The Jazz Singer, sionals were paid by each production on which which used a new synchronized sound technology. they worked and had no source of income between (Sound experiments date back to the 1890’s, but jobs. Studios continued to employ executives, inthe technology used in The Jazz Singer proved more cluding some producers, but they no longer pereffective and popular than had earlier attempts.) manently employed actors, writers, directors, and The Jazz Singer was followed by Steamboat Willie other creators. (1928), the debut of Walt Disney’s cartoon character Mickey Mouse. The introduction of sound When World War II came to an end in 1945, another medium began to grow in popularity. Televiopened the floodgates for cinema, powering a

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A television show host gestures to get his point across. (©Haider Yousuf/Dreamstime.com)

sion had been introduced several years earlier at the 1939 World’s Fair, but with the economic boom of the postwar period, television became both extremely popular and affordable for consumers. The number of television stations increased dramatically, as sales of television sets grew by 500 percent. Over the course of the next few decades, picture quality improved. The diversity of programs also grew, as comedies, game shows, mysteries, dramas, and other shows were broadcast, in addition to news programs and other scheduled items. Advances in television technology also made it easier to produce shows anywhere, increasing viewers’ access, as well as the volume of entertainment options available. By the late twentieth century, television and film had become the most popular forms of entertainment, not just in the United States but also around the world. The Industry Today The motion picture and television industry remains healthy, despite the negative global eco-

nomic conditions of the early twenty-first century. In fact, many economy-weary consumers around the world consider television viewing and motion picture attendance to be cost-effective “therapies.” Motion picture and television production are lucrative, revenue-generating businesses. Their impact on local economies has led them to be sought after by economies seeking a strong boost, and local governments compete to bring productions to their areas by offering tax breaks and other incentives. In the United States, the industry accounts for 2.5 million jobs, paying over $41 billion in wages to its employees, as well as over $38 billion for external vendors and businesses. In 2008, it generated $13 billion in federal and state income and sales taxes. The industry provides a wide range of entertainment opportunities for viewers and audiences around the world. There are more than a dozen film studios, as well as nearly a dozen television studios, in greater Los Angeles and Hollywood alone. Each of these studios generates a large volume of

Motion Picture and Television Industry films and programs to suit a broad variety of audience tastes. Hollywood does not hold a monopoly on the industry, however. Greater New York boasts over two dozen television studios, and a growing number of major studios are appearing in such areas as western Canada. One of the fastest-growing venues for film studios is located in Mumbai (formerly Bombay), India, where the Bollywood style of filmmaking has gained increasing worldwide popularity. The world’s largest broadcasting company is the British Broadcasting Company (BBC), with one of the planet’s biggest studio campuses located just outside London. The expanse of the motion picture and television industry is demonstrative of its profitability. For example, Bollywood (so-named by merging the location, Bombay, with the more well-known icon of the industry, Hollywood) grew in profits by 12.5 percent over five years to achieve a total worth of about $21 billion. Global box office receipts totaled just over $28 billion in 2008, with the North American box office accounting for about 35 percent of that total, or $9.8 billion. Interestingly, the Motion Picture Association of America (MPAA), which normally issues an annual assessment of global box office receipts for the film industry, issued a statement in 2009 indicating that it would no longer report such figures with respect to film production costs, which can provide a more effective profile of the true nature of the industry’s revenues. The reason, it said, was that the unreliable nature of contemporary data on costs made it too difficult to assess global profits accurately.

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Inputs Consumed by the Motion Picture and Sound Recording Industries Input

Value

Energy Materials Purchased services Total

$0.6 billion $5.0 billion $35.4 billion $41.0 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

The world’s film and television studios have increased not only in number but also in diversity. In addition to large-scale studios such as Universal, the BBC, and Walt Disney, many small and midsize studios are in operation. These smaller studios have surged in popularity, as filmgoers have flocked to theaters to see such independent films as Sony Pictures Classics’ Academy Award winner Crouching Tiger, Hidden Dragon (2000) and Blumhouse Productions’ Paranormal Activity (pr. 2007, rl. 2009). Each year, these smaller studios and arthouse films are featured at a number of major film festivals, including the Sundance Film Festival and the Tribeca Film Festival. Still, motion pictures and television programs are expensive undertakings and often rely heavily on major studio support. Peter Jackson’s sweeping The Lord of the Rings trilogy (2001-2003) was designed by his small The Motion Picture and Sound studio, Wingnut Films, but was funded heavily by the much larger New Line StuRecording Industries’ Contribution dios. Many major studios have branched to the U.S. Economy out into the arthouse market, giving them the ability to capitalize on the small, inValue Added Amount dependent market while retaining their Gross domestic product $61.1 billion significant funding and resources. TwenGross domestic product 0.4% tieth Century Fox Film Corporation, DisPersons employed 385,000 ney, and Miramax Films have all created Total employee compensation $27.2 billion smaller subsidiary studios with this trend in mind. Source: U.S. Bureau of Economic Analysis. Data are for The television industry has not seen 2008. as much explosive growth in the early twenty-first century as it did in the second

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half of the twentieth century. Television does continue to enjoy growth, however, despite the economic downturn of 2007-2009 and the rise of the Internet as a significant new competitor. Total global revenues for the television industry dropped in 2009 but were predicted to rebound consistently in the following years. The motion picture and television industry is an extremely complex business, comprising a wide range of networks and professions. The studio (which may be defined as both a facility in which productions and programs are filmed and a centralized business housing every component of film and television production) is a microcosm of the larger industry. Studio executives, writers, directors, actors, technical crews, and other business professionals all collaborate to create feature films, broadcast programming, and other films and television shows. It is an exciting field, offering its employees opportunities to help build films and programs that will be viewed by millions of people at a time. Much of the industry is also extremely competitive, with would-be actors and screenwriters flocking to film capitols such as Hollywood, New York, and Mumbai to join the industry. The creation of a major motion picture or television show is not limited to the studios. In fact, the industry frequently relies on many outside companies to assist in special effects, graphics, set design, and other aspects of film production. Films and programs are often filmed on location (meaning anywhere outside of a controlled sound stage or other studio set). Many film and television locations, however, do not correspond to their settings. For example, Los Angeles may be represented on screen by Los Angeles, Vancouver, Cincinnati, a sound stage in London, or any combination thereof. Indeed, many film and television locations are pieced together by filming in a number of cities or areas that present the most aesthetic and cost-effective sites. The film and television industry has experienced significant challenges during the early twenty-first century. Motion picture studios have consistently been challenged by illegal copies of their films being made available in many locations (most prominently East Asia and Eastern Europe). Such practices, referred to as piracy, cost the global industry an estimated $18.2 billion in 2005, according to the MPAA. The rise of the Internet has also cut into

profits for the industry, particularly in television, which has had to adapt quickly and repeatedly to the World Wide Web’s rapid growth as an entertainment medium. The motion picture and television industry continues to evolve, updating both its production technologies and its marketing tools. It is a worldwide business that has largely proven very durable in the face of tumultuous economies and other conditions.

INDUSTRY MARKET SEGMENTS Both films and television programs are created and distributed by production companies of various sizes. Often in contemporary practice, content is distributed by a different company than the one that creates it. It is standard practice for a studio to attempt to line up distribution for a given film in advance, because such contracts often entail investment by the distribution company to help finance completion of the film. The result of this arrangement is that both small and large studios may be involved in the same project to varying degrees. This is particularly true in the television industry, in which a major network may provide financial backing to and assert creative veto power over a show otherwise produced by a small, stand-alone company. Small Studios and Production Companies Small film and television businesses include small studios, as well as the minor production companies assembled to create individual properties. In television, such companies include Bad Robot, Mutant Enemy Productions, MTM Enterprises, and a host of other companies whose logos are flashed briefly at the end of television shows. Most small production companies establish relationships with major studios, and some are even housed entirely on the lots of those studios. Small studios, meanwhile, create or acquire independent films. Some produce films that are distributed by major studios. Others act primarily as arthouse distributors, finding and sometimes funding promising small-scale films and paying for their distribution to movie theaters in return for a percentage of their profits. Potential Annual Earnings Scale. The average annual salary of a motion picture studio executive,

Motion Picture and Television Industry according to the U.S. Bureau of Labor Statistics (BLS), was $224,820 in 2009. The average salary for an entertainment lawyer was $166,420, while film producers and directors earned an average of $108,420, writers earned an average of $86,820, film and video editors earned an average of $70,100, and camera operators earned an average of $52,420 per year. Actors earned a median hourly wage of $27.14, or a mean hourly wage of $47.65 (the discrepancy is indicative of the gap between the average salary and the highest salaries). For almost all of these occupations, salaries of employees of small studios are generally equal to or below these averages. Clientele Interaction. Client interaction in the motion picture and television industry varies based on the position held. The primary clients of a motion picture company are members of the filmgoing audience, while the primary clients of a television company are the advertisers who purchase television air time. Two-way interaction with individual fans is extremely limited, so film clientele interaction mostly takes the form of public relations ventures that are directed to fans and meant to make them feel addressed or that facilitate the formation of fan clubs and similar groups. Some film marketing professionals may also conduct focus groups to help plan future projects or shape the direction of current ones. By contrast, television companies carefully cultivate their relationships with advertisers, and account executives may interact quite closely with their most important show sponsors. Amenities, Atmosphere, and Physical Grounds. Motion picture and television studios, even small ones, are often relatively secure facilities, with guarded gates to keep random members of the public off their lots. Many small studios are located on the lots of major studios and share in their atmosphere and amenities, from studio cafeterias to sound stages. Studios are often charged with excitement tinged with tension, as the glamor of the business is constantly mixed with the reality of extremely long hours, frayed nerves, and tight budgets. In addition, film and television productions often operate on location, taking over entire neighborhoods with large trailers and police-provided security and converting city streets into ad hoc film sets. Typical Number of Employees. The number of employees at a small motion picture or televi-

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sion studio depends largely on the size and volume of films being produced. Some studios employ only a few people full time, drawing actors and performers on a contract basis as necessary. Others may have as many as one hundred full-time employees. Traditional Geographic Locations. Small studios are capable of operating in a wide range of venues. Their independence of Hollywood (both real and perceived) enables them to develop films in many settings. Many small studios, however, realizing the need to have access to actors and other film industry segments (such as sound stages and directors), operate in or near major film-industry centers such as Southern California, greater New York, London, and Mumbai. Pros of Working for a Small Studio or Production Company. Some small studios have lesscorporate, top-down atmospheres and structures than do large studios, so creative employees may experience or perceive less artistic intrusion by executives at smaller companies. These employees may be able to take on projects that they find more artistically satisfying, as well as to enjoy more artistic control over their projects. Many small studio features are created by one person, who may write, produce, direct, and star in the film. While small productions are not always financially rewarding, many workers appreciate the process of creating original and unique work. Cons of Working for a Small Studio or Production Company. Small studios may afford creative employees no more artistic control than do large studios, and they may lack the financial resources of larger companies. Although many small films flourish despite low budgets, the norm is that films require financial backing. If small companies seek such backing from large distribution companies, for example, they give up some of their creative independence as a result. Pay for employees (including actors) on a given film is generally lower at small studios than it is at larger studios. Limited budgets may also preclude small studios from filming in a particular locale or acquiring a marketable star or stars to act in a film. If a small studio seeks to distribute a film itself, the scope of its distribution may be seriously curtailed, limiting its ability to reach audiences and maximize its revenue potential and cultural impact.

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Costs Payroll and Benefits: Small studios pay executives, administrative support staff, and other permanent employees annual salaries. Those working on a particular film are generally paid either a monthly salary or an hourly wage for the duration of the project, although it is common for some positions (such as actor, writer, and director) to receive a flat fee for the entire project. Supplies: Small film and television studios require production equipment, artistic supplies, costumes, film editing hardware and software, lighting, microphones, and other light and heavy filmmaking equipment. They also require office supplies such as paper, files, computers, copiers, telephones, and so on. External Services: Because of their size and their limited resources, small studios often contract a number of external vendors. They may hire such vendors to provide such services as marketing and distribution, accounting, and casting. On production sets, they may also contract out equipment rentals, transportation services, and makeup and wardrobe services. They may also contract postproduction services, including special effects and sound mixing. Furthermore, smaller studios may rely on the funding of larger studios to support filming and distribution to theaters. Utilities: Small motion picture and television studios use a significant amount of electricity, as well as heating, water, and sewage services. They must also pay for telephone and Internet service. Taxes: Motion picture and television studios must pay income and property taxes, as well as any permitting fees levied for location shoots on public property. However, small studios are often given tax breaks by local and state governments in order to encourage their activities in communities that benefit from the film crews’ business. Midsize Studios Midsize studios are generally significant corporations that are nonetheless smaller than the major studios. They may include the largest production companies, as well as the creative divisions of some television networks and the largest independent film studios.

Potential Annual Earnings Scale. The average annual salary of a motion picture studio executive, according to the BLS, was $224,820 in 2009. The average salary for an entertainment lawyer was $166,420, while film producers and directors earned an average of $108,420, writers earned an average of $86,820, film and video editors earned an average of $70,100, and camera operators earned an average of $52,420 per year. Actors earned a median hourly wage of $27.14, or a mean hourly wage of $47.65 (the discrepancy is indicative of the gap between the average salary and the highest salaries). Generally speaking, employees of midsize companies tend to earn salaries in line with these national averages. Clientele Interaction. Client interaction in the motion picture and television industry varies based on the position held. The primary clients of a motion picture company are members of the filmgoing audience, while the primary clients of a television company are the advertisers who purchase television air time. Two-way interaction with individual fans is extremely limited, so film clientele interaction mostly takes the form of public relations ventures that are directed to fans and meant to make them feel addressed or that facilitate the formation of fan clubs and similar groups. Some film marketing professionals may also conduct focus groups to help plan future projects or shape the direction of current ones. By contrast, television companies carefully cultivate their relationships with advertisers, and account executives may interact quite closely with their most important show sponsors. Amenities, Atmosphere, and Physical Grounds. The work environment at a midsize television or motion picture studio is usually a dynamic and exciting one. The hours are sometimes long (although sometimes hours are shorter than the average work week), but the work is rarely dull. Each of the studio’s employee teams is expected to show professionalism and an ability to work with other areas of the operation. Typical Number of Employees. The number of people working at a midsize film or television studio depends on the size and volume of the productions underway at that institution. Often, such projects may have as many as a few hundred fulltime employees, as well as external vendors working in direct support of the production. As many

Motion Picture and Television Industry midsize studios are part of larger studio complexes, the number of employees varies greatly. Traditional Geographic Locations. Midsize film and television studios are typically located in major metropolitan areas or regions in which the motion picture and television industry are well established. Hollywood, Toronto, Mumbai, and London are home to some of the most extensive film and television studio systems, and many midsize studios are located within those larger company campuses. Pros of Working for a Midsize Studio. Midsize studios offer those who work for them the opportunity to work not only on independent films but also on major productions. Because they are often part of, or closely connected to, much larger production companies, midsize studios tend to have more diverse productions, some of which target the arthouse crowd and some of which are more commercial, major productions. In light of this diversity, midsize studios may achieve greater influxes of producer money, enabling them to provide above-average salaries. Cons of Working for a Midsize Studio. Many midsize film and television studios are subject to absorption into larger production companies. Thus, those who work for them may find their job stability somewhat unpredictable. Additionally, the increased potential for major productions may increase competition for jobs on those productions, making work more difficult to come by. Costs Payroll and Benefits: Studios pay executives, administrative support staff, and other permanent employees annual salaries. Those working on a particular film are generally paid either a monthly salary or an hourly wage for the duration of the project, although it is common for some positions (such as actor, writer, and director) to receive a flat fee for the entire project. Midsize studios may employ a significant number of full-time workers, including cafeteria staff, security guards, maintenance workers, and a host of other auxiliary personnel. Supplies: Midsize film and television studios require production equipment, artistic supplies, costumes, film editing and effects hardware and software, lighting, microphones, and other light and heavy filmmaking equipment. They also re-

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quire office supplies such as paper, files, computers, copiers, and telephones. External Services: Although many midsize motion picture and television studios are capable of performing a number of production effects and programs, many use external contractors. They may contract such services as special effects, casting, set construction, accounting, postproduction, and distribution. Utilities: Midsize studios use a large amount of energy, particularly electricity. They also, by virtue of their size, expend a significant quantity toward heating, water, and sewage service. Furthermore, midsize studios require extensive telephone and Internet capabilities to facilitate both intra- and intercompany communications. Taxes: Midsize motion picture and television studios must withhold income taxes from their full-time employees for state and national tax agencies. They must also pay real estate and corporate taxes, as well as permitting fees for location shoots on public property. They may receive tax breaks from states and municipalities seeking to draw film and television productions to their locations in order to benefit their local economies. Major Studios The major motion picture and television studios are the icons of the industry, located on studios whose back lots have hosted some of the most famous productions in history. Almost all major studios in the twenty-first century either are owned by or are portions of even larger multinational corporations with multiple entertainment and nonentertainment properties. For example, Disney owns the Walt Disney Studios, the Walt Disney Theme Parks, the American Broadcasting Corporation (ABC), ESPN, and several other television stations. NBC Universal, which owns both the National Broadcasting Company (NBC) and Universal Entertainment (the parent company of Universal Studios), is itself owned jointly by General Electric and Vivendi Universal. In addition to the divisions that give the company its name, it also owns the USA Network, Syfy (formerly the Sci Fi Channel), and many other television and Internet properties. Through Vivendi, the company is also tied to Universal Music Group (formerly MCA), among many other entertainment properties. As these examples

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demonstrate, it is often very difficult to draw the line between a single major studio and the portfolio of properties of which it is a part and which it owns. As a result, though amorphous, the major studios are massive, multinational, multibilliondollar corporations with many thousands of employees. Potential Annual Earnings Scale. The average annual salary of a motion picture studio executive, according to the BLS, was $224,820 in 2009. The average salary for an entertainment lawyer was $166,420, while film producers and directors earned an average of $108,420, writers earned an average of $86,820, film and video editors earned an average of $70,100, and camera operators earned an average of $52,420 per year. Actors earned a median hourly wage of $27.14, or a mean hourly wage of $47.65 (the discrepancy is indicative of the gap between the average salary and the highest salaries). Generally speaking, employees of the major studios earn salaries at least equal to and sometimes significantly greater than the average for their positions. Clientele Interaction. Client interaction in the motion picture and television industry varies based on the position held. The primary clients of a motion picture company are members of the filmgoing audience, while the primary clients of a television company are the advertisers who purchase television air time. Two-way interaction with individual fans is extremely limited, so film clientele interaction mostly takes the form of public relations ventures that are directed to fans and meant to make them feel addressed or that facilitate the formation of fan clubs and similar groups. Some film marketing professionals may also conduct focus groups to help plan future projects or shape the direction of current ones. By contrast, television companies carefully cultivate their relationships with advertisers, and account executives may interact quite closely with their most important show sponsors. Amenities, Atmosphere and Physical Grounds. Major studios are dynamic settings, with many working parts for each production, as well as multiple simultaneous productions occurring all on the same grounds. Major studios are typically large campuses with multiple sets and soundstages of varying sizes and configurations, and they may even have outdoor areas designated for filming as

well. Hours for employees vary, with some working fewer than thirty hours per week and others working more than fifty hours per week. Work is hardly routine, particularly when shooting on location, where work is concentrated and often intense in order to stay on budget and time. Typical Number of Employees. The number of employees on hand at a major film or television studio varies based on the number of productions underway, as well as the size of those productions. One of the world’s largest film and television studios, the BBC, has nearly twenty-three thousand employees. Twentieth Century Fox, based in Los Angeles, has twenty-five hundred employees. Traditional Geographic Locations. Major film and television studios are located around the world. Although the heaviest concentrations have long been in Southern California, London, New York, Toronto, and Mumbai, an increasing number of major studios are appearing in other metropolitan areas as a result of tax credits and incentives offered by those locales. Film studios are under consideration in greater Boston and in Michigan, as well as in Cape Town, South Africa (which has seen a surge of interest since the popular 2009 science-fiction film District 9 was shot on location there). Pros of Working for a Major Studio. The notion of working at a major studio is attractive for many who would like to work with the biggest names on the biggest films. Indeed, a major studio is filled with many different projects, offering a high degree of diversity and energy that is rarely found in any other industry. Salaries at major studios tend to be higher on average than those offered at midsize or small studios, largely because the productions and programs have higher budgets. Cons of Working for a Major Studio. One of the most challenging aspects of working at a major studio is the high level of competition for each position. Countless people actively pursue employment at major studios and, as a result, those who hold positions there are under heightened pressure to retain their jobs. In addition, actors and other members of the industry working for major studios on large-scale projects have high expectations. In light of these two factors, employees at major studios have very little margin for error during the course of their work.

Motion Picture and Television Industry Costs Payroll and Benefits: Studios pay executives, administrative support staff, and other permanent employees annual salaries. Those working on a particular film are generally paid either a monthly salary or an hourly wage for the duration of the project, although it is common for some positions (such as actor, writer, and director) to receive a flat fee for the entire project. The major studios often have massive payrolls at any one time, and almost all of their employees are represented by collective bargaining units. In addition to their creative staffs and contractors, the major studios employ many full-time support staff, including cafeteria and craftservices workers, security guards, maintenance crews, and a host of other auxiliary personnel. Supplies: Major studios use a sizable number of supplies during the course of their operations. During shooting, they require cameras, lighting, sound systems, and other equipment, as well as the tools and parts to maintain them. Offcamera, they need basic office supplies, including computers, telephones, presentation materials, and similar resources. Their technology requirements may be quite significant, including editing workstations, special effects workstations, and other postproduction computing resources, as well as networking systems and the general office support systems required by major corporations. External Services: Although many studios are self-reliant in many ways, they still use a great many external vendors for their operations. On the set, for example, they may contract caterers and transportation services. On location, they may use local labor for set and equipment management. It is common for even the largest productions to outsource their most sophisticated special visual effects and sound needs to companies that specialize in those services, though those companies may sometimes be subsidiaries of the major studios. Studios may also hire external security companies to provide security both within the studios and on location. Furthermore, they may utilize casting agencies to locate the most appropriate actors for the roles they need to fill. Utilities: Major film and television studios expect major utility expenses. Their operations, both

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while filming and in the course of their business activities, require a great deal of electricity and, in the case of colder geographical locations, heat (which may use oil or natural gas). Additionally, they must pay for water use, sewage, trash removal, and telephone and Internet services to handle inter- and intra-studio communications. Taxes: Major motion picture and television studios must withhold income taxes from their fulltime employees for state and national tax agencies. They must also pay real estate and corporate taxes, as well as permitting fees for location shoots on public property. They may receive tax breaks from states and municipalities seeking to draw film and television productions to their locations in order to benefit their local economies.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of the motion picture and television industry comprises myriad jobs and responsibilities. Often, many of the facets of a film or television production’s development span a plethora of professional trades and industries, in addition to occupations within the film and television industry. Each of these components works as part of an overall organization centered on the production or program being developed. The following umbrella categories apply to the organizational structure of businesses within the motion picture and television industry: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Directing Casting Acting Set Design Hair/Makeup/Costume Writing Special Effects Technical Crew Postproduction Marketing and Advertising Representation

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Executive Management The responsibility of managing the overall operations and productions of a given studio falls to studio executives. Studio executives are similar to a corporation’s executive management team. They review all incoming scripts, approve (or “green light”) productions, hire relevant personnel, fund productions, and ensure that projects are completed and distributed within a certain period of time. The task of managing multiple productions, approving future programs and films, and handling the overall operations of what is usually an extensive business enterprise requires a great deal of attention to detail, a strong ability to multitask, and a true love of the entertainment industry. Most studio executives ascend to their professional positions through extensive training and experience within the film and entertainment industry. However, as their responsibilities entail oversight and management of a large company, they must also have relevant business management training. Moreover, as so many entertainment companies are now part of larger enterprises, some executives may become successful managers of other divisions and then move laterally into the motion picture or television business. Many receive their training by earning advanced degrees in business management or related fields. However, many others arrive at their positions by way of long careers of working for studios from the ground up. Studio executives read and review countless potential films and programs and, as a result, must be able to quickly assess and approve or decline a large volume of scripts. They are supported in this regard by significant support staff, who read entire scripts and provide “coverage,” or brief summaries of each script’s plot, aesthetic quality, general marketability, and suitability for a studio’s specific portfolio of properties. Executives must be careful business managers, capable of developing budgets and analyzing the potential returns of future films and programs. Executive management occupations may include the following: ■ ■ ■ ■

President/Chief Executive Officer (CEO) Vice President Chief Operating Officer (COO) Chief Financial Officer (CFO)

■ ■

Executive Producer Producer

Directing Each film or television episode is overseen by a director, who is responsible for every aspect of that production. The director is the creative force behind the development and filming of a film, and has significant control over a given television episode as well. Working in concert with producers, directors select their cast and crew, select locations and sets, and establish shooting schedules. They must be familiar with all technical aspects of producing films, including the use of various camera angles and any alterations to scripts required to meet the limitations of the film. In addition to technical management, directors must manage films themselves, making adjustments to story lines, characters, or settings as necessary and guiding actors through their scenes. After shooting takes place, directors review footage to determine whether corrections are necessary. They select or approve final edits made by film editors, and they plan their shoots largely in order to provide editors with the material they need to do their jobs. In addition to directors themselves, films’ directorial staffs include first- and second unit directors (who oversee subsidiary shots on films, such as long shots of open desert and other establishing or atmospheric shots). They also include the professionals directly responsible for the look of the film. These professionals, who tailor their work to directors’ specifications, include directors of photography and cinematographers. Directors come from a variety of backgrounds within the film and television industry. They are not necessarily expected to receive advanced training in film direction. Indeed, it has become common for television actors to direct select episodes of their series. Directors must have extensive experience in the film or television industry, a strong understanding of each aspect of production (both technical and artistic), and a clear vision of the final product. Some are actors themselves, while others receive academic educations in film direction from formalized vocational programs. They must have strong organizational skills, keen artistic perspectives, and strong focus on narrative flow. Directing occupations may include the following:

Motion Picture and Television Industry OCCUPATION

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PROFILE

Cinematographer Considerations

Qualifications

Description

Composes the shots that constitute a film or television program, working with the director and providing instructions to camera operators.

Career cluster

Arts, A/V Technology, and Communication

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ASE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

■ ■ ■ ■ ■ ■

Director Director of Photography Cinematographer First Unit Director Second Unit Director Assistant Director

Casting Casting personnel solicit and screen actors auditioning for parts in films and television programs. Working closely with directors and producers, casting personnel arrange script readings and auditions to find actors who are well suited to play the parts for which they are cast. They also help write and negotiate contracts between producers and actors and, when necessary, work with actors and their agents to resolve contract issues. Casting personnel must have a thorough knowledge of both films and actors and an awareness of talent, as well as an understanding of those film genres where a particular actor or actress will excel.

Successful casting personnel have extensive client lists and strong networking ties within the industry. They must also have an ability to identify acting excellence and take strong direction from senior filmmakers. Casting personnel do not necessarily have to have advanced degrees. Rather, what is most important is a strong understanding of the film and television industry, outstanding experience, and a keen eye for what studio executives require. Casting occupations may include the following: ■ ■ ■

Casting Director Casting Agent Administrative Assistant

Acting Film and television performers come from a variety of backgrounds. Some are classically trained, while others begin their careers in other performance genres, such as comedy or music. They must

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understand not only the principles of drama or comedy performance but also the peculiar requirements of filmed performances, most particularly the craft of working with the camera. Acting jobs are some of the most sought-after positions in the motion picture and television industry. Countless people move to areas such as Southern California and New York to join film and television companies, only to find that competition for roles is fierce. Actors may be paid small contracts or stipends at first, earning more per part as their experience grows. The median hourly wage for an actor in 2009, according to the BLS, was $27.14, down a bit from the previous year’s median, 28.72. Members of the Screen Actors Guild are guaranteed a minimum daily rate of $782 for any speaking part, with additional compensation for reruns (known as “residuals”). According to the Screen Actors Guild, only about 50 of their 100,000 members earn the salaries associated with Hollywood’s biggest celebrities. Other actors and actresses generally work sporadically, as film and television work tends to be inconsistent. Acting occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Leading Actor Series Regular Supporting Actor Series Recurring Role Actor Guest Star Character Actor Speaking Role Actor Extra Body Double Stunt Performer

Set Design Set designers plan and construct the sets of motion pictures and television shows, as well as “dressing” filming locations. They help bring directors’ artistic visions to fruition. Set designers employ both careful attention to detail and strong organizational skills with artistic, creative design ideas. They must develop detailed drawings and other plans, which are approved by directors before construction begins. Taking their cues from production designers or art directors, they draw up blueprints for construction and oversee the construction process. Set designers must have exten-

sive experience in both construction and the film industry, enabling them to understand the possibilities and limitations of set construction within the context of a motion picture or television production. They may have advanced degrees in art, graphic design, architecture, or related fields. According to the BLS, the mean annual salary of a set designer in 2009 was $65,050. Set design occupations may include the following: ■ ■ ■ ■

Art Director Set Designer Construction Coordinator Production Designer

Hair/Makeup/Costume The physical appearance of actors in motion pictures and television programs falls to hair and makeup artists and costume design teams. Costume designers design or rent clothing that best suits the characters within the setting of a given film or television production. Hair, makeup, and costume professionals are responsible for the look of the actors’ characters, who may appear within a contemporary drama, a period piece, or a work of science fiction. Additionally, these professionals ensure that actors appear in a manner commensurate with the expectations of directors and producers. Hair, makeup, and costume personnel must be well schooled in cosmetology, as well as in the motion picture and television industry. They must understand how people appear on film and how to modify their appearances to achieve desired effects, including a natural look, which requires as much artifice as any other. Hair, makeup, and costume occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Costume Designer Key Costumer Costume Assistant Key Makeup Artist Makeup Assistant Key Hair Stylist Hair Styling Assistant

Writing While directors are the ones who ensure that a film develops according to plan, it is the writers

Motion Picture and Television Industry who develop the plot, dialogue, and other critical areas of a film or television program’s production. Moreover, on many television shows, the show’s creators and creative overseers are writers rather than directors. Television directors and writers generally work on some but not all episodes, whereas a show’s creators and executive producers provide the overall vision for a series. These leaders are commonly the heads of a show’s writing staff. Writers are often called in on a contract basis when a given script is approved. They then help flesh out any aspects of the screenplay that previously appeared thin or shallow, as well as making any necessary modifications to the story line. Such changes in a film screenplay are generally requested and approved by directors or studio executives. Writers create scripts that are designed to be filmed. Often, initial ideas for a film or television program lack a great deal of detail, so writers use the limited information available to create characters, dialogue, dramatic situations, and other aspects of the film. Writers generally receive some form of training in the liberal arts that enables them to focus on creative writing. Some, however, combine theater with writing-centric undergraduate degrees (such as English) in order to focus professionally on script development. Screenwriting is an extremely competitive endeavor, as film and television studios receive countless scripts from writers but choose only a few for production. Writing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Teleplay Writer Senior Writer Screenplay Writer Script Supervisor Executive Story Editor Story Editor Staff Writer

Special Effects Most films and television productions rely on some form of special effects. Beyond the classic science-fiction type of special effect, these effects may be as mundane as using computer graphics to block out an unwanted advertisement in a location shoot or providing the sound of a person walking. Special effects teams and subgroups are divided

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into two main areas: visual effects and sound effects. Within these arenas, there are computer-generated effects, makeup effects, synthesized sounds, foley effects (recorded sounds of footsteps, glass breaking, and other situations), and photographic images. Special effects professionals are well trained in the devices and fields on which they focus and, like other artists, enjoy a great deal of creativity in generating sights or sounds for productions. Special effects professionals’ educations vary based on the arenas in which they work. Some attend undergraduate or vocational schools to learn about computer systems and software, while others are trained in cosmetic fields. They also tend to start at the ground level within the industry, learning from mentors before succeeding on their own. Special effects occupations may include the following: ■ ■ ■ ■

Sound Mixer Foley Artist Special Effects Director Makeup Effects Coordinator

Technical Crew Each shooting location and set contains a number of important pieces of equipment. From cameras, to boom microphones, to lighting equipment, this equipment is employed by technical crews. These crews ensure that lighting systems, sound recording systems, and cameras, among other vital tools, are functioning properly and performing in the manner required. They must also ensure that the equipment is maintained and, where necessary, either repaired or replaced. Most important, they use the equipment to record the sounds and images from which films and television programs are composed. Technical crewmembers often receive vocational training to become familiar with heavy machinery and technology, although they must receive on-the-job training on such equipment as well. Much of the work involved entails strenuous physical activity, so technical crewmembers must be able to handle such on-the-job physical stress. According to Simply Hired, the average annual salary for a technical film crewmember in 2010 was $37,000. Technical crew occupations may include the following:

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Motion Picture and Television Industry OCCUPATION

PROFILE

Camera Operator Considerations

Qualifications

Description

Covers news events as part of a reporting team, sets up and runs cameras on film sets, and otherwise operates equipment that captures or produces moving pictures for film or television.

Career cluster

Arts, A/V Technology, and Communication

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

On-the-job training; junior/technical/community college; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

RCS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

■ ■ ■ ■ ■ ■ ■ ■

Dolly Grip Key Grip Camera Operator Technical Director Sound Engineer Clapper/Loader Focus Puller First Assistant Cameraman

cesses are managed by postproduction teams, who ensure that films are well constructed. Many postproduction professionals are college-educated in liberal arts programs. Postproduction occupations may include the following: ■ ■

Postproduction Once the initial shooting of a film or television program is completed, the postproduction team reviews the resulting footage, pieces it together, and packages it. Postproduction staff are responsible for finalizing films and television programs and preparing them for distribution or broadcast. Postproduction personnel must be very detail oriented, with a keen eye for ensuring that films are as perfectly shot and assembled as possible. Film editing, sound mixing, and other technical pro-

■ ■ ■

Story Post Producer Assistant Editor Editor Digital Media Technician Sound Mixer

Marketing and Advertising The commercial success of a film or television program depends heavily on the efforts of marketing, advertising, and other public relations professionals. Marketing and advertising personnel spread the word about a film’s impending release in order to generate interest among potential view-

Motion Picture and Television Industry ers. Marketing campaigns may involve trailers (short advertising programs promoting films), viral marketing (clips and advertisements distributed on the Internet in such a fashion as to encourage people to spread the material to their friends via e-mail and social networking resources), and actor appearances in the media. Some marketing departments may also oversee distribution. In the case of the motion picture industry, that entails ensuring that films are shown in theaters with strong potential returns. Marketing and advertising personnel tend to have undergraduate or advanced degrees in business and marketing. They must also have a strong understanding of the film industry and media outlets and how they operate. In addition to their work on behalf of individual productions, marketing personnel create campaigns to promote entire studios. Marketing and advertising occupations may include the following: ■ ■ ■ ■ ■ ■

Marketing Director Marketing Manager Promotions Director Advertising Manager Distributor Intern

Representation Talent agents represent actors and other performing artists who seek to join film and television productions. They work directly with studio executives, producers, and other agents to secure auditions for their clients and otherwise promote them. Once their clients are hired, they negotiate pay and contract stipulations and continue to represent their clients’ interests to their employers throughout shooting and postproduction. In addition, agents are often the spokespeople for their clients, speaking out about issues facing them during the course of a film’s development or off the set. In light of the delicate yet intense environment in which they work, agents must be diplomatic, social, and direct on behalf of their clients. They must enter into negotiations with studios over money, seeking the maximum amount available, yet avoiding creating a negative image for their clients. Agents are usually educated, with undergraduate or advanced degrees in business, marketing, or

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similar fields. They usually begin their careers by working at large talent agencies. Once they have advanced to a high level, many agents strike out on their own and use their extensive contacts to start their own businesses. According to the BLS, the average annual salary for talent agents in 2009 was $81,310. Representation occupations may include the following: ■ ■ ■ ■ ■ ■

Partner Senior Agent Junior Agent Manager Intern Administrative Assistant

INDUSTRY

OUTLOOK

Overview The motion picture and television industry has undergone a dramatic evolution since its roots were laid near the end of the nineteenth century. The rate of change over the course of the twentieth century was driven by the strong desire of viewers and audiences for new experiences to entertain them. The Lumières’ footage of an oncoming train thrilled audiences, as did the “magic” of special effects a few years later. In 1933, audiences were mesmerized at the giant gorilla brought to life and interacting with real-life characters in King Kong, and in 1956 special effects icon Ray Harryhausen created an army of skeletal warriors to battle humans in Jason and the Argonauts in a scene that took special effects to an entirely new level. Special effects are not the only aspects of motion picture and television entertainment that have evolved over the course of the industry’s history. Revolutionary storylines, plots, and characters have contributed to both areas’ respective and rapid growth. Hollywood and other industry centers continue to see high volumes of incoming candidates offering screenplays and acting talent; still others arrive looking for any sort of work on a film or television production. The industry continues to produce a great deal of content, spanning all genres and budget parameters. It is expected that this ongoing operational growth will continue as video distribution channels and technologies multiply.

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continue to be subject to intense competition, as There are two issues, however, that will likely large numbers of candidates seek a limited numcreate a change within the industry. The first is the ber of jobs. international development of the industry—no longer are places such as Hollywood the epicenter Employment Advantages of the film and television world. Instead, studios The allure of working in the motion picture and are being constructed around the United States, a television industry continues to attract countless thriving Canadian studio industry continues to candidates from all over the world. Indeed, the dygrow, and European and Asian industries are also namic and exciting world of filmmaking and enterseeing growth. This trend will most likely draw tainment production serves as a major benefit for business away from traditional production centers those who are fortunate enough to obtain a job in such as Southern California and redistribute it this arena. Employees are able to interact with ce(and its revenues) around the world. This trend lebrities and high-profile industry personalities will also probably increase inter-studio competiduring the course of their everyday tasks, a benefit tion, as newer studios outside Hollywood are conthat few other industries can present to their emstructed in response to large tax incentives, enployees. abling them to produce films with significantly Additionally, motion picture and television prolower budgets. The rapid growth of so-called indefessionals have the opportunity to use cutting-edge pendent films provides evidence of this trend, technologies to bring to life new visual realities. changing the landscape of the industry. They create unusual and amazing new sights, such The second issue that continues to arise is pias alien worlds, dinosaurs, and natural phenomracy. Illegally obtained films and television proena. Similarly, nontechnical professionals can take grams are receiving increasing circulation (largely pride in working in an industry that creates memoin less developed countries in Asia and the former Soviet Union). The revenues generated from the sale of these pirated recordings have a significant impact PROJECTED EMPLOYMENT on the industry, costing jobs and fuFOR SELECTED OCCUPATIONS ture revenues. With efforts to curtail the practice falling short in the early Motion Picture, Video, and Sound twenty-first century, it is expected Recording Industries that this issue will continue to influence the industry. Employment Although these trends have signif2008 Projected 2018 Occupation icantly altered the dynamics of the field, declines in growth of the mo11,100 12,800 Actors tion picture and television industry 1,900 2,100 Art directors are expected to be modest. The aspect of the industry that has been 800 800 Musicians, singers, and related hardest hit overall is the television inworkers dustry, affected by the recession of 24,400 28,300 Producers and directors 2007-2009, as well as direct competition from the Internet. Nevertheless, 19,300 22,500 Television, video, and motion the television market will continue picture camera operators and to present job opportunities in many editors areas. Computer graphic artists, digital filming, editing, and other beSource: U.S. Bureau of Labor Statistics, Industries at a Glance, hind-the-scenes technical positions Occupational Employment Statistics and Employment will likely continue to offer jobs. ActProjections Program. ing, writing, and producing, long extremely competitive fields, will likely

Motion Picture and Television Industry rable characters and tells the stories that define contemporary culture. Finally, the industry presents its employees with stability. Although the industry is subject to great changes, and although they are employed by the project and subject to the vicissitudes of their projects, industry employees are able to work in a field that will continue to grow and produce. Although studios may fold or build, their personnel are part of a major, interconnected industry that will give them (once they have been accepted therein) a relatively strong sense of job security. Annual Earnings Although there are many connections between the motion picture and television sectors, the industry’s earnings are best calculated when the two sectors are separated. Such a methodology reveals differences in revenue growth rates. Motion picture earnings have increased with relative consistency, with the exception of a drop of approximately 7 percent in 2005. In 2008, the motion picture industry earned $28.1 billion, up 5 percent from 2007. With the exception of 2005, the film industry’s earnings have grown at modest but consistent rates. Television earnings have seen a downward trend. In 2009, U.S. industry experts predicted total revenues at $17 billion, a drop of about 15 percent in revenues from 2008. In fact, the industry has seen an earnings decline since 2006, with the most precipitous drop, over 21 percent, occurring between 2007 and 2009. Analysts predict, however, that the recovering economy will fuel slight increases in revenues. On the global scale, revenues dropped from 2008 to 2009 by $3.5 billion. However, analysts predict a turnaround on that front as well.

RELATED RESOURCES FOR FURTHER RESEARCH Academy of Motion Picture Arts and Sciences 8949 Wilshire Blvd. Beverly Hills, CA 90211 Tel: (310) 247-3000 Fax: (310) 859-9619 http://www.oscars.org

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Academy of Television Arts and Sciences 5220 Lankershim Blvd. North Hollywood, CA 91601 Tel: (818) 754-2800 http://www.emmys.org British Film Institute Belvedere Rd. South Bank, Waterloo, London SE1 8XT United Kingdom Tel: 44-20-7928-3232 Fax: 44-20-7928-3535 http://www.bfi.org.uk Canadian Film and Television Production Association 151 Slater St., Suite 902 Ottawa, ON K1P 5H3 Canada Tel: (613) 233-1444 Fax: (613) 233-0073 http://www.cftpa.ca Centre International de Liaison des Ecoles de Cinema et de Television Rue Theresienne 8 B-1000 Brussels Belgium Tel: 49-160-99-189-654 Fax: 49-160-99-52-584 http://www.cilect.org Motion Picture Association of America 1600 Eye St. NW Washington, DC 20006 Tel: (202) 293-1966 Fax: (202) 296-7410 http://www.mpaa.org Screen Actors Guild 5757 Wilshire Blvd., 7th Floor Los Angeles, CA 90036-3600 Tel: (323) 954-1600 http://www.sag.org

ABOUT

THE

AUTHOR

Michael P. Auerbach has over sixteen years of professional experience in public policy and ad-

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Motion Picture and Television Industry

ministration, economic development, and the tourism industry. He has worked closely with economic development advocates seeking to construct a major film studio in Massachusetts, a state that has passed tax incentives for film productions. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He is a veteran of state and federal government, having worked for seven years in the Massachusetts legislature and four years as a federal government contractor.

FURTHER

READING

Appleton, Dina, and Daniel Yankelevits. Hollywood Dealmaking: Negotiating Talent Agreements for Film, TV, and New Media. New York: Allworth Press, 2010. Balio, Tino. The American Film Industry. Madison: University of Wisconsin Press, 1976. _______. Grand Design: Hollywood as a Modern Business Enterprise, 1930-1939. New York: Maxwell Macmillan International, 1993. Bielby, Denise D., and C. Lee Harrington. Global TV: Exporting Television and Culture in the World Market. New York: New York University Press, 2008. Finney, Angus. The International Film Business: A Market Guide Beyond Hollywood. New York: Routledge, 2010. Hoovers. “British Broadcasting Corporation.” http://www.hoovers.com/company/British _Broadcasting_Corporation/hrfyri-1.html. International Television Expert Group. “TV Market Data/Global TV Funding, 2008-2013.” http://www.international-television.org/ tv_market_data/pay-tv-and-tv-fundingworldwide_2008-2013.html.

Koszarski, Richard. Hollywood on the Hudson: Film and Television in New York from Griffith to Sarnoff. New Brunswick, N.J.: Rutgers University Press, 2008. Langford, Barry. Post-Classical Hollywood: Film Industry, Style, and Ideology Since 1945. Edinburgh: Edinburgh University Press, 2010. Mehta, Rini Bhattacharya, and Rajeshwari Pandharipande. Bollywood and Globalization: Indian Popular Cinema, Nation, and Diaspora. New York: Anthem Press, 2010. Motion Picture Association of America. The Economic Impact of the Motion Picture and Television Industry on the United States. Washington, D.C.: Author, 2009. Musser, Charles. The Emergence of Cinema: The American Screen to 1907. New York: Maxwell Macmillan International, 1990. Udelson, Joseph H. The Great Television Race: A History of the American Television Industry, 19251941. University: University of Alabama Press, 1982. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Library of Congress. “History of Edison Motion Pictures.” http://memory.loc.gov/ ammem/edhtml/edmvhist.html.

Museums and Cultural Institutions Industry ©Maigi/Dreamstime.com

INDUSTRY

SNAPSHOT

INDUSTRY

DEFINITION

Summary The International Council of Museums (ICOM) defines a museum as

General Industry: Arts and Entertainment Career Cluster: Arts, A/V Technology, and Communication Subcategory Industries: Aquariums; Art Museums; Botanical Gardens; Halls of Fame; Historical Museums; Historical Ships; Historical Sites; Military Museums; Natural History Museums; Nature Parks; Nature Preserves; Nonretail Art Galleries; Observatories; Science and Technology Museums; Sculpture Gardens; Zoos Related Industries: Libraries and Archives Industry; Outdoor Recreation Industry; Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry; Themed Entertainment Industry; Travel and Tourism Industry Annual Domestic Revenues: $9 billion USD (Hoovers, 2009) NAICS Number: 712

a non-profitmaking, permanent institution in the service of society and of its development, and open to the public, which acquires, conserves, researches, communicates and exhibits, for purposes of study, education and enjoyment, material evidence of people and their environment.

The American Association of Museums (AAM) defines a museum as an organized and permanent non-profit institution, essentially educational or aesthetic in purpose, with professional staff, which owns and utilizes tangible objects, cares for them, and exhibits them to the public on some regular schedule.

These definitions are also applicable to similar institutions, such as nonprofit art galleries, historical societies, zoos, and aquariums. History of the Industry The institution of the museum as a place of cultural significance finds its roots in the classical world. Ancient Greece and Rome constructed and 1225

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People watching fish at an aquarium. (©David Miller/Dreamstime.com)

valued various “musaeums” or “mouseions” (places of music or poetry)—the Museum at Alexandria being perhaps the most famous. Though these early cultural institutions were largely centers of philosophical thought rather than repositories of valuable objects, the ancient world still had public collections of objects that resembled the modern concept of a museum. Greek temples and Roman forums, for example, often displayed gold and silver offerings, sculptures, and paintings. During the Middle Ages, churches and other religious institutions throughout Europe acted as cultural repositories, collecting vast numbers of religious artworks and manuscripts. During the fifteenth century, the more modern concept of museums came into fashion in Europe. Over the following few centuries, museums such as the Ashmolean Museum of Art and Archaeology, in Oxford, England; the Vatican museums; the British Museum in London; and the Louvre in Paris, France—considered the first art gallery—were founded. The first modern museums began as pri-

vate collections of wealthy individuals who amassed extensive collections and then exhibited them to the public. These first museums were, however, rarely accessible to all members of the public, catering instead to the upper classes. In addition, though the ancient world is well known for its fantastic gardens, genuine botanical gardens began to appear at universities during the sixteenth and seventeenth centuries in the interest of scientific study. Until the eighteenth century, museums were chiefly concerned with collecting the beautiful and the curious, and their collections were often motivated by personal interests. During the nineteenth and twentieth centuries, however, museums, cultural institutions, and public art galleries grew rapidly throughout Europe and the United States. It was during this intense period of proliferation that the concept of the museum as something more than just a storehouse for invaluable treasures was developed. Museums began to dedicate themselves to conservation, preservation, and, most im-

Museums and Cultural Institutions Industry portant, research. Natural history, science, and art museums became scholarly centers of academic research and thought. Once museums and other cultural institutions became public, exhibition became a much more central concern. Prior museum goals, such as collection, conservation, and preservation, suddenly became the means to procure interesting and desirable exhibitions. Museums developed slowly in the United States. American painter and naturalist Charles Wilson Peale founded a natural history museum in the late eighteenth century in Philadelphia. He is considered the first great American museum director. In 1846, James Smithson, a British scientist, made a bequest to the United States “for the increase and diffusion of knowledge” that led to the development of the Smithsonian Institution. In its formative years, however, the Smithsonian remained devoted to research; it was not until 1873 that it widened its scope to include all areas of the arts and humanities. The United States finally made its mark on the development of the modern museum

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in 1870, with the founding of the American Museum of Natural History (AMNH) and the Metropolitan Museum of Art in New York, as well as the Museum of Fine Arts in Boston. The influence and spread of the automobile also led to museums, historical sites, and cultural institutions being located outside major cities. Historic homes, battlefields, and other such sites became more popular, and sites that were maintained and opened for the public became more widespread. Throughout the twentieth century, museums and other cultural institutions began to focus on education. American museums, especially, became devoted to public education. Many such organizations also transformed themselves into cultural centers with performing arts, music, and film presentations. The Industry Today A 2007 AAM survey identified four critical challenges that museums will face over the coming years: obtaining increased public funding rather

Behind-the-scenes preparation for a museum exhibit. (©Dreamstime.com)

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than relying on private funds and benefactors; adapting to changes in technology, including new educational technologies, while still maintaining current museum practices and standards; developing new leaders, particularly among recent graduates and young professionals; and maintaining their relevance in the face of rapid social and cultural change. Though the industry is predicted to rise, it still faces considerable challenges in the face of the changing cultural landscape. Whereas museums were once regarded as warehouses of knowledge and shrines to specific aspects of history or culture, they have recently come under fire as outdated, stale buildings devoted to antiquated ways of thinking. In response, many cultural institutions have dedicated themselves to updating their exhibitions, expanding their collections and gift shops, and refining and publicizing their research. They have attempted to become more accessible through alternative approaches, such as mobile and online exhibits, as well as adopting educational programs for adults and children alike, including guided tours, demonstrations, lectures, and study groups. Germain Bazin (1901-1990), former chief curator of the Louvre, once commented, Perhaps the most significant contribution America has made to the concept of the museum is in the field of education. It is common practice for a museum to offer lectures and concerts, show films,

circulate exhibitions, publish important works of art. The museum has metamorphosed into a university for the general public—an institution of learning and enjoyment for all men. The concept has come full circle. The museum of the future will more and more resemble the academy of learning the “mouseion” connoted for the Greeks.

There are more than eleven thousand museums in the United States, more than half of which are free to the public. Rather than dusty storehouses of artifacts, these organizations have evolved into vital cultural institutions that strive to reach a wider population. They extend to classrooms, theaters, cinemas, performance halls, and the Internet. As they continue to evolve and adapt to the changing interests and habits of their visitors, museums have never been more exciting.

INDUSTRY MARKET SEGMENTS Museums range in size from small storefronts to major institutions that occupy entire city blocks and form the cornerstones of some cities’ cultural identities. Historical sites may be otherwise-unremarkable patches of ground marked by small plaques or large parks featuring elaborate historical diplays. Because they are not-for-profit institutions, the size of these organizations is measured by their operating budgets rather than their revenues.

A man at an astronomical museum in California looks up. (©Dreamstime.com)

Small Institutions Museums may be classified as small if they have annual operating budgets of less than $250,000. Small institutions are commonly staffed by volunteers and generally have only two or three full-time paid employees. Many small organizations target specific communities or neighborhoods, serve local interests, and represent local and regional cultures and communities. With the rise of the Internet and digital access to col-

Museums and Cultural Institutions Industry

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The Griffith Observatory is a great place to see the stars while visiting Los Angeles. (©Dreamstime.com)

lections and exhibitions, very small museums have been able to grow and reach a larger clientele that lives outside their immediate physical area. An example of a small institution might be a historic home. The significance of such homes is intensely local; for example, one may have belonged to the founder of a small community, or it may have been the home or office of a local official who later went on to greater prominence. Staff might include only one or two full-time employees responsible for administration, maintenance, exhibitions, and visitor interaction. Curators or managers of small museums are generally experts in the relevant focus of the museum. They are in daily contact with visitors, becoming their institutions’ primary educators. Volunteers may be involved in tours, interactive experiences, reenactments, and collections management. Potential Annual Earnings Scale. The average annual salary for a museum curator according to

the U.S. Bureau of Labor Statistics (BLS) was about $51,540 in 2008. A curator at a small museum can expect to receive a below-average salary. Clientele Interaction. Small museums offer opportunities for close interaction between museum professionals (such as curators, historians, and art historians) and visitors, since most museum staff members often take on multiple roles. This interaction allows them insight into visitors’ interests and enables them to hear feedback firsthand. Amenities, Atmosphere, and Physical Grounds. Small museums and cultural institutions generally occupy small spaces of only a few thousand square feet or less. Some are housed in dedicated buildings, while others are located within larger buildings. Local history museums are usually located in spaces of historical relevance, while art galleries typically rent space in larger offices or retail complexes. Botanical and zoological gardens can be located anywhere, so long as the grounds

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have been sufficiently landscaped. Visitor amenities are typically few. Small museums may have gift shops, but they will usually lack additional amenities such as restaurants, classrooms, or libraries. Employees are expected to be pleasant, helpful, and informed about their museums’ exhibits and collections. Since small museums are heavily dependent on visitor contributions and donations, interactions between staff and visitors are of paramount importance. Typical Number of Employees. Small institutions are widely staffed by volunteers and generally have only two or three full-time paid employees. The total number of volunteers varies according to the location of the institution and the nature of its collections. For example, the number of volunteers at an aquarium in Chicago would likely be much higher than that at a historic home in Frederick, Maryland. Traditional Geographic Locations. Small museums, zoos, gardens, and other fine arts or cultural institutions can be found in cities and towns of every size. Since many small organizations target specific communities or neighborhoods, they are found in major cities such as New York and San Francisco, as well as in smaller suburban and rural locations. A large percentage of small organizations, however, tend to be located outside major metropolitan areas in order to avoid competition from midsize and large institutions that have larger budgets, more publicity, and wider popularity among the general population. Pros of Working for a Small Museum. Small institutions explore themes and topics of local relevance that are typically overlooked at larger institutions. This local relevance combined with a high level of staff-visitor interaction provides curators with the freedom to be more responsive to their communities’ needs and interests. Collections and exhibitions at small institutions are usually immediately accessible, so visitors need not experience long waits. Such museums, then, can provide intimate visitor experiences unmatched at larger institutions. Volunteers at small museums tend to be committed and supportive, and both volunteers and staff enjoy relative freedom from bureaucracy. Cons of Working for a Small Museum. The staff of a small museum or cultural institution often has a plethora of responsibilities, including collec-

tions management, conservation, exhibit design, administration, grounds maintenance, and facilities oversight. Budgets are usually small and tight, with no funds allocated for professional development or training. This means that staff members rarely have the opportunity to attend professional conferences or training sessions. Little time and few resources are spent on experimentation and collaboration. Small institutions tend to be undervalued in the wider industry, and board members tend to be unaware of protocols and procedures. Costs Payroll and Benefits: Small museums and fine arts institutions generally pay an hourly wage or yearly salary. Benefits can range from full to no benefits and may include health insurance, 401(k) plans, and paid vacation and sick time. Supplies: Museums require the materials used to create and assemble exhibits and displays, including glass or plastic cases, audiovisual equipment, picture frames, pedestals, and so forth, as well as the tools to maintain them. They also require standard office supplies and equipment, such as paper, telephones, and computers. External Services: Some small museums contract third-party landscaping services. They may also seek professional accounting or legal services, especially when taxes are due. Cleaning of exhibition and office space is typically performed by staff. Utilities: Museums must pay typical utilities, including electricity, heating, water, telephone, and Internet access. Taxes: Nonprofit organizations are often exempt from taxes, including income taxes and property taxes. There are exceptions in some jurisdictions, and all nonprofits must still pay employer payroll taxes on employees’ wages and salaries. Midsize Institutions Museums may be classified as midsize if they have annual operating budgets of between $250,000 and $1 million. Midsize institutions have many more people on staff than do small institutions, but they still rely heavily on volunteer support for various job responsibilities. Like small institutions, many midsize organizations target specific communities or neighborhoods, serve local interests,

Museums and Cultural Institutions Industry and represent local and regional cultures and communities. However, midsize museums and cultural institutions also serve wider audiences with broader interest bases. Many such organizations are able to compete with larger institutions for visitors, publicity, and funding. An example of a midsize institution might be a state natural history museum. While such a museum’s exhibitions and research focus on subjects of general interest and significance, they usually have a local or regional flavor. For example, the museum might mount an exhibit of North American mammals (general interest) found in the North Carolina Piedmont (regional interest). Staff would include a full roster of museum professionals, including administrators, maintenance crew, exhibition designers, and visitor-services staff. Many midsize institutions have reciprocal membership agreements with partner museums, so paying members of one museum enjoy membership privileges at the museum’s partners as well. Such a partnering group may include institutions of similar size or focus located in different regions, or it may include a set of nearby cultural institutions within the same region. Potential Annual Earnings Scale. Employees at midsize institutions generally earn average salaries for their professions. According to the BLS, the average annual salary for a curator in 2008 was $51,540; the average salary for an archivist was $48,200; and the average salary for a museum technician or conservator was $40,750. Clientele Interaction. Midsize museums offer opportunities for close interaction between museum professionals (such as curators, historians, and art historians) and visitors, since some museum staff members take on multiple roles. Positions at midsize institutions are significantly more specialized than are those at small organizations, so some staff members tend to have responsibilities that separate them from day-to-day public operations. Nevertheless, a large proportion of midsize museums’ staffs experience a relatively high degree of direct contact with visitors. Amenities, Atmosphere, and Physical Grounds. Midsize museums and cultural institutions generally occupy dedicated buildings of several thousand square feet, with separate exhibition, storage, and office spaces. History museums of this size are located in a space of historical rele-

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vance with regional or national significance. Botanical and zoological gardens can conceivably be located anywhere, so long as their grounds are sufficiently landscaped. Visitor amenities may include a wide range of options, including a permanent exhibition, temporary exhibitions, education programs, arts programs, a museum shop, a cafeteria or restaurant, and carefully landscaped or manicured grounds. Visitor-services staff and docents have the most direct interaction with visitors. They are expected to be pleasant, helpful, and informed about their museums’ exhibitions. Many midsize organizations depend heavily on visitor contributions, entrance fees, and membership, so this interaction is of paramount importance. Typical Number of Employees. The total number of staff members at a midsize institution can range from as few as five to several dozen. This includes a full roster of museum professionals, with individuals trained and responsible for administration, maintenance, exhibitions, and visitor interaction. Most midsize museums employ design staff for graphic and environmental design projects, including exhibitions. In addition to traditional twodimensional and three-dimensional designers and architects, design departments may include audiovisual specialists, software engineers, audience research and evaluation specialists, writers and editors, and art handlers. Many staff members possess advanced degrees in their particular areas of specialization. Traditional Geographic Locations. Midsize museums and cultural institutions can be found in cities and towns of every size. A large percentage of midsize organizations, however, tend to be located in and around midsize and large metropolitan areas, where they have access to a wider potential audience and the resources necessary for operation. Because of their location, midsize institutions face competition from large institutions with larger budgets, more publicity, and wider popularity among the general population. However, they generally focus on more specialized subjects with specific regional interests. Pros of Working for a Midsize Museum. Midsize institutions explore themes and topics of regional and national relevance that are typically glossed over at larger institutions. Staff members have the opportunity for more specialized posi-

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tions, with the ability to focus on specific topics. The collections and exhibitions are also more accessible than at larger organizations. With larger budgets, larger membership, and wider publicity than small museums or cultural institutions, staff can afford more experimentation and collaboration in their work. There is also a greater possibility of career advancement; because of their larger budgets and wider renown, midsize institutions often have more qualified candidates for vacancies, and they are able to benefit from the skills, training, experience, and vision that such individuals bring to their work. Cons of Working for a Midsize Museum. Some staff members at midsize institutions have a wide range of responsibilities, including collections management, registration, and conservation. Although budgets are significantly higher than at small institutions, they still remain tight in certain respects. While funds may be reserved for professional development, these are rarely sufficient to provide opportunities for all staff members. Many times, only those in supervisory roles receive training or attend conferences. Salaries and benefit packages also tend to be lower than they are at large institutions. While education and arts programs are offered, they tend to be individual events. Budgets are rarely large enough for the wide spectrum of rich programming found at large organizations. Costs Payroll and Benefits: Midsize museums and cultural institutions typically pay annual salaries. Benefits can range from full to no benefits and may include health insurance, 401(k) plans, and paid vacation and sick time. Supplies: Museums require the materials used to create and assemble exhibits and displays, including glass or plastic cases, audiovisual equipment, picture frames, pedestals, and so forth, as well as the tools to maintain them. They also require standard office supplies and equipment, such as paper, telephones, and computers. External Services: Landscaping and cleaning services are usually contracted out by midsize institutions. However, these cleaning services are usually limited to public areas and office space. Care and cleaning of objects on display are typically performed by staff.

Utilities: Museums must pay typical utilities, including electricity, heating, water, telephone, and Internet access. Taxes: Nonprofit organizations are often exempt from taxes, including income taxes and property taxes. There are exceptions in some jurisdictions, and all nonprofits must still pay employer payroll taxes on employees’ wages and salaries. Large Institutions Museums may be classified as large if they have annual operating budgets of more than $1 million. Large institutions have many people on staff, and they typically offer volunteer positions for students interested in learning more about museum studies or about the particular focus of the institution. Large museums and cultural institutions serve extensive audiences with broad interest bases. They typically are founded on wide-reaching topics, such as natural history, American art, or African American culture. Many such organizations command significant visitorship, membership, publicity, and funding. An example of a large institution might be an established zoo, such as the San Diego or Philadelphia zoos. Exhibitions and research at a municipal zoo target subjects of general interest and usually of national or international significance, such as wildlife conservation and the protection of natural habitats. The staff of any large institution includes a full roster of professionals, including such employees as administrators, maintenance crew, exhibition designers, conservation specialists, veterinarians, and visitor services staff. Visitors enjoy a wide range of opportunities, including permanent exhibitions, temporary exhibitions, education programs, arts programs, family events, travel opportunities, special holiday events, several museum shops, and several cafeterias or restaurants. Visitors may participate in robust membership programs that include many incentives. Potential Annual Earnings Scale. Large institutions often pay above-average salaries. According to the BLS, the average annual salary for a curator in 2008 was $51,540; the average salary for an archivist was $48,200; and the average salary for a museum technician or conservator was $40,750. The average salary for a zoologist was $58,820, and the average salary for a conservation scientist was $60,170.

Museums and Cultural Institutions Industry Clientele Interaction. Large museums offer few opportunities for close interaction between museum professionals (such as curators, historians, and art historians) and visitors. Nearly all staff members are engaged in specialized work that keeps them separate from the public day-to-day operations of the museum. It is the responsibility of visitor services staff members to interact with the public, and they become the conduits through whom the professional work of the museum filters down to visitors and through whom the concerns and feedback of the visitors reach the rest of the staff. Amenities, Atmosphere, and Physical Grounds. Large museums and cultural institutions occupy dedicated buildings that may be several hundred thousand square feet or more, with separate exhibition, storage, and office spaces. Many continually undergo renovation and expansion, and large institutions are generally state of the art in all respects. Often, the architecture and design of buildings and grounds are as much a draw for tourists as are the exhibitions housed inside. Visitor amenities include permanent and temporary (traveling) exhibitions, libraries or archives, education programs, arts programs, family events, travel opportunities, special holiday or seasonal events, several museum shops, several cafeterias or restaurants, and carefully landscaped or manicured grounds. Visitor services staff have the most direct interaction with visitors, and they are expected to be pleasant, helpful, and informed about their museums’ exhibits. Many large organizations depend on entrance fees and membership, so a positive visitor experience is of paramount importance. Typical Number of Employees. The total number of staff members can range from a few dozen to several hundred. This staff typically includes a full roster of museum professionals, with individuals specially trained in and responsible for administration, maintenance, exhibitions, and visitor interaction. Large museums typically employ design staff for graphic and environmental design projects, including exhibitions. In addition to traditional two-dimensional and three-dimensional designers and architects, these staff departments may include audiovisual specialists, software engineers, audience research and evaluation specialists, writers and editors, educators, and art han-

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dlers. Most staff members possess advanced degrees in their particular areas of specialization. Traditional Geographic Locations. Large museums, zoos, gardens, and similar fine arts or cultural institutions are typically found in large cities, where they have access to wide audiences and the resources necessary for operation. Large institutions tend to face little competition from similar, smaller organizations. However, because of their locations and high entrance fees, they do face competition from other, unrelated tourist attractions. For example, the Metropolitan Museum of Art in New York City faces little competition from smaller art museums, but it competes for visitors’ time and money with other attractions such as the Statue of Liberty and the Empire State Building. Pros of Working for a Large Museum. Large institutions explore themes and topics of national and international relevance that simply cannot be covered in depth at smaller institutions. Staff members have the opportunity to occupy more specialized positions and focus on specific topics. Younger staff members also benefit from their proximity to senior professionals with significant knowledge and experience. With large budgets and membership, as well as wide publicity, staff can afford significant experimentation and collaboration in their work. Large institutional budgets also enhance program planning, exhibition design, and education programs. Generally, large museums’ budgets almost always have funds set aside for professional development and training. As a result of this funding, as well as of their larger and more hierarchically organized staffs, these institutions provide significant opportunities for career advancement. Because of their large budgets and wide renown, large institutions often receive applications from the most qualified candidates for vacancies, and they are able to benefit from the skills, training, experience, and vision that such individuals bring to their work. Salaries and benefit packages also tend to be among the most competitive available. Cons of Working for a Large Museum. Because of their size and popularity, large institutions cannot offer the intimate, personal visitor experience that smaller institutions can. Exhibitions are typically conceived, planned, and implemented based on staff research interests, current events, or prevailing trends in the industry, rather than visi-

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Museums and Cultural Institutions Industry

tor feedback or the unique and specific interests of the local community. Many large institutions have such large collections that only a fraction can be displayed at any one time, thereby keeping a majority of the collection unknown to the general public. Staff members tend to become isolated within their departments, and interaction with other divisions (for example, between the collections and education departments) can be rare or limited. Costs Payroll and Benefits: Large museums typically pay annual salaries, including full benefits such as health insurance, 401(k) plans, and paid vacation and sick time. Supplies: Museums require the materials used to create and assemble exhibits and displays, including glass or plastic cases, audiovisual equipment, picture frames, pedestals, and so forth, as well as the tools to maintain them. They also require standard office supplies and equipment, such as paper, telephones, and computers. External Services: Landscaping and cleaning services are usually contracted out by large institutions. However, these cleaning services are usually limited to public areas and office space. Care and cleaning of objects on display is typically performed by staff. Many large institutions also contract external security services. Utilities: Museums must pay for typical utilities, including electricity, heating, water, telephone, and Internet access. Taxes: Nonprofit organizations are often exempt from taxes, including income taxes and property taxes. There are exceptions in some jurisdictions, and all nonprofits must still pay employer payroll taxes on employees’ wages and salaries.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Any size museum or cultural institution needs to account for activities in the following areas. In smaller institutions, one person generally holds several roles within several groups. In larger organizations, specialists fulfill unique requirements in specific groups. Regardless of size and scope, the functions must be fulfilled.

The following umbrella categories apply to the organizational structure of museums and cultural institutions: ■ Business Management ■ Education and Programming ■ Collections and Registration ■ Visitor Services ■ Exhibitions ■ Sales and Marketing ■ Development ■ Human Resources ■ Libraries and Archives ■ Facilities and Security Business Management Business managers are responsible for the dayto-day operations of their institutions. Responsibilities include establishing the vision or direction of the organization, directing a group of employees who can implement that vision, and managing finances. The typical employee in this area will have an advanced degree, usually with a focus on business. Typically, salaries for employees in this area are the highest in the institution. In addition to overseeing strategy and finance, business managers coordinate an institution’s relationships with its partners, suppliers, and distributors. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Museum/Zoo Director Legal Counsel Business Manager Accountant

Education and Programming Education and programming staff are responsible for the educational initiatives of an institution. They develop and teach classes for children and adults, organize outreach programs to local schools and community centers, program special events, and schedule and promote performing arts presentations, film screenings, and lectures. They are also responsible for recruiting and managing volunteers and docents. Education and programming staff usually have advanced degrees in education or communica-

Museums and Cultural Institutions Industry tions. They typically receive salaries that are on par with those of other nonadministrative staff at their institutions. In addition to programmatic responsibilities, individuals in education and programming roles coordinate relationships with local schools, community centers, parent groups, and special events vendors. Education and programming occupations may include the following: ■ ■ ■ ■ ■

Public Programming Director Special Events Director Education Curator Education Specialist Volunteer Coordinator

Collections and Registration Collections and registration staff manage and preserve their institutions’ collections and govern access to them. They ensure the proper care and handling of the objects in collections, including

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three-dimensional, multimedia, and document collections. These staff members store objects, register them in an institution’s collections database, manage and track their documentation and provenance, package and ship them, and arrange access to them for researchers and scholars. Collections staff usually have advanced degrees in art history or museum studies. They typically receive salaries that are on par with those of other nonadministrative staff at their institutions. Conservators have additional responsibilities to care for and conserve delicate or damaged objects. Many professional conservators tend to specialize— for example, in paper, textile, wood, art, or film conservation. Collections and registration occupations may include the following:

OCCUPATION

■ ■ ■

Collections Curator Collections Manager Registrar

PROFILE

Archivist and Curator Considerations

Qualifications

Description

Evaluates, classifies, and protects historical items and documents and maintains records regarding their acquisition and status.

Career clusters

Arts, A/V Technology, and Communication; Hospitality and Tourism

Interests

Data; people

Working conditions

Work inside

Minimum education level

Apprenticeship; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest score

AES; IRS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Museums and Cultural Institutions Industry

Conservator Museum Technician

Visitor Services Visitor services staff are responsible for day-today public interaction with visitors. They conduct guided tours, staff information booths and customer-service counters, respond to visitor needs and questions, and ensure that the flow of visitors throughout buildings and grounds remains uninterrupted. They may or may not have advanced degrees, and their salaries are typically slightly lower than those of other nonadministrative employees of their institutions. Their duties may entail physical or manual activities, such as moving supplies, setting up or taking down chairs and tables for daily events, or participating in interactive tours and activities. They must also coordinate their activities with their institutions’ sales, marketing, development, and security departments. Visitor services occupations may include the following: ■ ■ ■

Guest Services Coordinator Docent Coat Check Attendant

Exhibitions Exhibitions staff design and construct exhibits. They plan and design new exhibits, then construct and produce exhibit spaces, displays, and supporting materials. They must plan electric wiring and lighting for exhibits, as well as designing or commisioning the security devices and procedures necessary to protect fragile or valuable objects from damage or theft. They are also responsible for security and maintenance of existing and permanent exhibits. Exhibitions staff members may or may not have advanced degrees, but they typically have either degrees or experience in design, architecture, or carpentry. They typically receive salaries on par with, or slightly lower than, those of other nonadministrative employees of their institutions. They often work with their hands, using power tools and construction equipment to engineer, design, and build unique exhibits. They must coordinate their activities with their collections and facilities departments, as well as with relevant external vendors.

Exhibitions occupations may include the following: ■ ■ ■ ■

Exhibitions Curator Exhibit Designer Electrician Lighting Technician

Sales and Marketing Sales and marketing staff manage publicity for their institutions. They publicize and market temporary and permanent exhibits, special events, and institutions’ broader social and cultural objectives. Their responsibilities include managing museum stores, conducting promotional campaigns to build membership and attendance, and publicizing their institutions’ social, educational, and humanitarian efforts in order to build their brands and reputations. They must build relationships with news agencies, advertising agencies, and retailstore suppliers in the service of their organizations. Sales and marketing staff members usually have advanced degrees in journalism, communications, or marketing. They typically earn salaries that are on par with those of other nonadministrative employees of their institutions. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■

Retail Store Manager Retail Sales Associate Public Relations Director Marketing Manager Graphic Designer

Development Development staff raise money for their institutions by cultivating and retaining members and by mounting fund-raising campaigns. They coordinate and implement initiatives to attract new members, organize membership benefit programs, identify potential donors, and organize and implement fund-raising efforts. They must coordinate relationships with charitable organizations and relevant foundations, as well as individual members. They may or may not have advanced degrees and typically earn salaries that are on par with those of other nonadministrative employees of their institutions.

Museums and Cultural Institutions Industry OCCUPATION

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SPECIALTIES

Archivists and Curators Specialty

Responsibilities

Art conservators

Coordinate the examination, repair, and conservation of art objects.

Historic-site administrators

Manage the overall operations of a historic structure or site.

Museum registrars

Maintain records of the condition and location of objects in museum collections and oversee the movement of objects to other locations.

Museum technicians

Prepare specimens for museum collections and exhibits. They preserve and restore specimens by reassembling fragmented pieces and creating substitute pieces.

Development occupations may include the following: ■ ■ ■

Membership Coordinator Fund-Raising Coordinator Director of Planned Giving

Human Resources Human resources staff are responsible for recruiting, hiring, training, and firing personnel, as well as managing payroll and administering benefits. They coordinate relationships with relevant benefits providers, such as 401(k) plan administrators and health insurance providers, as well as recruitment agencies and payroll management companies. They may or may not have advanced degrees and typically earn salaries that are on par with those of other nonadministrative employees of their institutions. Human resources occupations may include the following: ■ ■ ■

Human Resources Manager Human Resources Generalist Benefits Specialist

Libraries and Archives Librarians and archivists organize and manage their institutions’ public libraries and internal archives. They acquire new materials, update and maintain internal databases, lend materials to re-

searchers and general patrons, and organize and maintain internal records related to their archives. They coordinate relationships with libraries and archives at similar institutions, as well as with publishers and other staff members. They typically have advanced degrees in library science and earn salaries that are on par with those of other nonadministrative employees of their institutions. Library and archive occupations may include the following: ■ ■

Librarian Archivist

Facilities and Security Facilities and security staff are responsible for the maintenance and security of their institutions’ physical grounds and buildings. They landscape grounds, clean buildings and grounds, guard exhibits, and otherwise provide security for their institutions (including maintaining emergency alert and video surveillance systems). They also maintain and repair wiring; lighting; heating, ventilation, and air-conditioning (HVAC) systems; and electric systems such as elevators and escalators. Facilities and security personnel are typically experienced in relevant skills and do not have advanced degrees. They are usually paid less than other nonadministrative employees. Much of their work is physical or manual. Individuals often work with their hands, using power tools and other spe-

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Museums and Cultural Institutions Industry

cialized equipment to maintain, upgrade, and repair buildings and grounds. They must also coordinate relationships with external security agencies and facilities and maintenance vendors. Facilities and security occupations may include the following:

well as a loss in the value of investments held in trusts), even though for many admissions have remained somewhat steady. For example, the American Folk Art Museum, located in midtown Manhattan, saw its revenue drop by half—from $6.4 million to $3.2 million—from fiscal 2008 to fiscal 2009. In addition, New York City’s Metropolitan ■ Facility Manager Opera reported in 2009 that its $300 million en■ Building Maintenance and Repair dowment had decreased in value by one-third. More glaring, the Nevada Department of Cultural Worker ■ Employee Workplace Safety Manager Affairs cut its budget in 2009, resulting in state mu■ Heating, Ventilation, and Airseums being closed four days per week. Other museums and institutions, facing similar fiscal cutConditioning (HVAC) Technician ■ Building Security Manager backs, have postponed exhibitions or suspended ■ Security Guard daily operations. ■ Collections Warehouse Supervisor Nonetheless, according to the BLS, faster-than■ Computer Security Specialist average growth is expected in the museum industry, with employment expected to increase by approximately 18 percent by 2016. In addition, the National Employment Matrix projects employINDUSTRY OUTLOOK ment for curators, archivists, and museum technicians to increase from twenty-seven thousand posiOverview tions nationwide in 2006 to thirty-three thousand As a result of the economic downturn of 2007positions in 2016. Occupational employment sta2009, museums and cultural institutions have extistics indicate that the median hourly wages and perienced a decrease in revenue and donations (as annual salaries for these positions are also on the rise. A growing interest in establishing and maintaining PROJECTED EMPLOYMENT museum collections, in preserving FOR SELECTED OCCUPATIONS the growing volume of records and information, and in exhibiting variMuseums, Historical Sites, and Similar ous collections publicly are all conInstitutions tributing factors to this growth. However, competition for muEmployment seum positions is, and will continue to be, high. As more people choose 2009 Projected 2018 Occupation to pursue museum studies as a ca5,790 8,100 Curators reer option, the number of qualified candidates will continue to out3,940 5,600 Museum technicians and number vacancies. Students who conservators establish themselves in a more com4,790 5,800 Nonfarm animal caretakers petitive position tend to hold advanced degrees and have a keen 1,980 2,700 Public relations specialists ability to work in a digital environ11,670 13,600 Tour guides and escorts ment. This is particularly true as cultural institutions are increasingly Source: U.S. Bureau of Labor Statistics, Industries at a Glance, making their collections available Occupational Employment Statistics and Employment online and offering education opProjections Program. portunities and exhibits on the Internet and in other digital forms.

Museums and Cultural Institutions Industry (Digital media and skills are equally relevant and in demand in the for-profit art industry.) Many museums and cultural institutions are highly dependent on outside funding to continue their operations. Budgets are largely based on fund-raising efforts, grant acquisition, and membership support, and museums generally generate revenue based on earned income, membership, and philanthropy. As a result, job security and institutional budgets can fluctuate with periods of strong and weak national economic growth. The number of visitors is also influenced by trends in the wider travel and tourism industries. When tourism is on the rise, museum visitorship and membership also increase. When tourism is on the decline, museums and other cultural institutions have fewer visitors, fewer members, and smaller funds from external sources. Employment Advantages Most people who work in museums, zoos, galleries, and other cultural institutions find that their work combines learning and entertainment. Such organizations are natural fits for individuals with an interest in history, art, or the natural world. While academic environments are potentially static, museum work can be engaging and stimulating. Employees can work with subject material they enjoy in an environment that fosters appreciation of and interaction with that material on a variety of levels. Such work can also afford many opportunities for interaction with the general public. The number of small and midsize institutions is surprisingly large and growing. Job opportunities, though influenced by economic cycles, are usually available for a variety of roles in a variety of organizations. Annual Earnings According to Hoovers, museums and cultural institutions in the United States took in revenues of $9 billion in 2009. Although museums and cultural institutions are widespread and successful throughout the United States and many European countries, the industry is in relative infancy elsewhere. Many developing nations are currently home to only a few state-funded national museums, but there has recently been tremendous growth in the number of new museums that target local history, arts, and issues. These institutions tend to be private, for-profit organizations, but, ow-

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ing to the current state of the industry, revenue and earnings statistics are unreliable.

RELATED RESOURCES FOR FURTHER RESEARCH American Association for State and Local History 1717 Church St. Nashville, TN 37203-2991 Tel: (615) 320-3203 Fax: (615) 327-9013 http://www.aaslh.org American Association of Museums 1575 Eye St. NW, Suite 400 Washington, DC 20005 Tel: (202) 289-1818 Fax: (202) 289-6578 http://www.aam-us.org Association for Living History, Farms, and Agricultural Museums 8774 Rte. 45 NW North Bloomfield, OH 44450 Tel: (440) 685-4410 http://www.alhfam.org Association of Children’s Museums 1300 L St. NW, Suite 975 Washington, DC 20005 Tel: (202) 898-1080 Fax: (202) 898-1086 http://www.childrensmuseums.org Association of College and University Museums and Galleries 40 Arts Circle Dr. Evanston, IL 60208-2410 Tel: (847) 491-5893 Fax: (847) 467-4609 http://www.acumg.org Association of Zoos and Aquariums 8403 Colesville Rd., Suite 710 Silver Spring, MD 20910-3314 Tel: (301) 562-0777 Fax: (301) 562-0888 http://www.aza.org

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Museums and Cultural Institutions Industry

International Council of Museums 1 rue Miollis 75732 Paris CEDEX 15 France Tel: 33-1-4734-0500 Fax: 33-1-4306-7862 http://icom.museum/ Museum Studies and Reference Library National Museum of Natural History Smithsonian Institution 10th and Constitution Ave. NW Washington, DC 20560 Tel: (202) 633-1700 http://www.sil.si.edu Society of American Archivists 17 N State St., Suite 1425 Chicago, IL 60602-3315 Tel: (312) 606-0722 Fax: (312) 606-0728 http://www.archivists.org

ABOUT

THE

AUTHOR

Jamie Greene attended the University of Virginia, where he studied cultural anthropology and archaeology. He has held various curatorial and collections-management positions at the Academy of Natural Sciences in Philadelphia, the University of Virginia Art Museum in Charlottesville, and the U.S. Holocaust Memorial Museum in Washington, D.C. He also has considerable experience in the publishing and education industries.

FURTHER

READING

Alexander, Edward P. Museums in Motion: An Introduction to the History and Functions of

Museums. Walnut Creek, Calif.: AltaMira Press, 1996. Burdick, Jan E. Creative Careers in Museums. New York: Allworth Press, 2008. Center for the Future of Museums. Museums and Society, 2034: Trends and Potential Futures. Washington, D.C.: American Association of Museums, 2008. Available at http://aamus.org/upload/museumssociety2034.pdf. Chew, Ron. “In Praise of the Small Museum.” Museum News, March/April, 2002. http:// www.aam-us.org/pubs/mn/ MN_MA02_SmallMuseums.cfm. Institute for Career Research. Careers in Museums: Director, Curator, Conservator, Exhibit Designer, Archivist. Chicago: Author, 2007. Rentzhog, Sten. Open Air Museums: The History and Future of a Visionary Idea. Stockholm: Carlsson, 2007. Schlatter, N. Elizabeth. Museum Careers: A Practical Guide for Novices and Students. Walnut Creek, Calif.: Left Coast Press, 2008. Society of American Archivists. “So You Want to Be an Archivist: An Overview of the Archival Profession.” http://www2.archivists.org/ profession. U.S. Bureau of Labor Statistics. “Archivists, Curators, and Museum Technicians.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos065.htm. _______. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Music Industry ©Dreamstime.com

INDUSTRY

INDUSTRY DEFINITION

SNAPSHOT

General Industry: Arts and Entertainment Career Cluster: Arts, A/V Technology, and Communication Subcategory Industries: Instrument Manufacturing and Repair Industry; Integrated Record Production/ Distribution; Music Arrangers; Music Directors; Music Publishers; Musical Groups and Artists; Musical Performance Organizers and Promoters; Sound Recording Industries Related Industries: Broadcast Industry; Internet and Cyber Communications Industry; Motion Picture and Television Industry; Publishing and Information Industry; Retail Trade and Service Industry; Theater and Performing Arts Industry Annual Domestic Revenues: $9.2 billion USD (Pollstar/ International Federation of the Phonographic Industry, 2008; includes live performance industry) Annual International Revenues: $12.6 billion/year (International Federation of the Phonographic Industry, 2008; not including live performance industry) Annual Global Revenues: $18.4 billion USD (International Federation of the Phonographic Industry, 2008; not including live performance industry) NAICS Numbers: 5122, 7113, 339992, 711130, 711510, 811490

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Summary The music industry encompasses multiple and diverse for-profit and nonprofit businesses that provide live and recorded music to listeners. Although the sound recording segment makes up a large share of the industry, concerts, music publishing and licensing, artist management, and fine arts outlets such as symphony orchestras all play important roles in the field. Industry products include both tangible goods, such as compact discs (CDs) and digital video discs (DVDs), and intangible products, such as electronic music files and concert performances. Musicians also rely on products and services supplied by the musical instrument manufacturing and repair industries, while listeners obtain physical or electronic recordings through the music retail industry. History of the Industry Although people have written and performed music for entertainment

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Music Industry

track tapes—proved to be a major addition to the industry, allowing many new recording studios to appear throughout the world. For the first time, serious efforts to record lesserknown music began, widely expanding the available catalog of recorded music. Although the 1950’s had begun with only five major record labels, the success of rock-androll music during that decade encouraged a spate of new, independent imprints dedicated to the emerging genre. Shifting consumer tastes were influBy the 1990’s, the CD had become the dominant music format, replacing the vinyl enced by the increasing popualbum on retail shelves. (©Sandra Van Der Steen/Dreamstime.com) larity of rock, particularly after the British Invasion of 1964. Demand for the singer-songwriter-driven sounds and cultural reasons for millennia, today’s comof previous decades declined. Instead, music bemercial music industry dates back only to the sheet came a force for social protest and change. Casmusic and concert industries of the 1700’s. For sette tape recording techniques improved, and the over a century, music listeners consumed popular format grew in popularity and availability throughmusic exclusively through live performances. Muout the 1970’s. Airwaves offered new sounds such sicians and singers performed at public venues or as rock and funk and, later, disco and punk to avid were hired to appear in private homes, and amamusic listeners. teurs relied on printed sheet music to learn and During the 1980’s, the dual emergence of play popular songs. Sony’s Walkman, a portable personal tape player, By the early twentieth century, the invention of and the cable television network MTV contributed the phonograph had changed the music industry to a musical revolution. Music videos became a vital dramatically. Standardized discs called records promotional tool for artists—to the extent that the could hold about four-and-a-half minutes of repremieres of videos by artists such as Michael Jackcorded sound, and the sound recording industry son, marketed as “world premiere video” events, had already begun to emerge. The first record became cultural touchstones. Music became mocompanies, known as record labels, issued recordbile for the first time with the Walkman, and the ings of classical and popular music. New labels cassette tape enjoyed a brief heyday as the domithrived during World War I, but the popularization nant musical format stretching from the late 1970’s of radio, which brought music and other programinto the next decade. ming to a wider audience, had a negative impact on The CD emerged as the dominant music format the early record business during the 1920’s. In by the beginning of the 1990’s, eventually replac1931, two early record companies combined to ing the increasingly outdated vinyl album on retail form EMI (the only privately owned major music shelves. (Vinyl sales, however, have increased since corporation as of 2007), beginning a long history 2006, propelled by both nostalgia and their accuof mergers and acquisitions within the industry. rate sound, though their place on the commercial During the 1940’s, technological innovations scale remains minuscule.) This same decade saw brought the first tape recording, and the perfecan end to the pop-driven sounds that had domition of polyvinyl chloride (PVC) led to the developnated the 1970’s and 1980’s, with grunge rock and ment of the familiar vinyl album. Magnetic tape hip-hop becoming the defining styles of the era. By cartridges—first commercially available as eight-

Music Industry the end of the century, the rise of the Internet had provided listeners with a new source of recorded music: digital music. Soon, digital music formats such as MPEG-1 audio layer 3, or MP3, grew in importance and popularity, and the first online peerto-peer (P2P) sharing service, Napster, electrified an industry concerned about music piracy. The Industry Today The twenty-first century music industry is experiencing significant change. Modern technologies, particularly the Internet and its associated technologies, have greatly altered the ways that people discover, acquire, and listen to music. As of 2009, just four companies—Sony BMG Music Entertainment, Warner Music Group, Universal Music Group, and EMI—dominated the sound recording industry.

In the 2000’s, the popularity of digital music format began to alter the music industry. (©Yuri Arcurs/Dreamstime.com)

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However, technology shifts and the rise of online music downloading have contributed to steep declines in record label revenue. According to a 2007 study conducted by the think tank Institute for Policy Innovation, illegal music downloads and physical sales of pirated recordings cost the United States economy $12.5 billion annually. Record companies and trade organizations have acted vigorously to halt the flow of illegally downloaded music since the early 2000’s, and within a few years, legitimately purchased downloads began to steadily increase. By 2008, digital music sales had grown to encompass about one-fifth of all global music purchases, according to statistics gathered by the International Federation of the Phonographic Industry (IFPI). This trend was even more pronounced in the United States, where digital sources represented about one-third of total sales. Rock music remains the most popular genre by far, according to sales figures from the Recording Industry Association of America (RIAA); it is trailed closely by country and western, hip-hop, and rhythm and blues (R&B), respectively. Rising online music sales and competition from big-box retailers such as Walmart and Best Buy have also hit brick-and-mortar specialty music retailers hard, contributing to widespread store and chain closures. According to figures published by the RIAA, the percentage of music purchases made at traditional record stores declined from just over 44 percent in 1999 to only 30 percent in 2008. Consequently, according to a January, 2008, report from marketing research company NPD Group, the top five music retailers of 2007, in order, were digital-only retailer Apple, Walmart, Best Buy, Amazon, and Target. (A large percentage of sales at each retailer were attributed to gift cards.) In addition, according to Research and Markets in 2007, the top fifty music retailers earned 80 percent of music-store revenue. In the spring of 2009, the largest music store in the United States by volume—the Virgin Megastore in New York City’s Times Square—closed its doors. At the same time that traditional retailing industries have declined, the live performance industry has grown significantly. Year-over-year, revenue increases have been the norm since the early 2000’s, bolstered greatly by the high ticket prices commanded by the world’s top acts and, to a lesser extent, a general upward trend in live performance

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Music Industry

attendance. According to concert trade publication Pollstar, live performance revenues for North American tours reached $4.2 billion in 2008, which represents a strong 7 percent increase over the previous year. That same year, country artist Kenny Chesney sold more than one million tickets to performances in North America alone, a testament to the immense selling potential of top artists. In addition, live events promoter and venue owner Live Nation has begun actively courting major recording artists for its so-called 360 deals. These agreements give the concert promoter a stake in all of the signed artists’ musical output, including albums, music merchandise, Web sites, concert films, and DVD sales, as well as exclusive rights to promote the artists’ associated tours. As of 2009, four big-name acts—pop singer Madonna, rock bands U2 and Nickelback, and hip-hop performer Jay-Z—had signed on. (In 2009, Live Nation also merged with Ticketmaster, the nation’s largest ticket broker, in a $2.5 billion deal that was scrutinized for antitrust implications.)

Licensing and product integration remain vital to the music industry. Much as filming a successful music video could make or break an artist during the height of the MTV era, placing a song in a commercial, television program, or video game offers performers, songwriters, and record labels needed exposure and significant revenue streams.

INDUSTRY MARKET SEGMENTS The music industry is highly segmented into a plethora of enterprises. Advancements in sound recording technology have made high-quality recording affordable for almost anyone. Professional quality recordings that once required a full studio and significant resources can now be made in private homes with a personal computer and minimal recording equipment. At the same time, a handful of key corporations dominates the music distribution subsector. As a result, the music industry is one

Live performances are popular and generate substantial revenue. (©Dreamstime.com)

Music Industry of the most variable industries in existence in terms of business size. It is one of the few economic sectors in which individuals and multinational corporations alike exert significant influence and constitute significant brands. Small Businesses Small businesses make up an important segment of the music industry. Nearly any type of business that can exist in the industry is represented in the small business segment. These businesses may be as small as one person—such as a solo musician, talent manager, agent, or music retailer. Other small businesses may be considerably larger, with twenty or twenty-five employees. Small businesses often gain success by focusing on a certain niche, such as retailers selling specialty products—used equipment or CDs, for example—or agents or venues that book acts only in a specific genre of music. Some music retailers have closed their brick-andmortar operations and conduct their business solely online. Because of the wide revenue spread between those working part time in the industry and those who have become widely successful, such as topearning acts and agents, a small music business may earn practically no money or millions of dollars each year. Potential Annual Earnings Scale. Because many individuals pursue music as a hobby, some part-time musicians, promoters, and record label owners may net practically nothing from their businesses. According to the U.S. Bureau of Labor Statistics (BLS), the median earnings of professional musicians who perform with a symphony orchestra or religious organization were $19.73 per hour in 2006. Highly successful recording artists may make millions of dollars each year. Clientele Interaction. Small businesses can allow for a great deal of interaction between workers and clients. A small venue owner, for example, may take on multiple roles, such as talent booking, accounting, supply ordering, and human resources, while generally managing the nuts and bolts of the business. The venue might have fifteen or twenty employees who sell and take tickets for musical performances, staff the venue’s bar, assist the touring musicians who play at the venue, and provide general security during events. All of these workers interact with attendees at performances and may

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deal directly with the artists and their road crew. Also, independent bands and musicians are often responsible for selling their own wares, such as Tshirts and CDs, after or before shows. At traditional small or independent music stores, a sense of community was often important to the success of the operation. For example, in the heyday of music stores, store employees often served as “tastemakers,” suggesting new music for their customers. While this has largely changed, as online sales and big-box retailers are pushing mom-andpop stores aside, personal interaction is still an important part of fostering success. Amenities, Atmosphere, and Physical Grounds. Some music businesses may be operated in the most basic setups, such as an extra room of an apartment or home. Others may rent limited office or retail space. The atmosphere is often casual, in accord with the nature of the work, but it may also be quite stressful. For example, a small-business operator engaged in booking acts for a summer festival may spend a great deal of time listening to new groups or reading music magazines, all the while juggling phone calls, scrambling to arrange a successful lineup, and negotiating contract details. Many bands spend long hours traveling from venue to venue in a van packed with the group’s members, road crew, and equipment. More successful artists may travel in relative comfort aboard large buses, with separate vehicles carrying their gear and road staff. Bands typically have access to a private area to relax, and these areas can range greatly in terms of comfort and cleanliness. Typical Number of Employees. Most small businesses in the music industry have relatively few employees, ranging from just one to twenty or twenty-five. For example, Chris Lombardi started independent record label Matador in 1989. At first, he ran the label by himself out of his apartment. Twenty years later, the business had expanded to include an artist roster of about twenty and a staff of twenty-three. Perhaps the most common small music business, the musical artist or group, typically has one to five members. Traditional Geographic Locations. A small music business may be located practically anywhere. Although many bands relocate to New York and Los Angeles in the hopes of increased exposure, many other cities, such as Nashville, Tennes-

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see; Austin, Texas; and Atlanta, Georgia, have been hubs for varying styles of music. Smaller cities may be home to independent record labels and promoters that release music and put on shows by local or regional artists. Pros of Working for a Small Business. Many people establish small music businesses for the personal satisfaction of being part of the industry. Small-business owners perform a range of job duties and generally have the freedom to make creative decisions, such as what music to perform, what bands to book, or what albums to release. Music industry business owners and staff often attend live performances for free and may work with famous musicians. Artists have the remote chance of achieving great financial success. Cons of Working for a Small Business. Smallbusiness owners are often sole proprietors, meaning that all the financial risks of their organizations lie with them. Thus, an event such as a lawsuit for copyright infringement could bankrupt not only a record label, but also its owner. Musicians, whether self-employed or on the staff of a small arts organization, often experience extended periods of unemployment between tours or performing arts seasons. Because musicians typically earn the bulk of their income from performances, this can leave them short of cash or forced to seek alternate employment. In addition, small retailers and independent record stores are often subject to cost-cutting efforts from large labels. For example, in June of 2009, EMI informed its smaller accounts, mostly small and independent stores, that it was no longer selling its products directly to them, instead directing them to third-party distributors, who sell at higher prices. Costs Payroll and Benefits: Small businesses may pay workers on an hourly or salaried basis, and benefits can range from extensive packages with health insurance and retirement plans to nothing at all. Even small record labels typically pay advances to signed artists. Self-employed musicians often earn money sporadically through quarterly royalty payments, as well as through licensing and performance fees. Supplies: Musicians typically own their own instruments and sound equipment, while business

managers and record labels need office supplies and computers. External Services: Necessary external services depend on the type of business operated. Artists employ many outside services, often having business managers and booking agents, as well as employing road crews such as touring managers, soundboard operators, and instrument technicians. Record labels pay for studio time and production services for signed artists and may employ outside accountants or lawyers. Small retailers such as music stores or online ventures may also contract outside services for printing catalogs, accounting or ordering systems, and other related services. Utilities: An office-based business, such as a record label or a small music retailer, requires physical utilities such as heat, water, electricity, telephone, and Internet access. A touring band would need to pay for travel, lodging, and vehicle costs. Taxes: Small private businesses and self-employed workers must pay applicable local, state, and federal taxes on all revenues. Nonprofit organizations, such as symphony orchestras, must file tax forms but do not pay taxes. Any small business that has employees must pay a portion of those employees’ Social Security and Medicare taxes, while self-employed workers instead pay a special self-employment tax to cover their share of Social Security and Medicare taxes. Midsize Businesses Midsize companies and businesses generally employ a few hundred employees and have much higher revenues than do small businesses, with some topping half a billion dollars. Examples of companies at this level include record labels, music venues, and large symphony orchestras, as well as regional, independent music-store chains. During the late twentieth and early twenty-first centuries, mergers and buyouts led to many small and midsize companies becoming subsidiaries of larger corporations. Some of these companies continue to operate largely as independent businesses, while others have been more or less completely subsumed by their parent companies. Potential Annual Earnings Scale. A typical midsize music business takes in revenues between $1 million and hundreds of millions of dollars. Di-

Music Industry versification into fields such as merchandising or publishing can significantly increase a company’s earnings potential. For example, record label Bad Boy Entertainment (now Bad Boy Records) earned about $600 million in 2008 from its music, television, fashion, and other business activities. Similarly, regional midlevel music retailer Newbury Comics, which has twenty-eight locations in the New England area as of 2009, sells pop-culturerelated goods and comics in addition to music CDs and DVDs. Company-wide revenue for the store was projected to be $77 million in 2008. Clientele Interaction. The increased size of midsize businesses often brings a greater structural hierarchy. Staff members at performance venues or who work for a fine arts organization may interact with the general public, but many music businesses of this size function on a business-to-business model. For example, midsize record labels may employ regional representatives, who call on retail business owners and managers to promote their labels’ albums. In midlevel music stores, clientele interaction may not be as personal as that in small, independently minded stores, but employees may still be instrumental in influencing consumer tastes. Amenities, Atmosphere, and Physical Grounds. Although some employees may spend time traveling with performing artists, seeking out new acts at clubs, or conducting other business, staff members are likely to have permanent work spaces in cubicles or offices. Symphony orchestras may have office space in a performing arts complex. For example, the New York Philharmonic both performs and has administrative offices at New York City’s Lincoln Center. Large performance venues may be extensive outdoor complexes with seating areas, food and beverage outlets, and extensive landscaping. The atmosphere of midsize companies varies but is likely to be more relaxed than a traditional corporate environment. Many music companies promote a laid-back, jeans-and-T-shirt corporate culture. Many midsize businesses have grown from small business roots, and these may retain a similar atmosphere. Typical Number of Employees. Midsize music businesses may employ from one hundred to one thousand people, either at a central location or spread throughout multiple locations. These employees are more likely than their small business

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counterparts to have defined job duties. For example, for a record label, defined job duties would be in such areas as artist development, marketing and public relations, legal affairs, talent management, and business administration. For midlevel music retailers, beyond storefront personnel, other areas would be warehouse and distribution. Traditional Geographic Locations. Unlike small businesses, midsize companies are likely to cluster around traditional entertainment meccas such as New York, Los Angeles, and London. Some may operate offices or outlets in more than one of those cities. For example, the New York-based Knitting Factory operates concert venues in Brooklyn and Los Angeles, as well as Spokane, Washington, and Boise, Idaho. Substantial symphony orchestras employing significant numbers of musicians and administrative workers can be found in New York City, Boston, Chicago, Los Angeles, and other major metropolitan areas throughout the world. Because certain types of music are associated with particular cities—for example, country music with Nashville—businesses that cater to specific segments of the industry are likely to maintain offices in those cities. Pros of Working for a Midsize Business. The greater scope of a midsize business means that jobs are generally more specialized. This specialization may appeal to those business owners who prefer to handle top-level decision making or management rather than deal with the variety of day-to-day concerns that can occupy much of the time of smallbusiness owners. Midsize businesses typically have higher revenues than small businesses and may offer the opportunity for greater profit. With mergers and acquisitions common in the industry, the owner of a midsize business may receive a substantial sum of money for the sale of that business to a larger company. For example, in 2002, BMG Entertainment paid nearly $2.75 billion for the Zomba Label Group, the home of successful pop and R&B issuers Jive Records and LaFace Records. Cons of Working for a Midsize Business. For a business owner who enjoys working closely with music listeners or having a direct hand in the differing aspects of the organization, the increased structural hierarchy inherent in a midsize business can be a distinct disadvantage. With larger numbers of employees come higher levels of personnel management, a task that not everyone enjoys. Rec-

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ord labels and music retailers of this size face stiff competition from larger companies, which may have greater financial resources, lower overhead costs, and increased product integration. Costs Payroll and Benefits: Midsize businesses often have both hourly and salaried employees and may also employ unpaid interns. Such companies typically offer additional benefits such as health insurance, paid time off, and retirement plans to full-time staff. Record labels pay artists an advance when signing them and pay additional royalties once sales take off. It is hoped that an artist’s recording earnings will be enough to repay the advance costs of recording and promotion. Supplies: Offices typically require a wide range of supplies, including computers and recording equipment for studios. Companies that manufacture physical products require specialized equipment. Performance venues may operate food and beverage services, requiring cooking equipment, raw ingredients, and disposable eating utensils. External Services: Because businesses typically maintain office space, they are likely to employ cleaning services. Those with freestanding buildings may contract landscaping services. Performance venues typically contract security guards. Sound recording companies that do not have on-staff lawyers typically hire independent attorneys, as well as hiring time at studios and necessary production staff for artists to record albums. Utilities: Offices and venues alike must pay for basic utilities, including electricity, gas, heat, water, telephone and Internet access. Taxes: Because most midsize businesses are corporations rather than sole proprietorships, they pay corporate taxes at the federal and state levels. Some may also pay local taxes. Nonprofit organizations must file tax forms but are exempted from taxes. Additionally, midsize businesses contribute to their employees’ Social Security and Medicare taxes. Large Businesses The large businesses of the music industry are few but powerful. In the sound recording segment

of the industry, eight companies garner about 80 percent of the segment’s total revenue. Live Nation dominates the performance segment of the industry, with 2008 sales exceeding $4 billion. These revenues are representative of the massive earning potential at the upper tiers of the industry. As of 2009, Universal Music Group was the largest music business in the world, with branches dedicated to album production and distribution, artist management, music catalogs and publishing, merchandizing, and digital ventures. Such diversified operations contribute to the immense influence exerted on the global music industry by the industry’s large businesses. The largest businesses in the music retail industry are typically big-box retailers such as Walmart, Best Buy, and Target, though digital-only retailer Apple has garnered the top spot in recent years through the success of its iTunes Store, which offers music and videos available for download. Potential Annual Earnings Scale. Large music businesses earn revenues ranging from hundreds of millions to billions of dollars. They employ workers of all types, from unpaid interns and minimum wage office clerks to entertainment executives who may earn more than $1 million per year, plus perks. Clientele Interaction. Employees at a large corporation typically have highly defined job duties and may have little interaction with those outside of their immediate fields. For example, a public relations representative might deal with music journalists, magazine editors, and event coordinators to ensure coverage of an artist, album release, or other newsworthy event. The average listener has little, if any, contact with the staff of sound recording companies. Equally, although some employees of performance operations companies may deal directly with concert attendees, such as ticket sellers and venue workers, the bulk of the administrative staff is removed from the end user of its products. Amenities, Atmosphere, and Physical Grounds. Large music businesses typically maintain substantial office presences in major cities around the world. Because of music’s integration with mainstream culture, the physical buildings associated with its major businesses hold their own iconic appeal. For example, Los Angeles’s Capitol Records building is one of the city’s best-known landmarks.

Music Industry These businesses may have relatively formal corporate cultures that are influenced by the practices of their international owners. For example, some have argued that Sony BMG’s corporate culture reflects its Japanese parent company with a distinct hierarchical decision-making structure. As record labels have struggled with declining revenues, some have tried to reinvigorate their organizations by hiring creative individuals to manage business operations. Notable music producer Rick Rubin became the head of Columbia Records in 2007, and other artists, producers, and songwriters, including Jay-Z (Def Jam Recordings) and Amanda Ghost (Epic Records), have served in executive roles. Such individuals may lead to shifts in existing cultures, as when Rubin moved the staff of Columbia Records into nicer offices in a building designed by famed architect I. M. Pei. Typical Number of Employees. Large music businesses generally have at least a few thousand and as many as ten thousand employees. For example, the 2010 merger between performance giant Ticketmaster and Live Nation created a company with about ten thousand employees. However, the challenges facing the sound recording industry have forced significant reductions in staff—between 2003 and 2007, the number of employees at Sony BMG declined by about 40 percent, from 4,880 to 2,851. Employees of large companies work in many capacities, ranging from business administration to creative services to sales and marketing. Traditional Geographic Locations. In the United States, large music companies cluster in the entertainment capitals of New York City, Los Angeles, and Nashville. Internationally, these businesses can be found in such major capitals as London, England, and Tokyo, Japan. Vivendi, the parent company of industry giant Universal Music, is headquartered in Paris, France. Pros of Working for a Large Business. Large businesses in the music industry may offer high salaries and the prospect of working with some of the music world’s biggest names. The industry’s renowned glamour revolves around the artists and executives attached to major labels, and the prestige level of working at these organizations can be high. Cons of Working for a Large Business. The overall challenges facing the industry have hit large

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sound recording companies especially hard. Major record labels often invest hundreds of thousands of dollars in developing freshly signed artists through recording sessions, promotion, and tour support; if an artist fails to achieve widespread success, these outlays may never be repaid. Because of their size, large companies may face government scrutiny before being able to complete proposed mergers. The media typically pay greater attention to the problems experienced at these well-known companies than to those of smaller, less prominent music businesses. Costs Payroll and Benefits: Large companies employ hourly and salaried employees, as well as interns, and offer full benefits packages to fulltime employees. These may include stock options, bonuses, and other incentives, in addition to standard health insurance, paid time off, and retirement investment plans. Artists signed to major record labels often receive hefty contract advances and tour support. Supplies: Integrated music production and distribution companies must support multiple offices and their accompanying business supplies, as well as operate merchandising and physical music-production facilities. Live performance companies may operate food and beverage businesses at their venues. External Services: Large offices may contract their cleaning and maintenance services, while performance venues may employ external security companies. Record labels may rent recording studios for artists to cut albums. However, the size of these companies makes it possible that any of these functions may be filled by regular internal staff rather than contract workers, and artists may choose to record albums in studios owned by major record labels. Utilities: Large business offices and performance venues alike pay for utilities, such as electricity, heat, water, telephone, and Internet access. Taxes: Large businesses pay necessary federal and state corporate taxes, and may additionally pay local taxes. These businesses must also contribute to their employees’ Social Security and Medicare taxes. Multinational corporations may be subject to taxes in other countries in addition to those paid in the United States.

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Music Industry ORGANIZATIONAL STRUCTURE AND JOB ROLES

Although the types of businesses in the music industry vary depending on their particular industry segment, size, and purpose, most of these companies must address organizational needs in each of the following activities. A few specialized firms, such as music publishing businesses, may not maintain operations in each field. Typically, in small businesses, one person juggles responsibilities in more than one of these areas, while in midsize and large businesses, the increased size allows employees to have a greater degree of specialization in their work. Variations in the specifics of each broad job category exist primarily among music businesses that fill different industry roles rather than among businesses of different sizes. That is, a small record label has an organizational structure more similar to a large record label than to an equally small performance venue. These differences are explained more thoroughly in the descriptions of the relevant individual categories that follow. The following umbrella categories apply to the organizational structure of businesses in the music industry: ■ ■ ■ ■ ■ ■ ■ ■

Creative Services Business Management Sales and Marketing Design, Technology, and Manufacturing Facilities and Security Production and Operations Distribution Human Resources/Artist Recruitment

Creative Services Artists who provide creative services lie at the heart of the music industry. Creative artists may be responsible for any combination of writing, recording, performing, arranging, or conducting music. Musicians and singers typically have some degree of formal training. Some may have only rudimentary instruction acquired through regular schooling, while others may have years of personal instruction and advanced degrees under their belts. Composers, conductors, and arrangers typically pursue highly specialized studies in addition to

Musicians are at the heart of the music industry. (©Dreamstime.com)

normal musical training. All creative services workers rely on extensive practice and on-the-job training to maintain and improve their technical skills. Many have skills on more than one instrument or can perform various styles of music. According to the BLS, about half of all creative artists in the music industry are self-employed. Of those who work regularly part or full time, nearly all work for religious or performing arts organizations. Some musicians and other creative artists belong to labor unions, such as the American Federation of Musicians (AFM) or the American Guild of Musical Artists (AGMA). Although artists are the most important players in the music industry, they typically operate outside of the business structure that exists to support and profit from their work. For example, a rock musician under contract to a specific record label would have little to no involvement with any of that

Music Industry label’s business operations. Music directors, however, may be exceptions to this rule. These individuals are typically the head conductors at performing arts organizations and may work closely with an organization’s executive director to select musical programming that fulfills both artistic and business goals. Creative services occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Musician Singer Songwriter Composer Arranger Music Director Conductor Music Video Director

Business Management Top music executives hail from various walks of life. Some, such as symphony orchestra executive directors and certain corporate officers, may hold advanced degrees in arts or business administration. These executives may draw on professional backgrounds in the music industry or related

OCCUPATION

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fields, such as film and media, or may come from a corporate background outside of the entertainment field. Other music executives assume business leadership roles on the basis of their successful creative careers. For example, hip-hop performer Sean “Puffy” Combs founded and oversees the running of Bad Boy Entertainment. Small-business owners generally serve as their own chief executives, and this role may grow significantly if their business becomes successful. Business administrators are responsible for the overall management and financial success of an organization. They create and implement long-term business development plans and strive to achieve maximum business profitability. Such employees typically work at a corporate headquarters, although many travel frequently to ensure smooth business operations and develop business partnerships or other relationships. Business administrators typically earn higher salaries than do employees in other parts of the music industry. Attorneys may work on behalf of artists, music publishers, or record labels to negotiate contracts, mediate disputes, and defend against censorship. Music business specialists may have extensive experience working with entertainment clients or on in-

SPECIALTIES

Musicians and Composers Specialty

Responsibilities

Arrangers

Transcribe musical compositions or melodic lines to adapt them to or create a particular style.

Choral directors

Conduct vocal music groups, such as choirs and glee clubs.

Instrumental musicians

Play musical instruments as soloists or as members of a musical group, such as an orchestra or band, to entertain audiences.

Musical directors

Plan and direct the activities of personnel in studio music departments and conduct studio orchestras.

Orchestra conductors

Lead instrumental music groups, such as orchestras and dance bands.

Orchestrators

Write musical scores for orchestras, bands, choral groups, or individuals.

Singers

Singers entertain by singing songs on stage, radio, and television or in nightclubs.

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tellectual property matters, or they may have more generalized experience in corporate and tax law. All music businesses are likely to retain the services of an attorney at some point. Some specialized professions also exist in this category. Royalties administrators work for record labels and publishing-rights organizations to oversee the collection and distribution of royalty payments for the physical sale, usage, or public performance of a recorded work. (This has become more pertinent as a result of the rise of the Internet and associated technologies, such as smart phones, Web broadcasting, and Internet and satellite radio.) Artist managers work directly with musicians and singers to handle the business end of their careers. Managers help their clients find work, set goals, take care of finances, and fulfill contractual obligations. Typically, managers also act as intermediaries between artists and business organizations such as record labels and publishing-rights houses. They may also work closely with artists’ talent agents. Tal-

ent agents deal with promoters and others who book artists for live appearances to negotiate contracts, pay rates, and other details relating to concert performances. Agents also act as customerservice point persons should artists or bookers fail to live up to their contractual obligations. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Executive Director Business Manager Legal Counsel Artist Manager Talent/Booking Agent Acquisitions and Mergers Director Royalties Administrator Accountant

Sales and Marketing Sales and marketing are vital to the success of all segments of the music industry. Small and large

OCCUPATION

PROFILE

Musician and Composer Considerations

Qualifications

Description

Creates and performs music.

Career cluster

Arts, A/V Technology, and Communication

Interests

Data; people

Working conditions

Work inside

Minimum education level

High school diploma or GED; junior/technical/community college; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ASE; ASI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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record labels must have employees or entire departments dedicated to public relations, marketing, promotions, and sales. Music publishers work to place their artists’ songs in films, television programs, video games, and commercials. Performing arts organizations and concert promoters market their events to attract listeners and sell tickets. Public relations workers are responsible for getting their artists, recordings, and events mentioned in publications. They conduct such activities Studio musicians may experience less travel than band members. (©Dreamsas writing press releases, contime.com) tacting journalists, setting up photo shoots, and working with media outlets to secure maxiDesign, Technology, and Manufacturing mum coverage for a given topic. Closely related to Graphic designers and photographers provide public relations are promotional staff, who work to images to help promote artists, recordings, and secure radio or television time for artists, songs, or events. Graphic designers are responsible for the events. Public relations and promotions employees visual conceptualization and creation of digital artmay work in offices or attend events, and they typiwork, including packaging materials such as liner cally have bachelor’s degrees in English, journalnotes, promotional posters and flyers, advertiseism, public relations, or mass communications. ments, and other printed pieces. They typically Similarly, members of the marketing staff help cowork in an office setting. Photographers capture ordinate these efforts, as well as conduct and anastill images used in these types of products. They lyze market research to help create overall marketmay work in a studio or on location. On-location ing plans. photo shoots may produce staged photos or may Artists, record labels, and concert promoters rely on events such as concerts to provide opportumay all build street teams, which are groups of indinities for candid shots. After photographers have viduals who market artists or events by such activicompleted their shoots, either they or trained ties as hanging flyers, collecting marketing lists on photo editors correct their images to prepare them college campuses, or handing out promotional for use. This work may be as simple as cropping or materials. Street team members are often college enlarging an image or as complex as balancing students or other young people trying to break into color, adding or removing details, or merging sevthe music industry. eral images together. Sales and marketing occupations may include Music industry companies often have staffers rethe following: sponsible for maintaining up-to-the-minute Web ■ Public Relations Manager sites to promote artists or services. Some may oper■ Marketing Manager ate online sales outlets or encode digital music files ■ Public Relations Representative for sale through marketers such as the iTunes ■ Publicist Store. Technology workers typically hold associ■ Market Research Analyst ate’s or bachelor’s degrees in a computer-technol■ Sales Representative ogy field. They generally work in offices, although ■ Street Team Member some may travel from site to site as needed.

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Music Industry OCCUPATION

SPECIALTIES

Musical Instrument Repairers Specialty

Responsibilities

Piano technicians

Repair and refinish pianos in addition to tuning them.

Piano tuners

Adjust piano strings so that they will be in proper pitch. They may tune pianos in both public and private establishments, and they make initial adjustments in the factory.

Pipe-organ tuners and repairers

Tune and repair organs that make music by forcing air through flue pipes or reed pipes.

Violin repairers

Adjust and repair bowed instruments such as violins, violas, and cellos, using hand tools.

Wind instrument repairers

Clean, adjust, and repair brass, wind, and woodwind instruments.

Large sound recording companies typically employ workers who manufacture physical music products, such as CDs or DVDs. Specialized manufacturing companies that make musical instruments and accessories also exist. Artisans use factory or handcrafting techniques to build various types of instruments to company specifications, or they may create custom instruments ordered by artists. Instrument-repair technicians may work for such companies or operate independently to service damaged instruments. Design, technology, and manufacturing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Graphic Designer Photographer Photo Editor Web Designer Systems Engineer Information Technology Technician Artisan Instrument Repairer

Facilities and Security In the music industry, facilities and security staff are responsible for the maintenance and oversight of physical locations such as offices and performance venues. Businesses that lease space in large office complexes may rely on facilities services pro-

vided with their leases, while freestanding companies may employ or contract their own maintenance, landscaping, and cleaning crews. Performing arts venues typically employ house managers. These individuals oversee operations in the public spaces of the venue, including auditorium seating areas, lobbies, ticketing areas, and bars or restaurants. Because many performing arts organizations may share the use of a venue, such individuals typically work for the venue itself rather than for a particular organization. However, ushers (staffers who show patrons to their seats) may be provided by either the venue or the organization. Often, these people are volunteers rather than paid employees. All performance venues have on-site security guards to prevent members of the public from entering private areas. These employees also help ensure the safety of all attendees in the event of an emergency. Highly prominent creative artists may employ one or more personal bodyguards. These staffers ensure the safety of the artists when they appear in public by protecting them from paparazzi and overly intrusive fans. Facilities and security occupations may include the following: ■ ■

House Manager Usher

Music Industry ■ ■ ■ ■

Security Guard Bodyguard Safety Manager Maintenance and Repair Worker

Production and Operations Production and operations employees have diverse roles in the music industry. Perhaps the bestknown job in this field is that of the music producer. Producers manage music recording in studios and have some degree of creative input into final products. Recording engineers also work in studios, where they operate equipment to accurately capture the sounds made by singers and musicians. Production and operations staff members also play vital roles in the live performance segment of the music industry. Touring acts, performance venues, and performing arts organizations rely on the skills of production and operations personnel to ensure that musical performances run smoothly. Many performances begin with the work of concert promoters, who hire artists to appear at concerts and music festivals. Promoters may work alone, or they may represent small or large associations and businesses, ranging from college student groups to massive corporations such as Live Nation. Concert promoters’ responsibilities include hiring and paying artists, overseeing event promotion, and coordinating supplies and staffing needs at venues. Performing arts organizations essentially act as their own concert promoters. Occasionally, private companies or individuals may contract with artists directly or through a talent broker. For a live performance to be successful, certain roles need to be fulfilled. Artists and their equipment must travel to the performance site, and instruments and other equipment must then be unloaded and set up at the venue. Maintenance must then be performed to ensure that the items are in working order. A large touring act may employ extensive stage sets or complex light shows, and trained technicians must build those sets and set up necessary lights. During the show, sound quality must be managed to ensure that both performers and audience can adequately hear the music. On-site individuals must also manage the overall workflow to make sure everything happens on time and on schedule. Artists often bring many of these workers with them, and even small touring acts are likely to travel with at least one person who may

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double as a tour manager and sound technician. Alternatively, performance venues or promoters may provide some staff. At a performing arts organization, one or more people typically make up the operations department. This department conducts productions and operations backstage and may also oversee activities in the theater or the front of the house. Production and operations occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Producer Recording/Sound Engineer Promoter Production Manager Tour/Road Manager Stage Manager Stagehand Sound Technician Instrument Technician Bus/Truck Driver

Distribution Once a record label has released an album, that recording must find its way to listeners. The distribution sector of the music industry handles this process, taking physical or electronic music products from the point of creation to the point of sale. While large record labels handle their own distribution, smaller labels often strike deals with larger companies to distribute their products. Physical items, such as CDs and vinyl albums, travel from a manufacturing facility to a distribution center. From there, employees ship goods to individual retail facilities. Retail record stores may be independently owned or part of a chain. They are often located in urban and suburban shopping districts or malls. If a store is part of a chain, it may be overseen by a district or regional manager who is responsible for the performance of a number of retail outlets. This job involves a great deal of travel, and a typical district manager has a college degree and retail-store experience. At the store level, retail sales staff are responsible for stocking, sales, and customer service. A typical store includes a manager, at least one assistant manager, and a number of part-time and full-time store associates. These employees may have high school or college educations, or they may still attend school.

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During the early twenty-first century, online distribution has become increasingly common. Through online distribution, smaller record labels can sell their products without relying on a partnership with a larger distributor. Some retail stores have also expanded into online sales. When an online order is received, an employee must pull, pack, and ship the item to the purchaser. Distribution and sales staff may also work in a live performance venue. These employees sell merchandise including recordings, T-shirts, posters, and other goods to attendees of live performances. Often, these crew members are employed by and travel with particular artists rather than being on the staff of a performance venue. Distribution occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Distribution Manager Shipping and Receiving Clerk Truck Driver Regional Manager Store Manager Store Associate Merchandiser

aries between creative artists and their managers on the one hand and the record label on the other. At small labels, the label owner may fulfill these functions. At performing arts organizations, music directors and other trained listeners from each orchestral section determine which musicians to hire based on live auditions. Typically, these auditions are “blind,” meaning that those performing cannot be seen by the people for whom they are auditioning. This practice helps ensure unbiased decisions. In fact, researchers determined in 2001 that use of blind auditions led to a 50 percent jump in the likelihood of a female musician advancing beyond the first round of auditions. Human resources and artist recruitment occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Human Resources/Artist Recruitment Human resources staff oversee employee recruitment, hiring, and termination processes. They are also typically responsible for mediating disputes between employees and employers, administering payroll and benefits, and contributing to employee and organizational policies. Small companies may have only one person to perform these functions, or they may be assumed by the financial manager or business owner. Large companies may have entire divisions dedicated to human resources, with an executive-level director managing the work of several departments. A typical human resources staffer has at least an associate’s degree in the field. Record labels must have one or more individuals responsible for artists and repertoire, commonly called A&R. A&R managers scout new musical talent and recruit artists for their record labels. After artists have been signed to a particular label, that label’s A&R manager may help develop the artists’ careers, make suggestions about recording decisions, and help choose singles for radio airplay. Typically, A&R managers become intermedi-

Vice President of Human Resources Vice President of Artists and Repertoire Human Resources Manager Human Resources Generalist Human Resources Assistant Benefits Specialist Payroll Administrator A&R Manager

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be in decline. However, while the sound recording industry is expected to continue an overall trend of decline, not all segments of the music industry face the same challenges. Some subindustries face somewhat stronger outlooks. The BLS projects rapid growth in the overall field of arts, entertainment, and recreation as both the incomes and the leisure time of American workers increase. However, performing arts fields such as music are expected to remain unchanged. This discrepancy is due to significant growth expected in the other portions of the larger industry. For example, people are increasingly expected to choose to spend money on health-club memberships rather than on recorded music. Because of this shift in consumer tastes, the BLS does not anticipate occupational growth for musicians or singers to outpace the average for all jobs. Moreover,

Music Industry music jobs are anticipated to remain highly competitive because many people desire them. Some segments of the music industry are struggling with other difficulties stemming from consumer taste and lifestyle changes. For several years, the sound recording industry has experienced declining sales, both in terms of revenue and in terms of units sold. Industry analysts have attributed at least part of this decline to the rise of online music piracy. Although record companies have found ways to capture revenue streams by offering content through popular paid download services such as the iTunes Store, this rise in paid electronically delivered music has not compensated for the consistent drops in physically delivered music formats such as CDs. In 2009, financial analysts at accounting and consulting firm Deloitte predicted that overall revenues for the sound recording industry were likely to continue their downward trend for quite some time. These shifts have had a negative impact on traditional retail music outlets. Entertainment retailer Trans World Entertainment has steadily purchased failing record-store chains over the past several years, yet it has experienced disappointing revenues that have forced individual store closures. Throughout the industry, even those outlets that survive face such severe continued challenges that the BLS anticipates that the number of workers at book, periodical, and music stores will decline by nearly 20 percent by 2016. On the other hand, the concert industry has generally enjoyed strong growth over the past several years. Although analysts predict that the worldwide economic downturn of 2007-2009 is likely to bring diminished returns for the concert industry as consumer discretionary spending declines— and industry reports of live-performance returns for the first half of 2009 indicate a decrease of more than 10 percent—bright spots have emerged. For example, concert producer and venue operator Live Nation enjoyed revenue growth during the period of general decline. A 2010 merger between Live Nation and ticket powerhouse Ticketmaster has created a music company of unparalleled scope, to the extent that the two corporations had to agree to several U.S. Department of Justice demands before the merger was approved. In the wake of the deal, Live Nation’s product expansion through its “360 deals” seems all the more likely to continue.

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Employment Advantages Despite the challenges facing the music industry as consumer consumption habits shift, the industry offers exciting opportunities for those who love music. The few performers who achieve worldwide success can earn huge sums of money in a short period of time, and the possibility—no matter how remote—of achieving fame and fortune attracts many musicians to the field. However, most musicians work part time for low pay, simply for the satisfaction of playing an instrument or singing before an appreciative audience. Full-time musicians and their support crews often spend much of their time on the road, making the lifestyle attractive to individuals who enjoy visiting new places. The range of jobs available in the music industry is quite diverse, and many positions exist for nonperformers. Students who love music but prefer not to take on the risks or the extensive training that come with being a performer may enjoy working for a record company, publishing company, or performance venue. Such workplaces may also offer opportunities for staff members to meet wellknown stars or attend publicized events. Annual Earnings Revenue outlooks for the overall music industry vary greatly depending on the particular market segment. Analysts widely expect the revenues of traditional sound recording companies to continue to decline for the foreseeable future, both domestically and internationally. These declines will presumably bring further staff reductions at large record labels and eventually usher in transformed business models. Dropping sales also seem to be heralding the end of the traditional specialty music store. By 2007, Trans World Entertainment, the largest operator of music retail outlets in the United States, had begun working to diversify into other entertainment products, such as video games. In 2008, the sound recording industry posted annual revenues of nearly $5 billion in the United States, a decline of 18.6 percent from the preceding year. International revenues were more than $12.6 billion, with the music industry bringing in $18.4 billion worldwide. These figures include sales of physical and digital music media, as well as performance rights. Live performance companies have a much rosier outlook. Steadily increasing concert revenues,

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paired with innovative artist agreements, seem likely to guarantee strong revenue streams in upcoming years, despite temporary challenges brought on by overall economic woes. In 2008, the U.S. concert industry brought in about $4.2 billion, an increase of 7 percent over 2007.

Tel: (559) 271-7900 http://www.pollstar.com Recording Industry Association of America 1025 F St. NW, 10th Floor Washington, DC 20004 Tel: (202) 775-0101 http://www.riaa.com

RELATED RESOURCES FOR FURTHER RESEARCH ABOUT American Society of Composers, Authors, and Publishers 1 Lincoln Plaza New York, NY 10023 Tel: (212) 621-6000 http://www.ascap.com American Symphony Orchestra League 33 W 60th St. New York, NY 10023 Tel: (212) 262-5161 http://www.symphony.org Billboard BPI Communications 1515 Broadway New York, NY 10036 Tel: (800) 745-8922 http://www.billboard-online.com International Federation of the Phonographic Industry IFPI Secretariat 54 Regent St. London W1B 5RE United Kingdom Tel: 44-20-7878-7900 http://www.ifpi.org Music Week Ludgate House 245 Blackfriars Rd. London SE1 91S United Kingdom http://www.musicweek.com Pollstar 4697 W Jacquelyn Ave. Fresno, CA 93722

THE

AUTHOR

Vanessa E. Vaughn is a freelance writer who has experience in both the commercial and the nonprofit sides of the music industry. While completing her bachelor’s degree in mass communications at Boston University, she interned at a small music management and booking company in London, England. Later, she spent two years on the staff of the Dayton Philharmonic Orchestra in Dayton, Ohio, before earning a master’s degree from Wright State University. From 2004 to 2007, her husband played drums for a successful rock band, giving her a behind-the-scenes look at such music institutions as Radio City Music Hall and Chicago’s Lollapalooza festival.

FURTHER

READING

Allen, Katie. “Downloads Fail to Stem Fall in Global Music Sales.” The Guardian, July 3, 2007. Borg, Bobby. The Musician’s Handbook: A Practical Guide to Understanding the Music Business. New York: Billboard Books, 2008. Cosper, Alex. “History of Record Labels and the Music Industry.” Playlist Research, 2009. http://www.playlistresearch.com/ recordindustry.htm. Deloitte. “2009 Industry Outlook: Media and Entertainment.” January 28, 2009. http:// www.deloitte.com/view/en_US/us/ Industries/Media-Entertainment/article/ a5391ec6f6001210VgnVCM100000ba42f00aRC RD.htm. The Economist. “Digital Music Sales.” May 28, 2009. Espejo, Roman, ed. What Is the Future of the Music Industry? Detroit: Greenhaven Press, 2009. Gordon, Steve. The Future of the Music Business. 2d ed. Milwaukee: Hal Leonard Books, 2008.

Music Industry Hefflinger, Mark. “Sony BMG Revenue Down 27.8%; Digital Up 40%.” Digital Media Wire, March 20, 2008. http://www.dmwmedia.com/ news/2008/03/20/sony-bmg-revenue-down27.8%25%3B-digital-40%25. Krasilovsky, M. William, and Sydney Shemel. This Business of Music: The Definitive Guide to the Music Industry. 10th ed. New York: Billboard Books, 2007. Miller, Warren. “Live Nation, Ticketmaster Announce Plan to Merge.” Morningstar, February 12, 2009. http://quicktake .morningstar.com/Stocknet/san.aspx?id =279588. Negus, Keith. Music Genres and Corporate Cultures. New York: Routledge, 1999. Rapaport, Diane. A Music Business Primer. Upper Saddle River, N.J.: Prentice Hall, 2003. Thall, Peter W. What They’ll Never Tell You About

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the Music Business: The Myths, the Secrets, the Lies (and a Few Truths). New York: Billboard Books, 2006. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Musicians, Singers, and Related Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos095.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Gerald L. Nino/U.S. Department of Homeland Security

National and International Security Industry

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The national and international security industry is an overarching network of private and public corporations and agencies dedicated to locating, assessing, and defending against threats to a nation’s interests. The industry is often interconnected with various branches of the military, but it focuses on systems and analysis as opposed to policy making. The national and international security industry has been in a constant state of evolution throughout history, adapting to meet an ever-changing threat environment. Generally, this industry comprises two manifested areas. The first area involves systems, such as computer networks, early-warning systems, and satellite technology. The second of these areas is more academic and focuses on events, organizations, and key individuals that may strengthen or destabilize the interests of a given country.

General Industry: Government and Public Administration Career Clusters: Government and Public Administration Occupations; Law, Public Safety, and Security Subcategory Industries: Intelligence Agencies; Intelligence and National Security Consultants; International Development; International Security Organizations; Technology Manufacturers; Think Tanks Related Industries: Civil Services: Public Safety; Defense Industry; Federal Public Administration; Legal Services and Law Firms; Public Health Services Annual Domestic Revenues: $302 billion USD (U.S. Department of State, 2001) Annual International Revenues: $534 billion USD (U.S. Department of State, 2001) Annual Global Revenues: $839 billion USD (Stockholm International Peace Research Institute, 2002) NAICS Numbers: 928, 336992

History of the Industry In the mid-seventeenth century, the governments of Europe coalesced to address common economic issues. Europe had long been in crisis from war and economic stagnation, and the leaders of each major government sought to move away from past conflicts to create a framework whereby 1260

National and International Security Industry the many nations of the continent could work together. This common desire resulted in the signing of two peace treaties, commonly known as the Peace of Westphalia, that fostered the creation of a new type of political entity—the sovereign nationstate, with defined interests and goals. After the establishment of the Peace of Westphalia in 1648, countless regional and imperial governments began to form nation-states with borders, individual governments, and discernable cultures and social groups. They also demonstrated their own interests and goals, in some cases coincidental with the pursuits of other nation-states. Nonetheless, these nation-states remained independent of one another. The military remained the primary tool of national defense throughout preindustrial history. Designed to defend or attack with blunt force, armies and navies were organized and dispatched to challenge threats to a given nation-state’s way of life. After World War I, many new nation-states rose from the ashes of defeated European and Asian empires. Each of these emerging countries developed its own government, military, and other institutions. With time, the interests and goals of these new states coincided with the interests and goals of

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neighboring countries. Often, two or more neighbors identified a potential mutual threat in some other nearby country or countries. As a result, it became necessary for nations to set forth policies that would protect each country’s interests and people in the event of a foreign attack. As more countries emerged on the global stage, an increasing volume of national and international security plans were effected. Although espionage, one of the oldest aspects of security, dates as far back as ancient Egypt, the boom of modern nation-states that followed World War I caused a surge in intelligence institutions and organizations. In the interests of protecting their lifestyles and assets, new nation-states created systems designed to analyze the actions of other nation-states to assess any potential threats. In the years leading up to World War II, some of the most elaborate and far-reaching security networks were operated by Nazi Germany and Japan. In the United States, the Office of Strategic Services (OSS) was developed as a wartime intelligence agency in 1942, although the key intelligencegathering entity used by the Allies in the war was that of the British government. Following World War II, the Cold War between

A U.S. Air Force MQ-1 Predator unmanned aerial vehicle flies over a U.S. Marine Corps AV-8B Harrier at Creech Air Force Base in Nevada. (U.S. Department of Defense)

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National and International Security Industry

the Soviet Union and the United States brought about a renaissance in national and international security pursuits. The Soviet Committee for State Security (Komitet Gosudarstvennoy Bezopasnosti, or KGB) and the U.S. Central Intelligence Agency (CIA)—of which the OSS was the predecessor— engaged in a decades-long cat-and-mouse game. The Industry Today Modern national and international security endeavors did not subside with the 1991 dissolution of the Soviet Union and the end of the Cold War. Rather, the industry changed significantly along with the rest of the international environment. In fact, the end of the Cold War helped foster an increase in two new potential security threats: international terrorism and rogue states. These two threats, long in the background during the Cold War era, were brought to the forefront after the terrorist attacks on the United States of September 11, 2001, and the increasing penchant for aggressive

The nano-hummingbird is a tiny remote-controlled aircraft designed by the AeroVironment facility in Simi Valley, California. (AP/Wide World Photos)

countries to combat their adversaries by funding terrorists. The national and international security industry has become one of the most pivotal global industries in the early twenty-first century. Generally, government agencies and organizations are the primary drivers of this industry, as they set and implement security policy. In most cases, these agencies have become clients of private security and defense companies, which have entered into development and manufacturing contracts to meet a country’s security needs. Thus, government intelligence and security agencies such as the CIA, the National Security Agency (NSA), and the Department of Homeland Security (DHS) are not the only components of the national and international security industry, as private corporations work closely with government agencies to develop surveillance and weapons technologies. The vast collection of public and private organizations constituting the national and international security industry spans a wide range of fields. For example, the aerospace industry, long dedicated to creating military aircraft, increasingly emphasizes surveillance aircraft used to track the movements of hostile elements in such areas as Iraq and the Afghanistan-Pakistan border. Similarly, the naval defense industry is changing its focus from defenses against naval attack toward long-distance detection systems such as radar. The naval defense industry is also shifting from larger ships to smaller patrol craft. This evolution toward a focus on security rather than combat is not accidental: With the demise of the Cold War, the primary threat to national interests comes from smaller, more agile, and stealthy nonmilitary enemies. As a result, military contractors across the spectrum are now meeting the demand for national security-oriented technologies and hardware. In addition to public and private institutions concerned with the security of individual nations, entities exist to coordinate international security. These entities administer international security partnerships, which are usually forged between two or more countries with common interests and which are seeing greater participation than in previous decades. Two of the most prominent of these organizations are the North Atlantic Treaty Organization (NATO), which was created among Western nations to counter the perceived Soviet threat

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during the Cold War era, and the European Union (EU), which was established to concentrate and strengthen the economic and political interests of the tightly knit countries of Western Europe. These organizations are hardly alone in terms of their focus on integrated regional and international security. In 2003, the twenty-one-member Asia Pacific Economic Cooperation (APEC) established the APEC Counter-Terrorism Task Force, and in Central and South America, the Organization of American States (OAS) created the InterThe FBI recruits prospective candidates at Cleveland State University in American Committee Against TerrorMarch, 2011. (AP/Wide World Photos) ism (Comité Interamericano Contra el Terrorismo, or CICTE). Additionally, the United Nations maintains a number well as investigative and enforcement agencies, such of security and counter-terrorism committees and as the Federal Bureau of Investigation (FBI). The organizations under its umbrella. DHS integrates both functions, as well as assuming priBeyond government agencies and partnerships mary responsibility for monitoring and securing the and the private manufacturing and contract supUnited States’ national borders against illegal entry. port corporations they utilize, there exists another Potential Annual Earnings Scale. The average element of this industry that is critical to analyzing hourly salary for many positions in the Department issues and implementing proper reactive policies: of Homeland Security, for example, is between $18 think tanks. National security think tanks are reand $33, while the average pay at the Central Intelsearch companies and academic nonprofit organiligence Agency is $70,000 per year. zations that assess potential security threats and Clientele Interaction. Federal national security submit reports to governments and their security employees have varying degrees of public interacagencies. Often, these think tanks, also known as tion. Those who work in such agencies as the CIA policy institutes, operate as the primary policy acor NSA rarely interact with private citizens outside tors or counsels within an organization or governof their workplace. Homeland Security personnel, ment. including airport screeners employed by the Transportation Security Administration (TSA), and protective service personnel, including law enforceINDUSTRY MARKET ment officers and some members of the U.S. Secret SEGMENTS Service, have constant contact with private civilians as part of their job descriptions. The national and international security industry Amenities, Atmosphere, and Physical today is a diverse network, offering potential emGrounds. Federal security agents may work in ofployees a wide range of fields and career paths. fices, at airports, at border stations, or in military Whether one comes from a law enforcement backinstallations. These work settings are typically team ground, academic environment, or engineering oriented, with peers working closely alongside one field, this growing field continues to offer a host of another, often in compartmentalized divisions of options for professional development. labor. Typical Number of Employees. The number Government Security Agencies of people employed by government security agenU.S. government agencies include intelligence cies is rarely disclosed. However, it is believed that and espionage services, such as the CIA and NSA, as

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National and International Security Industry

A Border Patrol agent watches trains passing through Montana, looking for any illegal activities. (Gerald L. Nino/U.S. Department of Homeland Security)

the CIA employs about 22,000 (excluding private contractors), while the NSA is believed to have considerably more employees. The Department of Homeland Security is estimated to have about 196,000 employees around the country, many of whom are civilians. Traditional Geographic Locations. Although most federal agencies are headquartered in the greater Washington, D.C., area, positions with such agencies as the CIA and DHS may be based in virtually every state and in offices around the world. In some cases, national and international security jobs are located on both domestic and foreign military bases. Pros of Working for a Federal Security Agency. Despite the 2007-2009 global economic crisis, the federal government continues to hire personnel for national and international security agencies. The government offers competitive salaries and benefits and, in the light of the ongoing nature of security concerns, relative stability.

Cons of Working for a Federal Security Agency. Federal salaries, while typically competitive, are also regimented according to experience and limited by budgets, so increases in such salaries are not as frequent or dramatic as they are in the private sector. Additionally, jobs are beholden to the federal budget, which may cause layoffs or work furloughs when legislative budget impasses occur. Furthermore, security agencies in particular are managed strictly with protocols and oversight, which may frustrate those who prefer organizational flexibility in the workplace. Costs Payroll and Benefits: Pay for employees of federal security agencies varies based on the job performed and the experience of the individual. Such agencies pay both hourly and salaried rates for their employees. For full-time employees, benefits such as health insurance are provided.

National and International Security Industry Supplies: Federal agencies must procure a wide range of office and personnel supplies. In addition to up-to-date computer and communications systems (along with office supplies and furniture), many agencies must pay for vehicles, weapons, and uniforms. External Services: Like most federal agencies, national security agencies use contractors as administrative, logistical, and consultative support resources. Such “stringers” often work in offices alongside agency personnel and receive their salaries and benefits from the private company by which they are employed. Because of the sensitive nature of the data handled (and the security clearance required to work in such an environment), other external services would be limited to activities that do not provide access to key internal areas. Utilities: Because of their sheer size, federal agencies pay a considerable percentage of their budgets to utilities, including heat, electricity, and telecommunications providers. Utility providers and government procurement offices usually negotiate a lower rate for such utilities than is paid in residential areas. Taxes: Public national security agencies rarely pay property or corporate taxes. However, in many cases, such federal departments offer a payment in lieu of taxes to the communities or states in which they are located. National security employees are also often exempt from certain kinds of sales taxes as long as they are traveling on official government business. Private National and International Security Corporations Private corporations form a crucial portion of the national security sector, although as is the case with government-agency employment figures, the precise proportion and distribution of security roles filled by private contractors are not public knowledge. Private contractors have been increasingly integrated into military and intelligence operations, and many have job descriptions—such as interrogation of suspected terrorists or providing personal security for government officials in war zones—that were once the sole purview of public employees. Many contractors previously worked for the government, whether in the armed forces or in the intelligence community, and they capital-

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ize on the skills, experience, and security clearances they obtained as public employees. Potential Annual Earnings Scale. The salaries of private contractors depend on the size and scope of their contracts. According to a 2007 U.S. Senate report, the average national security private contractor earns about $250,000 per year, while the average federal agency employee earns about half of that figure. Clientele Interaction. Private contractors provide hands-on support to national security agencies. Typical contractors spend a large percentage of their work time in communication with (if not at the offices of) their clients, presenting frequent reports, assisting in financial reviews, and conducting program audits to ensure quality service. Amenities, Atmosphere, and Physical Grounds. While many private contractors work alongside federal agencies, often in the same offices, others are located in their own office spaces, although usually near the client. In many situations, private contractors work in the field, alongside their clients. Arlington, Virginia, which is located just outside Washington, D.C., and is home to the Pentagon, contains a large number of office buildings filled with national and international security companies. Pros of Working for a Private National Security Corporation. Private contractors are able to perform many of the same tasks as public employees for greater pay and benefits. Many contractors also receive per diem payments to cover travel expenses. In addition, private contractors are not necessarily beholden to the stringent internal policies found in military branches and other government agencies, so private companies are able to attract a more diverse base of employees. Cons of Working for a Private National Security Corporation. Private corporations risk losing their government contracts, which could result in them laying off the staff funded by those contracts. Additionally, contractors must compete for contracts by offering cost-effective budgets to potential government clients, so they must keep salaries in check. In some cases, this competition can keep pay levels lower than some federal employee salaries (as the federal government has no competition). Additionally, national security firms must work within parameters set by the government, fostering little creativity for those who work under such contracts.

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National and International Security Industry

Costs Payroll and Benefits: Salaries for employees of private national and international security agencies vary based on the job performed and the experience of the individual. Such agencies pay both hourly and salaried rates for their employees. Benefits such as health insurance are provided for full-time employees. Supplies: Private corporations must procure a wide range of office and personnel supplies to support their efforts. They must have up-to-date computer and communications systems (along with office supplies and furniture), as well as audiovisual capabilities in order to assist in client reports. External Services: Private national and international security agencies may employ subcontractors to help manage administrative, logistical, and systemic support services. Such workers remain beholden to the same parameters and guidelines established by the main contract and the private company, although they receive pay and benefits from the company through which they are employed. Utilities: Private national and international security companies must pay for such operational utilities as heat, electricity, and telecommunications. Although some are large enough to own their offices, others must pay rent to building owners or leasing companies. Such costs may or may not be attached to the contracts they hold with the federal government. Taxes: Unlike public national and international security agencies, private companies must pay property and corporate taxes. Under some circumstances, they may be exempt from sales tax, hotel occupancy tax, and other such taxes. In many instances, however, they are not. Technology Manufacturers National security technology includes everything from spy satellites and military hardware to proprietary software used to intercept and evaluate telecommunications. Manufacturers of this technology often receive government contracts to create it, and they may receive support in their quest for such contracts from the members of Congress representing their districts. Potential Annual Earnings Scale. Average salaries for engineers, scientists, and other personnel

working for aerospace and security technology manufacturers range from just over $60,000 per year for mechanical engineers to as much as $110,000 per year for project managers at aviation plants and other producers of military and security hardware. Clientele Interaction. The level of client interaction for technology manufacturers varies based on job responsibilities. For example, sales managers and senior officials are responsible for designing proposals for technology delivery that can fit the needs of clients, and they therefore have a great deal of interaction with clients. Project managers and engineers, on the other hand, may spend more time in their plants conducting research, operations, or assembly endeavors; they often have very little interaction with clients. Amenities, Atmosphere, and Physical Grounds. The work environment of a security technology manufacturer varies based on the type of work performed. Many such manufacturers operate in large complexes of interconnected plants and warehouses, rather than in office buildings. Because of their size, many of these campuses offer employees walking areas outside of the buildings, cafeterias, and other amenities. Project managers and more senior personnel may have individual offices, while other workers are grouped together in teams, whether in shared office space or in cubicle settings. Typically, these manufacturing complexes are carefully monitored and protected by security personnel, gates, and systems. Typical Number of Employees. Security technology manufacturers often employ a great many people. For example, the Raytheon Company, which is an industry leader in producing homelandsecurity-oriented intelligence-gathering and information technology, employs seventy-three thousand workers worldwide. Saab, the Sweden-based producer of aerospace, aviation, and coastal security systems, has about thirteen thousand employees at its various international locations and has plans to grow significantly in the future. Such large employee pools are usually broken up and departmentalized, with small teams working on individual projects under the oversight of project managers. Major projects such as coastal defense systems and integrated satellite technologies, however, require much larger groups of interconnected teams.

National and International Security Industry Traditional Geographic Locations. Because producers of security and military technology must have access to transportation systems, reliable telecommunications systems, and employee bases from which to draw, plants are often located near urban centers. For example, Hughes Missile Systems, which produces the Patriot interceptor missile, is located just outside Tucson, Arizona. Northrop Grumman, one of the world’s largest global security manufacturers, has plants just outside Los Angeles and Washington, D.C. Many manufacturers require an enormous amount of real estate in order to produce their systems and maintain sufficient building security. As a result, they tend to remain near but outside cities, where sufficient land is available and affordable. Pros of Working at a Technology Manufacturer. Security technologies are among the most advanced, best funded, most cutting edge technologies in the world. As a result, employees take a great deal of pride in their work, as well as enjoying opportunities for invention and innovation that exceed those afforded by most other technology subsectors. Additionally, because security manufacturers seek the best engineers and teams available, they usually pay higher than average salaries and benefits. Cons of Working for a Technology Manufacturer. Security technology manufacturers enforce strict rules governing the workplace. These include a wide range of security protocols, some of which are company-imposed and some of which are imposed on companies by clients, such as the military. Many of these requirements involve frequent administrative reporting, strict project oversight, concrete deadlines and timelines, and tightly controlled access. This level of control, combined with the size of manufacturing facilities, can make leaving those facilities for lunch or brief breaks challenging. Additionally, the workplaces themselves are not always accommodating and may include makeshift offices and workstations and occasionally inefficient air and heating systems. Costs Payroll and Benefits: Security technology manufacturers generally pay annual salaries. Benefits are usually competitive and tailored to those who work in a hands-on environment: Most major manufacturers offer accidental death and

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dismemberment insurance, as well as short- and long-term disability plans. Supplies: Manufacturers require a great deal of office, machine, hardware, computer, and other supplies in their day-to-day operations. In addition, they need wiring, computer modeling software, heavy machinery equipment, power generators and other tools, as well as hard-hats and uniforms for personnel working in environments in which clothing may be damaged on the job. Manufacturers that produce aircraft, ground vehicles, or naval systems need gasoline, jet fuel, or other energy sources. Finally, they may need audiovisual equipment to present their technologies to prospective buyers. External Services: Because of the classified nature of the systems and equipment they produce, security technology manufacturers often perform in-house many operations that other manufacturers would normally contract to external vendors. Nonetheless, they may still contract groundskeeping services (including winter snow removal), shuttle-bus services (to transport staff from building to building on large campuses), and even gate security. Snack machine maintenance services and cafeteria operations may also be staffed by external vendors who are kept away from secured areas. Even with limited access, these external vendors must often pass background checks as a condition of employment on-site. Utilities: Security technology manufacturers use a relatively large amount of energy and utility services during the course of their daily operations, including electricity to run computers, heavy machinery, lights, and other key systems. Because of the size of their facilities and the large number of on-site personnel employed at a given time, trash, water, and sewage utilities are also heavy components of a manufacturer’s monthly expenses. In order to mitigate the cost of utilities, manufacturers may implement green technologies such as solar power, low-pressure faucets, and recycling programs. Taxes: Technology manufacturers are often among the largest property tax contributors in a given area. Unlike federal agencies, they are not exempt from state and local taxes (although, in many cases, they are able to negotiate their corporate and property tax rates with local govern-

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National and International Security Industry

ments, which benefit from their presence as high-paying employers of large workforces). International Security Partnerships International security organizations often exist by virtue of treaties among their member states. Their immediate mission may be to administer and execute the terms of those treaties, while their larger mission is to protect the mutual interests of their members. These interests may include maintaining the relative stability of strategically important global regions, so international security partnerships often engage in peacekeeping missions in third-party nations. Potential Annual Earnings Scale. The earnings of employees at a given international security organization are usually dependent on the civil service standards of the participating countries. These standards usually include pay scales for various positions, such as senior leadership, managers, support staff, and administrative personnel. Clientele Interaction. Employees of an international security partnership act as representatives of their respective countries while in service to the overarching organization. They work closely with representatives of other states, as well as project administrators from higher levels. They remain, however, beholden to the countries they represent, taking orders from their home countries’ international relations leadership (such as the U.S. Department of State or the British Foreign and Commonwealth Office). Client interaction varies at these organizations based on the position involved, as does the definition of a client. In some contexts, a client may be a project team, while for others it will be an ambassador. In any case, partnership staff must have strong communication and interpersonal skills, and they must be able to relate to and interact effectively with people of vastly different cultural backgrounds. Amenities, Atmosphere, and Physical Grounds. The work performed at an international security organization is professional and diplomatic in nature. Many such organizations’ operations are conducted in or near government or military installations. In the interest of costeffectiveness, many such organizations lack the personalized décor of an Internet start-up or the grandiose architecture of a skyscraper. In fact, many staff must share office space or work in cubi-

cle settings. Those who work in the field are often sent to unstable zones, where they are charged with combating the elements that create threats to regional security. Typical Number of Employees. The number of employees at a given international security organization varies based on the size of that organization. For example, NATO employs thousands of nonmilitary personnel in its efforts to maintain international security, while similar organizations dedicate smaller task forces to their regional efforts. Traditional Geographic Locations. International security partnerships have headquarters and other facilities throughout the world. Because of the large volume of high-level diplomats and leaders that frequent them, they are usually headquartered in major cities. Smaller offices are found in locations throughout their regions of influence or in strategically important centers. Additionally, these organizations may have offices located on military bases, at transportation centers, or in other key facilities. Pros of Working for an International Security Partnership. Working for an international security partnership offers employees unique opportunities. International security professionals assess and address regional, national, and international security threats in diverse and cosmopolitan settings. They are able to work with people from other countries, analyzing information from sources to which they may not have access on a national level. While working in international settings, they are able to receive the benefits and salaries typically provided by their home countries. Workers from wealthy nations such as the United States and those in Western Europe thus receive competitive pay, even when they are located in regions with much lower annual salaries than those of their home countries. Cons of Working for an International Security Partnership. In most cases, work at international security partnerships is not conducted over the long term; assignments may last only a year or two, which may hinder professional growth. Additionally, although the directives of an individual working for an international security partnership are clear (as they originate in the individual’s home country), the diversity of the environment entails being surrounded by colleagues from other

National and International Security Industry countries with conflicting directives and interests. Such divisive conditions may hinder the work being performed or slow its progress considerably. Furthermore, employees’ duties may require them to travel to unstable or dangerous areas for prolonged periods of time. Costs Payroll and Benefits: International security organizations pay salaries and benefits based on the pay scales of member countries’ civil services. These salaries, like most of the organizations’ operating budgets, are supplied by the member nations themselves. Supplies: Like any large government agency, international security partnership organizations must procure large amounts of office supplies, such as computers, telecommunications hardware, and audiovisual equipment (such as overhead projectors and screens). Because of the large quantity of supplies purchased, the managing organization and its individual members may negotiate lower procurement costs with suppliers. External Services: While most international security partnership organizations are staffed primarily by public employees, some contract external services for less integral positions. Because of the sensitivity of the data they handle and the level of security clearance necessary to view such data, externally contracted positions may be limited to janitorial services, building security, or systems maintenance (such as groundskeeping and building engineering). Utilities: International security partnerships must pay for standard utilities such as electricity, heat, water usage, and waste management. Taxes: The tax status of an international security partnership organization can be vague, particularly when it operates in a third-party country. In the case of the former Yugoslavia, for example, NATO’s establishment of operations depended on the Croatian, Serbian, and Bosnian governments’ willingness to exempt NATO employees from any national income, property, or sales taxes, as long as their presence was part of official NATO business. When they do not secure such exemptions, the organization and its employees must pay the relevant taxes of the countries in which they are operating.

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Think Tanks National and international security think tanks conduct research and engage in advocacy in order to shape the foreign and defense policies of national governments. Some think tanks are avowedly partisan, embracing a progressive or a conservative point of view. Others strive to be nonpartisan and seek a balance of diverse opinions from their staffs. Some—particularly in the national and international security realm—are funded by the government itself. These government-funded institutes evaluate current and prospective policies and provide reports and recommendations directly to the government. They bring together governmental, industrial, and academic resources in a way that a fully governmental entity cannot. In addition, some think tanks are funded by particular business interests, such as defense contractors. Their job is to shape policy for the specific benefit of their funders—usually for their financial benefit. Even those nonpartisan entities funded by public donor contributions may have a vested interest in producing analyses that confirm the opinions of their particular donor bases. If so, they tend to shy away from expressing opinions that those bases will find controversial. Think tanks may employ researchers and analysts with varying levels of academic credentials versus practical experience in government and national security. Indeed, one of the benefits of the think tank as an entity is its ability to bring together academics and those with real-world experience to work cooperatively on the same project. Potential Annual Earnings Scale. The earnings of a national and international think tank vary based on the contracts under which the organization is operating, as well as the security clearance required for a given position. In 2006, the average uncleared staff member earned about $50,000 per year, while the average staff member with a higher security clearance earned about $66,000 per year. At the largest security think tank, the Rand Corporation, the average annual salary is about $56,000, although high-level economists and policy analysts may earn more than $100,000. Clientele Interaction. Government-funded think tanks report directly to government agencies, while other institutions tend to issue press releases and reports and hold public events to disseminate their findings. In either case, at small think tanks it

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is likely that most if not all employees will present findings and publicize positions in forums outside their institutions. By contrast, large institutions generally employ specific staff members tasked with client relations, public relations, or government relations. Other employees are unlikely to interact much with clients or the general public. Amenities, Atmosphere, and Physical Grounds. The environment of a national and international security think tank is typically an office setting with individual offices, cubicles, or a combination thereof assigned according to seniority. The environment is professional, and most of the work is performed with computers and telecommunications technologies. Typical Number of Employees. Think tanks vary in size, from small, nonprofit organizations staffed by only a few individuals and administrative personnel to large corporations with hundreds of staff members working on a large number of contracts. Small institutions may supplement their small staffs with unpaid interns or part-time work-

ers. Large corporate think tanks often divide employees into teams that are each assigned specific projects. Traditional Geographic Locations. National and international security think tanks are typically located either in major urban areas or in major university environments. Urban areas facilitate transportation and access to a large amount of information, whereas academics and staff may dedicate a larger percentage of time analyzing data and utilizing a wide range of information resources within an academic setting. Pros of Working for a Think Tank. Working at a think tank involves a great deal of academic research and policy analysis (if not recommendations). It is intellectually stimulating work that allows specialists in such fields as political science, defense, economics, and national security to capitalize on their training and expertise. Additionally, although think tanks study threats to a nation’s security, their employees are not typically placed in harm’s way (though they may have previ-

A U.S. Navy SH-60B Seahawk helicopter flies over an Arleigh Burke-class guided missile destroyer in the Pacific Ocean. (U.S. Department of Defense)

National and International Security Industry ous experience in high-risk environments, including battlefields and front-line counter-terrorism assignments). Cons of Working for a Think Tank. The work conducted at a think tank is done in something of a vacuum, in that it is shielded from the reality of the political process or the dangers of physically repelling a security threat. The think tank is an academic setting, dependent on models and theoretical concepts as well as actual data. Those seeking a realworld career environment may become frustrated with the approach of a think tank. Additionally, while the larger, corporate think tanks have sufficient financial resources to offer high salaries to their employees, the same cannot be said for a significant number of think tanks, which are often nonprofit entities. As a result, salaries, while at times competitive for higher-level managers and executives, are typically set at the level of the nonprofit sector rather than at the level of the corporate sector. A corporate employee doing comparable work is likely to be better paid. Costs Payroll and Benefits: Think tanks generally offer annual salaries and benefits to employees, although small institutions that receive contractual funding for specific projects may pay the staff working on those projects on a contract (per-project) basis. Supplies: Think tanks require office hardware and equipment, such as phones, computers, photocopiers, and fax machines, as well as stationery, writing implements, staples, and similar supplies. They also require computer software that is capable of collating and modeling large amounts of data. External Services: Think tanks may use external accounting services, employment agencies, custodial services, and private security agencies. Small institutions that are only occasionally in the public spotlight may also hire external public relations professionals or legal counsel. Utilities: Think tanks pay for standard utilities, which may include electricity, water, sewage, and trash removal, as well as telephone and Internet access. Taxes: Nonprofit think tanks are exempt from most taxes, though they must still pay payroll taxes on employees’ salaries. For-profit institu-

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tions must pay corporate and real estate taxes to state and federal governments.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of a national or international security agency or company is dependent on its size and duties. Many such institutions have multiple purposes and, as a result, are compartmentalized into mission- or project-specific groups. Many components of the industry are considerably different in terms of the types of employees who fill particular job roles. For example, an aerospace company that is responsible for developing intelligence satellite technology will likely have a high volume of engineers and technical experts in senior leadership. By contrast, a public policy organization that gauges political instability in certain regimes is more likely to have leaders with academic or diplomatic backgrounds. Because of the sensitivity of the industry and its endeavors, most employees of a national or international security organization must undergo extensive background checks. Upon passing, they are given security clearances appropriate to their job functions. The following umbrella categories apply to the organizational structure of agencies and institutions within the national and international security industry: ■ ■ ■ ■ ■

Senior Leadership Project Management Analysts Field Personnel Administrative Personnel

Senior Leadership At the top of a national or international security agency or corporation is a seasoned leadership team. It is responsible for overseeing the activities and operations of the entire organization. Many members of such teams are retired military officers or former legislators, both of whom are fully experienced in not just the issues involved in national security but also the operations directed toward ad-

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dressing those issues. They must also be capable budgeters and often serve as the official representatives of their organizations, reporting to legislators, officials, and even members of the media. The education of senior leadership in this industry varies, but they must be fully experienced in the issues at hand. Some are academics with extensive university experience and degrees in relevant fields. They must also be effective bureaucrats and leaders who can command employees and implement plans effectively. Senior leadership occupations may include the following: ■ ■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Vice President Chief Operating Officer (COO) Director Deputy Director Supreme Commander Chief Financial Officer (CFO)

Project Management Project managers oversee projects from conception to completion, and they manage the teams dedicated to carrying out those projects. They are responsible for overseeing team members, developing and maintaining project budgets and schedules, and assigning duties and tasks to team members. They report to senior leadership and, in the case of private contractors, to clients on a frequent basis. Project managers in the national and international security industry are typically former military personnel or college-educated civilians who have spent a number of years ascending through the industry. They are expected to have leadership skills and be effective administrators. Project management occupations may include the following:

who are adept at writing and speaking, as they are called upon to present coherent explanations of often-complex situations and systems. The recipients of these briefings may include senior officials who may not be familiar with the intricacies of the relevant concepts, as well as underlings who must understand the information they are given well enough to relay it up the chain of command. Analysts typically have advanced degrees, including at least a bachelor’s degree in the field most directly relevant to their projects. In many cases, they must be proficient (if not fluent) in a foreign language, which makes them far more effective at assessing data. Analyst occupations may include the following: ■ ■ ■ ■

Field Personnel Field personnel operate on the front lines against those who threaten national or international security. They are often the most visible of the agents in this industry, positioned at airports and other ports of call, assisting in maintaining security in combat zones, and even conducting investigations and interrogations. Field personnel vary in experience and educational background according to the type of work they are charged with performing. Some have law enforcement or military training, while others are trained after they have been hired, following strict procedures set forth by their agency or company. Field occupations may include the following: ■ ■ ■ ■

■ ■ ■

Program Manager Project Coordinator Contract Writer

Analysts Most international and national security teams include trained analysts. These individuals assess data, conduct audits, study trends, and assess threats. Analysts must be effective communicators

Senior Analyst Analyst Senior Researcher Researcher

■ ■

Security Officer Intelligence Officer Site Manager Special Agent Section Chief Peacekeeping Officer

Administrative Personnel Like any effective corporation or agency, in order to be efficient, a national or international security organization must have a highly capable group of administrative personnel to oversee the day-today operations. Administrative personnel manage

National and International Security Industry paperwork, answer phones, organize files and computer networks, and handle other tasks of vital importance. They may or may not have postsecondary educations, but they are expected to have exceptional organizational skills so that their offices will function both efficiently and effectively. Administrative occupations may include the following: ■ ■

Receptionist Administrative Assistant

INDUSTRY

OUTLOOK

Overview Since the earliest development of the modern nation-state, the security of a country and of the regions in which it has interests has been a high governmental priority. However, the environment in which the national and international security industry operates has changed considerably over the last several decades, and it will no doubt continue to evolve. What has emerged as a sizable, diverse, and global industry has been modified in response to changes in the nature of the threats against which it guards. While the need still exists for nations to have military and police presences to deter and defeat would-be attackers, the industry increasingly employs technological solutions to combat terrorism, monitor national instability and the behavior of rogue states, and protect against other threats. Concerns over security have major implications for other important national and international sectors and, as a result, may affect their operations. For example, it has been estimated that the heightened state of vigilance stemming from the terrorist attacks of September 11, 2001, helped spur American defense spending by as much as 60 percent over a six-year period. The growing national security industry continues to have strong ties to the arenas of aerospace, maritime, and conventional weapons (such as missiles, armor, and small arms), with which it has long been connected. Additionally, computer and communications surveillance, fields overseen in part by the NSA, continue to be a mainstay for the national and international security industry. The changing landscape of potential threats to a

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nation’s security has required adaptation and expansion into other areas. Although the NSA has been pursuing suspected combatants by monitoring telephone and electronic communications since the turn of the twenty-first century, the agency and its contractors have also had to defend against attempts to breach the country’s economic, governmental, and other vital systems via the Internet (so-called cyberterrorism). In doing so, the industry has needed to train personnel to create online defenses, as well as tracking and destroying viruses and other programs that pose a danger to a nation’s infrastructure. Additionally, biological and chemical weapons, while not necessarily new to the world, are seeing a renaissance of sorts. With the collapse of the Soviet Union, most countries eschewed the development of such weapons. However, many former Soviet chemical weapons scientists and their products disappeared after the Soviet collapse. Their disappearance gave rise to anxiety that they would resurface among terrorists and rogue nations. Fears persist that terrorist groups such as al-Qaeda will obtain such weapons and deploy them in heavily populated urban centers. As a result, the national and international security industry has paid a considerable amount of attention to the myriad biological and chemical agents that might be used in terrorist weapons. The industry is also helping local law enforcement establish protocols in the event that such weapons are used. National and international security industry representatives in both the government and the private sector have demonstrated an increasing interest in undoing the elements that foster terrorism. Working alongside military, diplomatic, and even nonprofit organizations, many such groups are helping train local law enforcement, develop democratic institutions, and help build business and social service networks. To this end, international development organizations and international security organizations increasingly work hand-inhand to defeat terrorism at its roots. Employment Advantages The national and international security industry is constantly growing and adapting in response to a changing environment. The industry offers an extremely wide range of career areas and, with them, a large number of opportunities for advancement

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along different career paths. Additionally, individuals who are part of this industry are also buoyed by the fact that they are part of a network that works to protect their country and its allies. The tragic events of September 11, 2001, fanned passions about not just defeating al-Qaeda but also preemptively neutralizing other terrorist organizations around the world. This industry and those who work within it are dedicated to preventing another tragedy. Annual Earnings The ongoing global effort against terrorism, coupled with continued conflicts in the Middle East, South Asia, and the former Soviet Union, perpetuates a perceived need among policy makers for continued investment in national and international security efforts. Although the stagnant global economy resulting from the 2007-2009 financial crisis is affecting most industries, national and global spending on security continues to rise, and it is estimated that this trend will continue. The only fiscal years for which the budget of the U.S. intelligence community is unclassified are 1997 and 1998. In those years, the total governmental expenditures on intelligence were $26.6 billion and $26.7 billion, respectively. Overall revenues in the American national security industry in 2001 were $302 billion. One study estimates that by 2018, U.S. spending on national and international security programs will increase by nearly 30 percent. The study also suggests that nineteen other major countries will see increases as well. The growing focus on combating terrorism through international development has also caused an increase in the industry’s revenues, as U.S. spending on such efforts increased by nearly 4 percent from 2009 to 2010.

RELATED RESOURCES FOR FURTHER RESEARCH ASIS International 1625 Prince St. Alexandria, VA 22314 Tel: (703) 519-6200 Fax: (703) 519-6298 http://www.asisonline.org

Lawrence Livermore National Laboratory 7000 East Ave. Livermore, CA 94550 Tel: (925) 422-1100 Fax: (925) 422-1370 http://www.llnl.gov North Atlantic Treaty Organization Blvd. Leopold III 1110 Brussels Belgium http://www.nato.int U.S. Department of Homeland Security 245 Murray Ln. SW Washington, DC 20528 Tel: (202) 282-8000 http://www.dhs.gov

ABOUT

THE

AUTHOR

Michael P. Auerbach has over sixteen years of professional experience in public policy and administration, international relations, and defense. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He previously worked as a project manager for a number of U.S. Navy international informational exchange programs in Washington, D.C., and has published a number of articles about defense and international security, including a comprehensive study of NATO and the Partnership for Peace.

FURTHER

READING

Bullock, Jane A., et al. Introduction to Homeland Security: Principles of All-Hazards Response. 3d ed. Boston: Butterworth Heinemann, 2009. CareerBuilder.com. Salary Calculator and Wage Finder. http://www.cbsalary.com/salarycalculator. Defence.Professionals. “Saab Half-Yearly Result Shows Increased Sales.” July 24, 2009. http:// www.defpro.com/news/details/8775. Federation of American Scientists. “Fast Facts.” 2009. http://www.fas.org/asmp/ fast_facts.htm.

National and International Security Industry Homeland Security Research Corporation. Global Homeland Security, Homeland Defense, and Intelligence Markets Outlook, 2009-2018. Washington, D.C.: Author, 2009. Howard, Russell D., and Reid L. Sawyer, eds. Terrorism and Counterterrorism: Understanding the New Security Environment. New York: McGrawHill, 2009. Jones, Elka. “Careers in Homeland Security.” Occupational Outlook Quarterly, Summer, 2006. Available at http://www.bls.gov/opub/ooq/ 2006/summer/art01.pdf. Method, Jason. “Fed Pay: Rank-and-File Tops Private Average, Managers Fall Below.” USA Today, June 24, 2007. Nemeth, Charles P. Homeland Security: An Introduction to Principles and Practice. Boca Raton, Fla.: Auerback, 2010. PayScale.com. “Salary Survey for Industry: Aerospace and Defense.” http:// www.payscale.com/research/US/ Industry=Aerospace_and_Defense/Salary. Renshon, Stanley Allen. National Security in the Obama Administration: Reassessing the Bush Doctrine. New York: Routledge, 2010. Rosenbach, Eric, and Aki J. Peritz. Confrontation or Collaboration? Congress and the Intelligence

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Community. Cambridge, Mass.: John F. Kennedy School of Government, Belfer Center for Science and International Affairs, 2009. Simply Hired. “Average Central Intelligence Agency Salaries.” http://www.simplyhired .com/a/salary/search/q-Central+Intelligence +Agency+cia. Thomas, Douglas, and Brian D. Loader, eds. Cybercrime: Law Enforcement, Security, and Surveillance in the Information Age. New York: Routledge, 2000. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. White, Jonathan R. Terrorism and Homeland Security. 6th ed. Belmont, Calif.: Wadsworth Cengage Learning, 2009.

U.S. Fish and Wildlife Service

Natural Resources Management

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Natural Resources Career Cluster: Agriculture, Food, and Natural Resources Subcategory Industries: Administration of Conservation Programs; Environment, Conservation, and Wildlife Organizations; Forestry Related Industries: Civil Services: Planning; Coal Mining Industry; Environmental Engineering and Consultation Services; Logging Industry; Mining Industry; Petroleum and Natural Gas Industry; Waste Management Industry; Water Supply Industry Annual Domestic Revenues: $1.2 billion USD (Hoovers, 2010, natural resource management segment for private environmental consulting firms only) Annual International Revenues: $1.65 billion USD (Hoovers, 2010, natural resource management segment for private environmental consulting firms only) Annual Global Revenues: $2.85 billion USD (Hoovers, 2010, natural resource management segment for private environmental consulting firms only) NAICS Numbers: 113, 92412, 813312

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DEFINITION

Summary Natural resources management professionals provide direction in implementing and maintaining a balance between immediate human needs to exploit land and water resources and long-term needs to protect ecosystems so resources can recover, restock, grow, and renew. Natural resource managers function as planners, analysts, restoration specialists, preservationists, conservationists, fisheries and wildlife managers, forestry professionals, rangers, wetland monitors, social advocates, environmental consultants, and land-use managers. Natural resource managers work in private sector companies and consulting firms; public sector agencies within federal, state, and local governments; and nonprofit organizations and trusts. Many natural resource professionals build careers in academia doing basic and advanced research, providing the information necessary to promote sound resource management plans and policies. History of the Industry The modern era of environmental awareness began in the 1890’s and lasted until the early 1970’s; it was characterized by an emphasis on efforts to conserve and preserve wilder-

Natural Resources Management ness areas or to identify areas of scenic interest and provide access and amenities, so urban dwellers could vacation in these natural environments. At the beginning of the 1970’s, scientific studies indicated a growing danger to both the natural world and humans from increased levels of humaninduced pollution. For the next thirty years, environmental sciences concentrated on methods to prevent, control, or remediate the effects of pollution of the environment. During the 1990’s, a series of laws was enacted acknowledging that industrial pollution and human behaviors were affecting the natural world and, as a by-product, the quality of human life. This legislation assumed that to ensure current and future generations a livable world, environmental degradation resulting from pollution had to be monitored, controlled, or eliminated, and those in violation had to be penalized. Much of the legislation passed also set standards for recycling, treating, and disposing of human and industrial wastes. At the beginning of the twentyfirst century, an emphasis was placed on remedia-

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tion and reclamation of sites previously contaminated with pollutants. As environmental awareness grew over the course of the twentieth century, it became clear the rate of human resource exploitation and consumption could not be maintained within the obvious finite limits of the resources themselves. Land, groundwater, timber, minerals, wildlife, grazing lands, farmlands, wetlands, and waterways needed to be observed, monitored, cataloged, managed, and maintained in a manner ensuring their continued biodiversity, prosperity, and renewal. It became clear to science professionals that maintaining sustainable ecosystems equated to maintaining a sustainable quality of life for humans: To do otherwise would court disaster. From this understanding, the modern role of the natural resource manager arose: Such managers were skilled professionals versed in the science needed to oversee and direct the use and preservation of natural resources. Government agencies were the first to employ professional resource managers in an attempt to

Wetlands at Tomales Bay State Park in California. (©Christopher Russell/Dreamstime.com)

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Natural Resources Management

identify the resources available for exploitation on government lands. Knowledge of available resources allowed the government to promote specific territorial regions to business, industry, and settlers for development. Early resource specialists were most often interested in mineral reserves, groundwater availability, timberlands, wildlife numbers, and grazing lands. As the period of westward expansion in North America during the 1800’s waned and the idea of preservation and conservation began, the primary role of the governmentbacked resource manager changed from being a promoter of the exploitation of public lands to being a vigilant protector of those lands. Often, the mission of government resource managers was, and still is, double-sided: While they were charged with protecting and safeguarding resources, they were also charged with cultivating a climate in which business and exploitation are encouraged within the relevant legal restrictions.

A sign in a conservation area alerts hikers that birds are roosting, so they must walk around them. (©Dreamstime.com)

At the same time the role of government resource managers was developing, other resource managers attached to industry approached the environment differently. They placed their major emphasis on coordinating and managing industrial and other activities in order to extract the maximum amount of resources in the most efficient manner possible. These early industrial and agricultural managers paid little to no attention to remediation, reclamation, sustainability, or any other considerations that did not contribute to their employers’ profits. The Industry Today The profession of natural resources manager is growing rapidly, both in positions available and in importance. As human understanding of environmental interactions and sustainability collide with the ever-growing need for renewable and nonrenewable resources generated by the growth of the human population, resource professionals trained in implementing sound policy and decision making are in demand. Trained resources managers are necessary to ensure that both the needs and the rights of farmlands, wetlands, wilderness, watersheds, forests, and wildlife are considered in balance with the needs of growing human demands for resources. This is especially significant as urban boundaries expand and infringe on previously undeveloped areas. The same balance must also be taken into consideration as developing countries attempt to exploit their resource bases in order to modernize. Much of the emphasis on natural resource management is based on strategies and policies initiated through legislation and regulation. As governments acknowledge the need to maintain sustainable ecosystems and resource bases and to preserve healthy environments for the long-term good of their citizens, they understand that the balance between resource exploitation and preservation or restoration requires the guidance of highly trained scientific professionals. Government agencies currently employ over 74 percent of land, water, mineral, wildlife, and forest resource managers. There are a limited number of large privatesector environmental consulting firms, and many rely heavily on contracts to government agencies. The reason the government relies on private consulting firms is that there are so many resource-

Natural Resources Management

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A California condor spreads its wings. (U.S. Fish and Wildlife Service)

related issues to address, so many stakeholders affected, and a constant shift in priorities within national and local agendas that those resource specialists in public service cannot handle the everincreasing number of cases and projects put before them in a timely manner. The awareness of global climate change has added a new aspect to the field of natural resource management. Earth is an integrated ecosystem of cycles and feedback loops fluctuating through time in varying states of equilibrium. Scientific evidence suggests human behaviors have upset certain chemical, hydrogeologic, and atmospheric cycles of the planet, altering the climatic regime at a scale in which extremes in climatic conditions are being generated as the planet attempts to reach a new equilibrium. The new equilibrium may turn out to be less hospitable to many of the planet’s existing ecosystems. The science of global climate change offers new opportunities to natural resources managers. As global climatic conditions shift, there will be a determined need for natural

resource professionals skilled in energy matters, renewable resources, population dynamics, international policies, remediation, reclamation, pollution prevention, alternative resources, hydrogeology, desalinization, soil conservation, irrigation, air quality, and land-use management. Because skill sets are generally focused to each specific branch of resource management, positions within the field require a minimum of a bachelor’s degree in a specialized area of environmental, biological, botanical, or physical science. The majority of employers in both the public and private sectors search for candidates with graduate educations, especially those with cross-specialty training. Most research-based resource management positions within government agencies, and similar careers in academia, require doctoral degrees. Resource managers holding advanced degrees are more likely to see increased chances for advancement in their fields. Depending on education level and job responsibilities, average annual compensation for resource management jobs ranges from

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Natural Resources Management

Wild horses in Utah. (BLM/Utah)

$65,000 to $130,000. Resource managers with graduate educations can be expected to earn about $20,000 to $25,000 more annually than those with only bachelor’s degrees. Salaries may be lower for resource managers working for underfunded government agencies, or considerably higher for upper managers, business owners, and technical specialists in the private sector. There are a small number of resource management jobs within private industries exploiting natural resources, such as mining, energy exploration, agriculture, construction, commercial fishing, irrigation, desalinization, and waste management. A very limited number of resource managers are also employed as advocates or lobbyists for nonprofit organizations or large industrial and business interests. A limited number of natural resource specialists are also employed in academia. The field of resource management is predicted to grow as the need for more sustainable sources of natural materials increases. Increasing world population demands new or renewable sources of water, energy, minerals, and food products. The expansion of urban boundaries into previously wild or agricultural lands, the need for cleaner forms of energy, the loss of species habitat, ecosystem alteration from climate change, overharvesting of species, growing demands for timber prod-

ucts and minerals, and the need to protect resource areas from pollutants and waste products of modern societies all require the skill sets of modern natural resource managers. As long as human societies demand resources from their environment at a rate the planet cannot naturally renew, there will be a need for people willing to take on the responsibilities of natural resource management. Many positions in the resource management field involve regulatory or compliance functions. As governments enact laws to protect natural resources and ensure a healthy environment for citizens, it is up to natural resource managers to make sure applicable laws are enforced. Natural resource managers are often embroiled in debates among economic demands, cultural values, environmental realities, political necessities, scientific fact, and social traditions. Some natural resource managers are also experts in public policy or environmental law, making them especially valuable in facilitating compromises that seek balances between resource needs, sustainability, conservation, and preservation. Those individuals willing to become natural resource managers, at whatever level of responsibility, must understand that they can never satisfy all stakeholders in the realm of resource exploitation versus resource preservation. One stakeholder’s vision of sustainability and conservation is often the point of conflict with another person’s source of income or traditional value system. The most successful natural resource managers will always be those who are able to provide positive direction in implementing and maintaining a balance between human needs and promoting resource bases and ecosystems that function in a meaningful and naturally healthy manner. Those natural resource managers with the ability to communicate complex problems in plain language, are skilled in facilitating conflict resolution and negotiations that stay well away from litigation, and are able to establish working relationships with

Natural Resources Management stake holders of varying agendas will be the most successful.

INDUSTRY MARKET SEGMENTS Natural resource management jobs may occur in small, privately owned consulting firms or isolated field offices of government agencies; in large multinational environmental businesses and industries; or in large, statutory federal, state, or local government bureaus. The following sections give a generalized overview of what might be confronted while working for either a private or governmental natural resource management concern. Small Businesses and Agencies Natural resource management careers on the smallest levels include individual, contracted consulting firms that may have from one to a dozen employees. Of these, possibly only one to five are actual resource specialists in decision-making positions; the remaining are support staff. This is similar in the case of small government field offices, in which a limited number of environmental specialists may work alone or with shared support staff. Smaller municipalities or county agencies may be staffed with a limited number of permanent or part-time environmental specialists. In many instances, agency environmental specialists are hired on a seasonal basis for specific assessment or oversight responsibilities and are assigned to small permanent or mobile field stations. Potential Annual Earnings Scale. The average earnings for natural resource managers is $65,000 to $130,000, but salaries will vary based on location and level of responsibility and decision making. According to the U.S. Bureau of Labor Statistics (BLS), government-employed conservation scientists earned an average of $62,360 in 2009, soil and plant scientists earned an average of $69,030, environmental scientists earned an average of $63,260, environmental engineers earned an average of $76,550, and natural sciences managers earned an average of $100,720. Clientele Interaction. At the small business and agency level, the majority of client and stakeholder interaction occurs on the individual or small group level. Large groups may be encountered in public

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hearings, hearings of cause, park interpretations, educational lectures, or court testimony. When not collecting or analyzing environmental data, natural resource managers spend the majority of their time in conflict resolution. Being able to negotiate and build consensus and compromise are valuable skills, especially if the manager is working alone or in a limited group. Much of the interaction with stakeholders and the public requires the resource manager to be able to conduct one-on-one conversations in a rational and deliberate manner with emotionally stressed stakeholders. The ability to build a professional rapport with even the most distraught client or stakeholder, and to do so without backup or support, is a positive. In some state and federal agency positions, resource managers are armed, similarly to conservation law enforcement officers. Many stakeholders involved in controversial environmental problems have displayed powerful dislikes for government agencies they believe are standing in the way of their ability to exploit resources, and in the past such people have proven disruptive and even violent to lone environmental professionals in the field. Amenities, Atmosphere, and Physical Grounds. The working conditions for natural resource managers at the small business and agency level vary by location and profitability. A successful private consulting firm may choose to upgrade the amenities, technology, and surroundings of its working conditions. On the other hand, a small consulting firm may work out of a natural resource manager’s home office. The working conditions for small office agency postings may vary from quite upscale office space in a major metropolitan setting to a floorless tent in a wilderness logging camp. The most important aspect determining the amenities, working atmosphere, and physical grounds for working as a natural resource manager is what one is willing to live with while working the job. Many people want to live and pursue their profession in the most wild and isolated wilderness under the most physically demanding conditions; others prefer the comfort of a more urban environment. Wilderness jobs frequently have odd hours of work, not suited to people who prefer regular work schedules. Jobs in the wilderness may bring the natural resource manager in contact with a wide range of wildlife; some resource managers would as soon not have to deal with bears on a daily basis.

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Typical Number of Employees. Number of employees for small natural resource consulting firms fluctuates with the needs of the marketplace: Marketplace needs are often determined by regulatory mandate, changes to existing laws, or environmental dilemmas or disasters. Government agencies staff their field offices and research stations based on need, funding, urgency, or political expediency. Many projects in both the private and public sectors are seasonally dependent, so numbers of employees vary widely. Traditional Geographic Locations. Smaller consulting firms tend to remain regional in their project selection, choosing to specialize in the environmental problems of their local areas. Such regional specialization allows for the establishment of personal relationships with stakeholders and promotes the businesses as part of the local economy and culture. The building of a positive professional record in solving complex environmental problems that balance the needs of local stakeholders helps the smaller environmental consulting firms stay solvent. Agency natural resource management jobs of small-to-moderate size can be found in planning and environmental divisions of small towns and county governments. Federal and state environmental agencies have lone resource managers assigned anywhere from busy urban parks to isolated wilderness field stations to obscure mining and fishing operations spanning the width and breadth of most states and the entire nation. Job locations also revolve around resource specialties: Foresters will find jobs near timber regions, fishery specialists near fisheries, land-use planners in urban areas, and mineral managers near mining operations. Pros of Working for a Small Business or Agency. Natural resource professionals who enjoy working independently and free from bureaucratic constraints often imposed in larger agencies or businesses will enjoy working at the smaller level. Also, many natural resource managers enter the profession because of strong stands on environmental ethics: A smaller consulting firm allows managers to pick and choose projects expressing their environmental commitments. Working in a small agency for a local government allows for the building of connections and relationships within a community: Many natural resource managers feel that their jobs are more satisfying and meaningful

when they are also stakeholders in solving problems. Resource managers who enjoy the solitude of the wilderness may find that living and working in a remote field station is perfect for the professional experience they seek. Cons of Working for a Small Business or Agency. Negative aspects of working for a small consulting firm include the inability to compete with the resources of large consulting firms for certain jobs, even at the local level. Small firms often lack the access to advanced technology and additional staffing needed to complete tasks in a timely manner. The small consulting firm must rely on a constant stream of jobs to remain solvent, so downturns in business have a large effect on profitability. The negative aspects of working for a smaller agency office or field station are similar to the positives: isolation, lack of professional interaction, rugged living conditions, and minimal support staff. Costs Payroll and Benefits: Small consulting firms are free to establish whatever pay standards and benefits they determine, as long as they meet minimum wage requirements and the market is willing to accept their rates. Agency natural resource manager positions’ pay grades and benefits are mandated by the governments they work for and are usually the result of negotiations between the government and bargaining units representing civil service employees. Benefits, pensions, annual leave, sick time, and pay grades vary from city to city and state to state— and often from agency to agency. Federal pay and benefits are set nationwide. Cost of living increases for agency positions are often linked to budget restrictions of the local, state, or federal government. Agency seasonal employees may receive overtime pay when jobs require extended hours. Supplies: Most small agency offices and small businesses require telephones; mobile telephones; walkie-talkies; first-aid kits; personal and portable computers; printers; geographic information services (GIS)-capable computing devices; typical office supplies such as paper, pens, and office furniture; field equipment; safety equipment; business and staff vehicles—usually fourwheel-drive capable; Global Positioning System

Natural Resources Management (GPS) units; reference libraries; and occasionally firearms. External Services: External services may include landscaping, janitorial services, bottled-water delivery, security services, document removal and shredding, temporary and seasonal hires, laboratory services, and outside auditors. Ready access to travel agencies is important. Established positive working relationships with regional colleges and universities are favorable services. Utilities: Small environmental businesses and small agency offices require water, electricity, sanitation services, telephone, and Internet access. Additionally, local rubbish or recycling removal should be available. Taxes: All employees and managers are subject to payroll taxes applicable where the business or agency is located. Businesses are also subject to business and property taxes. Many states also require environmental professionals to be registered or licensed, and these fees may be considered taxes. Midsize Businesses and Agencies Most midsize environmental consulting firms servicing natural resource management clients tend to be niche-market oriented: In regions with large timber or mineral operations, midsize consulting firms focus their energies on these resources and hire accordingly. Midsize environmental firms in urban areas may concentrate on land-use planning issues and environmental impact statements; firms in agriculture-dominated areas may specialize in hydrology or soil resources. Midsize governmental agency offices with natural resources managers are typically located in capital cities of smaller states, or are regional field offices of major agencies and may be responsible for overseeing territories of significant sizes. Both these midsize operations tend to have twenty-five to one hundred employees, with about 10 percent of their employees being natural resource managers. Potential Annual Earnings Scale. The average earnings for natural resource managers is $65,000 to $130,000 USD, and salaries vary based on location and level of responsibility and decision making. According to the BLS, government-employed conservation scientists earned an average of $62,360 in 2009, soil and plant scientists earned an average

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of $69,030, environmental scientists earned an average of $63,260, environmental engineers earned an average of $76,550, and natural sciences managers earned an average of $100,720. Typically, salaries for resource managers working for midsize consulting firms are higher than those of employees working for smaller operations. These higher salaries reflect rates the companies charge and the need for higher salaries to allow employees to live in the urban areas where most of the firms are based. Employees of midsize consulting firms are usually paid according to their corporate status, responsibilities, and levels of decision making. Government employees are paid based on civil service rankings and pay scales established through bargaining units. Some midsize field office operations are often central bases for seasonal employees; most of these seasonal employees work at hourly rates of pay and often have the option to earn overtime pay. Clientele Interaction. Client interaction within midsize consulting firms and government agencies is dictated by the status of the resource manager within the corporate or agency hierarchy. Resource managers doing active oversight, assessment, research, and interviewing will have the most client interactions. Upper-level resource managers rely on the input and results of their subordinates to keep them informed of project progress. It is traditionally the midsize agency field office personnel who have the most frequent and extensive interactions with clients and stakeholders. Because of regional field offices’ specialization with the local ecosystems and intimate understanding of problems and events within their region, they employ the natural resource managers on whom central agency supervisors rely to do specific resource managing tasks. As a result, regional resource managers often have nearly daily contacts with resource extraction operations, concerned stakeholders, law enforcement officials, wilderness visitors, lawyers, academics, and polluters. Amenities, Atmosphere, and Physical Grounds. Most midsize consulting firms and agencies are housed in modern facilities with active technology networks, laboratories, and clerical staffs. Both types of operations are typically located in midsize communities with easy access to transportation and ancillary environmental support. While midsize environmental operations often are

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still highly career competitive, they also afford a greater opportunity for the development of collegial fellowship and long-term professional relationships. Typical Number of Employees. The number of employees for midsize natural resource consulting firms fluctuates with the needs of the marketplace, which are often determined by regulatory mandate, changes to existing laws, or regional environmental dilemmas or disasters. Government agencies are staffed based on need, funding, urgency, or current project needs. Many environmental projects in both the private and the public sectors are seasonally dependent, so numbers of employees vary widely. It is not unusual for midsize consulting firms and regional governmental offices to have twenty-five to one hundred full-time employees. Traditional Geographic Locations. Typical locations of midsize consulting firms and government agency regional field offices are midsize municipalities. Midsize consulting firms tend to specialize their resource management operations in those resources being exploited in their vicinities. Regional government agency offices are usually located in cities with necessary auxiliary operations that aid in their management operations: academic institutions, law enforcement, judiciary, testing laboratories, and other ancillary government agencies. Pros of Working for a Midsize Business or Agency. One of the greatest benefits of working in a midsize private or public environmental operation is the chance for resource managers to use their scientific specialties on a day-to-day basis in geographic areas with which they have daily interactions. It also allows resource managers to focus their understanding of ecosystems and specific resources on those specific geographic locations. Such specialization helps stakeholders, clients, and the public feel that the resource managers addressing their concerns are well-versed in the economic, cultural, and environmental issues particular to their locations. Since the resource managers live within the regions and communities they work within, they can be considered stakeholders as well. This sense of environmental and community ownership by some natural resource managers is considered a positive. Cons of Working for a Midsize Business or Agency. While being a visible part of the commu-

nity one works within is a positive for some natural resource managers, it can be a serious negative at the same time. Because many of the midsize consulting firms and regional government agency field offices are in midsize communities, natural resource managers can gain notoriety for the exploitation operations they represent, or the results of their studies, environmental impact statements, assessments, oversight operations, and law enforcement. Trying to strike a balance between sustainable ecosystems and resource exploitation entails confronting a set of stakeholders who have opposing viewpoints, values, and preferred outcomes. If the results of a public hearing, court case, or resource management plan leave one of the stakeholders feeling unsatisfied, the resource manager can become the target of criticism. Whether deserved or not, the resulting notoriety can greatly affect future business and career opportunities. Costs Payroll and Benefits: Midsize consulting firms are free to establish whatever pay standards and benefits they determine, as long as they meet minimum wage requirements and the employment market will accept their rates. Bonus packages at successful midsize consulting firms are often incentive-based and linked to project outcomes or competitive client acquisition, with bonuses based on annual business profitability or established as incentives in client contracts. Statutory agency natural resource manager positions’ pay grades and benefits are mandated by the local, state, or federal government they work for and are usually the result of negotiations between the government and bargaining units representing civil service employees. Benefits, pensions, annual leave, sick time, and pay grades vary from city to city and state to state— and often from agency to agency. Federal pay and benefits are set nationwide. Cost of living increases for agency positions are often linked to budget restrictions of the local, state, or federal government. Agency seasonal employees may receive overtime pay when jobs require extended hours. Typically, compensation time is given in lieu of overtime pay for civil service employees in nonclerical and nonmaintenance positions. Supplies: Most midsize agencies’ and environmental businesses’ offices require telephones;

Natural Resources Management mobile telephones; walkie-talkies; personal and portable computers; printers; plotters; GIScapable computing devices; typical office supplies such as paper, pens, and office furniture; fleet vehicles, some four-wheel-drive capable; GPS units; limited laboratory testing equipment; and reference libraries. Most midsize offices also have their own mainframe computers and servers. Since many midsize offices rely on their field offices for on-site actions, the midsize offices do not require the same field-oriented equipment. External Services: External services may include landscaping, janitorial services, bottled-water delivery, security services, document removal and shredding, temporary and seasonal hires, information technology support, outside laboratory contracts; and outside auditors. Ready access to travel agencies is important. Established positive working relationships with regional colleges and universities are favorable services. Some regional hub agency and business offices may also have their own pilots and aircraft available for travel needs. Utilities: Midsize environmental businesses and agency offices require water, electricity, sanitation services, telephone, and Internet access. Additionally, local rubbish or recycling removal is necessary. Taxes: All employees and managers are subject to payroll taxes applicable where the business or agency is located. Businesses are also subject to specific business and property taxes. Many states also require environmental professionals to be registered or licensed, and these fees may be considered taxes. Large Businesses and Agencies There are estimated to be about nine thousand environmental consulting companies in the United States, but the fifty largest companies account for less than 30 percent of annual revenues. Corporate contracts are defined by the needs of clients seeking to comply with laws and regulations or to pick up the overload for government agencies unable to provide necessary assessment and analysis of environmental issues in a timely manner. The biggest advantage of both large government environmental agencies and big consulting firms is their ability to draw from an extensive pool of environmental

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experts in their employ in developing problemsolving teams. Potential Annual Earnings Scale. The average earnings for natural resource managers is $65,000 to $130,000, and salaries vary based on location and level of responsibility and decision making. According to the BLS, government-employed conservation scientists earned an average of $62,360 in 2009, soil and plant scientists earned an average of $69,030, environmental scientists earned an average of $63,260, environmental engineers earned an average of $76,550, and natural sciences managers earned an average of $100,720. Typically, salaries for resource managers working for large consulting firms are higher than those of managers working for small or midsize operations; these higher salaries are a direct result of the reputation of the consulting firm and the rates it charges for services. Also, many of the major environmental consulting firms are located in large metropolitan areas with escalated costs of living, requiring employees to be paid at a level necessary to support local residency. Individuals within large consulting firms are also paid according to their corporate status, responsibilities, and levels of decision making. Government employees are paid based on civil service rankings and pay scales established through bargaining units. Those government employees in resource management positions that are appointed or on personal service contracts are often paid at a higher rate than career civil servants, but their job stability is often more tenuous and they are subject to termination with little to no advanced notice. Clientele Interaction. Client interaction within large consulting firms and large government agencies is dictated by the status of the resource manager within the corporate or agency hierarchy. Resource managers doing the footwork, research, data assessment, and interviewing will have the most client face time. Upper-level resource managers rely on the input and results of their subordinates. As businesses and agencies grow in size and power, bureaucracy often grows as well. Upperlevel decision makers will delegate differing levels of responsibility to stratified subordinates. The amount and degree of client interaction depends on the degree of hierarchy insulation provided in the bureaucracy: Lower-status resource managers will likely have the most client interactions; upper-

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status managers will interact with clients at final decision-making meetings, public hearings, court hearings, congressional investigations, or media events. While lower-status natural resource managers are the legs-on-the-ground of these large organizations, the upper-status managers are the public face and ultimate decision makers. Amenities, Atmosphere, and Physical Grounds. The amenities, working atmosphere, and physical aspects of working for a large agency or corporate environmental business reflect the confidence, status, or power of the operation. The largest environmental consulting firms are headquartered on modern corporate campuses with modern structures and state-of-the-art technologies. Many of these campuses are also equipped with athletic facilities and extensively landscaped grounds and parks. The hivelike activity in large corporate operations is not for everyone but for resource managers who like the feeling of being part of a large-scale team effort and have little ego invested in being a worker bee, the day-to-day work on a corporate campus can be rewarding. Most large-scale government agencies are housed in older structures reflecting classical government architecture. However, as the interest in environmental problem solving has increased over the last forty years, many new agency structures reflect an open and more modern sensibility. As with corporate life, resource managers working in large government operations headquarters will find themselves a small cog in a big machine. However, for environmental professionals who excel in team efforts and enjoy the collegial aspects of working toward a common goal, large corporate or government operations may offer a rewarding career. Typical Number of Employees. The number of employees for large natural resource consulting firms fluctuates with the needs of the marketplace, which are often determined by regulatory mandate, changes to existing laws, or environmental dilemmas or disasters. Government agencies are staffed based on need, funding, urgency, or political expediency. Many projects in both the private and public sectors are seasonally dependent, so numbers of employees vary widely. Estimates of environmental specialists currently working for corporate consulting firms place the number around 125,000. Environmental resource specialists working for local, state, and federal governments are estimated at 1.3

million. Within these employment numbers for environmental specialists, only about 11 percent are designated as natural resource managers. Traditional Geographic Locations. The largest environmental consulting firms can be found in California, the Pacific Northwest, and the Eastern Seaboard states. Large regional consulting firms, and branch offices of the largest companies, can be found in most major metropolitan areas. Large government agencies responsible for resource management issues are located in Washington, D.C., in every state capital, and at regional agency field offices across the United States. Pros of Working for a Large Business or Agency. One of the biggest positives of working in both large corporate and large agency settings is the opportunity for career advancement at a rate faster than that enjoyed by individuals working in annex or field settings. The chance for quicker advancement equates to the ability to earn more income. Some people find that the locations of larger consulting firms and central agencies allow them the opportunity to take advantage of cultural and social activities not afforded to employees in isolated regional or field locales. Cons of Working for a Large Business or Agency. The downsides of working for a large environmental corporation include a highly competitive work atmosphere; strict deadlines involving long hours and labor-intensive projects; large amounts of long-stay travel; and quotas of billable hours and revenue streams. In both large corporate and large government environmental operations, employees are often subject to transfers to new work locations if they wish to keep their jobs; this can be upsetting to employees with families or well-established family roots. One of the major downsides of working for large government agencies is that the enthusiasm and dedication that drive many civil service environmental specialists can be easily lost or turned into cynicism as a result of political agendas. Many career environmental civil servants work entire careers to help mitigate, enforce, or create balances between ecosystems and human resource needs only to see their long efforts dashed by a change in political will. Costs Payroll and Benefits: Large consulting firms are free to establish whatever pay standards and

Natural Resources Management benefits they determine, as long as they meet minimum wage requirements and the employment market will accept their rates. Bonus packages at large consulting firms are often incentive-based and linked to project outcomes or competitive client acquisition. Many corporate bonuses are portioned as golden parachute options established in contract negotiations, by annual business profitability, share prices, or stockholder votes. Agency natural resource manager positions’ pay grades and benefits are mandated by the government body they work for and are usually the result of negotiations between the government and collective bargaining units representing civil service employees. Benefits, pensions, annual leave, sick time, and pay grades vary from city to city and state to state—and often from agency to agency. Federal pay and benefits are set nationwide. Cost of living increases for agency positions are often linked to budget restrictions of the local, state, or federal government. Agency seasonal employees may receive overtime pay when jobs require extended hours. Typically, compensation time is given in lieu of overtime pay for civil service employees in nonclerical and nonmaintenance positions. Supplies: Large agency offices and large environmental business headquarters require telephones; mobile telephones; walkie-talkies; personal and portable computers; printers; plotters; GIS-capable computing devices; typical office supplies such as paper, pens, and office furniture; fleet vehicles, some four-wheel-drive capable; GPS units; reference libraries; microscopes; testing equipment; capable laboratory facilities; real-time distance conference capabilities; mainframe computers; and servers. External Services: External services may include landscaping, janitorial services, bottled-water delivery, security services, document removal and shredding, temporary and seasonal hires, information technology support, outside auditors, professional lobbying, public relations, advertising, fitness, legal counsel, and contracted expert witnesses. Established positive working relationships with regional colleges and universities are a favorable service. Ready access to travel agencies is important, but most large agencies and businesses have their own corporate pilots and aircraft available for travel needs.

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Utilities: Main headquarters of environmental businesses and agency offices require water, electricity, sanitation services, telephone, and Internet access. Additionally, local rubbish or recycling removal is necessary. Taxes: All employees and managers are subject to payroll taxes applicable where the business or agency is located. Businesses are also subject to specific business and property taxes. Many states also require environmental professionals to be registered or licensed, and these fees may be considered taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Unlike many other work environments, natural resource management is not an overarching umbrella industry or agency. People making a living as natural resource managers do so as individual specialists working within the framework of an agency or corporation. More than 74 percent of all natural resource management jobs are with government agencies at the federal, state, and local levels. Less than 30 percent of resource management positions are with private consulting firms or corporations. Because of the specialized nature of each resource management field, and because these jobs are spread throughout multiple agencies or corporate entities, there is no specific organizational structure defining the profession as a whole. The majority of individuals working as natural resource managers with private concerns actually started out within, or have spent some portion of their careers having worked within, the public sector. The following categories encompass areas in which resource managers participate. The organizational structure of each of these sectors has no set practices and varies based on resource specialties, agency requirements, budgets, politics, business environment, individual contracts, legal dictates, legislative mandates, and working conditions: civil service, academia, private industry, and nonprofit organizations and lobbies. Civil Service. The increased concern for environmental policy by governments at all levels has resulted in an expansion of natural resource management civil service jobs within statutory bodies.

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Overall growth in natural resource management positions within the civil service grows or slows often because of political realities: As administrations often shift with elections, so to do policy directions for environmental exploitation, management, oversight, and problem solving. Differing political philosophies often have differing environmental values, priorities, interests, and agendas toward the natural world. As these priorities change, so do the organizational structures of each agency, as well as numbers and roles of resource managers required to staff statutory agencies. Despite the political variations, government agencies—local, state, and federal—remain the dominant employers of natural resource managers and related environmental professionals. In the United States, government agencies are the largest employer of environmental specialists. The United States federal government employs nearly a quarter of a million resource and environmental specialists, from geologists to park rangers, foresters to soil scientists, biologists to oceanographers, and hydrologists to waste managers. They work for federal environmental, regulatory, conservation, preservation, or monitoring agencies. These envi-

OCCUPATION

ronmental professionals may work in large administrative complexes in Washington, D.C., national parks, wildlife refuges, or solitary field stations in isolated wilderness areas. In some cases, federal resource management jobs with international agencies such as the United States Agency for International Development (USAID) may place the employee in foreign countries. While the federal government is a large employer of environmental and resource specialists, state governments employ twice as many people to deal with environmental and resource-related issues. It is estimated that 10 to 15 percent of all jobs in state civil service professions involve some type of environmental work. Resource management jobs with state agencies usually involve roles in environmental protection, fisheries and wildlife, agriculture, land use planning, water resources, minerals management, parks and recreation, utilities, coastal management, community and economic development, and waste management. As with federal agencies, resource managers may find themselves working in large capital complexes, regional field offices, parks and reserves, or isolated wilderness research stations. It is estimated that five hun-

SPECIALTIES

Foresters and Conservation Scientists Specialty

Responsibilities

Forest ecologists

Conduct research upon the various environmental factors affecting forests.

Range managers

Study, manage, improve, and protect rangelands to maximize their use without damaging the environment; also called range conservationists, range ecologists, or range scientists.

Silviculturists

Manage tree nurseries and thin forests. They also conduct research in forest propagation, life span of seeds, and the effects of fire and animal grazing.

Soil conservationists

Assist farmers, ranchers, and others to conserve soil, water, and related natural resources.

Wood technologists

Conduct research on the methods of drying, preserving, and using wood and its by-products. They test wood for such properties as strength, moisture content, elasticity, and hardness and determine the best type of wood for specific uses.

Natural Resources Management OCCUPATION

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PROFILE

Marine Biologist Considerations

Qualifications

Description

Studies saltwater plants and animals for medical, environmental, industrial, and entrepreneurial reasons.

Career cluster

Science, Technology, Engineering, and Math

Interests

Data; people; things

Working conditions

Work inside; work outside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; volunteer work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest score

IRS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

dred thousand people work as environmental or resource specialists for local county or city governments in the United States. The majority of these resource jobs revolve around solving problems linked to land-use planning, waste management, water quality and supply, pollution remediation, reclamation, and parks and recreation. Academia. A very limited number of natural resource positions exist within academia. While students majoring in environmental studies have increased dramatically since 1985, there has not been a similar increase in the demand for qualified instructors, professors, and researchers. Numbers of academics teaching natural resource topics have risen in the last decades, but these numbers are small in comparison to the large increase in students interested in natural resources and environment-related fields. Despite the increased environmental awareness and concern of the public over natural resource topics, research funding has only increased in certain environmental fields such as alternative energy and climate change: Basic envi-

ronmental research grant funding tends to be erratic and reflects trends in political preferences and pressures. The organizational structure of each university or research institute varies greatly by departments within the institution. Often, the structure is linked to specialty, seniority, tenure, publication record, or research funding. Private Industry. Conservation, preservation, and sustainability have become premiere concerns in governmental policy in most nations, and while the majority of natural resource management is directed by government agencies, there are still many efforts dependent on the efforts of private industries and voluntary nongovernmental organizations. Many private environmental consulting firms, as well as resource managers with industrial concerns, do not consider themselves as actively promoting the ethics of resource conservation, preservation, or sustainability, but at the same time are often unfairly labeled and criticized for any apparent lack of environmental conscience. These private and commercial natural resource profes-

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PROFILE

Range Manager Considerations

Qualifications

Description

Studies, manages, improves, and protects rangelands to maximize their use without damaging the environment.

Career clusters

Agriculture, Food, and Natural Resources; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Recommended

Employment outlook

Average growth expected

Holland interest score

IRS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

sionals, despite often being motivated for purely economic reasons, have a very large influence over how natural resources are managed, exploited, or protected. It is professional planners, commercial foresters, energy specialists, agronomists, and land-use managers who establish many of the long-range plans directing the use and development of water, soil, mineral, wildlife, and land resources. It is the responsibility of many private natural resource managers to implement government policies directing the activities of industries exploiting the environment. These managers must make decisions affecting not only the environment but also the profitability of their businesses. They need to understand the structure and limitations of natural resources, as well as the seemingly endless circles of bureaucratic directives and governmental regulations to be successful. As technology has made it easier and more profitable for people to exploit the natural environment, the resulting often un-

planned and unrestrained rates of development have resulted in dangerous environmental side effects. Since 1970, a strengthening of environmental legislation has resulted in the setting of environmental standards and safeguards to establish some sort of balance between a sustainable environment and the needs of people for natural resources. As a result, industries have been made to take their environmental and social obligations seriously or face financial penalties. Though the positions are limited, opportunities do exist for jobs as natural resource managers within industries such as forestry, mining, land development, agribusiness, water management, and commercial fisheries. Many of these industries require skilled and qualified specialists as monitors, evaluators, and planners to oversee their operations and fulfill policy obligations and limitations established by local, regional, or federal agencies. The most difficult aspect of a natural resource

Natural Resources Management career in industry is the up-and-down nature of job assignments. Private industry most often must react and adapt to changes in government policies and mandates. Since 1990, legislation and statutes have shifted from pollution and resource control to remediation to sustainability. Natural resource managers that are overspecialized may find it difficult to adjust to this changing arena of work assignments. The fluid nature of change within the private and commercial natural resource management field, usually driven by profit margins, means defined organizational structures are always in flux, usually as new teams are developed to work on each new project based on budgets and client needs. Levels of management, researchers, project leaders, assistants, laboratory technicians, and specialists change with assignments and financial bottom lines. A major increase in employment for private natural resource managers exists in the de-

OCCUPATION

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veloping world. While growth in new natural resource career opportunities outside government service is small, demand outside the United States is on the rise. Resource management jobs are expected to rise at a growth rate of 15 percent annually in Asia, especially China; 12 percent annually in Latin and South America; and 10 percent annually in Africa. Instilled cultural values and business practices define the organizational structure in both governmental and corporate resource management scenarios in foreign nations. Nonprofit Organizations and Lobbies. The very idea of natural resource management owes a great debt to nonprofit organizations and lobbyists. Natural resource conservation, preservation, and sustainability originally began as a social reform movement over concern for degradation of the environment reflected in quality of life issues. Many of these environmental nonprofits are regis-

PROFILE

Soil Scientist Considerations

Qualifications

Description

Studies the chemical, physical, biological, and mineralogical composition of soils as they relate to plant or crop growth, as well as soil’s response to fertilizers, tillage practices, and crop rotation.

Career clusters

Agriculture, Food, and Natural Resources; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work outside; work both inside and outside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

IRS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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tered as charities or special interest groups; many others are registered as pro-exploitation lobbies. These organizations may be purely fund-raising groups aimed at purchasing land, promoting research, paying for conservation and preservation projects, or funding education programs. Many such organizations establish trusts to finance or manage land or wildlife reserves, zoos, or animal rescue facilities or to foster basic research. A number of nonprofit organizations maintain active lobbies running campaigns to pressure decision makers for new legislation or to raise concerns and support for environmental causes. Similarly, there are for-profit resource lobbyists whose sole purpose is to push back against regulation, campaigning for changes to legislation favoring exploitation of natural resources and limiting governmental oversight of commercial developments. Most nonprofit and for-profit organizations and lobbying concerns are organized in a similar manner; usually, there is a strong administrative staff directing personnel, financial, and legal matters, often hired more for their operational skills than for their commitment to the organizations’ causes. Within these organizations, there are usually several units responsible for private and corporate fund raising, membership coordination, information and public relations, press management, and education. There is little actual hands-on natural resource management taking place in these organizations; their business is more influencing how active natural resource managers will eventually be directed to conduct their operations. There is no exact census as to how many environmental nonprofits or lobbying groups there are in the United States, but estimates range from a low of five thousand to as high as eleven thousand or more. Job roles within natural resource management can be placed into four broad categories: ■ ■ ■ ■

Planning Policy Making Resource Assessment Sustainability

Planning When building a career in resource management, whether in the public, private, or academic sectors, most positions will fall within certain broad environmental specialties: resource planning, for-

estry, land-use management, water resources, minerals, coastal management, conservation, wildlife, fisheries, policy setting, remediation, reclamation, environmental protection and enforcement, practices and implementation, parks, and oversight. Land-use, resource, and environmental planning has been done throughout human history, but until the last hundred years it was seen not only as a means to exploit resources but also as a way to sustain and protect valued resources. Many resource manager jobs evolve into planning positions. Planning is an integral aspect of resource management because often a manager’s job is not focused on a single aspect of the environment, but requires arriving at solutions spanning a variety of environmental factors over differing time scales, across ecosystem boundaries, multiple resource bases, and differing cultural, economic, and political agendas. Resource managers who solve problems via planning must conduct research and formulate data to define the questions they need to ask. Resource planners must be versed in the legal parameters that exist and how they either help or limit the manager’s ability to plan a solution. Policy Making Resource managers may also be tasked with establishing boundaries for new regulations and laws that act to stimulate a balance between environmental sustainability and human needs. In this capacity many natural resource managers may find themselves in the role of policy setting. Many resource managers become involved in preparing environmental impact statements, an essential, and mandated, tool in land use planning. Often, the result of an extensive environmental impact statement is the finding of facts that lead to the enacting of new legislation, or the setting of a new standard by which policies are then established, ranging from the protection of an endangered species to banning of construction along threatened coastlines. Resource Assessment Natural resource managers who work in specialties involving land or water issues will most often find themselves dealing with issues surrounding resource assessment, habitat protection and restoration, preservation, or protection. Resource assessment involves the inventorying and evaluation of a

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ing soil reclamation, pollution remediation, reconstituting a wetland, or reconstruction of damaged shorelines. Preservation resource managers work to make sure valuable land, water, and sensitive ecosystems are excluded from development or recreational usage and are maintained in their natural state. After the preservation of these lands and water resources the manager’s job may shift to one of creating the necessary functions or legislation to conserve the ecosystem or resource for future generations. In addition, land and water resource managers may also be tasked with establishing priorities in protecting historic locations, archaeological sites, or other places of significant social, spiritual, or cultural value. Some resource managers will work in parks were they will monitor and maintain the integrity of the land or water resources, as well as wildlife. Sustainability Natural resource managers active in areas involving forestry, fish and wildlife, and minerals are charged with maintaining adequate resources for sustainable exploitation, while at the same time often being required to establish the limits at which point extraction of these resources is stopped. Natural resource managers dealing Trees vanish in the fog at Olympic National Park in Washington. Conflict with fish and wildlife problems are aloften arises over the best use of forests. (©Lindsay Douglas/Dreamsmost exclusively trained in biology; time.com) mineral managers are geoscientists; and timber managers are forest scientists. These management specialists may be reresource to rate its ecological wellbeing or ecoquired to assess and protect habitats, monitor and nomic value. Protection and restoration involve assess toxins, enforce pollution and reclamation identifying and limiting hazards to the environstandards, identify nonnative species and develop ment as a whole or to individual species or ecosyseradication programs, monitor migrating species tems. Protection of a resource may also involve mitfor hunting and health purposes, maintain public igating and then restoring an ecosystem damaged access to public lands, assess both natural and by pollution, overuse of a resource, intrusion activihuman-induced hazards in both wilderness and exties, or poorly planned development or exploitaploited environments, and enforce extraction limtion. Restoration activities could involve reintroits and proration standards. As modern societies duction of lost species, reforestation, reclaiming grow at an unprecedented rate the need for exand recontouring a damaged landscape, institut-

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ploiting timber, minerals, and fisheries is expanding to levels at which sustainability of these resources is threatened. The role of the natural resource manager is growing in importance in regard to these social and economic essentials. While there is a clear need for these resources, there also exists a concerned aspect of society that demands preservation of the lands and waters in which these resources exist. It is resource managers, directed by legislation, who are responsible for establishing the balance between resource sustainability and managed extraction.

INDUSTRY

OUTLOOK

Overview The outlook for careers in natural resource management is positive. As concerns over resource sustainability, pollution, climate change, alternative energy, water, useable lands, and wildlife receive increasing attention, the need for qualified professional resource managers increases. The greatest demand will be for resource managers with expertise in earth sciences, chemistry, engineering, computer modeling, ecology, geographic information systems (GIS), resource sustainability, public policy, environmental law, and energy issues. Technical savvy with the latest advances in equipment, modeling programs, and computer technology will be a must skill set for anyone entering the natural resource management field. These points all suggest the necessity for an interdisciplinary education for college students considering resource management as a career path. In the future, the majority of resource managerial jobs will still be with government agencies. Large federal and state agencies tasked with enforcing environmental laws and policies will remain the largest employers of resource managers. At the federal level, the Department of the Interior, Fish and Wildlife Service, Department of Energy, Bureau of Land Management, Department of Agriculture, Environmental Protection Agency, U.S. Geological Survey, Forest Service, National Parks Service, Department of Defense, National Marine Fisheries Service, Bureau of Indian Affairs, Bureau of Reclamation, the National Aeronautics and Space Administration, and individual branches of the military will require trained resource management professionals.

At the state level, departments of natural resources and departments of environmental quality and their subdivisions of parks, fish and wildlife, water quality, land management, geological surveys, waste management, soils conservation, and wetlands protection will all need new resource managers to assume new or vacated positions. Local governments will require more resource managers to help develop land-use plans, as urban boundaries and utility needs increase with growing populations. Fewer new jobs will be available in advocacy and lobbying, but the demand in these areas may shift with changes in political administrations or societal values. Industrial jobs in resource management will always be limited by the extent to which businesses are forced to be conscious of the need to manage the resources they profit from. As pressure on government budgets increases, consulting firms will likely become larger players in the field of natural resource management. Businesses and government agencies unable to afford full-time resource professionals will rely more on hiring consultants on a need-to-need basis. Jobs in academia are projected to remain steady, but if governments begin to emphasize concerns over global climate change, an increased number of professionals engaged in basic and applied research will be needed. An increased social sensitivity to the issues of climate change will result in an influx of students interested in resource management, thus requiring more academic specialists to train and educate these students. One of the biggest limiting factors in the future hiring of more natural resource managers, in any of the areas listed, is the increased reliance on technology. As field equipment and computer technology advances, a single resource manager becomes capable of completing numerous tasks that in the past might have required several resource professionals to complete. While this is a financial savings to agencies and companies, it limits career openings for natural resource managers, especially those not versed in advances in technology. The biggest fields of growth for upcoming resource managers will be in the areas of water management, land-use planning, fisheries management, energy resources, and timber management. In all these areas the concern will be over sustainability—resource sustainability in combina-

Natural Resources Management tion with economic sustainability. Natural resource managers with interdisciplinary skill sets and crossfields of experience and training will be those in highest demand. Employment Advantages A job in natural resource management is a career often well suited for an individual with an environmental conscience and an aptitude for science or politics. The career path allows many people to put their science training to practical application in the pursuit of what they see as a higher goal for good. Some resource managers end up living in wilderness areas or may travel to different natural environments in connection with projects they are working on. To many people the ability to work in the outdoors is a sought after job benefit. Other resource managers find the problem solving aspect of the job to be most rewarding: the majority of issues surrounding resource management are those involving direct interactions with stake holders in the resource in question. The ability to communicate and use critical thinking skills to reach a balance between competing positions is a must for resource managers. People who enjoy outcomebased work will find resource management either rewarding or eternally frustrating depending on their abilities to work with people with competing values, goals, and traditions. People who enter the field of natural resource management with high environmental ideals are often disappointed when they come to realize their jobs will require them to set aside their personal feelings or beliefs to reach a compromise in the balance between environmental sustainability and societal needs and economic realities. On the positive side, completing a project balancing the needs of a sustainable environment with those of an ever-changing society can be deeply rewarding, and the outcome in many instances, is one that can be seen and appreciated for generations to come. Annual Earnings In a healthy economy, salaries for resource managers would be expected to rise about 5 percent per year over the first twenty years of the twentyfirst century. This salary increase is dependent on the source of employment: government positions are less likely to see significant salary increases in comparison to profitable private businesses; non-

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profit advocates are less likely to see annual salary increases in comparison to professional lobbyists. Annual earnings are also dependent on location of employment; a state resource manager with an assignment in an isolated wilderness area is likely to see less financial gain than a resource manager working with a large petroleum corporation in a major metropolitan area. Annual earnings for resource managers are also linked with experience and education: managers with graduate educations and histories of increasing responsibilities and positive project outcomes will see greater chances for advancement and greater financial rewards. Resource managers employed as advocates or lobbyists may often be given bonuses based on positive outcomes of their efforts. Financial bonuses given to resource managers employed with businesses or consulting firms are sometimes linked to outcomes, but are more often based on annual corporate profits and the employee’s place within the corporate hierarchy.

RELATED RESOURCES FOR FURTHER RESEARCH EARTH WORK Magazine 689 River Rd. Charlestown, NH 03603 Tel: (603) 543-1700 Fax: (603) 543-1828 Environmental Career Opportunities Newsletter 700 Graves St. Charlottesville, VA 22902 Tel: (800) 315-9777 Fax: (434) 984-2331 http://www.ecojobs.com Environmental Careers Center 2 Eaton St., Suite 711 Hampton, VA 23669-4095 Tel: (757) 727-7895 Fax: (757) 727-7904 http://environmentalcareer.com Environmental Careers Organization 68 Harrison Ave. Boston, MA 02111

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Tel: (617) 426-4783 http://www.eco.org National Association of Environmental Professionals P.O. Box 460 Collingswood, NJ 08108 Tel: (856) 238-7816 Fax: (856) 210-1619 http://www.naep.org

ABOUT

THE

AUTHOR

Randall L. Milstein has nearly thirty years of professional experience in the areas of natural resource and environmental enforcement, education, and research. He holds a bachelor’s degree in earth sciences from Western Michigan University, a master’s degree in earth sciences from the University of Northern Colorado, and a doctorate in geology from Oregon State University. He began his career in 1981 with the Michigan Department of Natural Resources’ Geological Survey Division’s Petroleum Geology Unit. After a decade, he left government service for academia and now teaches within nine different scientific disciplines at Oregon State University.

FURTHER

READING

Cassio, Jim, and Alice Rush. Green Careers: Choosing Work for a Sustainable Future. Gabriola Island, B.C.: New Society, 2009. DeGalan, Julie. Great Jobs for Envrionmental Studies Majors. New York: McGraw-Hill, 2008. Education-Portal.com. Natural Resource Manager Career Summary. http://educationportal.com/articles/Natural_Resource _Manager_Career_Summary.html

Fasulo, Michael, and Paul Walker. Careers in the Environment. 3d ed. New York: McGraw-Hill, 2007. Fraidenburg, Michael E. Intelligent Courage: Natural Resource Careers That Make a Difference. Malabar: Krieger, 2007. Greenland, Paul R., and Annamarie L. Sheldon. Career Opportunities in Conservation and the Environment. New York: Checkmark Books, 2007. Hoovers. “Environmental Consulting.” http:// www.hoovers.com/environmental-consulting/ —ID__385—/free-ind-fr-profile-basic.xhtml Hunter, M. J., D. B. Lindenmayer, and A. J. K. Calhoun. Saving the Earth as a Career: Advice on Becoming a Conservation Professional. Oxford, England: Blackwell, 2007. Kroger, Richard. Choosing a Conservation Vocation or a Bureaucratic Career: Your Personal Choices and the Environmental Consequences. Victoria, B.C.: Trafford, 2006. Llewellyn, A. B. Green Jobs: A Guide to Eco-Friendly Employment. Cincinnati: Adams Media, 2008. Sharp, Bill. The New Complete Guide to Environmental Careers. Washington, D.C.: Island Press, 2001. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Conservation Scientists and Foresters.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos048.htm U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Nuclear Power Industry ©Ken Cole/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Energy Career Cluster: Science, Technology, Engineering, and Math Subcategory Industries: Nuclear Fuels Security; Nuclear Power Plant Construction; Nuclear Power Plant Operation; Radiation Safety Related Industries: Alternative Power Industry; Biofuels Industry; Coal Mining Industry; Electrical Power Industry; Petroleum and Natural Gas Industry Annual Domestic Revenues: $29 billion USD (U.S. Census Bureau, 2007) NAICS Numbers: 541, 221113

INDUSTRY

clear fuel from falling into the hands of domestic or international terrorists or other criminals. In the United States, the industry suffered setbacks following the nuclear power plant accidents at Three Mile Island in Pennsylvania in 1979 and at Chernobyl in the Ukraine in 1986, but it has revived somewhat as the environmental and political costs of heavy dependence on fossil fuels have become more salient.

History of the Industry The nuclear power industry stems from the discovery of induced uranium fission after neutron bombardment by German scientists Otto Hahn and Fritz Strassman in 1939 and is in some sense a by-product of the development of the atomic bomb by the scientists and engineers working on the Manhattan Project during World War II. A nuclear reactor is an arrangement of radioactive materials and control elements enclosed in sufficient shielding material to block the release of radiation into the environment. The fission of uranium or plutonium fuel releases additional neutrons, which can stimulate further fissions. The rate at which the resulting chain reaction occurs is controlled by the presence of other elements in control rods. The

DEFINITION

Summary The nuclear power industry generates electrical power using nuclear reactors and distributes it. Nuclear power production begins with uranium mining, followed by fashioning of fuel elements, operation of the actual reactors, distribution of electrical energy through the nationwide grid, and eventually the safe disposal or storage of nuclear waste. The industry is highly regulated and extremely security conscious. Care must be taken to prevent nu1297

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Nuclear Power Industry

An aerial view of steam rising from a cooling tower at a nuclear power plant. (©Ken Cole/Dreamstime.com)

first successful reactor was built by physicist Enrico Fermi and tested in December, 1942. The vast majority of nuclear reactors function as heat generators, and the heat produced is used to run a turbine and electric generator. Some reactors are dedicated to isotope production for medical applications. Because nuclear reactors do not require an air intake or exhaust pipes, they were quickly adapted for submarine propulsion. Many of the reactor operators and other technical staff employed in the nuclear power industry received their training on submarines. The fate of the atomic energy enterprise after the end of World War II was vigorously debated among scientists and political leaders. Military leaders wanted to maintain control in the interests of national security. Eventually, however, the advocates of civilian control prevailed, and the Atomic Energy Act of 1946 established the civilian Atomic Energy Commission to control both civilian and military uses of atomic energy. In 1954, the U.S. Congress approved private ownership of nuclear

reactors by power companies. In 1955 and 1956, the Atomic Energy Commission declassified most of the technology employed in nuclear reactors. An autonomous International Atomic Energy Agency was established in 1957 to encourage peaceful uses of atomic energy and ensure the safe handling of nuclear materials. In 1974, the Atomic Energy Commission was replaced by two agencies: the Nuclear Regulatory Commission and the Energy Research and Development Administration. In 1977, the Energy Research and Development Administration was combined with the Federal Energy Administration to form the U.S. Department of Energy. The first practical production of electrical energy by a nuclear reactor occurred at the experimental breeder reactor (EBR1) in Arco, Idaho, in December, 1951. The electrical energy initially produced was enough to light four 200-watt lightbulbs. In 1954, the Obninsk Nuclear Power Plant in the Soviet Union (now in Russia) was able to contribute 5 megawatts to an electrical grid. The first commercial nuclear power plant, Calder Hall, in

Nuclear Power Industry Sellafield, England, was commissioned in 1956 with a capacity of 50 megawatts, and the first nuclear power plant in the United States, the Shippingport Atomic Power Station, began operation in Pennsylvania in 1957. The Shippingport reactor was similar to the type that Westinghouse Corporation was building for the U.S. Navy Submarine Service. Over the next two decades, 104 commercial nuclear reactors became operational in the United States and more than 400 went into service worldwide. In 1979, an accident occurred at the Three Mile Island Nuclear Generating Station in Dauphin County, Pennsylvania. This accident, involving a partial core meltdown because of operator error, resulted in the evacuation of more than 144,000 people and raised significant questions about nuclear safety. In response to the Three Mile Island incident, the Nuclear Regulatory Commission tightened educational requirements for nuclear reactor operators, and the construction of new nuclear power plants ceased in the United States. In 1986, a far worse reactor breach occurred at the Cher-

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nobyl Nuclear Power Plant in the Ukraine (then part of the Soviet Union), resulting in a substantial discharge of radioactivity, a large-scale evacuation, and lingering medical and environmental problems. The Industry Today The nuclear power industry in the United States is experiencing something of a revival as people are becoming more aware of the political and environmental costs of coal mining, offshore drilling, and American dependence on imported oil and fossil fuels. Permits have been issued for the construction of at least twenty nuclear plants in the United States. Of the 104 commercial nuclear reactors in operation in the United States, the majority, 69, use a pressurized water reactor, and the remainder, 35, use a boiling water reactor. In the pressurized water reactor, demineralized water serves as the moderator and is maintained in the liquid state at high pressure. The pressurized water is pumped through a heat exchanger, where it provides the

The nuclear power plant in Chernobyl in 2008. (©Dreamstime.com)

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heat energy to an open supply of boiling water, which produces high-pressure steam to turn the blades of a turbine, which powers an electrical generator. In the boiling water reactor, the heat exchange step is skipped, and steam under pressure is produced in the core itself. Commercial nuclear power plants generally purchase prefabricated fuel elements consisting of uranium pellets sealed in aluminum cylinders. In principle, the spent fuel elements could be reprocessed to make additional fuel, but this technology is not considered cost-

effective; therefore, reactor waste is stored, often at the site at which it was generated. Other types of nuclear reactors are possible, including the breeder reactor, which creates plutonium while producing power. Such reactors have not yet proven commercially viable in the United States. Nuclear power plants are generally built by large utility companies and some government agencies, who sell the power produced to other utilities on a nationwide grid. Individual consumers thus have no control over the source of their electric power, which generally comes from a combination of hydroelectric, oil-fired, coal-fired, and nuclear sources. As of the start of the twenty-first century, nuclear power accounted for 17 percent of the electric power used in the United States. Nuclear power accounts for a far larger fraction of the power consumed in countries such as France and India, which have far fewer energy-producing natural resources. Nuclear power plants are generally built in geologically stable areas, far from population centers. Building a power plant in an earthquake-prone area could lead to the rupture of the reactor core and the release of significant radiation into the environment during a seismic event. Plants are built away from cities to keep real estate costs low and to minimize public opposition. Every new nuclear facility must be licensed by the Nuclear Regulatory Commission following public hearings at which opponents and proponents can voice their opinions and concerns. The concerns of the presentday nuclear power industry include safety, security, waste disposal, public relations, and the possibility of economic competition from new forms of energy production. The safety of power plant The control panel at a nuclear power station. (©Aleksandar Andjic/Dreamsoperations seems to be generally time.com) well established, provided power

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plant executives resist the temptation to cut corners. Nuclear power plants are one of the major employers of health physicists, who specialize in making sure that personnel are not exposed to unacceptable levels of radiation. Security is a particular concern of the nuclear power industry. Workers must generally obtain a security clearance, which requires proof of citizenship, evidence of personal reliability and mental stability, and the absence of any criminal history. The uranium used in reactor cores (the U-235 isotope) must be enriched, although not to the level required for nuclear explosives. Nonetheless, the location and amount of all reactor fuel in a Yucca Mountain in Nevada was suggested as a storage facility for nuclear plant must be carefully tracked and waste. (U.S. Geological Survey) recorded because the diversion of some of the material to a rogue state or terrorist group could have dire consequences. years, is another matter. Much high-level waste is Similarly, nuclear power plants must be protected stored under water at the sites where it is generfrom sabotage, which could result in the release of ated. Plans to create a national high-level waste faa harmful amount of radioactivity into the environcility in the Yucca Mountains of Nevada have been ment. developed, but concerns about the facility’s safety Nuclear power plants purchase nuclear fuel and the hazards of transporting high-level waste rods as aluminum tubes containing purified urahave delayed implementation of these plans. As nium extracted from uranium ore. Once the prodthe generation of nuclear waste continues, the storucts of radioactive decay have built up in the rods age and removal of waste will become increasingly to the point where they interfere with energy genimportant. However, the disposition of nuclear eration, the rods are replaced in the reactor. Alwaste presents scientific, environmental, and ethithough the technology exists to remove the fuel cal issues that remain unsolved. pellets and reprocess the uranium, it is not yet ecoPublic perception is a matter of great concern to nomically viable. Instead, spent fuel rods are genthe nuclear power industry. Many people have miserally stored under pools of water at the site where conceptions of what nuclear power involves and they were used, awaiting shipment to a long-term mistakenly regard anything nuclear as dangerous. storage facility. For example, physician concern about patients beNuclear waste is generally categorized as low, ing reluctant to undergo nuclear magnetic resointermediate, and high level, depending on the nance imaging (MRI)—a highly benign procedure length of time over which the waste presents a radinot involving ionizing radiation—resulted in the ation hazard. Low- and intermediate-level wastes dropping of “nuclear” from the procedure’s name are those for which the radiation level can be exto gain patient acceptance. pected to return to near ambient levels in one hunAny industry faces the danger that its producdred years or less. Low- and intermediate-level tion methodology might be rendered obsolete by a wastes can be buried in sites about 100 meters benew technology. Once controlled nuclear fusion low ground and will become harmless in the becomes economically viable, the reactor technology used in the present-day nuclear power industry forseeable future. The storage of high-level waste, might be abandoned, and many of the physical which could remain hazardous for thousands of

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plants of the industry could be decommissioned. Similar changes would most likely follow a breakthrough in solar energy conversion. The occurrence of an accident similar to the one at Three Mile Island in 1979 might again raise questions about the safety of nuclear plants, but at the same time, news of an ecological disaster, such as the Gulf oil spill of 2010, or development of efficient electric vehicles could greatly increase public acceptance of the nuclear industry. Worldwide, some countries are far more dependent on nuclear energy than the United States. France, for instance, receives a far greater share of its energy from nuclear reactors than does the United States. Governments are always involved in the production of nuclear power for reasons of security, and some governments subsidize their nuclear industries. Producing nuclear power is cause for national pride in some countries. In some cases, nuclear facilities may be used to mask the production of weapons-grade nuclear material. For these reasons, it is difficult to gauge the economics of the worldwide nuclear industry.

INDUSTRY MARKET SEGMENTS Because of the economics of nuclear energy production and the associated security and radiation safety concerns, there are no small or midsize nuclear energy generating plants. As of 2011, there were 104 licensed nuclear energy power plants in the United States and fewer than 500 worldwide. The exact nature of some of the overseas plants is uncertain. American nuclear power plants are generally owned by large utilities that also produce electrical energy by other means. Small Businesses Although there are no small nuclear power plants, there are numerous small and midsize businesses that affect the overall function of the nuclear industry, from the mining of uranium to the long-term storage of hazardous nuclear waste. For example, independent consultants provide access to expertise and services that are not provided by staff at a nuclear plant site. Safety regulations require that some instruments be calibrated by independent experts and that plans and operations be

Nuclear power production begins with the mining of uranium. (©Dreamstime.com)

reviewed by individuals who do not have a financial stake in the plant. Independent consultants range from college professors of nuclear engineering who augment their income on a part-time basis to veterans of the nuclear power industry who make their expertise available to multiple clients. Consulting firms can be as small as a one-man office or can be staffed by dozens of professionals with offices in several large cities. Some consulting firms specialize in the calibration of radiation-measuring instruments. Of special interest are the firms that prepare and interpret the badges that personnel who work with radiation must wear to monitor their exposure. Potential Annual Earnings Scale. Earnings in consulting firms that deal with nuclear energy range from $20,000 for a single-person, part-time consultancy to several million dollars per year for a high-level position. Clientele Interaction. Consultants may be required to submit bids for certain projects. If they were previously employed by the nuclear industry or have a history of working with the industry, they may be known by reputation, and their interactions with clients are likely to be less formal. Amenities, Atmosphere and Physical Grounds. Consulting firms dealing with nuclear energy generally maintain one or more small offices. The work of a consultant is generally pleasant, but it may involve substantial travel to nuclear plant sites. Nuclear plant sites are generally clean

Nuclear Power Industry and well maintained but tend to be located in remote areas. Typical Number of Employees. The number of employees can range from one to a dozen or more at a single-office consulting firm to hundreds at a multiple-office consulting firm. Traditional Geographic Locations. Consulting firms generally tend to be located in big cities or college towns. Many have Washington, D.C., offices. Pros of Working for a Small Nuclear Consulting Firm. In small firms involved in the nuclear energy industry, the consultants may actually be business partners and can share in the profits. Often, consultants may set their own business hours. Cons of Working for a Small Nuclear Consulting Firm. Small firms are more vulnerable to economic downturns than bigger firms are. Workers will generally have fewer benefits. Firms with full-time employees may be at an economic disadvantage with respect to firms in which the consultants are working part time and rely on their fulltime academic positions for employee benefits. Costs Payroll and Benefits: Except for the smallest operations, consulting firms require a full-time receptionist and a full- or part-time accountant. Salaries for experienced professional engineers and scientists can be in excess of $100,000 per year. Salaries of support employees range from $20,000 to $40,000 per year. Health insurance for full-time employees, if offered, is also a considerable expense. Firms that serve a number of clients can have appreciable travel expenses. Supplies: In addition to the usual office supplies, consulting firms involved in nuclear energy will require a number of powerful computers, costing from $1,500 to $4,000 each. Software packages for engineering applications can cost from $900 to $20,000 or more. Some consulting firms maintain an inventory of radiological instrumentation. This must be kept up to date and frequently calibrated. External Services: Consulting firms generally rent office space, and cleaning and groundskeepings services are incorporated into their rent. Utilities: Consulting firms may obtain utilities as a part of the rent they pay or may pay for them separately.

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Taxes: Consulting firms pay business taxes to federal, state, and local governments and must carefully track expenses to isolate profit from gross revenue. Midsize Businesses Midsize businesses include some of the extractors of uranium and fabricators of fuel elements for nuclear reactors. In the future, these midsize businesses are likely to include companies devoted to processing nuclear waste and safely shipping it to long-term repositories. Potential Annual Earnings Scale. The pay earned by employees at midsize nuclear-related businesses ranges from low, hourly wages to sixfigure salaries, depending on the position and the person’s experience. Clientele Interaction. The clients of midsize nuclear-related companies (such as extractors and fabricators) are the nuclear power plants. Therefore, the salespeople in these companies must be technically educated to effectively deal with their clients. Other employees of these companies, except for receptionists, are less likely to have much contact with clients. Amenities, Atmosphere, and Physical Grounds. Nuclear fuel extractors and packagers will generally be located near nuclear power plants and away from population centers. The workplace, both the offices and the building surroundings, will generally be clean and secure although constructed with function rather than beauty in mind. Typical Number of Employees. The number of employees at a midsize nuclear fuel extractor or fabricator can range from twenty to several hundred. Traditional Geographic Locations. Midsize nuclear-related facilities are located close to nuclear power plants or disposal facilities. Pros of Working for a Midsize NuclearRelated Business. Midsize extractors and fabricators can generally provide better fringe benefits than smaller firms, including better health insurance plans and possibly subsidized education. Cons of Working for a Midsize NuclearRelated Business. The disadvantages of working in midsize nuclear-related firms include some uncertainty as to continued employment and the possibility of accidental exposure to radiation.

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Nuclear Power Industry

Costs Payroll and Benefits: Midsize nuclear-related businesses will have professional staff consisting of professional engineers; a technical staff who may have bachelor’s or associate’s degrees or have received specialized training while working in the military; and a certain number of unskilled workers who receive on-the-job training. Salaries will range from $20,000 to more than $100,000 per year, depending on education and experience. Supplies: Midsize nuclear-related industries generally must make a substantial investment in the equipment needed to handle radioactive materials. Computers are needed for record keeping. These industries also need the typical office supplies used by any business. External Services: Midsize nuclear-related companies may hire contractors for janitorial services and groundskeeping. Utilities: Midsize nuclear-related companies generally pay for their utilities, which include electricity, gas, telephone, Internet service, and water. Taxes: Midsize firms pay business taxes to federal, state, and local governments and must carefully track expenses to isolate profit from gross revenues. Large Businesses Because of the high entry cost as well as the burdens imposed by security concerns and regulations, the nuclear power industry consists mainly of large businesses who sell electrical power to the national power grid. Nuclear reactors are operational more than 90 percent of the time but may need to be offline to allow time for refueling. Generally, the consumer is not affected by such shutdowns. Because the individual utility companies purchase power dependent on demand and cost, the actual mix of hydroelectric, oil, gas, coal, and nuclear power used by an individual energy consumer will vary from hour to hour and season to season. Potential Annual Earnings Scale. The U.S. Census Bureau reports annual revenues of about $29 billion in 2007 for the nuclear power industry. In 2002, this quantity was only $12 billion. Revenues can be expected to grow over the long term as the supply of fossil fuels becomes scarcer or more expensive. There are, however, a number of significant uncertainties in this prediction.

Clientele Interaction. Because nuclear power plants sell the power they produce to the nationwide grid, there is little need for sales personnel, although some attention must be paid to keeping costs competitive with power produced from coal, oil, and other sources. However, nuclear plants do require public relations personnel to ensure the local community that their operations are safe and that the economic benefits balance the environmental costs. Amenities, Atmosphere, and Physical Grounds. Nuclear power plants are generally remote from population centers; however, the plant workers and their families may form a tightly knit community. Because concern for safety is paramount, work spaces are generally clean, and some level of on-site medical care may be provided. The physical environment may involve a limited amount of landscaping. Plants will generally include reactor buildings and cooling towers, as well as hightension wires to carry away the power produced. Typical Number of Employees. Large nuclear power plants typically employ more than two thousand workers. Traditional Geographic Locations. Nuclear power plants are located on the East and West Coasts, as well as in the South and the Midwest. Very few are in Western states. Pros of Working for a Nuclear Power Plant. Large nuclear power plants offer job stability with some opportunity for advancement. They offer fringe benefits typical of other large business, including quality health insurance and pension plans. Employers often provide subsidies for education. Cons of Working for a Nuclear Power Plant. The disadvantages of working in nuclear power plants include the remoteness of the work site and the anonymity typical of a large business, which may lead to slow advancement. Costs Payroll and Benefits: Nuclear power plants have professional staff consisting of professional engineers, a technical staff that may have bachelor’s or associate’s degrees or have received specialized training while working in the military, and a certain number of unskilled workers who receive on-the-job training. Salaries range from $20,000 to more than $100,000 per year, de-

Nuclear Power Industry pending on education and experience, with executives often earning more than $100,000. Supplies: In addition to normal office supplies, nuclear power plants must have radiological monitoring equipment, specialized protective clothing, leak monitors, and equipment to monitor the performance of the steam turbines. External Services: Large nuclear-related companies may hire contractors for instrument calibration and short-term construction jobs or may rely on in-house staff. Utilities: Nuclear power plants generally pay for their utilities, which include gas, oil, water, electricity, telephone, and Internet access. Taxes: Nuclear energy producers pay business taxes to federal, state, and local governments and must carefully track expenses to isolate profit from gross revenues.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Nuclear power plants are high-tech production facilities requiring a technically skilled workforce that meets high standards of reliability and trustworthiness. Nuclear power plants offer employment for engineers in several disciplines, including nuclear, electrical, civil, and environmental; for scientists at degree levels from bachelor’s through doctoral; and for technicians who may be graduates of community colleges or technical institutes or have received advanced technical training in the armed forces. In addition, nuclear power plants, like other large organizations, have a need for managers, human resources specialists, janitorial and maintenance staff, and security personnel. Generally, nuclear plant employees must pass a rigorous security screening, which includes interviews of neighbors and relatives. Most nuclear plants are operated by energy-producing companies and are managed by a general manager who reports to the energy company. General managers and the shift managers that report to them are generally veterans of many years in the nuclear industry. Nuclear plants make a careful distinction between the reactor operators, who must be licensed and who actually control the reactor, and other technical personnel who are generally

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not allowed in the control room. Essentially all employees must obtain some level of security clearance. The following umbrella categories apply to the organizational structure of nuclear power plants: ■ ■ ■ ■ ■

Executive Management Engineering Analysis and Monitoring Operations Security

Executive Management Like all large organizations, nuclear power plants are under the control of senior managers, generally individuals with considerable experience in the industry who may have added management training to a technical background. Such individuals may hold a bachelor’s degree in science or engineering as well as a master of business administration. Executive management handles the general operations of the plant. These individuals help oversee the reactor operation, fueling and waste disposal, technical upgrades to the facility’s major operations, goal setting, and the implementation of plans for the property. They also manage individual teams and departments, or, as in the case of the general manager, oversee departments. Many executive managers have advanced degrees. As with many industries, experience can sometimes serve as a substitute for advanced education. Executive managers generally earn higher salaries than anyone else in the plant. Their job is to manage the overall functions of the property, address systemic issues, and ensure that all departments are functioning in a fluid fashion. Occupations in the area of executive management include the following: ■ ■ ■ ■ ■ ■ ■

Plant Manager Chief Financial Officer (CFO) Controller Chief of Engineering Security Manager Groundskeeping Manager Human Resources Manager

Engineering Nuclear plants offer employment opportunities for engineers in numerous specialties. Generally

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Nuclear Power Industry

engineers working at a nuclear plant will hold a bachelor’s or master’s degree in their engineering field and will have passed the professional engineer’s examination for their field and state. Engineers’ salaries range from about $40,000 to more than $100,000. Successful engineers can move into executive management or become private consultants commanding somewhat higher incomes. Civil engineers are involved in the design of new nuclear power plants and in supervising upgrades to existing structures. Materials engineers are needed to ensure the integrity of reactor shielding and of the turbine’s blades. Mechanical engineers monitor the function of the heat exchanger and the turbine blades. Electrical engineers are needed to ensure that all the electronic control systems of the reactor are functioning correctly. They are also needed to monitor the output of the generator powered by the turbine and the system of conductors leading electrical energy out of the plant. Nuclear engineers are responsible for the reac-

OCCUPATION

tor design and for making sure that it is operating within safe limits. They design and oversee the construction of new reactors and the modification of existing power plants. They develop procedures for the handling of radioactive materials. Computer engineers are needed by the nuclear industry to maintain or develop computer systems for monitoring reactor operation as well as for fulfilling normal business purposes, ranging from accounting to inventory control. An important specialty is simulator engineering. Like airline and military pilots, reactor operators must constantly prepare for emergencies that they hope to never actually experience. To be prepared for any eventuality, power plant technical staff members must undergo extensive training using computer simulations. Writing the control software for nuclear reactor simulators requires knowledge of reactor operations as well as programming skill and familiarity with the field of human factors psychology. Among the engineering specialties needed in the nuclear industry are the following:

PROFILE

Nuclear Engineer Considerations

Qualifications

Description

Designs and develops equipment and processes involving nuclear power.

Career clusters

Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Nuclear Power Industry OCCUPATION

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SPECIALTIES

Nuclear Engineers Specialty

Responsibilities

Nuclear equipment design engineers

Design nuclear machinery and equipment.

Nuclear equipment research engineers

Conduct research on nuclear machinery and equipment.

Nuclear equipment test engineers

Conduct tests on nuclear machinery and equipment.

■ ■ ■ ■ ■ ■

Civil Engineer Materials Engineer Mechanical Engineer Electrical Engineer Nuclear Engineer Computer Engineer

Analysis and Monitoring Nuclear power plants generally have an inhouse staff of scientists to monitor reactor function and environmental impact. Analytical chemists are needed to verify the condition of the fuel elements and to confirm the absence of heavy elements in the water that flows through the turbine. Chemists working at a nuclear site generally will have bachelor’s degrees in chemistry with graduate level training in analytical chemistry or radiochemistry. Biologists are needed to address the environmental impact of the plant. In addition to looking for signs that the plant might be releasing low levels of radiation or toxic chemicals into the environment, they may monitor the biological impact of heat generated by the reactor. Geophysicists have an important role to play in the storage of radioactive waste and in ensuring that the reactor can withstand any seismic activity likely to occur at its location. Health physicists are responsible for protecting plant personnel from the dangers associated with the radioactive fuel and its products. In addition to having a minimum of a bachelor’s degree in physics or a closely allied field, they must go through a specialized training program in health physics and a certification examination. They are experts in dosimetry (measuring radiation dose) and the environmental transport of radiation. Health physicists

generally have the final word on the selection of radiation protection and detection equipment and are assigned to monitor it for proper function. They also have general responsibility for training all plant personnel in the safe conduct of their jobs. Health physicists may supervise as many as seventy technicians and chemists and may be responsible for monitoring exposure data for up to two thousand plant employees. Materials scientists and metallurgists are responsible for ensuring that the physical properties of shielding and structural materials remain within safe limits. Because the mechanical properties of materials exposed to gamma rays and free neutrons will change as atoms are pushed out of their normal sites by radiation, degradation of material performance must be carefully monitored Among the scientific specialties employed in the nuclear power industry are the following: ■ ■ ■ ■ ■

Analytical Chemist Biologist Geophysicist Health Physicist Materials Scientist

Operations The operation of a nuclear power plant requires many technicians. These technicians generally have less than a bachelor’s degree but all have advanced technical training. Many have an associate’s degree or have received extensive training at a trade school or during military service. Nuclear reactor operators are charged with proper operation of the reactor and have responsibility of shutting down the reactor through the in-

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Nuclear Power Industry OCCUPATION

PROFILE

Nuclear Quality Control Inspector Considerations

Qualifications

Description

Inspects machinery, equipment, working conditions, and materials produced at manufacturing companies, during power plant construction, and during nuclear facility operations.

Career clusters

Government and Public Administration; Manufacturing; Transportation, Distribution, and Logistics

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

Junior/technical/community college

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

ERS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

sertion of control rods if the reactor gets outside of acceptable operating limits. Nuclear reactor operators must obtain both an operator’s license and a security clearance from the Nuclear Regulatory Commission. To obtain a license, individuals must both pass a test of knowledge and meet certain physical standards needed for the safe operation of a reactor. Generally, the nuclear reactor control room is staffed by several licensed reactor operators under a senior nuclear reactor operator who acts as shift supervisor. According to the Bureau of Labor Statistics, the median annual wage for a nuclear reactor operator was $70,410 in 2007. Nuclear plants may also employ a number of auxiliary nuclear reactor operators, nonlicensed individuals who operate equipment outside the control room. These individuals may be gaining on-the-job experience while preparing for the nuclear reactor operator exam.

Instrument technicians, also called by several other titles, are responsible for maintaining and repairing the instruments used in a nuclear power generating plant. A nuclear power plant will generally have its own machine shop and electronics shop so that malfunctioning equipment may be quickly repaired. Nuclear waste removal workers include decontamination technicians, radiation protection technicians, and decommissioning and decontamination (D&D) workers. Decontamination technicians are called in to clean up spills of radioactive materials, using for the most part standard janitorial equipment. This job may be done by robots if radiation levels are too high. Radiation protection technicians have more experience and training and may use may use high-pressure cleaning equipment. They may also be responsible for packaging radioactive materials. D&D workers break down

Nuclear Power Industry contaminated laboratory equipment and build storage containers for nuclear waste. When a nuclear site is decommissioned, they are responsible for the removal and safe storage of nuclear material. All hazardous waste removal workers wear protective clothing with the level of protection depending on the job. The essence of nuclear power plant operation is the use of heat produced in a nuclear reactor to boil water producing steam to turn an electric generator. The construction and maintenance of the large boilers required are the responsibilities of the boilermakers. Generally boilers are constructed on site, and considerable engineering know-how goes into their successful construction. Pipefitters are individuals who specialize in joining pipes for use under a variety of pressure and temperature conditions. Although some nuclear plants maintain an in-house staff of pipefitters, others contract for their services as needed. Boilermakers and pipefitters must be capable of reading blueprints and using computer-assisted design programs. Occupations in the operations area of nuclear power plants may include the following: ■ ■ ■ ■ ■

Nuclear Reactor Operator Instrument Technician Nuclear Waste Removal Worker Boilermaker Pipefitter

Security Nuclear plants must be constantly on guard against theft of nuclear material, sabotage, and terrorist activity. A substantial security force must be hired, trained, and equipped. Although a high school education is usually sufficient to become a security guard, potential employees must undergo extensive background checks and some states require licensure. Guards at nuclear facilities undergo several months of on-the-job training. According to the Bureau of Labor Statistics, the median annual wage for a security guard was $23,460 in 2008. Security occupations at a nuclear power plant may include the following: ■ ■

Security Manager Security Guard

INDUSTRY

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OUTLOOK

Overview The outlook for the nuclear power industry is positive. The industry is in growth mode, but political and economic issues make for an uncertain future. According to the Bureau of Labor Statistics, the number of nuclear reactor operators is likely to increase by 19 percent between 2008 and 2018, although the percentage of new employees is expected to grow much faster as the result of older workers retiring. New power plants are scheduled for construction and the growth in demand for energy continues, but the problem of long-term storage of high-level nuclear waste persists, as does the problem of carbon emissions from conventional power plants. With the introduction of purely electric and hybrid electric-gasoline vehicles for private individuals and corporate use, the demand for electric power is likely to increase. The nuclear power industry is well positioned to respond to this demand, particularly during off-peak hours. The nuclear power industry is particularly sensitive to the electoral process. For example, during the 2008 presidential election, those advocating expanded drilling for oil and removal of restrictions on coal mining were pitted against those advocating tougher restrictions on carbon emissions. Although nuclear advocates point to the lower environmental impact of properly run nuclear plants, the fear of possible nuclear accidents will be difficult to eliminate. On the other hand, the increasingly aggressive methods needed to maintain the flow of fossil fuels to the consumer and the increasingly stringent environmental regulations driven by a concern for global warming caused by excess carbon dioxide emissions make nuclear power generation increasingly attractive. The nuclear power industry requires a technologically educated workforce. Educational standards for reactor operators were significantly increased in the wake of the Three Mile Island incident, and a nuclear industry concerned with safety and security will continuously update its infrastructure and monitor new technological developments. Several types of reactors not yet in commercial operation may become practicable as the demand for electric power grows. These include breeder re-

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Nuclear Power Industry

actors, which actually produce additional radioactive fuel as they generate electricity, and liquid metal reactors, in which a liquid metal such as sodium replaces water as the heat exchange medium. The fuel produced in a breeder reactor is plutonium, an element that must be separated from uranium by reprocessing the spent fuel rods. Experimental fusion reactors, which generate energy by fusing hydrogen nuclei to form helium, are approaching a breakeven point, at which the energy released by fusion exceeds the energy input required to maintain the conditions of high-temperature plasma confinement needed for sustained fusion. Although some scientific and engineering breakthroughs may be needed for commercial fusion power to become a commercial reality, the basic skill sets needed to safely run a fusion power plant are likely to substantially overlap those required by the existing nuclear power industry. Employment Advantages The nuclear industry is in expansion mode, which is likely to continue barring a major nuclear accident. New nuclear plants will be constructed and older reactors refurbished, and the demand for electrical energy is likely to continue to grow. Significant new employment opportunities will occur as the baby-boomer generation begins to retire. Highly skilled workers will find their skills transferable to new technologies, if for instance, fusion power supplants nuclear fission as an energy source. Further, the demand for health physicists is likely to continue as medical applications for isotopes are identified. Particle accelerators for electrons and protons are routinely used for cancer therapy, and accelerators for ions of the heavier elements are used in the doping of semiconductors. Scientific and technical staff in the nuclear power industry will therefore have many jobs open to them, even outside the traditional area of energy production. Students who prepare for engineering or science degrees or receive advanced technical training at a community college or in the military should be able to select from a number of attractive positions, particularly if they are willing to relocate for employment. Workers in nuclear power and its allied industries can expect to participate in continuing education throughout their lifetimes.

Annual Earnings Electric power companies generally function as regulated monopolies and their profitability is unlikely to increase or decrease dramatically. It is probably safe to assume that power industry revenues will grow over time and that the fraction of electrical energy produced by nuclear power plants will increase, following the example of European countries. A marked increase in demand is possible as fully electric and hybrid vehicles capture more of the automotive market. The cost of hazardous reactor waste disposal or reprocessing is another economic variable. As spent nuclear fuel accumulates on site, there will be a push both for disposal at geologically safe sites as well as for the reprocessing of spent nuclear fuel. Transportation and security costs associated with transport of highlevel waste by rail or truck will also enter into the equation. In addition to their domestic operations, American companies are involved in exporting nuclear power technology to other countries, particularly those in Asia and the Middle East. In December, 2010, Westinghouse Electric Company announced the end of preparatory work on fuel for four of its AP1000 reactors, with the first scheduled for operation in Zhejiang, China. The AP1000 is a pressurized water reactor designed for robust performance. Meanwhile, the United Arab Emirates has announced that American construction giant Bechtel has been selected to build the first nuclear plant in the oil-rich Mideast.

RELATED RESOURCES FOR FURTHER RESEARCH American Nuclear Society 555 N Kensington Ave. La Grange Park, IL 60526 Tel: (800) 323-3044 Fax: (706) 352-0499 http://www.ans.org Health Physics Society 1313 Dolly Madison Blvd., Suite 402 McLean, VA 22101 Tel: (703) 790-1745 Fax: (703) 790-2672 http://www.hps.org

Nuclear Power Industry Nuclear Energy Institute 1776 I St. NW, Box 400 Washington, DC 20006-3708 Tel: (202) 739-8000 Fax: (202) 785-4019 http://www.nei.org U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, MD 20852-2738 Tel: (800) 368-5642 http://www.nrc.gov

ABOUT

THE

AUTHOR

Don Franceschetti has been a member of the physics faculty at the University of Memphis for more than thirty years. He received his bachelor of science degree from Brooklyn College in 1969 and his doctoral degree in physical chemistry from Princeton University in 1974. He came to the University of Memphis following research appointments in physics and materials science at the Universities of Illinois, North Carolina, and Utrecht (the Netherlands). He is Dunavant University Professor. He has taught a wide range of physics courses and courses for physics teachers and has written extensively about the physical sciences and their history.

FURTHER

READING

CareerBuilder.com. Salary Calculator and Wage Finder. http://www.cbsalary.com/salarycalculator. Careers.org. Occupation Profiles: Descriptions, Earnings, Outlook. http://occupations .careers.org.

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Elliott, David. Nuclear or Not? Does Nuclear Power Have a Place in a Sustainable Energy Future? New York: Palgrave Macmillan, 2007. Franceschetti, Donald R., David Rulloch, and Lee A. Paradise. “Can Radiation Waste from Fission Reactors Be Safely Stored?” In Vol. 2 of Science in Dispute, edited by Neil Schlager. Farmington Hills, Mich.: Gale, 2002. Heppenheimer, T. A. “Nuclear Power: What Went Wrong?” American Heritage of Invention and Technology 18, no. 2 (2002): 46-56. Herbst, Alan M., and George W. Hopley. Nuclear Energy Now: Why the Time Has Come for the World’s Most Misunderstood Energy Source. Hoboken, N.J.: John Wiley & Sons, 2007. Lejzerovi5, Aleksander. Wet-Steam Turbines for Nuclear Power Plants. Tulsa, Okla.: PennWell, 2005. Levy, Salomon. Fifty Years in Nuclear Power: A Retrospective. La Grange Park, Ill.: American Nuclear Society, 2007. Newton, David E. Nuclear Power. New York: Infobase, 2005. Taylor, Allan, and James Robert Parish. Career Opportunities in the Energy Industry. New York: Ferguson, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Wood, J. Nuclear Power. London: Institution of Engineering and Technology, 2007.

©Dreamstime.com

Outdoor Recreation Industry

INDUSTRY

SNAPSHOT

General Industry: Hospitality and Tourism Career Cluster: Hospitality and Tourism Subcategory Industries: Bicycle-Based Recreation; CampBased Recreation; Fishing Equipment; Fishing Guides; Hunting Equipment; Hunting Guides; Paddle-Based Recreation; Skiing Facilities; Skiing Instruction, Camps, and Schools; Trail-Based Recreation; Wildlife Viewing Related Industries: Hotels and Motels Industry; Museums and Cultural Institutions Industry; Sports Equipment Industry; Themed Entertainment Industry; Travel and Tourism Industry Annual Domestic Revenues: $289 billion (Outdoor Industry Foundation, 2006) NAICS Numbers: 7192, 7199, 423910, 451110, 532292, 611620, 713920, 713990

INDUSTRY

tivities form a major component of the industry. Retail stores that specialize in selling equipment for outdoor activities are also usually included in economic analyses of the industry.

History of the Industry Many activities grouped under the umbrella term “outdoor recreation” have their origins in antiquity. After all, the hunting and gathering techniques and exploratory wanderings of prehistoric humans constituted the earliest forms of what would later become such recreational activities as hiking, hunting, and fishing. Exploring nature, by foot and later by horseback, allowed humans to find food and other resources and facilitated the colonization of new areas. The transition of outdoor activities from necessity to leisure largely accompanied technological innovations, which led first to agriculture and animal husbandry, and later to industrial food production. As humankind relied more on innovations such as these, they inevitably experienced a reduced “need” for outdoor activities. Nonetheless, many humans still felt a desire to explore na-

DEFINITION

Summary The outdoor recreation industry provides equipment, training, and guidance for persons interested in such recreational activities as skiing, mountain climbing, hunting, and fishing, as well as hiking and bird-watching. Companies that offer tours of outdoor areas and training in outdoor ac1312

Outdoor Recreation Industry

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ture and engage in outdoor sports. The first outmost of the land during the first half of the twentidoor recreation industry was centered on hunting eth century. The transformation of outdoor areas and fishing, and mainly developed around the sale into residential, agricultural, or urban landscapes of hunting and fishing equipment. It also included helped spur the evolving outdoor recreation inthe breeding and sale of hunting dogs, horses, faldustry. With encroaching suburban and urban cons, and other animals used for outdoor sporting sprawl, more individuals began seeking out nature activities. in an effort to escape from their urban and suburLand ownership soon became the most signifiban environments. In addition, new ways to explore cant factor in the creation of the outdoor recrenature’s offerings developed, including pursuits ation industry. With ownership, it was possible to such as spelunking, or exploring caves, and the recharge a fee for the right to hunt, fish, ride horses, vival of culturally oriented sports such as surfing. ski, or mountain climb. Those with experience in The next major development in the outdoor the outdoors began to market their services, leadrecreation industry was the advent and subsequent ing amateur sporting enthusiasts on nature hikes, popularization of the automobile, followed by the hunting expeditions, and other types of outdoor first national highways in the 1950’s. Urbanites and leisure activities. their suburban counterparts could now travel to In eighteenth and nineteenth century Europe, national parks and other natural areas and engage “sporting” activities became popular among the soin hiking, bird-watching, and a number of other cial and economic elite. A movement toward more nature activities that their city environments did realistic art depicting scenes of nature also helped not offer, building an entirely new consumer base foster a romantic urge to hike and explore. Eurofor the outdoor recreation industry. The complepean settlers brought this renewed interest in nation of interstate highways led to a significant spike ture activities to the United States, where sportin the number of Americans engaging in hiking, ing and nature exploration also became popular camping, and other wilderness activities. among various social and economic classes. The next major milestone in the outdoor recAs mass fervor for the “great outdoors” began to reation industry was the development of ecologipeak in the United States, early American naturalcal consciousness, strengthening the conservation ists such as John Muir helped spread awareness of movement first spearheaded by naturalists such as the value of natural areas. The United States was Muir. While naturalists and scientists had long the first country to create wilderness reserves, warned of the damage being wrought on the envilargely through the work of Muir and other naturonment, it was not until the 1960’s that ecologiralists who promoted the value of preserving and protecting natural areas. Between 1830 and 1890, the U.S. government set aside several natural areas for public use and recreation. In 1916, the National Park Service was created to oversee the development and protection of the country’s preserves. As the twentieth century unfolded, there were still vast areas in both the United States and Western Europe where individuals could engage freely in nature exploration and outdoor sports. However, populaHunting and fishing are a big part of the outdoor recreation industry. (©Dreamstion growth and the industrial time.com) revolution gradually consumed

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Outdoor Recreation Industry

cal awareness became widespread in the United States. The movement had its roots in the writings of naturalists such as Rachel Carson, who brought the environmental crisis to a national audience with the publication of Silent Spring (1962). The early 1970’s witnessed the back-to-the-land movement, in which hundreds of urban dwellers began moving to the country to be closer with nature and engage in what they saw as a simpler, more natural existence. This movement coincided with the first international efforts to combat environmental destruction and to protect natural resources and ecosystems. The environmental movement of the 1960’s and 1970’s also popularized the idea of “ecotourism,” or traveling to a location for the express purpose of enjoying the natural environment. By the late 1990’s, ecotourism was one of the largest segments of the international tourism industry, and many countries began to focus on preserving portions of their natural environment to attract tourists. In the early twenty-first century, the outdoor recreation industry established itself as one of the fastest-growing segments of the international tourism and leisure industries. In urban areas, a variety of retail stores emerged specializing in selling equipment and educational materials for persons interested in outdoor activities. Companies offering outdoor recreational activities vary in size, from simple one-person guided hiking tours to massive

resorts where visitors can engage in a variety of activities such as skiing, hiking, boating, rapelling, and mountain climbing.

The Industry Today The outdoor recreation industry services a diverse array of customers from different cultural and socioeconomic backgrounds. Outdoor recreation appeals to those hoping to find a relaxing environment away from the hectic pace of modern life, as well as to those who crave the adventure and excitement that only the outdoors can offer. Given the wide-ranging appeal of the industry and the large base of potential customers, outdoor recreation has developed into a multitrillion-dollar industry that accounts for almost $300 billion in sales and services in the United States every year. The twenty-first century outdoor recreation industry can be divided into a number of subindustries, including hunting and fishing, snow-based recreation, trail-based recreation, camp-based recreation, water-based recreation, and wildlifethemed activities. Within each category, there are thousands of outdoor recreation businesses in the United States and abroad, ranging from small, privately owned operations to national and international corporations. Recreational hunting and fishing are among the largest segments of the industry—and the most controversial. Each year, hunting and fishing enthusiasts spend millions of dollars on training, equipment, licenses, and permits for such sports as game hunting, fly fishing, angling, deep-sea fishing, and big game or trophy hunting. In the wake of the environmental movement of the 1970’s, awareness of species extinction and loss of diversity increased. This increased awareness led to the development of vigorous antihunting and antifishing movements. In an effort to prevent the extinction of threatened species and curb overall gradual species loss, governments began creating more stringent laws regarding huntCamping is a popular outdoor activity. (©Stephen Spraggon/Dreamstime.com) ing and fishing licensing. Gov-

Outdoor Recreation Industry

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ernments also began more strictly to regulate and govern the numbers and types of animals that can be killed by sport hunters and fishers. Hunting and fishing remain widely popular around the world, and government agencies are currently attempting to adjust their laws and regulations to protect vulnerable species without damaging the lucrative sport hunting industry. Camping is another major facet of the outdoor recreation industry. There are hundreds of national parks across the United States that sell permits The snow-based recreation industry is robust in the United States because of the allowing individuals to camp popularity of skiing and other snow-based activities at mountain resorts. (©Brian within their grounds. There are Balster/Dreamstime.com) also thousands of private campgrounds, often located near cause of the popularity of skiing and other snowprotected areas or national parks, where visitors based activities at mountain resorts. (In recent can camp or park their recreational vehicles (RVs) years, the mountainous and newly economically for a fee. Camping is often connected with trailempowered countries of Central Asia have also inbased activities, which include any recreation or creased their respective profiles in the snow-based sport that uses a planned route through a natural recreation and travel industry.) Snow recreation area. These activities include basic hiking and bikcompanies earn money by offering access to priing paths, as well as mountaineering and mountain vate skiing and snowboarding slopes, as well as by biking. Most national parks contain hiking trails renting and selling equipment and clothing. for public use, and a number of businesses take cusWater-based recreation involves boating, scuba tomers to exotic locations for biking, horseback, or diving, snorkeling, water skiing, parasailing, jet hiking tours. skiing, kayaking, canoeing, and a variety of other Other outdoor recreation companies specialize marine-based activities. Boating is among the most in wildlife-themed entertainment. Wildlife-themed popular water-based recreation activities, as it inbusinesses include zoological parks and wildlife cludes activities such as recreational and competiparks, as well as guided tours designed to allow visitive sailing, as well as boat tours, in both marine tors to view wildlife in its natural habitat. Scuba divand freshwater areas. Much of the industry is foing, snorkeling, and other marine activities are a cused on the renting or seasonal housing of boats popular part of the modern ecotourism industry, and other watercraft. Water-based recreation also as are bird- and whale-watching tours. Many comincludes other wildlife-themed activities, such as panies offering wildlife tours donate portions of whale watching, an industry that was estimated in their profits to help support conservation and 2009 to be worth $2.1 billion globally by the Interother environmental efforts. Horseback riding is national Fund for Animal Welfare. also popular around the world and has developed The various categories of outdoor activities into a multimillion-dollar industry. overlap in practice. Ski resorts, for instance, might Snow-based recreation includes downhill and also offer bird-watching tours and horseback ridcross-country skiing, sledding, snowboarding, and ing in the off-season, while businesses offering snowmobiling. The snow-based recreation induswildlife-viewing tours might also own trails for try is robust in the United States and Europe be-

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Outdoor Recreation Industry

mountain biking. Similarly, a single business might try to cater to different types of clientele by offering some activities that are relaxing or familyoriented, as well as others that are more challenging and appeal to sporting or experienced consumers. The most important forces driving the development of the outdoor recreation industry are the availability of natural areas for consumers and their evolving ecological awareness. Companies that once specialized in deep-sea fishing, for example, may find that their consumer base is shrinking as concerns over declining fish populations Jet boats are a popular form of recreation on lakes and rivers. (©Dreamstime.com) become more widespread. Companies marketing services Small Businesses that are environmentally friendly and ecologically Most outdoor recreation businesses would fall responsible are beginning to have a major advaninto the small business category, with between one tage in the market. and ten employees and established ties to their imWhile the outdoor recreation industry includes mediate communities. In addition to small companumerous large and profitable companies, the innies, this category includes self-employed entrepredustry is only partly driven by profit. Many companeurs who work alone, offering training or tours in nies and outdoor recreation organizations donate some type of outdoor or recreational activity. profits and volunteer services to the ongoing effort Potential Annual Earnings Scale. According to preserve and protect wildlife and natural habito the U.S. Bureau of Labor Statistics (BLS), the avtats. Those who work in the industry, especially in erage annual salary range for employees of outsmaller businesses with ties to local communities, door recreation businesses in 2009 was between tend themselves to be avid participants in outdoor $14,000 and $37,000. Owners and managers of activities and to enjoy earning a living while sharsmall recreation companies can earn salaries siging their passion with others. nificantly higher than the average salary of all employees, which was $20,470. The potential earnings of outdoor recreation businesses’ owners vary INDUSTRY MARKET widely depending on their location and type of SEGMENTS business. For example, the owner of a small fishing tour business along a midwestern river might earn Outdoor recreation companies range in size a salary of less than $15,000 per year, while the from small operations with one or a few employees owner of a private deep-sea fishing tour business, to massive companies with hundreds or thousands located near a busy tourist area, might earn well of employees. There are small, midsize, and large over $80,000 per year. corporations for each category of outdoor activity, Clientele Interaction. Owners and managers of whether it is water-based, snow-based, or trailsmall recreation businesses generally work with based. The following descriptions list qualities small groups of clients and can therefore offer percommon to recreation businesses, grouped acsonalized service to their clientele. While some reccording to size and number of employees.

Outdoor Recreation Industry reation businesses maintain a significant number of repeat customers, most businesses must maximize the number of new customers they bring in each season because a large portion of their customers engage in outdoor recreation only occasionally. In order to maintain revenues, smaller businesses must market themselves on the basis of their unique qualities, which often include offering personalized service. Owners, managers, and employees of smaller outdoor recreation businesses are expected to have intimate knowledge of the activity in question. Owners of a surfing supply business, for instance, are generally expected to be surfers or at least to have firsthand knowledge of the local surfing scene. This intimate connection to the activity in question makes customers feel as if they are receiving expert service, and it is one of the primary reasons that customers choose smaller, independent businesses over larger companies. Smaller companies are also able to offer more flexible services, as they accommodate smaller groups of customers. A common niche for smaller recreational businesses is to offer various types of training, tours, or services depending on the client’s needs. A small hunting business might therefore offer private father-and-son hunting tours, while a hiking tour company might offer couples night hiking. Amenities, Atmosphere, and Physical Grounds. Smaller businesses tend to present a less formal and more personalized atmosphere. Depending on the type of business, the layout may range from a single-room office to a small building. The décor of a small outdoor recreation business’s office will often feature posters, photographs, and other souvenirs representing features of the local area. A small fishing shop might hang a stuffed fish caught by a local fisher, while a small mountainbike-rental office might hang maps of local biking trails or pictures of wildlife commonly found on their trails. Because most small recreation businesses are independent, the choice of décor and the overall atmosphere of the establishment generally reflect the personality of the owner and employees. One common theme is to employ a rustic or outdoors decoration scheme that builds on the theme of sports and nature appreciation. Smaller outdoor recreation businesses typically operate on low or limited incomes and may therefore keep amenities to a minimum. Depending on

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the type of business in question, the owners may make basic amenities such as restrooms and automated teller machines (ATMs) available on site. Few small businesses can afford to offer free souvenirs and other complimentary gifts, which is a popular strategy of larger recreation companies. Typical Number of Employees. Small outdoor recreation businesses typically have fewer than ten employees, but they may have only one or two, depending on the type of business. A small canoerenting facility might have between ten and twenty employees to handle customer service, make equipment and tour sales, shuttle visitors to and from the launch location, and maintain the office and grounds. A small bait shop or private deep-sea fishing operation, on the other hand, might have only one or two employees and might therefore operate only seasonally and during peak fishing hours. Outdoor recreation businesses with significant equipment expenditures, such as bike rental companies, surfboard rental companies, and retail stores specializing in outdoor equipment, typically have larger numbers of employees to fulfill the demands of maintaining and handling inventory. Smaller businesses offering tours or training may only require a few employees, each of whom is responsible for small groups of customers during a typical business day. Traditional Geographic Locations. Small outdoor recreation businesses are typically geographically specialized and situated as close as possible to the area in which their activities take place. Small fishing shops attempt to locate themselves near local lakes or rivers, surfing shops locate themselves coastally, and small skiing shops locate themselves near popular ski slopes. Most small businesses are operated by individuals who live near the area in question and have close ties to the community; for example, small surfing equipment stores are found in surfing towns. In general, those in the outdoor recreation industry are members of their local communities and build their livelihoods around the features that attract customers to the area. Some outdoor recreation companies set up remote locations in urban areas in an effort to capitalize on the larger number of potential customers who live there. A small mountain bike store might therefore open in a city, offering equipment and arranging for biking classes with urban residents who then travel to the appropriate location to partici-

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Outdoor Recreation Industry

pate in the classes. Satellite locations of this kind are more common among midsize and larger companies, but some small businesses also try to attract customers from nearby, more populous urban areas. Pros of Working for a Small Outdoor Recreation Business. Most owners and operators of small outdoor recreation businesses are not motivated primarily by potential earnings. Many entrepreneurs in the outdoor recreation industry have a genuine passion for their fields and open their businesses in an effort to earn a living while doing what that they love to do. In addition to working in an industry with personal appeal, small-business owners benefit from having close ties to their communities. They may also enjoy interacting personally with their customers. Small-business owner-operators also typically have the freedom to tailor every aspect of their businesses according to their personal tastes. By the same token, they can adjust their business strategies according to changes in the market or in their personal lives. This type of flexibility may not be possible at larger establishments that have greater overhead and more employees to consider. Cons of Working for a Small Outdoor Recreation Business. Small outdoor recreation industries, like many small and independently operated businesses, are especially vulnerable to both environmental and economic changes. While a large recreational venue or company might earn enough income to weather periods of economic downturn and reduced business, a smaller business might have more difficulty in meeting its payroll requirements, maintaining its inventory, and paying its expenses. In addition, owners and operators of small businesses are typically responsible for a variety of activities in the daily operation of the business. For example, a manager at a small mountain-climbing equipment store might be responsible for, among other things, human resources management, cashier and customer service duties, inventory management, and accounting, while managers at midsize and large businesses often have more defined and less demanding roles. Costs Payroll and Benefits: Small businesses generally pay hourly wages, and few offer medical or other typical benefits.

Supplies: Small retail stores must make significant investments in inventory, while service-based businesses, such as those providing tours or training, may have smaller expenses in terms of inventory and supplies. They will still need to maintain a full stock of the tools of their trade, such as fishing equipment or stable supplies and horse-transportation vehicles. External Services: Some small businesses pay for credit card processing services and other customer service amenities for their offices, such as vending machines. They may also hire accountants at tax season or small advertising firms or consultants to find and appeal to customers. Utilities: Depending on the business, small recreation business owners may need to pay for electricity, gas or oil, telephone and Internet services, and sewage and water utilities. Taxes: Small businesses pay local, state, and federal income taxes, as well as property taxes. In addition, many small businesses must maintain sporting licenses, and some also arrange to sell licenses to their customers. As many outdoor recreation activities are associated with significant physical risk, some businesses may carry highly specific insurance policies to protect themselves in cases of customer injury. Midsize Businesses Midsize outdoor recreation businesses are not as abundant as are small businesses, and they generally serve areas with high customer volume. Popular resort or vacation areas can support midsize businesses, where the number of customers necessitates larger size and more employees. Some midsize outdoor recreation businesses are part of larger chains, including a number of sportinggoods and other specialty retail shops. Midsize businesses may maintain between twenty and fifty employees, depending on the type of business and its location. Unlike smaller businesses, midsize businesses commonly offer more than one recreational activity or service. For instance, a midsize boating business may sell boating equipment, as well as offer lessons in sailing and operating motor boats, guided boat tours, and other services. By contrast, smaller businesses are often limited to providing a single service or limited service in a few basic categories.

Outdoor Recreation Industry Potential Annual Earnings Scale. The wages for managers, owners, and operators of midsize recreation businesses vary widely depending on the type of business and location. According to the BLS, salaries for all employees of recreation businesses generally fall within a range of $14,000 to $37,000 per year, with owners and managers earning incomes at the upper half of the range. Managers of recreation businesses in busy areas with high customer volumes may earn as much as $80,000 or more annually. Clientele Interaction. Midsize recreation businesses are more formal than their smaller counterparts, and generally have high customer volume, which translates into less personalized interaction between customers and staff. Because of high volume, midsize businesses are also sometimes less responsive and adaptable to the needs of individual customers. While midsize businesses may not be as personable as some smaller businesses, they are often able to offer more reliable service and have longer hours than their smaller competitors. In addition, midsize businesses are sometimes able to hire staff specifically assigned to customer relations and satisfaction, allowing them to handle greater volume without sacrificing personal customer interaction. Because midsize businesses often bring in higher revenues than do small businesses, they are sometimes able to offer services and customer sales that would be impossible for smaller businesses with less profit. Amenities, Atmosphere, and Physical Grounds. The appearance and layout of midsize outdoor recreation businesses varies widely according to the type of business and physical location. Most midsize businesses require larger spaces than do small businesses and typically provide at least basic amenities, such as restrooms and heating or air-conditioning in customer areas. A midsize nature park might, for instance, have two sets of restrooms for customers, as well as a cafeteria or refreshment stand. In addition, some midsize businesses are able to couple with other businesses to offer grouped services. For example, a midsize skirental business might be located next to a bed and breakfast or hotel to capitalize on business from tourists. Like small businesses, the décor and atmosphere of midsize businesses often feature decora-

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tions, art, and colors reminiscent of their professional activity. A business specializing in surfing equipment and lessons will feature a décor derived from surf culture, while businesses specializing in saltwater fishing might be decorated with pictures of the ocean and may hang decorations such as mounted fish, sea creatures, and other items associated with the marine environment. Midsize businesses that are part of larger chains may be required to decorate in accordance with the policies of the national chain management. In contrast to the common rustic decoration scheme of many smaller recreation businesses, midsize companies often attempt to project a more businesslike and formal atmosphere. Midsize recreation businesses are more likely than are smaller businesses to concentrate on branding their business. While a small business might rely on word of mouth and basic advertising as its only marketing efforts, a midsize business might create a logo and apply it to products and promotional items in an attempt to generate interest. In such a case, the business’s logo might play a major role in its decoration scheme and in choices made regarding its atmosphere and physical design. Typical Number of Employees. Midsize businesses may hire anywhere from ten to more than fifty employees, depending on the nature of the business and its physical location. A retail location, for instance, might need to have a full staff of ten or more employees divided over two or three shifts per day and operating from five to seven days per week, while a midsize nature park might need no more than ten or fifteen employees, because a minimal staff is required for the daily operation of the business. Traditional Geographic Locations. As midsize businesses typically specialize in handling larger groups or high customer volume, they generally appear near resort locations or other areas that draw large numbers of tourists. Midsize retail establishments are an exception to this trend, as they tend to appear in locations with large populations, such as urban areas, where their customer volume will be higher even though the equipment and other goods they sell are typically used at some distance from their retail locations. Many midsize outdoor recreation companies situate themselves close to other businesses that at-

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Outdoor Recreation Industry

tract tourists to the area, such as hotels, restaurants, museums, or other popular recreational venues. Many midsize outdoor recreation companies are coupled with hotels and motels, often creating a resort environment and encouraging guests to enjoy outdoor recreation activities during their stay. Pros of Working for a Midsize Outdoor Recreation Business. Midsize outdoor recreation companies offer employees higher average salaries and access to benefits such as health insurance that smaller businesses are typically unable to offer. As is the case in small businesses, employees of midsize businesses may enjoy the ability to use the company’s equipment and services for their personal recreation, either without cost or at a substantially reduced rate. Some employees may enjoy working at midsize establishments because the larger staff provides more flexibility and potential for advancement than is the case at smaller businesses that are constrained in terms of profit and resources. Midsize businesses are more likely than are small businesses to offer pay raises and other advancement opportunities. Working at a midsize business is therefore more likely to represent a long-term career choice than is working at a small business. Some employees might also enjoy the more defined structure of a midsize business because it allows them to concentrate on their specific roles, rather than having to serve in a variety of functions. For owners and managers, the larger staff at a midsize business makes it more likely that, if one or more employees are unable to work, the manager will be able to fill the available hours among the remaining employees rather than having to do the work him- or herself. Cons of Working for a Midsize Outdoor Recreation Business. In contrast to the informal, family-like atmosphere of many smaller establishments, midsize businesses must often adopt a more formal atmosphere. This may be a detriment to some employees who desire more personal relationships with other staff members and with customers. Midsize businesses are also dependent on maintaining significant customer volume in order to meet their costs of operation. Additionally, while midsize businesses are more likely to build financial insulation to guard against slow business periods or prolonged periods of reduced business, they still commonly remain

vulnerable to economic collapse, often leaving owners in poor financial shape because of the significant cost of maintaining a business. Another drawback to the midsize business is the large amount of capital needed to start it, including inventory (if applicable), staffing, building maintenance, and other costs. Compared to smaller businesses, which are able to more quickly adjust their business models to changing market conditions, midsize businesses are not as flexible, and any major change in their business will require another significant investment in capital. Costs Payroll and Benefits: Most midsize businesses pay support and sales staff hourly wages, while managers and executive personnel may be paid salaries. Midsize businesses are more likely than small businesses to offer benefits to employees, especially those that work for local or national chains. Supplies: Depending on the type of business, midsize outdoor recreation businesses may require a significant number of basic supplies for operation, including equipment, cleaning supplies, inventory for retail sales, and a variety of other items. Retail stores have the highest cost in terms of supplies, while tour companies, wildlife parks, and other similar businesses have relatively low supply costs. External Services: Because midsize businesses may require employees to wear uniforms, they are more likely to hire uniform or linen supply companies and laundry services. Some businesses may also hire payroll and accounting services, as well as tax services, from outside vendors. Retail equipment vendors also typically need to have accounts with shipping companies and electronic payment processing companies. They may also hire companies to provide and maintain vending machines and other supplies at their locations. Utilities: Midsize outdoor recreation businesses are typically required to pay for water and sewage, oil or gas, and electricity and telecommunication services. Many midsize businesses also offer Internet and other interactive services specifically for customers. Taxes: Many outdoor recreation activities require special licensing and fees, both for the business

Outdoor Recreation Industry itself and for customers who want access to activities that require licensing, such as hunting and fishing. Depending on the location, customers may need to purchase a one-day license for certain activities. As many outdoor recreation activities are associated with significant physical risk, some businesses may carry highly specific insurance policies to protect their business in cases of customer injury. In addition, midsize businesses are responsible for playing federal and state income, property, and other business-related taxes. Large Businesses Large outdoor recreation companies include resorts and regional or national outdoor-equipment supply companies. Large companies typically offer more than one type of recreational activity or a host of related services, which may include services classified under different industries. A ski lodge, for instance, might offer skiing, snowboarding, snowmobile rental, hiking, food and beverages, lodging, and travel-arrangement services. Large outdoor businesses are not as common as small and midsize businesses and typically appear only in areas with large numbers of potential customers and tourists. Potential Annual Earnings Scale. While the general earnings range for employees of the outdoor recreation industry falls between $14,000 and just over $37,000 per year, owners and managers of large outdoor recreation companies have the highest earning potential in the industry. Depending on the type of business and customer volume, some managers may earn more than $80,000 or $90,000 annually. Earnings for general employees at large outdoor recreation companies are usually commensurate with those of similar employees at smaller companies. Clientele Interaction. Because of their larger size and more significant customer volume, workers at large outdoor recreation companies have fewer opportunities for direct interaction with their customers. Many large outdoor recreation businesses handle hundreds of customers in a typical business period and may therefore need to adopt an efficient system for customer service, creating a different atmosphere from the informal interactions characteristic of small businesses. While the interactions in a larger outdoor recreation company may be formal by comparison to a

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small recreation company, larger companies sometimes hire personnel whose sole task is to handle customer relations and service. In this way, larger companies can maintain a more personal level of service, even with higher volume. At resorts, for instance, customer service is generally considered one of the keys to successful operation and most resorts will place significant investment in hiring and training staff to address customer needs. Larger businesses must often create standard strategies and routines for many aspects of their business and are therefore not as responsive to customer needs. Smaller companies, on the other hand, may have the freedom to address customers on an individual basis. Amenities, Atmosphere, and Physical Grounds. Because they serve larger numbers of customers, large outdoor recreation companies must provide a range of amenities for their customers, including restrooms with changing facilities, refreshments, and atmospheric controls. Resorts typically have entertainment amenities as well, including games, television, and Internet services. Large outdoor recreation companies, such as ski resorts and water parks, often blend elements of a rustic decorative scheme with luxurious appointments. For example, a large ski lodge may use live evergreen trees as decoration and hang a stuffed moose head in a customer area, but it will juxtapose these bucolic reminders with luxurious leather furniture and central heating. The general idea is to capture the flavor of the outdoor or rural lifestyle without sacrificing luxury. The physical layout of a large outdoor recreation business will differ depending on the type of business and its location. Some larger resorts may occupy huge complexes with several associated businesses, including restaurants, nightclubs or bars, lodging quarters, training facilities or venues, and a retail outlet. Other large outdoor recreation venues may occupy a single large building or warehouse space, as is true of some types of outdoorequipment vendors. Typical Number of Employees. Large outdoor recreation companies may have anywhere from fifty to several thousand employees. For example, Diamond Peak, a ski resort in Tahoe, Nevada, maintains a staff of three hundred full-time employees and as many as one hundred seasonal or part-time employees. REI Corporation, a vendor

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Outdoor Recreation Industry

specializing in sports and outdoor activities equipment, employed more than nine thousand fulltime employees in 2008. Similarly, outdoor recreation retailer L. L. Bean employed more than fiftyfour hundred workers year-round in 2008, with an additional twelve thousand temporary employees during that year’s holiday season. (The retailer also features a flagship store in Maine that is open twenty-four hours.) Traditional Geographic Locations. Large recreational businesses tend to be located in areas with heavy foot or automobile traffic or large numbers of arriving tourists. The businesses are ideally located close to some natural feature that attracts visitors, such as a mountain, beach, or stretch of woodland appropriate for hiking. Large retail recreation stores are often located on the immediate outskirts of urban areas, where they can still capitalize on significant foot traffic. Large recreation venues are not frequently found within major urban areas because the cost of urban property is prohibitive for businesses. Pros of Working for a Large Outdoor Recreation Business. Large outdoor recreation businesses are typically able to offer benefits for fulltime employees. For managers and owners, larger businesses may also offer significantly higher salaries and advancement opportunities than do small and midsize businesses. Employees of large recreation facilities may also have access to better equipment and other amenities. In addition, employees of large companies with established reputations may have an advantage in terms of finding employment with other companies in the same industry, and they may be able to relocate to other locations while remaining employed by the company. Cons of Working for a Large Outdoor Recreation Business. For some interested in a career in outdoor recreation, the formal atmosphere associated with the large business model might be unappealing. A majority of those seeking employment in the industry are outdoor activity enthusiasts, and many of these individuals might not relish the idea of working in a corporate environment. For managers, the sheer size and complexity of running a large business can be difficult and challenging. As large businesses are focused on attracting and handling large customer volume, daily operations can be hectic in comparison to those of smaller businesses that accommodate a more select clientele.

In addition, serving such a large volume of customers virtually guarantees that a variety of operational, customer-service, and human-relations problems will arise, creating additional difficulties for management and other staff. Large businesses have significant overhead in terms of supplies, staffing, maintenance, and basic operating costs. With such significant overhead, large businesses are dependent on maintaining significant customer volume throughout the year, or at least throughout the busiest season. Environmental and economic changes can be a major obstacle for a large outdoor recreation business, though it is more likely to have the resources to endure reduced business for short periods. Costs Payroll and Benefits: Because large businesses typically have more complex corporate and labor structures, they generally have both hourly and salaried employees. Most large companies provide some benefits, including basic health coverage. In addition, many outdoor recreation companies provide discounts on equipment or other services for their employees’ personal recreation. Supplies: The types of supplies needed by large outdoor recreation businesses vary widely among companies. While resorts need supplies that fit into a variety of categories, including housekeeping, recreational equipment, and food service equipment, smaller companies may only require basic supplies to meet the requirements of their daily operations. External Services: Large resorts often utilize laundry and linen services from an outside vendor. In addition, some companies may contract certain facets of their accounting and advertising, as well as other business services. Many companies hire outside vendors to process payments and handle credit transactions. Utilities: Large businesses usually pay for gas or oil heating, air-conditioning, electricity, sewage and water service, and telephone and Internet services. Taxes: Any large outdoor recreation business must pay local, state, and federal income taxes, as well as property taxes. Some businesses, such as hunting lodges and ski resorts, must also pay licensing and insurance costs on an annual ba-

Outdoor Recreation Industry sis. Many businesses pass on a portion of their insurance costs to customers through various service fees.

ORGANIZATIONAL STRUCTURE AND JOB ROLES

cluding maintaining supply inventory and participating in sales and other daily operations. Executive management occupations may include the following: ■ ■ ■ ■

The organizational structure of an outdoor recreation business depends largely on the type of business. The sheer diversity of the industry, which includes businesses from a variety of categories, defies simple examinations of organizational structure; however, some basic roles need to be filled at every business, regardless of the company’s specific niche. The following umbrella categories apply to the organizational structure of businesses in the outdoor recreation industry: ■ ■ ■ ■ ■ ■ ■ ■

■ ■ ■

Executive Management Sales and Marketing Booking and Reservations Customer Relations Maintenance and Janitorial Services First Aid and Medical Care Food and Beverage Services Groundskeeping and Facilities Maintenance Naturalists and Tour Guides Education Information Technology

Executive Management Executive managers oversee the operation of their businesses, and they may handle tasks in a variety of categories. A small-business owner may serve as the sole manager of a business, while some large companies have a variety of managers serving in different capacities. At a large retail operation, for instance, a manager may be hired solely to handle inventory. Managers often have the most demanding roles in their businesses, but they also earn higher salaries than do other employees. Many managers earn annual salaries, while most other employees in the outdoor recreation industry work for hourly wages. In small companies, managers are often required to handle personnel management, such as hiring decisions, in addition to a variety of other tasks, in-

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■ ■ ■ ■

Chief Financial Officer (CFO) General Manager/Managing Director Resort Manager Inventory/Sales Manager Facility Manager Customer Service Manager Food Service Manager Entertainment Director

Sales and Marketing Some outdoor recreation companies have sales and marketing departments, while others rely primarily on word of mouth, walk-in customers, and basic advertising in local media. Companies that are part of regional and national chains are more likely to maintain separate departments or to assign specific employees to handle their marketing and advertising campaigns. Large chains may employ a variety of advertising methods, including sponsorship campaigns, as well as print, radio, television, Internet, and other types of advertising campaigns. With more complex advertising strategies, larger companies may hire individuals or advertising firms just to maintain their overall marketing and advertising efforts. Sponsorship is a popular form of advertising and marketing for companies in the outdoor sport industry. For example, a mountain bike company may sponsor riders in return for their agreement to wear and use equipment featuring the company’s logo. Other companies may attempt to hire wellknown athletes to endorse their products. One important facet of advertising and marketing is branding. Logos and other methods of branding a company create public recognition and drive business to the company. Some larger companies and outdoor-equipment manufacturers may have employees specifically designated for branding and marketing management. Sales and marketing occupations may include the following: ■ ■ ■ ■

Advertising Director Sponsorship Director Advertising Sales Associate Corporate Relations Specialist

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Outdoor Recreation Industry

Marketing Representative Design and Branding Associate Marketing/Design Manager

■ ■ ■ ■

Booking and Reservations For recreation companies that offer guided tours, vacation packages, and other types of prearranged activities, booking and reservations employees handle customer service and scheduling. In large resorts and tour companies, the booking and reservation department might be divided into several distinct categories, including managers, reservations agents, and customer-fulfillment agents. Small companies may place booking and reservations in the hands of general customer-service personnel, who work under the supervision of one of the company’s managers. Booking and reservation occupations may include the following:

OCCUPATION

Booking/Reservation Manager Customer Service Representative Receptionist Administrative Assistant

Customer Relations Employees in the customer relations department focus on answering customer questions, resolving complaints, and assuring customer satisfaction. While some larger companies may have separate personnel for customer relations tasks, in many companies, customer relations duties fall on staff members from a variety of departments. Booking and reservations agents, for instance, often handle customer relations in resort hotels, while managers fill customer relations roles in many retail stores. Customer relations occupations may include the following:

PROFILE

Recreation Program Director Considerations

Qualifications

Description

Plans, organizes, and directs activities for the public at parks, community centers, recreation areas, health clubs, places of worship, and camps.

Career clusters

Education and Training; Hospitality and Tourism; Human Services

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

ESA

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Outdoor Recreation Industry OCCUPATION

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PROFILE

Recreation Worker Considerations

Qualifications

Description

Directs, plans, and organizes recreational activities.

Career cluster

Education and Training; Hospitality and Tourism; Human Services

Interests

Data; people

Working conditions

Work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; junior/technical/community college; bachelor’s degree

Physical exertion

Light work; medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; volunteer work; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

SCR; SEI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

■ ■

Customer Relations Manager Customer Relations Representative

Maintenance and Janitorial Services The maintenance and janitorial departments are responsible for maintaining the appearance of a business, from basic cleaning to decoration, and fixing any mechanical objects used in the operation of the business. Smaller companies rarely have separate employees to handle janitorial duties, but they may still need at least one employee with the knowledge and skills to fix and maintain equipment. For skiing companies, maintenance workers might need to repair and maintain a resort’s ski lifts; fix damaged rental skis, boots, and poles; and perform upkeep on landscaping equipment. In resort companies, janitorial services often overlap with housekeeping services, as housekeeping employees must handle laundry and basic cleaning for the resort’s guests. Janitorial employ-

ees are also responsible for removing garbage and, if applicable, organizing the company’s recycling. Maintenance and janitorial occupations may include the following: ■ ■ ■ ■ ■

Custodial Services Manager Custodian/Janitor Maintenance and Repair Worker Equipment Technician Mechanic

First Aid and Medical Care Companies offering outdoor activities and sports sometimes maintain on-site first-aid and medical specialists to help customers who are injured during their recreational activities. Ski slopes, rafting companies, and many other establishments offering vigorous outdoor activities must have some personnel trained in basic first aid. In addition, many companies offering water-based sporting activities

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Outdoor Recreation Industry OCCUPATION

SPECIALTIES

Recreation Workers Specialty

Responsibilities

Camp counselors

Direct and plan children’s camp activities, such as hikes, cookouts, and campfires, to provide a wide variety of camping experiences.

Recreation center directors

Plan, organize, and direct public and voluntary recreation programs at recreation buildings, indoor centers, playgrounds, playfields, or day camps.

Recreation leaders

Conduct recreational activities with assigned groups in public departments or voluntary agencies.

hire personnel with knowledge of cardiopulmonary resuscitation (CPR) and water-rescue techniques. Similarly, those operating mountain climbing areas must have staff who can tend to broken bones, various types of abrasions, and other injuries. In addition to providing first aid after an accident, medical personnel may be responsible for organizing a company’s medical and first-aid supplies, including bandages, splints, pain relievers, and other basic medical supplies. First-aid and medical occupations may include the following: ■ ■ ■

Physician Lifeguard Emergency Worker

Food and Beverage Services Some outdoor recreation companies offer food and beverages to their customers. This is especially common at resorts, which often have on-site restaurants. Other companies provide basic refreshments, such as drinks and wrapped foods, but do not have a full-service restaurant on premises. In large resorts, the restaurant department may function as an independent business with its own managerial and accounting departments. These businesses function under several industry classifications, including outdoor recreation, food service, and lodging. Food and beverage service occupations may include the following:

■ ■ ■ ■ ■ ■ ■ ■ ■

Cook Chef Restaurant/Kitchen Manager Server Server’s Assistant Expediter Kitchen Maintenance Worker Kitchen Worker Cafeteria Worker

Groundskeeping and Facilities Maintenance For ski resorts, nature parks, zoos, and similar businesses, groundskeepers and maintenance workers maintain the appearance and safety of the grounds. They may be responsible for, among other tasks, grass cutting, tree trimming, and landscaping, as well as maintaining plantings and other decorative elements such as statues, benches, and picnic areas. Groundskeepers fill an essential function at nature parks, where maintaining vegetation is very important for the safety of guests and visitors. In national parks, for instance, felled trees can pose a safety hazard for hikers and bikers, and they must therefore be cleared from roads frequently to prevent injury. Groundskeeping and facilities maintenance occupations may include the following: ■ ■ ■ ■

Landscaper Gardener Horticulturist Groundskeeper

Outdoor Recreation Industry ■ ■

Facility Manager Yard Worker

Naturalists and Tour Guides Outdoor recreation companies that handle wilderness areas such as wildlife parks, zoological parks, and nature parks often hire naturalists to manage their animal and plant populations. A nature park that offers hiking and other trail-based activities may hire only a single naturalist, while a zoological park may hire different keepers for different types of animals. Naturalists help facilitate any research conducted in the park and are also charged with handling any wildlife problems, so they may have quite a wide variety of tasks. Naturalists may also function as educators, helping create informative materials to teach guests about the animals found in the park. Many outdoor recreation areas offer guided tours, often conducted by trained tour guides who are experts in answering questions about the facility and about the plants and animals found in the area. In some facilities, naturalists function as tour guides, while other facilities have separate personnel for each department and may use naturalists to manage the tour team. Naturalist and tour guide occupations may include the following: ■ ■ ■ ■ ■ ■

Park Naturalist Animal Keeper Tour Guide Docent Conservation Specialist Wildlife Manager

teach classes in swimming, rafting safety, and other topics. Many outdoor recreation companies provide educational materials addressing conservation and wildlife preservation, issues that are important to any industry that depends on utilizing the world’s preserved wilderness areas. Education department employees may also assist and facilitate scholarly research conducted on premises. Education occupations may include the following: ■ ■ ■ ■ ■

Teacher Educational Coordinator Education Presenter Training Supervisor Trainer

Information Technology Many outdoor recreation companies hire employees to handle their information technology (IT) needs, including building and maintaining the company’s Web site, handling Web marketing, and maintaining the company’s internal e-mail system. While small companies may assign these duties to a general manager or to the basic advertising department, companies with specially designed information systems may require separate employees who concentrate only on the company’s technological needs. IT occupations may include the following: ■ ■ ■ ■

Education Some outdoor recreation companies have education specialists who prepare and present educational materials to guests or customers. In wildlife parks and zoological parks, the education department prepares educational materials about plants, animals, and conservation and often gives lectures to guests. Facilities specializing in outdoor sports may hire specialists to teach classes in outdoor activities. Many mountain-climbing facilities, for example, offer classes in various mountain-climbing techniques taught by experienced climbers. Similarly, rafting and canoeing companies hire individuals to

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■

Information Technology Supervisor Web Marketing Supervisor Webmaster Information Technology Assistant Secretary

INDUSTRY

OUTLOOK

Overview In the first decade of the twenty-first century, the outdoor recreation industry experienced significant flux. On one hand, the industry became more robust thanks to increased global interest in ecotourism, environmental protection, and fitness. On the other hand, the industry suffered from the global economic crisis of 2007-2009, and many industries are also coping with the ongoing threat of

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environmental damage from pollution, overdevelopment, and global warming. According to the BLS, the U.S. outdoor recreation industry will benefit from three related trends in the period from 2006 to 2016: an overall increase in disposable income, increased leisure time for American adults, and an increasing interest in health and physical activity. Because of these trends, the BLS estimated in 2006 that the recreation industry as a whole would grow by more than 31 percent in the following ten-year period, compared to 11 percent average growth for all U.S. industries. The Outdoor Foundation estimates that the outdoor recreation industry contributes more than $730 billion to the U.S. economy each year. This figure includes not only earnings by outdoor recreation companies but also those of intermediary companies that provide services to the industry. The outdoor recreation industry itself generates more than $289 billion in direct annual revenues. Estimates also indicate that the industry generates at least $88 billion in taxes. (Information on the state of the industry worldwide is problematic because many countries that generate significant income from tourism and outdoor recreation have not calculated earnings for that portion of their

economies; conservative estimates would indicate that the worldwide industry generates close to $1 trillion of the $5.4 trillion estimated for the global tourism and recreation industry as a whole.) Growth in the industry is largely fueled by an increase in both fitness and environmental consciousness in the United States. The popular media’s dissemination of information about environmental decay, global warming, and emerging trends in health and wellness has affected every industry in the United States and many countries around the globe. Today, more Americans take ecological consciousness and health into consideration when deciding where and how to spend their leisure time and evaluating the desirability of businesses and products. Outdoor recreation appeals to both the health and the environmental market, and the companies that dominate the industry are designing their marketing to cater to both facets of their consumer base. According to the Outdoor Foundation, wildlife viewing is the most popular outdoor activity, accounting for 66 million participants in 2007-2008. Bicycling was the second most popular activity, accounting for 60 million participants, while trailbased activities and camping accounted for 56 million and 45 million participants, respectively. While the outdoor recreation industry is currently experiencing robust growth, the industry has significant difficulties that may affect job outlook and earning potential in the next decade and beyond. First, the Outdoor Foundation and other organizations have noted a recent significant decrease in youth involvement in outdoor recreation. The Outdoor Foundation’s 2008 participation survey found that the number of children aged six to seventeen who had participated in outdoor activities in the previous year fell by more than 11 percent. The decrease was most significant for young girls, whose participation decreased from 77 to 61 percent. In another Outdoor FoundaA bicycle tourist on a desert road in India. (©Dreamstime.com) tion study, responses indicated

Outdoor Recreation Industry that approximately 90 percent of U.S. adults who regularly participated in outdoor recreation were introduced to outdoor activities between five and eight years of age. Decreasing youth participation could therefore indicate a dangerous trend with the potential to affect the industry over the next ten years. Surveys further indicate that media and advertising have little direct effect on stimulating youth involvement in outdoor activities. Companies must therefore concentrate on advertising toward parents of young children, while designing innovative programs that appeal to both children and parents. While fitness and environmentalism are appropriate marketing positions for companies seeking to attract adult customers, children are more responsive to activities that offer fun, adventure, or exploration. The success of the outdoor recreation industry in overcoming this marketing challenge will perhaps determine the growth of the industry as a whole for the next several years. Climate change and other forms of environmental degradation also threaten the stability of the outdoor recreation industry. According to the U.S. Climate Change Science Program’s 2003 investigation of the Rocky Mountain/Great Basin Region, climate change poses a significant threat to both the snow-based and the water-based recreation industries. Among the first businesses to be affected by global warming are ski slopes and resorts, where business depends on adequate snow levels during the peak skiing seasons. Even businesses that use artificial snow depend on weather conditions to maintain snow quality and to attract customers to the slopes. Warmer temperatures will also mean shorter skiing seasons and poor snow coverage in many areas. Warmer temperatures will also be difficult for the water-based recreation industry. In some places, climate change will contribute to low water levels, which will prevent kayaking and canoeing in many areas. In other parts of the country, warming may lead to higher water levels and faster currents, making the waters too dangerous for casual enthusiasts. Other forms of environmental damage, including overdevelopment, also threaten the outdoor recreation industry. As the population increases and communities are left with little space for expansion, some individuals will support development in protected areas in an effort to provide more hous-

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ing and commercial property. Many of these protected areas will be those currently used by companies offering outdoor recreation activities. To combat the threat of development, outdoor recreation companies may utilize their resources and mobilize their consumer base to fight against development and support the preservation of public and private wilderness and outdoor recreation areas. Outdoor recreation companies may also support or become involved in efforts to prevent pollution and environmental decay, as part of an effort to preserve the substrate that supports their livelihoods. From 2008 to 2009, the global economic crisis posed another challenge to the domestic recreation industry. Recreational spending fell across the board, as practically all recreation companies experienced reduced revenues. These lower revenues harmed employment. For example, outdoor retailer L. L. Bean, voted one of the best companies to work for nationwide in 2008 by organizations such as the AARP, announced layoffs estimated at between 200 and 240 employees in April, 2009. While there have been no comprehensive estimates of how the recession has affected the overall outdoor recreation industry specifically, reports from some companies indicate that many vendors experienced reduced business during the two years of the crisis. Some companies have begun marketing specifically to consumers experiencing the economic turmoil of the recession. This marketing strategy may be successful, as some forms of outdoor recreation, such as camping on public lands and taking hiking trips, are more affordable than are resort or hotel vacations. In summary, while the industry is currently enjoying growth and a positive outlook for the immediate future, the impact of the 2007-2009 recession and of emergent environmental and economic trends has not been well explored. It has been reported that some national parks have been forced to cut hours and employees and to raise fees and taxes in an effort to counterbalance reduced funds from government sources. To minimize loss of business and maximize profits, outdoor recreation companies need to stay abreast of current trends in consumer spending and emerging changes in consumer attitudes. The companies able to survive economic shifts will be those best able to adjust to changing market conditions without los-

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ing the aesthetic appeal that draws consumers to the great outdoors. Employment Advantages While the BLS estimates that the outdoor recreation industry will continue to display steady growth during the next decade, average wages within the industry are consistently low compared with other jobs requiring similar levels of experience and education. The recreation and entertainment industries rely on young and temporary workers to compose approximately 24 percent of their entire employee base, as compared to an average of 14 percent for all national industries. Outdoor recreation companies provide an excellent source of temporary and seasonal work, ideal for students seeking part-time employment during the winter or summer seasons. As a whole, the U.S. outdoor recreation industry accounts for more than 6 million jobs nationwide. In addition, the outdoor recreation industry stimulates economic development and creates jobs in rural communities. The industry thereby provides jobs for many young and semiskilled workers living in communities with otherwise limited opportunities for employment. By creating a competitive, sustainable industry to compete with the industrial, manufacturing, and engineering industries that typically buoy rural economies, the outdoor recreation industry helps create economic development that is also sustainable within small, rural communities. While the outdoor recreation industry might not offer as many career-oriented employment opportunities as some industries, it does offer a number of alternative benefits to employees, including the opportunity to learn more about and take part in outdoor recreation activities. A vast majority of those involved in the industry are active participants in outdoor activities, and they seek employment in the industry partly out of a desire to earn a living while participating in outdoor recreation. Annual Earnings The outdoor recreation industry experienced annual revenues of $289 billion in 2006. According to the BLS, the average weekly income of an industry employee in that year was approximately $332, which was relatively low compared to the $568 per week average for all private industries. Employees

of retail stores are more likely to be offered benefits in addition to their basic wages, while tour guides, park attendants, and other nonretail employees often work for hourly wages without benefits. As in other recreation industries, many employees in outdoor recreation are forced to hold multiple jobs in order to meet their cost of living. Despite low earnings, the outdoor recreation industry continues to attract employees because of the intangible benefit of being closer to nature and simply enjoying being outdoors.

RELATED RESOURCES FOR FURTHER RESEARCH American Alliance for Health, Physical Education, Recreation, and Dance 1900 Association Dr. Reston, VA 20191-1598 Tel: (703) 476-3400 http://www.aahperd.org American Camp Association 5000 State Rd. 67 North Martinsville, IN 46151-7902 Tel: (765) 342-8456 Fax: (765) 342-2065 http://www.ACAcamps.org American Recreation Coalition 1225 New York Ave. NW, Suite 450 Washington, DC 20005-6405 Tel: (202) 682-9530 Fax: (202) 682-9529 http://www.funoutdoors.com National Park Service 1849 C St. NW Org. Code 2220 Washington, DC 20240-0001 Tel: (202) 208-6843 http://www.nps.gov National Parks and Conservation Association 1300 19th St. NW, Suite 300 Washington, DC 20036 Tel: (800) 628-7275 http://www.npca.org

Outdoor Recreation Industry National Recreation and Park Association 22377 Belmont Ridge Rd. Ashburn, VA 20148-4501 Tel: (800) 626-6772 http://www.nrpa.org Outdoor Amusement Business Association 1035 S Semoran Blvd., Suite 1045A Winter Park, FL 32792 Tel: (407) 681-9444 Fax: (407) 681-9445 http://www.oaba.org Outdoor Foundation 4909 Pearl East Circle, Suite 200 Boulder, CO 80301 Tel: (303) 444-3353 Fax: (303) 444-3284 http://www.outdoorfoundation.org

ABOUT

THE

AUTHOR

Micah L. Issitt is a freelance writer specializing in history, ethnography, and ecology. He has been involved in the wildlife park industry since 1993, working at wilderness sanctuaries, national parks, and other recreational facilities. He has been writing about nature and outdoor activities since 1996, and his writing has appeared in numerous magazines, newspapers, and reference publications.

FURTHER

READING

Beech, John G., and Simon Chadwick. The Business of Tourism Management. Upper Saddle River, N.J.: Prentice Hall, 2006. Bell, Simon. Design for Outdoor Recreation. New York: Taylor and Francis, 1997. Broadhurst, Rich. Managing Environments for Leisure and Recreation. New York: Routledge, 2001.

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Fennell, David A. Ecotourism: An Introduction. New York: Routledge, 2003. Forbes, M. S., F. S. Liljegren, J. T. Liljegren, and V. E. Lovejoy. Outdoor Recreation Business Plan Guidebook. Denver: U.S. Department of the Interior, Bureau of Reclamation, Policy and Program Services, Denver Federal Center, 2008. Available at http://www.usbr.gov/ recreation/publications/BusPlanGuide.pdf Gartner, W. C., and D. W. Lime. Trends in Outdoor Recreation, Leisure, and Tourism. Oxfordshire, England: CABI Press, 2000. Jenkins, John. Outdoor Recreation Management. New York: Routledge, 1999. Jensen, Clayne R., and Steven Guthrie. Outdoor Recreation in America. Champaign, Ill.: Human Kinetics, 2006. Pigram, J. J. J., and John Michael Jenkins. Outdoor Recreation Management. Abingdon: Routledge, 2006. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Global Change Research Program. “Regional Paper: Rocky Mountain/Great Basin Region.” 2003. http://www.usgcrp.gov/ usgcrp/nacc/education/rockies-greatbasin/ default.htm Zueflie, Matt. “Leisure and Tourism Changing through the Great Recession.” The Athens News (Ohio), July 30, 2009.

©Dreamstime.com

Paper Manufacturing and Products Industry

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Other Converted Paper Product Manufacturing; Paper Bag and Coated and Treated Paper Manufacturing; Paperboard Container Manufacturing; Pulp, Paper, and Paperboard Mills; Sanitary Paper Product Manufacturing; Stationery Product Manufacturing Related Industries: Household and Personal Products Industry; Logging Industry; Printing Industry Annual Domestic Revenues: $167.3 billion USD (IBISWorld Industry Market Research, 2009) Annual International Revenues: $241 billion USD (Datamonitor, 2009) Annual Global Revenues: $408.3 billion USD (IBISWorld Industry Market Research, 2009) NAICS Number: 322

INDUSTRY

have been converted into end products from boxes to writing paper. The industry is subdivided into two industry groups. Pulp mills, paper mills, and paperboard mills (NAICS sector 3221) constitute the first industry group. Establishments that make products from purchased paper and other materials make up the second industry group, “Converted Paper Product Manufacturing” (NAICS sector 3222). These products are grouped together because their manufacture comprises a series of vertically connected processes consisting of three essential activities. First, the manufacturing of pulp involves separating the cellulose fibers from other impurities in wood or used paper. Second, paper is manufactured from pulp by forming the fibers into a sheet. Third, paper and pulp are converted into a wide variety of products by various cutting and shaping techniques. History of the Industry Humans have always strived to record their experiences and observations in some way. Before the invention of paper, various media were employed to carry information, including cave walls, stone, clay, plants, bones, and animal skins. The word “paper” derives from the Greek term for the ancient writing material called papy-

DEFINITION

Summary The paper manufacturing and products industry makes pulp, paper, and paper products that 1332

Paper Manufacturing and Products Industry rus, which was formed from beaten strips of the aquatic papyrus plant, common in Egypt. Actually, papyrus is not considered to be true paper, because of the process used to create it. True papermaking was first documented in China about 105 c.e. What was revolutionary about this writing surface was that it was created through the process of macerating materials into separate fibers, suspending these fibers in a watery pulp, and drying them into sheets of paper. The art of papermaking spread from China to Japan and Korea and then to Samarqand and Baghdad. Uses for paper were expanding, as evidenced by reports from Arab travelers, around 875 c.e., of seeing toilet paper in use in China. By the eleventh century, paper had spread to the Byzantine world and medieval Europe, especially Spain and Italy, where mills were established. Around 1450, the printing of Johann Gutenberg’s Bible marked the beginning of book printing in Europe and the commencement of the use of paper on a comparatively large scale. By 1487, every country in Europe had adopted printing, and large quantities of paper were consumed in the printing of books. For hundreds of years, cotton and linen rags

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were the papermaker’s raw materials. In 1666, a serious rag shortage in Europe resulted in the issue of a decree prohibiting the use of cotton or linen for burial, in order to save linen and cotton for papermakers. For colonists in America, paper had to be imported and was highly prized and treasured. Many goods imported from Europe were wrapped in paper, and scraps of these packaging papers were hoarded and used for writing. In 1690, William Rittenhouse, who had acquired papermaking skills in the Netherlands, established the first paper mill in America, near Germantown, Philadelphia, Pennsylvania. By 1776, the need for paper in America was so great that legislation obtained exemption from military service for all skilled papermakers. Linen and cotton rags for papermaking had become so scarce that committees of safety were appointed to encourage the saving of rags. During the American Revolution, paper was so hard to find that soldiers ripped pages from books to use them as wadding for their rifles. Around 1800, a machine was invented that allowed paper to be manufactured continuously rather than one sheet at a time. Following the Civil War (1861-1865), paper pro-

Piles of spruce logs waiting to be processed. (©Dreamstime.com)

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Paper Manufacturing and Products Industry

duction underwent a major transformation. New technologies permitted papermakers to process wood, which was relatively abundant, instead of rags, and to generate far greater quantities of energy from waterways. These developments precipitated a dramatic rise in the productive capacity of paper mills and caused a steep decline in paper prices. The modern paper industry is, in fact, defined by its use of wood. Paper manufacturing and consumption grew exponentially and the United States became both the top producer and the top consumer of paper products in the world. Even while the Great Depression of the 1930’s severely hurt other industries, it did not affect the pulp and paper industry as much, since paper was being used in new ways throughout the economy. World production of paper and board increased by more than 650 percent in the fifty years between 1950 and 2000. By the 1980’s, demand had begun to slow and currency exchange rates and global competition

had begun to put price pressure on U.S. papermakers at the same time that large outlays of corporate resources were required to comply with environmental regulations. In 1990, the global market began growing steadily, but revenues and profits for U.S. companies shifted dramatically, because of rapidly increasing commodity prices and weaker demand. Global competition continued to increase as production capacity grew in Asia and Latin America. Papermakers in these emerging markets have enjoyed lower costs for fiber, labor, and energy and are not required to fund environmental compliance. As demand retreated and competition grew, manufacturers in developed countries were faced with continual needs to reduce production costs. Plagued by fragmentation, overcapacity, and low profitability, North American paper manufacturers were forced to take drastic measures in an effort to remain competitive and profitable. The industry was consolidated in a series of mergers and

Cellulose, obtained from wood pulp and cotton, is used primarily to produce cardboard and paper. (©Moreno Soppelsa/ Dreamstime.com)

Paper Manufacturing and Products Industry

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shaping machinery to form paperboard into containers, boxes, corrugated sheets, pads, pallets, paper dishes, and fiber drums and reels. Other establishments cut, coat, treat, and laminate paper to make paper Value Added Amount bags, labels, wrapping paper, food and Gross domestic product $59.7 billion beverage packaging, packaging for the Gross domestic product 0.4% pharmaceutical and cosmetics industries, Persons employed 442,000 and an endless array of other products. Total employee compensation $31.5 billion These manufacturers alone generate almost $75 billion in sales every year. Sales Source: U.S. Bureau of Economic Analysis. Data are for in this segment are highly sensitive to eco2008. nomic conditions and tend to mirror trends in retail and food services. The second largest segment consists of firms that convert pulp and paper into sanitary paper products for household and peracquisitions involving more than $60 billion in assonal use. Toilet paper is used by nearly 100 persets. In 1980, the 150 largest companies accounted cent of the population in the United States, and pafor only 45 percent of production, but by 2000 they per towels and facial tissue are found in the vast accounted for 70 percent of production. Capital majority of households. Personal care products spending declined severely and planned projects such as sanitary napkins and tampons are necessiwere canceled. Capacity reduction was achieved by ties to a large segment of the population. Disposclosing down many older and less efficient mills, able diapers and wipes are used by fewer houseplants, and machines and taking extensive marketholds, but a higher percentage of personal income related downtime. Employment in the industry is spent on these products. As the population ages, went from 650,000 in 1990 to 400,000 in 2009. there has been a steady growth in the demand for incontinent-care products. Household and perThe Industry Today sonal care products are sold mainly to grocery Today paper and packaging are essential comwholesalers and retailers. Since most of these prodponents of modern life. There are thousands of apucts are considered necessities, sales of products in plications with high practical value, ranging from this segment are less sensitive to economic downspecialized commercial applications to printing turns than other types of products tend to be. paper and cardboard boxes. Personal and houseAbout 70 percent of all paper is produced at mills hold paper products, such as bathroom tissue and paper towels, are used by virtually everyone. The modern industry consists of two industry groups: pulp, paper and paperboard mills, and Inputs Consumed by the converted paper products manufacturing. In the first group, pulp mills create the pulp, a concenPaper Products Industry trated mixture of fibers suspended in liquid, by separating the cellulose fibers from the impurities Input Value in wood or other materials, such as recycled paper. Energy $13.6 billion Paper and paperboard mills manufacture various Materials $74.6 billion grades and types of paper and paperboard from Purchased services $19.2 billion pulp. Paper mills and manufacturers are organized Total $107.4 billion by the types and grades of paper they produce. The second industry group converts pulp, paSource: U.S. Bureau of Economic Analysis. Data per, and paperboard into a vast array of other prodare for 2008. ucts. The largest segment in this group consists of establishments that use corrugating, cutting, and

The Paper Products Industry’s Contribution to the U.S. Economy

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Paper Manufacturing and Products Industry

This machine is used to make paper and cardboard from recycled paper. (©Moreno Soppelsa/Dreamstime.com)

that are “integrated” with a pulp mill and paper mill at the same site. Large manufacturers are even further integrated with converting facilities, all of which are typically owned by the same company. Taken as a whole, the U.S. pulp, paper, and converted paper products industry is among the largest U.S. manufacturing industries in dollar sales. It is also the most capital-intensive industry in the world, requiring large investments in fixed assets. High levels of competitive rivalry, slowing demand, low product differentiation, and high entry and exit costs give the advantage to large, vertically integrated companies. High levels of production efficiencies and careful capacity management are required to achieve an acceptable return on investment. Today’s technologies and advanced machinery have made papermaking faster and more efficient. While there may be fewer facilities than in the past, the remaining ones are more efficient. Labor productivity has increased. Capacity has come closer to demand and producer prices are increasing. New technology also has led to increasingly technical training for workers throughout the industry.

Computers and computer-controlled equipment aid in many functions, and there is increased use of robotics to move material within the plant. Pulp and papermaking are energy-intensive industries, so companies are highly sensitive to changes in the price of energy as well as consumer and legislative concerns about environmental issues. The environmental performance of the industry has dramatically improved with investments in cleaner technologies. Pollution from water and air emissions has been significantly reduced, and dioxide-producing bleach is no longer used in most facilities. Today’s industry is much more energy-efficient than in the past. It uses 85 percent less water than it did thirty years ago and generates 50 percent of its own energy. These improvements come with a price. Regulation has a negative financial effect on the industry, as it restricts operators from certain activities, increases production costs, and reduces global competitiveness. In one of its 10-k reports, Kimberly-Clark estimated 2011 expenditures of $170 million for environmental compliance, includ-

Paper Manufacturing and Products Industry ing pollution-control-equipment operation and maintenance costs, governmental payments, and research and engineering costs. Increased consumer focus on sustainability is also reflected in the industry’s work to promote recycling. Today recovered paper has become the main resource for paper manufacturers, followed by wood pulp. Recycled paper uses less water and energy, but efforts to clean, deink, and prepare it for use sometimes result in products made from recycled materials being more expensive. The amount of recycled paper used in paper manufacturing continues to grow, however. In 2009, 63.4 percent of the paper consumed in the United States was recovered for recycling. North American paper and paper products manufacturers continue to face increasing international competition. Until recently, the United States produced more paper and paperboard than any country in the world, but it has recently been eclipsed by China. Despite these difficult operating

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conditions, however, the industry remains one of the largest in the world and employs hundreds of thousands of people.

INDUSTRY MARKET SEGMENTS The paper manufacturing and products industry is dominated by large global firms because of the capital-intensive nature of the business and the commodity nature of most products. The purchase and operation of massive and very expensive paper machines and the development and implementation of sophisticated technologies require that large amounts of resources be invested in fixed assets and research and development. The result is that most employees in the industry work for large global corporations. The number of employees a large company retains depends on the size of the operation. An integrated manufacturer needs em-

Recycled paper uses less water and energy, but efforts to clean, deink, and prepare it for use sometimes result in products made from recycled materials being more expensive. (©Moreno Soppelsa/Dreamstime.com)

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Paper Manufacturing and Products Industry

ployees for pulping, papermaking, converting, and distributing its products. International Paper, a global paper and packaging company, operates 23 pulp, paper, and packaging mills; 157 converting and packaging plants; 19 recycling plants; and 3 bag facilities in the United States. Internationally, the company employs about sixty thousand people in production facilities that are spread across Europe, Asia, Latin America, and South America. Kimberly-Clark, a company offering personal care and consumer tissue products, has 112 manufacturing facilities in thirty-eight countries with fiftysix thousand employees. Midsize firms tend to manufacture specialty papers or specialized converted products. They are more heavily represented in packaging and containers and might make products such as egg cartons. Small firms in the United States tend to be highly specialized and to excel in areas requiring more hand work and less machinery. In developing countries, small firms that make art paper and handmade paper containing fibers from exotic plants are more common than in the United States. The following sections provide a comprehensive breakdown of each of these different segments. Small Businesses In 2007, small businesses made up about 30 percent of establishments in the industry but accounted for only about 2.5 percent of employment in the industry and less than 1.5 percent of industry revenue. Papermaking by hand can use a wide range of natural materials and produce unique textures and qualities. These products tend to be more artistic than scientific in nature. Low-volume handcrafted paper and nicheconverting operations that do not require large investments in fixed assets make up most of these businesses. Products may be sold to an intermediary, such as a wholesale or retail establishment, or directly to the final customer though the establishment’s own retail outlet or the Internet. Small businesses in the paper industry are more common in underdeveloped countries than in the United States. Potential Annual Earnings Scale. The average earnings for a small business vary substantially depending on the size of the operation. A sole proprietorship with a single owner working part time may

earn just a few thousand dollars a year, whereas a small manufacturer or a converting operation might pay much more. Clientele Interaction. Small establishments rely on orders that are often tailored to a specific customer or an occasion, resulting in extensive and highly personalized interaction with the client. These establishments may work with a wedding planner, for example, to design and manufacture handmade invitations or with a small-business owner seeking unique packaging for a product line or personalized wrapping paper and boxes for a retail operation. Because small businesses rely on referrals and recommendations from their clients, they tend to maintain close and personal relationships. Amenities, Atmosphere, and Physical Grounds. Because of cost constraints, smaller operations are not able to offer many amenities to their employees. The physical grounds for a small papermaker may range from a private home to a small manufacturing or retail operation. Most consist of home, office, and manufacturing work environments. Those firms that operate from private homes will reflect that environment, while others might provide coffee machines and refrigerators to store food and drinks. Typical Number of Employees. Small organizations in this industry generally have fewer than twenty employees. Employees may range from one entrepreneur crafting handmade paper and paper products from a home to a small manufacturing or converting operation employing a dozen or so employees. Traditional Geographic Locations. Small establishments in the paper industry can be found all over the world. In developing countries, they are often located close to fiber and water sources as well as markets for the products. Makers of handmade papers tend to be spread out fairly evenly across the United States, while small pulp, paper, and converting operations are more concentrated. Box, bag, and packaging manufacturers and to a lesser extent paper manufacturers are concentrated in California, New York, Florida, and Illinois. Small pulp operators are concentrated in the Great Lakes and Southeast regions. Pros of Working for a Small Paper Manufacturing Organization. Owners and employees in small establishments tend to wear more than one

Paper Manufacturing and Products Industry hat. Performing myriad functions can lead to a better view of the entire operation and help develop flexibility and versatile skills in multiple areas. From a psychological standpoint, an employee of a small business may feel that his or her contribution is important to the success of the business as a whole. This feeling can contribute to a high level of job satisfaction. Staff members tend to work together closely and can develop long-lasting personal relationships at work. The opportunity to work part time or flexible hours is more prevalent in smaller business establishments than it is in larger concerns. Owners and managers of smaller establishments do not necessarily need to attend college or have sophisticated technical skills. If there are machines involved, they are smaller and simpler to operate and maintain. While compliance with some environmental regulations may be required, it is on a much smaller scale than that facing larger firms. Cons of Working for a Small Paper Manufacturing Establishment. In addition to offering fewer jobs in general, small establishments may be able to offer only limited salaries and benefits. There may not be as much opportunity for formal training and development. Along the same lines, the opportunity to learn the best practices on getting things done may be better in a larger company. Because there are fewer employees, the ability to delegate work can be limited. Costs Payroll and Benefits: Small establishments are more likely to hire part-time employees and might pay by the hour, by the job, or based on output. Benefits such as vacation and sick time are rare for part-time employees but may be offered to full-time employees at the discretion of the business owner. A smaller firm may be more willing to offer more flexible working hours and conditions. Supplies: Small companies typically do not have the resources to invest a lot of capital in equipment and supplies. Basic office supplies (one or more computers, a printer, a copier, telephones, paper, and other items typically consumed in an office environment) as well as the raw materials and equipment for paper manufacture will be found, usually in limited numbers.

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External Services: In many smaller mills, large engineering projects are contracted out. Small paper manufacturers may use bookkeeping or accounting services to help manage the financial aspects of the business. Transportation and delivery services to receive raw materials and deliver finished products are often required. The selling of the products can require credit-card processing systems or e-commerce services that allow payments and money transfers to be made through the Internet. Utilities: Papermaking operations of all sizes require access to lots of water. For small manufacturing entities, where processes are mechanized, access to a large amount of energy is also required. A handmade paper business operating a retail outlet or selling on the Internet also requires telephone, cable, and Internet access. Taxes: Tax requirements for a small business vary, depending on how the business is organized and whether a separate property is purchased or leased for making and/or selling products. Someone making handmade paper products and selling them on the Internet would pay personal income taxes. A partnership or corporation with a dedicated physical plant might pay corporate taxes and applicable property taxes. Midsize Businesses Midsize paper companies typically operate in a niche market where long, continuous production runs and economies of scale are not as important as they are for smaller businesses. Midsize paper companies account for 67 percent of establishments in the industry, 32 percent of the employees, and about 20 percent of the revenue. Many independent operators that convert pulp and paper into other products fall into this category. Boxes used by department stores and other retailers and for textiles, wearing apparel, and hosiery are often made by midsize firms. Other companies in this category produce labels, envelopes, gift wrap, pressed and molded products such as egg cartons, and filter paper. Potential Annual Earnings Scale. Wages for managers at midsize firms depend largely on the size of the operation and the position itself. There are more technicians and fewer engineers, and technical salaries tend toward $40,000 annually.

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Paper Manufacturing and Products Industry

The average salary of a production worker is between $30,000 and $35,000. Clientele Interaction. While in midsize paper manufacturing establishments the owners and sales force will have extensive contact with customers, the production workers will have substantially less. These companies often hire manufacturers’ representatives or independent salespeople to represent their products. In that case, the clients interact with the representative more than with the company. Amenities, Atmosphere, and Physical Grounds. Most midsize companies consist of office and manufacturing work environments. They typically offer their employees break rooms with coffee and vending machines and refrigerators to store food and drinks. Midsize operations may offer their employees gym memberships and flexible working conditions. Typical Number of Employees. Midsize manufacturers generally have between twenty and five hundred employees. There are fewer part-time employees, and temporary employees are often hired to handle tasks during periods of peak demand. Traditional Geographic Locations. Like larger manufacturers, midsize establishments are often located in proximity to raw materials, power sources, and consumer markets. Midsize manufacturers of pulp and paper tend to be concentrated in the Great Lakes area, especially Wisconsin, followed by the Southeast and Middle Atlantic regions. Midsize paper-converting operations are more widely distributed across the country and tend to be close to major markets. Pros of Working for a Midsize Paper Manufacturing Establishment. A midsize organization can offer the best of both worlds. Employees at midsize firms often derive the benefit and satisfaction of feeling that their contribution is important to the success of the business. Midsize organizations are more likely than smaller organizations to offer competitive wages and benefits such as insurance, vacation time, and sick time. There are often some resources allocated to training and development, while opportunities for advancement are more plentiful because of the midsize firm’s wider variety and number of positions. Because plants may run multiple shifts, there may be opportunities to work overtime and weekends and earn additional pay.

Cons of Working for a Midsize Paper Manufacturing Establishment. Midsize paper manufacturers often have older equipment, which can result in periods of frustrating downtime and lost productivity. Noise levels in the manufacturing area can be bothersome and midsize companies often do not have the resources to invest in sophisticated noise-reduction materials and technologies. Salaries and benefits are likely to be somewhat less than those larger establishments may offer for similar positions. Training and development opportunities might be limited. Along the same lines, the opportunity to learn the best practices for task performance may be better in a larger company. Finally, because there are fewer employees, the ability to delegate work may be limited. Costs Payroll and Benefits: A midsize paper manufacturer may have a larger number of more specialized positions than a smaller organization but not as much variety as a large operation. Most nonproduction employees are paid an annual salary and accrue benefits such as health insurance, vacation, and sick leave. They are generally not eligible for overtime pay, although this varies by employer. Production and maintenance workers are paid by the hour and often earn a higher hourly rate for working overtime, weekends, and holidays. Most hourly workers earn benefits in both union and nonunion environments. Incentive bonuses may be offered for some employees. Flexible benefits are often available to pay for health care and child care with pretax dollars. Supplies: Midsize paper manufacturers need office supplies such as computers, printers, copiers, telephones, paper, and other items typically consumed in an office environment. They also require supplies used in the manufacturing process, such as machine parts and supplies to maintain equipment, computerized process equipment, and the work space. Some midsize firms also use vending and food-service supplies as well as cleaning supplies. External Services: Many midsize paper manufacturers depend on external services functions that are not related to manufacturing. They may have their own sales force but are more likely to utilize independent sales or manufacturers rep-

Paper Manufacturing and Products Industry resentatives. They may also use independent accounting services, audit and security firms, and cleaning and housekeeping services. Utilities: Midsize pulp and paper manufacturing operations are heavy users of water and energy. Some manufacturers produce a percentage of their own energy and have processes in place to reuse large quantities of water. They must often pay for wastewater discharge. Taxes: Tax requirements for a midsize business vary, depending on how the business is organized and whether a separate property is purchased or leased for making and/or selling products. A partnership or corporation with a dedicated physical property might pay corporate taxes and applicable property taxes. Large Businesses Paper manufacturers are heavily skewed to this segment, given the economies of scale that exist in the industry. In 2007, less than 6 percent of firms in the industry accounted for more than 80 percent of the revenue and accounted for almost 70 percent of the employment. Potential Annual Earnings Scale. The earnings of employees who work for large paper manufacturers vary considerably, depending on the position. A housekeeper or grounds manager generally makes just over $20,000 per year, while a chief executive officer may earn several hundred thousand. Profit sharing and incentive bonuses for executives and managers are more prevalent in larger companies. Some companies offer incentive pay to all employees to encourage productivity. Clientele Interaction. Most large paper manufacturers have an internal sales force. These sales representatives will have contact with the wholesalers and retailers that buy their products. Customer service representatives interact with consumers by phone and Internet and help answer questions and resolve problems. Amenities, Atmosphere, and Physical Grounds. A wide variety of working environments are found in large establishments. Employees may work in an office, a laboratory, a manufacturing plant, or a warehouse. Large paper manufacturers are often located in industrial parks or areas where there might not be much access to places for employees to buy meals, especially for nightshift workers. They generally provide cafeterias or

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vending machines and often utilize traveling foodservice providers. Parking lots are usually provided by the company. Some companies provide on-site exercise classes and gyms, and some provide child-care facilities as well. Typical Number of Employees. Large paper and paper products manufacturers have five hundred or more employees. Large, integrated firms, such as International Paper and Kimberly-Clark, can have more than fifty thousand employees. Traditional Geographic Locations. Traditionally, requirements for the production of paper included suitable raw materials, an abundant water source, and proximity to the consumer market. Therefore, large paper manufacturers tend to be concentrated in the Great Lakes area, especially Wisconsin, followed by the Southeast and Middle Atlantic regions. These regions are home to 65 percent of paper mills in the United States. Pros of Working for a Large Paper Manufacturing Organization. A large organization is more likely to offer benefits such as insurance, vacation time, and sick time. Some offer on-site workout facilities, child-care facilities, and perhaps even access to doctors and occupational health nurses. More resources are allocated to training and development in a large company, and opportunities for advancement are more plentiful as a result of a wider variety and number of positions. Because their plants tend to operate around the clock, large companies can offer substantial opportunities to work overtime and weekends, providing employees the chance to earn additional pay. Cons of Working for a Large Paper Manufacturing Organization. Overtime, however, can also be viewed as a “con.” Overtime is common in large, around-the-clock plants, and while earning more money is a benefit, working long hours or night-shift hours can cause stress and can prove detrimental in other ways. In large factories that run twenty-four hours a day, many operators work on rotating schedules, which can cause sleep disorders and stress from constant changes in work hours. Managerial and administrative support personnel typically work five-day, forty-hour weeks in office settings, although some of these employees (generally those who occupy salaried, exempt positions, rather than hourly, nonexempt workers) may also work long hours without the option of

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overtime pay. Travel is an important part of the job for many managers and specialists. Costs Payroll and Benefits: A large manufacturer typically has a very complex payroll and benefit structure, given the scope and variety of jobs. Most nonproduction employees are paid an annual salary and accrue benefits such as health insurance, vacation time, and sick leave. They are generally not eligible for overtime pay. Production and maintenance workers are paid by the hour and often earn good wages at an hourly rate and have opportunities to work overtime, weekends, and holidays. Most hourly workers earn benefits in both union and nonunion environments. Incentive bonuses and profit sharing are usually offered to executives and sales people, but some companies have some kind of incentive structure for all employees. Flexible benefits are common, and it is often possible to pay for health care and child care with pretax dollars. Supplies: Large manufacturers require two basic categories of supplies. The first consists of supplies for offices, such as computers, printers, copiers, telephones, paper, and other items typically consumed in an office environment. Second are supplies used in the manufacturing process. These are parts and supplies that are needed to maintain large, expensive pieces of equipment, computerized process equipment, and the work space. Most large firms also use vending, food-service, and cleaning supplies. External Services: Depending on its integration strategy, a large manufacturer will either outsource most service functions or retain in-house service functions. Firms that focus on the core manufacturing area may utilize a large variety of external services, such as an outside sales force, independent accounting services, off-site customer service call centers, audit and security firms, uniform supply and cleaning services, and housekeeping services. Firms that are more vertically integrated may keep some or all of these functions in house. Utilities: Large paper manufacturers are heavy users of water and energy. Some manufacturers are producing a percentage of their own energy and have processes in place to reuse large quan-

tities of water. They must often pay for wastewater discharge. Taxes: Large manufacturers are required to pay federal, state, and local corporate income taxes and property taxes. Sometimes large corporations can take advantage of tax credits offered by the state or federal government, such as credits for generating and using biomass and biofuels.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The paper manufacturing industry offers a wide variety of employment opportunities, but production occupations and occupations related to transportation and material moving make up the majority of the workforce. The type of work is generally determined by the product being manufactured and the manufacturing process. Since papermaking is a series of vertically connected processes, job roles contribute to one of the three essential activities: the manufacturing of pulp, the manufacturing of paper, or the conversion of paper into other products. The following umbrella categories apply to the organizational structure of small, medium, and large manufacturers of paper and paper products: ■ ■ ■ ■ ■ ■ ■

Business Management Business and Financial Operations Science and Engineering Office and Administrative Support Craft, Maintenance, and Repair Production Occupations Transportation and Material Moving

Business Management Chief executives and other executive managers establish goals and objectives for the organization and develop strategies and policies designed to meet those goals and objectives. Other executives and managers direct the activities of various departments, business units, and functional units within the organization. Most management positions share the goal of maximizing sales, profit, and customer satisfaction. Duties and responsibilities include formulating and implementing plans and policies, managing daily operations, and guiding the use of materials and human resources. Market-

Paper Manufacturing and Products Industry ing and sales managers direct efforts to promote and sell a company’s products. They are often responsible for identifying and developing new products and markets, determining sales potential, and estimating demand. Computer and information systems managers direct the administration of technology such as network security and Web services. Engineering, science, and research and development managers are generally in charge of developing systems, developing new products, improving processes, and solving technical problems. They are often responsible for quality control. Production managers and plant managers direct activities and resources necessary for manufacturing products within parameters for quality, quantity, and cost. In smaller organizations an owner, partner, or general manager can be responsible for multiple areas, including purchasing, hiring, training, quality control, and day-to-day supervisory duties. Many executive managers have advanced degrees in business or engineering, while mid- and lower-level managers often achieve management status though experience and job performance. Managers generally earn higher salaries than others in the organization. Excluding chief executives, the average salary for a manager in the paper industry is about $100,000 per year. Actual compensation varies by position, level of responsibility, and years of experience. Occupations in the area of management include the following: ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■

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Administrative Support Manager Advertising and Marketing Manager Sales Manager Computer and Information Systems Manager Engineering Manager Research and Development Manager Financial Manager Human Resources Manager Industrial Production Manager Purchasing Manager Transportation, Storage, and Distribution Manager Top Executive

Business and Financial Operations These personnel make up the functional areas of running an organization that are not directly in-

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volved in the manufacturing of the product. Business operations specialists in finance, accounting, and auditing conduct quantitative analyses. They examine, analyze, interpret, and estimate costs and other financial and budgetary data and records for the purpose of giving advice, assuring compliance, or preparing statements. Network and computer systems and support specialists support an organization’s information networks and systems. They analyze user requirements, procedures, and problems to automate or improve existing systems and review computer system capabilities, workflow, and scheduling limitations, and they perform necessary maintenance to support network availability and security. They may also design software or customize software with the aim of optimizing operational efficiency. Marketing and marketing research specialists analyze markets, trends, competitors, prices, sales, and consumers to determine the potential for products. They develop advertising, promotion, pricing, and public relations strategies and inform product development. Sales specialists sell the organization’s products to members of the distribution channel or directly to end users. Purchasing specialists buy raw or semifinished materials for manufacturing as well as the machinery, equipment, or services necessary for manufacturing. Many also examine, evaluate, and administrate contract compliance. Production planning and logistics specialists analyze and coordinate production with demand, internal allocation of resources, distribution, storage, and delivery of raw materials and finished products. Human resources specialists analyze job descriptions and position classifications; determine compensation and benefits; and recruit, train, and develop employees. They may also conduct organizational studies and evaluations, design systems and procedures, conduct work simplification and measurement studies, and prepare operations and procedures manuals to assist management in operating more efficiently and effectively. Most specialists in the business and financial operations area require at least a bachelor’s degree, while many employees have advanced degrees. The average pay for a business and financial operations specialist is around $65,000 per year. Job areas in business and financial operations include the following:

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Accountant/Auditor Market Research Analyst Salesperson Network Specialist Purchasing Agent Production Planning and Logistics Specialist Human Resources Specialist

Science and Engineering The running of a paper mill relies heavily on engineers. Some of the components in paper machines are large and move at very high speeds. The main functions of engineering departments are repair, maintenance, monitoring, calibration, and keeping abreast of the latest environmental and safety regulations. Because of the increasing number of devices on paper machines, proactive and predictive maintenance is important to reduce breakdowns, since the cost of a machine being shut down is very high. Industrial engineers and technicians design, develop, test, and evaluate integrated systems for managing industrial production processes. They may study and record time, motion, method, and speed involved in performance of production and other operations to establish standard production rates or improve efficiency and develop economical solutions to technical problems. Mechanical engineers and technicians deal with the machines and equipment. They plan and design tools, engines, machines, and other mechanically functioning equipment to keep the paper machine running continuously in order to optimize production time available. They are involved in installation, operation, maintenance, and repair. Electrical and electronics engineers and technicians are involved with power use and power management in the mill. They design, develop, test, or supervise the manufacturing and installation of electrical or electronic equipment, components, or systems. Environmental engineers, scientists, and technicians are involved in research, prevention, control, and remediation of environmental health hazards. Work may include waste treatment, site remediation, or pollution control technology. Health and safety engineers and industrial product engineers promote work-site or product safety by applying knowledge of industrial processes, mechanics, chemistry, psychology, and industrial health and safety laws. They work with occupational

health and safety specialists to review, evaluate, and analyze work environments and design programs and procedures to control, eliminate, and prevent disease or injury caused by chemical, physical, and biological agents or ergonomic factors. Materials engineers and scientists study various natural and human-made materials to determine ways to improve or develop new materials, processes, applications, and machinery with specific properties for use in new and improved products and applications. The paper industry involves the use of many chemicals and compounds. Chemical engineers, chemists, and chemical technicians work with dye, sizing, and various other chemicals to improve efficiency and make the process more cost-effective and environmentally friendly. Average annual salaries for engineers are slightly greater than $80,000; scientists earn around $70,000 and technicians somewhat less than $50,000. The science and engineering occupations in the industry include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Industrial Engineer Mechanical Engineer Mechanical Drafter Electrical and Electronics Engineer Chemical Engineer Environmental Engineer Health and Safety Engineer Materials Engineer Technician

Office and Administrative Support This category is made up of various secretaries, administrative assistants, representatives, clerks, operators, and their front-line supervisors. They interact with customers, perform routine clerical and administrative duties, verify and keep records, handle shipping and receiving, and coordinate and expedite the flow of work and materials within or between departments. The average pay for this category is about $35,000 per year, with front-line supervisors earning close to $55,000. Advanced degrees are not typically required, but office and administrative support personnel are expected to have excellent organizational and computer skills. Occupations within this department include the following:

Paper Manufacturing and Products Industry ■

■ ■ ■

■ ■ ■ ■

Bookkeeping, Accounting, and Auditing Clerk Customer Service Representative Office Clerk Production, Planning, and Expediting Clerk Shipping and Receiving Clerk Stock Clerk Administrative Assistant Receptionist

Craft, Maintenance, and Repair These are primarily craft and maintenance positions that are involved in the installation, maintenance, and repair of all of the production and processing machinery and systems, wiring, equipment, fixtures, pipelines, heating, cooling, control systems, and facilities. A period of apprenticeship is generally required to qualify for craft occupations, such as electricians, plumbers, pipefitters, steamfitters, and millwrights. Machinery maintenance workers generally learn on the job, while industrial machinery mechanics usually need some technical education after completing high school. There are union and nonunion manufacturers; for union workers, salaries and benefits may be determined largely through collective bargaining. The average annual salary for a nonsupervisory position in this category is about $50,000. Occupations within this category include the following:

skills, such as supplying or holding materials and cleaning up the work space. There are also paper graders, sorters, stackers, counters, and testers. A high school diploma or general equivalency diploma (GED) is sufficient for most entry-level production occupations, although familiarity with computers and some postsecondary training are needed for technical jobs and to operate sophisticated machinery. Most production workers are trained on the job to understand complex automated machinery and to recognize and solve problems. The average annual pay for nonsupervisory positions is about $37,000. Occupations within this category include the following: ■ ■ ■ ■

■

■ ■ ■ ■

■

■

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Electrician Industrial Machinery Mechanic Maintenance and Repair Worker Millwright Plumber, Pipefitter, and Steamfitter Welding, Soldering, and Brazing Worker

Production Occupations This category represents the majority of the employment in the industry. There are hundreds of distinct job titles for workers in pulp and paper manufacturing and converting, but most set up, operate, or tend paper-goods machines that perform a variety of tasks, such as cutting, folding, drying, rolling, slitting, calendaring, winding, converting, corrugating, forming, coating, and gluing. Others perform duties requiring fewer specialized

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■ ■ ■

Production Manager Production Worker First-Line Supervisor Paper Goods Machine Setter and Operator Cutting and Slicing Machine Setter and Operator Printing Machine Operator Team Assembler Packaging and Filling Machine Operator Inspector, Tester, Sorter, Sampler, and Weigher Coating, Painting, and Spraying Machine Setter and Operator Cementing and Gluing Machine Operator Extruding, Forming, Pressing, and Compacting Machine Setter and Operator Mixing and Blending Machine Operator Machinist Tool and Die Maker

Transportation and Material Moving These workers operate industrial trucks or tractors equipped to move materials around a warehouse, storage yard, factory, construction site, or similar location. They manually move freight, stock, or other materials or perform other unskilled, general labor. These workers feed materials into or remove materials from machines or equipment that is automatic or tended by other workers. They pack or package by hand a wide variety of products and materials.

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Paper Manufacturing and Products Industry

Like production workers, transportation workers require only a high school diploma or GED for most entry-level tasks. Most workers are trained on the job. Nonsupervisory workers earn about $34,000 annually. Occupations within this area include the following: ■ ■

■ ■ ■ ■ ■

Industrial Truck and Tractor Operator Laborer and Freight, Stock, and Material Mover Machine Feeder and Offbearer Packer and Packager Truck Driver Conveyor Operator First-Line Supervisor

INDUSTRY

OUTLOOK

Overview The outlook for the paper manufacturing and products industry shows it to be stable, despite the struggle of North American and European companies to remain profitable during the 2000-2010 period. Global demand is estimated to increase an average of 2.3 percent annually to 2030 as emerg-

ing and developing countries increase their consumption of paper products. Developed economies will continue to lose market share as emerging economies, especially in China, Latin America, and India, continue to add capacity and profit from their lower cost structure, but most of their output will feed the increasing demand in local markets. The high cost of transporting goods encourages manufacturers to produce products close to the markets where they will be consumed. Because of limited access to raw materials, developing economies will still rely on imported pulp to feed their paper manufacturing operations, providing U.S. pulp manufacturers with an alternative avenue for revenue. While U.S. demand is falling, export growth has been on the rise since 2005. Even with increased revenue, profitability suffers, since domestic markets typically provide pulp millers with higher prices than export markets. The 2007-2009 global economic crisis severely affected the industry, but the economy began to show signs of recovery in the second quarter of 2009, when gross domestic product (GDP), a frequently used economic indicator, began a steady climb. The industry was expected to recover and grow, though more slowly than in the past.

A pulp and paper mill. (©Dreamstime.com)

Paper Manufacturing and Products Industry

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substantial levels of innovation will lead to new products and materials. Pulp mills will focus on higher energy recovery. The industry alPaper Manufacturing ready produces 50 percent of its own energy using biomass by-prodEmployment ucts from the production process 2009 Projected 2018 Occupation to create biofuels. Some companies produce all their own energy 15,510 13,300 Cutting and slicing machine and generate excess power, selling setters, operators, and tenders it back to local utilities. 16,800 13,400 First-line supervisors/managers Alternative fuel tax credits enof production and operating joyed by producers in the past few workers years have ended, but many see making and selling biofuels as a po4,870 3,800 Industrial production managers tential future revenue stream. The 17,740 14,700 Industrial truck and tractor paper manufacturing and products operators industry could become a cleanenergy supplier, producing 100 per77,340 64,600 Paper goods machine setters, cent of its own needs and selling operators, and tenders the excess. The future company in 13,670 11,600 Printing machine operators the industry might employ an integrated process that includes pulp Source: U.S. Bureau of Labor Statistics, Industries at a Glance, and papermaking together with enOccupational Employment Statistics and Employment ergy generation and the producProjections Program. tion of chemicals and biofuels. A long value chain of wood and fiber products is resource-, energy-, and carbon-efficient. Total employment is projected to fall because of In North America, substantial restructuring, growth in productivity resulting from automation elimination of excess production capacity, and inand equipment upgrades, but there are still many creased operating and production efficiencies will opportunities in the industry. continue to improve profitability, return on equity, and return on capital employed. Lower pulp and Employment Advantages energy prices will improve cost structures, and In spite of the decrease in total industry employprofitability will begin to improve over the 2010ment, as of 2010 the paper manufacturing and 2015 period. products industry remained an extremely large Research and development will continue to foemployer and there were still a multitude of opporcus on the economic and environmental aspects of tunities across a highly diverse range of occupapaper manufacturing, resulting in decreased contions. Higher levels of competition in this industry sumption of raw materials, energy, water, and indicate that students who excel academically will noise. Other anticipated improvements include inbe more likely to obtain positions. Demand for creases in the runability and lifetime of equipment graduates in core engineering disciplines and peoand machines, increases in product quality, and ple with strong management skills will remain process improvements. Focused efforts will be high, as well as for graduates in all computermade to improve the quality of recovered paper systems disciplines. Individuals interested in caand improve the recyclability of paper products. reers in the environmental and sustainability fields The number of facilities available to gather recywill find opportunities and satisfaction in the ongocled paper and process it into usable raw materials ing accomplishments in the industry. will continue to increase. It is also expected that PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

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Paper Manufacturing and Products Industry

Because most large paper mills and manufacturers are located near lakes, rivers, and oceans, employees can enjoy the recreational opportunities that exist in those areas. Many people in this industry have weekend cottages and enjoy fishing, boating, and other water sports. Hunters take advantage of well-forested areas. Individuals who have a love of nature and enjoy being outdoors may wish to consider an occupation in this industry. Annual Earnings As the global economic recovery has progressed since 2009, prospects for the paper manufacturing and products industry have improved. Income statements for corporations in the sector showed revenues increasing slowly but steadily in each quarter of 2009 and in the first quarter of 2010. The first quarter of 2009 saw losses, but by the last quarter profits before taxes had climbed out of the red. Balance sheets began to look better as cash positions improved and both short- and long-term debt declined. As manufacturers in North America and Europe continue to eliminate excess capacity, utilization rates will improve. Gains in production speeds will increase return on investments, and capital spending will focus on efficiency improvements. Increased productivity and lower cost structures will improve both the competitive positions of domestic corporations and profit levels. The performance of the global paper products market is forecast to accelerate, with an anticipated compound annual growth rate (CAGR) of 8.4 percent for the five-year period 2009-2014, which is expected to drive the market to a value of $427.1 billion by the end of 2014. The performance of the domestic market is forecast to accelerate more slowly than the global market, with an anticipated CAGR of 2.2 percent for North America and 2.1 percent for the United States for the five-year period 2009-2014.

RELATED RESOURCES FOR FURTHER RESEARCH American Forest and Paper Association 1111 19th St. NW, Suite 800 Washington, DC 20036 Tel: (800) 878-8878

Fax: (202) 463-2700 http://www.afandpa.org Center for Paper Business and Industry Studies 500 10th St. NW, 3d Floor Atlanta, GA 30332-0620 Tel: (404) 894-1488 Fax: (404) 385-2414 http://www.cpbis.gatech.edu Paper Industry Technical Association 5 Frecheville Ct. Bury, Lancashire B19 0UF United Kingdom Tel: 0161-764-5858 Fax: 0161-764-5353 http://pita.co.uk TAPPI (Technical Association of the Pulp and Paper Industry) 15 Technology Parkway South Norcross, GA 30092 Tel: (770) 446-1400 Fax: (770) 446-6947 http://www.tappi.org

ABOUT

THE

AUTHOR

Leslie Farison is a business librarian and assistant professor at Appalachian State University, Boone, North Carolina. She received her master’s degree in library science from the University of Kentucky and her master’s degree in business administration from Indiana University. Prior to becoming a librarian, she spent many years as a marketing professional, including several years at Kimberly-Clark Corporation. She has published in the Journal of Education for Library and Information Science and has written a book chapter titled “Data-Driven Cancellation Decisions” for the American Library Association publication The Frugal Librarian: Thriving in Tough Economic Times. She has presented at the Charleston Conference and the University of Louisville. Her research interests include economics in collection development, business information literacy, and international librarianship.

Paper Manufacturing and Products Industry FURTHER

READING

Bjorkman, A., D. Paun, and C. Jacobs-Young. “Financial Performance, Capital Expenditures, and International Activities of the North American Pulp and Paper Industry at MidDecade.” TAPPI Journal 80, no. 10 (October, 1997): 71-84. Carson, Thomas, and Mary Bonk. Gale Encyclopedia of U.S. Economic History. Detroit: Gale Group, 1999. Converter. “New Technology Active in Sector.” 46, no. 6 (October 28, 2008). Retrieved from Business Source Complete database. Datamonitor. Global Paper Products: Industry Profile. March 8, 2010. Retrieved from MarketLine database. _______. Paper and Paperboard in the United States. March 15, 2010. Retrieved from MarketLine database. Encyclopedia of American Industries. Millerton, N.Y.: Grey House, 2008. Holik, Herbert. Handbook of Paper and Board. Weinheim, Germany: Wiley-VCH, 2006. Hunter, Dard. Papermaking: The History and Technique of an Ancient Craft. New York: Knopf, 1947. IBISWorld. Cardboard Box and Container Manufacturing in the U.S.: Industry Report 32221. February, 2010. Retrieved from IBISWorld Industry Market Research database. _______. Cardboard Mills in the U.S.: Industry Report 32213. June, 2009. Retrieved from IBISWorld Industry Market Research database. _______. Coated and Laminated Paper Manufacturing in the U.S.: Industry Report 32222. February, 2010. Retrieved from IBISWorld Industry Market Research database. _______. Labels, Egg Cartons, and Other Paper Product Manufacturing in the U.S.: Industry Report 32229b. January, 2010. Retrieved from IBISWorld Industry Market Research database. _______. Office Stationery Manufacturing in the U.S.: Industry Report 32223. May, 2010. Retrieved from IBISWorld Industry Market Research database. _______. Paper Mills in the U.S.: Industry Report 32212. February, 2009. Retrieved from IBISWorld Industry Market Research database.

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_______. Sanitary Paper Product Manufacturing in the U.S.: Industry Report 32229a. February, 2010. Retrieved from IBISWorld Industry Market Research database. _______. Wood Pulp Mills in the U.S.: Industry Report 32211. November, 2009. Retrieved from IBISWorld Industry Market Research database. Nurmi, Ville. “Future Trends of HRD in the Finnish Pulp and Paper Industry.” Human Resource Development International 10, no. 1 (2007): 107-113. O’Hara, Frederick M., Jr., and F. M. O’Hara III. Handbook of United States Economic and Financial Indicators. Westport, Conn.: Greenwood Press, 2000. Organization for Economic Cooperation and Development. OECD Environmental Outlook to 2030. Paris: Author, 2008. Packaged Facts. The U.S. Market for Household Paper Products. December, 2005. Retrieved from MarketResearch.com Academic database. Parker, Philip M. The 2006-2011 World Outlook for Paper Mills. San Diego, Calif.: ICON Group, 2005. Parsons, Charles K. Workplace Transformation and Human Resource Management Practices in the Pulp and Paper Industry. Atlanta: Center for Paper Business and Industry Studies, Georgia Institute of Technology, 2004. Patrick, Ken, and Glenn Ostle. “Outlook: North America 2010.” Paper 360 5, no. 1 (January/ February, 2010): 8-11. PricewaterhouseCoopers. CEO Perspectives: Viewpoints of CEOs in the Forest, Paper, and Packaging Industry Worldwide. Available at http://www.Pwc.Com/en_gx/gx/forest-paperpackaging/ceo2009/index.Jhtml. _______. Global Forest, Paper, and Packaging Industry Survey. Available at http:// www.Pwc.Com/en_gx/gx/forest-paperpackaging/2009-fpp-survey/index.Jhtml. Smith, Maureen. The U.S. Paper Industry and Sustainable Production: An Argument for Restructuring. Cambridge, Mass.: MIT Press, 1997. Standard and Poor’s Industry Surveys. Paper and Forest Products. Available at http:// www.netadvantage.standardandpoors.com.

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Thompson, Claudia G., and the American Institute of Graphic Arts, Boston Chapter. Recycled Papers: The Essential Guide. Cambridge, Mass.: MIT Press, 1992. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco.

U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. Wilkinson, Norman B. Papermaking in America. Greenville, Del.: Hagley Museum, 1975. Young, Rod. “Rollercoaster Ride in Recovered Paper Continues.” PPI: Pulp and Paper International 52, no. 5 (2010): 48.

Passenger Transportation and Transit Industry ©Zygomaticus/Dreamstime.com

INDUSTRY

INDUSTRY DEFINITION

SNAPSHOT

General Industry: Transportation, Distribution, and Logistics Career Cluster: Transportation, Distribution, and Logistics Subcategory Industries: Ambulance Service; Charter Bus Industry; Commuter Rail Transportation; Employee Bus Transportation; Handicapped Passenger Transportation; Interurban and Rural Bus Transportation; Rail Transportation; Scenic and Sightseeing Transportation; School Bus Transportation; Taxi and Limousine Services; Urban Transit Systems; Van Pool Services; Water/Ferry Transportation Related Industries: Airline Industry; Automobiles and Personal Vehicles Industry; Freight Transport Industry; Mass Transportation Vehicles Industry; Shipbuilding, Submarines, and Naval Transport Industry Annual Domestic Revenues: $40 billion USD (U.S. Economic Census, 2007) Annual International Revenues: $134 billion USD (Organization for Economic Cooperation and Development, 2009) Annual Global Revenues: $174 billion USD (Organization for Economic Cooperation and Development, 2009) NAICS Numbers: 482-483, 485

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Summary The passenger transportation and transit industry comprises a diverse range of transport methods, all with the common goal of moving people to their desired locations. Modes of transportation are available to cover long or short distances, over land or water. The routes may be structured and scheduled, moving hundreds of people at a time, such as urban transit, rail, or ferry services, or under the direction of a single person or small group, as in taxi, limousine, or ambulance services. Companies in this industry can range from a single, independent owner-operator of a car service to a multibillion-dollar corporation covering great distances with thousands of vehicles and employees. Municipal transportation systems are transforming into highly efficient and economical options for travelers. Improvements in traffic patterns and planning in this industry are the focus of dedicated research departments within academic

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Passenger Transportation and Transit Industry

institutions and government agencies around the world. History of the Industry Since ancient times, people have needed to travel from place to place. Most early travel was done on foot or with the help of animals. People covered long distances on land, but ferries were created to assist with water crossings and were noted in early Greek mythology. In addition to providing safe water crossing, it was believed that ferries transported the souls of the deceased to their final resting place; the dead often were buried with a ferry coin under the tongue or covering each eyelid. Early passenger transport involved the use of a cart pulled by an animal or person. The first taxi meter was used in ancient Roman cities. A reservoir of small balls was attached to the axle of a passenger cart. As the cart moved, the balls were released

one by one, and the passenger paid a fare based on the number of balls that had fallen. The first structured transit line was organized in Paris in 1662 by physicist and mathematician Blaise Pascal, better known for his contributions to barometric pressure. This multiseat carriage service operated for fifteen years until influence from Parisian nobility raised the fares beyond the means of the general public. Similar stagecoach operations within cities did not reappear until the early 1800’s. In England, Walter Hancock revolutionized public transportation with the creation of the first steam-powered bus. These buses were more cost-efficient and alleviated many troubles of horse-drawn carriages, but strict legislation and high tolls discouraged the new buses from running. Abraham Brower, an American entrepreneur, pioneered bus use in New York City in 1829. News of its efficiency quickly spread, leading to bus services being instituted in Philadelphia, Baltimore, and Boston by 1844.

The Metro Light Rail connects Phoenix, Tempe, and Mesa. (©Anton Foltin/Dreamstime.com)

Passenger Transportation and Transit Industry

Inputs Consumed by the Transit and Ground Passenger Transportation Industry Input

Value

Energy Materials Purchased services Total

$5.4 billion $2.8 billion $2.5 billion $10.7 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

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street railway in 1888. At the Paris Exhibition in 1900, an experimental trolley line was used to move visitors. This innovation led to implementation of Europe’s first urban trolley car service in Bielathal, Germany, in 1901. As a solution to the congestion of New York City streets, Scientific American editor Alfred Ely Beach suggested taking transportation underground. His “Pneumatic Transit” opened in 1870 and used a 100-horsepower fan to propel a passenger car through a 312-foot (one city block) underground wind tunnel. This odd invention paved the way for modern subterranean subway systems. The first subway system in the United States was the Interborough Rapid Transit system in New York, which was completed in 1904 and carried more than 150,000 passengers on its first day.

In Europe, Julius Griffiths first patented a pasThe Industry Today senger road locomotive in 1821, but it was not until The passenger transportation industry has 1825 that regularly scheduled passenger trains evolved from the simple movement of people were developed by the Stockton & Darlington Railacross distances to a highly competitive, increasroad Company. The company’s locomotives were ingly efficient means of transportation incorporatdesigned by George Stephenson, an English invening a wide range of service options to passengers. tor, and pulled six coal cars and 450 passengers in In the United States in 2008, there were more than twenty-one cars, nine miles per hour. In 1830, the 7,700 operational public transit systems taking first steam-powered passenger train in the United people on some 10.5 billion trips, bringing public States, called the Best Friend of Charleston, carried transit ridership to its highest level in five decades. 141 passengers six miles on its first trip. Within the Many large metropolitan public transportation corporations have diversified to include all modes decade 2,218 more miles of rail track had been of travel within their jurisdiction, including buses, laid, linking even more communities. Passenger commuter rail, ferry boats, light and heavy rail, rail travel continued to expand and flourish, carryparatransit, trolley buses, and vanpools. ing more than 1.2 billion passengers annually by 1920. The advances in diesel engines in the 1930’s made rail travel even faster, although passenger numbers did drop sigThe Transit and Ground Passenger nificantly during the Depression era. Cable cars became a very popular Transportation Industry’s mode of transport in the United States. Contribution to the U.S. Economy They first were used in San Francisco in 1873, and within ten years, similar cars Value Added Amount were operating in Chicago, New York, Gross domestic product $23.2 billion and Philadelphia. New York’s Brooklyn Gross domestic product 0.2% Bridge cable car carried more than 9 Persons employed 438,000 million passengers during its very first Total employee compensation $15.0 billion year. In 1882, Ernst Werner von Siemens began experimenting with the Source: U.S. Bureau of Economic Analysis. Data are for Elektromote, the first electric trolley car, 2008. in Berlin. Richmond, Virginia, began testing North America’s first electric

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Passenger Transportation and Transit Industry

Ambulance services are included in the passenger transportation industry. (©Cheryl Casey/Dreamstime.com)

four thousand vehicles, and carrying some 3.5 million patients each year. Many companies in the passenger transportation industry are investigating multimodal transportation options, partnerships, and expansion of core services. Metropolitan transit services may include several modes of transportation in order to cover a great geographic area and meet the needs of their ridership by linking them to additional services. New York City offers the public a linked system of rail, bus, subway, and ferry options. Several cities provide bike racks on buses and trolleys to accommodate people who wish to travel a portion of their commute on bicycle and link to public transit for another portion. Passenger transportation companies are expanding their services to provide scenic tour options and destination bus trips for holidays or sightseeing; rail companies such as Amtrak are partnering with hotels and attractions to provide package and themed vacations. Passenger transportation companies want to use all of their potential space and energy output to generate revenue, so many have combined passenger transport with freight transport. An example is Greyhound Lines, the bus company that carries passengers as well as packages. All passenger transportation relies heavily on the infrastructure of the served area. Roads, rails, and ports must be maintained to ensure passenger safety, and a great deal of the responsibility and cost lies with municipal or other governments.

As metropolitan areas experience increased development and sprawl, demand grows for public transportation options. Although North Americans enjoy the convenience of driving their own vehicles, mounting fuel, parking, and insurance costs are leading many to look into alternate transportation options. Public transit systems are inexpensive alternatives, but predetermined routes and strict schedules do not work for everyone. Alternatives such as taxis, limousines, sedans, and shuttles offer more flexibility and convenience, but at higher costs. Costs and concerns surrounding air travel have risen in the past decade, leading more people to explore bus and rail travel for both business and recreation. Distances may take longer to cover, but the scenic route options, scheduled stops, vast network of destinations, and low fares make land travel an attractive alternative. Ambulance services are included in the passenger transportation industry. In many countries, ambulance service is operated as part of the health care system; in the United States, ambulance service generates billions of dollars in revenue. American Medical Response is one of the These buses are equipped with bike racks on front to accommodate those largest services, operating more than who wish to bike and bus to work. (©Bill Gillam/Dreamstime.com)

Passenger Transportation and Transit Industry Passenger transportation modes are the focus of a great deal of research. Research highlights include improved efficiency, lower costs, and cleaner fuels to reduce environmental impact. Many metropolitan transit systems have made the switch to buses that run on natural gas. In 1999, commercial bus service in Christchurch, New Zealand, began using hybrid electric vehicles, and Seattle became the first city to put General Motors hybrid transit buses into service in 2004.

INDUSTRY MARKET SEGMENTS Small Businesses Small passenger transportation companies can be a one-person, owner-operator business or a service of up to fifty employees taking on a range of roles. The most common type of small business in this industry is a taxi, limousine, or car service. These companies can be completely independent, made up only of a driver who manages dispatch, transport, and all other aspects of the business. In other cases, a small-business owner might manage a fleet of up to twenty vehicles. The owner hires dispatchers and drivers to operate the vehicles, rotating their schedules so at least one vehicle is in operation around the clock. Another popular arrangement is to have drivers lease vehicles from the owner for a shift or other specified period of time. Most of these small businesses stay confined to a specific geographic area or route, such as airport transfers. They may be contacted through telephone or online dispatch, flagged down on the street, or contracted by organizations or corporations to transport people on an on-call basis. Common modes of transportation for most small businesses are rickshaw cart (foot, bicycle, or motorized), boat, motorcycle, taxi, limousine, van, or sedan car. Potential Annual Earnings Scale. Small transportation operators earn approximately $18,000 to $27,000 per year, but earnings can vary widely by region and consistency of work available. Dispatchers and administrative positions in these small businesses usually are paid an hourly wage or salary, while drivers typically are not. If a driver is not the owner of the vehicle, he or she must make an arrangement to lease the vehicle from its owner and

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must pay the operating expenses. This can be a challenging arrangement because of fluctuations in traffic patterns, weather, and demand for services. Average fare revenue for a taxi driver in the United States is $150 per shift; however, fuel and lease costs can reduce this total by more than half. Tipping is customary for passengers and can increase revenue by 15 to 20 percent for good service. Clientele Interaction. The drivers for small transportation businesses most often pick up clients and take them to their destinations, with minimal to no interaction with a remote dispatcher. For some car services, the dispatcher and driver are the same person. Repeat business and recommendations from happy customers are keys to success, so all clientele interaction must be positive. Employees often are encouraged to meet standards for personal appearance and vehicle cleanliness.

Hailing a taxi in New York. (©Zygomaticus/Dreamstime.com)

Amenities, Atmosphere, and Physical Grounds. Small passenger transportation companies may have a small hub or office space, but frequently their transport vehicles are considered their offices. The dispatch center may be located in a home office or in a vehicle, with calls managed by cellular telephone. Typical Number of Employees. As in most small-business situations, the goal is to keep expenses low and revenues high. As fuel and insurance costs rise, a business might hire or lease its vehicles to operate twenty-four hours per day, rotating among operators. A small company usually is

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managed by a single individual, depending on the workload and geographic area the company serves. The typical number of employees for a small passenger transportation company can range from one to fifty. Traditional Geographic Locations. Most small businesses serve specific geographic areas, such as a single city or districts or routes within a city. Many limit service only to downtown areas, resort districts, or to and from major airports. Most taxi or car services will take passengers to any desired destination, although fares to some distant locations may be declined because of the prohibitive cost of the return trip for the driver. Shuttle companies operate on structured schedules between predetermined locations. Smaller and nonmotorized transportation options typically remain within a very small, specific service district. Pros of Working at a Small Passenger Transportation Company. Independent operators and driver have a great deal of flexibility and can usually decide how much and when they want to work. Small companies or individuals who hold contracts for service with other companies can have regular routes, allowing a familiarity with an area and frequent passengers. There usually is very limited direct supervision for employees of small businesses, and they most often work alone. Cons of Working for a Small Passenger Transportation Company. Within smaller passenger transportation companies there is limited opportunity for advancement. A job with a small company also might require employees to take on roles and responsibilities outside their expected job description. Often, without set service contracts or scheduled routes, demand fluctuations, traffic patterns, and weather conditions can make income unpredictable. Passenger transportation operators often work long hours and can encounter challenging, dangerous, and possibly criminal situations. Costs Payroll and Benefits: Typically, small passenger transportation operators earn and record their own fares or can be paid hourly wages based on completed trips. Administrative or dispatch employees usually receive hourly wages or salaries and the same benefits as other workers, at the discretion of the owner or manager; however,

most independent operators are not entitled to benefits. Supplies: The mode of transportation determines the supplies required. Employees must have a clean, properly maintained vehicle with adequate fuel as well as any safety equipment required by local law. Some businesses require communication systems to connect dispatchers to operators; these systems must be maintained. External Services: Maintenance of vehicles is the key to sustaining a small passenger transportation business. Fuel, repair, and insurance costs can be considerable. Also, a communication system such as cellular telephones, wireless devices, or two-way radios must be maintained. Utilities: Many small businesses do not have central offices or service centers, so utility costs are minimal. Taxes: Small businesses are required to pay local, state, and federal income taxes, as well as any required regional business and service taxes. Tips for service are common in this industry and also subject to federal income tax. In many cities, taxi drivers must possess a medallion issued by a regulatory agency. In New York City, a limited number of medallions are issued; they are transferable but can be very costly. Midsize Businesses Midsize passenger transportation companies usually operate within a larger geographic area and may have more services and employees than a small business. Midsize companies typically have a fleet of vehicles, focused on a single mode of transportation. They may confine transport within a specific area or offer service between several states or cities. Midsize businesses usually have centralized dispatch hubs and may offer online reservation services, schedules, and vehicle-tracking capabilities. Potential Annual Earnings Scale. Midsize transportation businesses have more employees and more positions within the company, possibly including vehicle operators or drivers, dispatchers, ticket clerks, customer service agents, managers, supervisors, and technical support staff. Wages for these positions vary by region and job responsibilities. Entry-level or nonsupervisory workers can expect to earn $17,000 to $32,000 annually. Supervisory and management positions will have higher

Passenger Transportation and Transit Industry earnings, depending on qualifications and responsibilities. Clientele Interaction. This industry is serviceand customer-based, so clientele interaction is very common; however, as the size of the business increases, more positions become available that involve less direct interaction with customers. Telephone customer service and requests are still very common, although many midsize businesses have started implementing online service options. The vehicle operator or driver still has the greatest amount of interaction, and personnel such as guides for scenic tours are hired to provide additional service to riders As with any company in the service industry, repeat business and recommendations from happy customers are key to success, so all clientele interaction must be positive. Employees often are required to maintain appearance standards and wear uniforms. Amenities, Atmosphere, and Physical Grounds. Midsize transportation service businesses often maintain service kiosks or station stops and waiting areas as well as dispatch offices, retail spaces, and lots for the storage and maintenance of fleet vehicles. Typical Number of Employees. The typical number of employees for a midsize passenger transportation business depends on the service provided, mode of transportation, and geographic area served. It can range from fifty to one thousand employees, covering a wide range of positions. Traditional Geographic Locations. Midsize transportation businesses usually serve larger geographic areas than do smaller companies. They also can simply have more vehicles in their service fleets. These businesses typically operate a single mode of transportation, such a shuttle buses, taxis, or water taxis, within a specific area. Pros of Working for a Midsize Passenger Transportation Company. Midsize companies tend to pay employees an hourly wage or annual salary rather than giving them independent contractor status, although some drivers do operate independently under the umbrella of the larger company. Employees normally experience more income stability. Midsize companies often provide benefits and uniforms to their employees. Many have their own fleets of vehicles; therefore, employees are not required to provide and maintain their own.

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Cons of Working for a Midsize Passenger Transportation Company. Midsize businesses usually operate on a more structured schedule than small companies, and employees receive more direct supervision and less flexibility. Costs Payroll and Benefits: Midsize passenger transportation companies typically pay their personnel an hourly wage, although drivers often are paid a portion of their completed trip fares. Fulltime employees usually receive the same vacation and benefits as other workers. Supplies: Midsize companies usually have fleets of transportation vehicles that require supplies for cleaning and maintenance. Supplies also may be necessary for ticketing and communication systems. Different modes of transportation require specific safety equipment, such as life preservers for water transportation. External Services: Midsize businesses need to maintain the vehicles they use. Fuel, repair, and insurance costs for a fleet can be considerable. Often, vehicle maintenance and repair are contracted out as needed. Communication systems linking dispatchers to service personnel must be maintained, such as cellular telephones, wireless devices, Global Positioning Systems (GPSs), or two-way radios. Transportation businesses may rely on partnerships with other businesses, such a tourism operators, to provide referrals to potential customers. Utilities: Utilities depend on the physical space or property type maintained by a business. Large office spaces will require electricity, heating, water, and sewer service. Internet and telephone services are the key to communication with customers and operators within the business and need to be maintained. Taxes: Midsize businesses are required to pay local, state, and federal income taxes, as well as any required regional business and service taxes. Tips for service are common in this industry and also subject to federal income tax. In many cities, taxis must possess a medallion from a regulatory agency. Large Businesses Large passenger transportation companies are the most well known in this highly competitive in-

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dustry. They may employ thousands of people and serve vast geographic areas or supply public transportation to a single metropolitan area. The Metropolitan Transportation Authority of New York City has an annual operating budget of more than $11 billion and employs more than 65,000 people in order to meet the travel needs of some 8 million people each day. Amtrak employs more than 26,000 people to maintain the daily service of more than 300 trains. ComfortDelGro is a transportation holding company based in Singapore that controls bus and rail operators and transit and taxi companies in Singapore but also has significant bus and taxi operations in several markets in the United Kingdom, Ireland, China, and Australia. Large companies might offer a variety of transit modes or provide a single service, covering a large geographic area. Large companies tend to diversify their services by providing passenger transport in combination with freight or courier service, or in partnership with other service providers to create package services. Some large companies are owned and operated by municipal governments and receive subsidy and stimulus funds in addition to fare revenue to provide service; others are contracted, privately owned, or publicly traded corporations. Potential Annual Earnings Scale. The annual earnings for large passenger transportation businesses vary widely depending on position and job responsibilities. Hourly wages for transit drivers and operators across the United States range from $10.62 to $16.8, while fleet mechanics earn an hourly wage of $15.59 to $20.80. Managers, supervisors, and directors earn annual salaries over $60,000. Clientele Interaction. Customer service is most often provided online or by telephone, but ticket agents and drivers have almost constant clientele interaction. Transit systems are becoming increasingly automated, limiting interaction in order to increase efficiency and improve safety of employees. By limiting the vehicle operators’ customer interaction, there also is less opportunity for driver distraction, which is a significant safety risk. Personnel, as representatives of the company, are required to wear uniforms or identification, adhere to appearance standards, have good communications skills, and be knowledgeable about the services, safety, and policies of their specific company. Amenities, Atmosphere, and Physical Grounds. Large passenger transportation compa-

nies can provide services throughout large metropolitan cities, states, or countries. Large companies have centralized corporate offices where administrative operations are managed and facilities for storing and servicing fleet vehicles. Some large companies maintain depots and waiting areas for their customers; these may simply be shelters from weather or large complexes with food, shopping, and business services. The atmosphere can be stressful as the movements of millions of people each day need to be efficient and safe. Typical Number of Employees. Large passenger transportation companies typically have thousands of employees. Most are full-time employees, although casual and part-time staff can be brought in during high-volume periods, events, or commuter rush hours. Deutsche Bahn, a Germany-based international mobility and logistics company whose core business is rail activities, employs a workforce of more than 251,000 worldwide to transport more than 5 million passengers and 1 million tons of goods every day. Traditional Geographic Locations. Large companies serve many diverse areas but often have their headquarters in major metropolitan cities. Pros of Working for a Large Passenger Transportation Company. Transportation and transit workers in many regions are municipal employees with the ability to unionize and collectively bargain for better wages and benefits. Benefits provided to almost all workers include cost of living adjustments, paid sick days, overtime pay, health insurance, and pensions. Wages and benefits for large businesses are comparable to or better than the national average. Employees at larger companies normally are responsible for a specific job, rather than covering multiple roles as often is required by smaller companies. Cons of Working for a Large Passenger Transportation Company. These companies are a very popular career choice for many people and entry-level positions require minimal education; therefore, the hiring process can be very competitive. Some metropolitan transit systems require potential employees to take qualification examinations. Many large companies provide around-theclock service, and in order to accommodate this, many positions require a lot of shift work. The environment, time commitments, and strict schedules can be stressful for some people.

Passenger Transportation and Transit Industry Costs Payroll and Benefits: Large companies employ thousands of people with varying skills and job descriptions. Large teams of people are hired solely to manage payroll and benefits for employees. Supplies: Transportation costs, including vehicles, fuel, and other maintenance and cleaning supplies, are significant for large companies. New York’s Metropolitan Transit Authority budgets more than $160 million for fuel costs. Materials and supplies in a large business’s operating budget consist primarily of items for maintenance and improvement of property and equipment as well as general supplies to run the business operations. In 2008, Amtrak reportedly spent more than $201 million for these materials. Many large companies are able to negotiate fuel-hedging programs in an attempt to stabilize fuel costs; most also are upgrading and retrofitting their fleets to use electric, hybrid, and hydrogen fuel-cell technology. External Services: Large passenger transportation and transit companies tend to have internal staff to cover all requirements for operations. Maintenance of facilities and equipment often is managed on site by employees of the company. Communication services are provided by national carriers and need to be of the highest quality and reliability. Utilities: Large companies operate thousands of offices, stations, ports, and hubs. Utilities include water, gas, sewer, electricity, heat and airconditioning, and communication services. Taxes: Large businesses are required to pay local, state, and federal income taxes, as well as regionally required business and service taxes. Tolls and services fees or international charges may be incurred. In many cities, taxis must be in possession of a medallion issued by a regulatory agency. Some companies receive federal grants that also may be subject to taxation.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of a passenger transportation company usually is based on the

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mode of transportation, size of the company, and purpose of the service being provided. In very general terms, passengers who need to travel from one place to another will solicit the service that best suits their needs and budgets. Transportation companies employ thousands of people in numerous positions to ensure safety and efficiency of travel. Because of the responsibility of ensuring passenger safety, employees in this industry are subject to random drug and alcohol testing and pre-employment investigation. The Metropolitan Transportation Authority, North America’s largest transit system, which operates public transit in New York and its surrounding area, employed more than 68,000 people in 2008. Some larger companies operate internationally, such as ComfortDelGro, the world’s second largest transport company, which is headquartered in Singapore but also operates in China, the United Kingdom, Ireland, Australia, Vietnam, and Malaysia. The following umbrella categories apply to the organizational structure of businesses in the passenger transportation and transit industry: ■ ■ ■ ■ ■

■ ■ ■

Business Management Customer Services Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources

Business Management Management and executive positions are the highest ranking positions within passenger transport and transit companies. These positions normally comprise a small group of individuals, supported by a larger team of administrative and other professionals. The goal of this team is to make decisions that ensure that the company continues to generate maximum revenue, reduce costs, and improve safety and service. The annual salaries for top positions in the transit industry are quite considerable. The chief executive officer (CEO) of New York’s Metropolitan Transportation Authority reportedly negotiated a compensation package in 2008 that included an annual salary of $350,000 in addition to housing

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and retirement benefits. The average annual compensation package for the heads of city transit systems in North America is $305,000. Many public transit systems receive government financial assistance. Executive positions in large, privately owned or publicly traded companies typically earn higher compensation. Greyhound Lines is the largest intercity bus company in North America; its executives receive annual compensation over $500,000. Occupations in the area of executive and business management include the following: ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) Chief Information Officer (CIO) President Vice President

Customer Services Customer service is critical to a company’s success. Personnel in this field must provide accurate information and assistance to customers, respond to inquires, resolve problems, and sell services. In many transportation businesses, the operator of the vehicle may be the only company employee with whom the customer has direct contact; therefore, there is an overlap of responsibilities. Customer service employees provide answers and resolutions to customer inquiries. This may include helping customers determine which mode of transportation best suits their needs, explaining route options, or providing fare quotes. Customer service representatives also handle customer complaints. Positions in customer service do not often require previous training or specialized education. Employees need to demonstrate excellent communication skills, professionalism, patience, telephone etiquette, and good problem-solving and multitasking skills. Occupations within the customer service department include the following: ■ ■ ■ ■

Customer Service Representative Ticketing Agent Customer Relations Executive Service Agent

Sales and Marketing Passenger transportation is a highly competitive industry. Customers have many choices depending on their transportation needs, so brand recognition and a reputation for superior service are critical. Sales and marketing departments ensure that advertising dollars are well spent, the company’s brand remains at the forefront of customer choice, and exceptional relationships with the customer are maintained. Some smaller businesses in this sector, such as independent owner-operators, may not advertise. Instead, they locate their vehicles and services in places of opportunity, such as airport taxi queues or tourist districts. However, most businesses, regardless of size, have dedicated advertising budgets. Depending on the target customer demographic and area of service, advertising strategies may focus on small areas in a single city or the entire world, and the marketing team may be a single individual or a team of thousands. Marketing and communications personnel need to project their message to potential customers and may handle a lot of public relations activities. Effective media relations and media monitoring is critical in the handling of a crisis and issues which may arise, and often marketing and communications staff need to protect the company’s reputation by identifying and managing these emerging issues. A key measurement of corporate success is revenue; therefore, sales of products and services are imperative. In this industry, advertising and exposure are marketing keys. Many of the customers accessing transportation services remain anonymous and therefore direct sales rarely take place. Sales personnel may contact companies or event managers to make arrangements for people attending conventions, tours, or other events to be offered exclusive transportation services. Marketing and sales analysts determine whether allocated advertising budgets have been effectively used. They report if the proposed sales goals and targets have been achieved and develop analysis and recommendations for future sales opportunities. Sales positions often are compensated by a base salary and commission structure. Key skills include communication, influence, negotiation, problem solving, and organization. Sales positions often require travel. Marketing and communications positions usu-

Passenger Transportation and Transit Industry ally require a degree or training. Salaries can start near $25,000 annually for entry-level positions and exceed $90,000 for marketing managers and directors. Key skills include communication and organization; knowledge of branding, promotions, trade shows, and event planning; database marketing; telemarketing; promotions; advertising; and research. Occupations within the sales and marketing department include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Marketing Director Sales Account Manager Sales Analyst Sales Clerk Corporate Communications Specialist Media Relations Representative Business Solutions Specialist Business Liaison Market Research Manager

Facilities and Security The goal of passenger transportation companies is to achieve the highest practical level of safety and security for all modes of transportation in order to protect passengers, employees, revenues, and property. The maintenance of facilities, routes, and transportation equipment is critical to the operation of any passenger transportation or transit company, and government and regulating bodies encourage all companies in this industry to develop and implement a safety and security plan. In most countries, governments have strict regulations and requirements for modes of passenger transportation in order to ensure safety. The United States Department of Transportation is the umbrella governing agency and is divided into several more specific offices, such as the Federal Transit Administration, Federal Motor Carrier Administration, Federal Railroad Administration, and others. The vehicle used to transport passengers must be safe for passengers and mechanically maintained. Small companies may require that the operators or drivers perform required cleaning and maintenance or take the vehicle for regular maintenance. Specialized maintenance of equipment and vehicles often is contracted out to other companies, although larger companies may keep individuals on staff to perform repair and maintenance of fleet vehicles.

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Urban transit systems may include a wide range of travel modes, including rail, trolley car, bus, and water taxi, and all of this specialized equipment has very precise maintenance needs. Occupations in this area often require specialized training and certification. Employees need to perform scheduled maintenance and install new equipment, troubleshoot, and make repairs as needed. Routes and other equipment also must be maintained, including places such as passenger stops, waiting areas, depots, rail lines, docking facilities, and ticketing kiosks, as well as signals and overhead wire systems. Maintenance and facilities positions cover a very wide range of employment options, anything that ensures the smooth running and maintenance of the larger operations. Managers, supervisors, and engineers in maintenance-related positions can expect to earn $50,000 to $75,000 annually. Fleet maintenance technicians can expect annual salaries between $32,000 and $45,000. Passenger transportation security has been enhanced by installation of video cameras and protective barriers between customers and vehicle operators. This has been in response to increasing criminal activities and violence on public transit and taxi services to better protect passengers and operators. Personnel are needed to install, maintain, and monitor security equipment. There have been incidents around the world that have involved radical or terror attacks and threats to transit operations, leading to increased security measures and vigilance. Transportation companies and transit authorities work with local and federal law enforcement to perform security duties. Specialized security personnel normally require training and experience in law enforcement and transportation security and familiarity with applicable technical devices. Security personnel can expect annual salaries of $32,000 to $48,000 depending on required skills, experience, and level of responsibility. Occupations within the facilities and security department include the following: ■ ■ ■ ■ ■

Security Specialist Security Guard Security Analyst Maintenance Technician Car and Vehicle Maintenance Technicians

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Maintenance Supervisor Mechanic Electrical Engineer Cleaner (Vehicle and/or Facilities) Track Maintainer

■ ■ ■ ■ ■ ■

Technology, Research, Design, and Development Technology is becoming increasingly important to the passenger transportation industry. Programmers, analysts, and technical support personnel are experiencing the greatest job growth in the industry. Customers want to be able to plan travel and purchase fares and ticket vouchers online, all securely and in real time. The operation of transportation systems requires specialized equipment for security, scheduling, and tracking, such as video links and global positioning systems. There also is increasing demand for technical services onboard public transportation. Many buses, rail transport, and ferry systems now provide customers with convenience options like entertainment or wireless Internet service. In order to remain competitive in the industry, advances in technology design also are crucial. Technology is constantly changing because the systems need to be efficient and effective but easy for customers and employees to use. Positions in the technology, research, design, and development require specialized training such as degrees in computer science and information systems. Programmer analysts’ and systems programmers’ salaries begin at about $32,000 and can go up to more than $84,000 annually. Private companies and public transit authorities employ research and development teams to look for more cost-effective transportation options, including cleaner-burning fuel. Customers increasingly seek out transportation options that provide service while doing less damage to the environment. Occupations within the technology, research, design, and development department include the following: ■ ■ ■ ■ ■

Data Analyst Programmer Analyst Systems Analyst Technical Analyst Application Manager

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Application Analyst Technical Specialist Technology Consultant Technology and Application Support Application Project Manager Technological Adviser Environmental Impact Analyst

Production and Operations Operations is the key to the passenger and transportation industry. A great deal of planning and scheduling goes on behind the scenes to ensure that customers are able to arrive at their intended destinations on time. When a taxi cannot be flagged down on the street, dispatchers are the liaison between the customer and driver of a taxi, limousine, or shuttle. A dispatcher collects location and service request information from customers or online requests and assigns them to appropriate drivers. Dispatchers can be asked to communicate to the customer in case of delays or complications. Dispatcher positions normally do not require any specialized training, but candidates need to be organized, patient, and good multitaskers. The annual median salary for dispatchers is about $30,000, although some earn as much as $50,000. Operations workers keep various transportation modes on strict schedules and assure the operation of the system in the most cost-effective and efficient manner. This may include implementing recommendations for commencement, improvement, modification, or elimination of a particular transportation service. Operations services clerks perform duties that overlap between operations and customer service. They dispatch and assign work to drivers and allocate vehicles for routes. Clerks also respond to trouble calls and relay information to supervisors or emergency services. Operations staff also are responsible for receiving and transferring lost property to customer service and emptying and replacing fare boxes. Annual salaries for operations clerks range from $22,000 to $34,000. Rail service requires employees to manage operations on the trains, the tracks, and in the rail yard. Rail yard and track workers spend most of their time outdoors in varying weather. Conductors must be at least twenty-one years of age and can be trained by their employers or required to complete training programs. In 2008, the U.S. Depart-

Passenger Transportation and Transit Industry ment of Labor estimated that the average annual salary for railroad conductors and yardmasters was $54,120, although many conductor positions are paid based on the number of miles traveled. Passenger transportation across water does have different challenges and therefore requires a uniquely trained staff. Ferry, water taxi, shuttle, and commuter boat companies regularly look to hire mates, seamen, deckhands, and operations engineers in order to keep their service operations running smoothly. Entry, training, and educational requirements for the majority of water transportation positions are regulated by the Coast Guard, and officers and operators of commercial vessels must be licensed. No special training or experience is needed to become a seaman or deckhand on vessels operating in harbors or other waterways. Mates often are referred to as captain assistants, and seamen and deckhands assist with docking operations and other shipboard duties.

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The annual wage range for ferry operations staff is $25,000 to $49,000. Occupations within the production and operations department include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Operations Supervisor Operations Engineer Dispatcher Operations Service Clerk Deckhand Seaman Mate Rail Yard Worker Train Conductor

Distribution Careers in distribution in the passenger transportation industry involve almost all modes of transportation, including drivers, chauffeurs, cyclists, motorcyclists, ferry captains, transit operators, and

The Washington State Ferry at Bainbridge Island, near Seattle. (©Natalia Bratslavsky/Dreamstime.com)

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train engineers. Many of these careers also overlap with customer service, as these individuals have a lot of direct interaction with customers. Most of these positions require clean driving records and proper certification. Federal regulations require that drivers who operate commercial vehicles hold stateissued commercial driver licenses. The average annual salary for taxi drivers in the United States and Europe is $26,000. Income may vary because of arrangements with a parent company regarding vehicle maintenance and operating expenses. Transit operators and drivers, such as bus drivers and subway operators, normally must work a range of shifts or split shifts to accommodate peak commuter travel times. North American wages for these positions range from $11.75 to $28.90 per hour, and most of these positions are unionized. Ferry captains are expected to possess managerial and leadership skills in addition to proficiency in navigation, seamanship, docking, and passenger

embarking and debarking procedures. All water transportation captain and officer positions are regulated and must be licensed by the Coast Guard. The average annual salary for a ferry captain is $80,000. Train locomotive engineers must be at least twenty-one years of age, and these positions are customarily filled by workers who have had previous experience in other railroad-operating occupations. Occupations within the distribution department include the following:

OCCUPATION

■ ■ ■ ■ ■ ■ ■

Taxi Driver Bus/Trolley Driver Ferry Captain Light Rail Operator Train Engineer Chauffeur Ambulance Driver

PROFILE

Bus Driver Considerations

Qualifications

Description

Drives a passenger-carrying bus; may be responsible for some maintenance.

Career clusters

Hospitality and Tourism; Transportation, Distribution, and Logistics

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

No high school diploma; on-the-job training

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

RES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Passenger Transportation and Transit Industry OCCUPATION

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PROFILE

Locomotive Engineer Considerations

Qualifications

Description

Drives electric, diesel-electric, and gas-turbine-electric locomotives; monitors the operation of the engine; oversees the function of the entire train; and maintains prescheduled timetables.

Career cluster

Transportation, Distribution, and Logistics

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

No high school diploma; on-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

IRS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Human Resources The human resources department is responsible for the employees. They ensure that each employee has the tools and training that they need in order to be effective and productive in their position. They manage a variety of tasks, beginning with the hiring of personnel, their training and development, compensation and benefits, retirement and dismissal. Human resources also ensures that all employee relations and practices comply with legal requirements and corporate policies. Most positions within human resources require a degree or equivalent experience. Managers in this field earn approximately $80,000 annually. This is often a challenging area, and employee relations require patience, collaboration, negotiation, and conflict resolution skills. In many smaller companies, managers and su-

pervisors take on the roles of human resources as part of their job responsibilities. Occupations within the human resources department include the following: ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Human Resources Coordinator Human Resources Analyst Administrative Assistant Human Resources Generalist

INDUSTRY

OUTLOOK

Overview The outlook for the passenger transportation and transit industry appears to be on the rise. The

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Passenger Transportation and Transit Industry PROJECTED

EMPLOYMENT

FOR

SELECTED

OCCUPATIONS

Transit and Ground Passenger Transportation Employment 2009

Projected 2018

Occupation

12,060

12,400

Bus and truck mechanics and diesel engine specialists

160,130

170,200

71,530

77,000

Bus drivers, transit and intercity

14,700

14,400

Dispatchers, except police, fire, and ambulance

76,220

89,900

Taxi drivers and chauffeurs

Bus drivers, school

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

United States Bureau of Labor Statistics expects to see an increase in ground passenger transportation of 2.1 percent and water transportation of 4.2 percent by 2018. The gains expected in this industry can be attributed to a number of factors, including fuel costs, vehicle maintenance costs, urban sprawl, and convenience. Safety and convenience are important to passengers, and many transportation businesses and municipal transit services are making improvements to service and implementing increased safety measures. People are finding it increasingly expensive to operate, insure, and park their vehicles and are looking to transportation options to reduce their costs but maintain convenience. According to the American Automobile Association, the estimated annual cost of driving a single-occupant vehicle ranges from $4,826 to $9,685, depending on vehicle type and mileage; the annual average cost for public transportation ranges from $200 to $2,000. A commuter who travels 120 miles daily round trip could save more than 1,888 gallons of gasoline every year by switching from using a car to using public transportation. Many transportation and transit companies have expanded hours and routes and upgraded fleet vehicles in order to increase ridership. Environmental concerns also provide incentive to riders to use mass transit. Without mass transit, there would be more than 2.6 million more cars on New York City

streets. For each mile traveled, fewer pollutants are emitted by transit vehicles than by single-passenger automobiles. Emissions and fuel efficiency will continue to improve as passenger transportation vehicles transition to cleaner-burning fuels. As improvements in service and convenience continue to be made in the passenger transportation industry, more customers will consider it a viable option. Governments around the world are providing cash and incentives to transit systems to make these improvements in order to reduce traffic congestion and environmental impact. Teams of researchers are working on ways to improve fuel efficiency, alternative fuel options, and transportation planning. Globally, private-sector influence over the transportation industry is growing. In many cases, inability of governments to efficiently administer public transportation has led to privatization. These collaborations have improved the performance of transportation modes and infrastructure. Examples of successful privatization include railroads in several European countries and privatized subways in Tokyo and Hong Kong. Employment Advantages The transportation industry was identified by the High Growth Job Training Initiative, which recognizes the need to prepare workers for new and increasing job opportunities in high-growth/high-

Passenger Transportation and Transit Industry demand and economically vital industries. Many of the positions in this industry do not require advanced education, and some companies will provide training, licensing assistance, and certification. Careers in transportation often are a popular choice for new immigrants. Some larger companies may provide above-average wages and benefits, while employees of smaller and independent transportation companies usually are able to determine their own benefits and working conditions. Many of the large transportation companies and urban transit systems have labor unions and provide opportunities for advancement, career development, and job security. Transportation employees are needed to work a range of shifts to accommodate around-the-clock service.

Occupations in the transit, rail, and ground passenger transportation sector that are expected to have the greatest projected employment by 2014 are bus drivers, taxi drivers/chauffeurs, conductors, engineers, and dispatchers. Occupations in the industry projected to have the greatest job gains are bus drivers, taxi drivers/chauffeurs, engineers, heavy mechanics, and service technicians.

RELATED RESOURCES FOR FURTHER RESEARCH American Public Transportation Association 1666 K St. NW, Suite 1100 Washington, DC 20006 Tel: (202) 496-4800 Fax: (202) 496-4324 http://www.apta.com

Annual Earnings The passenger transportation and transit industry is strongly influenced by fuel costs and convenience. Despite the love that North Americans have for their vehicles, between 1996 and 2001 public transportation travel increased by 23 percent and continues to rise annually. In 2007, the United States Economic Census reported that annual revenues for this industry were more than $40 billion. Global annual revenues in this industry in 2009 were more than $174 billion, and the average growth rate is projected to be between 2 and 4 percent annually to 2014.

PROJECTED

EMPLOYMENT

Federal Transit Administration, U.S. Department of Transportation East Building, 1200 New Jersey Ave. SE Washington, DC 20590 Tel: (202) 366-4043 Fax: (202) 366-9854 http://www.fta.dot.gov

FOR

SELECTED

OCCUPATIONS

Support Activities for Transportation Employment 2009

Projected 2018

1367

Occupation

27,490

31,800

Aircraft mechanics and service technicians

44,920

58,600

Cargo and freight agents

14,800

14,600

Dispatchers, except police, fire, and ambulance

53,370

56,700

Laborers and freight, stock, and material movers, hand

45,860

67,800

Truck drivers, heavy and tractor-trailer

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

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Passenger Transportation and Transit Industry

Institute of Transportation Studies, University of California, Berkeley 109 McLaughlin Hall UC Berkeley, Mail Code 1720 Berkeley, CA 94720-1720 Tel: (510) 642-3585 Fax: (510) 643-3955 http://its.berkeley.edu

graduate of the University of Calgary and has been associated with the passenger transportation industry since 2000, originally in a communications role and later as a research officer for transportation engineering research at the University of British Columbia.

FURTHER International Association of Public Transport Rue Sainte-Marie 6 (Quai des Charbonnages) B-1080 Brussels Belgium Tel: 32-2-673-61-00 Fax: 32-2-660-10-72 http://www.uitp.org Taxicab, Limousine, and Paratransit Association 3200 Tower Oaks Blvd., Suite 220 Rockville, MD 20852 Tel: (301) 984-5700 Fax: (301) 984-5703 http://www.tlpa.org Transportation Research Board, the National Academies 500 5th St. NW Washington, DC 20001 Tel: (202) 334-2934 Fax: (202) 334-2519 http://www.trb.org

ABOUT

THE

AUTHOR

April D. Ingram is a freelance writer and researcher in British Columbia, Canada. She is a

READING

Cudahy, Brian. Cash, Tokens, and Transfers: A History of Urban Mass Transit in North America. New York: Fordham University Press, 1990. Guess, George. Public Policy and Transit System Management. New York: Greenwood Press, 1990. Landefeld, Steven, Brent R. Moulton, and Cindy M. Vojtech. “Chained-Dollar Indexes: Issues, Tips on Their Use, and Upcoming Changes.” Survey of Current Business (November, 2003): 8-16. McDavid, Richard, and Susan Echaore-McDavid. Career Opportunities in Transportation. New York: Ferguson, 2009. Transit Cooperative Research Program. 2008 Annual Report. Washington, D.C.: Transportation Research Board, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Personal Services ©Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The personal services industry provides a wide range of private services to individual consumers. The industry comprises dating services, massage parlors, hair and beauty salons, escort services, valet parking services, laundry services, event planning, and a host of other services. It consists largely of small businesses and individuals, making it one of the most fragmented industries in the U.S. economy.

General Industry: Personal Services Career Cluster: Human Services Subcategory Industries: Astrology, FortuneTelling, Psychic, and Phrenology Services; Barber Shops; Beauty Salons; Body Piercing Services and Tattoo Parlors; Concierge Services; Dating Services; Dry Cleaning and Laundry Services (Except Coin-Operated); Escort Services; Event Planning Services; Garment Alteration and Repair; Hair, Nail, and Skin Care Services; Hair Removal Services; Massage Parlors; Nail Salons; Parking Lots and Garages; Personal Care Services; Personal Shopping Services; Spas, Saunas, and Baths Related Industries: Animal Care Services; Day-Care Services; Furniture and Home Furnishings Industry; Health and Fitness Industry; Home Maintenance Services; Landscaping Services; Rental and Leasing Services; Retail Trade and Service Industry Annual Domestic Revenues: $588.8 billion USD (U.S. Bureau of Economic Analysis, 2008) NAICS Numbers: 8121, 81232, 81293, 81299, 811490

History of the Industry The personal services industry includes services that were once performed in the home or were not available to a family. Before the 1960’s, most women worked in the home. They did the housecleaning, cooking, laundry, shopping, and errands. The majority of women now work outside the home, so they do not have time to perform all these household tasks. Their presence in the workforce is projected to keep growing. For this reason, many of these domestic tasks have been transferred to the marketplace. Another reason for the growth of personal services is the increase in unmarried people who hold jobs and most likely live alone. Personal services providers run errands and plan parties for working people who lack the time to perform such tasks themselves. 1369

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Personal Services

Other causes of the emergence of personal services in the public market include the rising wealth of families and the low cost of immigrant labor. In addition, successful personal service business models, such as franchising, have increased outsourcing of household tasks and growth of the personal services industry. In addition, technology has created a demand for services requiring specialized knowledge. Despite the great diversity of personal services, they are all focused on helping individuals and families in their daily lives. The goal of all of them is to help people. Most service workers enjoy the feeling of satisfaction they get from helping others. The personal service industry has four main functions: to help people feel better about themselves and look better, to provide care to people at different ages who need physical or emotional help, to help people when in crisis or when going

Hair and beauty are a large part of the personal services industry. (©Dreamstime.com)

through major changes in their lives, and to save clients time. The jobs available in this industry match a wide range of interests, skills, and education levels. Some are new jobs, whereas others have been around a long time. Some people want advice on what to buy. Others want help caring for their possessions. Others want their animals groomed, closets organized, pianos tuned, clothes washed or dry-cleaned, or items repaired. Personal service providers may save people time by running errands, standing in line for event tickets, or waiting at one’s house for an appliance to be repaired. They might plan children’s birthday parties or supervise the redecorating of one’s home. They may clean out or organize one’s closets and drawers, or every room in one’s home, including the garage. In the late 1990’s, leading personal services in terms of capital included the Aramark Corporation in Philadelphia; Weight Watchers International, headquartered in New York; GE Capital Mortgage in Cherry Hill, New Jersey; and Unifirst Corporation in Wilmington, Massachusetts. Companies are taking advantage of the personal services tag. A car dealer, for example, may advertise quality factory repairs that feature personal service. The personal feeling of the service, including staff attitude and amenities provided, can encourage repeat business. In other words, many providers of services in general seek to market them as personal services. The Industry Today The personal services industry is now well established and includes a number of niche industries. Major segments of the industry include laundry and cleaning services, garment repair, and hair and beauty services. More specialized niche services include baby shoe bronzing and phrenology. New segments have emerged, such as tanning salons and spray tanning. Among the largest business segments of this industry is dating services. Miscellaneous personal services listed by the NEC Corporation include many but not all personal services available today. These services, some of which are classified in the personal services industry and some of which are classified within other industries, comprise 160,829 U.S. companies. The “other” sector is the largest within personal services and includes a number of distinct indus-

Personal Services

The Contribution of Personal Services to the U.S. Economy Value Added

Amount

Gross domestic product Gross domestic product Persons employed Total employee compensation

$365.5 billion 2.5% 7.093 million $239.5 billion

Note: Comprises miscellaneous services that are not primarily financial, professional, scientific, technical, eductional, business-oriented, medical or health-related, food-related, entertainmentrelated, governmental, or geared toward social assistance. Source: U.S. Bureau of Economic Analysis. Data are for 2008.

tries. Some, such as formal wear and costume rental, have operated for decades, while others are relatively new. Online dating and matchmaking is one of the newer categories. Its growth in revenue averaged 17.8 percent per year between 2002 and 2007. Extermination, insect, and pest control services generate the second-highest profit margin among all personal services categories, at 12 percent. This is behind only hair-loss treatment and hair removal. The extermination sector is in a growth phase. This service, however, has moderate barriers to entry and heavy regulatory requirements that make it difficult for start-up operations to succeed. Some personal services industries are good lending prospects, while others are not. Finding good investments among millions of personal services is not easy. Industry fundamentals have to be evaluated, including revenue growth, risk, historical performance, and profits. According to IBISWorld, funeral homes and the “linen supply and diaper service” category exhibit the lowest risk ratings. These industries have been around a long time, but their growth predictions are low. Expected revenue growth through 2013 is below 2 percent per year. Nevertheless, these industries are considered to be low risk, even though returns will be low. The pluses, in addition to low risk, are low levels of volatility and moderate barri-

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ers to entry. Both lower the risk of default. Returns are not favorable, but investing in and lending to these businesses are considered relatively safe. Businesses that are not safe for investment include shoe-repair shops and nanny, butler, and other such household services. These services are in decline. Their revenue is predicted to fall during the coming years. Shoe repair is in decline because consumers buy new shoes instead of having older shoes fixed. Nanny and butler services are being replaced by more specialized personal services that achieve better results and save time. Shoe repair, nanny, and butler services are threatened by default and bankruptcy. Cash and revenue is static and at a low level. All these factors make these services unsafe for lending and investment. The best services for lenders and investors are child day care, pet grooming and boarding, and weight-loss centers. These industries are expected to experience strong revenue growth in the coming years. Profits are predicted to occur above the industry average, at 8 percent, 12 percent, and 9 percent, respectively. Profits will be higher as a result of franchising and low capital requirements. Franchises can also fade away. To maintain

Inputs Consumed by Personal Services Input

Value

Energy Materials Purchased services Total

$6.8 billion $39.3 billion $177.2 billion $223.3 billion

Note: Comprises miscellaneous services that are not primarily financial, professional, scientific, technical, eductional, businessoriented, medical or health-related, foodrelated, entertainment-related, governmental, or geared toward social assistance. Source: U.S. Bureau of Economic Analysis. Data are for 2008.

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growth, they need to introduce new products and services. This often includes developing a technology component. Franchises may also explore new demographic niches and markets in order to expand operations and develop more profits. Most personal services involve face-to-face communication between providers and clients and tend to serve the household market, although some serve businesses. Through the Internet, new virtual opportunities have also developed. New markets that used to be local may be made global by the Internet. For example, personal fitness training can take place online. Clients can ask questions about fitness goals online with a trainer, and they can watch exercise videos. Similar Web sites can offer many other services, such as those of wedding consultants and florists. One can become trained and certified online in some fields, such as the dry cleaning industry. In addition, virtual personal assistants can be of

help in business for minimal cost. A business does not have to hire a full-time office assistant, provide office space, or buy office equipment. A virtual assistant communicates with the employer through the Internet, e-mail, telephone calls, or fax. This person can do many things such as help out on a new project, compile data, manage workload, or find new marketing opportunities. Personal assistants can also hire grass cutters and snow removal services or order groceries to be delivered to one’s home. They can hire babysitters or housekeepers, pay bills, make travel reservations, confirm reservations, and book rental cars or hotel rooms. Numbering more than 4 million businesses and employing nearly 7 million people, the personal services sector is increasingly important to the U.S. economy, which overall is a service-based, rather than manufacturing-based, economy. The number of businesses in the industry is growing faster than the overal rate for all types of businesses in the

Dry cleaning businesses receive clothes and cleaning instructions from consumers, assign identifying tags to the clothes, and assign them priorities and complete-by dates. (©Lisa Mckown/Dreamstime.com)

Personal Services United States. Personal services have expanded at an annualized rate of 2 percent, compared to an average of 1.4 percent for the overall economy. One of the reasons for this fast growth is that the personal services industry has low barriers to entry. It requires relatively small amounts of capital investment, for example. New business owners need to make relatively few purchases to support their businesses. As a result, thousands of people enter this industry every year. For new services, a steady flow of income can be difficult to achieve, but one new category, online dating and matchmaking, has grown substantially in revenue. This trend of growth in personal services is sometimes difficult to track, because various personal services are categorized as parts of other industries. Little information on all personal services is consolidated within an individual category or set of categories, and isolating comprehensive data on personal services requires a great deal of effort.

INDUSTRY MARKET SEGMENTS Because so much of the personal services industry comprises individuals and small businesses, it is not useful to segment the industry by size. Instead, each type of service may be treated as its own industry segment. The sections below list some of these

OCCUPATION

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segments and their function within the industry and the economy. Laundry and Dry Cleaning Laundry and dry cleaning businesses receive clothes and cleaning instructions from consumers, assign identifying tags to them, and assign them priorities and complete-by dates. Once a schedule and service is determined, these businesses place the clothes in the appropriate washing or dry cleaning machines; mix and add detergents, bleaches, starches, and other chemicals that clean, stiffen, color, and dry clothes; sort clothes removed from dryers; and fold, wrap, or hang them on racks. They then sort the finished clothes according to their expected pickup date. In addition to knowledge of the principles and processes of laundry and dry cleaning, workers in this business have to be aware of and evaluate customer satisfaction and uphold the quality of their services. The laundry and dry cleaning industry has seen significant restructuring over the last two decades. Businesses in the industry used to be, and to some degree still are, family-owned neighborhood services, but a dramatic change has taken place, as much of this work is increasingly being done in industrial plants owned by corporations. Garment Sewing and Alteration Tailors work by sewing. They make dresses, do alterations, hem clothes, or mend clothes. They

SPECIALTIES

Laundry/Dry Cleaning Machine Operators Specialty

Responsibilities

Dry cleaners

Operate dry-cleaning machines, which clean clothing, drapes, and other materials that cannot be washed in water.

Fur cleaners

Restore fur garments by hand or machine, using brushes, pads, sawdust, corncob dust, and cleaning fluids.

Laundry operators

Perform various duties, such as receiving, marking, washing, finishing, checking, and wrapping laundry articles.

Machine washers

Tend one or more machines that wash commercial, industrial, or household articles, such as apparel, blankets, curtains, and rugs.

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Personal Services work with many different kinds of fabrics. They may also make home accessories such as curtains, tablecloths, and pillows. They may work full or part time, for themselves, for businesses, or on a client-by-client basis. As long as there is clothing, there will always be a need for qualified people who can sew, but it is difficult to make a living solely by sewing.

A seamstress fits a bridal gown. (©Ron Chapple Studios/Dreamstime.com)

OCCUPATION

Hair and Beauty Services Generally, beauty and haircare salons offer hair, nail, and skin care. They provide haircuts, hair styling, highlights, hair coloring, hair weaves, permanents, curling, scalp treatments, hair treatments, manicures, pedicures, nail sculptures, nail re-

PROFILE

Barber Considerations

Qualifications

Description

Cuts and trims hair, mostly of male customers.

Career cluster

Human Services

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

On-the-job training; junior/technical/community college; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Personal Services pair, facials, makeup application, and other services. Manicurists work on customers’ hands. Most manicurists also are pedicurists and also work on feet. In many salons, manicurists also remove unwanted hair from clients’ faces, legs, bikini areas, or arms. Manicuring is one of the fastest-growing specialties in the cosmetology business. Child-Care Workers Helping children learn and gain new skills can be rewarding. Child-care workers often

OCCUPATION

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SPECIALTIES

Cosmetologists Specialty

Responsibilities

Electrologists

Remove hair from the skin by using a round-tipped needle.

Hair stylists

Dress hair according to the instructions of the customer or the makeup person.

Makeup artists

Apply makeup.

Manicurists

Clean, shape, and polish customers’ fingernails and toenails; may also apply false nails, wrap nails, and provide other beauty services.

improve their own communication, learning, and other personal skills in their work. Jobs are available all year long for daytime or live-in child-care workers. Parents who travel with their children may hire child-care workers to travel with them. Fashion Consultants Some fashion consultants go into business for themselves or work in department stores. They can also become motivational speakers, become cosmeticians, or move into doing fashion design shows. Some travel to fashion hubs to learn about the latest trends in the fashion industry. Some specialize in bridal work or work with only one gender.

Many manicurists also work on toenails. (©Stefan Nedelchev/Dreamstime.com)

Housekeepers Housekeepers work in private homes, cleaning them for the owners. Housekeeping is the systematic process of making a home neat and clean. Housekeepers can also become household managers. For example, they can be called on to manage

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Personal Services OCCUPATION

SPECIALTIES

Housekeepers Specialty

Responsibilities

Butlers

Coordinate the activities of the household workers, receive and announce guests, answer telephones, deliver messages, serve food and drinks, chauffeur clients, or act as personal attendants.

Caretakers

Perform heavy housework and general home maintenance. They wash windows, wax floors, and hang draperies. They maintain heating and other equipment and perform light carpentry and gardening if the household does not have a gardener.

Child monitors

Attend to children in private homes.

Companions

Care for the elderly, disabled persons, or persons recovering from illness or injury in home settings.

Cooks

Plan menus, cook meals, clean the kitchen, order groceries and supplies, and may also serve meals.

General house workers

Clean homes, care for children, plan and cook meals, do laundry, administer the household account books, and perform numerous other duties. Many household workers work for two or more employers.

Personal attendants

Perform personal services for their employers in home settings.

organizational, financial, and day-to-day operations of a house or estate.

■

■

Parking Valets Parking valets park and retrieve vehicles at parking lots, restaurants, and hotels. American Valet, a company that hires parking lot valets, describes other requirements of this job: ■

■

■

■

■

■

One must be hospitable, attentive, friendly, and efficient with all clients. One must park and retrieve vehicles in a prompt and safe way. One must assist with whatever the client wants such as baby strollers and suit jackets. If requested, provide driving directions and other information to clients. One is responsible for following American Valet’s Safety and Loss Prevention Policies. One must receive claim checks before issuing keys.

■ ■ ■

One must work independently with minimal or no direct supervision. One must be able to run fast and stand during the entire shift. One must have good vision. One must tolerate long hours. One must have at least a high school diploma.

Personal Assistants A personal assistant helps in business and personal tasks, For example, a business person may have a personal assistant help with time and diary management, scheduling of meetings, correspondence, and note taking. Personal assistants also work with disabled people. Families in which both parents work may also employ personal assistants. Personal Services All these personal services vary widely in job description, earnings, and related features because they are so dependent upon the individual situa-

Personal Services tions in which they are provided. Personal services providers may be employed primarily by a few individuals or may serve hundreds of customers. They may work for upper-class clients seeking luxuries, or they may serve clients on relatively tight budgets who are seeking to save money by “outsourcing” their household chores to free more time to work. Thus, the variation in experiences within the industry is even greater than the variation in most other industries. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual income of all workers in the personal and laundry services industry in 2009 was $27,500. Hair dressers, hair stylists, and cosmetologists earned an average of $27,250, manicurists and pedicurists earned an average of $21,990, laundry and dry cleaning workers earned an average of $20,160, parking lot attendants earned an average of $20,080,

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and tailors engaged in garment alteration and repair earned an average of $24,680. Depending on the circumstances, a personal services provider may earn significantly more or less than these mean salaries. Clientele Interaction. All personal services providers must cultivate client relationships. They must be good communicators and able to relate to all types of clients. They should be approachable, cheerful, and tactful. Many providers develop close personal relationships with their clients—which may be gratifying but may also interfere with their business relationships. Amenities, Atmosphere, and Physical Grounds. If a personal service provider works out of an office or other commercial space, location is crucial. Offices should be easily accessible for clients and enjoy significant foot traffic. The atmosphere should be physically appealing and look relaxing

Valet parking is offered by many hotels, restaurants, hospitals, and shopping malls. (©Les Palenik/Dreamstime.com)

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Personal Services

and professional. Buildings should be landscaped so as to present an appealing entrance. Services should provide coffee and drink machines. Some of the services should have extended business hours to accommodate clients’ schedules. Those working as a team should be top employees in ability and work attitudes. Reputation is crucial, as is providing superior personal services. Typical Number of Employees. Personal services providers may be self-employed sole proprietors or may have several employees. Larger groups may work in corporate headquarters, such as laundries. Traditional Geographic Locations. Service providers may be located almost anywhere, depending on the service being provided. More luxuryoriented providers are likely to be located in urban or suburban areas, while more universally necessary services, such as dry cleaning, may be located in rural areas as well. Pros of Working as a Personal Services Provider. Americans value attractive appearances, so the demand for hair and beauty services will continue to thrive. Some hair and beauty salons are located in business buildings to be accessible to business people working there. Other providers travel to nursing and retirement homes. Some may specialize in makeup and hair styling for weddings or other special occasions. Some salons provide other services, such as massages and facials. Manicurists and pedicurists often work in salons. Waxing can be done to remove hair. Manicurists also work in nail salons separate from hair salons. An increasing number of nail salons are in cities. Some of them have spas. Fashion consultants have numerous opportunities. Some go into business for themselves or work for a business such as a department store and help customers choose clothes. They do not spend much time at a desk. Fashion designers develop skills in advertising, promoting, displaying, selling, and buying fashions. They may work in jobs such as fashion buying, public relations for fashion companies, sales in showrooms, and working on catalogs. Fashion journalism is also a possibility. In this field, consultants write and edit fashion magazines, trade journals, and Web sites. Tailors make their living with needle and thread. This is a very popular occupation for a mother or father who needs money but does not want to be

away from the children. The basic tailoring skill is sewing, but it is possible to put this skill to work in many contexts, such as dressmaking, gown design, handbag making, or costume design. Those who can work outside the home may be able to work in the fashion industry. This industry needs people who can sew and construct apparel. Certificate programs teach tailoring and the use of specialty fabrics. Child-care work sometimes seems routine, but new activities and challenges come each day. Housekeepers have income potential, are paid daily, have flexible hours, and do not work nights. There is great demand for this service. Workers can often choose where and when to work. Personal assistants often interact with high-level executives and may have opportunities for permanent employment if they are good at their contract jobs. They may accompany executives to business dinners, private parties, or working vacations. They may work with hotels when executives travel to be sure they have the desired personal services at their hotels. Some hotel chains are developing guest histories to track and anticipate the preferred services of each guest. Personal assistants can consult with hotels to help them develop profiles of their clients and anticipate their needs, even on an initial visit when a history has not yet been constructed. Usually, clients are happy to retrieve clean and well-pressed clothes. Compliments on their work can be satisfying to laundry workers. Parking valets are in demand, and they may enjoy flexible hours or tips depending on the position. Cons of Working as a Personal Services Provider. Classes required to work in hair and beauty can be expensive. Also, most states require providers to purchase and renew licenses to practice this occupation. New services in particular have to work hard to gain clients. It helps to be located where people notice the business. People in this business must stand a lot, wash towels, keep the floors clean of hair, and collect money from each client for their services. Fashion consultants have to be available when clients are available. This could include nights and weekends. Buying trendy clothes can be expensive, but people in this business must keep up with fashion changes. It also takes time to shop. If the economy is good, some personal shoppers get a lot of

Personal Services business, but in a recession there is considerable competition for work. Work in apparel production can be physically demanding. Some workers sit for long periods, and others spend many hours on their feet, leaning over tables and operating machinery. Operators must be attentive while running sewing machines, pressers, and automated cutters. They may need to wear protective clothing, such as gloves. Garment workers’ wages are low, and they face a constant threat of unemployment because of unregulated overseas competition. This industry is expected to lose 245,000 jobs by 2012, probably more than any other industry. Child care can be physically taxing, as workers are always standing or walking. They may have to stoop to the level of the child or lift the child. They constantly have to attend to each child’s needs and problems. Child-care workers must be constantly alert to possible trouble and deal effectively with troublesome children. Child-care workers may become dissatisfied with their jobs’ stressful conditions, low pay, and lack of benefits. They may eventually leave this work. The caregiving sector was hurt by the recession of 2007-2009. Higher unemployment has caused more people to be at home with their children, reducing the demand for child-care services. Revenue will decline in this sector. Still, the caregiving industry remains robust. Profit margins are high, averaging 10 percent. Laundries and dry cleaning establishments are often hot and noisy. Employees also may be exposed to harsh solvents, although there are now less toxic cleaning solvents. In addition to being exposed to contaminants, workers spend considerable time standing. Outside unionized plants, working conditions and wages are poor in laundries and dry cleaning. Workers mostly earn minimum wage. Workdays and workweeks are long, and hardly any laundry or dry cleaning business pays overtime. Dry cleaning workers inhale a cleaning fluid that is a carcinogen, and this can cause health problems. Summertime heat exposure is also physically taxing. Pressers suffer year-round from burns. Salaries are low for parking valets, and when cleaning cars, safety is a consideration because some cleaning products are toxic. Also, cleaning cars is physically demanding.

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Housecleaning is hard physical work. One is exposed to germs on a daily basis. Cleaning toilets is not the most respectable job. One cannot depend on a certain salary every week. To do their job well, personal assistants have to develop many skills across numerous areas. They have to be experts in these areas and produce error-free results. Their jobs are often high pressure and stressful. Costs Payroll and Benefits: Most personal service providers earn hourly wages, many of which are low. Benefits do not exist for self-employed persons, unless they are able to afford pension or other retirement plans. Benefits are offered to employees at the discretion of the employer and are relatively rare in the industry. Supplies: For hair and beauty workers, supplies include a washbasin, faucets, a styling register, styling chairs, supply trolleys, hair dryers, mirrors, scissors, shampoo, hair steaming machines, towels, clothes covers, and salon loungers. Other supplies include combs, brushes, curling irons, gloves, hairspray, and mousse. Manicure supplies include manicure sets, cuticle remover, towels, massage tables, magazines, pedicure equipment, and razors. Later, one might get a computer and software that provides clients a virtual view of a hair cut before the actual haircut is done. Fashion consultants require mirrors, makeup, color swatches, and fashion books and magazines. A video camera can help clients judge their body language and how well clothes look on them. Parking valets who clean and finish car interiors and exteriors need cleaning products. They also clean wheels, tires, fabrics, and other parts of a car. For some cleaning, they need a pressure washer. Other needed supplies include a vacuum cleaner, broom, and mop. Supplies such as cleaning solutions, polish, and sponges are also required. Laundry and dry cleaning businesses need washing and dry cleaning machines, clothes hangers and stands to hang clothes, tags for clothes identification, cash registers, and bags for clothes. Housekeepers need supplies such as brooms,

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brushes, buckets, cleaning and rinsing solutions, dusters, mops, squeegees, steam cleaners, vacuums, paper towels, polish, spray bottles, and steam cleaners. Some clients have these items on hand, but some do not and want the cleaner to bring supplies. Some have these supplies but still want the cleaner to bring them. This can be costly for the housekeeper. External Services: Personal service providers require minimal external services, but they may contract cleaning and maintenance of office facilities, as well as accounting or tax preparation services. Utilities: Depending on the service, utilities used may be supplied by clients. Businesses with storefronts or offices require water, sewage, electricity, gas, telephone, and perhaps Internet access. Taxes: Personal services providers must pay local, state, and federal taxes on their business income, which they may claim on their personal returns if self-employed. In such cases, they must pay self-employment taxes. Business owners with employees must pay payroll taxes. Many providers must also collect and pay sales taxes on their services.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The personal services industry contains a mix of different structures and job roles. Some service providers are commonly self-employed or own very small, often home-based, businesses. In this case, the owner fulfills most or all job roles and is responsible for the success or failure of the business. Garment cleaners and beauty salons require storefronts and generally have some employees, but even then multiple job roles must often be assumed by each person. Some personal services providers, such as fashion consultants and personal assistants, may act as contractors and fill several roles within several different businesses simultaneously. All these jobs are specialized in the sense that workers have to have the skills and knowledge to apply to their jobs. They also must often provide their own supplies. Some have to be licensed to practice with clients. The following umbrella categories apply to the

organizational structure of businesses in the personal services industry: ■ ■ ■ ■

Business Management Customer Services Sales and Marketing Facilities, Security, and Technology

Business Management Business managers oversee the operations of their companies. In small personal services companies, the business managers are usually the owners. They are often responsible not only for business decisions and staff management but also for staff training and dispatching. Sole proprietors must perform all necessary tasks themselves, including seeking work, performing work, and managing company finances. Some small businesses are partnerships. Often, co-owners of such businesses have complementary skill sets. Business management occupations may include the following: ■ ■ ■

Owner Partner Manager

Customer Services Customer services are the products provided by personal service providers. They include everything from sewing a button on a shirt to coordinating a large wedding. Service providers strive to simultaneously deliver requested services and promote themselves by cultivating lasting business relationships. Customer service occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Stylist Planner Consultant Housekeeper Dry Cleaner Caregiver Valet Personal Assistant

Sales and Marketing While most personal services providers thrive on client recommendations and word of mouth,

Personal Services they cannot assume such recommendations will occur on their own. Providers must create the necessary infrastructure to generate referrals, by checking in with clients, requesting reviews to post on Web sites and elsewhere, attending trade events, and taking advantage of other business promotion opportunities. Some personal service providers, even small ones, have dedicated promotional staff. In such cases, there may be one partner who provides service and a second partner who both secures clients and maintains the work schedule. Sales and marketing occupations may include the following: ■ ■

Owner/Partner Customer Relations Representative

Facilities, Security, and Technology Most personal services providers do not have dedicated facility staffs: They must provide for their own cleaning, maintenance and security or contract such services. One exception, however, is in the parking segment. Many parking lots in urban areas require visible security staffs, not only to prevent damage to vehicles for which providers may be liable but also because potential clients may not be willing to park in lots that lack security guards. The workers who can best use technology are fashion consultants and personal assistants. They can use video cameras, computers, and other technology to assist their clients. Fashion consultants use computer-aided design (CAD) software to create clothing on virtual models. Many businesses rely upon the World Wide Web to promote and even sell, schedule, or coordinate their services. Few small businesses have dedicated information technology staffs, but some employ office staff or other workers with technical knowledge who oversee their use of computers in addition to their other duties. Facilities, security, and technology occupations may include the following: ■ ■ ■ ■ ■ ■

Security Guard Maintenance and Repair Worker Custodian/Janitor Web Designer Webmaster Computer Technician

INDUSTRY

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OUTLOOK

Overview The outlook for this industry shows it for the most part to be on the rise. The number of businesses in the industry is growing faster than the average growth rate for all businesses combined. Personal services have expanded at an annualized rate of 2 percent, compared to an average of 1.4 percent for the overall economy. Service occupations will increase by 13.8 percent between 2008 and 2018, compared with an average increase of 11 percent across all occupations. There are so many different personal services that almost all people could find one they would enjoy providing. Among the major occupational groups, only professional occupations outpace personal service occupations and only by 1 percent. The industry with the most change is laundry and dry cleaning. Small neighborhood businesses in some areas have been replaced by coin-operated laundry facilities. Institutions such as hospitals, hotels, restaurants, and other industries are subcontracting their cleaning to industrial laundries, plants that may have as many as several hundred workers. Dry cleaners also had small operations but are now increasingly using large dry cleaning plants. These plants are squeezing out the small, locally owned operations. They have found a labor supply in immigrant women, although jobs of drivers, pressers, and cleaners or spotters are still mostly filled by men. There is not much change in hair and beauty salons, fashion consultants, child caregivers, valets, housekeeping, or personal assistants. Tailors have become more specialized, focusing their sewing skills on dressmaking, sail making, or wedding gown design. Prospects in child care are good because the industry has a high rate of turnover, so many workers leaving the occupation need to be replaced. They leave because of responsibilities in their own families, to study further, or for other reasons. Others leave to pursue other occupations or because of the low wages in child-care work. Child-care workers often work as assistants to preschool teachers. This helps them gain experience in child care. More states instituting preschool education could increase employment growth for child-care workers. Qualified people who want to be child-care workers should have little trouble finding and keeping a job.

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Earnings in fashion design can vary widely based as a personal assistant to becoming a business execon the employer and years of experience. Starting utive. Many kinds of other personal assistants opersalaries in fashion design tend to be very low, unate within almost every occupation. til designers become established in this occupation. Salaried fashion designers usually earn higher Annual Earnings and more stable incomes than self-employed or According to the U.S. Bureau of Economic freelance designers. Self-employed fashion designAnalysis, all personal services providers earned ers also must provide their own benefits and for combined gross revenues of $588.8 billion in 2009 their retirement. A few of the most successful selfand had a combined gross operating surplus of employed fashion designers, however, may earn $108.2 billion. many times the salary of the highest paid salaried designers. Jobs as parking valets will be plentiful and probRELATED RESOURCES FOR ably easy to get. Most do not clean cars. Instead they FURTHER RESEARCH just park them and return them when the owner gets back. American Association of Family and Job prospects are expected to be good in houseConsumer Sciences cleaning. Most job openings will result from turn400 N Columbus St., Suite 202 over. Many new jobs are expected in private Alexandria, VA 22314 households as more people purchase residential Tel: (800) 424-8080 cleaning services. There will also be more compahttp://www.aafcs.org nies that supply cleaning services on a contract basis. Employment of supervisors and managers of these workers is projected to grow more slowly than the crossPROJECTED EMPLOYMENT occupation average, increasing by only FOR SELECTED OCCUPATIONS 5 percent between 2008 and 2018. An increasing number of supervisors will Personal and Laundry Services be needed, however, to manage the growing number of housekeepers. Employment Much of the growth in personal as2009 Projected 2018 Occupation sistants resulted from laid-off workers who attempted to start their own busi62,290 72,200 Counter and rental clerks nesses. Starting a personal assistant 22,870 30,200 First-line supervisors/ business involves overcoming a relamanagers of personal tively low barrier to entry, as well as low service workers overhead costs. All one needs is a home office, phone, voicemail, and in319,040 435,500 Hairdressers, hairstylists, surance. and cosmetologists Hair and beauty will always be a 108,420 119,000 Laundry and dry-cleaning thriving business because both women workers and men want to look good. Employment Advantages Personal services constitute a feelgood industry. People who help others feel good about what they do. There are many career paths available, with a wide range of roles and salaries. They range from housecleaning to working

49,100

51,000

Pressers, textile, garment, and related materials

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Personal Services National Association for Family Child Care 5202 Pinemont Dr. Salt Lake City, UT 84123 Tel: (800) 359-3817 http://www.nafcc.org National Association for the Education of Young Children 1313 L St. NW, Suite 500 Washington, DC 20005 Tel: (866) 623-9248 Fax: (202) 328-1846 http://www.naeyc.org National Association of Child Care Resource and Referral Agencies 3101 Wilson Blvd., Suite 350 Arlington, VA 22201 Tel: (703) 341-4410 http://www.naccrra.net National Child Care Association 1325 G St. NW, Suite 500 Washington, DC 20005 http://www.nccanet.org National Child Care Information Center 10530 Rosehaven St., Suite 400 Fairfax, VA 22030 http://www.nccic.org National Extension Association of Family and Consumer Sciences P.O. Box 849 Winchester, VA 22604 Tel: (800) 808-9133 http://www.neafcs.org

ABOUT

THE

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AUTHOR

Ski Hunter, Ph.D., is a professor at the School of Social Work, University of Texas at Arlington. She teaches in the areas of human behavior, adult development, and personal relationships.

FURTHER

READING

Brown, Bobbi, and Sally Wadyka. Bobbi Brown Beauty Evolution: A Guide to a Lifetime of Beauty. New York: HarperCollins, 2002. Careers in Focus: Personal Services. 2d ed. New York: Ferguson, 2007. Clarke-Stewart, A., and V. D. Allhusen. What We Know About Childcare. Cambridge, Mass.: Harvard University Press, 2005. Ferri, E., and M. E. Siegel. Finger Tips: A Professional Manicurist’s Techniques for Beautiful Hands and Feet. New York: C. N. Potter, 1988. Mendelson, C. Home Comforts: The Art and Science of Keeping House. New York: Scribner, 1999. Riordan, T. Inventing Beauty: A History of the Innovations That Have Made Us Beautiful. New York: Broadway Books, 2004. Smith, G., and T. V. Beeck. “Personal Services: A Fast Growing Sector with Unique Risks.” RMA Journal, July/August, 2009, 60-64. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Wittenberg, R. Opportunities in Child Care Careers. New York: McGraw-Hill, 2007.

©Karl Naundorf/Dreamstime.com

Petroleum and Natural Gas Industry

ery to sales outlets and end users. Some energy companies produce both oil and gas, while others proGeneral Industry: Natural Resources duce only one or the other. Both Career Clusters: Agriculture, Food, and Natural Resources; oil and gas have upstream operaManufacturing tions involving exploration, deSubcategory Industries: Drilling Oil and Gas Wells; Oil velopment, and production, as and Gas Extraction; Petroleum Refineries; Petroleum and well as downstream operations Petroleum Products Merchant Wholesalers; Pipeline encompassing refining, transportTransportation of Crude Oil; Pipeline Transportation of ing, retailing, and accounting. Natural Gas; Pipeline Transportation of Refined Transportation includes loading Petroleum Products; Support Activities for Oil and Gas and unloading terminals, as well Operations as pipelines and transportation Related Industries: Biofuels Industry; Coal Mining fleets. Collectively, these activiIndustry; Electrical Power Industry; Natural Resources ties place the industry among the Management United States’ and world’s largest Annual Domestic Revenues: $1.9 trillion USD and offer a wide variety of career (Congressional Reference Service, 2007) possibilities. By the industry’s acAnnual Global Revenues: $4 trillion USD (estimate based counting, more than 2 million of on Forbes “Global 2000,” 2007) the 138.5 million people in the NAICS Numbers: 211, 486, 4247, 32411, 213111-213112 U.S. workforce in 2010 were directly employed in the gas and oil industry, and approximately 9.2 million people were working either in the industry itself or in businesses depenINDUSTRY DEFINITION dent on it. In terms of gross domestic product (GDP), industry publicists calculate that the indusSummary try annually adds over $1 trillion to the U.S. econThe petroleum and natural gas industry is conomy (approximately 7.5 percent of the country’s cerned with all facets of gas and oil operations, wealth). from exploration and extraction to the fuels’ delivINDUSTRY

SNAPSHOT

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Petroleum and Natural Gas Industry History of the Industry Although gas can occur in pockets apart from oil, oil and gas are normally both present at oil wellheads. Despite this geological copresence, however, the histories of these two industries in North America have differed considerably. The modern petroleum industry is older than the natural gas industry by a half century, and oil remains the more versatile and lucrative of the two commodities to this day. Initially focused on the production of kerosene, and with antecedents stretching back a thousand years to Baku, the American oil industry was born in the latter half of the nineteenth century when John D. Rockefeller established his Standard Oil monopoly by cornering the refining market and deploying a fleet of kerosene tankers to carry his product abroad. The invention of the incandescent lightbulb soon cut into kerosene’s appeal as a home lighting source, but the versatility of oil as a means of powering industry, heating homes, and moving naval and passenger ships quickly spurred the industry’s

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growth, as did government policy. Great Britain and other European countries founded national companies to locate, gain access to, and develop the foreign oil fields that their navies needed to protect their empires, even as at home they continued to rely upon coal for the preponderance of their energy needs. In time, two giant international oil companies emerged from their actions: BP (British Petroleum) and Royal Dutch Shell. Meanwhile, in the United States, the era of laissez-faire capitalism that had characterized the country’s economy gave way at the end of the nineteenth century to trust-busting. In 1911, the United States Supreme Court sanctioned the breakup of Rockefeller’s oil industry giant into its regional components. Even as separate entities, Standard Oil’s California, New York, and New Jersey units (later known as Chevron, Mobil Oil, and Exxon, respectively) remained among the largest petroleum corporations in the world. Not all of them remained vertically integrated, however. Those chronically

An oil rig off the coast of California. (©David Stelmach/Dreamstime.com)

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Petroleum and Natural Gas Industry

“crude short,” such as Mobil, were forced to join the European companies and, eventually, a pair of U.S.-based corporations (Gulf Oil and Texaco) in seeking oil abroad. World War I temporarily interrupted that search, even as it underscored the strategic importance of oil, but with the spread of low-cost, assembly-line-produced automobiles in postwar America and the economic boom of the 1920’s, the search for petroleum became more intense. The development of the Oklahoma and Texas fields and the discovery of oil in Saudi Arabia during the interwar period triggered momentary concerns of a glut on the oil market. Since World War II, however, the dominant fear has been one of oil shortages, either as the result of increased demand (especially from 1945 to 1950 and from 2003 to 2008) or as the result of producer states withholding oil shipments (as during the 1973 Arab oil embargo). In the era stretching from the end of World War II until the 1973 energy crisis, Western nations came to depend on oil they did not possess for the

energy upon which their lifestyles depended. Japan and western Europe, which relied on local coal for at least 70 percent of their total energy when World War II ended, recovered from the ravages of that war based primarily on Middle Eastern oil. Consequently, by the time of the 1973 crisis, it was imported oil that accounted for more than 70 percent of their energy. Meanwhile, 1957 was the last year that domestically produced oil met the United States’ petroleum demands, and by the time of the oil embargo, the country was importing oil to satisfy approximately 14 percent of its total energy needs. For years, the growing dependency on outside energy sources was masked by the fact that the global oil market was dominated by the Seven Sisters—Exxon, Mobil, Standard Oil of California, Gulf, Texaco, BP, and Royal Dutch Shell. As late as 1970, this Western oil consortium still accounted for approximately 80 percent of all oil produced outside North America and the communist world, as well as 70 percent of that area’s refining capacity.

An oil pump jack in southern Alberta, Canada. (©Karl Naundorf/Dreamstime.com)

Petroleum and Natural Gas Industry The consortium either leased or owned oil tankers carrying over 50 percent of the oil moving from producer to consumer countries. Nevertheless, even in 1970, the movement into international operations of several formerly domestic oil companies was undercutting the Seven Sisters’ ability to establish the market price of oil. In the aftermath of the 1973 energy crisis, that power passed to the major producer-exporting states that constituted the Seven Sisters’ replacement cartel, the Organization of Petroleum Exporting Countries (OPEC). Likewise, as OPEC states bought out the private petroleum corporations’ holdings inside their borders, control over reserves passed to a new set of “majors”—the stateowned oil companies, now capped by such giants as Saudi Aramco, the National Iranian Oil Company, Petroleos de Venezuela, and the Kuwait Petroleum Corporation. By the time these events were occurring in the petroleum industry, the American natural gas industry had been established for nearly four decades. In the early 1930’s, electronic welding techniques made it possible for gas producers to create a pipeline network capable of transporting natural gas to consumers throughout the country. This pipeline allowed producers to sell the gas that had previously been burnt off as a nuisance at oil wellheads in the gas fields of Oklahoma, Louisiana, Texas, and elsewhere. The natural gas industry blossomed, finding a growing market for its product in the utility companies supplying power to home consumers. It did so

Inputs Consumed by the Oil and Natural Gas Extraction Industry Input

Value

Energy Materials Purchased services Total

$9.7 billion $47.8 billion $62.1 billion $119.6 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

within the framework of the regulatory state that emerged during the Franklin D. Roosevelt administration. Because its primary purchasers were utility companies, which operated as governmentregulated monopolies, natural gas producers were soon regulated by federal statutes seeking to control the price of natural gas. These statutes prohibited natural gas producers from owning both the pipelines transporting gas and the utility companies utilizing it. U.S. natural gas producers moved out of the utility industry at that time, and they continue to lack the end-use supply network that petroleum corporations have in their service station outlets, even though most of the other regulations affecting the price of natural gas, as well as those limiting pipeline ownership, have subsequently been eliminated or relaxed.

The Oil and Gas Extraction Industry’s Contribution to the U.S. Economy Value Added

Amount

Gross domestic product Gross domestic product Persons employed Total employee compensation

$203.8 billion 1.4% 161,000 $26.9 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

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The Industry Today Despite their different histories, the petroleum industry and the natural gas industry continue to have much in common. Both are capital- and technologyintensive industries in ways that differentiate them from midsize and small-scale operations in other energy-producing sectors, such as strip or deep-shaft coal mining. Both—especially in their upstream research, extraction, and development activities—rely on employees with extensive training across a wide range of professions. Because oil and gas are the principal energy sources in the energy-intensive

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Petroleum and Natural Gas Industry

Projects also extract oil from such exotic sources as tar sands and oil shale. New extraction techniques have permitted the commercially viable development of relatively low yield offshore pools and mile-deep wells on land whose develValue Added Amount opment was not previously cost-effective. Gross domestic product $13.7 billion Lateral drilling is now capable of reaching Gross domestic product 0.1% oil deposits that would otherwise be unatPersons employed 41,000 tainable. Oil fields once thought to be Total employee compensation $4.7 billion commercially exhausted have been revisited with secondary and tertiary recovery Source: U.S. Bureau of Economic Analysis. Data are for techniques capable of producing more oil 2008. from them. New technologies have also affected downstream operations. For example, in 2010 Standard Oil increased the efficiency of its delivery and billing operations by introducing Western world and are increasingly sought by dea wireless system to electronically track its shipments veloping states, both the private corporations and from refineries to distributors. The system enabled the state companies involved in the industry are exthe company to plan more efficient routing, curpected to continue hiring new employees for years tailing the number of miles its tankers needed to to come. travel in order to deliver fuel to its service stations. The natural gas industry continues to be primarThe petroleum and natural gas industry’s job ily involved in the upstream production of natural market is complex, so career options within the ingas and in building and maintaining the pipelines dustry may be difficult to assess. The variety of jobs that carry it to public utility companies. Indeed, at all levels of skill and in a variety of different setwhether carried out by the producers themselves tings defies easy description. Many recent changes, or by the large pipeline industry that has grown up such as the ability to extract oil from tar sands, have around the oil and gas industry, building pipelines widened the job market, even as the introduction has become a major industry in its own right. Techof more efficient technologies and practices have nological changes have also made the production contracted that market in other areas. Economic of liquified gas into a bona fide export business for swings have also negatively affected the job market countries with large holdings and low consumption capacities. Thus, BP is committed to developing a market for its liquefied petroleum gas (LPG) in Asian and European areas, where populations Inputs Consumed by the dwelling beyond the reach of city utility services may find LPG attractive for home heating, cookPipeline Transportation ing, and hot water generation. Industry Technological advances likewise continue to shape the petroleum industry. Large-scale investInput Value ments in upstream and downstream activities conEnergy $2.0 billion tinue to be made by both private petroleum corpoMaterials $2.3 billion rations—many of which merged during the 1980’s Purchased services $10.1 billion and 1990’s—and the state-owned companies of the Total $14.4 billion OPEC producers. Coupled with the rising, OPECset price of oil on the world market, these developSource: U.S. Bureau of Economic Analysis. Data ments have widened the extraction end of the inare for 2008. dustry into offshore operations conducted even in turbulent waters such as those of the North Sea.

The Pipeline Transportation Industry’s Contribution to the U.S. Economy

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Building pipelines has become a major industry in its own right. (©Keng Po Leung/Dreamstime.com)

when plunging demand and oil prices have encouraged industry restructuring and mergers, with a resultant downsizing of operations.

development and production activities. Various firms specialize in these segments. However, large, vertically integrated corporations also exist that operate within all three segments at once.

INDUSTRY MARKET SEGMENTS

Retailing and Distribution The principal businesses operating at the end of the downstream activities of the oil and gas industry are the public utility companies that purchase natural gas and distribute it to home and business customers, as well as the service stations and home fuel companies that distribute transportation fuels and home heating oil to local customers. Potential Annual Earnings Scale. Earning opportunities related to work within the public utility sector depends on the position, with jobs running from engineering and managerial positions at the top to repair and meter reading positions in the trenches. Overall, according to the U.S. Bureau of Labor Statistics (BLS), the average salary among all workers in the utilities industry in 2009 was $61,530 per year.

The profiles of the various sectors in the petroleum and natural gas industry do not correspond directly to the profiles of other industries, which generally include small, midsize, and large businesses. Even the businesses that are small relative to others in the industry are large by most standards. Independent firms, such as Ashland and Marathon Oil Corporation in the United States, are often involved in large-scale, expensive energy extraction and refining operations, and some produce both natural gas and oil. It may be more useful to segment the industry into downstream retailing and distribution activities, downstream transportation activities, and mid- and upstream

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Petroleum and Natural Gas Industry

Oil retailing is a thriving business with a massive number of outlets. BP alone estimates that it serves 10 million motorists daily with its 44,000 service stations around the world. The United States has approximately 175,000 retail outlets dispensing gasoline and diesel fuel—a number smaller than before the oil industry restructured in the 1990’s, but also one that remained relatively stable throughout the first decade of the twenty-first century. The earnings of proprietor-operated fuel stations vary depending on their location and nature. The highest profits are normally garnered at stations lining major highways and offering twentyfour-hour convenience-store shopping. These hybrids continue to grow in number and were already grossing slightly under $800,000 per year in 2000 through their convenience-store sales alone. Also profitable are fast food-service station hybrids and the now proportionally few stations still offering full-service automotive maintenance, with mechanics on duty and selling tires, batteries, and other automotive supplies. Their gross receipts are apt to be less, but their needed staff is also smaller because their hours of operation tend to be less as well. Profits also depend on the locale of an operation. According to the BLS, in 2009 the average annual salary of automotive mechanics and technicians employed at gasoline stations was $33,850, while the average salary of service station attendants was $19,890. Clientele Interaction. Except perhaps for highway service stations, where most customers are transient in nature, clientele interaction is important for both the gas and oil outlets at the local level. As regulated monopolies, public utility companies enjoy captive markets, and customers can grow restive when rates increase substantially. Public relations thus becomes a major part of their business. Meanwhile, the high level of competition most service stations face from other service stations, convenience stores, and automotive repair shops makes customer satisfaction crucial to repeat business, whether the face of the business is that of a friendly cashier or a proprietor who knows the names of regular customers. Amenities, Atmosphere, and Physical Grounds. The twenty-first century has witnessed significant changes in the distribution networks for oil and gas at the local level. Natural gas continues to be distributed through a network of over one

An engineer stands on pipes to look at part of the oil and gas refinery. (©Dreamstime.com)

thousand government-regulated natural gas distribution companies that collectively control over 1 million miles of pipeline linking them to their local home and business customers. The majority of these firms still operate as government-granted monopolies in their areas. Because state governments regulate them, those governments can impose minimum standards for hiring upon these companies. These standards must be investigated by anyone seeking employment at a natural gas utility. Public utility companies consciously maintain a clean ambiance, so office workers generally enjoy orderly and climate-controlled workplaces. Field workers, by contrast, spend most of their time outdoors, in all kinds of weather. Those laying and re-

Petroleum and Natural Gas Industry pairing pipelines work with heavy machinery underground and are subject to industrial hazards common to such occupations. Older cities still retain companies committed to delivering fuel oil for home heating systems, and the existing networks for delivering aviation fuel to airports have changed little. However, the typical neighborhood service station has been radically transformed since 1990. Most typically, it has turned into either a miniconvenience store-gasoline station hybrid or it has paired with a fast-food franchise—or both. Marquees have also changed, as oil industry mergers have occurred and the outlets of acquired companies have closed or hoisted the logos of their new parent companies. Not infrequently, abandoned properties have been purchased by smaller, independent oil company operatives or convenience store chains contracting with oil suppliers, such as the QuikTrip convenience store stations in the Southwest. Convenience and food store hybrids necessarily must project clean appearances. However, given the price of land, whether purchased or leased, metropolitan full-service gasoline stations are not usually located in prime, attractive settings. Mechanics working in service bays are generally surrounded by the noise and grime associated with automotive repair throughout their workdays. Typical Number of Employees. The positions available at all levels in the public utility field are directly proportional to the size of the metropolitan or rural districts being served. As for service stations, the principal variables are whether they are twenty-four-hour operations and whether they include convenience stores with one or two cashiers or fast-food establishments with separate food staffs. Twenty-four-hour operations need staff around the clock; however, given the fact that most pumps are now self-service, these operations can often function with staffs of three or four persons per day, or a total of six to seven employees on rotating schedules. Full-service stations with mechanics on duty can also suffice with three or so people, including their proprietors. However, they are usually open only ten to twelve hours per day, and only five or six days per week. Traditional Geographic Locations. Gas distributors, public utility outlets, service stations, home fuel oil services, and suppliers of aviation fuel are nationwide sources of employment, given

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the dependency of Americans on natural gas and transportation fuel. Pros of Working in Retailing or Distribution. The principal advantage of employment in this segment is the ability to work in one’s home locale, normally on a set schedule. Retail and distribution workers often have opportunities to interact with customers. Positions in the public utility field carry a high level of job security, and supervisors and home office staff enjoy white-collar working conditions. Cons of Working in Retailing or Distribution. Public utilities are generally bureaucratic organizations. Service station-convenience store hybrids demand low energy but pay low wages. Mechanic jobs, while potentially gratifying, require multitasking and working under time pressures to keep customers happy. Managing or owning a service station involves shouldering the responsibilities of any small enterprise owner (managing payroll, paying bills, maintaining inventory, and so forth), but it may not come with the freedom usually associated with self-employment, as large corporations often set the prices to be charged at each station. Costs Payroll and Benefits: Public utilities pay salaries or hourly wages, and they generally offer relatively generous benefits. Service stations pay hourly wages and rarely pay benefits. Supplies: Various businesses in this segment may require retailing supplies, such as cash registers and credit card machines; tools for automotive repair, pipeline repair, and road excavation or construction; cleaning supplies; vehicle fleets; office supplies and equipment; and so on. External Services: Retailing and distribution businesses may contract accounting and tax preparation, maintenance, landscaping, security, or advertising services as necessary. They often require insurance as well, and may need to contract hazardous waste disposal services if those are not provided by local government. Utilities: Businesses typically pay for electricity, water, sewage, oil or gas, telephone, and Internet access. Taxes: Private businesses must pay local, state, and federal corporate and property taxes. Business owners may report income on their personal

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Petroleum and Natural Gas Industry

returns, in which case they must also pay selfemployment taxes. Public utilities are exempt from local taxes. Transportation Pipeline companies transport natural gas from processing plants to public utility companies. Pipeline companies and land and sea transportation fleets transport oil from extraction sites to refineries to distribution terminals to service stations. Oil tanker trucks and sea-going oil tankers may be owned and operated either by oil producers or by contracted agents of the industry. The principal independent businesses in this segment are regional pipeline companies. Potential Annual Earnings Scale. According to the BLS, the average salary of all employees of pipeline companies in 2009 was $62,700. Engineering managers in the field earned an average of $132,040, while operations managers earned an average of $112,060. Petroleum engineers in the field earned an average of $103,070, control and valve installers and repairers earned an average of $50,160, and front-line production workers earned an average of $56,110. Among land and sea workers, heavy truck drivers in the oil and gas industry earned an average of $38,400 in 2009. Sailors and marine oilers earned an average of $50,860, while captains, mates, and pilots earned an average of $89,060. Clientele Interaction. Aside from lobbying state and federal officials, the pipeline business operates largely outside the sight of the public. Natural gas pipeline companies, when not owned by suppliers, necessarily attempt to maintain good customer relations with their suppliers and those at the opposite end of the pipeline charged with marketing their wares to utility companies and local consumers. However, because of the heavily automated nature of the pipelines themselves, clientele interaction is low overall in the pipeline industry. Amenities, Atmosphere, and Physical Grounds. Those working in the headquarters and field offices of pipeline companies enjoy comfortable work environments, often in prime locales in major cities. Those who drive trucks, repair pipelines, and work on sea-going oil tankers lack most of these amenities and work long hours at physically demanding jobs, often in uncomfortable circumstances. For the latter, the amenities—like the

advantages of their jobs—are highly personal. The sea can be alluring and a life on it, even with hard work, pleasurable to some. The same is true of the open road, and the task of muscling an eighteenwheeler from refinery to neighborhood station can be satisfying. The physical landscape of the truck driver is unlikely to inspire, however, and the work can be grueling. Typical Number of Employees. The number of employees at all levels in the pipeline industry depends on the geographical scale of operations and the pipeline mileage being managed by the individual company. The average number of employees per company is in the low hundreds, including accountants and clerical employees operating at corporate headquarters. Specific numbers are particularly hard to locate for the petroleum wing of the pipeline business because many of those professionals (engineers, for example) who become involved with oil pipelines are also involved in upstream activities in the industry. Estimates of the number of petroleum tanker drivers serving petroleum producers and refineries are even more difficult to report. This segment of the industry is now carefully watched by the Department of Homeland Security because of the danger of terrorists using oil tankers as rolling bombs. Land transport also occurs largely within vertically integrated companies that do not always differentiate in their reports the specific numbers performing each task when those tasks are similar, as in the case of truck driving, which can include driving tankers, rig hauling, carrying explosives, driving vacuum trucks transporting wastes, and driving supply trucks. Finally, the number of seamen needed on board an oil tanker depends on the size of the tanker itself. Supertankers are becoming increasingly automated, shrinking jobs in the field. However, slots are not hard to find for qualified seamen. ExxonMobil alone maintains a fleet of over fifty tankers. Land drivers are likewise in demand, the number depending on the size of the petroleum corporation’s refinery output and the area being served. Traditional Geographic Locations. The oil pipelines transporting petroleum from wellheads to refineries in the United States tend to cover the short distances typically separating extraction operations from refineries. Work in this sector is thus concentrated in the states where the most oil is

Petroleum and Natural Gas Industry produced. Refined oil and processed gas enter the national network of pipelines, and pipeline managing positions can exist anywhere along that network. Trucks carrying petroleum normally serve areas within defined radii of oil refineries, as well as pipeline terminal points across the country. Gas pipeline companies are regionally organized. Each company tends to operate in a general region such as the Southwest, the Pacific Northwest, and so forth. Thus, a career with one of these companies would be largely spent within one such region. Pros of Working in Transportation. Working midstream in the oil and gas industry is not like working for a midsize business in most sectors. The regionalized gas pipeline companies tend to be well established, have somewhat captive client bases, and enjoy low competition. They offer very secure employment. The same can largely be said of careers involving the transport of petroleum and petroleum products. Employers are most likely to be vertically integrated economic giants, capable of offering competitive wages and above-average benefits packages. Workers also enjoy the job security of dealing with commodities that are likely to remain in high demand throughout their lifetimes. Finally, the industry offers positions for people who like to work alone (such as truck drivers and pipeline maintenance workers), as well as for those who like to work on teams (at company headquarters). Cons of Working in Transportation. There are no “walk-in” positions in the oil and natural gas transportation industry segment. College degrees and sometimes advanced work are required for many positions involving natural gas pipelines. Various certificates and licenses are absolutely required to drive a big rig or to become a merchant marine. In addition, many positions require security checks and drug testing. Elsewhere, although job security is good, some positions are being shrunk by further automation (electronic rather than spot testing for pipeline breaches, for example), and other positions (such as driving a tanker loaded with highly inflammable liquids) are hazardous. Costs Payroll and Benefits: Oil and natural gas transportation workers receive salaries or hourly

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wages. Both the pay and the benefits provided by firms within the industry are usually superior to the average pay and benefits across all industries. This high compensation reflects the lucrative nature of the business, the size of most companies, and the expertise necessary to obtain a job in the industry. Supplies: The essential supplies required for oil and natural gas transportation are very large ticket items. Depending on the size of the pipeline (41 inch or 45 inch diameters, for example) and the nature of the terrain, the cost of laying a pipeline can average $500,000 or more per mile. Likewise, the cost and maintenance of a fleet of trucks equipped to transport refined oil can range into the tens of millions of dollars, and the cost of a single sea-going oil tanker starts at $100 million. Depending on the price of oil and the calmness of the sea, the cost of operating such a vessel begins at more than $30,000 per day. External Services: To assure the integrity of stockholder reports and the management of pension funds (or stock options), and to satisfy tax authorities, outside auditors are commonly contracted by petroleum and natural gas companies. Most other functions at these large corporations are handled in-house, although they may contract lobbying consultants or public relations firms to supplement existing staff for specific projects. Insurance of a natural gas or oil corporation’s holdings also represents a significant expense. Utilities: Petroleum and natural gas corporations are not only capital-intensive businesses but also energy-intensive ones. Pipeline pumping stations and the equipment necessary to keep the pipelines within prescribed temperature ranges require electricity. Gas, electrical power, water, and sanitation services are also required in all facets of their operations, from home offices to field stations. Measured against the costliness of the supplies necessary for those involved in gas and petroleum transportation activity, however, these are comparatively small operating expenses. Taxes: Oil and natural gas companies must pay local, state, federal, and international corporate and property taxes, as well as industry-specific taxes, such as severance fees and other taxes on fossil fuels. They also, however, have access to

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Petroleum and Natural Gas Industry

tax benefits that can greatly reduce their overall tax burdens. In addition, the international nature of the business can help reduce taxes, as, for example, profits or losses sustained in transporting petroleum and refined fuels can be enfolded for maximum tax benefit into the tax filings for overall corporate operations, in which taxes paid to foreign governments can offset part of their domestic tax bills. Other Expenses: Transport companies must maintain large contingency funds in the event of accidents and may face very significant expenses in the rare event of an environmental disaster. Development and Production The largest segment of the petroleum and natural gas industry is the upstream segment. These companies and corporate divisions locate fossil fuel deposits, determine how to extract them, engage in extraction, and refine the raw resources into usable fuel and other products. Geologists begin the search for oil and gas, using the newest techniques, which today means seismic instruments that use sound-waves to locate oil and gas deposits—a practice that has transformed the search process. Petroleum engineers, environmental engineers, and construction engineers all contribute to the installation of largely automated drilling and extraction equipment. This equipment is maintained by drilling supervisors with the assistance of various skilled personnel and general hands, still known as roustabouts in the industry. Engineers plan pipelines to transport oil and gas from the fields to nearby processing plants. Gas plants purify natural gas and then add odor to it for safety purposes because purified natural gas is odorless and potentially lethal. Oil refineries, while typically near the fields, can also be half a world away. Potential Annual Earnings Scale. Because of the skill levels required, the often arduous nature of work, and the frequently harsh conditions in which they work, wage and salaried personnel in the oil and gas industry are normally paid at least 10 percent more at all levels than are employees performing similar tasks in other sectors of the mining category. Highly skilled workers and employees drawn from professionals are similarly well paid. According to the BLS, the average salary of general and operations managers in the oil and gas ex-

traction industry in 2009 was $139,630. Industrial production managers earned an average of $119,590, while engineering managers earned an average of $151,650, and petroleum engineers earned an average of $126,090. Engineering technicians earned an average of $68,720, geoscientists earned an average of $136,270, and geological and petroleum technicians earned an average of $63,600. Petroleum pump and refinery operators earned an average of $57,780, and gas plant operators earned an average of $54,050. Roustabouts earned an average of $36,400. Clientele Interaction. The large revenue and profits that the oil and gas industry regularly report have frequently provoked public criticism and legislative action. Especially in the wake of the 2010 Deepwater Horizon disaster in the Gulf of Mexico, the industry has found itself targeted by public interest groups. For this reason, the industry maintains a highly skilled public relations staff and employs experienced lobbyists to make its case in the media and before governing bodies. Otherwise, the dialogues of those involved in the business of finding, developing, producing, and processing oil and gas tend to be in-house, not between producers and clients. Amenities, Atmosphere, and Physical Grounds. Executives, scientists, accountants, and legal staffs working in home offices enjoy the creature comforts of modern civilization and, often, state-of-the-art facilities and equipment. The same is true of the industry’s engineers and geologists when they are not in the field. However, field assignments can take these scientists far away from their amenities. Field workers engaged in construction, extraction, and refining activities, such as pipeline pumping station managers, are in the field most of the time and for the life of a given field. Moreover, even with automation technologies, field work can be arduous. It is performed in areas where the outside temperature may be uncomfortably high or low, generally around the clock. Typical Number of Employees. There are approximately 161,000 Americans domestically employed in the development and production of oil and natural gas. Most of these work in the extraction end of the business, either in drilling operations or in general (roustabout) labor. Small independent producers concentrating primarily on

Petroleum and Natural Gas Industry extraction activities often operate with fewer than twenty full-time employees. They contract additional drillers, accountants, and other staff when needed. By contrast, ExxonMobil, the largest employer in the industry, employs nearly eighty-five thousand people worldwide. Traditional Geographic Locations. The major oil firms have headquarters in major cities, notably in Houston and New York in the United States and in world capitals abroad. They also have regional offices in urban and international regional centers. Field operations occur wherever oil or natural gas are located and extractable, anywhere in the world. Domestically, the greatest oil-producing states are Texas, California, Oklahoma, and Louisiana. Refineries are normally located either near oil fields, outside industrial centers where the demand for refined oil is high, or at seaports large enough to serve oil tankers. Pros of Working in Development and Production. Oil and natural gas companies are most likely to be vertically integrated economic giants, capable of offering competitive wages and aboveaverage benefits packages. Workers also enjoy the job security of dealing with commodities that are likely to remain in high demand throughout their lifetimes. Cons of Working in Development and Production. Because oil corporations are so large, employees may feel lost in the crowd and may be frustrated by corporate bureaucracy. Corporate decisions are made based on the bottom line, and during economic difficulties retrenchment decisions are made. Thus, individual companies may cut jobs in some areas to refocus on others as their circumstances change. Also, even when the overall picture is positive, the introduction of new technologies or changing oil prices can significantly affect specific career paths. Finally, the geologists, engineers, and general managers involved in the industry spend considerable time on the road. The members of drilling crews must also be willing to move as old fields become automated and experienced personnel are needed in new locales. Costs Payroll and Benefits: Petroleum and natural gas companies are large employers of personnel at all levels, offering competitive wages and fringe benefit packages, stock options, and attractive

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pension plans. For a major multinational concern, payrolls and benefits may represent a cost of tens of billions of dollars. Supplies: Fossil fuel development and production requires extremely complex and heavy machinery, including massive drilling equipment. Refineries require industrial-scale machinery as well. Even the seismological equipment now used to prospect for oil and gas can be extremely expensive. In addition to these supplies, corporations require all standard office business supplies. External Services: Oil and gas corporations contract outside auditors and security consultants. Large corporations tend to handle all other tasks in-house, whereas smaller independent concerns often contract maintenance, legal, engineering, custodial, and other services. All oil and gas companies require insurance. Utilities: Utility costs ranging from the lighting of corporate headquarters to the powering of drilling and refining operations are significant for even independent oil companies, and they are very sizeable for the majors, albeit dwarfed by the cost of constructing and maintaining production and refining facilities. In some instances, those costs have encouraged petroleum companies to seek alternative energy sources. For example, solar power units requiring little maintenance have been installed when feasible for some purposes on offshore drilling platforms. Taxes: Oil and natural gas companies must pay local, state, federal, and international corporate and property taxes, as well as industry-specific taxes, such as severance fees and other taxes on fossil fuels. They also, however, have access to tax benefits that can greatly reduce their overall tax burdens. In addition, the international nature of the business can help reduce taxes, as, for example, profits or losses sustained in transporting petroleum and refined fuels can be enfolded for maximum tax benefit into the tax filings for overall corporate operations, in which taxes paid to foreign governments can offset part of their domestic tax bills. Other Expenses: Oil and gas companies must maintain large contingency funds in the event of accidents and may face very significant expenses in the rare event of an environmental disaster.

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Petroleum and Natural Gas Industry ORGANIZATIONAL STRUCTURE AND JOB ROLES

The U.S. natural gas industry encompasses 6,500 producers, 530 processing plants, 160 pipeline companies operating 300,000 miles of pipeline (including 180,000 miles interstate), 123 natural gas storage operators with 400 underground facilities, and 260 companies marketing natural gas. The oil industry is similarly spread out, with numerous companies involved in both oil and gas. The petroleum industry encompasses the global search for oil, its extraction, its refining into transportation fuel and chemical products, its transportation, and its distribution through a network of company-owned or -licensed service station retailers, whose customers can often charge their purchases on oil-company credit cards. Consequently, careers in this broad industry reflect its scope and the intertwined nature of its operations across the multiple hiring sectors it encompasses. The following umbrella categories apply to the organizational structure of businesses in the petroleum and natural gas industry: ■ ■ ■ ■ ■

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Business Management Customer Service Sales and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources

$31 billion in order to increase its natural gas holdings in the United States. Top management tends to be drawn from people who have spent careers in the industry and includes those with field experience in engineering positions, as well as those who have made careers in business management. They oversee the overall and sector operations of their companies, make decisions involving resource allocation to upstream and downstream activities, and engage in longterm planning. Operational managers are accountable to them; they are accountable to stockholders. Also at each corporate headquarters are the corporation’s own certified public accountants and its legal staff. Outside auditors may be employed to help produce annual shareholders’ reports. However, the large corporations have their own staffs and their own legal departments, composed of both lawyers and paralegals. Finally, at the lower echelons, corporate headquarters require large support staffs of administrative assistants, general technicians, and clerical personnel, all of whom are normally able to rise to supervisory positions over time and most of whom are eligible to participate in corporate stock-option pension plans. Given the industry’s performance over the past four decades, these pension plans have produced very comfortable retirements. Business management occupations may include the following: ■ ■ ■ ■ ■ ■

Business Management There is an overwhelming consensus among objective observers that the oil and gas industry is well managed. Indeed, the term understates the case. Even during the global financial crisis of 20072009, with the resultant drop in demand for their products, the larger private oil and gas corporations continued to record overall profits on their vertically integrated concerns. Many also managed to increase their overall revenue even as the industry contracted, and several of the majors continued to expand their acquisitions, as in December of 2009 when ExxonMobil acquired XTO Energy for

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■

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President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) General Counsel Engineering Manager Billing Manager Vice President of Exploration and Development Vice President of Public and Government Relations Accountant/Auditor Certified Public Accountant

Customer Service Two areas are subsumed under customer service. First, there are the managers in charge of coordinating the relationships among the internal components of the vertically integrated corporation, who are inwardly their own customers, or of

Petroleum and Natural Gas Industry communicating with the consumers of their products, such as refineries, brokers, and so on. Second, there are those who are involved in field operations. For example, schedulers coordinate the delivery of refined fuels to service station outlets, home heating oil companies, and airports. Direct contact with individual end users is normally left in the hands of the retail outlets in the oil industry, the utility companies in the gas industry, and other third parties. Customer service occupations may include the following: ■ ■ ■ ■

Public Relations Director Public Relations Representative Information Services Specialist Scheduler

Sales and Marketing Because of the structure of the industry, the similarity of the product from producer to producer, and the essential nature of that product, there is less aggressive sales and marketing activity in the oil and gas industry than in most other industries. Salesmanship is more likely to occur before a state legislature concerned with high gas prices than to be involved in inducing customers to purchase a particular brand of gasoline, although such ad campaigns occasionally occur. Those campaigns normally originate within the public relations departments of corporate headquarters, where advertising specialists are on staff. Public relations campaigns normally originate in, or are coordinated by, the American Petroleum Institute, which has looked after the industry’s interests almost since the day when the Standard Oil monopoly was broken. Either as a separate department or an ancillary to sales and marketing, those corporations with their own credit cards, which include the majors that operate retail station outlets, maintain their own credit card operations and hire staffs composed of programmers, computer technicians, customer service representatives, and clerical personnel. Sales and marketing occupations may include the following: ■ ■

Vice President of Sales and Marketing Sales Manager

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Marketing Manager Market Research Analyst Sales Representative Credit Operations Director Account Executive Account Associate

Facilities and Security The security of oil and gas property and holdings has always been of concern, if only because the equipment employed is valuable and requires guarding against theft. Environmentalists have sometimes been angered by drilling sites, and protecting facilities against political vandalism has become a more recent concern. Since the terrorist attacks of September 11, 2001, however, the security of all facets of this industry has been given priority, with concerns ranging from guarding refineries and gas fields from terrorist attacks to preventing the hijacking of oil tankers that could easily be made to function as rolling bombs. Employment opportunities in the security sector go beyond interior patrolling. Perimeter guarding of facilities against intrusion, or even photographers, is needed, as are computer and network security experts. Small staffs of people with military, civil-government, or private-firm experience in the security field are becoming as basic to the operations of large energy corporations as are geologists and petroleum engineers. Salaries at all levels are at least competitive with similar jobs in the private sector. Facilities and security occupations may include the following: ■ ■ ■

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Emergency Services Crew Computer Network Security Specialist Installation and Perimeter Security Specialist Risk Analyst Security Manager Security Guard Maintenance Supervisor Maintenance and Repair Worker Custodian/Janitor

Technology, Research, Design, and Development The oil and natural gas industry is forward-looking: Each corporation is more concerned about

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running out of resources to develop than about competition with other corporations. As a result, research scientists, laboratory technicians, engineers, draftsmen, and others work to develop new methods for extracting, transporting, and processing petroleum and gas. The hiring market is not wide, but for those penetrating it a secure career awaits in an industry that relies on continuous innovation to reach difficult areas on- and offshore and to build pipelines that can sustain high pressures in extreme weather and temperature conditions. Indeed, research and development is an almost recession-proof area to which the industry usually allocates steady funding, even in times of declining revenues. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Engineering Manager Natural Sciences Manager Industrial Engineer Industrial Engineering Technician Petroleum Engineer Petroleum Engineering Technician Geologist Geological/Petroleum Technician

Production and Operations Project engineers, drilling personnel, mechanical engineers, pipeline managers, and general managers oversee production and operations activities. Managerial pay reflects the size of the crew, with pay slightly higher in the area of refining (where a total of sixty thousand are domestically employed, despite the growing automation of refineries), as well as the technical competence needed for the position. As in most sectors of the industry, the top positions in production and operations require either on-site experience or areaspecific college and graduate degrees. Production and operations occupations may include the following: ■ ■ ■ ■ ■ ■

Petroleum Engineer Industrial Engineer Industrial Production Manager Construction Manager Roustabout Service Unit/Rotary Drill/Derrick Operator

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Construction Supervisor Petroleum Pump System Operator/ Refinery Operator/Gauger Gas Plant Operator Production Supervisor Wellhead Pumper Environmental Scientist

Distribution Distribution personnel transport oil and natural gas products to wholesalers, public utilities, and other sellers and consumers. The best-paying positions are the white-collar and highly skilled ones in the utility companies distributing natural gas to end users, as well as proprietor-ownership positions involving hybrid gasoline stations along welltraveled routes. Distribution occupations may include the following: ■ ■ ■ ■ ■ ■

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Distribution Manager Heavy Truck Driver Dispatcher Shipping and Receiving Clerk Control and Valve Installer/Repairer Petroleum Pump System Operator/ Refinery Operator/Gauger Gas Compressor/Gas Pumping Station Operator Sailor/Marine Oiler Water Vessel Captain/Mate

Human Resources Big corporations, such as those in the oil and natural gas industry, have large human resources departments to manage hiring, termination, benefit packages, and sometimes in-house pension funds. Career opportunities in managing these departments, in accounting services related to them, and in overseeing employee relations exist in all of the majors, the state-petroleum corporations, and most of the smaller oil and gas companies. Human resources occupations may include the following: ■ ■ ■ ■ ■

Human Resources Manager Recruiter Human Resources Generalist Payroll Clerk Benefits Specialist

Petroleum and Natural Gas Industry ■

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cially involving exploration, will always be in demand, as finding and developing new sources of fossil fuels become increasingly difficult. Moreover the sheer breadth of activities within the industry INDUSTRY OUTLOOK guards against any across-the-board drying up of career opportunities, although many such opporOverview tunities may exist in Asia, Australia, and Latin The outlook for this industry shows it to be in deAmerica. cline. The BLS projects that between 2008 and The private petroleum corporations, which lack 2018, employment in natural gas and oil extraction and no longer have guaranteed access to deep rewill decrease by 16 percent, while employment by serves, are moving more into upstream activities. natural gas utilities will decrease by 11 percent. At These involve not just exploring for new pools of the same time, employment across all sectors of the oil but also pursuing extraction processes once economy is projected to grow by 11 percent. Autothought to be exotic, such as seeking oil from tar sands and oil shale, and producing liquefied petromation will continue to reduce the number of emleum gas. In 2007, almost 80 percent of the net inployees needed at the extraction end of the busicome of the U.S. oil and gas industry came from ness; however, the 2010 BLS report on the industry these upstream operations. Meanwhile, state comnoted that the overall employment picture will be panies within and outside OPEC, with their access improved by the fact that many current employees to often very deep oil and gas reserves, are more inare nearing retirement age and will need to be reclined to balance their upstream and downstream placed. Skilled workers in some positions, espeinvestments or to expand their downstream operations. Thus, during the first quarter of 2010, Saudi Arabia launched PROJECTED EMPLOYMENT an ambitious five-year expansion plan FOR SELECTED OCCUPATIONS capitalized at $170 billion, divided almost evenly between upstream investSupport Activities for Mining ments ($90 billion, focused on increasing natural gas development in order to Employment free for export the oil now being used 2009 Projected 2018 Occupation for electrical generation) and downstream refining and petrochemical op18,920 18,300 Derrick operators, oil and erations ($80 billion). gas ■

Administrative Assistant Pension Plan Manager

15,000

23,900

First-line supervisors/ managers of construction trades and extraction workers

20,980

20,400

Rotary drill operators, oil and gas

43,970

50,400

Roustabouts, oil and gas

29,590

30,700

Service unit operators, oil, gas, and mining

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Employment Advantages Industry employers and career counseling guides frequently stress industry working conditions. Most positions work regular hours, leaving employees’ time free after those hours. Some jobs are arduous; for example, working on an offshore oil rig normally involves working fourteen straight days on the job, but the shift is then followed by twenty-one days off work and on shore. Industry salaries can be high, and benefits are generous. A rapid rise in income is not a feature of industry jobs, however. Those who begin in low-skill jobs (for example, roughnecks on off-

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About 175,000 retail outlets in the United States dispense gasoline and diesel fuel. (©Michael Adams/Dreamstime.com)

shore rigs) have the opportunity to rise to supervisory positions as they acquire additional skill and experience. Job skills in the industry are normally portable, insofar as the tasks are similar regardless of the locale, and multinational corporations hire globally. Saudi Aramco, for example, boasts that it is the employer of a workforce numbering fifty-four thousand drawn from more than fifty different countries. It can also be satisfying to help the world’s nations obtain the energy they need to function. More elusive but important, employees, from oil rig roughnecks to top industry executives, tend to share a camaraderie unmatched in most if not all other industries.

PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Oil and Gas Extraction Employment 2009

Projected 2018

Occupation

6,500

5,700

Geoscientists, except hydrologists and geographers

10,580

9,800

Petroleum engineers

8,720

8,000

Petroleum pump system operators, refinery operators, and gaugers

11,160

10,700

7,750

6,400

Roustabouts, oil and gas Wellhead pumpers

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Petroleum and Natural Gas Industry

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Annual Earnings PROJECTED EMPLOYMENT The world consumes over 30 bilFOR SELECTED OCCUPATIONS lion barrels of oil per year, and, except when price increases force dePetroleum and Coal Products veloping states to scale back their Manufacturing development agendas, that amount is expected to rise in the years Employment ahead. Kenneth Deffeyes and oth2009 Projected 2018 Occupation ers argue that the world may have already reached its peak capacity to 5,570 4,100 First-line supervisors/managers meet that demand; however, even of production and operating pessimists acknowledge that petroworkers leum will remain the world’s princi2,510 1,700 Maintenance and repair pal energy source until mid-cenworkers, general tury. Thus, oil is expected to remain extremely valuable for the foresee3,730 3,600 Mixing and blending machine able future, and the industry continsetters, operators, and tenders ues to deploy geologists to find, and 21,530 18,900 Petroleum pump system drillers to extract, oil that would be operators, refinery operators, unprofitable at lower rates. and gaugers Oil and natural gas remain a multitrillion-dollar industry. Indeed, 3,090 2,200 Truck drivers, heavy and ExxonMobil alone experienced tractor-trailer global revenues of $442.85 billion Source: U.S. Bureau of Labor Statistics, Industries at a Glance, in 2009, as well as profits of more Occupational Employment Statistics and Employment than $45 billion, despite a decline Projections Program. in oil prices. The company’s net worth was valued at one-third of $1 trillion. Moreover, the largest private corporations are not necessarily the most profitable. Thus, although three of 2009’s five most profitable U.S. companies were RELATED RESOURCES FOR FURTHER RESEARCH ExxonMobil (first), Chevron (third), and ConocoPhillips (fifth), smaller corporations (in particular American Petroleum Institute Marathon Oil and Occidental) also made Fortune’s 1220 L St. 2009 list of the fifty most profitable companies in Washington, DC 20005-4070 the United States. Tel: (202) 682-8000 Overall, though, the majors dominate, with the http://www.api.org five largest oil and gas corporations (ExxonMobil, Royal Dutch Shell, BP, Chevron, and ConocoExxonMobil Phillips) accounting for over 75 percent of both 5959 Las Colinas Blvd. the $1.9 trillion in revenue and the $155 billion in Irving, TX 75039-2298 profits garnered by the private petroleum industry Tel: (972) 444-1000 in 2007. In a similar manner, the large state petrohttp://www.exxonmobil.com leum enterprises dominate the international export market, with OPEC producers estimating Saudi Aramco their 2007 revenue at $660 billion. It is in the operP.O. Box 1977 ations of these private and public majors that both Dhahran 31311 the future of the oil and natural gas industry and Saudi Arabia jobs within it principally lie.

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Petroleum and Natural Gas Industry

Tel: 966-3-877-2626 http://www.saudiaramco.com Shell 910 Louisiana St. Houston, TX 77210 Tel: (713) 241-6161 Fax: (713) 241-4044 http://www.shell.us

ABOUT

THE

AUTHOR

Joseph R. Rudolph, Jr., holds a Ph.D. from the University of Virginia and has served as a consultant for various petroleum-related companies while chairing the Department of Political Science at Tulsa University during the years of great upheaval in the petroleum industry. He is currently a professor of political science at Towson University, in Maryland. The author of more than two dozen essays and book chapters on various topics relating to energy, he also published a short guide to the literature pertaining to energy in the Magill Bibliographies series in 1995.

FURTHER

READING

Anderson, Robert O. Fundamentals of the Petroleum Industry. Norman: University of Oklahoma Press, 1984. Bader, Jeffrey, et al. The Global Politics of Energy. Washington, D.C.: Aspen Institute, 2008. Boudreaux, Terry. Ethanol and Biodiesel: What You Need to Know. McLean, Va.: Hart Energy, 2007. Deffeyes, Kenneth S. Hubbert’s Peak: The Impending World Oil Shortage. Princeton, N.J.: Princeton University Press, 2001. Drapes, Michaela. Vault Guide to the Top Energy and Oil and Gas Employers, 2009. New York: Vault Reports, 2008.

Engler, Robert. The Brotherhood of Oil: Energy Policy and the Public Interest. Chicago: University of Chicago Press, 1977. Falola, Toyin, and Ann Genova. The Politics of the Global Oil Industry: An Introduction. Westport, Conn.: Praeger, 2005. Grace, Robert. Oil: An Overview of the Petroleum Industry. Houston, Tex.: Gulf, 2007. Johnson, Arthur M. Pipelines: A Study in Private Enterprise and Public Policy. Ithaca, N.Y.: Cornell University Press, 1956. Reprint. Westport, Conn.: Greenwood Press, 1982. Miesner, Thomas O., and William L. Leffier. Oil and Gas Pipelines in Nontechnical Language. Tulsa, Okla.: Pennwell, 2006. Odell, Peter R. Global Issues. Vol. 1 in Oil and Gas: Crises and Controversies, 1961-2000. Brentwood, Essex, England: Multi-Science, 2004. Raymond, Martin S., and William L. Leffier. Oil and Gas Production in Nontechnical Language. Tulsa, Okla.: Pennwell, 2005. Roberts, Paul. The End of Oil: On the Edge of a Perilous New World. New York: Mariner Books, 2005. Sampson, Anthony. The Seven Sisters: The Great Oil Companies and the World They Shaped. New York: Viking Press, 1980. Simmons, Matthew R. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. New York: Wiley, 2006. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Pharmaceuticals and Medications Industry ©Catalin Plesa/Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The pharmaceuticals and medications industry researches, develops, produces, and distributes medicinal products that are used to diagnose, treat, and prevent disease. These products include medications available only by prescription, as well as over-the-counter products available without a prescription. Most leading pharmaceutical companies also work in other business segments, including consumer health, animal health, nutritional products, and medical devices. Considerable amounts of time, resources, and money are invested in research and development of new drugs, and the United States is a leader in pharmaceutical research and innovation. The pharmaceutical and medications industry is one of the fastest-growing industries in the United States.

General Industry: Manufacturing Career Clusters: Manufacturing; Science, Technology, Engineering, and Math Subcategory Industries: Biological Product Manufacturing; Botanical Manufacturing; Drug Wholesalers; InVitro Diagnostic Substance Manufacturing; Medicinal Manufacturing; Pharmaceutical Preparation Manufacturing; Research and Development in Biotechnology; Research and Development in the Life Sciences Related Industries: Medicine and Health Care Industry; Scientific and Technical Services; Scientific, Medical, and Health Equipment and Supplies Industry Annual Domestic Revenues: $286.5 billion USD (IMS Health, 2008) Annual International Revenues: Outside North America: $352.9 billion USD (IMS Health, 2007) Annual Global Revenues: $643 billion USD (IMS Health, 2007) NAICS Numbers: 3254, 4242, 54171

History of the Industry Drugs and medicinal products have been used throughout recorded history, with varying degrees of sophistication and understanding. However, the modern pharmaceuticals and medications industry (or simply pharmaceutical industry) was born from the nineteenth century chemical industry. Most of the largest pharmaceutical companies were already well-established organizations involved in chemical research and production when they en1403

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Pharmaceuticals and Medications Industry

Pharmacists are responsible for filling prescriptions and instructing patients on drug usage. (©Mangostock/Dreamstime.com)

tered the pharmaceutical business in the 1920’s and 1930’s. Groundbreaking medical discoveries at that time, including the use of penicillin as an antibiotic and the function of insulin in the human body, served as catalysts for large-scale manufacturing and marketing of medicinal products. Countless drugs were discovered, manufactured, and marketed throughout the 1950’s and 1960’s, but the industry remained relatively small. Since the 1960’s, the organization of the pharmaceutical industry has changed dramatically. Between 1960 and 1980, total U.S. pharmaceutical company sales and annual revenues were fairly static as a percentage of gross domestic product (GDP). Until the mid-1970’s, most pharmaceutical companies were large, vertically integrated enterprises that participated in every step of the pharmaceutical manufacturing process, from drug discovery to regulatory affairs, to manufacturing, to marketing. In the late 1970’s, the industry started growing at an unprecedented rate, introducing new players in the market that challenged the tra-

ditional function of science and research enterprises. Between 1980 and 2000, total pharmaceutical sales tripled, owing to changes in regulation and in the processes by which drugs were discovered and ultimately marketed. In the early 1980’s, the U.S. Congress enacted laws that sped the transition of tax-supported basic science and research into useful products. Other new laws extended patent protections for brand-name drugs. These changes improved the United States’ standing in the hightech world markets and allowed drug companies to rely on academic and federal institutions, rather than in-house development teams, to conduct research. Since the early 1980’s, the pharmaceutical industry has been one of the most profitable industries in the United States each year. The industry achieved record-high growth in 1999, with revenues expanding more than 14 percent from the previous year. From 1998 to 2006, the industry grew at a rate of 7 to 10 percent each year. The economic downturn that began in 2000 af-

Pharmaceuticals and Medications Industry fected the pharmaceutical industry, as the government and private employers looked for ways to cut health care spending and pushed back against high drug and medical costs. Total pharmaceutical sales continued to grow, but at a slower rate, in part because many brand-name drugs lost their exclusivity, fewer new products were approved, the growth of Medicare’s Part D prescription drug benefit leveled off, and safety issues arose that affected sales. The landscape of the pharmaceutical and medications industry has changed considerably since the 1970’s. The number of institutions in the industry, and the relationships among them, have adjusted as waves of mergers have transformed the industry’s structure. Companies merged in order to pool resources and mitigate revenue losses in the face of low expected growth in earnings or patent expirations. While smaller pharmaceutical firms have disappeared and larger firms have consolidated, biotechnology firms have entered the marketplace to form an intermediate sector between academia and large, global pharmaceutical companies. So-called biotech companies are researchoriented and specialize in new drug discovery. Most biotech companies are private, for-profit endeavors, but they are smaller than traditional pharmaceutical companies, with close geographical, cultural, and contractual relationships to nonprofit research institutions. Many biotech companies are founded by academic research scientists and serve as suppliers of specialized technology to larger firms. Large pharmaceutical firms rely heavily on developments in the biotech industry, and 25 to 40 percent of pharmaceutical sales come from drugs that originated in the biotech sector. The Industry Today The pharmaceutical industry is dominated by a small number of private, for-profit companies. “Big Pharma” is the collective name for the world’s ten to fifteen largest pharmaceutical companies, which lead the industry. More than half of these companies are headquartered in the United States. The pharmaceutical industry operates globally— in terms of research and development, manufacturing, and sales—but the United States is the dominant market in all industry segments. The pharmaceutical industry is one of the most research-intensive industries in existence, spend-

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ing 10 to 20 percent of its revenues on research and development, a very large percentage compared to other industries. Investments in research and development have increased exponentially since the 1980’s, and Big Pharma now spends an estimated $50 billion collectively in research and development each year. Global sales are the primary funding source for research and development in large, private companies, while smaller, newer firms rely on venture capital and equity financing to fund research and development. The industry’s attention has moved from basic science to more focused research and a deeper understanding of the human body. Still, only one out of every five thousand candidate drugs proves to be both safe and effective and becomes an approved drug that enters the market. Drug companies spend an average of nearly $2 billion to bring each

The pharmaceutical industry spends 10 to 20 percent of its revenues on research and development. (©Jovan Jaric/ Dreamstime.com)

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new drug to market, through all the stages of drug discovery and development, testing, manufacturing, and distribution. As a result of rising costs and decreased research productivity, new drugs are not appearing as often as they once did. Most new approvals mark only small changes or improvements to existing drugs. The year 2007 witnessed the fewest new product launches in more than three decades. The first stage in the industrial pharmaceutical process is drug discovery and the search for innovative products. This process involves identification of biological targets, validation of new chemical compounds, and screening and optimization of drug products. After a product has been optimized, the pharmaceutical company developing it files for a patent with the United States Patent and Trademark Office to safeguard its intellectual property rights. Most patents issued today provide twenty years of protection for a chemical or the processes involved in its production. Patent protection is one of the most significant issues facing the

industry, as manufacturers attempt to recoup investments in research and development and to deter competitors from copying their original products. Following discovery, pharmaceutical companies proceed with product design and development, which includes years of trials and submission for regulatory approval. This stage involves both preclinical testing involving animals and clinical testing involving human subjects to prove that a drug is safe and effective. Before it can begin trials, a company must file a new drug application with the United States Food and Drug Administration (FDA) detailing its research and plans for the trials. The clinical stage of drug testing is highly regulated by the government. While drug companies coordinate their trials and are responsible for their outcomes, most trials are actually conducted by separate, private clinical research organizations. Phase I trials include a small number of healthy volunteers to test the safety of a drug. Phase II trials test drug safety and efficacy and include patients who have

Generic drugs now represent more than half of all drugs sold in the United States. (©Dreamstime.com)

Pharmaceuticals and Medications Industry the disease or medical condition the drug is designed to treat. Phase III trials include large numbers of patients and establish safety, efficacy, and dosage regimens for the drug. After trials are complete, an FDA advisory panel reviews their findings and determines whether the drug is suitable to go to market, as well as the uses for which the drug can be prescribed and at what dosages. Postmarketing, or Phase IV, trials and surveillance continue after a drug is on the market, since not all safety issues arise during the preapproval phase of testing. Manufacturers of generic drugs do not have to complete clinical trials, since the brand-name manufacturer of each drug has already completed them. Generic-drug manufacturers submit an abbreviated new drug application to the FDA and, upon approval, start producing drugs already developed by other companies once the original patent has expired. Once a drug receives the necessary FDA approval, pharmaceutical companies proceed to manufacture the drug product. This stage is also heavily regulated by the government to ensure the quality of products and the safety of consumers. Manufacturing facilities are held to rigorous quality standards, and worker aptitude is routinely monitored. Distribution, marketing, and sales represent the final stage in the life cycle of a pharmaceutical product or medication. This phase is directed at both physicians and consumers. Pharmaceutical companies have teams of sales representatives who report the findings of drug studies and detail drugs’ benefits to physicians. Pharmaceutical companies are also involved in providing continuing education programs for physicians and other health care professionals. Direct-to-consumer advertising is a fast-growing expense in the marketing budgets of pharmaceutical companies. In 1997, rules regarding what information needed to be included in direct-to-consumer advertising were relaxed, resulting in an explosion of advertising. Insurance companies are large players in the marketing and sales of pharmaceutical products, owing to strict formularies established by health maintenance organizations, hospitals, and other health care providers. Formularies limit the drugs that can be ordered or prescribed and can significantly affect the sales of certain products. The pharmaceutical market is expected to continue to grow as the health care focus shifts away

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from primary-care, therapeutic classes of medication to specialty and biotech-driven therapies. Oncology and autoimmune products are currently the fastest-growing therapeutic classes. Specialtydriven products have nearly doubled their market share since 2000, accounting for more than 60 percent of the market’s growth. Revenues from primary-care classes, in contrast, are shrinking, owing to the emergence of low-cost, high-quality generic drugs and switches from prescription-only to overthe-counter products. Generic drugs now represent more than half of all drugs sold in the seven key world markets: the United States, Canada, France, Germany, Italy, Spain, and the United Kingdom.

INDUSTRY MARKET SEGMENTS Businesses within the pharmaceutical industry range from small start-up companies with only a few employees to large, multinational corporations that account for a considerable share of the market. The following divisions provide a comprehensive overview of businesses within the industry. Small Businesses Small pharmaceutical businesses are typically young start-up and biotech companies with no or few commercial products on the market. Most of these firms are exclusively research and development entities. Some small pharmaceutical businesses develop their own drugs, while others perform research and development functions for larger businesses. Revenues from small pharmaceutical businesses represent approximately 20 percent of global pharmaceutical revenues. Potential Annual Earnings Scale. Low-level and unskilled workers may earn minimum wage or slightly more in a small pharmaceutical business. Throughout the industry, machine and equipment operators and manual laborers earn between $12 and $16 per hour. According to the U.S. Bureau of Labor Statistics (BLS), in 2009 the average annual salary of pharmaceutical biochemists and biophysicists was $91,070 and the average earnings of pharmaceutical epidemiologists were $92,920. Chemists in the industry earned $70,710, and microbiologists earned $69,830 on average. Biologi-

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Pharmaceuticals and Medications Industry

cal technicians earned an average of $42,950, while chemical technicians earned an average of $46,740. Natural sciences managers earned $156,910. These wages do not tend to fluctuate significantly based on business size. Chief executive officers may earn between $100,000 in a small start-up company and $3 million in a strong biotech company. Clientele Interaction. There is limited clientele interaction in small pharmaceutical businesses. Sales and marketing representatives may be employed to promote their companies’ products to midsize or large pharmaceutical businesses or directly to health care providers or services. Amenities, Atmosphere, and Physical Grounds. Small pharmaceutical businesses are primarily research-focused, and their facilities consist primarily of laboratory space. The available amenities and work atmosphere vary widely across the industry, depending on the location of the business, scope of the work, and number of employees. Typical Number of Employees. In the pharmaceutical industry, business size is determined by revenue, rather than number of employees. However, smaller businesses in terms of revenue tend to have fewer employees than do larger businesses. Start-up companies may have only a few dozen employees, while other small manufacturers or distributors may have thousands. Small businesses employ a small fraction of workers in the pharmaceutical industry. According to the BLS, only 13 percent of workers in this industry are employed by businesses with fewer than one hundred employees. Traditional Geographic Locations. Traditionally, small pharmaceutical companies and biotech firms have emerged from academic research institutions, and they tend to maintain close geographic proximity to large colleges and universities. Some small pharmaceutical businesses maintain close relationships with larger businesses, necessitating locations in the northeastern United States, where most large pharmaceutical companies are based. Many biotech companies are found near Boston, Massachusetts; San Francisco and San Diego, California; Princeton, New Jersey; Philadelphia, Pennsylvania; and Washington, D.C. Small pharmaceutical and biotech companies are emerging in developing countries, as demand for scientific and biotech innovation increases in these countries. The developing world imposes less regulation

and provides greater financial incentives than the United States. Pros of Working for a Small Pharmaceutical Business. Small start-up firms offer exciting opportunities to work with cutting-edge technology and develop groundbreaking products. Small businesses’ employees often encounter less corporate bureaucracy and may be afforded greater flexibility than at large firms. This situation often leads to more efficient decision making and greater risktaking. This, in turn, leads to increased discovery and innovation, and small companies sometimes make discoveries more quickly and cost-effectively than larger companies can. With a small number of fellow employees, each worker may be able to gain valuable experience by taking on many different tasks. Such broad job descriptions allow workers to explore other related job opportunities and learn about every segment of their companies’ operations. Also, workers usually enjoy more interaction with top management in small pharmaceutical businesses, providing them with opportunities for learning and career development. Each individual has the opportunity to stand out for his or her work in a small business; it is also easier for each worker to contribute actively to the success of the business and to feel a sense of personal accomplishment. Citing employee satisfaction, Fortune magazine consistently lists several small pharmaceutical and biotech companies among its annual list of “One Hundred Best Companies to Work For.” The magazine praises these companies for their compensation packages, family-friendly work environments, pride in products, workplace diversity, and community outreach programs. Growth is expected in the biotech sector of the pharmaceutical industry, positioning small businesses to expand their size, revenue, and market share. Opportunities for entrepreneurs and venture capitalists abound in the small business segment of the industry. Cons of Working for a Small Pharmaceutical Business. Small pharmaceutical businesses are not always able to survive economic downturns or grow their staffs in climates of recession or decreased revenues, so they offer less job security than do large, established companies. Top management of small pharmaceutical or biotech companies often have more research- and academic-oriented experience than business management experience,

Pharmaceuticals and Medications Industry OCCUPATION

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SPECIALTIES

Pharmacists Specialty

Responsibilities

Hospital pharmacists

Work in hospitals, clinics, or nursing homes. They may advise the medical staff on the selection and effects of drugs, perform administrative duties, and work in patient-care areas as members of medical teams. They may also monitor drug levels and fill medical orders.

Pharmacy services directors

Direct and coordinate the activities and functions of a hospital pharmacy and plan and implement procedures in the pharmacy according to hospital policy and legal requirements. They also direct pharmacy personnel programs, such as hiring, training, and intern programs.

Radiopharmacists

Prepare and dispense radioactive pharmaceuticals used for patient diagnosis and therapy, applying the principles and practices of pharmacology and radiochemistry. They verify that the specified radioactive substance prescribed by a physician will give the desired results in examination and treatment procedures.

and they may be unable to survive business challenges and industry fluctuations. Small pharmaceutical businesses often focus the majority of their research and development attention on one or two therapeutic areas. They cannot sustain broader efforts or modify their areas of focus in response to changing client needs. With few staff, small businesses may require their employees to assume multiple job roles or perform several job functions, which may not appeal to all workers. Further, small businesses lack resources for training and education, which may limit employees’ opportunities for career advancement. Costs Payroll and Benefits: Small pharmaceutical businesses employ workers at both hourly wages and annual salaries. Depending on employee job function, terms of employment, and size of the employer, benefits may or may not be included in a compensation package. However, most employees in the pharmaceutical industry receive paid sick leave and vacation time. Some small businesses offer pension plans or retirement benefits as well.

Supplies: Small pharmaceutical businesses require basic office supplies, as well as computers, telephones, and other communication supplies. Basic and sophisticated science tools and laboratory equipment are required for research and development teams. Production-specific equipment for manufacturing pharmaceutical products is required in manufacturing facilities. Raw materials and supplies are purchased for research, as well as for manufacturing operations. External Services: Small pharmaceutical companies may own the buildings that house their corporate headquarters and manufacturing facilities, but they may pay mortgages or rent their properties. They may hire external vendors to manage janitorial or housekeeping services, as well as groundskeeping services, for their offices and manufacturing facilities. In order to maintain a small number of employees, small pharmaceutical businesses may hire contract workers for some job functions, such as human resources, legal counsel, or communications. Utilities: Small pharmaceutical businesses pay utilities for all properties, including water and sew-

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Pharmaceuticals and Medications Industry OCCUPATION

PROFILE

Pharmacist Considerations

Qualifications

Description

Dispenses medicines, looks at possible interactions with other medications, and advises customers on prescription and over-thecounter medications.

Career cluster

Health Science

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

Doctor of pharmacy degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; military service

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

IES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

age, gas service, electricity, telephone, and Internet access. Taxes: Small pharmaceutical businesses pay federal, state, and local income, property, and sales taxes. Additional tariffs or duties are placed on all equipment, chemicals, and raw materials imported from foreign countries. Pharmaceutical companies collect applicable sales tax from product sales to distributors, wholesalers, or other entities. Small pharmaceutical businesses often obtain insurance to protect against loss, damage, theft, injury, and other liabilities. Midsize Businesses The global market share of midsize pharmaceutical companies has decreased considerably since the beginning of the twenty-first century, as the industry has been largely consolidated through a series of corporate mergers and acquisitions. Revenues from midsize pharmaceutical businesses represent less than 20 percent of global pharmaceuti-

cal revenues. Most manufacturers of generic drugs are midsize pharmaceutical businesses. They manufacture drugs that are no longer protected by patents and devote relatively small amounts of money to research and development, investing instead in manufacturing. Potential Annual Earnings Scale. Low-level and unskilled workers may earn minimum wage or slightly more in a midsize pharmaceutical business. Throughout the industry, machine and equipment operators and manual laborers earn between $12 and $16 per hour. According to the BLS, in 2009 the average annual salary of pharmaceutical biochemists and biophysicists was $91,070 and the average earnings of pharmaceutical epidemiologists were $92,920. Chemists in the industry earned $70,710, and microbiologists earned $69,830 on average. Biological technicians earned an average of $42,950, while chemical technicians earned an average of $46,740. Natural sciences managers earned $156,910. Sales representatives earned an

Pharmaceuticals and Medications Industry average of $80,700, sales supervisors earned an average of $97,010, and sales managers earned an average of $139,180. These wages do not tend to fluctuate significantly based on business size. Chief executive officers of midsize pharmaceutical companies generally earn between $1 million and $10 million in total compensation, including salary and stock options. Clientele Interaction. The level of clientele interaction varies considerably in the midsize pharmaceutical business segment. Some midsize companies remain research-intensive, limiting interaction with clients. Sales and marketing representatives may be employed to promote companies’ products to large pharmaceutical businesses or directly to health care providers or services. Midsize pharmaceutical businesses may also purchase technology or processes from smaller pharmaceutical or biotech companies. Other pharmaceutical businesses manufacture and distribute drug products and compete with large pharmaceutical companies for commercial market share. These midsize companies employ sales and marketing staff to detail the benefits of their drug products to consumers, as well as to physicians, pharmacists, and other health care providers. Amenities, Atmosphere, and Physical Grounds. As with all manufacturing sectors, midsize pharmaceutical manufacturers operate under strict regulatory and legal requirements. The pharmaceutical industry as a whole enjoys a low level of work-related accidents and injuries. Available amenities and work atmosphere vary widely across the industry, depending on the location of the business, scope of the work, and number of employees. Typical Number of Employees. In the pharmaceutical industry, business size is determined by revenue rather than number of employees. Midsize pharmaceutical companies usually employ between one hundred and five hundred employees, but some have thousands of employees. Traditional Geographic Locations. Midsize pharmaceutical companies are located throughout the United States. Some are located near smaller pharmaceutical or biotech firms with which they work. Midsize manufacturing and distribution companies often locate themselves in areas with strong transportation infrastructures, providing advantages for travel, transportation, or delivery. New Jersey and the surrounding areas in the northeast-

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ern United States have been home to the major pharmaceutical businesses since the modern industry’s founding in the early twentieth century. Today, many midsize pharmaceutical businesses maintain locations along the East Coast, from Massachusetts to North Carolina. Pros of Working for a Midsize Pharmaceutical Business. Midsize pharmaceutical companies work hard to expand market share and compete with large businesses. Many choose to focus on emerging technologies, challenging employees to innovate products on the cutting edge of the industry. Additionally, midsize pharmaceutical companies often choose to focus on less prevalent diseases, as opposed to common lifestyle conditions that produce blockbuster drugs for large pharmaceutical companies. This focus allows for personal and professional satisfaction when creating drugs to treat diseases that may have no widespread treatments yet available. Midsize pharmaceutical businesses, while lacking the resources of large pharmaceutical companies, do possess sufficient capital to buy technology from small pharmaceutical and biotech companies. This process speeds innovation and allows for costeffective research and development operations. Citing employee satisfaction, Fortune magazine consistently lists several midsize pharmaceutical companies among its annual list of “One Hundred Best Companies to Work For.” The magazine praises these companies for their compensation packages, family-friendly work environments, pride in products, workplace diversity, and community outreach programs. Many midsize pharmaceutical businesses also routinely appear on Working Mother’s similar annual “One Hundred Best Companies” list. Manufacturers of generic drugs typically fall into the category of midsize pharmaceutical businesses. These manufacturers expect to grow in the near future, as many brand-name drug products will be losing their patent protection. At the same time, the U.S. government, health care providers, and patients seek cost-saving measures in the provision of health care services, making generic drugs an attractive treatment choice. The expected growth will result in more job growth and security in this segment of the industry. Cons of Working for a Midsize Pharmaceutical Business. Midsize pharmaceutical businesses face challenges as the industry changes. Midsize

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Pharmaceuticals and Medications Industry

companies are not large enough to compete with the world’s largest pharmaceutical companies in terms of research and development resources or marketing budgets. Owing to financial, geographical, or discovery challenges, the proportion of midsize pharmaceutical businesses is shrinking. Multiple midsize companies have merged with one another, or they have been acquired by large firms. This trend leads to job insecurity, as newly merged companies may eliminate some resources and personnel to avoid redundancies and increase efficiency. Salaries tend to be slightly lower in midsize pharmaceutical companies than in large companies owing to smaller operating margins and lower total revenues and returns on investments. Costs Payroll and Benefits: Midsize pharmaceutical businesses employ workers at both hourly wages and annual salaries. Depending on employee job function and full- or part-time status, benefits may or may not be included in the compensation package. However, most employees in the industry receive paid sick leave and vacation time. Some midsize employers offer pension plans or retirement benefits as well. Some pharmaceutical businesses offer discounted medications to their employees. Supplies: Midsize pharmaceutical businesses require basic office supplies, as well as computers, telephones, and other communication supplies. Basic and sophisticated science tools and laboratory equipment are required for research and development teams. Production-specific equipment is required in manufacturing facilities. Raw materials and supplies are purchased for research, as well as for manufacturing operations. External Services: Midsize pharmaceutical companies may own the buildings that house their corporate headquarters and manufacturing facilities, or they may pay a mortgage or rent their properties. Midsize pharmaceutical companies may hire external vendors to manage janitorial or housekeeping services, as well as groundskeeping services, for their offices and manufacturing facilities. In order to streamline business operations, midsize pharmaceutical businesses may hire contract workers for some job functions, such as human resources, legal counsel, or communications.

Other costs of midsize pharmaceutical businesses include premiums for insurance to protect against loss, damage, theft, injury, and other liabilities. Midsize pharmaceutical companies also pay smaller pharmaceutical and biotech companies fees to license promising research at various stages in the research and development process. These fees purchase the right to use the research or technology in the companies’ own work. Utilities: Midsize pharmaceutical companies pay utilities for all properties, including water and sewage, gas service, electricity, telephone, and Internet access. Taxes: Midsize pharmaceutical companies pay federal, state, and local income, property, and sales taxes. Additional tariffs or duties are placed on all equipment, chemicals, and raw materials imported from foreign countries. Pharmaceutical companies collect applicable sales tax from product sales to distributors, wholesalers, or other entities. In some states, drug distributors are required to pay additional wholesale drugdistribution taxes. Large Businesses Large pharmaceutical companies are longstanding firms that have many approved drugs on the market. These companies share a majority of the total global pharmaceutical revenue; the 20 largest pharmaceutical companies represent 60 percent of the global pharmaceutical industry revenue. Large pharmaceutical businesses invest a large percentage of financial and employee resources in research and development. Large pharmaceutical companies are not guaranteed success, but do enjoy advantages over small and midsize businesses. Potential Annual Earnings Scale. Low-level and unskilled workers may earn minimum wage or slightly more in a large pharmaceutical business. Throughout the industry, machine and equipment operators and manual laborers earn between $12 and $16 per hour. According to the BLS, in 2009 the average annual salary of pharmaceutical biochemists and biophysicists was $91,070 and the average earnings of pharmaceutical epidemiologists were $92,920. Chemists in the industry earned $70,710, and microbiologists earned $69,830 on average. Biological technicians earned an average of $42,950, while chemical technicians earned an

Pharmaceuticals and Medications Industry average of $46,740. Natural sciences managers earned $156,910. Sales representatives earned an average of $80,700, sales supervisors earned an average of $97,010, and sales managers earned an average of $139,180. These wages do not tend to fluctuate significantly based on business size. Chief executive officers of the largest pharmaceutical companies earn between $3 million and $35 million in total compensation, including salary and stock options. Clientele Interaction. Large pharmaceutical businesses employ large sales and marketing teams to promote their products to physicians, pharmacists, and other health care providers. Alternatively, large pharmaceutical businesses may purchase technology or processes from small or midsize pharmaceutical or biotech companies. Amenities, Atmosphere, and Physical Grounds. The largest pharmaceutical companies in the world maintain work sites on many acres of land that contain millions of square feet of office space, laboratories, and warehouses. The research facilities at these businesses are state-of-the-art and offer ideal scientific working conditions. As with all manufacturing sectors, large pharmaceutical manufacturers operate under strict regulatory and legal requirements. The industry as a whole enjoys a low level of work-related accidents and injuries. Typical Number of Employees. In the pharmaceutical industry, business size is indicative of revenue, rather than number of employees. More than half of the employees in the industry are employed by pharmaceutical businesses that employ more than five hundred workers. Traditional Geographic Locations. New Jersey and the surrounding areas in the northeastern United States have been home to the major pharmaceutical businesses since their founding in the early twentieth century. Most of the American pharmaceutical industry’s employees work in New Jersey, New York, California, Puerto Rico, and Pennsylvania. The world’s largest pharmaceutical companies have corporate offices and research facilities across the United States and Europe, primarily in or around major metropolitan areas to facilitate travel and distribution of goods. Manufacturing facilities are spread across the globe to facilitate distribution to crucial markets. Large companies are increasingly moving their production facilities to developing nations. The

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economies of Asia, South America, and Central and Eastern Europe are growing quickly and offer attractive financial and regulatory benefits for large pharmaceutical companies. Skilled laborers in a variety of pharmaceutical business sectors are available in developing countries and require lower salaries than do workers in the United States. China and India are growing markets for pharmaceutical research and development processes, as they offer large populations of highly educated workers and industry-friendly regulations and tax incentives. Pros of Working for a Large Pharmaceutical Corporation. Larger pharmaceutical companies are able to employ large numbers of workers and generally able to continue to grow their staffs during economic downturns. They have the managerial experience to succeed in the face of business challenges and industry fluctuations. Such businesses offer a multitude of resources to employees, including access to top-of-the-line equipment, funding for training and education, and opportunities to collaborate with world-renowned experts. These benefits can lead to career advancement and additional employment opportunities. Large pharmaceutical businesses consistently appear on Fortune magazine’s annual list of “One Hundred Best Companies to Work For.” The magazine praises their compensation packages, familyfriendly work environments, pride in products, workplace diversity, and community outreach programs. Many large pharmaceutical businesses also routinely appear on Working Mother’s similar annual “One Hundred Best Companies” list. Economies of scale in manufacturing, clinical trials, and marketing allow large companies to diversify their investments and expand their offerings. This diversification increases companies’ job growth and employees’ job security. Cons of Working for a Large Pharmaceutical Corporation. Large companies operate with a high level of bureaucracy. Strict business structures and decision-making hierarchies lead to reduced research productivity, increased research and development costs, and longer discovery and manufacturing times. Such businesses are also fairly compartmentalized, with significant division of labor and job specialization. Thus, their employees may not be able to explore different job functions or business operations to the extent that they can at

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Pharmaceuticals and Medications Industry

smaller companies. Indeed, each worker at a large business often has a specific, defined role, with little or no autonomy. Additionally, workers may not immediately see or feel the impact of their work on their companies or the larger world. Costs Payroll and Benefits: Large pharmaceutical businesses employ workers at both hourly wages and annual salaries. Depending on employee job function and full- or part-time status, benefits may or may not be included in a compensation package. However, most employees in the industry receive paid sick leave and vacation time. Many employers offer pension plans or retirement benefits as well, and some offer discounted medications to their employees. Supplies: Large pharmaceutical businesses require basic office supplies, as well as computers, telephones, and other communication supplies. Basic and sophisticated science tools and laboratory equipment are required for research and development teams. Production-specific equipment is required in manufacturing facilities. Raw materials and supplies are purchased for research, as well as for manufacturing operations. External Services: Large pharmaceutical companies often own the buildings that house their corporate headquarters and manufacturing facilities, but they may pay a mortgage or rent their properties. They may hire external vendors to manage janitorial or housekeeping services, as well as groundskeeping services, for their offices and manufacturing facilities. Large pharmaceutical businesses also pay tremendous insurance costs to protect against loss, damage, theft, injury, and other liabilities. Large pharmaceutical companies pay small and midsize companies fees to license promising research at various stages in the research and development process. These fees purchase the rights to use the research or technology in the companies’ own work. Utilities: Large pharmaceutical companies pay utilities for all properties, including water and sewage, gas service, electricity, telephone, and Internet access. Taxes: Large pharmaceutical companies pay federal, state, and local income, property, and sales

taxes. Additional tariffs or duties are placed on all equipment, chemicals, and raw materials imported from foreign countries. Pharmaceutical companies collect applicable sales tax from product sales to distributors, wholesalers, and other entities. In some states, drug distributors are required to pay additional wholesale drugdistribution taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The pharmaceuticals and medications industry employs nearly 300,000 workers in twenty-five hundred different places of employment throughout the United States. Some pharmaceutical companies locate all of their business functions in one geographic location, while others maintain distinct and separate research and development facilities, administrative headquarters, and manufacturing facilities. A large majority of pharmaceutical workers (87 percent) are employed by companies with more than one hundred employees. In the United States, more than half of industry employees work in California, New Jersey, Puerto Rico, Pennsylvania, and New York. In general, industry workers are highly educated. More than 60 percent hold bachelor’s, master’s, professional, or doctoral degrees. Not all pharmaceutical jobs require advanced education, but entrance into the industry and career advancement may both depend on industry-specific training and expertise. The organizational structure and function of corporations within the pharmaceuticals and medications industry vary based on size, location, and business functions. The following umbrella categories apply to the organizational structure of businesses within the pharmaceuticals and medications industry: ■ ■ ■ ■ ■

■ ■

Business Management Office and Administrative Support Sales and Marketing Facilities and Security Technology, Research, Design, and Development Manufacturing and Supply Production and Operations

Pharmaceuticals and Medications Industry ■ ■

Distribution Infrastructure and Support Functions

Business Management A small team of executives and managers makes policy and procedural decisions within a pharmaceutical company. Executive managers may decide matters of finance, marketing, or research for entire companies, while other managers direct specific departments. Overall, management and business occupations represent less than 20 percent of jobs within the industry. Top managers include chief executive officers who oversee operational, financial, technological, and communications affairs. Depending on the size of each company, responsibilities within each job title may change, or one person may fulfill multiple roles. As a result of economic constraints, as well as anticipated corporate mergers and acquisitions, the number of top executive positions in the industry is not expected to increase in the short term. Other positions within the management structure are expected to increase, however, as demand for new pharmaceutical products and innovations continues to grow. Business operations specialists will be required to optimize companies’ performance and business functions. Salaries for top executives are typically much higher than salaries for similar positions in other industries. Compensation packages for many executives and managers combine salaries and stock options. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Medical Officer Chief Operating Officer (COO) Vice President Production Manager Natural Sciences Manager Business Operations Specialist Accountant Auditor General Counsel

Office and Administrative Support Office and administrative support professionals maintain payroll, personnel, sales, and shipment

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records. They also perform tasks such as answering phones, scheduling and coordinating meetings, and maintaining office supplies. Excellent computer and organizational skills are essential for office and administrative support personnel. Occupations in this area represent approximately 11 percent of jobs within the pharmaceutical industry. Job growth in the area has slowed relative to other areas, owing to corporate mergers and the consolidation of resources. Office and administrative support occupations may include the following: ■ ■ ■ ■ ■

Customer Service Representative Shipping and Receiving Clerk Administrative Assistant Executive Assistant Office Manager

Sales and Marketing Sales and marketing personnel are the link between pharmaceutical companies and their clients. In large companies, they promote products to physicians, pharmacists, dentists, and retail and wholesale drug distributors, as well as other health services and health care providers. Sales and marketing jobs account for 3 percent of the jobs within the pharmaceutical industry. Sales and marketing representatives working for small research-intensive pharmaceutical firms or biotech companies may focus on marketing their products or discoveries to larger pharmaceutical companies, rather than directly to health care providers or consumers. Sales and marketing representatives also work with production staff, engineers, and research and development teams to determine how existing products can be changed to meet new client needs. Larger pharmaceutical companies have larger sales and marketing teams than do smaller companies. With more personnel, each representative covers a smaller geographical territory. Larger companies also provide sales representatives with more financial support for expense accounts, marketing outreach, and promotional support. Sales representatives typically earn a combination of a salary and performance-based commissions. Most sales and marketing personnel have employment experience in a related industry, as well as scientific or technical expertise. Sales and

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Pharmaceuticals and Medications Industry

marketing staffs typically grow when their parent companies grow, and the outlook for such growth is positive as the industry continues to grow. A bachelor’s degree is preferred for most sales and marketing positions, as are exceptional computer, technology, communication, and interpersonal skills. Course work or experience in economics, marketing, communication, and foreign languages is also desirable. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■

■

Vice President of Sales and Marketing Regional Sales Supervisor Sales Manager Sales Representative Health Care Communications Professional Marketing Representative

■ ■

Market Research Analyst Marketing Manager

Facilities and Security The pharmaceutical industry requires installation, maintenance, and repair specialists to maintain office space, research laboratories, and manufacturing facilities. Security is also important, as laboratories and manufacturing facilities develop and use proprietary chemicals and processes, as well as federally regulated controlled substances. Facilities and security workers account for approximately 4 percent of employees within the industry. Facilities and security occupations may include the following:

OCCUPATION

■ ■ ■

Industrial Machinery Mechanic Maintenance and Repair Worker Custodian/Janitor

PROFILE

Pharmaceutical Sales Representative Considerations

Qualifications

Description

Promotes the use of legal drugs and other pharmaceutical products to physicians, dentists, hospitals, and retail drug stores, informing potential customers of new drugs and explaining their characteristics and the results of relevant clinical studies.

Career clusters

Business, Management, and Administration; Human Services; Marketing, Sales, and Service

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ESA

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Pharmaceuticals and Medications Industry ■ ■ ■ ■

Housekeeper Groundskeeper Security Guard Security Supervisor

Technology, Research, Design, and Development Technology, research, design, and development staff perform every scientific step in the process from drug discovery through introduction to the market. Nearly one-third of all positions within the pharmaceutical industry are professional occupations, including scientists and science technicians. Scientists collaborate with one another and with other industry professionals throughout the entire life cycle of a pharmaceutical product or medication. Life scientists may develop new drugs, study the effects of new chemical products on animals, investigate the action of drugs on the human body, or evaluate the safety or toxicity of drug products. Chemists may create models of chemical compounds, set standards for production or storage conditions, or test finished products for quality. Science technicians work under the supervision of scientists to operate and maintain laboratory equipment and conditions and to record results. Engineers, who represent a small fraction of pharmaceutical professionals, improve equipment design, layout, and workflow and devise manufacturing processes. Specific disciplines include, but are not limited to, chemical, mechanical, biomedical, and industrial engineering. Statisticians help design clinical trials and validate study results. Medical writers communicate technical medical information throughout the drug development and distribution phases. They write policies and procedures for company operations, design research and clinical trial protocols, publish findings from research studies, and produce education and training materials for in-house staffs and health care personnel. Salaries and wages within the technology and science professions vary widely based on education, work experience, and area of expertise, but overall earnings for most scientists and technicians are significantly higher than those for related professions in other industries. Significant growth is expected in research and development-related occupations through 2014. Especially given that they pay higher average sal-

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aries than their competitors in other industries, pharmaceutical companies prefer to hire scientists with advanced degrees who have published scientific and academic papers. A bachelor’s degree may or may not be required for a technician position; often, an associate’s degree or specialized training is a minimum requirement. A bachelor’s degree in computer science or information systems is a minimum requirement for most computer-systems analysts. Scientists and technology professionals with advanced degrees and several years of experience may have the opportunity for career advancement, becoming science or production managers or directors. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Computer Systems Analyst Engineer Chemist Biochemist Biophysicist Microbiologist Biological Technician Chemical Technician Pharmacist Physician Statistician Medical Writer

Manufacturing and Supply The manufacturing sector of the pharmaceutical industry is focused on chemical manufacturing, raw material supply, and pharmaceutical production. Quality control and assurance are integral to pharmaceutical manufacturing, and most companies have full-time employees devoted to maintaining the quality and integrity of their products. Engineers working in pharmaceutical manufacturing are responsible for the quality and reliability of both equipment and work processes. Chemical, mechanical, electrical, and industrial engineers are needed to oversee the manufacturing processes, and they routinely collaborate with scientists and other professionals to optimize those processes. All pharmaceutical manufacturing and supply personnel are tasked with producing drug products in large quantities while meeting regulatory demands and safety standards and preserving the

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are also needed to inspect final drug products by sorting, sampling, testing, and weighing random product samples. Pharmaceutical production and operations personnel work in scheduled shifts. Production and manufacturing facilities may operate twenty-four hours per day, allowing for flexible or nontraditional work schedules for employees. Working conditions in pharmaceutical manufacturing facilities are better than in most other types of manufacturing facilities, and work-related injuries are relatively rare. Most of the job functions in manufacturing and supply are not physically demanding. Career advancement to a supervisorial or managerial position is possible for producPat the cat sits behind a vial of insulin. The diabetic cat has been receiving tion workers who excel at their jobs. daily injections for four years. (AP/Wide World Photos) Wages in pharmaceutical production and operation occupations are higher than they are for similar occupations in health and safety of consumers and patients. Techother manufacturing industries. A bachelor’s denology in the sector is quickly evolving, and workgree is not required for most production and operers remain continuously challenged to broaden ations positions. A high school diploma or the their skills and knowledge base in order to improve equivalent and specialized in-house training, along their companies’ products. Pharmaceutical manuwith computer skills, are often necessary. facturing and supply personnel also face increasing Production and operations occupations may inpressure to design and implement environmenclude the following: tally conscious production facilities. Engineering positions require at least a bachelor’s degree or sig■ First-Line Production Supervisor nificant work experience in a related discipline. ■ Chemical Processing Machine Operator Manufacturing and supply occupations may in■ Mixing and Blending Machine Operator clude the following: ■ Packaging and Filling Machine Operator ■ Biomedical Engineer ■ Inspector ■ Chemical Engineer ■ Industrial Engineer Distribution ■ Industrial Engineering Technician Pharmaceutical products and medications are ■ Health and Safety Engineer distributed from manufacturing facilities first to ■ Quality Assurance Analyst drug wholesalers and then to physician offices, pharmacies, government agencies, and research Production and Operations labs, before they reach patient and consumers. The Most pharmaceutical manufacturing facilities transfer of drug products from manufacturers to are highly automated, but production-related ocwholesalers and from wholesalers to dispensing encupations still account for more than one-quarter tities is carefully regulated to avoid drug diversion. of all jobs within the pharmaceutical industry. The actual moving of drug products requires Workers are needed to operate and control the transportation and material-moving workers. Laborers and material movers move pharmaceutical machinery that produces bulk chemicals, mixes ingredients, and packages drug products. Workers freight or stock, as well as maintaining the equip-

Pharmaceuticals and Medications Industry ment necessary to accomplish that task. Material movers include truck and tractor operators, loaders, and related personnel. Distribution work is unskilled, general labor and is often repetitive and physically demanding. Workers in this area do not need formal or advanced education, but they should be attentive to detail and may be subject to security and background checks since they work with controlled substances. Wages are low compared to those of other pharmaceutical workers, but they are comparable to those of distribution workers in other manufacturing industries. Job growth is not expected in this area of the industry, owing to consolidation and streamlining of distribution and transportation processes. Distribution occupations may include the following: ■ ■ ■ ■ ■

Truck Driver Hand Freight Loader/Material Mover Machine Feeder and Offbearer Hand Packager Warehouse Supervisor

Infrastructure and Support Functions All pharmaceutical companies, regardless of size or specific function, need a stable, knowledgeable infrastructure to support the work of their scientists and manufacturers. Management, regulation, and financing are important aspects of drug design, development, and distribution systems. Regulatory affairs professionals understand federal regulatory requirements and compile the information and applications necessary to secure drug approval. Similarly, lawyers and legal experts ensure that patents are obtained for new drug products and draft contractual agreements between their companies and others. The pharmaceutical industry also places heavy emphasis on training and continuing education for employees in topics including safety, quality control, and new technological and medical developments. Pharmaceutical support workers assist and sustain company employees, as well as the communities in which companies are located. They also engage company stakeholders and improve corporate citizenship. Corporate outreach and community liaison roles help empower patients and improve access to medications.

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Infrastructure and support occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Accountant Payroll Clerk Human Resources Manager Human Resources Generalist Benefits Specialist Information Technology Specialist Training Specialist Education and Training Director Legal Counsel Community Outreach Coordinator Administrative Assistant

INDUSTRY

OUTLOOK

Overview The outlook for the pharmaceutical industry shows it to be on the rise. The aging of the world’s population will increase global demand for health care services and pharmaceutical products. The expansion of public and private health insurance companies will also contribute to increased growth of the pharmaceutical market. The pharmaceutical industry has not been immune to the effects of the recession of 2007-2009. Most pharmaceutical companies imposed cost-cutting measures as a result of lower-than-expected growth and decreased profits during the global financial crisis. Similarly, a decrease in the amount of public and private funding available for pharmaceutical and biotech research and development has decreased the research productivity of the industry as a whole. Today, the pharmaceutical industry faces challenges to its traditional mode of operation. Concerns about the transparency and integrity of the industry have compromised drug companies’ images and resulted in increased government regulation and public scrutiny. Further, profitability and growth are at risk, as health care budgets are strained, patents expire, and generics take over a large percentage of the pharmaceutical and medications market. Comparative effectiveness research—analyses of the relative effectiveness of different treatments—will increase, resulting in amplified production and distribution of generic medications around the world. The U.S.

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Pharmaceuticals and Medications Industry

government may examine reimportation guidelines and adopt price controls on pharmaceutical and medical products, further reducing industry profits. The success of pharmaceutical companies depends on their ability to improve their research and development productivity to mitigate the factors that limit their growth and profitability. The cost of drug discovery and development is the largest contributor to escalating costs and the declining number of new product launches. The costs of bringing a new drug to market will likely rise and will not vary between small biotech companies and large pharmaceutical companies. Further, with a deepening understanding of the human body and its disease states, there is a continuing shift in the pharmaceutical industry away from producing primary-care, therapeutic classes of drugs and toward producing specialty and biotech-driven products. Oncology and autoimmune products represent the fastest-growing therapeutic classes. Also, generic medications continue to replace branded drugs in major therapeutic classes, challenging brand-name pharmaceutical compa-

nies to innovate new, profitable products. As a result, companies such as Johnson & Johnson and Abbott, two of the world’s largest pharmaceutical companies, are growing their nonpharmaceutical business lines. Similarly, Roche, another large manufacturer of medicines and diagnostics, is expanding its oncology specialty franchise to generate increased revenue. Further large mergers, as well as small-scale acquisitions, by Big Pharma companies are expected, continuing industry trends. Consumers are the ultimate payers in health care, and they are increasingly proactive in managing their own health at reasonable costs. As a result, patients and consumers influence regulatory approvals, market decisions, and physicians’ prescribing practices. Owing to increased regulations, changes in pharmaceutical sales practices, and fear of lawsuits, physicians have become slower to adopt new products. Several notable black-box safety warnings have been issued in the twenty-first century, causing justifiable concern among consumers and prescribers. As public and private health care expands and the population ages, the demand for pharmaceuticals will continue around the world. The pharmaceutical industry will continue to expand, but it faces a new era of modest growth, more narrowly foPROJECTED EMPLOYMENT cused medications, and increased scruFOR SELECTED OCCUPATIONS tiny of safety issues.

Pharmaceutical and Medicine Manufacturing Employment 2008

Projected 2018

16,400

16,700

1,200

1,200

15,800

16,100

1,700

1,900

100

100

Occupation Chemists Legal occupations Life, physical, and social science technicians Media and communication occupations Pharmacists

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Employment Advantages Job prospects in the pharmaceutical industry are favorable. The industry is already one of the largest employers in the United States, employing 289,800 workers in 2008. The U.S. Department of Labor also reports that the industry will continue to grow by approximately 26 percent through at least 2014, exceeding the average growth rate of 14 percent for all industries combined during the same period. Workers in all stages of the pharmaceutical industry—from scientists involved in drug discovery to machine operators—will be in high demand. A significant advantage to the pharmaceutical industry is that it needs workers with diverse education levels, backgrounds, and work experience.

Pharmaceuticals and Medications Industry Production-related occupations account for slightly more than one-quarter of all jobs within the industry and include both low- and high-skilled tasks. Wages and salaries in the industry are higher than they are in other manufacturing industries. Professional occupations account for one-third of all jobs and include scientists, engineers, and science technicians. With industry growth expected and innovative drug products required, life scientists will be in particularly high demand in the future. The pharmaceutical industry offers exciting challenges and opportunities for growth, and job satisfaction within the industry is high. Annual Earnings Despite challenges to its traditional business model, the pharmaceutical industry enjoys continued growth and market expansion. In 2006, the global pharmaceutical market grew by 7 percent to earn $643 billion in revenue. This growth was due to an increase in prescribing volume in the United States owing to Medicare Part D, a governmentpaid prescription drug benefit for seniors. Strong innovations in oncology therapies also helped drive growth. North America accounts for 45 percent of global pharmaceutical sales, with the United States claiming nearly all of the North American revenue. In 2007, the U.S. pharmaceutical industry’s revenue was $286.5 billion, up nearly 4 percent from 2006. In total, North American revenues reached $290.1 billion in 2006. Outside the United States, the five major European markets (France, Germany, Italy, Spain, and the United Kingdom) have experienced slower growth than North America has, but they generated $123.1 billion in revenues in 2006. Latin American and African markets are experiencing higher growth than other countries because of increased life expectancies and improved standards of living and medical care. By 2013, the global pharmaceutical market is projected to exceed $975 billion. The rate of growth of the industry is likely to remain low, but strong demand for safe, effective, and innovative medications will continue.

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RELATED RESOURCES FOR FURTHER RESEARCH Biotechnology Industry Organization 1201 Maryland Ave. SW, Suite 900 Washington, DC 20024 Tel: (202) 962-9200 Fax: (202) 488-6301 http://www.bio.org Drug Information Association 800 Enterprise Rd., Suite 200 Horsham, PA 19044-3595 Tel: (215) 442-6100 Fax: (215) 442-6199 http://www.diahome.org International Federation of Pharmaceutical Manufacturers and Associations Chemin Louis-Dunant 15 P.O. Box 195 1211 Geneva 20 Switzerland Tel: 41-22-338-3200 Fax: 41-22-338-3299 http://www.ifpma.org International Society for Pharmaceutical Engineering 3109 W Dr. Martin Luther King, Jr., Blvd., Suite 250 Tampa, FL 33607-6240 Tel: (813) 960-2105 Fax: (813) 264-2816 http://www.ispe.org Pharmaceutical Research and Manufacturers Association of America 950 F St. NW Washington, DC 20004 Tel: (202) 835-3400 Fax: (202) 835-3414 http://www.phrma.org

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Pharmaceuticals and Medications Industry ABOUT

THE

AUTHOR

Jennifer L. Gibson holds a bachelor of science degree in biochemistry from Clemson University, with a research emphasis in enzyme structure and function; she earned a doctorate in pharmacy from the Virginia Commonwealth University’s School of Pharmacy. She has clinical practice expertise as a pharmacist in a hospital setting. She is also a medical communicator with experience in researching and preparing scientific publications for international journals and creating medical education resources and presentations for health care professionals.

FURTHER

READING

Alliance for Retired Americans Educational Fund. Outrageous Fortune: How the Drug Industry Profits from Pills. Washington, D.C.: Author, 2007. Angell, Marcia. The Truth About Drug Companies: How They Deceive Us and What to Do About It. New York: Random House, 2004. Bastianelli, Enrico, Jurg Eckhardt, and Olivier Teirlynck. “Pharma: Can the Middle Hold?” The McKinsey Quarterly, May 29, 2001, 118. Campbell, John J. Understanding Pharma: The Professional’s Guide to How Pharmaceutical and Biotech Companies Really Work. 2d ed. Raleigh, N.C.: Pharmaceutical Institute, 2008. Cockburn, Iain M. “The Changing Structure of the Pharmaceutical Industry.” Health Affairs 23, no. 1 (January/February, 2004): 10-22. Jacobsen, Thomas M., and Albert I. Wertheimer. Modern Pharmaceutical Industry: A Primer. Sudbury, Mass.: Jones and Bartlett, 2010.

McCarthy, Robert L., and Kenneth W. Schafermeyer. Introduction to Health Care Delivery: A Primer for Pharmacists. 2d ed. Gaithersburg, Md.: Aspen, 2001. Niebyl, Jennifer R. “The Pharmaceutical Industry: Friend or Foe?” American Journal of Obstetrics and Gynecology, April, 2008, 435. Organization for Economic Cooperation and Development. Pharmaceutical Pricing Policies in a Global Market. Paris: Author, 2008. Paul, Steven M., et al. “How to Improve R&D Productivity: The Pharmaceutical Industry’s Grand Challenge.” Nature Reviews: Drug Discovery 9, no. 3 (March, 2010): 203-214. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Congressional Budget Office. Research and Development in the Pharmaceutical Industry: A CBO Study. Washington, D.C.: Author, 2006. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Internal Revenue Service. “Pharmaceutical Industry Overview.” http://www.irs.gov/ businesses/article/0,,id=169579,00.html. World Trade Organization. “TRIPS and Pharmaceutical Patents: Fact Sheet.” Geneva, Switzerland: Author, 2006. http:// www.wto.org/english/tratop_e/trips_e/ factsheet_pharm00_e.htm.

Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Personal Services Career Cluster: Human Services Subcategory Industries: Business, Professional, Labor, Political, and Similar Organizations; Civic and Social Organizations; Grant-Making and Giving Services; Religious Organizations; Social Advocacy Organizations Related Industries: Counseling Services; Higher Education Industry; Libraries and Archives Industry; Museums and Cultural Institutions Industry; Personal Services; Political Advocacy Industry; Public Elementary and Secondary Education Industry Annual Domestic Revenues: $1.1 trillion (The Nonprofit Almanac, 2005) NAICS Number: 813

INDUSTRY

scholarship, but these organizations have several features in common: Their purposes are to promote ideals and causes, not to make money; they are part of both the private sector and the government; and they are dependent on donations of money and goods and on volunteer labor.

History of the Industry Philanthropic, charitable, religious, civic, and grant-making organizations have had a long, if not always cherished, place in American history and society. Their purposes have both overlapped and varied, but they have all sought a central place in the social and moral life of American society. Although Americans have always prided themselves on a society characterized by voluntarism, the diverse organizations that have both supported and been supported by this voluntarism were not always regarded with favor. Rather, changing political, social, and economic circumstances, along with competing ideas regarding charity and compassion, have had profound effects on their forms and practices. The overlapping role of the govern-

DEFINITION

Summary The philanthropic, charitable, religious, civic, and grant-making industry is not, strictly speaking, an “industry,” but a collection of organizations whose purpose is to provide services and that operate on a not-for-profit basis. This industry is diverse enough to include charities, religious institutions, service organizations, and foundations supporting 1423

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Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry

The Humane Society of the United States works to reduce suffering and improve the lives of animals, both directly through animal shelters and indirectly through advocacy. (©Michael Ledray/Dreamstime.com)

ment with private organizations has likewise changed throughout history. The separation of church and state established in the U.S. Constitution firmly placed religious organizations outside the public sector and contributed to the creation of religious-based private social service organizations. It also influenced the establishment of a partial separation of charitable and philanthropic efforts from religion. Despite the resulting American voluntaristic tradition, responsibility for the social commonweal was considered a public effort, and private charitable and social service efforts did not enjoy widespread approval or support until the mid-nineteenth century. The period before the Civil War was one of massive social challenges resulting from urbanization, immigration, and industrialization, and these

challenges only accelerated in the postwar decades. In particular, immigration created not only new challenges but also new promise, as newly arrived groups formed their own religious and ethnicity-based social services organizations. The late nineteenth century, remembered as a period of unregulated industrial growth, was also the period when modern philanthropy was born, as industrialists sought to do good with their fortunes, resulting in the creation of many still existing foundations. Charity and social services, by then increasingly privatized efforts, were undergoing a shift to a “scientific” approach that emphasized determining “worthiness” and promoting “moral uplift.” A burgeoning labor movement and its politically Progressive allies shifted the emphasis to a public and governmental responsibility for societal welfare, resulting in the strengthening and reforming of the public sector during the early twentieth century period known as the Progressive Era. It was not until the Great Depression, however, that the primary role of the private sector for public welfare was seriously challenged. The New Deal, as well as the postwar efforts culminating in the 1960’s Great Society, led to the creation of the modern welfare state, as well as of new roles for nonprofits of various descriptions. From the 1960’s onward, these nonprofits created a kind of “shadow state” that had significant influence in shaping government policy. This increased public role for nonprofits, however, led to an increasingly close relationship with the government that included not only the support of public money but also greater regulation regarding permissible activities, financial practices, and even compensation for top executives. The 1980’s would bring further changes to the roles and relationship of public and private nonprofit organizations. Increasing political conservatism and conservative religious revivalism led to a denigration of the welfare state, eventual cutting of public welfare, and an increased emphasis on private charity and voluntarism. However, fiscal conservativism and, later, declining revenues led to decreasing financial support for the same private organizations that were expected to play an increased public role. Paradoxically, although religious organizations were traditionally excluded from government support, recent presidential ad-

Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry ministrations have sought to change that tradition, first through the 1996 Charitable Choice Act and then through the creation of the Office of FaithBased and Community Initiatives. The Industry Today The public and private nonprofit industry today is the only sector of the American economy that is defined by what it is not—namely, that its primary purpose is not the creation of economic profits. It is also more varied in focus and purpose than ever before and covers numerous diverse categories, including government agencies and private organizations created to promote a sometimes intangible social, intellectual, or spiritual public welfare. In many of these areas, there are overlapping roles for public organizations and private agencies. The notable exception has traditionally involved interaction with religious organizations, where government support is more limited. Nonetheless, religious organizations enjoy tax exemption and other

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privileges similar to those of secular organizations. The degree and type of political activity and advocacy practiced by all nonprofit organizations can affect (though not necessarily eliminate) their taxexempt classification. The public and private nonprofit sectors, therefore, closely interact in a variety of ways, to the point that private nonprofits have come to be regarded as the “third sector” of the American economy, alongside government and private, for-profit industry. For all the popular political emphasis on the importance of private charities, philanthropies, and social services, however, government support has remained an integral part of the functioning of this sector, with all but the smallest organizations required to register with the Internal Revenue Service (IRS) and to accept a certain degree of IRS monitoring. In some cases, this has led to increased conservatism in the purposes and services of many private organizations. In recent years, there has been a noticeable blurring of lines between for-profit and not-for-

In 2007, about 13,000 cyclists participated in a two-day bike tour from Houston to Austin to benefit people with multiple sclerosis. The National Multiple Sclerosis Society holds similar events across the country. (AP/Wide World Photos)

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tions against nonprofit executives accepting the payment and perks of their counterparts in the forprofit sector. In 1991, a scandal involving the United Way resulted in the disaffiliation of many local federations from the national organization and the downfall of the organization’s president, William J. Aramony. This scandal is a key example of the real and imagined perils of the not-for-profit sector becoming too similar to the for-profit sector. Some industry observers argue that the restrictions on nonprofit organizations’ financial activities and structures are based on sometimes outmoded ideas regarding altruism and self-sacrifice and that they needlessly hamper the successful functioning of nonprofits. It is argued that restrictions on compensation in particular drive the most talented people to choose careers in the for-profit sector rather than in nonprofit or public service. At the lower level, these expectations can mean poor compensation for employees, especially in organizations that rely heavily on volunteer labor. They can sometimes put charitable organizations at odds with living wage campaigns. Among religious organizations, there are a variety of views and practices concerning compensation for institutional employees. Conversely, pay rates for public employment are usually set either directly or indirectly via legislation and may involve labor agreements with collective bargaining units. As the roles of the public sector and private nonprofits have shifted, another important trend among private not-for-profit organizations has been a move away from federationbased disbursement of funds toward increased donor control over that disbursement, even by small donors. This has resulted in an unprecedented diversity among organizations, not only in clientele and purpose but also in leadership and donation, including an increasing presence of women among top execIn 2010, a UPS employee, in partnership with United Way, rebuilds homes utives and boards. This increased didevastated by Hurricane Katrina in the New Orleans area. That same year, versity comes along with a greater, if Forbes magazine ranked United Way as the largest charity in the United still controversial, demand for the States. (AP/Wide World Photos) equal inclusion of faith-based orgaprofit activity, both in the sense that organizations devoted to the services traditionally provided by nonprofits have experienced unprecedented forprofit competition and in the sense that some forprofit enterprises make social action part of their business. These efforts have naturally been a source of controversy, as have the increasingly close partnerships between for-profit enterprise and not-for-profit organizations. Such partnerships lead to concerns regarding whether nonprofits can maintain a vital degree of independence from private industry and remain noncommercialized. Corporate sponsorship and support has long been a hallmark of many officially not-for-profit institutions, as has corporate participation on governing boards. Along with the mixed blessings of for-profit collaboration with nonprofits, there has been recent controversy over the increased use of administrative and financial practices from the forprofit sector. In particular, there has been a slow eroding of the social stigma and even legal prohibi-

Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry nizations in the public-private nonprofit partnership. This demand has provoked the most controversy when applied to religious organizations whose religious principles may sanction otherwise publicly unacceptable forms of discrimination, frequently regarding gender and leadership or the acceptability of homosexuality. Another significant change in the nonprofit sector has been the increasingly universal use of the Internet, as well as the increasing use of social networking sites, such as Facebook. Indeed, not only is fund-raising increasingly conducted via the Internet, but there is also a small but growing number of legitimate organizations whose presence on the Web greatly outpaces their brick-and-mortar facilities. Finally, the recession of 2007-2009 has once again highlighted the depth of the partnership between public services and the private not-for-profit sector. As governments struggle to balance budgets and rein in debts, public welfare has been heavily affected. At the same time, public funding for private nonprofit organizations has dried up, even though the need for their services has not decreased and, in many cases, has increased. Although the future of many individual organizations remains uncertain, the not-for-profit industry remains a vital and important sector of the American economy and polity.

INDUSTRY MARKET SEGMENTS Generally speaking, nonprofit organizations are those that qualify for tax-exempt status under the U.S. Tax Code. They may be almost any size, from an organization with one full- or even part-time employee that subsists on volunteer labor, to an international nongovernmental organization (NGO) with a worldwide employee base. Almost all have fewer paid staff than do organizations with equivalent budgets in the for-profit sector, and their unpaid volunteers and interns may therefore have significant operational responsibilities. Small Organizations Small organizations in the nonprofit world include local organizations and foundations, as well as local churches, synagogues, and other religious institutions. In the public sector, they may include

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local government agencies. Though they vary in size and purpose, most remain small-scale, and many private agencies are heavily dependent on volunteer labor. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the overall average annual salary of all employees in the nonprofit sector was $41,080 in 2009. On average, members of the clergy earned $46,480, community and social service specialists earned $39,750, social and human service assistants earned $31,690, and child, family, and school social workers in the industry earned $36,820. Lawyers in the nonprofit sector earned an average of $113,980. General and operations managers earned an average of $104,900, while social and community service managers earned an average of $60,320. Clientele Interaction. In small organizations, clientele interaction is more likely to be individualized and one-on-one. Projects of these organizations tend to be comparatively few, local, and small-scale. Clientele may be further limited for organizations that are dedicated to serving distinct populations, including religious groups. In some cases, individual organizations may work on a federated basis through larger organizations in order to effectively serve their client pools. Nonetheless, for many of these organizations, client service is the point of being, and dedication to this purpose is the expectation. Amenities, Atmosphere, and Physical Grounds. Although many small nonprofit organizations, especially most houses of worship, are likely to have their own buildings and grounds, many others may merely have offices or office suites, located in larger professional buildings. Amenities in these settings may be basic, and in some organizations equipment and supplies may be donated. Depending on the organization, the atmosphere may be more informal and less bureaucratic than in larger organizations. Typical Number of Employees. Small nonprofit organizations, especially in the private sector, are almost invariably characterized by small staffs, which may include as few as one full-time paid employee. Depending on the type of organization, five may be a typical number, but many nonprofits may not have any full-time employees, and many are heavily dependent on volunteer labor.

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Traditional Geographic Locations. Small nonprofit organizations may be located anywhere but are more likely than larger organizations to be found in smaller towns and communities. They are also less likely to have multiple locations or branch offices. As with larger organizations, however, a growing number in recent years have been developing a presence in cyberspace. Pros of Working for a Small Organization. Working in a small nonprofit organization has many advantages, not the least of which is less bureaucratization and more opportunity to work oneto-one with people of different backgrounds and perspectives. There tends to be a closer relationship among the paid staff and boards, as well as with the community, and there may also be more opportunities to work in multiple areas and for direct involvement with clients and donors alike. Finally, for nonprofit entrepreneurs, small organizations may require only low overhead to start. Cons of Working for a Small Organization. Although working for a small nonprofit organization can bring much personal and professional satisfaction, it may also involve numerous headaches and disadvantages peculiar to small organizations. First, in a smaller, less formal workplace, office politics have the potential to become personal, especially among the often dedicated and idealistic people who choose nonprofit work. Additionally, because idealism is emphasized and budgets may be limited, small organizations may suffer from a limited leadership pool. Although there are possibilities for advancement and specialization within the organization, they may be limited. Smaller organizations also are likely not only to be more dependent on volunteer labor but also to require greater staff deference to volunteer boards. With limited budgets and infrastructures, not only is pay likely to be poor, but the managerial leadership is also likely to be less professional, providing fewer opportunities for professional development and networking to employees. In short, small organizations have all the problems of nonprofit organizations, exacerbated by small size and budget. Costs Payroll and Benefits: This form of overhead is likely to be minimal in small nonprofit organizations, thanks in large part to reliance on volunteer labor and leadership. The relatively few full-

time positions are likely to be salaried, but parttime employees may be paid on an hourly basis. Benefits likewise may be minimal, especially in entrepreneurial nonprofits whose staff may be essentially self-employed. Notably, this expense may be especially affected by available revenues. Supplies: Supply requirements depend on the type of organization, although nearly all require general office, computer, and communication supplies and equipment. Some organizations may also require self-publishing supplies and library material, and the needs of religious organizations may include the appropriate religious sancta and books, as well as musical instruments and sheet music. Many organizations also require food for social and fund-raising events. External Services: In small organizations, services such as computer and equipment maintenance and repairs, legal counsel, financial services, publicity and public relations, and consulting are likely to be contracted out, along with maintenance and security, although many religious organizations are likely to employ at least parttime staff for building cleaning, maintenance, and groundskeeping. Some maintenance and even clerical services may also be donated. Utilities: Utilities for small organizations include the basics of electricity, water, sewage, garbage collection, telephone, and Internet access. Many organizations, notably churches and synagogues, have begun attempting to minimize their environmental and carbon footprints. Taxes: Although small nonprofit organizations are by definition tax exempt, they must adhere to the appropriate IRS codes and accept monitoring as necessary. Most employee pay remains taxable. Midsize Organizations Midsize nonprofit organizations are a varied group that can sometimes be more diverse than either small or large organizations. These organizations may be local, regional, or national private entities or government agencies. In the case of religious institutions, they may include both individual congregations and larger religious organizations. Potential Annual Earnings Scale. Midsize nonprofit organizations are likely to have a more stable and diverse donor population than their small counterparts, though even that may depend on the

Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry type and nature of the organization. Their donor pool is more likely to include corporate donors and sponsors from the for-profit sector, and partnerships with for-profit organizations are more common in this sector. Depending on the type of organization, there is more likely to be fee-based revenue, and as with small public agencies, midsize ones are supported by taxes and fees. According to the BLS, the overall average annual salary of all employees in the nonprofit sector was $41,080 in 2009. On average, members of the clergy earned $46,480, community and social service specialists earned $39,750, social and human service assistants earned $31,690, and child, family, and school social workers in the industry earned $36,820. Lawyers in the nonprofit sector earned an average of $113,980. General and operations managers earned an average of $104,900, while social and community service managers earned an average of $60,320. Clientele Interaction. The type of clientele interaction depends on the size, type, and purpose of the institution, but it is likely to be less individualized and more bureaucratic than in small organizations. There may be less direct employee-client interaction, but there may also be opportunities to work with a larger and more diverse clientele than is served by smaller organizations. Amenities, Atmosphere, and Physical Grounds. Midsize organizations are more likely than their small counterparts to have their own buildings and grounds, or at least multiple offices or office suites, depending on the type of organization. There may be more personal and professional amenities available within midsize organizations than in small ones, and their availability may be less dependent on direct donations. Typical Number of Employees. In the nonprofit world, the number of employees may be absolutely smaller at a midsize organization than it would be at its for-profit counterpart, especially since organizational size is determined by amount of revenue rather than number of employees. As a result, midsize organizations may be categorized as those that have between five and twenty-five fulltime employees, supplemented by larger numbers of part-time employees and significant volunteer labor. Traditional Geographic Locations. Like nonprofit organizations, midsize organizations may be

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located anywhere, though they are less likely than their small counterparts to be located in small towns and communities. Many have multiple regional, if not always national, branches, and they are increasingly likely to have an additional presence in cyberspace. Pros of Working for a Midsize Organization. Working for a midsize nonprofit organization may offer the best of both small and large organizations. Midsize organizations may be more financially and organizationally stable than small organizations and may have fewer problems with excess bureaucracy than large organizations. There may be better compensation, greater career mobility, and greater opportunities for specialization and professional growth than in small organizations. Plus, midsize organizations are more likely than small organizations to offer the satisfaction of name recognition, and, depending on the type of organization, they may offer better financial and professional resources. Cons of Working for a Midsize Organization. Although midsize nonprofit organizations may on average have greater financial and organizational viability than their small counterparts, they may nonetheless have fewer resources, and therefore be less likely to survive economic downturns, than large organizations. As with midsize forprofit corporations, their ambitions may outpace their available resources, leading to more frustrated and unfulfilled organizational goals. In addition, they may have less professional management than large organizations, and paid staff may be more dependent on volunteer labor and beholden to volunteer boards. Costs Payroll and Benefits: There are more salaried full-time positions available in midsize organizations, though they may still be few compared to positions paid on an hourly basis. Top executives are unlikely to be compensated at rates comparable to those of the private sector, and the pay rate for hourly positions in some cases may not be much more than the minimum wage. In public agencies, pay rates are determined by legislation, union contracts, or some combination, and pay and benefits are likely to be more generous in the public sector. On the other hand, public agencies are increasingly

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contracting out certain job categories to private, for-profit vendors. Supplies: Supply requirements vary according to the type of organization but are likely to include all of the necessary office, computer, and communications equipment and supplies. Library and self-publishing supplies may be included, along with the appropriate sancta, religious books, and musical supplies for religious organizations. Less commonly than in small organizations, some supplies may be donated, although in some cases, they may be purchased at a discount. External Services: Although computer and equipment repair and maintenance may be performed by in-house staff, it may also be contracted out, and the same is true for maintenance and security, although midsize institutions are more likely to maintain most of these positions inhouse. In addition, midsize institutions are more likely to engage outside consultants, legal counsel, accounting services, publicity and public relations services, catering, and entertainment services. Utilities: Midsize nonprofit institutions require all the essential utilities to function, including electricity, water, sewage, garbage removal, telephone, and Internet access. Taxes: Although nonprofit organizations are by definition tax exempt, their type and degree of tax exemption may depend on the nature and amount of political advocacy they engage in. All private nonprofit organizations are required to register with the IRS and accept a certain degree of public monitoring in order to maintain their tax-exempt status. Large Organizations Large not-for-profit organizations include the big-name national and international charities and foundations. Although they may be the projects of individuals or families, they are more likely to be broad-based organizations whose identities transcend those of individuals and families. They may also be public agencies or subsectors of government departments. Potential Annual Earnings Scale. According to the BLS, the overall average annual salary of all employees in the nonprofit sector was $41,080 in 2009. On average, members of the clergy earned $46,480, community and social service specialists

earned $39,750, social and human service assistants earned $31,690, and child, family, and school social workers in the industry earned $36,820. Lawyers in the nonprofit sector earned an average of $113,980. General and operations managers earned an average of $104,900, while social and community service managers earned an average of $60,320. Clientele Interaction. Clientele interaction is on average far less personalized and more bureaucratic in large organizations and agencies than in smaller ones, except in the cases of some local branches. Depending on the type of organization, client interaction may involve less interaction with private individuals and more with other organizations and their representatives. Amenities, Atmosphere, and Physical Grounds. Large nonprofit organizations are the most likely to have their own building and grounds and to have multiple offices and even campuses. Office amenities are more likely to go beyond the basic and may be similar to those found in the offices of for-profit businesses. The atmosphere at these organizations may be more formalized and bureaucratized than in smaller organizations but may still emphasize a sense of mission that differentiates them from for-profit corporations. Typical Number of Employees. The number of full-time employees in a nonprofit organization, for which size is gauged by revenue rather than personnel, is likely to be smaller than for a comparably sized for-profit corporation, but one operative definition for a large organization is one that employers twenty-five or more full-time employees. These numbers may not account for larger numbers of part-time employees and certainly not for the numerous volunteers whose leadership and labor help many nonprofits carry out their missions. In any case, the size and prestige of private nonprofit organizations may not necessarily be correlated with the number of employees. Traditional Geographic Locations. Large notfor-profit organizations are most likely to be found in major metropolitan centers, and private nonprofits are the most likely to have multiple locations in the form of headquarters and regional field offices, sometimes located nationwide. Most large nonprofit organizations also maintain a strong presence in cyberspace. Pros of Working for a Large Organization. Working for a large nonprofit organization offers a

Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry variety of opportunities to associate with and enjoy the prestige of a widely recognized organization. For career changers moving from the for-profit to the not-for-profit sector, large organizations may offer the most opportunities for transference of professional skills and, for all professional employees in the nonprofit sector, may offer the best opportunities for specialization, career advancement, professional development, and networking. They may also offer some categories of nonprofit employees the most glamour in terms of opportunities for interaction with prominent individual and corporate donors. Finally, pay and benefits, especially at the top executive level, are more likely to be generous, though not necessarily approaching those offered by the for-profit sector. Cons of Working for a Large Organization. As with large for-profit organizations, one chief disadvantage of working for large nonprofit organizations or public agencies is greater bureaucracy, with all of its attendant problems, including the sense of being merely a “cog in the machine.” There may be less opportunity for direct client and donor interaction than in smaller organizations. Because large organizations are more likely to work closely with for-profit corporate partners, the effects of commercialization may diminish the sense of organizational idealism. Paradoxically, legal restrictions and social stigmas regarding compensation for nonprofit employees may make jobs at these organizations less attractive to those who have the potential to earn much more in the for-profit sector. Costs Payroll and Benefits: Large organizations and agencies maintain the most full-time, salaried employees, but salary costs may be kept down through formal and informal limits on nonprofit employee compensation. Likewise, fulltime employees in nonprofit organizations are more likely to have benefits, though they may be less than those available in the for-profit sector. Even so, it is possible in some organizations for top executives to earn six-figure salaries. Beyond full-time employees, payroll expenses may include compensation for part-time and hourly employees. Supplies: As with smaller organizations, supply needs for large nonprofit organizations may depend on the size of the organization but invari-

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ably include office, computer, and communication supplies and equipment. They may also include necessary library, self-publishing, and mailing equipment External Services: Although large not-for-profit organizations are the most likely to maintain inhouse maintenance, repair, and security staff, they are increasingly likely to contract these services to for-profit vendors, an increasing trend among public organizations as well as private agencies. Large nonprofit organizations are also the most likely to engage outside consultants on a regular and sustained basis. They may also contract catering and entertainment for fund-raising events and benefits, legal counsel, financial services, lobbying, publicity, public relations, and software design and administration. Utilities: Large nonprofit organizations require the most significant use of basic utilities, including electricity, water, sewage, garbage removal, telephone, and Internet access. Taxes: Although nonprofit organizations may receive tax exemption regardless of size, the type and degree of tax exemption may be dependent upon how much and what type of political activity a given organization practices. For that reason, large organizations, as with their smaller counterparts, must register with the IRS and accept a certain degree of monitoring in order to maintain tax-exempt status. The close partnerships with for-profit enterprises that some large nonprofits maintain may create additional complications regarding tax exemptions. It is becoming increasingly common for umbrella organizations to operate simultaneously multiple nonprofit entities, such as a 501(c)3 and a 501(c)4, each of which has different limitations on permissible activities. Thus, for example, the organization may conduct its lobbying efforts through its 501(c)4 while conducting its nonpartisan activities through its 501(c)3.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Although the not-for-profit industry is regarded as almost synonymous with volunteer work and voluntarism, there are numerous professional roles

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and opportunities available within this sector. Although some opportunities may require skills and training similar to those required in the for-profit world, some may require more specialized preparation. Similarly, while many professional opportunities with not-for-profit organizations may involve more mundane and less glamorous duties than the voluntary opportunities, other nonprofit professional roles may offer unique opportunities to educate, influence, and even inspire. In the case of religious organizations, there may be significant religious requirements, chief among them faith membership, for entry into certain job categories, while for other job categories, religious requirements may be negligible or nonexistent. On the other hand, in some organizations even low-level support staff may be required to subscribe to the organization’s culture and mission. In nearly all of these categories, working conditions and compensation may vary widely, sometimes even for the same type of position. Finally, although it is not true for all job categories, for some nonprofit jobs, it is possible to gain entry to paid positions via volunteer work, and in many cases previous relevant volunteer work may be considered advantageous. The following umbrella categories apply to the organizational structure of organizations in the philanthropic, charitable, religious, civic, and grantmaking industry:

and mission of the organizations they work for and to understand the differences between performance criteria for nonprofit organizations and those of for-profit enterprises. In high-level administrative positions, this may mean working closely with volunteer boards, organizational members and volunteers, spiritual or religious leaders, or some combination. Depending on the type of position and organization, administrative roles may merely involve responsibility for day-to-day management or may require long-term, visionary leadership. In numerous instances, administrative occupations may require a careful balance of authority and deference to voluntary boards, as well as a focus on the less “glamorous,” nuts-and-bolts aspects of nonprofit organizations. Also, depending on the size of the organization’s paid staff, administrative occupations may involve multiple and sometimes diverse responsibilities. There are many entry points to administrative careers in this industry, and in many cases the required skills and background may be easily transferred from the forprofit world. However, compensation is likely to be significantly less than it is for similar positions in the for-profit sector. Management and administrative occupations may include the following: ■

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Management and Administration Client and Donor Services Public Relations Facilities and Security Technology, Research, and Development Financial and Legal Services Education and Spirituality Human Resources

Management and Administration As in the for-profit economy, good administration and management are vital to the successful operation of philanthropic, charitable, civic, and grant-making organizations. There are notable differences, though, between working for these organizations, whether at the high or low levels of administration, and holding similar jobs in the forprofit sector. To begin with, administrators and their support staff at all levels are required to maintain at least a minimal adherence to the purpose

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Executive Director/Chief Executive Officer (CEO) Chief Operating Officer (COO) Program Officer Project Director Administrative Assistant Receptionist

Client and Donor Services Among philanthropic, charitable, civic, and grant-making organizations, client services are what stand in for customer service in for-profit enterprises, and donor services constitute a relatively unique department. Combined, they form the lifeblood of nonprofit organizations, most of whose purposes are providing services and advancing social causes. For that reason, working in client relations, donor relations, or both requires a broad set of people skills for dealing with diverse populations that, depending on the organization, might even overlap. In both cases, working in either of

Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry these sectors may require specialized knowledge pertaining to the type of organization, and in some instances may require advanced degrees. Additionally, for some organizations, working in either of these sectors may require an awareness of broader class and economic issues and even political trends. For many organizations, it is also important for specialists in this sector to maintain awareness of changing donor and client pools. Occupations within this sector may also involve coordination and supervision of volunteer labor and, in the case of donor relations, may require knowledge of Internet and social networking technology. Notably, client and donor services are both areas where it may be possible to gain entry into professional positions via volunteer experience. Client and donor relations occupations may include the following:

tant roles is to maintain a line between promotion and commercialization of their organization and its services. In addition to the appropriate professional education and background, working in public relations for nonprofit organizations is increasingly likely to require knowledge of Internet and even social networking technology. In some cases, skills may be transferable for those from for-profit public relations or journalistic backgrounds. Public relations occupations may include the following: ■ ■ ■ ■ ■ ■ ■

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Development Director Event Coordinator Program Director Project Director Fund-Raising Officer Case Worker Social Worker Psychologist

Public Relations Public relations and publicity are vital to the workings of philanthropic, charitable, religious, civic, and grant-making organizations, as well as to public agencies. Specialists in this sector may engage not only in promoting the organization and its goals but also in creating the public face of the organization and, in some cases, frequently dealing with the press. In addition, for many private not-for-profit organizations, publicity and public relations are vital to successful fund-raising. Finally, the job of public relations specialists in the nonprofit sector is often to manage the brand of the organization they serve. In some cases, public relations work may overlap with that of other departments, especially client and donor services. As partnerships between nonprofit organizations and for-profit corporations become more common, especially among larger organizations, public relations specialists may find themselves working in ethically and legally dicey areas and may find that one of their most impor-

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Marketing Director Assistant Marketing Director Publications Specialist Webmaster Public Relations Executive Press Agent Public Affairs Specialist Press Secretary Media Specialist

Facilities and Security Although seemingly mundane, facilities management and security are often essential to the successful running of private, not-for-profit organizations, as well as public agencies. For nearly all organizations and agencies, maintaining clean, attractive, and inviting facilities is as important as it is for for-profit businesses. In addition, while security needs may vary (and may not always require specialized personnel), for many public agencies and for numerous private ones (sadly, Jewish agencies in particular), professional security service is a must for maintaining a safe environment and preventing disruption of operations. Security needs may vary according to location, with institutions located in large metropolitan areas being more likely to require full-time security services. The number and type of facilities and security staff vary according to institutional needs and may be in-house, contracted out, or some combination. In addition, work in this area may be part or full time, and, while some institutions may mandate the payment of a living wage, many do not. Facilities service in particular may be strictly custodial or may involve a variety of duties. In the case of some religious institutions, some religion-specific duties may be involved, but denominational membership is not necessarily required as a result.

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Training and skills for occupations within the facilities and security sector are usually easy to transfer to and from other industries. Facilities and security occupations may include the following:

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Security Guard Custodian/Janitor Caretaker Sexton

Technology, Research, and Development Beyond the grant-making organizations and agencies that specialize in the support of research and development, technology, research, and development is a broadly categorized department within the philanthropic, charitable, religious, civic, and grant-making industry and may include everything from program and project development to development of Internet capacity, as well as research in a variety of areas. Research and development is also important to retroactive assessment of the success of nonprofit programming. This department therefore, may require broadbased technological skills, business skills, specialized knowledge pertinent to the organization’s mission, or a combination of these skills. Full-time opportunities in this department are most likely to be available in large organizations, whereas smaller organizations may be more likely to rely on parttime and volunteer labor for some functions and outside consultants for others. Because of the broad-based nature of this department, there are numerous career entry points, and for potential entrants, technological skills may be most easily transferable from the for-profit sector. Research and development are broad categories but frequently involve financial research skills that may be transferable from the for-profit sector, albeit with necessary refocusing. Additionally, private and public nonprofit organizations that specialize in research grants or social services may require more social-science-based research skills, and offer opportunities for skill transference in this case from higher education. Technology, research, and development occupations may include the following:

Financial and Legal Services Financial and legal services are essential to the successful management of private philanthropic, charitable, religious, civic, and grant-making organizations, as well as to the functioning of public agencies. Legal services are often necessary for managing potentially difficult legal issues organizations may face and to assist in settling lawsuits and legal disputes. In addition, some nonprofit organizations or agencies may specialize in legal services or in legal advocacy and therefore retain lawyers and legal staff for that purpose. The roles of financial service specialists in nonprofit organizations are more varied and complex. Competent financial management is vital to the solvency of nonprofit organizations and includes monitoring income, outflows, and disbursement of funds. Beyond day-to-day duties, specialists in financial services also play key roles in long-term financial planning, risk management, and fundraising, and they may work in tandem with legal specialists to deal with the requirements regarding tax exemptions. Specialized professional training is usually required for this group of occupations. In many cases, skills and qualifications are transferable from the for-profit sector, and financial services occupations in this industry may be especially attractive to those with business school backgrounds. Nonetheless, those who transfer to this sector from for-profit organizations must be prepared to adapt to a different kind of business culture and, in most cases, be willing to accept compensation that is notably below that of comparable occupations in for-profit industries. Financial and legal occupations may include the following: ■ ■ ■ ■

■

Management Information Systems Director

Chief Technology Officer (CTO) Special Projects Manager Development Director Webmaster Researcher Statistician

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Chief Financial Officer (CFO) Certified Public Accountant Development Officer Finance Officer Grants Manager Special Projects Manager

Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry OCCUPATION

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PROFILE

Clergy Considerations

Qualifications

Description

Provides religious services for believers.

Career cluster

Human Services

Interests

People

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; volunteer work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

SAI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Attorney Paralegal Legal Secretary

Education and Spirituality Although this segment may be pertinent only to certain sectors of the not-for-profit industry, religious and spiritual leaders, along with religious education and sacred music specialists, play vital roles in religious institutions. In most houses of worship, ministers, priests, rabbis, imams, and other spiritual leaders are the recognized heads of the organizations they serve, yet in some cases they also may be regarded as employees, with little difference from other religious institution personnel. Spiritual leaders of all faiths are increasingly likely to be found working in nonprofit settings other than houses of worship, including charitable and educational institutions. They must meet the requirements of their respective faiths, which frequently include formal ordination by the appropriate religious organization. In addition, depending on the size and type of the institution, job description and

compensation may vary, notably in that spiritual leaders may also take on educational and even musical roles. In large institutions, they are more likely to be assisted, especially in musical duties, by specialists in the appropriate sacred music or religious education field. Occupations in these areas, therefore, require specialized education and training and frequently (though not universally) membership in the appropriate faith. Most of these occupations may involve some supervisory duties, and some may involve specialized work with children and youth. Nearly all require some weekend work, and in some cases those who practice these occupations may also be members of or participants in the institution they serve. Education and spirituality occupations may include the following: ■ ■ ■ ■ ■

Minister/Priest/Rabbi/Imam Chaplain Cantor/Cantorial Soloist/Church Soloist Organist/Musician Music/Choir Director

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Educational Director Religious School Teacher

Human Resources The human resources department within the philanthropic, charitable, religious, civic, and grantmaking industry deals with essentially the same issues as its counterparts in for-profit industries, including hiring and firing, organizational discipline, and dispute resolution, along with contract negotiations of various kinds. There are, however, some key differences that create complications for specialists in this department. Chief among them is the small size of most not-for-profit organizations, which frequently makes it impossible to have even one full-time specialist in human resources. The other, which is genuinely unique to the nonprofit industry, is the high reliance on volunteer labor. This reliance requires a different type of human resource management method, one that treats volunteer labor with the appropriate seriousness but also recognizes the different conditions involved in volunteer versus paid work. In any case, the role of employer-employee relations may vary according to the size and type of organization. Although larger organizations have specialized personnel officers, more often, human resources is fully integrated into general management, and there may be only one full-time personnel specialist, if any. The heavy reliance on volunteer labor may affect or limit the role of the human resources department as conventionally defined, and in the case of higher-level management and leadership roles, hiring decisions may require close cooperation with organizational boards and even, in some cases, membership. Human resources occupations may include the following: ■ ■ ■ ■

Human Resources Manager Personnel Manager Ombudsman Volunteer Coordinator/Supervisor

INDUSTRY

OUTLOOK

Overview The outlook for the philanthropic, charitable, religious, civic, and grant-making industry appears

to be stable, even in hard economic times, although the outlook varies among different subsets of the industry. This variation makes the outlook for the nonprofit industry difficult to compare to those of many for-profit industries, particularly given the different ways of measuring success in the two sectors. The recession of 2007-2009 in particular highlights the interdependence among many not-for-profit organizations, as well as between the public and private sectors of the industry. In practice, this set of interdependencies means that, while there will definitely be an increased need for the services of many kinds of nonprofit organizations, public, private, and corporate funding sources may be less available. The programming and even functioning of many organizations has been affected by the declining donor pools and availability of (tax-deductible) disposable income. Public agencies and private organizations alike have been and will be affected by state budget cuts, and while fee-based income may help make up the difference for some organizations, it is not likely to do so completely. Many organizations, moreover, will not have this option readily available to them. The upshot is that the persistent need for nonprofit organizations may not translate into the steady availability of full-time paid employment within these organizations, especially in sectors that traditionally have relied on part-time and volunteer labor. While an increasingly businessoriented approach to nonprofit management may stabilize some organizations and make it possible to encourage greater experimentation and risktaking, the business approach may also result in greater conservatism in mission and methods in order to limit the risk of offending potential donors, especially institutional donors from the for-profit corporate world. Additionally, an increased blurring of lines between not-for-profit and for-profit organizations may entail risks of increased commercialization and obscuring of mission, even as some nonprofit organizations might see this shift as necessary in order to remain competitive, especially as some services that traditionally have been the purview of nonprofits are being taken up by for-profit enterprises. Even with these issues, however, not-for-profit organizations should maintain a steady role as the “third sector” of the American economy and furthermore one that many regard as vital to the health and functioning of American

Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry democracy. The continued presence and perceived necessity of the nonprofit industry also highlights the enduring place of voluntarism and altruism in an otherwise increasingly commercialized American society. The continued economic and social presence of nonprofit organizations also does not stop at the borders of the United States. A growing number of organizations, especially the larger ones, are or are becoming international in scope and operation, some with the sponsorship, assistance, and even active management of prominent individuals. Beyond these, however, there are numerous nonprofits and NGOs that play important charitable, cultural, economic, and even diplomatic roles on an international and global scale. Notably, in countries that feature more advanced welfare states than the United States, charitable organizations may not be perceived as playing the same essential role, but they nonetheless remain a significant part of national economies. In other parts of the world, there may be sometimes uncomfortable negotiations between international nonprofits and indigenous organizations, especially regarding control of the disbursement of funds and goods. Nonetheless, the success of internationally focused nonprofits and of NGOs both require and promote

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international cooperation, providing these organizations with an often unacknowledged role in the global economy.

Employment Advantages Although full-time employment in many sectors of the philanthropic, charitable, religious, civic, and grant-making industry may sometimes be hard to secure and may never offer comparable pay and benefits to those of for-profit industries, jobs in this industry can offer intangible benefits that few forprofit enterprises can match—namely the opportunity to perform intellectually stimulating work and to work for the advancement of causes that one genuinely cares about. It is best, therefore, to pursue a career in the nonprofit industry with a healthy balance of idealism and realism, along with the willingness to put in the necessary hours and seek the appropriate training for the particular subset of the industry in which one is interested. That said, the nonprofit industry offers many points of entry and comparatively uniquely involves the possibility of securing paid employment via volunteer work. Additionally, in some departments, it is comparatively easy to transfer from forprofit employment, and in some cases there are even possibilities for entrepreneurship. In summation, while it is difficult at best to become rich working for nonprofit organizations, most peoPROJECTED EMPLOYMENT ple who go into this industry enFOR SELECTED OCCUPATIONS joy the satisfaction of working for an organization dedicated to Religious, Grantmaking, Civic, advancing societal good.

Professional, and Similar Organizations Employment 2008

Projected 2018

Occupation

650,800

733,300

Clergy

8,800

10,000

Counselors

77,900

87,800

Directors, religious activities and education

24,800

27,800

Social workers

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Annual Earnings In some ways, it is difficult to gauge the annual earnings of the philanthropic, charitable, religious, civic, and grant-making industry, precisely because it is broad-based enough to include a variety of organizations with widely differing structures, purposes, and budgets. Aside from the seeming philosophical contradiction of measuring the earnings of not-for-profit organizations, there are also practical obstacles. Chief among them is

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Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry

that annual earnings are just one measure for rating nonprofit institutions and not even the chief one. Another difficulty is that annual income frequently includes donations of time and goods, rather than simply money. In addition, the differing structures and resources of nonprofits, as well as the understandable emphasis on disbursement over income, make acquiring aggregate data difficult. The Nonprofit Almanac reports the combined domestic assets for all nonprofit organizations as totaling $3.4 trillion in 2005. International figures can be even more difficult to come up with, especially when figuring in different factors that account for widely varying levels of giving. While reports are available for individual countries, most of which are major powers in the global economy, most of them focus on disbursement statistics and similar rankings, rather than absolute dollar numbers or equivalents.

National Council of Churches 475 Riverside Dr., Suite 800 New York, NY 10115 Tel: (212) 870-2228 Fax: (212) 870-2030 http://www.nccsusa.org

ABOUT

THE

AUTHOR

Susan Roth Breitzer holds a Ph.D. in U.S. history with specialties in social, cultural, immigration, urban, and labor history. She has taught U.S. and world history at Fayetteville State University and additionally worked with manuscript collections for several nonprofit institutions. She is the author of numerous encyclopedia articles for reference works that include Issues: Understanding Controversies and Society, The Dictionary of American History, Encyclopedia of American Labor History, and Work in America: An Encyclopedia of History, Policy, and Society.

RELATED RESOURCES FOR FURTHER RESEARCH FURTHER Alliance for Nonprofit Management 1899 L St. NW, 7th Floor Washington, DC 20036 Tel: (202) 955-8406 Fax: (202) 822-0669 http://www.allianceonline.org Association for Research on Nonprofit Organization and Voluntary Action 550 W North St., Suite 301 Indianapolis, IN 46202 Tel: (317) 684-2120 Fax: (317) 684-2128 http://www.arnova.org Council on Foundations 2121 Crystal Dr., Suite 700 Arlington, VA 22202 Tel: (800) 673-9036 http://www.cof.org Foundations Center 79 5th Ave. New York, NY 10003-3076 Tel: (212) 620-4230 http://foundationcenter.org

READING

Boris, Elizabeth T., et al. What Drives Foundation Expenses and Compensation: Results of a ThreeYear Study. New York: Urban Institute, Foundation Center, and Philanthropic Research, 2008. Available at http:// foundationcenter.org/gainknowledge/ research/pdf/fec_report.pdf. Charities Aid Foundation. International Comparison of Charitable Giving, November, 2006. Kings Hill, West Malling, Kent, England: Author, 2006. Available at http://www .cafonline.org/pdf/International Giving highlights.pdf. Elazar, Daniel J. Community and Polity: The Organizational Dynamics of American Jewry. Philadelphia: Jewish Publication Society of America, 1976. Gassler, Robert Scott. The Economics of Nonprofit Enterprise: A Study in Applied Economic Theory. Lanham, Md.: University Press of America, 1986. Grobman, Gary M., and Gary B. Grant. The NonProfit Internet Handbook. Harrisburg, Pa.: White Hat Communications, 1997. Independent Sector. “The Sector’s Economic

Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry Impact.” http://www.independentsector.org/ economic_role. Keating, Barry P., and Maryann O. Keating. Notfor-Profit. Glen Ridge, N.J.: Thomas Horton and Daughters, 1980. Knauft, E. B., Renee A. Berger, and Sandra T. Gray. Profiles of Excellence: Achieving Success in the Nonprofit Sector. San Francisco: Josey-Bass, 1991. Lowell, Stephanie. Careers in the Nonprofit Sector. Cambridge, Mass.: Harvard Business School, 2000. Olasky, Marvin. The Tragedy of American Compassion. Preface by Charles Murray. Washington, D.C.: Regnery, 1992. Organization for Economic Cooperation and Development. The Non-profit Sector in a Changing Economy. Paris: Author, 2003. Pallotta, Dan. Uncharitable: How Restraints on Nonprofits Undermine Their Potential. Hanover, N.H.: University Press of New England, 2008. Raymond, Susan U. The Future of Philanthropy: Economics, Ethics, and Management. Hoboken, N.J.: John Wiley & Sons, 2004. Shaw, Sondra C., and Martha A. Taylor. Reinventing Fundraising: Realizing the Potential of Women’s Philanthropy. San Francisco: JosseyBass, 1995. U.S. Bureau of Labor Statistics. Career Guide to

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Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Von Drehle, David. “The Other Financial Crisis.” Time, June 28, 2010, 22-28. White, Michelle J., ed. Nonprofit Firms in a ThreeSector Economy. Washington, D.C.: Urban Institute, 1991. Wing, Kennard T., Katie L. Roediger, and Thomas H. Pollak. The Nonprofit Sector in Brief: Public Charities, Giving, and Volunteering, 2009. Washington, D.C.: Urban Institute, 2010. http://www.urban.org/uploadedpdf/412085nonprofit-sector-brief.pdf. Wolch, Jennifer L. The Shadow State: Government and Voluntary Sector in Transition. New York: Foundation Center, 1990.

©Ann Murie/Dreamstime.com

Plastics and Rubber Manufacturing Industry

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Birth Control Device Manufacturing; Laminated Plastics Plate, Sheet (Except Packaging), and Shape Manufacturing; Plastics Bottle Manufacturing; Plastics Packaging Materials and Unlaminated Film and Sheet Manufacturing; Plastics Pipe, Pipefitting, and Unlaminated Profile Shape Manufacturing; Plastics Plumbing Fixture Manufacturing; Plastics Product Manufacturing; Polystyrene Foam Product Manufacturing; Resilient Floor Covering Manufacturing; Rubber and Plastic Hoses and Belting Manufacturing; Rubber Product Manufacturing; Rubber Product Manufacturing for Mechanical Use; Tire Manufacturing; Urethane and Other Foam Product (except Polystyrene) Manufacturing Related Industries: Automobiles and Personal Vehicles Industry; Chemicals Industry; Petroleum and Natural Gas Industry; Toys and Games Industry Annual Domestic Revenues: $215 billion USD (Business Wire, 2009) Annual International Revenues: $2.8 trillion USD (IBISWorld, “Plastics & Rubber Machinery Manufacturing,” U.S. Industry Report, 2010) Annual Global Revenues: $3.015 trillion USD (Business Wire, 2009, and IBISWorld, 2010) NAICS Number: 326

INDUSTRY

DEFINITION

cules consisting of numerous repeating and linked units or building blocks. Polymers such as synthetic plastics and rubber constitute a major portion of the basic chemicals market. The industry manufactures a variety of products, from plastic resins to natural, synthetic, and reclaimed rubber. The term “plastic” is derived from a Greek word meaning pli-

Summary The plastics and rubber manufacturing industry is part of the basic chemicals industry, sometimes called commodity chemicals. Plastics and rubber are polymers, very large natural or synthetic mole1440

Plastics and Rubber Manufacturing Industry able, and in modern usage plastics are natural or synthetic materials that can be molded into products using heat, pressure, or a combination of both. Traditionally, plastics have been divided into two types: thermoplastics, such as polyvinyl chloride, which soften and melt under high heat, and thermosetting plastic materials, such as vulcanized rubber, which retain their shape after solidification. Throughout the twentieth century, the manufacture of plastics and rubber products constituted an increasingly high percentage of developed and developing countries’ output. In the United States, this industry has been variously estimated to comprise ten thousand to sixteen thousand companies that play a pivotal role in the nation’s economy. History of the Industry Though often linked in contemporary practice, the histories of rubber and plastics were largely separate until the twentieth century. Modern scholars have shown that Native American Maya used rubber as far back as 1600 b.c.e. Ancient artisans used the sap of certain plants and trees (later called latex) to make balls, containers, human figures, and footwear. They also discovered that the juice from such plants as the morning glory, when mixed with latex sap, formed a durable, elastic material that proved advantageous for binding axe heads to handles, as well as for waterproofing clothing and headgear. The most notable use of what subsequently came to be called rubber, which caught the attention of colonizing Europeans in the fifteenth and sixteenth centuries, was to make a ball about the size of a modern basketball that was central to a dangerously violent game played by the Maya. Christopher Columbus, after his second voyage to the New World in 1496, took back some of these bounceable rubber balls to Europe. In 1615, the Spanish in Mexico learned how to use latex to waterproof leather, and they were also able to apply their technique to other fabrics, leading to a thriving waterproof fabric industry. In the eighteenth century, following an expedition to South America, Charles de la Condamine and François Fresneau were the first to study rubber scientifically, reporting to the French Academy of Sciences about their discovery of substances that dissolved rubber. In 1770, Joseph Priestley, the accomplished English chemist, bestowed the name “rubber” on this material because of its ability to

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rub out pencil marks. The French built the world’s first rubber factory near Paris in 1803, and the English rubber industry got its start from chemist Charles Macintosh’s discovery that dissolving rubber in a certain way enabled him to waterproof cotton materials for raincoats (which were named “mackintosh” for him). Thomas Hancock is called the founder of the British rubber industry because he invented the “masticator,” which produced a rubber material that could be rolled into sheets. American inventor Charles Goodyear, after experimenting with numerous substances, accidentally discovered in 1839 that natural rubber, when heated with sulfur, generated a material that, unlike earlier products, remained flexible in hot and cold weather. Goodyear’s “vulcanized” rubber proved to be waterresistant and electrically nonconductive, and it came to be used in a variety of commercial prod-

Latex is collected from a rubber tree. (©Chan Yew Leong/ Dreamstime.com)

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Plastics and Rubber Manufacturing Industry

ucts. In the second half of the nineteenth century, the rubber industry in several countries prospered because of such inventions as the pneumatic tire, golf and tennis balls, and rubber toys. During this time, Brazil dominated the natural rubber market, but in 1876 rubber-tree seeds were smuggled from Brazil to England, enabling the British to breed new, disease-resistant trees that were sent to their colonies in Asia, particularly Malaysia and Ceylon, where colonists established large rubber plantations. Concomitant with these developments in the rubber industry were changes in the science of chemistry that would deepen understanding of natural rubber while enabling organic chemists to create synthetic rubber and originate the new field of plastics. Through the experiments and theories of organic chemists, rubber was revealed to consist of very long chains of carbon and hydrogen atoms. After plastics were discovered and developed in the second half of the nineteenth century, they, too, were eventually shown by organic chemists to consist of very long chains of carbon, hydrogen, oxygen, and a variety of other atoms. Though scholars have traced certain precursors of plastics from antiquity to the nineteenth century, most agree that English chemist Alexander Parkes discovered the first plastic in the 1850’s when he evaporated a solution of camphor and partially nitrated cellulose in alcohol and ether. This process produced a ma-

terial called pyroxylin that could be shaped and molded. Parkes’s attempts to market his material failed, but John Wesley Hyatt, an American inventor, improved his process. In 1869, Hyatt patented a method of making billiard balls out of celluloid, the name that he gave to his plastic. After a patent dispute was favorably settled, Hyatt’s Celluloid Manufacturing Company flourished.

The Industry Today The plastics and rubber industry of the twentyfirst century evolved from a series of twentieth century developments and products, several of which remain an integral part of the industry today. The pattern was set when, in 1909, Belgian American chemist Leo Baekeland made public Bakelite, the first totally synthetic plastic and the first thermoset plastic, which kept its shape under a variety of stresses of heat, pressure, and shock. Bakelite’s stress-resistant properties, as well as its resistance to electricity, led to several successful products, making it the first plastic to achieve worldwide acceptance. The American military used Bakelite in lightweight war machinery in World War II, and it is still part of many products today. Following Baekeland’s example, other inventors came up with such plastics as cellophane, the first flexible moisture-proof wrapping; polyvinyl chloride (PVC), a thermoplastic resin used in such products as rainwear, phonograph records, and floor tiles; and nylon, a thermoplastic material discovered by Wallace Carothers that proved to be better and cheaper than natural substances in such products as toothbrushes and silk stockings. Although nineteenth century chemists had made modest progress in converting certain substances into rubber-like materials, synthetic rubber’s creation was a twentieth century development. A patent for the world’s first synthetic rubber was granted in 1909. Before World War I, Russian, German, and English chemists created various elastic polymers that, unfortunately, were inferior to their natural Raw plastic granules, ready for processing. (©Ari Sanjaya/Dreamstime.com) counterpart. Deprived of natu-

Plastics and Rubber Manufacturing Industry

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were producing more than 700,000 tons of synthetic rubber annually. The exigencies of war also fostered progress in plastics, especially the creation of inexpensive and reliable substitutes for materials that could no longer be imported. Such plasValue Added Amount tics as polyethylene, polystyrene, polyesGross domestic product $66.7 billion ter, polyethylene terephthalate (PET), Gross domestic product 0.5% and several others, including silicones, Persons employed 726,000 owe their maturation and, in some cases, Total employee compensation $40.5 billion their origin and development to wartime pressures (many of these plastics would Source: U.S. Bureau of Economic Analysis. Data are for achieve great commercial success in the 2008. postwar period). After World War II, the plastics and rubber manufacturing industries expanded rapidly. In order to commercialize products researched and developed during the war, ral rubber during World War I, German chemists massive investments were needed to make the manufactured a synthetic rubber from dimethylmany kinds of plastics and synthetic rubbers into butadiene, but it had limited uses, especially since goods that would succeed in the marketplace. Contires made from it were mediocre. However, high sequently, such massive and long-established busiprices for natural rubber in the 1920’s encouraged nesses as Goodyear Tire & Rubber Company, the experimental and theoretical blossoming of Firestone, Michelin, DuPont, Shell, BASF, Dow, synthetic rubber. and Exxon were able to make plastics and synthetic Herman Staudinger, a German theoretical chemrubbers for companies making automobiles and ist, proved that plastics and rubber were polymers tires, footwear, and construction materials. Small with long, orderly arrangements of basic units (and and midsize businesses were able to find market not disorderly agglomerations, as many believed). niches in making such things as specialized polyExperimental advances included the creation of a mers. New synthetic rubbers introduced in the copolymer of butadiene and styrene that was a 1950’s and 1960’s included Hypalon and Viton by forerunner of styrene-butadiene rubber (SBR), DuPont, Natsyn by Goodyear, and polyurethane by whose properties of strength and processability Bayer. Thermoplastic rubbers were introduced in made it a success in the rest of the twentieth and into the twenty-first century. Julius Nieuwland, a Belgian American chemist and Roman Catholic priest, discovered how acetylene could generate Inputs Consumed by the various polymers, and Carothers, working for DuPont, capitalized on Nieuwland’s studies and crePlastics and Rubber ated neoprene, a synthetic rubber that was better Products Industry than natural rubber in its resistance to oxidizing chemicals and sunlight. During the 1930’s, GerInput Value many and Russia built plants capable of producing Energy $4.4 billion over 100,000 tons of synthetic rubber annually, Materials $107.6 billion while the United States developed synthetic rubPurchased services $25.9 billion bers that were resistant to oil and oxidants. Total $137.9 billion During World War II, the Japanese captured Asian natural rubber plantations, stimulating the Source: U.S. Bureau of Economic Analysis. Data U.S. government to invest heavily in the producare for 2008. tion of styrene-butadiene and other synthetic rubbers. By the end of the war, North American plants

The Plastics and Rubber Products Industry’s Contribution to the U.S. Economy

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Plastics and Rubber Manufacturing Industry

the 1960’s; they were more easily molded than vulcanized rubbers. Their elastomeric and plastic properties led to a variety of applications, especially in the footwear and adhesive industries. By the mid-1960’s, synthetic rubber constituted about 75 percent of the market, but since these polymers were made from oil, market share could change dramatically with political developments. For example, during the oil embargo of 1973, the price of synthetic rubber doubled and market share declined precipitously. During the remaining decades of the twentieth century, the environmental movement had an increasing influence on the way that the public viewed plastics and synthetic rubber. The multiplication of plastics in automobiles, aircraft, computers, and many other mass-produced products led to wastes that harmed the environment. Some plastics played a role in consumer crazes, such as the flexible, shiny vinyl plastic that found favor with certain fashion designers in the late 1970’s. Plastics played a major role in the expansion of global communications in the 1980’s and 1990’s, since such devices as computers, fiber optic cables, and telephones make extensive use of plastics. The ability of various plastics to mimic and even surpass natural products led to such goods as laminated and even completely plastic furniture, clothing made with polyvinyl chloride that was better than leather, and solid materials that were harder than wood, mimicked marble, and found wide use in kitchens. By the twenty-first century, the plastics and synthetic rubber industries had grown into mammoth enterprises, and their products constituted a major part of all chemicals manufactured throughout the world. In the United States, for example, the plastics and rubber products manufacturing industry has thousands of companies that occupy hundreds of market niches, determined by the kinds of plastic and synthetic rubber manufactured and their commercial uses. Although, overall, these industries have experienced phenomenal expansion throughout the twentieth and into the twenty-first century, they have also undergone declines, for example, during the recession of 2007-2009. These industries continued to be attacked by environmental groups because nondegradable plastic containers and other discarded plastic products remain in landfills and

A 400-meter athletic track made of polyurethane. (©Ioana Davies/Dreamstime.com)

the environment for dangerously extended periods of time. Researchers at plastics companies have sought to develop various biodegradable plastics. Because traditional and new plastics and synthetic rubbers comprise materials that are essential to modern industrialized societies and because the public has accepted many of these commodities as necessary to the quality of their lives, making plastics the most utilized materials in the world, most analysts believe that ways will be found to minimize the negative properties of these substances and to maximize their benefits to society.

INDUSTRY MARKET SEGMENTS As the rubber and plastics manufacturing industries developed, they diversified (or fragmented) into hundreds of thousands of firms, ranging in

Plastics and Rubber Manufacturing Industry size from specialty shops employing a handful of workers to such gigantic corporations as BASF, ExxonMobil, and DuPont, which employ many thousands of people. By using some examples from this large number of companies, the following sections provide an overview of small, midsize, and large rubber and plastics businesses.

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plants along the U.S.-Mexican border) and kibbutz industries (based in collective Israeli settlements). Similarly, in North America, industry giants such as Goodyear and Michelin typically garner over half of all tire sales, but small businesses have been successful in providing parts for the automotive and electronics industries, in distributing and recycling tires, and in specializing in manufacturing rubber products for roofing, flooring, and weather-stripping. Small companies also tend to be more agile than giant ones in responding quickly to changes in their clients’ needs and desires. Amenities, Atmosphere, and Physical Grounds. Small businesses find it much easier to get to know the needs of their employees than do large businesses. For example, since the manufacture of certain rubber and plastic products often entails exposure to hazardous materials, workers have been able to influence managers to improve the work environment by introducing hoods for those handling toxic substances and ventilation systems to remove unsafe materials from the air. Typical Number of Employees. For small businesses, as for large ones, the number of people employed by the plastics products industry is much larger than that employed by the rubber products industry. Employees involved in the manufacture of a great variety of plastics products tend to be concentrated in small businesses. For example, in the United States about half of all plastics products es-

Small Businesses According to the Profile of the Rubber and Plastics Industry (2d ed., 2005), 84 percent of the facilities in the United States involved in making plastics and synthetic rubber have fewer than one hundred employees. Twenty-two percent have twenty to forty-nine employees, while 2,649 facilities (19 percent) have only one to four employees. Surprisingly, then, small firms dominate this industry, which, in the public mind, is often associated with such giants as Goodyear and DuPont. Potential Annual Earnings Scale. According to a U.S. Bureau of Labor Statistics (BLS) report on plastics and rubber products manufacturing, hourly earnings for all American employees in this industry averaged $19.71 between March and June, 2010 (though earnings decreased slightly from month to month). When multiplied by the average weekly hours, 41.7, the result is a weekly pay of $821.91, and for those who work fifty weeks per year, this results in an annual salary of $41,095. The average hourly earnings for production employees was about $4 per hour less than the industry average, whereas the hourly wages for supervisors and managers was about $4 more. Annual wages for production personnel in 2009 ranged from about $30,000 for machine operators, setters, and tenders, to about $51,000 for supervisors. Mechanical engineers earned an average of $75,490, industrial engineers earned an average of $67,730, and industrial engineering technicians earned an average of $46,960. Clientele Interaction. Although certain countries such as China and the United States tend to dominate the market (despite the troubling American trade deficit in plastic products with In North America, industry giants such as Goodyear and Michelin typiChina), smaller countries, such as Mexcally garner more than half of all tire sales. (©Mark Winfrey/Dreamsico and Israel, have been able to satisfy time.com) clients in their maquiladoras (assembly

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Plastics and Rubber Manufacturing Industry

tablishments have fewer than twenty employees. Similarly, the rubber products industry manufactures many different products and, excluding tire manufacturers, well over half of the rubber products businesses have fewer than twenty employees. Traditional Geographic Locations. Worldwide, the principal producers of rubber and plastics historically have been China, the United States, and the countries of the European Union. Within the United States, principal producers of rubber and plastics traditionally have included such states as Ohio, California, and Illinois. In terms of the geographic distribution of plastic products industries for 1997, the states with the largest number of facilities were California (1,708), Texas (842), and Illinois (836). For the rubber products industry in 1997, California led with 299 facilities, followed by Ohio with 279 and Texas with 190. Pros of Working for a Small Business. The great variety of small synthetic rubber and plastics firms and their locations in greatly diverse settings allow potential employees wide selectivity in matching their talents, needs, and desires to a particular workplace. Unlike the mass-production products of large companies, small businesses often make customized goods that allow greater scope for creativity and individuality. With their small numbers of employees, these firms tend to have closer and more satisfying employer-employee personal relationships than do large firms. Cons of Working for a Small Business. As statistics reveal, salaries for employees at all levels tend to be lower in small firms than they are in large corporations. In the highly competitive world of this industry, small businesses tend to fail at a much higher rate than large companies. Leaders of small businesses do not possess the capital to give their employees generous health and retirement plans, and they sometimes cannot even afford to make use of the new technologies that create a safe and healthy work environment. Costs Payroll and Benefits: How much workers in the rubber and plastics manufacturing industry are paid and what benefits they receive are dependent on their abilities, level of education, where they are employed (nation and region), the politics and economics of the time, the presence or absence of a union, and so on. Small businesses

generally have lower pay and poorer benefits than midsize or large businesses. Supplies: Both the rubber and plastics industries are highly dependent on the petroleum industry for their raw materials, and small businesses, because of this dependence, often disappear by failure or merger with larger companies when the oil business is under economic duress. These petroleum chemicals constitute a major manufacturing expense, often exceeding 50 percent of revenues. Certain companies need such devices as injection, transfer, and compression molding machines. Depending on their products, they also need supplies of other chemicals, for example, those used as catalysts. Small businesses additionally require office supplies and computers. Vehicles are needed to bring raw materials in and send finished products out. External Services: Small synthetic rubber and plastics industries often have to purchase chemicals and machines that they are unable to make for themselves. Some firms frequently hire outside help for their accounting and payroll, machine maintenance, and food services. Utilities: Small firms manufacturing synthetic rubbers and plastics need access to water supplies and electricity. They generally depend on local utilities for natural gas, telephone service, and Internet access. Taxes: Some plastics and rubber manufacturing industries have located part or all of their businesses in such countries as Mexico, where the taxes and environmental regulations are not as burdensome as in the United States. Some state governments in the United States (and some federal laws) have provided tax breaks and incentives to small American synthetic rubber and plastics companies, but they, as well as firms that have not received these advantages, still have to pay their share of local, state, and federal taxes. Because these businesses often have significant trade with other countries, they may be subject to various foreign taxes. Midsize Businesses Variation exists among analysts, statisticians, and government agencies about precisely how to define midsize businesses. Some define them as facilities employing from one hundred to five hundred workers, while others extend the upper limit

Plastics and Rubber Manufacturing Industry to one thousand. The Bureau of the Census counts numbers of employees per facility in increments of 5, 10, 30, 50, 150, 250, 500, and 1,500. For those defining midsize businesses as having between one hundred and five hundred employees per facility, the number of midsize U.S. plastic businesses in 2005 was 2,170, constituting 15 percent of all facilities. The number of midsize U.S. rubber products facilities was 349, constituting 13 percent of all businesses. In terms of numbers, then, midsize businesses are much fewer than small businesses but much greater than large ones. Potential Annual Earnings Scale. According to the BLS, in 2009 annual wages for production personnel in this industry ranged from about $30,000 for machine operators, setters, and tenders, to about $51,000 for supervisors. Mechanical engineers earned an average of $75,490, industrial engineers earned an average of $67,730, and industrial engineering technicians earned an average of $46,960. Production managers earned an average of $86,750, and general and operations managers earned an average of $119,470. Sales representatives earned an average of $65,640; shipping, receiving, and traffic clerks earned an average of $30,970; and installation, maintenance, and repair workers earned an average of $42,940. Clientele Interaction. Midsize plastics and rubber manufacturing industries, while often specializing in machinery that molds parts and generates plastic sheeting, have several advantages over small companies. Typical customers are large companies such as DuPont and Farrel that require devices for manipulating and manufacturing their raw plastic materials. Midsize companies can readily adapt to customer needs through their engineering flexibility. They are not wedded to traditional mechanical designs but are able to fashion mechanical systems to meet their customers’ requirements. Amenities, Atmosphere, and Physical Grounds. The facilities involved in the manufacture of plastics for midsize companies typically comprise equipment that can compress, extrude, and mold plastics. Rubber factories have machinery to make tires as well as recap them. In America, some states have developed support networks to aid companies in their competition with other states and countries, and they have tried to make the amenities at these polymer research centers as attractive to workers as possible. Some of these cen-

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ters are associated with universities. While many of the facilities are owned and operated by U.S. companies, some states have succeeded in attracting foreign-owned plastics and synthetic rubber companies to establish their facilities at these centers by providing funding for construction materials, machines, and employee job training. Typical Number of Employees. The number of employees in the plastics and rubber manufacturing industry varies according to occupations within the industry. In 2009, U.S. employment was largest (57,430) for molding and casting machine operators and tenders, but employment was also substantial for team assemblers (45,220) and for operators and tenders of extruding and drawing machines (34,370). While these data apply to the industry as a whole, similar job distributions apply for midsize companies. While employment in the rubber product manufacturing industry was high in 2009 (about 164,000), it is expected to decline to 133,000 by 2014. Traditional Geographic Locations. In 2009, the U.S. plastics and rubber industry imported from 76 countries and exported to 139, which shows the extensive geographic locations of this industry. Traditionally, the United States and western Europe accounted for about two-thirds of the plastics market, but competition from Latin America and particularly China reduced this proportion to about one-half by the year 2000. In 1997, with the exception of Alaska, all American states had plastics industries, with states such as California, Ohio, Texas, Illinois, Indiana, and Pennsylvania having the greatest numbers of factories. Plastics and rubber manufacturing facilities are generally located in or near cities, but advocates for the plastics industry in Kentucky (which, in 2005, had nearly 200 facilities) point out that this state is equidistant from the Great Lakes, the Gulf of Mexico, and the Atlantic seaboard, making it a prime distribution center for plastics products. Pros of Working for a Midsize Business. Since the demand for synthetic rubber and plastic products as replacement parts in automobiles and aircraft continued to increase in the second half of the twentieth century, the possibility for growth in the twenty-first century exists. Demand is also increasing in the packaging and container markets, as officials in these companies prefer plastic over glass and metal for containers. Synthetic chemists

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have the opportunity to research and develop new plastic and synthetic rubber materials, and chemical engineers are then able, for marketable new substances, to design and construct facilities to manufacture products made of these new plastics and synthetic rubbers. Cons of Working for a Midsize Business. Midsize manufacturers of plastic and synthetic rubber products often do not have the capital to invest in new technologies and machinery. They also can be hampered by increasing health-care and pension costs. Because exports constitute a significant proportion of their business, midsize companies may find the high costs associated with exports prohibitive, such as compliance with burdensome regulations and testing. U.S. environmental regulations can also lower profits, as do increasingly high prices for energy and petroleum. Costs Payroll and Benefits: Compensation and entitlements tend to correlate with the educational level and experience of the employee. Midsize plastics and synthetic rubber companies hire managers, engineers, technicians, and machine operators on contract. These contracts often contain provisions for health benefits, vacation time, and incentives for ideas that improve the quantity and quality of the company’s products. Supplies: As with small and large companies, midsize plastics and synthetic rubber industries are heavily dependent on petroleum as a raw material for their products. They often depend on other companies for basic equipment and machinery. While some raw materials and machinery can be bought from concerns in the United States, midsize firms have become increasingly dependent on imports from foreign countries. Administrative staff, engineers, and technicians need computers and office supplies. External Services: Midsize plastics and rubber industries typically purchase their bulk, basic, and specialty chemicals from other concerns. Machinery in their factories and equipment in their offices usually comes from external sources. Outside firms generally take care of accounting and payroll, on-site food, and on- and off-site medical services. Utilities: Because of the great variety of products made by the plastics and synthetic rubber indus-

tries, their needs for public utilities vary, but midsize companies generally rely on local water, sewage, electricity, and gas or oil services. Their facilities also depend on telephone, cable television, and Internet services. Taxes: Some midsize plastics and rubber manufacturing industries have been able to take advantage of tax breaks and incentives provided by state and federal programs meant to improve competitiveness in a global economy, but all companies have to pay certain local, state, and federal taxes, and their sizable imports and exports also necessitate duty payments. Large Businesses Despite their relatively small number of facilities when compared to small and midsize plastics and rubber industries, such large companies as BASF, Dow, Eastman Chemical, and DuPont dominate the market because of their advanced technologies and thousands of highly trained workers. According to 1997 Bureau of the Census data, only twentyone facilities in the U.S. plastic products industry had more than a thousand employees per facility, and only thirty-three rubber products facilities had more than a thousand employees. These large companies are worth hundreds of millions, even billions, of dollars. They have many more divisions and produce greater assortments and quantities of products than do small or midsize firms. Although several of these gigantic corporations retain ties to particular countries (even regions within a country), their focus has become increasingly international, and they have branches all over the world. Potential Annual Earnings Scale. According to the BLS, in 2009 annual wages for production personnel in this industry ranged from about $30,000 for machine operators, setters, and tenders, to about $51,000 for supervisors. Mechanical engineers earned an average of $75,490, industrial engineers earned an average of $67,730, and industrial engineering technicians earned an average of $46,960. Production managers earned an average of $86,750, and general and operations managers earned an average of $119,470. Sales representatives earned an average of $65,640; shipping, receiving, and traffic clerks earned an average of $30,970; and installation, maintenance, and repair workers earned an average of $42,940. Because large corporations have facilities in

Plastics and Rubber Manufacturing Industry many countries, salary scales differ from nation to nation. For example, according to statistics from the Canadian census for 1996, about 35 percent of workers in the rubber industry earned less than $29,000 per year, 60 percent earned between $30,000 and $59,000, and 5 percent had annual salaries exceeding $60,000. The pay scale for workers in large U.S. rubber companies was substantially higher than these Canadian averages, whereas the pay scales for Mexican workers in maquiladoras were substantially lower. Gender is a factor in potential annual earnings. Women typically make up about one-fourth of the plastics and rubber industry labor force, but their pay, despite government efforts, continues to be less than that of males working at comparable jobs. Clientele Interaction. Large businesses, which often generate substantial profits, can afford to set up specific divisions for dealing with clients, both domestically and internationally. Large companies have extensive budgets for advertising to attract new clients and customer-relations departments for retaining old clients while increasing sales to them. Since client-company interactions occur more and more frequently via computers or telephone, companies save money by outsourcing their relations with clients to concerns in such countries as India. Amenities, Atmosphere, and Physical Grounds. Plastics and synthetic rubber companies are part of the chemical industry, and leaders in this industry have issued mission statements emphasizing that, besides making products efficiently and economically, they aspire to create working environments that are safe and healthy. They also realize that they have a duty to the communities in which their facilities are located and, more generally, to the environment. Despite the presence of hazardous chemicals, high temperatures, and noisy machinery, modern plastics and synthetic rubber plants are safer and more comfortable than the average chemical factory. Because of the modern environmental movement, governments around the world have passed laws designed to improve the quality of air, water, soil, and the habitats for animals as well as the living and working conditions for humans. For example, in the United States, plastics and rubber products manufacturers have had to comply with the Clean Air Act, the Clean Water Act, the Resource Conser-

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vation and Recovery Act, the Toxic Substances Control Act, and many other laws. Large companies have found that the best way to reduce pollution is to prevent it, which they have done by such changes as reengineering their processing technology to reuse by-products. Furthermore, they have discovered substitutes for toxic chemicals, while improving techniques for cleaning wastewater and recycling solid wastes. Large companies generally have facilities with extensive grounds on which are located buildings housing machinery for making various products. Other buildings are used for administration and for storing and handling raw materials. These facilities have been located in suburbs as well as exurbs, with administrative facilities often within cities. Typical Number of Employees. According to the BLS, the employment of all workers (seasonally adjusted) in the plastics and rubber industry in the months of March through June, 2010, was 631,800; the employment for production and nonsupervisory workers was 477,425. The unemployment rate for this period averaged 11.8 percent, which was higher than the national average. Companies were laying off workers at the rate of about 8,000 per month. The recession of 2007-2009 affected large companies as well as small ones. Traditional Geographic Locations. Historically, the plastics and synthetic rubber industries were located in the United States and western Europe, but in the twenty-first century such countries as China have become major producers. In America, such states as Ohio, which in 2006 employed more people in the plastics and rubber products industry than any other state, also had an ample number of such large corporations as Goodyear, Eaton Corporation, and Hamilton Parker Company, whose revenues were from $10 billion to $20 billion in 2006. Other states with substantial numbers of large businesses were California, Illinois, Texas, and Indiana. Pros of Working for a Large Company. Over the course of the twentieth and into the twenty-first century, large companies making plastic and rubber products have generally progressed in terms of their employee numbers, market share, economic success, and job security. This has led to better salaries and benefits for their employees when compared to small and midsize businesses. North America and western Europe continue to be excel-

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lent places to work in these industries, but as more plastics and synthetic rubber are made in Asia and Latin America, benefits of working for companies in these regions increase. Cons of Working for a Large Company. Analysts have pointed out that, as globalization has made large companies richer than ever before, it has made small companies and ordinary workers poorer. Multinational corporations have been accused of social injustice, for example, by manufacturing plastics and synthetic rubber in regions of the world where workers can be hired at drastically substandard wages. Even in prosperous Western nations, poorly managed large companies have sometimes experienced dramatic failures. Other companies have been slow to comply with environmental and health legislation, thereby exposing their employees to unsafe conditions. These large companies are not recession-proof, as evidenced by large layoffs in the years after 2008. Costs Payroll and Benefits: The payroll structure and benefits of large companies depend not only on the country within which their facilities are located but also on the education, experience, and talent of their employees. Salaries range from many millions of dollars for chief executive officers, whose increasing compensation even for poorly managed businesses has generated passionate criticism, to the $25,000 annual salaries paid to unskilled workers. Highly skilled employees such as polymer chemists earn in excess of $100,000 a year. Supplies: Large companies making synthetic rubber and plastic products depend heavily on raw materials supplied by the petroleum industry. They also need specialized chemicals, semifinished products, and modern machines that improve productivity. They require plastics with better heat resistance, more effective pigmentation processes, and increased biodegradability. They have to have access to fibers for use in reinforced plastics. The administrative and sales divisions of these large companies need office supplies, and the scientific and engineering personnel need chemicals, laboratory equipment, and computers. External Services: When it is to their economic benefit, large companies contract with outside

firms to take care of their payroll, accounting, computer-maintenance, and food-and-health services. Large companies also make extensive use of original equipment manufacturers (OEMs), when these can fulfill their requirements more economically and efficiently than their own engineers. Utilities: Large manufacturers of plastics and synthetic rubber use great amounts of electrical power, generally supplied by local public utilities. Their water-and-sewage needs, as well as their use of gas and oil, are similarly taken care of. Administrative, sales, and research and development sections of large companies make use of locally supplied telephone, cable, and Internet services. Taxes: State and federal laws require large companies to pay local property taxes, as well as state and federal taxes. Large companies have increasingly depended on imports and exports as significant parts of their business, and these transactions often involve tariffs and surcharges.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Because the plastics and rubber manufacturing industry involves the creation of thousands of different plastic and synthetic rubber products, and because the number of job roles increased dramatically in the final decades of the twentieth century (as evidenced by economic censuses during this period, whose coverage of the range of industries and job roles within them expanded and deepened), no single organizational structure or list of jobs will suit every company or cluster of companies. Nevertheless, some commonalities in company organizations and job roles do exist, though these, too, have evolved and changed over time. This volatility has forced many companies to be flexible in order to survive in a highly competitive marketplace. Plastics and synthetic rubber products initially succeeded because of their low cost (compared to such traditional materials as glass and metals), ease of manufacture, and resistance to water and other chemicals. New plastics and synthetic rubber products have continued this trend, acting as substitutes

Plastics and Rubber Manufacturing Industry for such materials as wood, stone, bone, leather, and even ceramics. During the last third of the twentieth and initial decade of the twenty-first century, environmental concerns have dampened the former optimism for plastic and synthetic rubber products because of the pollution associated with their creation and the environmental problems created when they are discarded after use. The increasing price of petroleum and questions as to its future availability are other concerns for leaders of these businesses, which they have attempted to meet with biodegradable plastics and petroleum substitutes. Analysts who have studied the evolution of modern business organizations in the plastics and synthetic rubber industries have developed theories about their functioning, although some important questions remain unanswered, such as the role that market performance plays in determining the organizational structure of these industries. For example, the synthetic rubber industry’s development was accelerated under government control during World War II, when the United States was unable to import sufficient quantities of natural rubber. After the war, in 1953, this industry, the first large one ever built by the federal government, was transferred into private hands under the Rubber Producing Facilities Disposal Act, with the goal of creating “a free, competitive, synthetic rubber industry.” This law, for the first time in American history, gave Congress the power of setting up the organizational structure of a private business. Although the propelling idea was a competitive industry within which no single company could unduly influence the market price of various synthetic rubber products, the reality turned out to be many small and a few gigantic companies, and these large corporations have been able, to some extent, to manipulate the market, though attempts have been made by concerned citizens, groups, and government agencies to rein in their excesses. The following umbrella categories apply to organizational structures of businesses within the plastics and rubber manufacturing industry: ■ ■ ■ ■ ■

Executive Management Marketing and Sales Customer Service Research and Development Office and Administrative Support

■ ■ ■

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Production Distribution Information Technology

Executive Management In their early evolution, the plastics and rubber industries developed separately, with executive managers generally chosen for their understanding of how to market the specialized products of each industry. Since World War II, government agencies and others have treated the plastics and rubber manufacturing industry as one, because of the many common characteristics between its subindustries, such as their foundation in polymer chemistry, highly specialized and fragmented subdivisions, dependence on rapid technological innovation, and so on. While some companies manufacture both plastic and synthetic rubber products, others maintain their historical allegiance to rubber or plastics. For example, Norman H. Cohan, with a background in chemical engineering, founded Security Plastics in 1955, and by inventing a revolutionary injection molding technology and by enlightened leadership, he created a highly successful company, for which he has been honored. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Administrative Support Manager Advertising and Marketing Manager Research and Development Director Domestic Sales Manager International Sales Manager Customer Service Manager

Marketing and Sales Marketing deals with those processes concerned with getting goods from producers to consumers, whereas sales involves processes concerned with the actual selling of goods to consumers. When the plastics and rubber industry created highly desirable products, such as Bakelite and nylon, marketing could be kept to a minimum, but as domestic and global competition became intense, companies created sales and marketing divisions whose purpose was to alert the public to the benefits of their new plastics or synthetic rubber products or to remind consumers of what made their traditional products so successful. Persons marketing

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and selling plastics and synthetic rubber products should understand something of the science and technology that created them as well as their potential risks to consumers and the environment. Those marketing these products to foreign countries should have an understanding of the customers’ cultures and languages. Marketing and sales occupations may include the following: ■ ■ ■ ■ ■ ■

Marketing Director Sales Director Domestic Sales Manager International Sales Manager Sales and Marketing Expert in Plastics Sales and Marketing Expert in Synthetic Rubber

Customer Service The plastics and synthetic rubber industry produces a great diversity of items sold to both individuals and companies, which means that customer service representatives have many responsibilities. For example, they typically deal with misunderstandings about the properties and functions of a particular product, complaints about defective products, and requests for information about new products. Since they often have to handle detailed technical questions about specific plastics, such as vinyl, acrylics, or PVC, they should either have the requisite scientific and technical background to deal knowledgeably with customers or be able to direct them to scientists, engineers, or technicians in the firm who can effectively deal with such questions, complaints, and misconceptions about their purchases. Customer service occupations may include the following: ■

■

■

Customer Service Representative for Plastics Customer Service Representative for Synthetic Rubber Products Customer Relations Manager

Research and Development Most plastics and synthetic rubber industries originated through the research and development of particular inventions, such as Goodyear’s invention of vulcanized rubber. This tradition has contin-

ued, and most large manufacturers of plastics and synthetic rubber products have research and development divisions whose purpose is to improve their well-known merchandise and to introduce innovative plastics and synthetic rubbers. Research and development divisions often maintain helpful relations with researchers in colleges, universities, and technical institutes, where discoveries of new manufacturing procedures and innovative products have contributed to the progress of the industry. Polymer chemists specialize in creating new kinds of plastics and synthetic rubber materials. If these new substances have a good chance of being successful in the marketplace, then chemical engineers develop industrial processes for manufacturing them and machinery for molding them into products. Materials engineers are similarly concerned with techniques for the production of materials that meet the commercial requirements of the company. Research and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Chemist Chemical Engineer Materials Scientist Materials Engineer Polymer Chemist Plastics Technology Expert Synthetic Rubber Technology Expert

Office and Administrative Support The sizes of administrative staffs in the plastics and synthetic rubber industry depend on the sizes of companies, with large companies needing extensive staffs in multiple divisions to keep their thousands of employees working efficiently and to manage their national and international operations. Many workers are necessary to keep track of raw material inputs and finished product outputs. Because so much of information processing is now computerized, staff members need to have computer expertise, particularly in information management systems. Office and administrative support occupations may include the following: ■ ■ ■

Bookkeeper Accountant Auditor

Plastics and Rubber Manufacturing Industry ■ ■ ■ ■

Shipping and Receiving Clerk Administrative Assistant Secretary Computer Specialist

■ ■ ■ ■ ■

Production Many plastic products are made through injection and compression molding, in which heat is the chief agent, but some are made through reaction injection molding, which employs liquids, and blow molding, which uses compressed air. Most rubber manufactured in the United States is synthetic, and added chemicals change synthetic rubber’s properties, making it soft, resilient, or hard, depending on the rubber product’s ultimate use. Typical products include plastic pipes, rubber hoses, and rubber tires. To make these products requires the efforts of workers skilled in a variety of operations. Production occupations may include the following:

■ ■

■

■ ■ ■

■

Production Manager Production Supervisor Inspector, Tester, Sorter, Sampler, and Weigher Molding and Casting Machine Setter and Operator Extruding Machine Setter and Operator Packager Specialist in the Manufacture of Rubber, Plastic Hoses, and Belting Specialist in the Manufacture of Machines for Manipulating Plastics and Synthetic Rubber

Distribution Supplying products to wholesalers or retailers is often an important part of the synthetic rubber business. Some tire distributors, for example, specialize in tires from certain companies, such as Goodyear or Firestone. Because of environmental concerns, recycling old tires has become an increasingly necessary part of the tire business. Most tire distributors offer a selection of tires with different features such as longevity and all-weather use. Distribution occupations may include the following: ■ ■

Warehouse Manager Distribution Manager

Dispatcher Heavy Truck Driver Light Truck Driver Shipping and Receiving Clerk Freight Loader/Unloader

Information Technology Computer specialists play important roles in such divisions as administration, marketing, and sales, but they have also become an increasingly important part of production, since processes for making certain plastics and synthetic rubber products have been automated through computers. Information technology occupations may include the following: ■ ■ ■ ■ ■

■

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■ ■

Information Technology Director Computer Scientist Computer Hardware Engineer Software Engineer Computer Technician Computer Programmer Computer Maintenance and Repair Technician

INDUSTRY

OUTLOOK

Overview Because of its many enterprises around the world and the large number of facilities within certain countries, determining the outlook for the plastics and rubber manufacturing industry is complex. Throughout the twentieth century, a trend of escalating growth, in general, characterized the production and consumption of plastic and synthetic rubber products, despite occasional dips during times of economic stress and despite changes in the nature of the market. For example, natural rubber was dominant before World War II, and synthetic rubber was dominant after it. Both global and U.S. production of plastics materials grew steadily in the postwar period. For example, in 1951 global production was 2 million tons and U.S. production was 810,000 tons; in 1967, global production was 18 million tons and U.S. production was 5.567 million tons; in 1980, global production reached 50 million tons, of which the U.S. share was 16.117 million tons. In 1998, global production exceeded 135 million tons and U.S. pro-

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Plastic bottles account for 5 percent of the plastic industry’s products. (©Ann Murie/Dreamstime.com)

duction was 33.5 million tons, or about 25 percent of the world’s total. Economic trends for the plastics and synthetic rubber industry in the twenty-first century have been variable, with a few good years and several bad ones. For example, shipments in the U.S. plastics industry decreased 6.6 percent from 2000 to 2002, and at the end of the decade the BLS reported that, for 2009, there was a decline in the number of plastics and rubber manufacturing establishments from 13,790 in the first quarter to 13,664 in the fourth quarter. On the other hand, during this decade, sales of industrial rubber products rose nearly 6 percent per year from 2001 to 2006. Compared to the North American and European markets, which analysts describe as mature, China represents a young market, eager for Western technology, investment, and skilled workers. The United States has responded with roughly $30 billion of annual investment in China, though some analysts believe that the Chinese plastics and

synthetic rubber industry confronts investors with considerable risks. Some optimistic companies have already shifted their manufacturing and production to China, taking advantage of much lower labor costs than in the West, as well as less stringent environmental regulations. One shortcoming is China’s lack of significant oil and gas reserves, necessitating costly imports from the Middle East. Nevertheless, China has been increasing plastics production to meet surging domestic and global demands, and, if growth trends exhibited in the first decade of the twenty-first century continue, China is projected to be the world’s biggest plastics market by around 2026. Diversification and fragmentation characterized the U.S. plastics and synthetic rubber industries in the twentieth century, and many experts predict that they will continue to do so in the twenty-first. By the end of the twentieth century, general products constituted 55 percent of the plastics industry, with the following percentages for other products: plastic films and sheets (12 per-

Plastics and Rubber Manufacturing Industry

1455

predicting better than average growth in the seccent), plastic foam products (10 percent), custom resins (6 percent), plastic bottles (5 percent), unond decade of the twenty-first century, although supported plastics (4 percent), plastic pipes (3 perothers predict that the economic recovery will be cent), laminated plastic plates and sheets (3 perslow. A Business Wire report forecast that the decent), and plastic plumbing fixtures (3 percent). mand for natural and synthetic rubber would rise. The rubber products industry was somewhat less This prediction is based on the increasing expandiverse, with the following percentages for various sion of the Chinese automobile industry. Other exproducts: tires (36 percent), fabricated rubber perts believe that economic turmoil in Europe and products (22 percent), mechanical rubber goods high unemployment in the United States and (16 percent), gaskets and sealing devices (13 perother countries will have a negative influence on cent), rubber hoses and belting (10 percent), and the markets for plastic and rubber products. In this rubber footwear (3 percent). The plastics and rubber manufacturing industry has been and will continue PROJECTED EMPLOYMENT to be very sensitive to the economic FOR SELECTED OCCUPATIONS ups and downs of the petroleum industry, since petroleum is the source Plastics and Rubber Products of over half of its raw materials. Other Manufacturing industries that have an economic effect on the plastics and rubber manuEmployment facturing industry are construction and health care. 2009 Projected 2018 Occupation Exports are important for the U.S. 34,370 36,300 Extruding and drawing plastics industry, and the three largmachine setters, operators, est export markets have been Canand tenders, metal and ada, Mexico, and Japan. At the start plastic of the twenty-first century the United States had a trade surplus in plastics 19,710 27,700 Extruding, forming, products of $894 million, but this pressing, and compacting turned into increasing deficits beginmachine setters, operators, ning in 2001. The basic reason for and tenders this change was the inability of U.S. 30,420 30,800 First-line supervisors/ producers to compete with facilities managers of production and in developing nations in the manuoperating workers facture of inexpensive plastic goods. 23,170 23,300 Inspectors, testers, sorters, Besides labor costs, the divergence samplers, and weighers between the United States and less developed countries also involves dif57,430 59,300 Molding, coremaking, and ferent laws and product standards casting machine setters, that make American goods more exoperators, and tenders, pensive. Despite cultural differences, metal and plastic most large-scale U.S. manufacturers 25,660 24,300 Packers and packagers, hand of plastic and rubber products have overseas facilities. Industry analysts 46,220 47,600 Team assemblers emphasize that many opportunities exist for American manufacturers to Source: U.S. Bureau of Labor Statistics, Industries at a Glance, expand to such developing countries Occupational Employment Statistics and Employment as China, Brazil, India, and Mexico. Projections Program. Despite declines after the recession of 2007-2009, some analysts are

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uncertain economic situation, giant companies have been merging with small and midsize competitors, while also moving facilities to low-cost locations. What government officials do or do not do in terms of economic stimulus, regulation of large companies, and the encouragement of green technologies may also affect the plastics and synthetic rubber industry. Employment Advantages According to the BLS, the plastics and rubber products manufacturing industry will decline early in the second decade of the new millennium, though workers who can operate multiple machines will have an advantage in an increasingly competitive workforce. Highly skilled polymer chemists and chemical engineers will also fare better than less educated competitors. According to the Occupational Outlook Handbook, employment for all manufacturing jobs is expected to decline rapidly in the second decade of the twenty-first century, perhaps by as much as 13 percent. Nevertheless, because of an expected increase in the number of retirements by workers in the baby-boom generation, many jobs for workers with a thorough background in machine operations will open. For example, those with a good knowledge of plastics and synthetic rubber materials will have distinct advantages in what is expected to be a tortuously changing jobs environment. Annual Earnings Even though annual global revenues for the plastics and synthetic rubber industry are in excess of $3 trillion a year, with U.S. revenues as 14 percent of this value, uncertainties exist in calculating annual earnings in this industry, especially since it is difficult to count companies in certain foreign countries and even more difficult to get accurate figures on their earnings and employment. Data are much better for the American plastics and rubber products manufacturing industry. For example, employment was over 600,000 in the first half of 2010, with average weekly earnings of over $800. Work-related fatalities averaged 19.5 annually for the 2005-2008 period. For the same period, labor productivity (in terms of output per hour) declined from 108.721 to 102.71. This last statistic is surprising and somewhat troubling in the context of what had been overall increases in productivity

that had characterized the plastics and synthetic rubber industry in earlier decades, driven by dramatic advances in American technology.

RELATED RESOURCES FOR FURTHER RESEARCH American Chemical Society 1155 16th St. NW Washington, DC 20036 Tel: (800) 227-5558 Fax: (202) 872-6257 http://www.acs.org American Institute of Chemical Engineers 3 Park Ave. New York, NY 10016-5991 Tel: (800) 242-4363 Fax: (203) 775-5777 http://www.aice.org International Institute of Synthetic Rubber Producers 2077 S Gessner Rd., Suite 133 Houston, TX 77063 Tel: (713) 783-7511 Fax: (713) 783-7253 http://www.azom.com Plastics Industry Trade Association 1667 K St. NW, Suite 1000 Washington, DC 20006 Tel: (202) 974-5200 Fax: (202) 296-7005 http://www.plasticsindustry.org Society of Plastics Engineers 23 Church Hill Rd. Newtown, CT 06470 Tel: (203) 775-0471 Fax: (203) 775-8490 http://www.4spe.org

ABOUT

THE

AUTHOR

Robert J. Paradowski is a historian of science and technology who specializes in the history of chemistry, with a particular emphasis on the life

Plastics and Rubber Manufacturing Industry and work of Linus Pauling. He is a summa cum laude graduate of Spring Hill College, with a master’s degree in chemistry from Brandeis University and a Ph.D. in the history of science from the University of Wisconsin (1972). He has taught at Brooklyn College, Eisenhower College, and the Rochester Institute of Technology, where he is a professor in the Science, Technology, and Society/ Public Policy Department.

FURTHER

READING

Aftalion, Fred. A History of the International Chemical Industry. Philadelphia: University of Pennsylvania Press, 1991. Chamis, Alice Yanosoko. “The Literature of Synthetic Rubber.” In Literature of Chemical Technology, edited by Julian F. Smith. Washington, D.C.: American Chemical Society, 1968. Chandler, Alfred D. Shaping the Industrial Century: The Remarkable Story of the Evolution of the Modern Chemical and Pharmaceutical Industries. Cambridge, Mass.: Harvard University Press, 2005. Ciesielski, Andrew. An Introduction to Rubber Technology. Shawsbury, Shrewsbury, Shropshire, England: RAPRA Technology, 1999.

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International Institute of Synthetic Rubber Producers. Synthetic Rubber: The Story of an Industry. New York: Author, 1973. Kaufman, M. The First Century of Plastics: Celluoid and Its Sequel. London: Plastics Institute, 1963. Mossman, Susan, ed. Early Plastics: Perspectives, 18501950. London: Leicester University Press, 1997. Schidrowitz, P., and T. R. Dawson. History of the Rubber Industry. London: Institution of the Rubber Industry, 1952. Stevens, Eugene S. Green Plastics: An Introduction to the New Science of Biodegradable Plastics. Princeton, N.J.: Princeton University Press, 2001. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Environmental Protection Agency. Office of Compliance. Profile of the Rubber and Plastics Industry. 2d ed. Washington, D.C.: Author, 2005.

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Political Advocacy Industry

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SNAPSHOT

General Industry: Communications Career Cluster: Arts, A/V Technology, and Communication Subcategory Industries: Business Associations; Environment, Conservation, and Wildlife Organizations; Human Rights Organizations; Labor Organizations; Lobbying Services; Political Consulting Services; Political Organizations; Professional Organizations; Social Advocacy Organizations Related Industries: Advertising and Marketing Industry; Civil Services: Planning; Civil Services: Public Safety; Defense Industry; Federal Public Administration; Legal Services and Law Firms; Local Public Administration; Philanthropic, Charitable, Religious, Civic, and GrantMaking Industry Annual Domestic Revenues: $3.2 billion USD (Center for Responsive Politics, 2008) NAICS Numbers: 8133, 8139, 541820

INDUSTRY

hand and government officials and legislators on the other. Central to the industry’s activities is lobbying, or attempting to influence the creation, passage, or defeat of legislation. The political advocacy industry represents nearly every major industry that has an interest in the decisions made by legislators and other political leaders on the local, state, and national levels.

History of the Industry It is believed that the first manifestations of the practice of political advocacy occurred during the Roman Empire (27 b.c.e to 476 c.e.). At the time, there was no government bureaucracy through which public policy was conducted. Instead, members of the Roman senate acted not just as legislators but also as government administrators, bureaucrats, and even diplomats. Senators therefore enjoyed a great deal of contact with a broad range of people, both within the empire and in other nations. Those individuals and groups, with whom the senators enjoyed strong relationships, consistently traveled to Rome to seek senatorial audiences to promote their public pol-

DEFINITION

Summary The political advocacy industry focuses on creating connectivity and access between private businesses, organizations, and associations on one 1458

Political Advocacy Industry icy agendas in the Senate. Senators, in turn, experienced a great deal of increased stature in the light of their large circle of friends and peers. In many cases, they saw a significant increase in their own personal wealth as a result of their public advocacy contacts. In 1215, political advocacy was integrated into one of the most pivotal legal documents of Western civilization, the Magna Carta. The Magna Carta, as a foundational document, granted individuals the right to petition their government in the event that their interests were threatened, established legal systems, bound the king to the rule of law, and became the basis for many national constitutions and governments. More than five hundred years later, the failure of the British crown to heed the petitions of American colonies was a central theme in the Declaration of Independence of 1776. Following the American Revolution, the U.S. Constitution was drafted in 1787. The First Amendment, added in 1789, contained a provision similar to that offered by the Magna Carta—the private cit-

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izen’s right to petition the government for a redress of grievances. This constitutional clause not only allowed a person the right to protect his or her interests but also helped form public interest groups and organizations. As a result, the focus of political advocacy grew from a system to protect individual rights and needs to a much broader collection of industries and networks that sought representation and protection from negative public policy actions. The ability of interest groups and individuals to solicit support from the U.S. government, granted by the Constitution, created a new industry that worked closely with the federal government and its officials. In fact, political advocacy, at least in terms of modern government, was founded only three years after the Constitution was signed. General William Hull, who was considered a hero of the American Revolution, was hired by veterans of the Continental Army who were seeking financial compensation from Congress for their wartime duty. Political advocacy also became one of the cen-

Lobbyists gather outside the Michigan State Capitol House chambers in November, 2010. The state had 2,783 registered lobbyists in 2010, outnumbering state lawmakers nearly nine to one. (AP/Wide World Photos)

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tral vehicles in the abolitionist movement that preceded the Civil War. In the 1830’s, while Congress and the federal government avoided issuing any antislavery measure that superseded states’ rights, the movement’s supporters cleverly petitioned Congress to ban slavery within the nation’s capital, the District of Columbia, which is governed by Congress itself. Though the effort ultimately failed, as Congress tabled any such legislation, it helped fuel the antislavery movement and contributed to the North-South schism. The political advocacy industry continued to grow in strength during the post-Civil War era. President Ulysses S. Grant is credited with coining the term “lobbyist” during his presidency. As president, he often left the White House to relax in the public rooms of the nearby Willard Hotel. However, he complained that, during his visits to that establishment, people constantly approached him with questions, requests, and solicitations; he would eventually refer to these people as “those damn lobbyists.” By the late nineteenth and twentieth centuries, the political advocacy industry had become one of the more controversial and widespread industries

in America. Popular opinion painted the industry as either one that encouraged political corruption (by granting access to political power to a relative few insiders) or one that ensured that those who previously lacked a voice in their local, state, or federal government would have an agent making that voice heard. A number of efforts on the federal and state levels throughout the late 1800’s and 1900’s sought more extensively to regulate lobbying. In some cases, outright bans of the practice were issued (although never fully enforced), while other laws were passed to identify and register lobbyists and the companies for which they worked. In the mid- to late twentieth century, a more comprehensive set of laws was passed to update antiquated post-World War II lobbying laws. These laws created strict guidelines on practices involving political contributions, gifts, meetings, and other aspects of political advocacy on all levels.

The Industry Today The political advocacy industry is a multibilliondollar sector spanning virtually every industry and connected to every level of government. Lobbying, which is the act of soliciting government officials to support or oppose public policy initiatives, composes only one part of the industry’s endeavors. Lobbying activities also entail fund-raising efforts, such as sponsoring or holding events for political candidates to generate contributions. Additionally, political advocates help companies, associations, and organizations activate their grassroots members by assisting in grassroots campaigns. Lobbying firms also help develop their clients’ legislative agendas by writing bills and monitoring the progress of those bills through the legislative process. The lobbying industry has taken advantage of the increased prevalence of media technology as part of its resurgence over the last few decades. Lobbyists are often teamed with or employed by public relations firms to ensure that their clients’ inZine and Rose Hosein, right, are paid $15 an hour to hold places in line for terests are heard not just in the lobbyists outside crowded congressional hearing rooms. (AP/Wide World capitol building but on the airwaves Photos) as well. The Internet also plays a criti-

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cal role in how lobbyists acquire and use information. Because such information is so readily available online, lobbyists are able to access and monitor a greater number of political developments on behalf of a greater number of clients without being stretched too thin. Even in times of economic downturn, the political advocacy industry remains in high demand. Special interest groups spent nearly $2.6 billion on lobbying activities in 2007, a sharp increase of 10 percent from 2005. The industry saw a slight decline in the number of practicing federal lobbyists in 2009, a reflection of the 2007-2009 recession and the attitude of the new presidential administration toward officially registered lobbyists. Nonetheless, the decline in the lobbying field was slower than in other industries. Lobbyists and political advocates operate in a number of different organizational arenas, and many comNew Jersey Education Association president Barbara A. Keshishian responds panies are dedicated solely to the after hearing Governor Chris Christie’s budget address in March, 2010. The practice of lobbying. Some lobbying association spent $6.9 million during the year, making it the biggest spender organizations, however, are part of among lobbying groups. (AP/Wide World Photos) larger law firms that conduct business that may or may not be relevant ing of—or be able quickly to familiarize themselves to the political advocacy they offer. In addition, with—a number of often divergent issue areas. many corporations, organizations, and trade assoWhile the U.S. government, by virtue of its prociations have their own lobbyists on staff, overseepensity to remain transparent and accessible to priing their lobbying efforts in addition to all other asvate citizens, is seemingly the target of the majority pects of government relations and affairs. of the world’s lobbyists, in truth most modern deLobbyists themselves come from a wide range of mocracies are heavily solicited by such professionbackgrounds. Many begin their careers in governals. Today, lobbyists are found in democracies ment, either as staff members or as legislators around the world. The access granted by the U.S. themselves. Others are attorneys who are intisystem of government, as well as its importance as a mately familiar with the laws and the legislative promajor market, has made the United States the apcess. Still others are business professionals who act parent epicenter of the lobbying industry. Many as their companies’ lobbyists while also performing foreign governments invest heavily in lobbying the nonpolitical corporate duties. The political advoU.S. government, as do foreign-based corporacacy industry is a dynamic environment that often tions. calls for long days and nights (especially during The United States is the most transparent delegislative sessions and budget hearings). Because mocracy in this arena. For example, many counof this profession’s prevalence across a broad tries and regional governments do not require lobrange of industries, those employed as lobbyists byists to register in the same manner as the United and advocates must generally have an understand-

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States. As a result, the U.S. industry is far more quantifiable (both in terms of number of political advocates and in terms of the revenues generated by the industry) than are foreign industries.

INDUSTRY MARKET SEGMENTS Political advocacy is conducted by a variety of individuals, corporate entities, and organizations, both for-profit and nonprofit. In the United States, individuals who engage directly in lobbying activities must register with the entity that they lobby. In other words, they must register as federal lobbyists, as state lobbyists in specific states, and so on. Those who work for firms that engage in lobbying do not need to register if they work in a support or other indirect capacity. The industry may be divided into several segments by function rather than size: law firms, nonprofit organizations and trade associations, individual corporations, and consultants. Law Firms It has become increasingly common for lobbyists not merely to suggest legislative provisions but also to write the legislative language they wish to see in final bills. For this reason, legal expertise— rather than expertise only in the area to be covered by the law—is crucial to political advocacy. As a result, lobbying and political advocacy have become specialties of entire law firms. Generally speaking, such firms locate themselves in national or state capitals, where they can enjoy maximum access to legislators. Other laws firms may specialize in representing specific industries, such as the motion picture industry. They will engage in lobbying and political advocacy as part of their overall job of representing their industries’ interests. Potential Annual Earnings Scale. Lobbyists working as part of law firms earn varying wage levels, depending on the level of government with which they work, as well as the contract parameters established between the firm and the client. The geographic location of the position is also a factor. According to Salary.com, in 2009 the nationwide average annual salary for political advocates was $96,000. Additionally, according to a 2009 survey on associate salaries conducted by the National Association for Legal Professionals (NALP), the over-

all median starting salary for law firm associates was $130,000. Clientele Interaction. In political advocacy, client interaction is a high priority. Advocates and lobbyists must be in constant communication with their clients in order to report on developments in the government and receive the clients’ recommendations for action. Because many clients are unfamiliar with the legislative process and the inner workings of government, lobbyists need to hold many meetings with clients, sometimes on a weekly or monthly basis. They may also engage in e-mail and telephone correspondence. These interactions might take place on multiple occasions during a week in which relevant political activity is increased. Amenities, Atmosphere, and Physical Grounds. Law firms maintain a professional office environment with varying degrees of employee and physical amenities. Such offices are usually part of larger buildings, although some firms are located in ground-level or two-level “storefront” settings. Depending on an employee’s professional standing, individual offices may be available, although cubicles and shared offices are also common. The office atmosphere is usually high-paced, with many meetings and strategizing sessions. Hours are variable depending on the level of work performed, but for higher-level employees, the workday is often longer than average. Typical Number of Employees. The number of political advocates and lobbyists at law firms varies based on the size of firm, the number of clients, and the size of the contracts on which they work. Some are national and even international corporations, employing hundreds of staff dedicated to political advocacy, while others are small and may operate on a local level, working for only a handful of clients at a time. Traditional Geographic Locations. Law firms that conduct political advocacy tend to occupy office space in or near the capitals whose governments they solicit. Firms that have federal pursuits in the United States, for example, tend to be located in the greater Washington, D.C., area, while lobbyists who work with state governments tend to stay closer to state capital areas. Other firms that conduct both state and federal lobbying activities operate in major urban centers that provide them with access to transportation that can easily take them to their target government entity.

Political Advocacy Industry Pros of Working for a Law Firm. Law firms that offer political advocacy services present great opportunities for new and midlevel attorneys. Well-established and reputable law firms help such individuals enhance their own reputations and standing among clients and the government officials with whom they work. Lobbyists with legal qualifications are not only able to create connectivity between client and government entities, but also able to write public policy. Additionally, the salary and benefits of a political advocate working in a law firm, particularly a well-established firm, are typically above average. Cons of Working for a Law Firm. The individual reputations of political advocates who work within law firms are closely tied to their firms’ public reputations. Advocates may find themselves turned away by government officials based not on their own qualifications but on their firms’ public standing and reputed political ideology. In addition, lobbyists may find themselves pulled in several directions at once—having less time to dedicate to one or two clients when the larger obligations of the firm require their attention. Costs Payroll and Benefits: Pay for lobbying and political advocacy activities vary based on the manner in which the activity is contracted. For example, some lobbyists operate on an hourly rate, while others are paid on a monthly, quarterly, or yearly basis. Benefits such as health and dental insurance are usually included. Supplies: Law firms require computer hardware and software, basic office supplies, photocopiers, scanners, postage machines, and other office hardware. Because lobbyists are often mobile, wireless and mobile technology such as smart phones are often a necessity. External Services: Political advocates operating out of law firms may call upon temporary employees to provide administrative support. Firms that own their own office space also often contract custodial services and, in many cases, security services. Because communications are so critical, they also utilize external telecommunications vendors to provide up-to-date cellular, voice-mail, and Web capabilities. As the nature of advocacy often requires travel, transportation can also be a significant cost, albeit often reim-

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bursable, for lobbyists and their firms. Additionally, because they conduct a number of client luncheons and political fund-raisers, they often contract catering services. Utilities: Law firms pay standard utilities, including telephone, Internet access, electricity, and heat. Larger firms that own their own property must also pay for trash removal, water, and sewage. Depending on the size of the firm and the number of contracts on which the company works, utilities may or may not comprise a significant portion of a law firm’s monthly expenses. Taxes: Law firms pay corporate taxes based on the income they generate. If they own their own property, they must also pay commercial real estate taxes and other local and state taxes. Lobbyist registration expenses, not technically considered taxes but rather fees, must also be paid in states that have such protocols (although some clients pay these fees as part of negotiated contracts). Nonprofits and Trade Associations Nonprofit organizations and trade associations advocate on behalf of often broad and diverse constituencies, such as retired persons, energy companies, medical professionals, or animal lovers. As a result, they are responsible to sometimes extremely large and diverse constituencies. It is sometimes difficult or impossible for such organizations to please their entire membership, so they must strive to influence legislation in a manner that matches their perceived mission and the interests expressed in that mission. Nonprofits and trade associations are more likely than other political advocates to spend a significant amount of time advocating directly to their own membership as well as to legislators. Potential Annual Earnings Scale. Most nonprofits and trade associations pay in the lower end of the lobbyist income range. The higher education Web site eLearnPortal.com reports that U.S. Bureau of Labor Statistics (BLS) figures show that the median annual salary for a lobbyist with a nonprofit organization was $49,717 as of 2009. Salaries trend upward if the nonprofit or trade association employer has a large membership or a significant political agenda that may command a larger-thanaverage percentage of its budget expenditures. Clientele Interaction. As is the case for all political advocates, client interaction is paramount for a

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lobbyist. In the case of nonprofits and trade associations, however, it is particularly important that the lobbyist work closely with the client, since in most cases, the clients are either individuals or members of the organization who are relatively inexperienced in political affairs. Lobbyists must conduct frequent meetings with clients and be in consistent contact (if not consistently available). Amenities, Atmosphere, and Physical Grounds. Most nonprofit and trade associations maintain professional work atmospheres in their office space. Depending on the space available, offices may be shared or unavailable for lower-level employees. Because nonprofits and trade associations are typically smaller than corporations, their personnel are often required to perform multiple tasks in addition to their primary duties. With the exception of high-activity periods (such as legislative budget sessions, receptions, and other events at which pertinent bills are reviewed), the average workday is generally not as demanding as it is in other political advocacy environments. Typical Number of Employees. Nonprofit and trade associations, in general, have relatively few employees on site. However, many such organizations also have broad memberships that are led by boards of directors. Additionally, many organizations may have a number of key leadership committees containing varying numbers of volunteer members who are tasked with driving the organizations’ political activities. Traditional Geographic Locations. Nonprofits and trade associations that conduct political advocacy and lobbying efforts are generally located in or near major urban centers (if not state or national capital cities) in order to facilitate government relations efforts. In many cases, however, they are positioned in a geographic location central to their membership, traveling to and from the capital from that base of operations. Pros of Working for a Nonprofit or Trade Association. Political advocates and lobbyists who are part of nonprofits or trade associations have the benefit of focusing on one agenda and, thus, a relevant set of legislative pursuits. A single-minded approach such as this helps with organization and minimizes the amount of information that must be obtained from the thousands of legislative bills that are filed in each legislature every session. Additionally, by virtue of the relatively small size of most

nonprofits and trade associations, employees may have many tasks to manage in addition to their own, making work fast-paced and exciting. Cons of Working for a Nonprofit or Trade Association. Nonprofit organizations and professional trade associations rely heavily on membership dues and external donations. Salaries for staff members are generally lower than in other business sectors. Additionally, although the association or organization is expected to have a single mind on political issues, its stances must be formulated through the often challenging process of reconciling the disparate opinions and attitudes of its members. Furthermore, the relatively small size of such organizations requires employees to handle many tasks. This situation can create confusion when dealing with the complex environment of legislative policy. Costs Payroll and Benefits: Nonprofits and trade associations usually pay staff members annual salaries. They are aware that the salaries they pay are lower than those paid for similar work and job descriptions in other arenas, so when budgetary constraints allow, they attempt to make up for lower pay with excellent benefits. Off-site meetings and other travel expenses are usually reimbursed if they are not included in a lobbyist’s base salary. Supplies: Nonprofit and trade associations need basic office supplies, as well as computers and smart phones (particularly for political advocates who will conduct business in the capital environment), fax machines, photocopiers, postage machines, and other such equipment. External Services: Because of the relatively small size and budgets of trade associations and nonprofit organizations, much of their work may be distributed among external vendors. Computer and telecommunications consultants may help support operating systems, while accountants may handle member dues and contributions, as well as tax preparation. Additionally, such groups often use publishers or printing companies to produce pamphlets and promotional materials. Utilities: Like most office environments, nonprofits and trade associations must pay for electricity and heat. In some cases, they must also pay for trash removal and recycling services. Addition-

Political Advocacy Industry ally, such groups must pay for telephone and Internet service, which may include rental fees for equipment such as fax machines. Taxes: Trade associations and nonprofit groups may pay a number of taxes, although a large volume of such organizations are tax-exempt. Some associations may be nonprofit in nature but, because they are driven by member dues revenues, must still pay commercial and corporate taxes. If they own their own real estate, such groups must also pay property taxes. Furthermore, while they may be exempt from sales taxes, they may still be subject to state and local taxes, such as hotel occupancy and meals taxes, provided that they are not on official government business. Corporations Many lobbyists work directly for large corporations that find their interests constantly engaged— whether positively or negatively—by legislation and public policy initiatives. These corporations find it more practical and cost-effective to engage lobbyists full time, rather than employing an outside law or consulting firm. Lobbyists of corporations in the same or related industries, such as banks or oil companies, may cooperate in their efforts on specific legislation. Sometimes, however, the interests of different companies in the same sector may diverge, particularly if they are of different sizes, are in different geographic regions, or have different attitudes toward expansion. In that case, the lobbyists working for one health insurer, for example, may pressure legislators to vote in precisely the opposite way as the lobbyists from a different health insurer. Potential Annual Earnings Scale. A chief corporate lobbyist with ten to twenty years of experience may earn from just over $80,000 to well over $100,000 annually. Clientele Interaction. A corporate lobbyist and political advocate’s primary client is the corporation for which that individual works. However, the work performed is usually not just on behalf of one company, but rather on behalf of an entire industry or segment thereof. In both situations, the lobbyist will be expected to report to and communicate with executives as frequently as the situation merits, in order to ensure that the proper legislation is filed, meetings are conducted, and information is disseminated among the clients.

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Amenities, Atmosphere, and Physical Grounds. Corporations that conduct political advocacy or lobbying activities maintain a professional office environment. Lobbyists may or may not be located in a corporate headquarters, however, as their work may require consistent placement in a capitol building or area that may be far from the main office. In other situations, lobbyists may be placed near public relations and external affairs offices. Corporate political advocates and lobbyists usually work in a fast-paced atmosphere, particularly when items on the company’s agenda are under consideration. Typical Number of Employees. Corporations vary in terms of personnel size. Political advocacy and lobbying activities within a corporate environment may be somewhat smaller and compartmentalized, with only a handful of lobbyists and administrative staff to support the political advocates while off site. The size of a political advocacy department depends on the amount of lobbying done, as well as the levels on which the lobbying takes place. For example, corporations that have local, state, and federal agendas employ a larger number of political advocates, lobbyists, and grassroots organizers than do companies that work solely on the state or local level. Traditional Geographic Locations. Corporations that conduct lobbying and political advocacy may or may not be located near the target of that activity. Usually, larger corporations (which are more likely to have political interests) are located in or near major metropolitan areas in order to better conduct their main business. Lobbyists may be located on site as well, traveling to the capital in question from time to time. However, many larger corporations have satellite offices in Washington, D.C., London, and other capitals. Typically, these offices are dedicated fully to the pursuit of political advocacy and lobbying on the company’s behalf. In still other cases, companies may have regional offices dedicated to regional lobbying or grassroots organizing. Pros of Working for a Corporation. Corporations offer a degree of stability and financial security to lobbyists and political advocates, as well as above-average salaries. They may also provide better benefits, such as insurance, profit sharing, and retirement plans, than other potential employers. Corporate lobbyists and political advocates are

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also usually involved in the coordination of government affairs activities, such as grassroots mobilization, position-paper writing, and speaking at seminars and conferences. These activities, among others, help diversify a corporate political professional’s daily activities. Additionally, with the clout of a major corporation behind them, those who work for such companies often enjoy a strong degree of backing among the legislators and officials with whom they meet and conduct business. Cons of Working for a Corporation. Lobbyists and political advocates working directly for corporations may be limited in their level of access by virtue of the fact that they work for just one company. For example, they may not be seen as representative of an entire industry by legislators. Professionally, there is also a potential advancement issue for corporate political advocates, since such activities are but one part of the corporation’s overall activities. Beyond certain upper-level positions, such as vice president of government affairs or a similar executive title, political advocates do not have much room for professional growth or upward mobility within a given corporation. Costs Payroll and Benefits: Corporate political advocates and lobbyists are usually paid on a salary basis. These salaries are dependent on the individual’s experience and qualifications, as well as the financial strength of the corporation in question. Benefits are usually above average in quality, negotiated as part of an overall corporate package with insurance and financial consulting companies. Supplies: Corporations require a general range of office supplies, as well as telecommunications and computer hardware such as printers, phones, and copiers. They also typically require audiovisual supplies such as screens, projectors, and related hardware. In many cases, rather than (or in addition to) personal computers, they may require laptop computers and smart phones (such as BlackBerries) for their mobile personnel. External Services: Corporations, depending on their size, may use a number of external vendors for such tasks as printing and publications, offsite data storage and management, landscaping and custodial services, and caterers for profes-

sional luncheons and meetings. Larger companies may also employ security staff and even cafeteria staff that may be externally based. Additionally, they may use various modes of transportation, from taxis to corporate jets, to transport mobile staff to and from meeting sites. Utilities: Corporations use a number of key utilities, such as telephone and Internet services, electricity, and heat. Larger corporations that own their own properties or lease large properties may also pay for water and sewage, as well as garbage-collection and recycling services. Taxes: Corporations are required to pay corporate taxes, as well as commercial real estate taxes. They may also be expected to pay capital gains taxes on financial transactions. Additionally, they may pay taxes for state unemployment insurance programs. Consultants Political consultants advise clients on their political advocacy needs. Advocacy professionals who are based in consultancies rather than law firms may still have law degress, but they see themselves as offering a wider or differently focused range of services than do legal professionals. Because lobbyists must often have expertise in the industry or sphere within which they advocate, many consultants specialize in a particular type of lobbying, such as environmental lobbying. They may also specialize in advocacy techniques that are ancillary to a law firm’s lobbying efforts, such as grassroots organizing or mounting public relations campaigns. Potential Annual Earnings Scale. Political advocates and lobbyists who work as consultants receive salaries commensurate with their skills and reputations, as well as the scope of work performed. For example, some simply provide government affairs strategy information, while others act as their clients’ official lobbyists. According to Simply Hired, the average salary for political advocacy consultants as of September, 2009, was approximately $66,000 per year. Clientele Interaction. As is the case for most political advocates and lobbyists, client interaction and communication is imperative. Political consultants generally remain in consistent contact, whether via phone or e-mail, with the client. On many occasions, a consultant will meet with senior

Political Advocacy Industry executives or board members to create and implement legislative strategies. During periods of particularly high legislative activity (such as hearings on relevant bills, budget sessions, and other key events), the frequency of such interactions will increase significantly. Amenities, Atmosphere, and Physical Grounds. Political consultants, by virtue of being independent of corporate or legal oversight, vary in terms of their respective professional atmospheres. Still, they are expected to demonstrate professional characteristics and appearance, particularly when in contact with clients. The atmosphere of a consultant’s workplace varies depending on the number of ongoing client projects, as well as the level of legislative or agency activity taking place. Consultants are located in a number of settings, such as urban office spaces. However, if the consultant is self-employed, he or she may work in a home office. Typical Number of Employees. Political consultancies vary in staff size based on the number of clients and the types of activity they perform. In some cases, consultants have a number of staff, including lower-level lobbyists, researchers, interns, and administrative personnel. In others, the consultant is the sole staff representative, working out of a home office or similar venue. Traditional Geographic Locations. Political advocacy consultants typically conduct their business close to or in capital cities, depending on the level of government with which they work. They may choose to locate in major noncapital urban areas in order to generate the largest volume of business, traveling to capitol buildings and legislative events as their work requires. Pros of Working for a Consultancy. Political advocacy consultants generally act as independent agents outside a singular corporate or business framework. As a result, they are better able to organize their own schedules and pursuits. This arrangement may also allow them to work with a wide range of clients, industries, or issue areas. Additionally, they are generally able to avoid certain stigmas, such as political ideologies, that may attach to certain corporations or other lobbyists. Thus, they may be more able to stand on the merits of their own qualifications and professional reputations. Furthermore, for small advocacy consultant businesses, overhead expenses tend to be min-

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imal. As a result, such businesses may present themselves as cost-effective alternatives to more expensive political advocacy firms and companies. Cons of Working for a Consultancy. Political advocates and lobbyists who are independent of other companies, firms, and organizations must gain access to key government personnel by virtue of their own reputations. Consultants who are relatively new to the environment may have difficulty competing against more well-established lobbyists, particularly those with greater financial assets or backing. Consultants without the financial backing of major corporations or firms have expenses that must be deducted from their revenue streams. As a result, they must have enough clients and business to ensure that bills are paid and salaries are issued. In heavily saturated political advocacy markets or in economic downturns, such challenges can have a negative impact on a consultant’s financial condition. Additionally, those consultants with limited staff must often assume the workloads of others within the firm, which may hinder their ability to complete their own work. Costs Payroll and Benefits: Political consultants are typically paid on an hourly, monthly, or quarterly basis, depending on their contracts. Smaller consultant businesses may not have as many competitive benefits, such as health care or financial planning services, as a result of their smaller staffs. However, those smaller staffs may also result in each employee garnering a higher percentage of major client agreements and contracts, translating into higher salaries. Supplies: Political consultants require a general range of office supplies, including stationery, computers, and smart phones (such as BlackBerries). They also need fax machines, photocopiers, and related hardware. In some cases, they need overhead projectors and other audiovisual equipment. Advocates who conduct research may need computer software that enables them to conduct survey analyses and monitor targeted legislative and regulatory processes. External Services: Consultants may contract caterers for client luncheons and fund-raisers, as well as custodial, accounting, and printing services. Many consultants subscribe to government

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news services, which provide real-time e-mailed reports of political events, sessions, and developments. Most require external companies to handle computer data storage and telecommunication services. They also incur the same necessary travel expenses incurred by other lobbyists. Utilities: Political consultants must pay all relevant utilities, such as electricity, water, telecommunications, garbage pickup, recycling, and sewage. Taxes: Consultants pay corporate taxes and property taxes. They must also account for taxation pertaining to any political donations to candidates or incumbent officials.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and distribution of tasks within a political advocacy business depends largely on the size of the company and the number of clients or projects being served. Independent consultants, for example, are likely to manage all of the major tasks of their businesses, while larger corporations and organizations have defined organizational structures and hierarchies. The tasks themselves, however, generally remain similar throughout the political advocacy and lobbying industry. The following umbrella categories apply to the organizational structure of businesses in the political advocacy industry: ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Business Development Communications and Public Relations Research Lobbying Legal Counsel Information Technology/Multimedia Human Resources Administrative Support

Executive Management Executive management handles the general operations of a political advocacy company, corporation, organization, or consultancy. Managers oversee all aspects of their companies’ endeavors,

setting goals and strategies, assigning tasks to personnel, drafting and implementing budgets, and approving all new business. They are usually well educated, with graduate degrees such as a master of business administration (M.B.A.) or juris doctor (J.D.). Executive managers generally earn the highest salaries in their companies. Their job is to manage the overall functions of the organization, address systemic issues, guide political activities, and ensure that all departments are functioning in such a way that clients’ needs are fully satisfied. In most cases, they are the public face of their companies. Because of this visibility, executive managers of political advocacy organizations often come from highprofile positions themselves, thereby giving the organization a positive or immediate reputation. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Vice President Government Relations Director Operations Director Chief Financial Officer (CFO) New Business Director

Business Development The business development department of a political advocacy firm, organization, or corporation is responsible for researching, contacting, securing, and maintaining the firm’s client base. Business development personnel serve as the initial point of contact for new business, seeking out key groups whose interests may be well served by their companies. They must also monitor trends and issues in the political sphere in order to gauge the best areas for client contacts. Business development specialists and personnel are well trained in business, although those who work in the field of political advocacy and lobbying must also have experience in government. A college and, in many cases, graduate degree such as an M.B.A. are usually preferred by the hiring company. Salaries vary based on the position, the organization’s financial status, and the geographic location of the company. According to Simply Hired, the 2009 national average for a high-level business development staff member was about $70,000 per year.

Political Advocacy Industry Business development occupations may include the following: ■

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Vice President/Director of Business Development Business Development Manager/ Coordinator Administrative Assistant

Communications and Public Relations Communications and public relations staff ensure that the political activities of their organization are shared with association members, clients, potential members, and the media. They serve as the primary point of contact for media representatives who have questions or need public statements concerning the organization’s activities or clients. They also draft press releases and communications pieces (such as e-newsletters, mass e-mails, publications, and brochures) to ensure that the positive and negative developments on the organization’s

OCCUPATION

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agenda are given light. They may also be tasked with Web site management. Communications and public relations personnel are experienced in communications, having typically received undergraduate and sometimes graduate degrees in the field. They may also have backgrounds in government, often as spokespeople for legislators or executive agency officials. According to Salary.com, on average, a high-level communications and public relations manager in the United States earns about $129,000 per year. Communications and public relations occupations may include the following: ■ ■

■ ■ ■ ■

Vice President/Director of Public Relations Communications/Public Relations Manager Press Secretary Press Assistant Administrative Assistant Intern

SPECIALTIES

Public Relations Specialists Specialty

Responsibilities

Fund-raising directors

Direct and coordinate the solicitation and disbursement of funds for community social-welfare organizations. They establish fundraising goals according to the financial needs of the agency and formulate policies for collecting and safeguarding the contributions.

Funds development directors

Plan, organize, and coordinate ongoing and special project funding programs for museums, zoos, public broadcasting stations, and similar institutions. They prepare a statement of planned activities and enlist support from members of the institution staff and volunteer organizations.

Lobbyists

Contact and confer with members of the legislature and other holders of public office to persuade them to support legislation favorable to their clients’ interests.

Sales-service promoters

Generate sales and create goodwill for a firm’s products by preparing displays and touring the country. They call on merchants to advise them of ways to increase sales and demonstrate products.

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Research Many political organizations have on-site individuals dedicated to researching and analyzing key issues and data in order to assist the company in developing key strategies. Researchers are required to analyze complex accounts, budgets, and statutes, as well as to write position papers and studies. Researchers and analysts usually have college or graduate degrees in such fields as economics, political science, public policy, public administration, or sociology. They must be able to analyze and communicate complex and detailed material to those who will use it for the benefit of clients—and sometimes to the clients themselves. Additionally, qualified researchers and analysts must be experienced in the use of statistical-analysis and other types of specialized computer software, such as survey software. They must be experienced in the computer systems used to track legislation and legal precedents. This expertise is usually garnered

OCCUPATION

in undergraduate and graduate programs before potential researchers emerge onto the job market. Salaries are dependent on the type of research performed and the individual’s experience and issue familiarity. According to the Economic Research Institute, the average U.S. salary for political researchers and analysts is approximately $71,000 per year. Research occupations may include the following: ■ ■ ■ ■ ■ ■

Research Director Research Coordinator/Project Manager Researcher Analyst Administrative Assistant Intern

Lobbying Lobbyists form the field staff of a political advocacy firm or organization. They meet and com-

PROFILE

Public Relations Specialist Considerations

Qualifications

Description

Promotes or creates goodwill for individuals, companies, or organizations, often by creating promotional materials.

Career clusters

Business, Management, and Administration; Marketing, Sales, and Service

Interests

Data; people

Working conditions

Work inside

Minimum education level

Junior/technical/community college; apprenticeship; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service; volunteer work; parttime work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

EAS

Political Advocacy Industry municate with clients on a consistent basis, helping clients develop strategies for achieving their objectives, writing legislation, and helping guide and monitor bills as they travel through the legislative process. In many cases, lobbyists also facilitate meetings between their clients and key agency personnel in order to achieve regulatory (rather than legislative) goals. Furthermore, lobbyists frequently host or attend political fund-raisers on behalf of their clients, guiding money to the campaign committees of legislators whom the clients support. Lobbyists are usually college educated, with considerable experience in the political fields and geographical areas in which they work. They may have advanced degrees, such as a law degree or a master’s degree in public policy, public administration, or political science. In addition to this academic experience, most lobbyists must register with state or federal government regulatory agencies in order to comply with state and federal lobbying laws. Often, legislators who have either lost or given up their elected seats choose to stay in Washington to act as lobbyists. Lobbyists must be able to organize their schedules to account for a wide range of meetings and meeting topics. Therefore, they must have strong administrative and project management skills. The salary range for a lobbyist is diverse in nature. Salary.com lists the 2009 national average salary for a lobbyist at about $96,000, while The Learning House lists the median annual salary for a lobbyist as $45,000. The difference between mean and median salaries may be telling: Former legislators with significant experience can garner significantly more money for their services than can the average lobbyist. Lobbying occupations may include the following:

vant bills and existing statutes but also with assessing the liability of their companies and personnel as a result of their lobbying activities. Legal counsels have law degrees and must have passed the local bar examination, which determines whether candidates can practice law in a certain jurisdiction. In some cases, they have additional degrees, such as a master’s degree in public administration. Furthermore, they must be familiar with the industry or industries in which they work. Legal occupations may include the following: ■ ■ ■ ■

■ ■ ■

Government Relations Director Lobbyist Administrative Assistant Intern

Legal Counsel Any organization that conducts political advocacy and lobbying activities must employ experts in the relevant state and federal laws. These staff members are tasked not only with analyzing rele-

General/Chief Counsel Attorney Paralegal Administrative Assistant

Information Technology/Multimedia Large political advocacy and lobbying organizations may have on-site personnel dedicated to ensuring the smooth operation of computers, telephones, and audiovisual systems. This department maintains the internal computer operations of the company and may be called upon to set up and operate presentations for meetings and receptions, as needed by clients. Information technology (IT) personnel tend to have either college or vocational training in computer systems management. They must be familiar with the latest systems available and understand the most up-to-date antivirus and security software in order to maintain the integrity of the client-company relationship. According to the BLS, the national average salary for IT specialists is about $65,000 per year. IT and multimedia occupations may include the following: ■ ■

■

1471

■ ■

Information Technology Specialist Systems Analyst Audiovisual Support Specialist Administrative Assistant

Human Resources The human resources department is responsible for personnel management and the administration of employee benefits, such as insurance, retirement funds, and other employee incentives. It also assists employees with obtaining on-thejob training. Human resources managers are well

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trained in their field, both through experience and through college-level education. According to the BLS, human resource managers in the United States earn an average of about $104,000 per year. Human resources occupations may include the following: ■ ■ ■

Human Resources Director Human Resources Manager Administrative Assistant

Administrative Support Administrative personnel are found throughout most political advocacy organizations, assisting each department in its overall operations. They assist at the front desk in answering phones during high-activity periods, run errands for executives, make photocopies and sending faxes for in-house personnel and clients, and perform a host of other associated office tasks. In many cases, they are the nucleus of a given department, providing support to managers through scheduling, data entry, filing, and other activities. Administrative personnel have a wide range of backgrounds and professional training experience. Many are temporary employees, while others are brought in as entry-level staff for managers and other personnel. Many have college degrees and are hired with the potential for upward mobility. Their salaries are often hourly. According to PayScale.com, the national average salary for an administrative assistant is about $14 per hour. Administrative occupations may include the following: ■ ■ ■ ■

Administrative Assistant Secretary Cooperative Employee Intern

INDUSTRY

OUTLOOK

Overview The political advocacy and lobbying industry has been both one of the most maligned and one of the steadiest industries in the modern economy. The industry is political in nature but, as is the case in government, has permutations in virtually every other industry in a given economy. Any company

that has an interest in federal, state, or local legislation or regulations likely has direct access or, through trade associations, indirect access to a lobbyist. The increased number of Western-style democracies (which promote the open solicitation of government officials by private citizens) in the twenty-first century indicates that the political advocacy industry will continue to play a major role in public policy making and public administration. Still, it is likely that the lobbying industry will need to undergo another evolution as government and industries alike experience fundamental changes. In the United States, the 2008 election of Democratic presidential candidate Barack Obama, coupled with a strong showing by Democrats in both the House and Senate, led to a fundamental shift in leadership in the federal government. Campaigners— both Republican and Democrat—railed against “special interests” (another name for lobbyists), and the new administration instituted new rules making it more difficult for former lobbyists to work for the executive branch of government and for government employees to become lobbyists. Even so, the so-called revolving door between lobbying firms and government has continued. However, the rules have resulted in fewer people becoming officially registered lobbyists, as more seek to accomplish the same goals through less direct means. Moreover, despite the administration’s avowed distrust of lobbyists, many lobbyists work to support the agendas promoted by President Obama, his administration, and the Democratic Party. Others represent right-leaning corporate interests, particularly in battles over the desirability or undesirability of new and increased regulation of the private sphere. Thus, while the industry outlook is strong, political advocates and lobbyists are still faced with change. To address this change, lobbying and political advocacy firms are seeking seasoned veterans to head their efforts. In other words, lobbying firms may prefer to hire lobbyists with proven legislative experience, such as former state representatives and senators, as well as others who have strong relationships with the current legislature. They may prefer such candidates over those who are simply experienced lobbyists. In addition to personnel adjustments, political

Political Advocacy Industry organizations must also change their tactics. The success of President Obama in the 2008 election is widely attributed to his grassroots organization, as well as his use of the Internet and emerging social media. Twenty-first century lobbyists must also be skilled at using the latest technologies to advance their causes. They must prove effective in organizing or helping organize grassroots campaigns that will send more than one message to targeted legislators. The evolution of lobbying practices is not limited to the United States. The cohesion of the European Union means that lobbyists, while working with national governments on issues of local importance, must now also attempt to gain access to a much larger European political organization. Corporate political advocates must create new strategies in order to advance their clients’ agendas among British, French, German, and other European leaders. Such an undertaking, challenging in and of itself, is complicated by the complexity of the EU structure, whose decision-making processes alternate between the national and supranational levels. Political advocacy and lobbying will not continue unfettered, however. There are already strict rules in place that govern and regulate lobbying on the federal and state levels. Public outcry over the influence of special interests on the U.S. government led to a series of changes in lobbying and campaign finance rules in 2002. It is widely believed that such regulatory measures will continue to be pursued in Congress, in state governments, and in other governments. Even as the European Union continues to take shape, there is a growing call for lobbying regulations in Europe similar to those passed in the United States. While campaign finance itself is not an issue in Europe (EU policy makers are not elected), the issue of access has taken a larger portion of the spotlight in recent years, and it will most likely continue to influence the industry in that region. Lobbyists and political advocates continue to be in high demand, particularly as leaders address complex issues such as health care, international terrorism, and the further development of the global economy. Although lobbyists will remain under scrutiny from the public, the industry will continue to play a major role in the establishment of public policy.

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Employment Advantages The political advocacy industry, while focused in terms of its own activities, has broad applications across a wide range of industries and levels of governments. Lobbyists and political advocates may enjoy working with a number of industries and issue areas—a lobbyist is hired largely because of the individual’s expertise in government, knowledge of the political process, and relationships with key legislative leaders and officials. Additionally, the breadth of the industry’s domain signifies industry stability. While the key leaders and issues may change, lobbyists and political advocates remain in high demand among companies and organizations seeking access to government. Although the 2007-2009 global economic crisis tightened budgets around the world (and, as a result, placed limitations on lobbyist pay scales), the increased demand for qualified political advocates will likely translate into competitive salaries and benefits for such advocates. (According to a report in The Wall Street Journal, prior to the 2007-2009 recession, from 2000 until 2005, the number of registered lobbyists in Washington, D.C., more than doubled, and the amounts they charged clients increased by as much as 100 percent.) Political advocacy is also a good occupation for activists who seek to be part of a dynamic vehicle for advancing their agendas. Individuals with a strong interest in the political process and a desire to work in a fast-paced environment often find satisfaction in the industry, as advocacy provides a voice in government for those who did not previously have or could not utilize one. Furthermore, lobbying presents employees with strong chances for advancement, either within the field itself or within another industry. This open-ended quality is due to the fact that a political advocate must become familiar with a number of industries and issue areas; the basic skills and personal characteristics political advocates must have and hone during their tenures may help significantly further their careers. Annual Earnings The political advocacy industry continues to generate significant earnings. In 2008, industry members were paid roughly $3.2 billion to lobby Congress. The largest political advocacy groups worked on behalf of the pharmaceutical industry—

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Political Advocacy Industry

in 2007, pharmaceutical companies paid $168 million to lobbyists to press their agenda on Capitol Hill. Lobbying on an international scale is also expected to see strong earnings. (According to Public Affairs Links, as of 2007, the lobbying industry was estimated to be worth over $3 billion in the United Kingdom.) Contributing to demand for international lobbyists are issues such as HIV/AIDS, climate change, and poverty. These issues increase the activity of nonprofit and nongovernmental organizations (NGOs) that, in turn, activate their grassroots bases to push local, national, and regional governments into addressing their concerns.

RELATED RESOURCES FOR FURTHER RESEARCH American League of Lobbyists P.O. Box 30005 Alexandria, VA 22310 Tel: (703) 960-3011 http://www.alldc.org Association of Accredited Lobbyists to the European Parliament Rond Point Schuman 6 B-1040 Brussels Belgium Tel: 32-2-735-9339 http://www.eulobby.net Cassidy and Associates 700 13th St. NW, Suite 400 Washington, DC 20005 Tel: (202) 347-0773 Fax: (202) 347-0785 http://www.cassidy.com Center for Public Integrity 910 17th St. NW, Suite 700 Washington, DC 20006 Tel: (202) 466-1300 http://www.publicintegrity.org Library of Congress 101 Independence Ave. SE Washington, DC 20540 Tel: (202) 707-5000 http://thomas.loc.gov

Public Affairs Council 2033 K St. NW, Suite 700 Washington, DC 20006 Tel: (202) 872-2790 Fax: (202) 835-8343 http://www.pac.org

ABOUT

THE

AUTHOR

Michael P. Auerbach has over sixteen years of professional experience in public policy and administration, economic development, and the hospitality industry. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He is a veteran of state and federal government, having worked for seven years in the Massachusetts legislature and four years as a federal government contractor.

FURTHER

READING

Bimbaum, Jeffrey H. “In a Harsh Climate for Lobbyists, the Forecast Calls for . . . More Lobbyists.” The Washington Post, August 12, 2008. “Biography of Ulysses S. Grant.” Incredible People. http://profiles.incrediblepeople.com/ulysses-s-grant. Center for Responsive Politics. Communications. “Washington Lobbying Grew to $3.2 Billion Last Year, Despite Economy.” Capitol Eye Blog, January 29, 2009. http://www.opensecrets .org/news/2009/01/washington-lobbyinggrew-to-32.html. Clarke, Conor. “The Dire State of the Lobbying Industry.” The Atlantic, March 12, 2009. http:// politics.theatlantic.com/2009/03/the_dire _state_of_the_lobbying_industry.php. Cummings, Jeanne. “Inside the Lobbying Industry’s Evolution.” Politico. August 14, 2007. http://www.politico.com/news/stories/0807/ 5368.html. Danzinger, Danny, and John Gillingham. 1215: The Year of Magna Carta. New York: Simon and Schuster, 2004. Hrebenar, Ronald J., and Bryson B. Morgan. Lobbying in America: A Reference Handbook. Santa Barbara, Calif.: ABC-CLIO, 2009.

Political Advocacy Industry Luneburg, William V., Thomas M. Susman, and Rebecca H. Gordon. The Lobbying Manual: A Complete Guide to Federal Lobbying Law and Practice. 4th ed. Chicago: American Bar Association, 2009. McGrath, Conor. Interest Groups and Lobbying in the United States and Comparative Perspectives: Essays in Ethics, Institutional Pluralism, Regulation, and Management. Lewiston, N.Y.: Edwin Mellen Press, 2009. Mahoney, Christine. Brussels Versus the Beltway: Advocacy in the United States and the European Union. Washington, D.C.: Georgetown University Press, 2008. _______. “Why Lobbying in America Is Different.” EuropeanVoice.com, April 6, 2009. http://www.europeanvoice.com/article/ 2009/06/why-lobbying-in-america-isdifferent/ 65078.aspx. Newton, Adam, and Ronald K. L. Collins. “Petition.” First Amendment Center. http:// www.firstamendmentcenter.org/petition/ overview.aspx. Public Affairs Links. http://www.publicaffairs links.co.uk. Public Citizen. “History of the Lobbying Disclosure Act.” July 23, 2005. http://www .lobbyinginfo.org/laws/page.cfm?pageid=15. Salary Expert. “Political Analyst Compensation Data.” http://www.salaryexpert.com/ index.cfm?fuseaction=Browse.Political-Analystsalary-data-details&PositionId=17475. Salent, Jonathan D., and Kristin Jensen. “Lobbyist-Bashing by Obama Doesn’t Dim Industry’s Boom Forecast.” Bloomberg.com,

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November 20, 2008. http://www.bloomberg .com/apps/news?pid=20601070&refer=home &sid=aEZoCjCjrYDE. SimplyHired. “Average Business Development Salaries.” http://www.simplyhired.com/a/ salary/search/q-business+development. _______. “Average Political Consultant Salaries.” http://www.simplyhired.com/a/salary/ search/q-Political+Consultant. Taminiau, Yvette, and Arnold Wilts. “Corporate Lobbying in Europe: Managing Knowledge and Information Strategies.” Journal of Public Affairs 6, no. 2 (May, 2006): 122-130. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Vance, Stephanie D. The Advocacy Handbook: A Practitioner’s Guide to Achieving Policy Goals Through Organization Networks. Bethesda, Md.: Columbia Books, 2009. Young, McGhee. Developing Interests: Organizational Change and the Politics of Advocacy. Lawrence: University Press of Kansas, 2010.

©Tess Van Kerkhoff/Dreamstime.com

Postal and Package Delivery Services

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Transportation, Distribution, and Logistics Career Clusters: Government and Public Administration Occupations; Transportation, Distribution, and Logistics Subcategory Industries: Air Courier Services; Bicycle Courier Services; Courier Services; Direct Mail Advertising Services; Express Delivery Services; Local Letter and Parcel Delivery Services; Mailbox Rental Centers; Messenger Services; Parcel Mailing Services; Postal Station Operation; Private Mail Centers Related Industries: Freight Transport Industry; Retail Trade and Service Industry Annual Domestic Revenues: Postal services: $79.97 billion USD (U.S. Postal Service, 2008); courier services: $58.16 billion USD (U.S. Census Bureau, 2002) Annual International Revenues: Postal services: $135.28 billion USD (Universal Postal Union, 2007); courier services: $71.84 billion USD (Oxford Economic Forecasting, 2003) Annual Global Revenues: Postal services: $215.25 billion USD (Universal Postal Union, 2007); courier services: $130 billion USD (Oxford Economic Forecasting, 2003) NAICS Number: 491-492

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DEFINITION

Summary Postal and package delivery services encompass a highly strategic network of carefully coordinated tasks that moves mail and parcels efficiently. These services include government-regulated postal services with regular home delivery, such as the United States Postal Service, as well as local and ground messenger services and worldwide express carriers, such as FedEx Corporation, UPS, DHL, TNT, and Purolator. These corporations have grown with improvements in transportation and technology, and they have evolved to meet the demands of their customers. Globally, postal services employ more than 5.5 million people and move more than 440 billion letters and parcels annually. The United States Postal Service moves over half of the world’s mail, making it the largest postal service in the world, with over 780,000 staff. History of the Industry References to delivery services date back to 2000 b.c.e. in Egypt and 1100 b.c.e. in China. In China, an organized

Postal and Package Delivery Services system of relay messengers on horseback incorporated post houses, strategically placed throughout the kingdom, where messengers could pass along their packets to other messengers or collect fresh horses to continue the delivery themselves. Similar configurations existed in Egypt and the rest of the Persian Empire. Mounted messengers, using the relay stations, were able to travel approximately 170 miles in twenty-four hours. Early postal systems were reserved for royal, governmental, and military communications. International business and commerce emerged during the Renaissance, creating a need for commercial communication. Related businesses and banking institutions established their own networks of postal systems. Late in the fifteenth century, after the invention of the printing press, mail volume vastly increased. Soon, private, for-profit postal services carried both commercial and personal mail. One of the largest services, Thurn and Taxis, received a patent to conduct business from

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Roman emperor Maximillian I, employed over twenty thousand messengers, and carried mail throughout much of lower Europe between 1512 and 1867. Successful public mail delivery in London, the Penny Post, was established in 1680 by William Dockwa, but within two years it was shut down because the duke of York deemed its profits and efficiency an infringement of the government monopoly on postal systems. Rowland Hill, an English tax reformer, is credited with the development of the modern postal system. In 1837, he wrote Post Office Reform: Its Importance and Practicability, which suggested a uniform rate of postage based on weight, regardless of distance, using prepaid stamps. The vast geographic territory of the United States posed challenges for mail delivery. The famous Pony Express was established in 1860 but only lasted for a year. Soon thereafter, the transcontinental railroad connected the two sides of America. A railway post office was created in 1864,

The U.S. Postal Service sorts and delivers about 703 million pieces of mail to more than 146 million businesses and homes, six days per week. (AP/Wide World Photos)

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Postal and Package Delivery Services

but the railway did not run everywhere, so stagecoaches became the most reliable form of mail transport. Airmail began in 1911 in Britain and in 1918 in the United States. The first transcontinental airmail flight occurred in 1921. For international mail to become feasible, various countries had to enter into agreements with one another promising to deliver foreign mail and establishing costs and protocols. In 1874, the Swiss government called for a meeting of twenty-two countries that led to the creation of the General Postal Union, which became the Universal Postal Union in 1878. The union regulates and communicates mail standards of rate and delivery between countries. It became a specialized agency of the United Nations in 1948. The United States Postal Service is an independent agency of the federal executive branch. It began in the late eighteenth century under George Washington as part of the Treasury Department; during Washington’s administration, only seventysix post offices existed in the United States. The of-

fice separated from the Treasury, becoming its own cabinet-level department, the Post Office Department, headed by the postmaster general. On July 1, 1971, the Post Office Department became the United States Postal Service (USPS), in accordance with the 1970 Postal Reorganization Act. Home delivery of mail began in the United States in 1863, with 440 letter carriers serving fortynine cities. Before that, street letter boxes were used, beginning in 1858, or a fee could be paid to have mail delivered to home and business addresses. Private parcel delivery from department stores began in 1913 with Merchants Parcel Delivery, which changed its name to United Parcel Service (UPS) in 1919 and slowly expanded service throughout the country. UPS provided air service as early as 1929, but the Depression halted that service in 1932; it resumed in 1953. Express service began in 1973, when FedEx (Federal Express) began operations. Deregulation of the air cargo industry in 1977 allowed cargo carriers to purchase and operate their own aircraft:

As of 2011, FedEx had 684 aircraft and 43,000 motorized vehicles. (AP/Wide World Photos)

Postal and Package Delivery Services

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They no longer had to rely on the schedules of air forwarders, such as passenger jets. In the 1980’s, many air couriers competed to provide overnight and express delivery, but by 2000 only a few companies remained, including FedEx, DHL (originally Dalsey, Hillblom, and Lynn), UPS, USPS, Purolator, TNT (originally Thomans Nationwide Transport), and Airborne Express. The Industry Today The Universal Postal Union, a special agency of the United Nations based in Bern, Switzerland, now has 191 member countries. Its purpose is to set the rules and standards for international mail exchange. It does not, however, interfere in nations’ domestic postal operations. Individual postal This UPS package sorter in Hodgkins, Illinois, reads codes and automatiservices can set their own postage rates cally sorts packages into bags ready for the delivery trucks. (AP/Wide and determine how to manage their World Photos) postal operations and staffs. There are more than 5.5 million postal employsystem in the world, handling over half of the ees worldwide. In many countries, the roles of world’s mail. Russia has more post offices, nearly postal clerks and delivery personnel are very differninety thousand, but the volume of mail handled ent from what they are in North America. Some by those offices is much less than the volume of post offices require employees to collect specific American mail. taxes, sell pet or hunting licenses, distribute welThe modern process for moving mail is exfare benefits, and even distribute antimalarial tremely streamlined and efficient and involves sevmedications. eral different stages. Mail that is collected each day USPS was put into operation on July 1, 1971, folis brought to centrally located facilities to undergo lowing implementation of the 1970 Postal Reorgaa cancellation process. Mail handlers unload the nization Act. At that time, taxpayers subsidized 23 mail and separate it based on size and priority. Letpercent of USPS; those subsidies were phased out ter mail is then fed onto conveyors, where autocompletely by 1983. In order to compensate for unmated machines check it for appropriate postage. profitable postal outlets, USPS is authorized to reEach item’s postage (whether a stamp, meter ceive approximately $460 million annually; howmark, or prepaid insignia) is canceled, so it cannot ever, this funding has not been requested or be reused. A bar code is then printed on each envereceived in over eighteen years, saving taxpayers lope to assist in tracking and sorting. Each letter is more than $13 billion. Since 1971, USPS has been a scanned and visually analyzed by computer softself-supporting government agency that covers its ware, which produces Postnet bar codes through operating costs with revenues generated through character recognition. This automated procedure the sale of postage and related products and sercan process 95 percent of all letters, almost forty vices. thousand per hour. The remaining 5 percent have USPS operates almost forty thousand post ofto be manually sorted. Once bar codes have been fices and sorts and delivers approximately 703 million of pieces of mail to over 146 million businesses applied, the mail can be further sorted for local or and homes, six days per week. It is the largest postal other distribution.

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Postal and Package Delivery Services

Letter carriers arrive at depots early each morning to complete the final sorts for their mail routes. They typically stand at their sorting cases for approximately three hours a day, inserting the day’s mail by street and address. The balance of the eight-hour workday is spent delivering the sorted mail, which is carried in satchels or pushed in carts. Letter carriers may also have smaller bundles left at secured relay boxes, strategically placed throughout their delivery zones, for them to pick up and deliver in addition to the mail they sort at their depots. Large express package delivery services operate in a centralized hub-and-spoke system. Companies may have several hubs interconnected around the country and the world. Their drivers travel around each city, picking up and delivering packages. The collected packages are all placed in trucks or aircraft containers, depending on their destinations. Most truck- and aircraft-based package transport occurs at night, lessening the likelihood of interference from road- and air-traffic congestion. Moreover, many of the large companies have sufficient extra trucks and aircraft to continue operating at full capacity even when some of their vehicles must be removed from operation for maintenance and repair. When packages arrive at a hub, they are unloaded and sorted by destination. Automation, bar coding, and other technologies increase the speed and accuracy of the sorting. After being sorted, packages are loaded back into containers and carried by truck and aircraft to their final destinations. Express couriers and messengers deliver packages to residences and businesses within a certain route contracted in advance. At the start of a route, drivers go to local warehouse facilities, where all packages for their routes have been previously sorted for them by automated technology and parcel handlers. Their shifts are spent driving their routes and hand-delivering packages to recipients. Packages that cannot be delivered are returned to distribution centers for later delivery or pickup by customers. Some drivers service the same routes and become familiar with their regular customers. Small and independent courier and messenger companies pick up packages and documents from individuals and businesses and take them directly to their intended recipients. These items do not get sorted. Some businesses keep couriers and de-

livery drivers on contract for regular transport of their important documents and packages. Some couriers transport sensitive or hazardous packages, such as laboratory specimens. Electronic documents have affected the postal system by causing a consistent reduction in letter mail volume. However, some documents and materials cannot be sent electronically. Courier and messenger services are often hired to transport important documents and items, such as passports, legal documents, blueprints, laboratory specimens, or even organs for transplant.

INDUSTRY MARKET SEGMENTS The postal and package delivery industry includes a wide variety of business structures. Industry players range from individual contractors running sole proprietorships, to multimillion-dollar international express delivery services, to government postal services. The following sections outline small, medium, and large businesses within the postal and package delivery industry. Small Businesses Small courier and messenger services may employ anywhere from one to one hundred people. They are local and regional businesses, operating within specific geographic areas. Because they are confined to small areas, many small businesses specialize in same-day or within-the-hour delivery. They are contracted to pick up, carry, and deliver messages, documents, packages, and other items between offices, businesses, and individuals. Items can include important and time-sensitive documents and medical specimens, depending on the needs of their customers. Their mode of transportation may be foot, bicycle, motorcycle, or automobile. These small businesses may be contracted by larger corporations on an on-call service basis. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual earnings for local couriers and messengers in 2009 were $24,500. These earnings can vary widely by region and depending on the consistency of work availability. Approximately 19 percent of couriers and messengers are independent contractors.

Postal and Package Delivery Services Courier businesses that hold permanent or long-term contracts to provide services within branches of larger corporations, such as making steady trips between bank branches, law firms, medical offices, or laboratories, tend to have more reliable, steady sources of income. Many other small businesses are independent and can see variability in their work volume, as they respond to individual requests for service garnered through local advertising and marketing. According to the BLS, dispatchers for local courier and messenger services earned an average of $35,000 in 2009, while sales representatives earned $55,200 and chief executives earned $137,580. These figures include salaries of large companies that operate multiple local-delivery offices in different cities. Earnings at small businesses may be significantly less than these averages. Clientele Interaction. Small messenger and courier businesses most often pick up parcels directly from their customers and bring them directly to recipients. Couriers therefore have direct clientele interactions several times each day. Customers contact dispatchers by telephone to arrange service, and dispatchers assign messengers to respond to requests based on their locations, schedules, and workloads. In some very small businesses, the dispatcher and the messenger are the same person. Repeat business and recommendations from happy customers are keys to success, so all clientele interaction must be positive. Employees are often required to maintain standards of appearance, as they are the representatives of their companies. Amenities, Atmosphere, and Physical Grounds. Small courier and messenger companies may have a small hub or office space, but delivery personnel most often consider their transport vehicles to be their offices. Dispatch centers may be located in home offices or in vehicles, and calls may be managed by cellular telephone. Most small businesses do not maintain retail or drop-off locations. Typical Number of Employees. Small couriers, like other small businesses, attempt to keep expenses low and revenues high. A courier company can be managed by a single individual, depending on the workload and the geographic area it serves. Quite often, a central dispatch center receives requests for service and assigns them to independent couriers who work for the business as subcontrac-

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tors. The typical number of employees for a small courier and messenger service ranges from one to one hundred. Traditional Geographic Locations. Most small businesses serve specific geographic areas, such as a single city or district within a city. Many couriers offer service only to downtown office areas or have employees dedicated to specific city quarters or districts. Dispatch offices tend to be located in the center of their territories. Fuel and other transportation expenses make it difficult to keep costs low enough to attract customers while covering large areas. Pros of Working for a Small Courier Business. Independent subcontractors can decide how much and when they want to work. Small companies or individuals that hold contracts for service with other companies have regular delivery points, allowing them to become familiar with their areas and customers. Employees usually do not experience a great deal of direct supervision, as they most often work alone. Cons of Working for a Small Courier Business. Small courier companies offer very little room for advancement. Often, without set service contracts, fluctuations in business and income are common. Time and delivery commitments can cause a great deal of stress for delivery personnel, who may need to work long hours and may face penalties in pay if they fail to make their deliveries on time. Costs Payroll and Benefits: Typically, small courier and messenger companies pay their full-time delivery personnel an hourly wage or pay independent contractors per delivery. Full-time employees usually receive the same benefits as other workers, at the discretion of the owner or manager. However, many independent contractors do not receive benefits. Supplies: Small courier and messenger services may need vehicles or may require their employees to provide their own transportation. In either case, the employer generally pays for fuel. They all require communication systems, such as mobile telephones or two-way radios, as well as some standard office supplies. They may provide some packaging services at an additional fee, in which case they require packaging supplies.

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External Services: Small delivery services may contract vehicle maintenance and repair or may employ in-house specialists. They may also contract maintenance and repair of communication systems and computer systems as necessary, as well as advertising or accounting services. Utilities: Many small courier businesses do not have central offices or service centers, so their utility costs may be minimal. Taxes: Small businesses are required to pay local, state, and federal income taxes, as well as regional business and service taxes and permitting fees. Midsize Businesses Midsize package delivery companies usually operate within larger geographic areas and provide a greater range of services than do small companies. They typically provide only ground-based transportation services, operating within a specific area, often among several cities or states. Midsize businesses have centralized dispatch hubs and may offer online services, including order placement and package tracking, to compete with large express companies. Potential Annual Earnings Scale. Midsize package delivery businesses have a broader range of positions. They may employ delivery drivers, dispatchers, sorting clerks, managers, supervisors, and technical support staff. Wages for these positions vary by region and job responsibilities. According to the BLS, the average annual salary of couriers and messengers employed by express delivery companies was $25,920 in 2009. Dispatchers earned an average of $42,360; shipping, receiving, and traffic clerks earned an average of $33,930; delivery-truck drivers earned an average of $45,780; and large commercial truck drivers in the industry earned an average of $51,640. Sales representatives averaged $56,620 in earnings. Transportation and distribution managers earned $95,660, on average, while general managers earned $102,200, sales managers earned $107,680, and chief executives earned $179,010. Employees of midsize businesses often receive salaries below these averages. Clientele Interaction. As package and delivery businesses get larger, a greater proportion of their employees experience little direct clientele interaction. Midsize companies still take orders for service by telephone, and personnel still pick up packages in person, but many midsize businesses have

started to offer online service orders and strategically placed drop boxes as well. As with any service industry, repeat business and recommendations from happy customers are keys to success, so all clientele interaction must be positive. Employees are often required to maintain standards of appearance and to wear uniforms, as they are the representatives of their companies and need to be recognizable as such. Amenities, Atmosphere, and Physical Grounds. Midsize package delivery businesses often maintain central warehouses or package sorting hubs, dispatch offices, retail spaces, and lots for fleets of delivery vehicles. These businesses are committed to providing fast service, which can create a highly organized but frequently stressful atmosphere. Some employees, such as service clerks, may work in retail spaces, providing assistance to customers. Others spend most of their working hours in delivery vehicles or service warehouses. Typical Number of Employees. The number of employees of a given midsize package and delivery business depends on its workload and the geographic area it serves. Midsize companies generally employ between one hundred and one thousand persons. Traditional Geographic Locations. Midsize delivery companies usually cover larger territories and offer more services than do small companies. Sorting hubs are generally located in or outside urban or suburban areas near major highways to provide easy access to both transportation infrastructure and retail and dispatch centers. Retail centers are usually located conveniently for customers, in business centers and highly populated urban and suburban areas. Pros of Working for a Midsize Courier or Express Delivery Company. Midsize companies tend to employ their workers directly, rather than engaging independent subcontractors. Employees are thus more likely to be guaranteed full-time work and may receive annual salaries rather than hourly wages, increasing their income stability and the likelihood of receiving benefits. Midsize companies often provide corporate uniforms and delivery vehicles, saving employees the expense of providing and maintaining their own. Cons of Working for a Midsize Courier or Express Delivery Company. Midsize companies usually institute more structured work schedules

Postal and Package Delivery Services than do small companies, reducing the flexibility of employees’ work hours and increasing the amount of direct supervision they receive. Because couriers must cover larger areas, their routes may require greater time commitments than those at small companies, and drivers are more likely to be unfamiliar with some portion of their routes. Both of these factors may increase worker stress. Costs Payroll and Benefits: Midsize delivery companies pay hourly wages or annual salaries; delivery drivers may be paid per completed trip. Full-time employees usually receive vacation and benefits, at the discretion of the owner or manager. Supplies: As the size of a parcel and package delivery service increases, so does the volume and range of supplies and items required to provide service to customers. Midsize companies must usually maintain fleets of delivery vehicles. In addition to the vehicles themselves, they need fuel, maintenance tools, and spare parts. They also require computerized inventory and parceltracking systems, including mobile scanning equipment, as well as radio or cellular communication systems. Midsize companies provide their employees with uniforms and other items to increase brand and logo recognition among their customers. External Services: Midsize delivery companies may contract external vendors to maintain their vehicles, or they may employ maintenance crews directly. They must obtain vehicle and other liability insurance. Communication system and computer maintenance may also be contracted, and companies may engage advertising consultants, accountants, or legal counsel as necessary. Utilities: Midsize companies must pay for electricity, heating, water, and sewage, as well as Internet and telephone service. Taxes: Midsize businesses are required to pay local, state, and federal income taxes, as well as regional business and service taxes and permitting fees. Large Businesses Large postal and package delivery businesses are the best known companies in the industry, employing millions of people and serving the entire globe. The highly competitive worldwide delivery

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industry has annual revenues of over $75 billion. Globally, postal services employ over 5.5 million people to move more than 450 billion pieces of letter and parcel mail. Large courier express companies such as UPS, DHL, and FedEx have their own impressive statistics. They each employ over 275,000 people and use fleets of more than ninety thousand vehicles and hundreds of aircraft to move more than 1.5 billion packages annually. Potential Annual Earnings Scale. The annual earnings for large postal and delivery service businesses have tremendous variability, depending on geographic area and job responsibilities. At the U.S. Postal Service, there are over four thousand distinct positions, most of which pay salaries of $32,000 to $55,000 annually. The express couriers have a similar number of unique positions, ranging from meteorologists and pilots to delivery drivers and sorting clerks. According to the BLS, the average annual salary for a postal service mail carrier in 2009 was $48,940. Postal service clerks earned an average of $51,920, and first-line supervisors earned an average of $71,660. Postmasters and mail superintendents earned an average of $59,600. The postmaster general of the United States earned a base salary of more than $250,000 in 2008, as well as a six-figure bonus, and several other top managers in the USPS also received salaries of more than $200,000. The highest-paid postmaster, the head of Germany’s Deutsche Post, receives $4 million per year. According to the BLS, the average annual salary of couriers and messengers employed by express delivery companies was $25,920 in 2009. Dispatchers earned an average of $42,360; shipping, receiving, and traffic clerks earned an average of $33,930; delivery-truck drivers earned an average of $45,780; and large commerical truck drivers in the industry earned an average of $51,640. Sales representatives averaged $56,620 in earnings. Transportation and distribution managers earned $95,660, on average, while general managers earned $102,200, sales managers earned $107,680, and chief executives earned $179,010. The salaries at the major delivery corporations are significantly higher than these averages: The chief executive officer (CEO) of FedEx earned $8.67 million in 2007, and the CEO of UPS earned $3.1 million. Clientele Interaction. Package and delivery services in general are becoming more high-tech and

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automated. Clients can easily request pickup and other services online. FedEx reports that more than 3 million people visit its Web site each day. Customer service at large delivery companies is most often provided online or by telephone. Delivery personnel, including counter workers, have the greatest amount of clientele interaction during package receipt, pickup, and delivery. The situation is similar for postal services: Most clientele interaction occurs with letter carriers, delivery staff, and post office counter workers. Such personnel, as the recognizable face of their companies, are required to wear uniforms, adhere to standards of appearance, have good communication skills, and be knowledgeable about the services and policies of their companies. Amenities, Atmosphere, and Physical Grounds. The physical grounds of large postal and delivery companies are vast and vastly distributed. Postal services operate within specific countries but have agreements with other national postal services through the Universal Postal Union to provide continuity of service on an international scale. There are over 650,000 post offices worldwide providing public service, as well as an additional 650,000 administrative and corporate offices. Large express delivery companies have large hubs and offices. DHL, for example, has 450 hubs, where sorting and delivery is managed, in addition to 6,500 offices and a fleet of 76,000 vehicles and 420 aircraft. The other large express delivery companies have similar structures and facilities. Delivery personnel and loading-dock and other workers spend a great deal of time outside, which can be challenging. The atmosphere can be stressful, as billions of packages have to be accurately tracked and delivered in a timely manner. Typical Number of Employees. Large postal and package delivery companies typically have thousands of employees, most of them full-time employees. Casual and part-time staff are sometimes engaged during high-volume periods, such as Christmas, or to cover entry-level positions. USPS employs over 685,000 career employees and over 100,000 noncareer staff, making it the secondlargest employer in the United States after Walmart. Traditional Geographic Locations. Postal services and large express delivery corporations have facilities throughout the world. Corporate and agency headquarters are generally located in ma-

jor cities and government centers, while sorting and distribution hubs are most often located on the outskirts of major urban areas, facilitating access both to population centers and to transportation infrastructure. Local front-line offices and drop points exist in all communities. Often, in more remote locations, express couriers collaborate with local postal services to provide delivery service. Letter carriers and some express delivery personnel have specific areas or districts that they deliver to on a daily basis, which allows them to become very familiar with their territories and customers. Pros of Working for the Postal Service or Large Delivery Company. Postal workers in many countries, including the United States, are federal employees with the ability to unionize and collectively bargain for better wages and benefits. Benefits provided to almost all workers include cost-ofliving adjustment payments, overtime payments, health insurance, and pensions. Wages and benefits for postal services are comparable to those of large express delivery couriers. Employees at larger companies are normally responsible for specific jobs, rather than covering multiple roles as they would at smaller companies. Some of the large express couriers have appeared many times on lists of best places to work; in 2009, FedEx was ranked on one such list at number ninety. Cons of Working for the Postal Service or Large Delivery Company. Large delivery corporations and the Postal Service represent a very popular career choice for many people; therefore, hiring processes are highly competitive. USPS requires potential employees to take a qualification examination and then remain on a waiting list until positions open or their examination results expire. The agency services 146 million homes and businesses six days per week in the United States, and many express couriers make pickups and deliveries seven days per week. In order to provide such services, many large delivery companies operate twenty-four hours per day, requiring a significant amount of second- and third-shift work. This environment, as well as necessary time commitments and constant mail volumes, can be stressful for some people. Costs Payroll and Benefits: Large companies employ thousands of people with varying skills and job

Postal and Package Delivery Services descriptions. Large teams of people are hired solely to manage employee payrolls and benefits. USPS pays out over $50 billion annually in salaries and benefits, and UPS and FedEx each pay between $12 billion and $18 billion annually. Supplies: Large delivery corporations and the USPS each maintain massive fleets of ground vehicles and sizeable aircraft fleets as well. They require fuel for all these vehicles, as well as the tools and spare parts necessary to maintain and service them. The express delivery companies have each purchased over 90,000 vehicles, and FedEx and DHL own and operate over 400 aircraft. USPS operates a fleet of over 260,000 vehicles. It has been calculated that each time fuel prices increase by a single cent per gallon, USPS’s total fuel costs increase by $5.5 million. Many of the large express couriers use a fuelhedging program in an attempt to stabilize their fuel costs. Larger companies are currently testing the use of electric, hybrid, and hydrogen fuel cell vehicles. External Services: Large postal and delivery companies tend to have internal staff to cover all requirements for operations, including maintenance of facilities and equipment. Communication (Internet, telephone, radio, and Global Positioning System) services are provided by national carriers and need to be of the highest quality and reliability. Companies that have large fleets of vehicles and aircraft are required to pay landing and service fees that can reach almost $2 billion annually. It is common for even the largest companies to consult with external public relations and advertising experts when launching new national ad campaigns. Utilities: Large companies operate thousands of offices, retail spaces, warehouses, and hubs. Utilities include water, sewage, electricity, heat, and communication services. The U.S. Postal Service has implemented a utility management system (UMS) to facilitate central utility bill verification and payment and to capture energy-use and cost data for electricity, natural gas, and steam. Taxes: Large express delivery corporations are required to pay local, state, and federal income taxes, as well as business and service taxes and permitting fees as required in each region. In-

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ternational carriers also pay customs and duty charges. The U.S. Postal Service is exempt from federal taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of delivery companies is usually based on the size of each company and the service being provided. Some small independent couriers may have only a single or a few employees, who stay with each shipped item throughout its journey from pickup to delivery. By contrast, the U.S. Postal Service has over four thousand different job classifications, and FedEx has over 275,000 employees worldwide. The following umbrella categories apply to the organizational structure of businesses in the postal and package delivery industry: ■ ■ ■ ■ ■

■ ■ ■

Business Management Customer Service Sales and Marketing Facilities and Security Technology, Research, Design, and Development Operations Distribution Human Resources

Business Management Management and executive positions are the highest-ranking positions within postal and package delivery corporations. The management staff is normally composed of a small group of individuals who are supported by a larger team of administrative and other professionals. The goal of this staff is to make decisions that ensure that their company generates maximum revenue, reduce costs, and improve service. Most countries have appointed postmasters general who head their national postal services. The very first postmaster general of the United States was Benjamin Franklin, appointed in 1775. The annual salaries for national heads of postal services are quite considerable. Germany’s postmaster earns $4 million annually, and the CEO of New Zealand’s postal service earns over $730,000. In

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2008, the total compensation package of the U.S. postmaster general—including base salary, bonus, perks, and significant increases in two pensions— totaled more than $800,000. In comparison, large nongovernmental express couriers compensate their high-ranking executives quite substantially. CEOs routinely earn salaries in the millions annually. Business management occupations may include the following: ■ ■ ■

■ ■ ■ ■

■

■

■

Postmaster General President/Chief Executive Officer (CEO) Deputy Postmaster General/Chief Operating Officer (COO) Chief Financial Officer (CFO) Chief Technology Officer (CTO) Executive Vice President Vice President of Government Relations and Public Policy Vice President of Human Resources/ Chief Human Resources Officer Vice President of Sales and Marketing/ Chief Marketing Officer General Counsel

Customer Service Customer service is critical to success. Positions in customer service often provide a company’s customers with their very first and most lasting impressions of it. Personnel must provide accurate information and assistance to customers, respond to inquiries, resolve problems, and sell company services. Customer service employees proactively provide answers and resolutions to customer inquiries. They assist customers to determine their pickup or delivery needs, trace shipments, quote rates, resolve tariff discrepancies, and answer billing and invoicing questions. Postal service clerks work at post offices and retail outlets, where they measure and weigh packages and sell postage, money orders, insurance, registration services, and mailing materials. Positions in customer service do not often require previous training or specialized education. Employees often need to demonstrate excellent communication skills, professionalism, patience, and telephone etiquette, as well as problem-solving and multitasking skills.

Customer service occupations may include the following: ■

■ ■ ■ ■ ■

Telephone/Online Customer Service Representative Retail Outlet Clerk Customer Relations Representative Customer Relations Manager Service Agent Postal Service Clerk

Sales and Marketing Postal and package delivery is a competitive industry. Customers have many choices depending on their service requirements, so brand recognition and associated superior service reputation are critical to a company’s success. Sales and marketing departments seek to ensure that advertising dollars are well spent, their brands remain at the forefront of customer choice, and exceptional relationships with customers are maintained. All businesses, large or small, have dedicated advertising budgets with which to develop and implement strategies to increase sales. A company’s advertising may target the downtown blocks of a single city or the entire world, and its marketing team may be a single individual or a team of thousands. Marketing and communications personnel seek to project their messages to potential customers; they also seek to protect their companies’ reputations by identifying and managing emerging issues that may harm those reputations. Effective media relations and media monitoring are critical to handling crises and other issues that may arise. A key measurement of corporate success is revenue, so sales of products and services are imperative. A sales team needs to contact customers and prospective customers to be certain that they are aware of current and upcoming products and services and are satisfied with their current service. Sales and marketing analysts determine whether allocated advertising budgets have been used effectively. They report whether sales goals and targets have been achieved and develop analyses and recommendations for future sales opportunities and problems. Sales positions are often compensated according to pay structures that incorporate base salaries and performance-based commissions, allocated either to individuals or to teams. Key skills include

Postal and Package Delivery Services communication, persuasion, negotiation, problem solving, and organization. Sales positions often require travel, depending on the service being sold and the territory being covered. Marketing and communications positions usually require degrees or training in the field, and salaries can start near $25,000 annually for entry-level or fellowship positions and in excess of $90,000 for marketing managers and directors. Key skills include communication, organization, knowledge of branding and promotions, trade-show and event planning, database marketing, telemarketing, advertising, and research. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Sales Manager Sales Account Executive Sales Account Associate Sales Representative Sales Analyst Sales Clerk Corporate Communications Specialist Marketing Manager Media Relations Representative Business Solutions Specialist Business Liaison Market Research Manager Market Research Analyst Shipping/Mailing Solutions Specialist

Facilities and Security The security and protection of shipped materials is extremely important, as is the protection and safety of postal and package delivery employees. The maintenance of facilities and equipment is also critical to the operation of any courier or delivery company. During the early twenty-first century, security has increased and evolved to meet growing concerns over identity theft, privacy protection, drug transport, and terrorist threats. Mail and delivery personnel receive training and continuing education in identifying and dealing with suspicious packages and in general security awareness. Security is taken very seriously. For example, FedEx has more than five hundred security personnel around the world. Security personnel inspect aircraft, trucks, and facilities for a range of threats. Security workers at large express delivery com-

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panies protect against both outside threats and those from within. They work with local and federal law enforcement to investigate thefts, pilferages, acts of vandalism, misconduct, and other activities detrimental to the company, its employees, or its customers. They may also protect management and executives in the corporation. Specialized security personnel normally require training and experience in law enforcement and transportation security, as well as familiarity with theft detection and applicable technical devices. Security analysts use statistical and scientific methods to detect trends or suspicious patterns in delivery data to identify thefts and other criminal acts. They design and implement preventive security methods and programs. The annual salary for a security analyst begins at about $55,000. The United States Postal Inspection Service is one of the oldest federal law enforcement agencies, founded by Benjamin Franklin. Its agents carry firearms, make arrests, and serve federal search warrants and subpoenas. Postal inspectors perform protective functions at mail facilities and escort high-value mail shipments. They also staff and operate a forensic crime laboratory staffed with forensic scientists and technical specialists. Postal inspectors must have college degrees and complete a twelve-week training program. The annual salary for a postal inspector begins at about $54,000. Facilities positions cover a wide range of job descriptions that ensure the smooth running and maintenance of equipment and grounds. Facilities personnel make minor repairs and provide routine maintenance for office, shop, dock, and yard facilities. Basic knowledge of electrical repair, plumbing, and carpentry are required. Specialized maintenance of equipment and vehicles is often contracted out to other companies, but some large companies keep individuals on staff to repair and maintain fleet vehicles. Facilities and security occupations may include the following: ■ ■ ■ ■ ■ ■

Security Specialist Security Guard Loss Prevention Specialist Postal Inspector Security Analyst Maintenance and Repair Technician

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Mechanic Electrical Engineer Cleaner Custodian/Janitor

Technology, research, design, and development occupations may include the following: ■ ■

Technology, Research, Design, and Development Technology is a critical and fast-paced area of postal and package delivery. Programming, analysis, and technical support jobs are experiencing the greatest growth. Customers want to be able to use their computers to purchase postage and services, request pickup service, track their packages, view recipients’ signatures for registered items, and conduct numerous other technical operations, all securely and without delays. To meet this demand, package delivery companies use specialized equipment to scan and track parcels throughout the entire transportation and delivery process. In order to remain competitive in the industry, companies must quickly incorporate relevant advances in technology design. Technology design is constantly changing because systems need to be extremely efficient and effective while remaining easy for customers and employees to use. Positions in the technology, research, design, and development area require specialized training for specific roles, such as degrees in computer science and information systems. Programmer analysts and systems programmers earn salaries beginning at about $35,000 and ranging up to $80,000 annually. Postal and package delivery companies are beginning to employ scientists as well. Research and development teams look for more cost-effective transportation options, including cleaner-burning fuels, in order to combat rising fuel costs and minimize the environmental impact of their companies’ operations. Consumers are increasingly demanding service that does less damage to the environment while maintaining standards of speed and efficiency. Large express companies must meet rigorous and complex air and ground transport schedules. Some employ dedicated meteorologists to track and predict weather patterns that may interfere with their service. UPS has had meteorologists on staff since 1994, and it employs five of them on rotating shifts to monitor weather patterns around the world that may affect delivery schedules.

■ ■ ■ ■ ■ ■

■ ■ ■ ■

Programmer Analyst Systems Analyst Technical Analyst Application Manager Application Analyst Technical Specialist Technology Consultant Technology and Application Support Staff Application Project Manager Technological Adviser Meteorologist Environmental Impact Analyst

Operations Operations personnel conduct and oversee the inner workings of the postal and package delivery system, determining what happens to each item after it has left the sender’s possession. At smaller courier companies, an article may not change hands between pickup and delivery, but at larger companies articles—especially those that have to travel great distances—may go through several points of processing on the way. As efficiency improves with the development of new technology, many operations tasks are automated or semiautomated. Dispatchers are the liaisons between customers and couriers. A small delivery service may have a single dispatcher, while larger companies have single or multiple dispatch centers. Dispatchers collect pickup and delivery requests, whether directly from customers, through an automated online system, or in the form of lists assembled by support staff. They then assign jobs to field personnel as appropriate. Dispatchers communicate with customers in case of any delays and also serve as the primary contacts for couriers while they are on the road. Dispatchers normally do not require any specialized training or diplomas, but they need to be extremely organized, patient, and good multitaskers. The average annual salary for postal service dispatchers was $39,900 in 2009. Postal and express couriers have specific dropoff and collection points, often within retail outlets or dedicated service centers. They pick up packages from these points and directly from customers

Postal and Package Delivery Services and take them to central operations plants or hubs for sorting. Courier packages, parcels, and registered mail are scanned and tracked at each step of the process; pieces of regular mail are not. Operations staff, such as handlers, sorters, and processing-machine operators, prepare incoming and outgoing articles by different methods of sorting and distribution. This type of work can be physically demanding, involving standing for long periods and handling heavy parcels or bags of mail (up to one hundred pounds), as well as pushing containers weighing up to fifteen hundred pounds. Individual units and larger shipments may need to be inspected for damage or customs processing. Equipment and strict protocols are in place to ensure that the process is efficient and safe for personnel. Handler salaries usually start at around $25,000 annually. Operations engineers oversee and apply standardization processes and improvement policies to develop increased service and cost performance in mail and package processing operations. Annual

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salaries for operations engineers start at approximately $50,000. Operations supervisors coordinate the activities and movement of freight and articles at sorting plants and hubs. This job often involves coordinating employees inside, those at loading and unloading docks, and the vehicles dropping off and picking up parcels at their sites. Operations occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Operations Supervisor Operations Engineer Sorting Clerk Handler Dispatcher Processor Processing Machine Operator

Distribution Distribution of mail and parcels is the end result and goal of the postal and package delivery industry. Successful delivery within an agreed-upon time

OCCUPATION

PROFILE

Dispatcher Considerations

Qualifications

Description

Schedules and dispatches workers for delivery and pickup of packages and letters.

Career cluster

Transportation, Distribution, and Logistics

Interests

Data; people

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

CES; CSR; ECS; ERS; ESC; ESI; ESR; SEC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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is the service customers are paying for. Careers in distribution involve almost all methods of transportation, including aircraft, automobiles, light and heavy trucks, bicycles, motorcycles, Segways, and walking. Many distribution occupations overlap with customer service, as delivery personnel are often viewed as the faces of their companies and many enjoy a great deal of direct interaction with their customers. Pilots and large-truck drivers transport parcels over long distances between hubs and sorting plants. They do not generally work regular 9-to-5 schedules. Trucks and planes often travel overnight, and employees spend a lot of time away from home. The large express-air companies are considered to be two of the best-paying airlines in the world, and captains at FedEx and UPS in their fifteenth year of service can earn more than $240 per hour. Delivery drivers do much more than drive. They are often expected to load and unload aircraft and vehicles, sort packages, and provide efficient delivery and pickup of packages and related customer

OCCUPATION

service functions. The job can be physically demanding and is often considered stressful because it is so tightly scheduled and deadline-driven. A good driving record is required to obtain a driving position, as is proper licensing, such as possession of a commercial driver’s license (CDL) and a hazardous materials endorsement. Annual salaries for courier drivers usually start at about $23,000, and many are paid hourly. The average annual salary of a heavy-truck driver in the courier and messenger industry was $50,660 in 2009; delivery-truck drivers earned an average of $44,440. The same positions in the U.S. Postal Service paid average salaries of $53,020 and $50,850, respectively. Some private companies may require that their drivers be responsible for their own vehicles and expenses. Letter carriers deliver and collect mail on foot or by vehicle under varying road and weather conditions in specific urban or rural areas. They are the most recognizable face of a postal service and need to maintain a positive and professional relationship with customers. Many are required to carry mail weighing up to 35 pounds in shoulder

PROFILE

Mail Carrier Considerations

Qualifications

Description

Sorts mail for delivery and delivers it.

Career cluster

Transportation, Distribution, and Logistics

Interests

Data

Working conditions

Work outside; work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Required

Employment outlook

Decline expected

Holland interest score

SRC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Postal and Package Delivery Services OCCUPATION

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SPECIALTIES

Mail Clerks and Messengers Specialty

Responsibilities

Express clerks

Receive express parcels from customers, compute charges, route parcels according to destination, and release incoming parcels to consignees.

Mail handlers

Sort and process mail in government or business post offices. They may sort mail into sacks or place it in pigeonholes according to destination.

Parcel post clerks

Wrap, inspect, weigh, and affix postage to outgoing mail parcels. They also record cash-on-delivery and insurance information.

Post office clerks

Work the front counter of a post office. They weigh envelopes, sell stamps, complete forms, issue money orders, compute mailing costs, and handle registered mail.

satchels or other equipment and to load or unload containers of mail weighing up to 70 pounds. Most letter carriers start in casual or temporary positions and then move into more permanent routes. Annual salaries of letter carriers averaged $48,940 in 2009. Rural mail carriers sort their routes at urban mail facilities and then drive to established routes outside town or city corporate limits to deliver mail. Many rural mail carriers use their own vehicles and are reimbursed for mileage or have vehicle allowances built into their salaries. Rural carriers also pick up outgoing mail, sell stamps, and issue money orders. Distribution occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

City Driver Courier Road Driver Long-Haul Driver Pickup and Delivery Driver Pilot Letter Carrier Rural Mail Carrier

tools and training they need in order to be effective and productive in their positions. They manage a variety of tasks, beginning with recruiting new employees. In addition to hiring, training, and developing employees, human resources personnel administer payrolls and benefits, including retirement benefits for former employees. They also ensure that all employee relations and practices comply with legal requirements and corporate policies and respond to employee grievances. Most human resources positions require college degrees or equivalent experience. Human resources managers in the postal service earned an average of $124,750 in 2009, while those at courier and messenger firms earned $110,520. Human resources is often a challenging area, and employee relations require patience, collaboration, negotiation, and conflict-resolution skills. Human resources occupations may include the following: ■ ■ ■ ■ ■

Human Resources Human resources (HR) personnel hire and fire employees and ensure that all employees have the

■ ■ ■

Human Resources Director Human Resources Manager Human Resources Coordinator Human Resources Analyst Human Resources Generalist Payroll Clerk Benefits Specialist Administrative Assistant

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Postal and Package Delivery Services INDUSTRY OUTLOOK

PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Overview Couriers and Messengers Industry The outlook for the postal and package delivery industry appears Employment to be on the rise or holding stable 2009 Projected 2018 Occupation in most areas. Concerns have been raised regarding the impact 9,860 13,800 Customer service representatives of electronic commerce and digi6,190 6,800 Dispatchers, except police, fire, tal communication on the indusand ambulance try, as well as that of increasing fuel and transportation costs. As 8,950 9,600 First-line supervisors/managers has been true of many industries of transportation and materialin the wake of the 2007-2009 recesmoving machine and vehicle sion, postal and delivery compaoperators nies are exploring ways to increase 152,580 159,500 Laborers and freight, stock, and revenues and decrease expenses material movers, hand through innovation and modernization. 147,930 157,400 Truck drivers, light or delivery Globally, letter mail and parservices cel volumes have increased by 1 to 2 percent each year since 2004. Source: U.S. Bureau of Labor Statistics, Industries at a Glance, However, the United States has Occupational Employment Statistics and Employment experienced a 1 to 2 percent deProjections Program. crease in letter mail. A small increase in package and parcel volumes has kept domestic revenues across all categories relatively stable. Following a U.S. Postal Service is also a customer of FedEx and three-week congress of the Universal Postal Union UPS, utilizing their air networks for contract transin 2008, over twenty-five hundred representatives portation arrangements. from 179 of the 191 member countries determined Package delivery services are constantly evolving that the global postal service is looking toward “deto meet the needs of potential customers. They velopment—rather than downsizing.” Participants have developed more elaborate time structures to in the congress determined that the issues at the accommodate specific needs, allowing for two-, forefront of postal services globally are the needs to three-, or five-day delivery at reduced costs. Tradimodernize services at all levels, to reform postal setionally, packages are limited to 100 pounds; howcurity, and to minimize and mitigate the impact of ever, some businesses are now allowing heavier the industry on the environment. They agreed that items in order to capture some market share from postal services are managing the changing needs of freight and cargo carriers. Networks of carefully loglobalization and keeping pace with technological cated drop boxes are being expanded to accomadvances. The next congress was scheduled for modate customers. Partnerships have been forged 2012. between package delivery companies and retailers Concerns have been raised that postal systems to include drop boxes in their establishments. would be unable to compete with express carriers, Online shipping solutions and services have but it appears that these competitors have become been expanded and become more streamlined as customers. In the United States, FedEx and UPS well. Most packages can now be tracked momentare two of the postal service’s largest customers, by-moment throughout their journeys to their recipients. FedEx claims to have more than 3 million paying the U.S. Postal Service to deliver over 400 visitors to its Web site every day. million packages to residential customers. The

Postal and Package Delivery Services Delivery drivers travel billions of miles each year, tremendously affecting the environment and businesses’ expenses. In order to save money and address customers’ concerns for environmental conservation, most courier and package delivery services are exploring alternative operating options and cleaner-burning fuels. Oxford Economic Forecasting projects the express delivery industry to grow at an average annual rate of 6.7 percent between 2005 and 2015.

1493

prove and modernize their services. The forecast from the Universal Postal Union is positive and focused on development. As e-commerce grows, the items purchased need to be shipped and delivered. Express couriers continue to experience growth, as the demand for fast service continues to grow and market expansion into Asia develops.

RELATED RESOURCES FOR Employment Advantages FURTHER RESEARCH The postal and package delivery industry continues to be one of the world’s largest sources of Association of International Courier and employment. There are 5.5 million postal employExpress Services ees around the world. The U.S. Postal Service is sec1st Floor, Unit 6, Poyle 14, Newlands Dr. ond only to Walmart as the largest employer in the Colnbrook S13 0DX United States, with over 685,000 career employees United Kingdom and over 100,000 noncareer staff. Despite the large Tel: 44-1753-680-550 number of jobs, employment in the industry is Fax: 44-1753-687-033 highly competitive. Many positions do not require http://www.aices.org advanced education, but larger companies provide above-average wages and benefits. Smaller and indepenPROJECTED EMPLOYMENT dent courier services determine their FOR SELECTED OCCUPATIONS own benefits and working conditions. Employment in the industry is Postal Service Industry considered desirable because most corporations provide automatic pay Employment raises, cost-of-living adjustments, paid 2008 Projected 2018 Occupation vacation time, life and health insurance, retirement pensions, and 217,600 209,500 First-line supervisors/ career development opportunities. managers of transportation FedEx sets an example in this reand material-moving machine gard, as it has remained, for over a and vehicle operators decade, on numerous lists of the 75,800 62,100 Postal service clerks best companies to work for. Annual Earnings Postal and package delivery services constitute a multibillion-dollar industry. The impact of the global economic downturn of 2007-2009 has been widespread; however, the delivery industry appears be resilient. Over six thousand businesses operate within the industry. Mail volumes have remained stable in most areas of the world, and postal systems are looking at ways to im-

343,300

339,400

Postal service mail carriers

179,900

125,300

Postal service mail sorters, processors, and processing machine operators

25,600

21,700

Postmasters and mail superintendents

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

1494

Postal and Package Delivery Services

Express Delivery and Logistics Association 400 Admiral Blvd. Kansas City, MO 64106 Tel: (816) 221-0254 Fax: (816) 472-7765 http://www.expressassociation.org Global Postal Strategy 1 Elmcroft Rd. Stamford, CT 06926-0700 Tel: (203) 351-7588 Fax: (203) 351-6371 http://www.postinsight.com Universal Postal Union 3000 Bern 15 Switzerland Tel: 41-31-350-3111 Fax: 41-31-350-3110 http://www.upu.int

ABOUT

THE

AUTHOR

April D. Ingram is a writer and researcher in British Columbia. She is a graduate of the University of Calgary and has been associated with the postal and delivery services industry since 1999.

FURTHER

READING

Frock, Roger. Changing How the World Does Business: FedEx’s Incredible Journey to Success— The Inside Story. San Francisco: Berrett-Koehler, 2006. Hill, Rowland. Post Office Reform: Its Importance and Practicability. London: Charles Knight, 1837. Kosar, Kevin. The U.S. Postal Service’s Financial Condition: Overview and Issues for Congress. Washington, D.C.: Congressional Research Service, 2010.

Niemann, Greg. Big Brown: The Untold Story of UPS. San Francisco: Jossey-Bass, 2007. Oxford Economics. The Impact of the Express Delivery Industry on the Global Economy. Oxford, England: Author, 2009. Potter, John. “Five Myths About the U.S. Postal Service.” Washington Post, February 28, 2010. http://www.washingtonpost.com/wp-dyn/ content/article/2010/02/25/ AR2010022504888.html. Rubio, Philip F. There’s Always Work at the Post Office: African American Postal Workers and the Fight for Jobs, Justice, and Equality. Chapel Hill: University of North Carolina Press, 2010. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Congress. House. Committee on the Judiciary. Competition in the Package Delivery Industry. Washington, D.C.: Government Printing Office, 2009. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Postal Service. Annual Report, 2009. Washington, D.C.: Author, 2009. _______. Envisioning a Viable Postal Service for America: An Action Plan for the Future. Washington, D.C.: Author, 2010. _______. 2008 Sustainability Report: Delivering a Greener Tomorrow. Washington, D.C.: Author, 2009. http://www.usps.com/green/report/ 2008/welcome.htm. Workplace Economics.The Relative Size of Labor Costs at UPS, FedEx, and the U.S. Postal Service. Washington, D.C.: American Postal Workers Union, 2002.

SURVEY OF

American Industry and Careers

SURVEY OF

American Industry and Careers Volume 5 Printing Industry— Telecommunications Infrastructure Industry

The Editors of Salem Press

Salem Press Pasadena, California

Hackensack, New Jersey

Editorial Director: Christina J. Moose Project Editor: Rowena Wildin Manuscript Editors: Stacy Cole, Andy Perry Acquisitions Manager: Mark Rehn Administrative Assistant: Paul Tifford, Jr.

Research Supervisor: Jeffry Jensen Photo Editor: Cynthia Breslin Beres Design and Layout: James Hutson Additional Layout: William Zimmerman

Cover photo: ©Jose Luis Pelaez Inc./Blend Images/CORBIS

Copyright ©2012, by Salem Press, A Division of EBSCO Publishing, Inc. All rights in this book are reserved. No part of this work may be used or reproduced in any manner whatsoever or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without written permission from the copyright owner except in the case of brief quotations embodied in critical articles and reviews or in the copying of images deemed to be freely licensed or in the public domain. For information, address the publisher, Salem Press, at [email protected]. ∞ The paper used in these volumes conforms to the American National Standard for Permanence of Paper for Printed Library Materials, X39.48-1992 (R1997). Library of Congress Cataloging-in-Publication Data Survey of American industry and careers / The Editors of Salem Press. v. cm. Includes bibliographical references and indexes. ISBN 978-1-58765-768-9 (set : alk. paper) — ISBN 978-1-58765-769-6 (vol. 1 : alk. paper) — ISBN 978-158765-770-2 (vol. 2 : alk. paper) — ISBN 978-1-58765-771-9 (vol. 3 : alk. paper) — ISBN 978-1-58765-772-6 (vol. 4 : alk. paper) — ISBN 978-1-58765-773-3 (vol. 5 : alk. paper) — ISBN 978-1-58765-774-0 (vol. 6 : alk. paper) 1. Business—Vocational guidance—United States. 2. Industries—United States. 3. Occupations— United States. 4. Vocational guidance—United States. I. Salem Press. HF5382.5.U5S87 2012 331.7020973—dc23 2011019601 First Printing

printed in the united states of america

Contents Complete List of Contents . . . . . . . . . . . . . . . . . . . . . . cix List of Tables and Sidebars . . . . . . . . . . . . . . . . . . . . . cxiii Printing Industry . . . . . . . . . . . . . . . . . . . . . . . . . . 1495 Private Education Industry. . . . . . . . . . . . . . . . . . . . . 1515 Public Elementary and Secondary Education Industry . . . . . 1537 Public Health Services . . . . . . . . . . . . . . . . . . . . . . . 1554 Publishing and Information Industry . . . . . . . . . . . . . . . 1572 Real Estate Industry . . . . . . . . . . . . . . . . . . . . . . . . 1588 Rental and Leasing Services . . . . . . . . . . . . . . . . . . . . 1606 Residential Medical Care Industry. . . . . . . . . . . . . . . . . 1626 Restaurant Industry. . . . . . . . . . . . . . . . . . . . . . . . . 1644 Retail Trade and Service Industry . . . . . . . . . . . . . . . . . 1664 Scientific and Technical Services . . . . . . . . . . . . . . . . . 1682 Scientific, Medical, and Health Equipment and Supplies Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1703 Shipbuilding, Submarines, and Naval Transport Industry . . . . 1722 Space Exploration and Space Science Industry . . . . . . . . . 1741 Spectator Sports Industry . . . . . . . . . . . . . . . . . . . . . 1762 Sports Equipment Industry . . . . . . . . . . . . . . . . . . . . 1783 Telecommunications Equipment Industry . . . . . . . . . . . . 1799 Telecommunications Infrastructure Industry . . . . . . . . . . 1819

cvii

Complete List of Contents VOLUME Contents . . . . . . . . . . . . . . . . . . . . . . v Publisher’s Note . . . . . . . . . . . . . . . . . vii Contributors . . . . . . . . . . . . . . . . . . . xi Complete List of Contents . . . . . . . . . . . xiii List of Tables and Sidebars . . . . . . . . . . xvii Accounting Services . . . . . . . . . . . . . . . 1 Advertising and Marketing Industry . . . . . . 19 Airline Industry . . . . . . . . . . . . . . . . . 36 Alternative Power Industry . . . . . . . . . . . 54 Animal Care Services . . . . . . . . . . . . . . 74 Apparel and Fashion Industry . . . . . . . . . 86 Automobiles and Personal Vehicles Industry . . . . . . . . . . . . . . . . . . . 105

1

Banking Industry . . . . . . . . . Batteries and Fuel Cells Industry Beverage and Tobacco Industry. Biofuels Industry . . . . . . . . . Broadcast Industry . . . . . . . . Building Architecture Industry . Building Construction Industry . Business Services . . . . . . . . .

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125 141 159 177 197 215 233 252

Casino Industry. . . . . . . Chemicals Industry. . . . . Civil Services: Planning . . Civil Services: Public Safety

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271 288 305 325

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Contents . . . . . . . . . . . . . . . . . . . . xxxv Complete List of Contents . . . . . . . . . xxxvii List of Tables and Sidebars . . . . . . . . . . . xli

Day-Care Services. . . . . . . . . . . . . . . . 503 Defense Industry . . . . . . . . . . . . . . . . 523 Dental and Orthodontics Industry . . . . . . 541

Coal Mining Industry . . . . . . . . . Complementary and Alternative Health Care Industry . . . . . . . . Computer Hardware and Peripherals Industry . . . . . . . . . . . . . . . Computer Software Industry . . . . . Computer Systems Industry . . . . . . Construction Equipment Industry . . Corporate Education Services . . . . . Counseling Services . . . . . . . . . . Criminal Justice and Prison Industry .

Electrical and Gas Appliances Industry . . . . 559 Electrical Power Industry . . . . . . . . . . . 578 Environmental Engineering and Consultation Services . . . . . . . . . . . . 593

. . . . 345 . . . . 362 . . . . . . .

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379 397 414 432 452 469 485

Farming Industry . . . . . . . . . . . . Federal Public Administration . . . . Financial Services Industry . . . . . . Fishing and Fisheries Industry. . . . . Food Manufacturing and Wholesaling Industry . . . . . . . . . . . . . . . Food Retail Industry . . . . . . . . . .

VOLUME Contents . . . . . . . . . . . . . . . . . . . . . lix Complete List of Contents . . . . . . . . . . . lxi List of Tables and Sidebars . . . . . . . . . . . lxv

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613 631 648 663

. . . . 681 . . . . 704

3

Food Services . . . . . . . . . . . . . . . . . . 721 Freight Transport Industry . . . . . . . . . . 742 Funerary Industry . . . . . . . . . . . . . . . 760 cix

Survey of American Industry and Careers Furniture and Home Furnishings Industry . . . . . . . . . . . . . . . . . . . 775 Hand Tools and Instruments Industry . . Health and Fitness Industry . . . . . . . . Heavy Machines Industry . . . . . . . . . Higher Education Industry . . . . . . . . Highway, Road, and Bridge Construction Industry . . . . . . . . . . . . . . . . . Home Maintenance Services . . . . . . . Hospital Care and Services . . . . . . . . Hotels and Motels Industry . . . . . . . . Household and Personal Products Industry . . . . . . . . . . . . . . . . .

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793 808 825 844

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863 881 899 918

Industrial Design Industry . . . . . . . . . . . 952 Insurance Industry . . . . . . . . . . . . . . . 971 Internet and Cyber Communications Industry . . . . . . . . . . . . . . . . . . . 989 Landscaping Services . . . . . . Legal Services and Law Firms . Libraries and Archives Industry Light Machinery Industry . . . Livestock and Animal Products Industry. . . . . . . . . . . . Local Public Administration . .

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1005 1026 1043 1060

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4

Contents . . . . . . . . . . . . . . . . . . . lxxxiii Complete List of Contents . . . . . . . . . . lxxxv List of Tables and Sidebars . . . . . . . . . lxxxix

Nuclear Power Industry . . . . . . . . . . . 1297

Logging Industry . . . . . . . . . . . . . . . 1113

Paper Manufacturing and Products Industry. . . . . . . . . . . . . . . . Passenger Transportation and Transit Industry. . . . . . . . . . . . . . . . Personal Services . . . . . . . . . . . . Petroleum and Natural Gas Industry . Pharmaceuticals and Medications Industry. . . . . . . . . . . . . . . . Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry . Plastics and Rubber Manufacturing Industry. . . . . . . . . . . . . . . . Political Advocacy Industry. . . . . . . Postal and Package Delivery Services .

Mass Transportation Vehicles Industry . Medicine and Health Care Industry . . . Metals Manufacturing Industry . . . . . Mining Industry . . . . . . . . . . . . . . Motion Picture and Television Industry . Museums and Cultural Institutions Industry. . . . . . . . . . . . . . . . . Music Industry . . . . . . . . . . . . . .

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Outdoor Recreation Industry . . . . . . . . 1312

1131 1151 1169 1187 1204

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National and International Security Industry. . . . . . . . . . . . . . . . . . . 1260 Natural Resources Management . . . . . . . 1276

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5

. . . . 1495 . . . . 1515

Real Estate Industry. . . . . . . . . Rental and Leasing Services . . . . Residential Medical Care Industry . Restaurant Industry . . . . . . . . . Retail Trade and Service Industry .

. . . . 1537 . . . . 1554 . . . . 1572

Scientific and Technical Services . . . . . . 1682 Scientific, Medical, and Health Equipment and Supplies Industry . . . . 1703

Contents . . . . . . . . . . . . . . . . . . . . cvii List of Tables and Sidebars . . . . . . . . . . cxiii Printing Industry . . . . . . . . . . . Private Education Industry . . . . . . Public Elementary and Secondary Education Industry . . . . . . . . Public Health Services . . . . . . . . Publishing and Information Industry

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cx

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1588 1606 1626 1644 1664

Complete List of Contents Shipbuilding, Submarines, and Naval Transport Industry. . . . . . . . . . Space Exploration and Space Science Industry. . . . . . . . . . . . . . . . Spectator Sports Industry. . . . . . . . Sports Equipment Industry. . . . . . .

Telecommunications Equipment Industry. . . . . . . . . . . . . . . . . . . 1799 Telecommunications Infrastructure Industry. . . . . . . . . . . . . . . . . . . 1819

. . . 1722 . . . 1741 . . . 1762 . . . 1783

VOLUME

6

Contents . . . . . . . . . . . . . . . . . . . cxxxi Complete List of Contents . . . . . . . . . cxxxiii List of Tables and Sidebars . . . . . . . . cxxxvii

Waste Management Industry . . . . . . . . . 1981 Watches and Jewelry Industry . . . . . . . . 1999 Water Supply Industry . . . . . . . . . . . . 2017

Textile and Fabrics Industry . . . . . . Theater and Performing Arts Industry Themed Entertainment Industry . . . Toys and Games Industry. . . . . . . . Travel and Tourism Industry. . . . . .

Employment by Industry, 2008 and Projected 2018 . . . . . . . . . . . Fortune 500 Companies by Industry, 2009. . . . . . . . . . . . . . . . . Bibliography. . . . . . . . . . . . . . Electronic Resources . . . . . . . . .

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1839 1859 1877 1893 1910

Veterinary Industry . . . . . . . . . . . . . . 1927 Video, Computer, and Virtual Reality Games Industry . . . . . . . . . . . . . . 1947

. . . . 2037 . . . . 2044 . . . . 2060 . . . . 2129

Industries by Career Cluster . . . . . . . . . 2161 Jobs and Careers . . . . . . . . . . . . . . . 2164 Subject Index . . . . . . . . . . . . . . . . . 2181

Warehousing and Storage Industry . . . . . 1964

cxi

List of Tables and Sidebars Accommodation Industry’s Contribution to the U.S. Economy, 920 Accountant: Occupation Profile, 12 Accountants and Auditors: Occupation Specialties, 4 Activities Therapist: Occupation Specialties, 1636 Actor: Occupation Specialties, 1871 Actuary: Occupation Profile, 984 Advertising Account Executive: Occupation Profile, 25 Advertising Agent: Occupation Specialties, 27 Aerospace Engineer: Occupation Profile, 1756 Aerospace Engineer: Occupation Specialties, 1755 Agricultural Scientist: Occupation Specialties, 627 Agriculture: Projected Employment for Selected Occupations, 628 Air Transportation: Projected Employment for Selected Occupations, 51 Aircraft Mechanic: Occupation Profile, 48 Airline Industry’s Contribution to the U.S. Economy, 39 Ambulatory Health Care Services’ Contribution to the U.S. Economy, 1153 Amusement Parks: Projected Employment for Selected Occupations, 1889 Animal Caretaker: Occupation Profile, 81 Animal Caretaker: Occupation Specialties, 82 Apparel Industry: Projected Employment for Selected Occupations, 102

Apparel Worker: Occupation Specialties, 92 Architect: Occupation Profile, 225 Architect: Occupation Specialties, 228 Archivist and Curator: Occupation Profile, 1235 Archivist and Curator: Occupation Specialties, 1237 Athletic Trainer: Occupation Profile, 1773 Auditor: Occupation Profile, 14 Automobile Salesperson: Occupation Profile, 112 Automotive Technician: Occupation Specialties, 119 Bank Teller: Occupation Profile, 135 Barber: Occupation Profile, 1374 Bellhop/Bell Captain: Occupation Specialties, 931 Beverage and Tobacco Product Manufacturing: Projected Employment for Selected Occupations, 174 Bindery Worker: Occupation Specialties, 1510 Biomedical Engineer: Occupation Profile, 1714 Biomedical Equipment Technician: Occupation Profile, 1716 Boilermaker: Occupation Profile, 191 Brickmason/Stonemason: Occupation Profile, 247 Broadcast Technician: Occupation Specialties, 210 Broadcasting and Telecommunications Industries, inputs consumed by the, 201 Broadcasting and Telecommunications cxiii

Industries’ Contributions to the U.S. Economy, The, 201 Broadcasting: Projected Employment for Selected Occupations, 212 Budget Analyst: Occupation Profile, 262 Bulldozer Operator: Occupation Specialties, 873 Bus Driver: Occupation Profile, 1364 Business Services Industry’s Contribution to the U.S. Economy, 254 Camera Operator: Occupation Profile, 1220 Career/Technology Education Teacher: Occupation Profile, 464 Chemical Engineer: Occupation Specialties, 299 Chemical Equipment Operator: Occupation Specialties, 300 Chemical Manufacturing: Projected Employment for Selected Occupations, 302 Chemical Products Industry’s Contribution to the U.S. Economy, 289 Chemist: Occupation Profile, 190 Chemist: Occupation Specialties, 189 Child-care Worker: Occupation Profile, 518 Chiropractor: Occupation Profile, 370 Cinematographer: Occupation Profile, 1217 Civil Engineer: Occupation Specialties, 311 Clergy: Occupation Profile, 1435 Clothes Designer: Occupation Profile, 98

Survey of American Industry and Careers College Faculty Member: Occupation Profile, 859 Compositor and Typesetter: Occupation Profile, 1509 Computer and Electronic Product Manufacturing: Projected Employment for Selected Occupations, 394 Computer and Electronic Products Industry’s Contribution to the U.S. Economy, 381 Computer-Controlled Machine Tool Operator: Occupation Profile, 443 Computer-Controlled Machine Tool Operator: Occupation Specialties, 440 Computer-Controlled Tool Programmer: Occupation Profile, 442 Computer Engineer: Occupation Profile, 391 Computer Programmer: Occupation Profile, 408 Computer Security Specialist: Occupation Profile, 1000 Computer Systems Analyst: Occupation Profile, 426 Computer Systems Industry’s Contribution to the U.S. Economy, 416 Construction and Building Inspector: Occupation Specialties, 243 Construction Industry: Projected Employment for Selected Occupations, 250 Construction Industry’s Contribution to the U.S. Economy, The, 234 Construction Manager: Occupation Profile, 874 Contribution of Apparel and Leather Manufacturers to the U.S. Economy, 87 Contribution of Food, Beverage, and Tobacco Product Manufacturing to the U.S. Economy, 685

Contribution of Food Services and Drinking Places to the U.S. Economy, The, 1646 Contribution of Funds, Trusts, and Other Financial Vehicles to the U.S. Economy, The, 651 Contribution of Hospital, Nursing, and Residential Care Facilities to the U.S. Economy, 902 Contribution of Personal Services to the U.S. Economy, 1371 Contribution of Securities, Commodity Contracts, and Investments to the U.S. Economy, The, 650 Contribution of Textile and Textile Produce Mills to the U.S. Economy, The, 1841 Contribution to the U.S. Economy of Scientific, Technical, and Miscellaneous Professional Services, 1683 Cook/Chef: Occupation Profile, 1656 Cook/Chef: Occupation Specialties, 1657 Copywriter: Occupation Profile, 30 Corrections Officer: Occupation Profile, 494 Corrections Officer: Occupation Specialties, 493 Cosmetologist: Occupation Specialties, 1375 Cost Estimator: Occupation Specialties, 1507 Counter and Rental Clerk: Occupation Profile, 1619 Couriers and Messengers Industry: Projected Employment for Selected Occupations, 1492 Dancer/Choreographer: Occupation Profile, 1872 Dancer/Choreographer: Occupation Specialties, 1873 Dental Hygienist: Occupation Profile, 554 cxiv

Dental Laboratory Technician: Occupation Specialties, 555 Dentist: Occupation Specialties, 553 Dietician and Nutritionist: Occupation Specialties, 819 Dispatcher: Occupation Profile, 1489 Drafter: Occupation Specialties, 313 Education Administrator: Occupation Specialties, 1527 Educational Counselor: Occupation Specialties, 1549 Educational Services: Projected Employment for Selected Occupations, 1551 Electrical and Electronics Engineer: Occupation Profile, 572 Electrical Equipment, Appliance, and Component Manufacturing: Projected Employment for Selected Occupations, 575 Electrical Equipment, Appliances, and Components Industry’s Contribution to the U.S. Economy, 561 Electrical Line Installer and Repairer: Occupation Specialties, 588 Electromechanical Equipment Assembler: Occupation Profile, 573 Electronic Commerce Specialist: Occupation Profile, 997 Elementary School Teacher: Occupation Profile, 1547 Energy Conservation and Use Technician: Occupation Profile, 607 Energy Conservation and Use Technician: Occupation Specialties, 608 Engineering Technician: Occupation Specialties, 1689 Environmental Engineer: Occupation Profile, 606

List of Tables and Sidebars Fabricated Metal Product Manufacturing: Projected Employment for Selected Occupations, 1183 Farmer/Farm Manager: Occupation Specialties, 625 Farming Industry’s Contribution to the U.S. Economy, 614 Federal Government’s Contribution to the U.S. Economy, The, 633 Federal Law Enforcement Agent: Occupation Specialties, 336-337 Finance and Insurance Industry: Projected Employment for Selected Occupations, 139 Firefighter: Occupation Profile, 1565 Fishing Industry: Projected Employment for Selected Occupations, 677 Fitness Trainer and Aerobics Instructor: Occupation Profile, 818 Flight Attendant: Occupation Profile, 46 Food and Beverage Service Worker: Occupation Profile, 736 Food and Beverage Stores: Projected Employment for Selected Occupations, 718 Food Manufacturing: Projected Employment for Selected Occupations, 700 Food Service Manager: Occupation Profile, 733 Food Services and Drinking Places: Projected Employment for Selected Occupations, 739 Forester and Conservation Scientist: Occupation Specialties, 1288 Forestry Worker: Occupation Profile, 1122 Forklift Operator: Occupation Profile, 1977

Funeral Director: Occupation Profile, 771 Furniture and Related Product Manufacturing: Projected Employment for Selected Occupations, 790 Furniture Manufacturing Industry’s Contribution to the U.S. Economy, 776 Gambling Industry: Projected Employment for Selected Occupations, 286 Gardener and Groundskeeper: Occupation Profile, 1020 Gardener and Groundskeeper: Occupation Specialties, 1021 Geologist and Geophysicist: Occupation Profile, 356 Hazardous Waste Manager: Occupation Profile, 1994 Health Care and Social Assistance Industry: Projected Employment for Selected Occupations, 1166 Health Information Technician: Occupation Profile, 910 Heavy and Civil Engineering Construction: Projected Employment for Selected Occupations, 877 Heavy Equipment Service Technician: Occupation Profile, 839 Highway Maintenance Worker: Occupation Profile, 875 Home Appliance Repairer: Occupation Profile, 888 Hospitals Industry: Projected Employment for Selected Occupations, 915 Hotel/Motel Manager: Occupation Specialties, 927 Hotels Industry: Projected Employment for Selected Occupations, 934 Housekeeper: Occupation Specialties, 1376 cxv

Industrial Designer: Occupation Profile, 965 Industrial Engineer: Occupation Profile, 966 Industrial Hygienist: Occupation Profile, 1091 Industrial Machinery Mechanic: Occupation Profile, 1071 Inputs Consumed by Ambulatory Health Care Services, 1154 Inputs Consumed by Food Services and Drinking Places, 1646 Inputs Consumed by Funds, Trusts, and Other Financial Vehicles, 651 Inputs Consumed by Hospital, Nursing, and Residential Care Facilities, 902 Inputs Consumed by Manufacturers of Food, Beverages, and Tobacco Products, 685 Inputs Consumed by Personal Services, 1371 Inputs Consumed by Scientific, Technical, and Miscellaneous Professional Services, 1684 Inputs Consumed by Securities, Commodity Contracts, and Investments, 650 Inputs Consumed by State and Local Governments, 1097 Inputs Consumed by Textile Mills and Textile Product Mills, 1842 Inputs Consumed by the Accommodation Industry, 921 Inputs Consumed by the Airline Industry, 39 Inputs Consumed by the Apparel and Leather Manufacturing Industry, 88 Inputs Consumed by the Broadcasting and Telecommunications Industries, 201 Inputs Consumed by the Business Services Industry, 254

Survey of American Industry and Careers Inputs Consumed by the Chemical Products Industry, 289 Inputs Consumed by the Computer and Electronic Products Industry, 381 Inputs Consumed by the Computer Systems Industry, 416 Inputs Consumed by the Construction Industry, 234 Inputs Consumed by the Electrical Equipment, Appliances, and Components Industry, 562 Inputs Consumed by the Farming Industry, 614 Inputs Consumed by the Federal Government, 634 Inputs Consumed by the Furniture Manufacturing Industry, 776 Inputs Consumed by the Insurance Industry, 973 Inputs Consumed by the Legal Services Industry, 1029 Inputs Consumed by the Machinery Manufacturing Industry, 830 Inputs Consumed by the Mining Industry, 1191 Inputs Consumed by the Motion Picture and Sound Recording Industries, 1209 Inputs Consumed by the Motor Vehicle Industry, 107 Inputs Consumed by the Oil and Natural Gas Extraction Industry, 1387 Inputs Consumed by the Paper Products Industry, 1335 Inputs Consumed by the Pipeline Transportation Industry, 1388 Inputs Consumed by the Plastics and Rubber Products Industry, 1443 Inputs Consumed by the Primary Metals Manufacturing Industry, 1172

Inputs Consumed by the Printing Industry, 1499 Inputs Consumed by the Publishing Industry, 1575 Inputs Consumed by the Real Estate Industry, 1590 Inputs Consumed by the Rental and Leasing Industry, 1607 Inputs Consumed by the Retail Trade Industry, 1666 Inputs Consumed by the Transit and Ground Passenger Transportation Industry, 1353 Inputs Consumed by the Truck Transportation Industry, 744 Inputs Consumed by the Utilities Industries, 581 Inputs Consumed by the Warehousing and Storage Industry, 1967 Inputs Consumed by the Waste Management Industry, 1984 Inputs Consumed by the Water Transportation Industry, 1725 Inspector and Compliance Officer: Occupation Profile, 167 Inspector and Tester: Occupation Specialties, 533 Insulation Worker: Occupation Profile, 894 Insurance Carriers and Related Activities: Projected Employment for Selected Occupations, 986 Insurance Claims Adjuster and Examiner: Occupation Profile, 983 Insurance Industry’s Contribution to the U.S. Economy, 973 Interior Designer: Occupation Profile, 229 Jeweler and Watch Repairer: Occupation Profile, 2009 Journalist: Occupation Specialties, 1583 cxvi

Landscape Architect: Occupation Profile, 1019 Laundry/Dry Cleaning Machine Operator: Occupation Specialties, 1373 Lawyer: Occupation Specialties, 1037 Legal Services Industry’s Contribution to the U.S. Economy, 1029 Librarian: Occupation Specialties, 1053 Library Technician: Occupation Profile, 1055 Locomotive Engineer: Occupation Profile, 1365 Logging Industry: Projected Employment for Selected Occupations, 1128 Lumber Production Worker: Occupation Specialties, 1124 Machinery Manufacturing Industry’s Contribution to the U.S. Economy, The, 829 Machinery Manufacturing: Projected Employment for Selected Occupations, 841 Machinist: Occupation Profile, 803 Mail Carrier: Occupation Profile, 1490 Mail Clerk and Messenger: Occupation Specialties, 1491 Management Analyst and Consultant: Occupation Specialties, 264 Management of Companies and Enterprises: Projected Employment for Selected Occupations, 267 Manufacturers Representative: Occupation Profile, 694 Marine Biologist: Occupation Profile, 1289 Marine Engineer and Architect: Occupation Profile, 1735 Marine Engineer and Architect: Occupation Specialties, 1734

List of Tables and Sidebars Marriage Counselor: Occupation Profile, 473 Meat Cutter: Occupation Profile, 1088 Mechanical Engineer: Occupation Profile, 1074 Media Specialist: Occupation Specialties, 1056 Medical and Health Services Manager: Occupation Specialties, 911 Medical Records Administrator: Occupation Profile, 1637 Medical Scientist: Occupation Profile, 1566 Medical Social Worker: Occupation Profile, 478 Medical Technologist: Occupation Specialties, 1567 Merchandise Displayer: Occupation Profile, 1671 Metal/Plastic Working Machine Operator: Occupation Profile, 1144 Metallurgical/Materials Engineer: Occupation Specialties, 1180 Millwright: Occupation Profile, 697 Mining and Geological Engineer: Occupation Specialties, 1198 Mining and Quarrying: Projected Employment for Selected Occupations, 1201 Mining Industry’s Contribution to the U.S. Economy, 1190 Motion Picture and Sound Recording Industries’ Contribution to the U.S. Economy, 1209 Motion Picture, Video, and Sound Recording Industries: Projected Employment for Selected Occupations, 1222 Motor Vehicle Manufacturing: Projected Employment for Selected Occupations, 122 Motor Vehicles Industry’s Contribution to the U.S. Economy, The, 107

Museums, Historical Sites, and Similar Institutions: Projected Employment for Selected Occupations, 1238 Music Therapist: Occupation Profile, 480 Musical Instrument Repairer: Occupation Specialties, 1254 Musician and Composer: Occupation Profile, 1252 Musician and Composer: Occupation Specialties, 1251 Nuclear Engineer: Occupation Profile, 1306 Nuclear Engineer: Occupation Specialties, 1307 Nuclear Quality Control Inspector: Occupation Profile, 1308 Nurse Practitioner: Occupation Profile, 1638 Nursing and Residential Care Facilities: Projected Employment for Selected Occupations, 1641 Occupation Profile: Accountant, 12 Occupation Profile: Actuary, 984 Occupation Profile: Advertising Account Executive, 25 Occupation Profile: Aerospace Engineer, 1756 Occupation Profile: Aircraft Mechanic, 48 Occupation Profile: Animal Caretaker, 81 Occupation Profile: Architect, 225 Occupation Profile: Archivist and Curator, 1235 Occupation Profile: Athletic Trainer, 1773 Occupation Profile: Auditor, 14 Occupation Profile: Automobile Salesperson, 112 Occupation Profile: Bank Teller, 135 Occupation Profile: Barber, 1374 cxvii

Occupation Profile: Biomedical Engineer, 1714 Occupation Profile: Biomedical Equipment Technician, 1716 Occupation Profile: Boilermaker, 191 Occupation Profile: Brickmason/Stonemason, 247 Occupation Profile: Budget Analyst, 262 Occupation Profile: Bus Driver, 1364 Occupation Profile: Camera Operator, 1220 Occupation Profile: Career/ Technology Education Teacher, 464 Occupation Profile: Chemist, 190 Occupation Profile: Child-care Worker, 518 Occupation Profile: Chiropractor, 370 Occupation Profile: Cinematographer, 1217 Occupation Profile: Clergy, 1435 Occupation Profile: Clothes Designer, 98 Occupation Profile: College Faculty Member, 859 Occupation Profile: Compositor and Typesetter, 1509 Occupation Profile: ComputerControlled Machine Tool Operator, 443 Occupation Profile: ComputerControlled Tool Programmer, 442 Occupation Profile: Computer Engineer, 391 Occupation Profile: Computer Programmer, 408 Occupation Profile: Computer Security Specialist, 1000 Occupation Profile: Computer Systems Analyst, 426 Occupation Profile: Construction Manager, 874 Occupation Profile: Cook/Chef, 1656

Survey of American Industry and Careers Occupation Profile: Copywriter, 30 Occupation Profile: Corrections Officer, 494 Occupation Profile: Counter and Rental Clerk, 1619 Occupation Profile: Dancer/ Choreographer, 1872 Occupation Profile: Dental Hygienist, 554 Occupation Profile: Dispatcher, 1489 Occupation Profile: Electrical and Electronics Engineer, 572 Occupation Profile: Electromechanical Equipment Assembler, 573 Occupation Profile: Electronic Commerce Specialist, 997 Occupation Profile: Elementary School Teacher, 1547 Occupation Profile: Energy Conservation and Use Technician, 607 Occupation Profile: Environmental Engineer, 606 Occupation Profile: Firefighter, 1565 Occupation Profile: Fitness Trainer and Aerobics Instructor, 818 Occupation Profile: Flight Attendant, 46 Occupation Profile: Food and Beverage Service Worker, 736 Occupation Profile: Food Service Manager, 733 Occupation Profile: Forestry Worker, 1122 Occupation Profile: Forklift Operator, 1977 Occupation Profile: Funeral Director, 771 Occupation Profile: Gardener and Groundskeeper, 1020 Occupation Profile: Geologist and Geophysicist, 356

Occupation Profile: Hazardous Waste Manager, 1994 Occupation Profile: Health Information Technician, 910 Occupation Profile: Heavy Equipment Service Technician, 839 Occupation Profile: Highway Maintenance Worker, 875 Occupation Profile: Home Appliance Repairer, 888 Occupation Profile: Industrial Designer, 965 Occupation Profile: Industrial Engineer, 966 Occupation Profile: Industrial Hygienist, 1091 Occupation Profile: Industrial Machinery Mechanic, 1071 Occupation Profile: Inspector and Compliance Officer, 167 Occupation Profile: Insulation Worker, 894 Occupation Profile: Insurance Claims Adjuster and Examiner, 983 Occupation Profile: Interior Designer, 229 Occupation Profile: Jeweler and Watch Repairer, 2009 Occupation Profile: Landscape Architect, 1019 Occupation Profile: Library Technician, 1055 Occupation Profile: Locomotive Engineer, 1365 Occupation Profile: Machinist, 803 Occupation Profile: Mail Carrier, 1490 Occupation Profile: Manufacturers Representative, 694 Occupation Profile: Marine Biologist, 1289 Occupation Profile: Marine Engineer and Architect, 1735 Occupation Profile: Marriage Counselor, 473 cxviii

Occupation Profile: Meat Cutter, 1088 Occupation Profile: Mechanical Engineer, 1074 Occupation Profile: Medical Records Administrator, 1637 Occupation Profile: Medical Scientist, 1566 Occupation Profile: Medical Social Worker, 478 Occupation Profile: Merchandise Displayer, 1671 Occupation Profile: Metal/ Plastic Working Machine Operator, 1144 Occupation Profile: Millwright, 697 Occupation Profile: Music Therapist, 480 Occupation Profile: Musician and Composer, 1252 Occupation Profile: Nuclear Engineer, 1306 Occupation Profile: Nuclear Quality Control Inspector, 1308 Occupation Profile: Nurse Practitioner, 1638 Occupation Profile: Occupational Therapist, 515 Occupation Profile: Office Machine Repairer, 1073 Occupation Profile: Online Merchant, 941 Occupation Profile: Packer/ Packager, 1905 Occupation Profile: Painting/ Coating Machine Operator, 1904 Occupation Profile: Paralegal, 1038 Occupation Profile: Park Ranger, 339 Occupation Profile: Parole and Probation Officer, 495 Occupation Profile: Pharmaceutical Sales Representative, 1416 Occupation Profile: Pharmacist, 1410

List of Tables and Sidebars Occupation Profile: Plumber and Pipefitter, 892 Occupation Profile: Precision Assembler, 535 Occupation Profile: Prepress Technician, 1584 Occupation Profile: Principal, 1546 Occupation Profile: Production Coordinator, 1812 Occupation Profile: Professional Athlete, 1774 Occupation Profile: Public Administrator, 1108 Occupation Profile: Public Relations Specialist, 1470 Occupation Profile: Quality Control Inspector, 1795 Occupation Profile: Range Manager, 1290 Occupation Profile: Real Estate Sales Agent, 1601 Occupation Profile: Recreation Program Director, 1324 Occupation Profile: Recreation Worker, 1325 Occupation Profile: Refuse Collector, 1995 Occupation Profile: Research Assistant, 857 Occupation Profile: Retail Salesperson, 715 Occupation Profile: Retail Store Sales Manager, 1675 Occupation Profile: Riveter, 1145 Occupation Profile: Robotics Technician, 804 Occupation Profile: Science Technician, 154 Occupation Profile: Secondary School Teacher, 1531 Occupation Profile: Ship Loader, 755 Occupation Profile: Software Designer, 409 Occupation Profile: Soil Scientist, 1291 Occupation Profile: Solar Energy System Installer, 69

Occupation Profile: Stationary Engineer, 1811 Occupation Profile: Teacher Assistant, 1532 Occupation Profile: Technical Sales Representative, 1715 Occupation Profile: Telecommunications Installer and Repairer, 1834 Occupation Profile: Telephone Installer and Repairer, 1813 Occupation Profile: Textile Machine Operator, 1852 Occupation Profile: Tool and Die Maker, 2012 Occupation Profile: Upholsterer, 788 Occupation Profile: Urban and Regional Planner, 319 Occupation Profile: Veterinary Assistant/Technician, 1939 Occupation Profile: Water and Wastewater Engineer, 2029 Occupation Profile: Water Treatment Plant Operator, 2030 Occupation Profile: Wholesale Sales Representative, 170 Occupation Profile: Wind Energy Engineer, 71 Occupation Profile: Woodworker, 789 Occupation Specialties: Accountants and Auditors, 4 Occupation Specialties: Activities Therapist, 1636 Occupation Specialties: Actor, 1871 Occupation Specialties: Advertising Agent, 27 Occupation Specialties: Aerospace Engineer, 1755 Occupation Specialties: Agricultural Scientist, 627 Occupation Specialties: Animal Caretaker, 82 Occupation Specialties: Apparel Worker, 92 Occupation Specialties: Architect, 228 cxix

Occupation Specialties: Archivist and Curator, 1237 Occupation Specialties: Automotive Technician, 119 Occupation Specialties: Bellhop/Bell Captain, 931 Occupation Specialties: Bindery Worker, 1510 Occupation Specialties: Broadcast Technician, 210 Occupation Specialties: Bulldozer Operator, 873 Occupation Specialties: Chemical Engineer, 299 Occupation Specialties: Chemical Equipment Operator, 300 Occupation Specialties: Chemist, 189 Occupation Specialties: Civil Engineer, 311 Occupation Specialties: Computer-Controlled Machine Tool Operator, 440 Occupation Specialties: Construction and Building Inspector, 243 Occupation Specialties: Cook/ Chef, 1657 Occupation Specialties: Corrections Officer, 493 Occupation Specialties: Cosmetologist, 1375 Occupation Specialties: Cost Estimator, 1507 Occupation Specialties: Dancer/ Choreographer, 1873 Occupation Specialties: Dental Laboratory Technician, 555 Occupation Specialties: Dentist, 553 Occupation Specialties: Dietician and Nutritionist, 819 Occupation Specialties: Drafter, 313 Occupation Specialties: Education Administrator, 1527 Occupation Specialties: Educational Counselor, 1549

Survey of American Industry and Careers Occupation Specialties: Electrical Line Installer and Repairer, 588 Occupation Specialties: Energy Conservation and Use Technician, 608 Occupation Specialties: Engineering Technician, 1689 Occupation Specialties: Farmer/ Farm Manager, 625 Occupation Specialties: Federal Law Enforcement Agent, 336337 Occupation Specialties: Forester and Conservation Scientist, 1288 Occupation Specialties: Gardener and Groundskeeper, 1021 Occupation Specialties: Hotel/ Motel Manager, 927 Occupation Specialties: Housekeeper, 1376 Occupation Specialties: Inspector and Tester, 533 Occupation Specialties: Journalist, 1583 Occupation Specialties: Laundry/Dry Cleaning Machine Operator, 1373 Occupation Specialties: Lawyer, 1037 Occupation Specialties: Librarian, 1053 Occupation Specialties: Lumber Production Worker, 1124 Occupation Specialties: Mail Clerk and Messenger, 1491 Occupation Specialties: Management Analyst and Consultant, 264 Occupation Specialties: Marine Engineer and Architect, 1734 Occupation Specialties: Media Specialist, 1056 Occupation Specialties: Medical and Health Services Manager, 911 Occupation Specialties: Medical Technologist, 1567

Occupation Specialties: Metallurgical/Materials Engineer, 1180 Occupation Specialties: Mining and Geological Engineer, 1198 Occupation Specialties: Musical Instrument Repairer, 1254 Occupation Specialties: Musician and Composer, 1251 Occupation Specialties: Nuclear Engineer, 1307 Occupation Specialties: Packer/ Packager, 1906 Occupation Specialties: Pharmacist, 1409 Occupation Specialties: Police Officer, 341 Occupation Specialties: Power Plant Operator, 587 Occupation Specialties: Precision Assembler, 534 Occupation Specialties: Property and Real Estate Manager, 1600 Occupation Specialties: Psychologist, 471 Occupation Specialties: Public Relations Specialist, 1469 Occupation Specialties: Rail Transportation Worker, 752 Occupation Specialties: Recreation Worker, 1326 Occupation Specialties: Renewable Energy Technician, 70 Occupation Specialties: Reservation and Ticket Agent, 1920 Occupation Specialties: Science Technician, 1694 Occupation Specialties: Small Engine Mechanic, 1072 Occupation Specialties: Special Education Teacher, 1548 Occupation Specialties: Sports Instructor/Coach, 1772 Occupation Specialties: Telecommunications Equipment Installer/ Repairer, 1833 cxx

Occupation Specialties: Textile Machine Operator, 1853 Occupation Specialties: Travel Agent, 1921 Occupation Specialties: Veterinarian, 1938 Occupation Specialties: Welder, 1144 Occupational Therapist: Occupation Profile, 515 Occupations in Pharmaceutical and Medicine Manufacturing: Projected Employment for Selected Occupations, 1420 Office Machine Repairer: Occupation Profile, 1073 Oil and Gas Extraction Industry’s Contribution to the U.S. Economy, 1387 Oil and Gas Extraction: Projected Employment for Selected Occupations, 1400 Online Merchant: Occupation Profile, 941 Packer/Packager: Occupation Profile, 1905 Packer/Packager: Occupation Specialties, 1906 Painting/Coating Machine Operator: Occupation Profile, 1904 Paper Manufacturing: Projected Employment for Selected Occupations, 1347 Paper Products Industry’s Contribution to the U.S. Economy, 1335 Paralegal: Occupation Profile, 1038 Park Ranger: Occupation Profile, 339 Parole and Probation Officer: Occupation Profile, 495 Performing Arts: Projected Employment for Selected Occupations, 1874 Personal and Laundry Services: Projected Employment for Selected Occupations, 1382

List of Tables and Sidebars Petroleum and Coal Products Manufacturing: Projected Employment for Selected Occupations, 1401 Pharmaceutical Sales Representative: Occupation Profile, 1416 Pharmacist: Occupation Profile, 1410 Pharmacist: Occupation Specialties, 1409 Pipeline Transporation Industry’s Contribution to the U.S. Economy, The, 1388 Plastics and Rubber Products Industry’s Contribution to the U.S. Economy, 1443 Plastics and Rubber Products Manufacturing: Projected Employment for Selected Occupations, 1455 Plumber and Pipefitter: Occupation Profile, 892 Police Officer: Occupation Specialties, 341 Postal Service Industry: Projected Employment for Selected Occupations, 1493 Power Plant Operator: Occupation Specialties, 587 Precision Assembler: Occupation Profile, 535 Precision Assembler: Occupation Specialties, 534 Prepress Technician: Occupation Profile, 1584 Primary Metal Manufacturing: Projected Employment for Selected Occupations, 1184 Primary Metals Manufacturing Industry’s Contribution to the U.S. Economy, 1172 Principal: Occupation Profile, 1546 Printing and Related Support Activities: Projected Employment for Selected Occupations, 1512 Printing Industry’s Contribution to the U.S. Economy, 1499

Production Coordinator: Occupation Profile, 1812 Professional Athlete: Occupation Profile, 1774 Professional, Scientific, and Technical Services: Projected Employment for Selected Occupations, 1700 Projected Employment for Selected Occupations: Agriculture, 628 Projected Employment for Selected Occupations: Air Transportation, 51 Projected Employment for Selected Occupations: Amusement Parks, 1889 Projected Employment for Selected Occupations: Apparel Industry, 102 Projected Employment for Selected Occupations: Beverage and Tobacco Product Manufacturing, 174 Projected Employment for Selected Occupations: Broadcasting, 212 Projected Employment for Selected Occupations: Chemical Manufacturing, 302 Projected Employment for Selected Occupations: Computer and Electronic Product Manufacturing, 394 Projected Employment for Selected Occupations: Construction Industry, 250 Projected Employment for Selected Occupations: Couriers and Messengers Industry, 1492 Projected Employment for Selected Occupations: Educational Services, 1551 Projected Employment for Selected Occupations: Electrical Equipment, Appliance, and Component Manufacturing, 575 cxxi

Projected Employment for Selected Occupations: Fabricated Metal Product Manufacturing, 1183 Projected Employment for Selected Occupations: Finance and Insurance Industry, 139 Projected Employment for Selected Occupations: Fishing Industry, 677 Projected Employment for Selected Occupations: Food and Beverage Stores, 718 Projected Employment for Selected Occupations: Food Manufacturing, 700 Projected Employment for Selected Occupations: Food Services and Drinking Places, 739 Projected Employment for Selected Occupations: Furniture and Related Product Manufacturing, 790 Projected Employment for Selected Occupations: Gambling Industry, 286 Projected Employment for Selected Occupations: Health Care and Social Assistance Industry, 1166 Projected Employment for Selected Occupations: Heavy and Civil Engineering Construction, 877 Projected Employment for Selected Occupations: Hospitals Industry, 915 Projected Employment for Selected Occupations: Hotels Industry, 934 Projected Employment for Selected Occupations: Insurance Carriers and Related Activities, 986 Projected Employment for Selected Occupations: Logging Industry, 1128

Survey of American Industry and Careers Projected Employment for Selected Occupations: Machinery Manufacturing, 841 Projected Employment for Selected Occupations: Management of Companies and Enterprises, 267 Projected Employment for Selected Occupations: Mining and Quarrying, 1201 Projected Employment for Selected Occupations: Motion Picture, Video, and Sound Recording Industries, 1222 Projected Employment for Selected Occupations: Motor Vehicle Manufacturing, 122 Projected Employment for Selected Occupations: Museums, Historical Sites, and Similar Institutions, 1238 Projected Employment for Selected Occupations: Nursing and Residential Care Facilities, 1641 Projected Employment for Selected Occupations: Oil and Gas Extraction, 1400 Projected Employment for Selected Occupations: Paper Manufacturing, 1347 Projected Employment for Selected Occupations: Performing Arts, 1874 Projected Employment for Selected Occupations: Personal and Laundry Services, 1382 Projected Employment for Selected Occupations: Petroleum and Coal Products Manufacturing, 1401 Projected Employment for Selected Occupations: Pharmaceutical and Medicine Manufacturing, 1420 Projected Employment for Selected Occupations: Plastics and Rubber Products Manufacturing, 1455

Projected Employment for Selected Occupations: Postal Service Industry, 1493 Projected Employment for Selected Occupations: Primary Metal Manufacturing, 1184 Projected Employment for Selected Occupations: Printing and Related Support Activities, 1512 Projected Employment for Selected Occupations: Professional, Scientific, and Technical Services, 1700 Projected Employment for Selected Occupations: Publishing Industries, 1585 Projected Employment for Selected Occupations: Rail Transportation, 1147 Projected Employment for Selected Occupations: Real Estate Industry, 1603 Projected Employment for Selected Occupations: Real Estate Rental and Leasing, 1604 Projected Employment for Selected Occupations: Religious, Grantmaking, Civic, Professional, and Similar Organizations, 1437 Projected Employment for Selected Occupations: Rental and Leasing Services, 1623 Projected Employment for Selected Occupations: Restaurants, 1660 Projected Employment for Selected Occupations: Retail Trade Industry, 1679 Projected Employment for Selected Occupations: Scenic and Sightseeing Transportation, 1922 Projected Employment for Selected Occupations: Securities, Commodity Contracts, and Related Activities, 661 cxxii

Projected Employment for Selected Occupations: Social Assistance, 520 Projected Employment for Selected Occupations: Specialty Trade Contractors, 897 Projected Employment for Selected Occupations: Sporting Goods, Hobby, Book, and Music Stores, 1796 Projected Employment for Selected Occupations: Support Activities for Mining, 1399 Projected Employment for Selected Occupations: Support Activities for Transportation, 1367 Projected Employment for Selected Occupations: Telecommunications Industry, 1832 Projected Employment for Selected Occupations: Textile Mills, 1851 Projected Employment for Selected Occupations: Textile Product Mills, 1854 Projected Employment for Selected Occupations: Transit and Ground Passenger Transportation, 1366 Projected Employment for Selected Occupations: Transportation Equipment Manufacturing, 1147 Projected Employment for Selected Occupations: Truck Transportation, 757 Projected Employment for Selected Occupations: Utilities Industry, 590 Projected Employment for Selected Occupations: Warehousing and Storage, 1978 Projected Employment for Selected Occupations: Waste

List of Tables and Sidebars Management and Remediation Services, 1997 Projected Employment for Selected Occupations: Water Transportation, 2031 Projected Employment for Selected Occupations: Wood Product Manufacturing, 230 Property and Real Estate Manager: Occupation Specialties, 1600 Psychologist: Occupation Specialties, 471 Public Administrator: Occupation Profile, 1108 Public Relations Specialist: Occupation Profile, 1470 Public Relations Specialist: Occupation Specialties, 1469 Publishing Industries: Projected Employment for Selected Occupations, 1585 Publishing Industry’s Contribution to the U.S. Economy, 1574 Quality Control Inspector: Occupation Profile, 1795 Rail Transportation: Projected Employment for Selected Occupations, 1147 Rail Transportation Worker: Occupation Specialties, 752 Range Manager: Occupation Profile, 1290 Real Estate Industry: Projected Employment for Selected Occupations, 1603 Real Estate Industry’s Contribution to the U.S. Economy, 1590 Real Estate Rental and Leasing: Projected Employment for Selected Occupations, 1604 Real Estate Sales Agent: Occupation Profile, 1601 Recreation Program Director: Occupation Profile, 1324

Recreation Worker: Occupation Profile, 1325 Recreation Worker: Occupation Specialties, 1326 Refuse Collector: Occupation Profile, 1995 Religious, Grantmaking, Civic, Professional, and Similar Organizations: Projected Employment for Selected Occupations, 1437 Renewable Energy Technician: Occupation Specialties, 70 Rental and Leasing Industry’s Contribution to the U.S. Economy, 1607 Rental and Leasing Services: Projected Employment for Selected Occupations, 1623 Research Assistant: Occupation Profile, 857 Reservation and Ticket Agent: Occupation Specialties, 1920 Restaurants: Projected Employment for Selected Occupations, 1660 Retail Salesperson: Occupation Profile, 715 Retail Store Sales Manager: Occupation Profile, 1675 Retail Trade Industry: Projected Employment for Selected Occupations, 1679 Retail Trade Industry’s Contribution to the U.S. Economy, 1666 Riveter: Occupation Profile, 1145 Robotics Technician: Occupation Profile, 804 Scenic and Sightseeing Transportation: Projected Employment for Selected Occupations, 1922 Science Technician: Occupation Profile, 154 Science Technician: Occupation Specialties, 1694 Secondary School Teacher: Occupation Profile, 1531 cxxiii

Securities, Commodity Contracts, and Related Activities: Projected Employment for Selected Occupations, 661 Ship Loader: Occupation Profile, 755 Small Engine Mechanic: Occupation Specialties, 1072 Social Assistance: Projected Employment for Selected Occupations, 520 Software Designer: Occupation Profile, 409 Soil Scientist: Occupation Profile, 1291 Solar Energy System Installer: Occupation Profile, 69 Special Education Teacher: Occupation Specialties, 1548 Specialty Trade Contractors: Projected Employment for Selected Occupations, 897 Sporting Goods, Hobby, Book, and Music Stores: Projected Employment for Selected Occupations, 1796 Sports Instructor/Coach: Occupation Specialties, 1772 State and Local Governments’ Contribution to the U.S. Economy, 1097 Stationary Engineer: Occupation Profile, 1811 Support Activities for Mining: Projected Employment for Selected Occupations, 1399 Support Activities for Transportation: Projected Employment for Selected Occupations, 1367 Teacher Assistant: Occupation Profile, 1532 Technical Sales Representative: Occupation Profile, 1715

Survey of American Industry and Careers Telecommunications Equipment Installer/Repairer: Occupation Specialties, 1833 Telecommunications Industry: Projected Employment for Selected Occupations, 1832 Telecommunications Installer and Repairer: Occupation Profile, 1834 Telephone Installer and Repairer: Occupation Profile, 1813 Textile Machine Operator: Occupation Profile, 1852 Textile Machine Operator: Occupation Specialties, 1853 Textile Mills: Projected Employment for Selected Occupations, 1851 Textile Product Mills: Projected Employment for Selected Occupations, 1854 Tool and Die Maker: Occupation Profile, 2012 Transit and Ground Passenger Transportation Industry’s Contribution to the U.S. Economy, 1353 Transit and Ground Passenger Transportation: Projected Employment for Selected Occupations, 1366

Transportation Equipment Manufacturing: Projected Employment for Selected Occupations, 1147 Travel Agent: Occupation Specialties, 1921 Truck Transportation Industry’s Contribution to the U.S. Economy, 744 Truck Transportation: Projected Employment for Selected Occupations, 757 Upholsterer: Occupation Profile, 788 Urban and Regional Planner: Occupation Profile, 319 Utilities Industries’ Contribution to the U.S. Economy, 580 Utilities Industry: Projected Employment for Selected Occupations, 590 Veterinarian: Occupation Specialties, 1938 Veterinary Assistant/Technician: Occupation Profile, 1939 Warehousing and Storage Industry’s Contribution to the U.S. Economy, 1966

cxxiv

Warehousing and Storage: Projected Employment for Selected Occupations, 1978 Waste Management and Remediation Services: Projected Employment for Selected Occupations, 1997 Waste Management Industry’s Contribution to the U.S. Economy, 1983 Water and Wastewater Engineer: Occupation Profile, 2029 Water Transportation Industry’s Contribution to the U.S. Economy, 1724 Water Transportation: Projected Employment for Selected Occupations, 2031 Water Treatment Plant Operator: Occupation Profile, 2030 Welder: Occupation Specialties, 1144 Wholesale Sales Representative: Occupation Profile, 170 Wind Energy Engineer: Occupation Profile, 71 Wood Product Manufacturing: Projected Employment for Selected Occupations, 230 Woodworker: Occupation Profile, 789

SURVEY OF

American Industry and Careers

Printing Industry ©Dreamstime.com

INDUSTRY

INDUSTRY DEFINITION

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Book Printing; Bookbinding and Repair; Calendar Printing; Card Printing; Commercial Flexographic Printing; Commercial Gravure Printing; Commercial Lithographic Printing; Commercial Screen Printing; Digital Printing; Directory and Database Printing; Magazine and Periodical Printing; Manifold Business Form Printing; Music Printing; Postpress Services; Prepress Services; Quick Printing; Sign and Poster Printing Related Industries: Advertising and Marketing Industry; Computer Hardware and Peripherals Industry; Heavy Machines Industry; Libraries and Archives Industry; Paper Manufacturing and Products Industry; Publishing and Information Industry Annual Domestic Revenues: $166.6 billion USD (Printing Industries of America, 2009) Annual International Revenues: $234.5 billion USD (Datamonitor USA, Global Commercial Printing Industry Profile, 2009) Annual Global Revenues: $401.1 billion USD (Datamonitor USA, Global Commercial Printing Industry Profile, 2009) NAICS Number: 323

1495

Summary The printing industry produces printed materials on a variety of substrates, including paper, plastic, metal, and fabric. These products range from books and magazines to forms, labels, packaging, and signage. Printing is divided into three areas: prepress, press, and finishing. Prepress entails preparing materials and client electronic files for reproduction. Press is the actual reproduction stage, where ink is married to the substrate. Finishing includes cutting, folding, and binding. Related companies produce equipment and consumables for the industry, such as printing presses and bindery equipment, ink, paper, chemicals, and printing plates. History of the Industry Printing dates back to around 200 b.c.e., during the Han Dynasty in China. The Chinese used carved wooden blocks coated with ink to apply an image to paper. This woodblock printing was widely used both for artistic prints and for

1496

Printing Industry

The blue rollers of an offset printing machine. (©Boris Fojtik/Dreamstime.com)

text. Woodblock printing probably arrived in Europe in the late fourteenth century. The Chinese developed moveable type around 1000 c.e., using porcelain, tin, and wood as type materials. Around 1403, King Taejong of Korea established a type foundry that made type from bronze. The complexity of the Chinese writing system, which was used in China, Korea, and Japan, made it economically prohibitive to produce a complete set of type. In Europe, around 1450, Johann Gutenberg created moveable type for the Latin alphabet. His type was made by using a mold to cast individual metal type pieces that consisted of an alloy of lead, tin, and antimony. This metal did not expand or contract, so it could produce letters of uniform size. Gutenberg also designed a composing stick and a flat-bed press, which was modeled after wine presses of the era. His press used a flat metal plate to press paper or vellum against the inked type, while a screw mechanism adjusted the position and amount of pressure of the platen.

The wooden printing press produced one page at a time and remained largely unchanged for three hundred years. In 1800, Lord Stanhope developed a cast-iron press, and the first steam-powered press was patented by Friedrich Koenig in 1810. Koenig produced machines with the assistance of Andreas Friedrich Bauer. The first steam presses were purchased by The Times newspaper of London. The rotary printing press was introduced in 1843 by Richard March Hoe. This press passed paper around a cylinder and could handle both rolls and individual sheets of paper. Flexography was invented in 1890 and could handle a wide range of substrate materials. The lithographic offset press was invented in 1903 by Ira W. Rubel. This press used flat metal sheets called “plates,” which transfered an inked image first to a rubber impression cylinder and then to paper. This process produced a clearer image than printing directly from a metal plate to paper. Screen printing was developed in China around

Printing Industry 1000 and was introduced to Europe around 1700. In 1907, Samuel Simon patented the process in England. Because the printing screen was made from silk, the process became known as “silk screening.” Silk screening was originally used to produce wallpapers, but today it is widely used in printing fabrics, metals, and even compact discs (CDs). In the late 1880’s, hot metal type replaced foundry type. Two kinds of typesetting machines emerged: monotype, which made individual letters from lead, and linotype, which formed an entire line of type in one pass. Cold type, or phototypesetting, emerged in the 1940’s but did not become widely popular until the late 1970’s. Early machines produced a punched paper tape that was fed into a mechanical typesetting device, which in turn used a negative filmstrip to expose photographic paper. Later models dispensed with the filmstrip and used lasers to expose the photographic paper. Personal computers entered the printing industry in the early 1980’s as front-end word processing

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stations. In the mid-1980’s, graphical user interfaces (GUIs) and page-layout software ushered in the age of desktop publishing. As prepress became computerized, so did presses. By the end of the twentieth century, desktop publishing had replaced manual prepress work. By 2009, digital printing represented about 12 percent of commercial printing products. The Industry Today The printing industry today is divided into two main categories: traditional and digital. Traditional printing companies use printing methods— such as offset lithography, flexography, or gravure—in which printing plates carry ink onto a substrate material, such as paper, plastic, metal, or fabric. Digital printing may be toner- or ink-based, and it does not require printing plates. Offset lithography constitutes the largest segment of the printing industry. Nearly one-third of today’s commercial printing establishments are lithographers. More commonly called offset print-

In the computer-to-plate process, a desktop publishing application is output directly to a printing plate. (©Moreno Soppelsa/ Dreamstime.com)

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services, as well as for short-run printing, and they include electronic, inkjet, and electrostatic printing. Because digital printing equipment requires no printing plates, it involves lower material costs, which makes it more economical to own and operate than a traditional press. Digital printing presses are therefore very attractive to smaller companies that do not have the financial resources needed to invest in large presses and the accompanying platemaking equipment. Increasingly, graphic design firms are investing in digital presses as a way of offering more in-house services to their clients. Quick printing is the second-largest segment of the printing industry. Unlike other forms of commercial printing, quick-printing establishments are most likely to be found in shopping centers or office buildings, where their storefronts are easily reached by customers. Quick printers are able to attract walk-in business, and they appeal to individuals because they generally produce wedding invitations and other custom-printed products for nonbusiness use. Small businesses make extensive use of quickprint shops for printed materials such as stationery and forms, as well as for many types of photocopying and bindery services that are not easily handled in a small office. Additionally, many quick-print shops have expanded their operations to offer other businessrelated services, including packaging, mailing, and shipping. Because they are stores, many quick printers also sell a small range of office supplies, including postage. Variable-data printing has also been widely accepted in the quick-printing segment of the industry because it is very economical for short-run and personalized orders. Letterpress printing, which uses raised metal type, is a traditional printing method that dates back to the fourteenth century. Although high-speed offset presses have replaced letterpresses as the primary means of commercial printing, letterpresses continue This digital four-color press does not need printing plates. (©Moreno Soppelsa/ to be used in the industry for specialty printing needs. Foil stampDreamstime.com) ing, lithography uses smooth printing plates that carry ink images onto carrier rollers, and these images are then offset to paper and other substrate materials. The printing plates may be made from metal or plastic and are coated with photosensitive emulsions that are exposed to produce right-reading plates. Offset printers account for approximately 39 percent of the jobs in the printing industry. This does not include newspaper-press jobs, which are considered to be part of the publishing industry. Offset presses range from small, sheet-fed machines that can print only one or two colors of ink at a time to large presses that can handle both sheets and rolls of paper and can print in six or even eight colors in one pass. Small quick-print shops typically operate two-color offset presses. Flexography is similar to offset printing, but it uses flexible printing plates made from plastic or rubber. These flexible plates allow presses to print on a wide range of substrates. Flexographic printing companies generally print consumer goods, such as shopping bags, packaging materials, cartons, and labels. Digital printing is the fastest-growing portion of the printing industry. Digital printing technologies are used for photocopying and duplicating

Printing Industry

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Inputs Consumed by the Printing Industry Input

Value

Energy Materials Purchased services Total

$2.0 billion $37.1 billion $25.1 billion $64.2 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

their competitiveness within the industry. Many now offer variable-data printing (personalization), short-run printing, and warehousing. Some printers are even positioning themselves to be complete Letterpresses continue to be used in the industry for specialty communications service providers. In addition to printing needs. (©Dreamstime.com) printing, these companies offer graphic design, Web-site creation and management, database management, and marketing services. They may also ing, embossing, and die cutting are all accomoffer complete distribution services, including plished using letterpresses. Because of its unique mailing-list management, inventory control, and nature, letterpress printing is widely used by graphic fulfillment services. artists who seek to achieve a “retro” look to their Screen printers continue to carve out a niche for work, and it is also used for custom invitations and themselves in the industry, and screen printing is specialty books. the one area of commercial printing that is not preThe printing industry as a whole is moving away dicted to decline during the 2010’s. Screen printfrom traditional ink-on-paper methods and toward ers produce printed textile products, signage, prodigital methods of printing. Additionally, printers motional goods, and display items. As digital are offering more ancillary services to maintain methods continue to improve and replace earlier technologies used to create screens, screen printing will become more efficient and profitable. The Printing Industry’s Print shops have increased the amount of green materials and supplies that they Contribution to the U.S. Economy use in the production of printed goods. Soy inks, which were problematic when Value Added Amount they were first introduced to the market, Gross domestic product $37.1 billion are now widely used in printing. These Gross domestic product 0.3% inks do not give off volatile organic comPersons employed 596,000 pounds as oil-based inks do, and they are Total employee compensation $32.4 billion easier on humans as well as the environment. Additionally, water-based cleaning Source: U.S. Bureau of Economic Analysis. Data are for solvents can be used on plates and presses 2008. that use soy inks. Recycled paper stock has become more common as client demand

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Printing Industry

has increased for it, and print shops also recycle their paper trimmings and waste. Shops that still use photochemical processes for developing plates or negatives recover and recycle the silver from the photographic chemicals they use.

INDUSTRY MARKET SEGMENTS The printing industry is extremely diverse. It includes small, quick-print shops that may have only one or two employees, midsize companies of up to one hundred employees, and large multinational corporations with more than one hundred employees. The following sections describe the different segments of the printing industry in more detail. Small Businesses Small print shops offer a range of printing services that are geared toward small businesses and individuals, including printing business cards, stationery, resumes, and wedding invitations. Typically located within urban areas, such as shopping centers or office buildings, they are often accessible to walk-in customers. Small print shops may be sole proprietorships, limited liability companies, or corporations. Potential Annual Earnings Scale. The chief executive officer (CEO) or president of a small print shop is usually also the owner of the company. According to the Printing Industries of America’s Compensation and Benefits Report, during the 2009-2010 period persons in these positions generally earned between $26,000 and $150,000 per year. The mean annual salary was $65,443, and the median was $60,500. Salaries for vice presidents and general managers of small print shops averaged $65,659 and $57,057, respectively. Sales managers earned an average of $54,372, and customer service representatives earned an average of $47,763. Production planners averaged $53,531 per year. Department supervisors’ salaries averaged $44,880 for bindery supervisors, $43,542 for sheetfed pressroom supervisors, and $46,666 for prepress supervisors. Office and administrative positions averaged $27,306 for human resources assistants, $36,296 for accounting managers, $35,386 for office managers, and $38,612 for estimators.

Clientele Interaction. Many quick-print shops occupy storefronts or office space, and they provide excellent opportunities for employees to interact closely with customers. Walk-in customers often need help with photocopying tasks and rely on the experience of shop employees to help them. Customers who are purchasing printing services frequently want advice on design, especially with regard to choice of paper stock and ink colors. Press operators may even come out to the front counter to speak with clients. Small shops that are not quick printers are usually located in light industrial parks, where walk-in business is not common. They may have reception areas for clients, but usually their sales representatives call on clients at their workplaces. There is little interaction between production employees and customers in these businesses, as most customer service is handled outside of the shop by salespersons, or over the telephone or through e-mail by customer service representatives and receptionists. Amenities, Atmosphere, and Physical Grounds. Quick-print shops constitute the printing industry’s second-largest segment in number of establishments. Many quick-print shops have storefronts that include one or two small printing presses, bindery equipment, and storage space for paper and ink in the back, which also serves as the pressroom. The atmosphere of a quick-print shop is generally relaxed and friendly. The front of the store generally houses a counter, one or more photocopy machines, bookracks with wedding invitation books, and a seating area for clients that includes chairs and a table large enough to accommodate the invitation catalogs. Often, quick-print shops offer a small assortment of office supplies for sale, and they can function as stationery stores for everyday office needs. Quick-print shops that are located in office buildings or office parks are most likely to have these amenities. The physical grounds are usually part of a commercial office building or a shopping center and are usually well groomed. There is usually parking for customers at the front of the building. Typical Number of Employees. Small print shops generally employ between one and fifteen people, usually fewer than ten. The owner of a business often doubles as sales representative and customer service representative and may also handle human resources and accounting. Often, small

Printing Industry quick-print shops are family businesses whose administrative functions are divided so that one person focuses on staffing the front counter and conducting sales while another handles the administrative part of the business. Traditional Geographic Locations. The ten states with the most graphic communications jobs are California, Illinois, New York, Pennsylvania, Texas, Ohio, Wisconsin, Minnesota, New Jersey, and Michigan. However, quick-print and small print shops are located in every state and are usually located in urban and suburban areas. They tend to be very close to commercial businesses, and small print shops are most likely to solicit work from businesses in their local geographic area. Pros of Working for a Small Printing Business. Owners of small printing companies generally have complete control over the kinds of printing services they offer, as well as over the marketing, purchasing, and hiring processes. Small shops are often family businesses and, as such, offer an intimate working atmosphere for both owners and employees. Quick-print franchises often provide training and support services to help owners establish prices and market their services. Franchise owners may group together to purchase materials at reduced rates, so they can price their printing competitively within the local market. Owners do not need to have formal business school training. A small print shop generally operates during regular business hours, especially if it is located within an office building or shopping center. As a consequence, little or no overtime is required of employees. A small print shop’s limited employee base requires each worker to perform a variety of tasks, which keeps the work from becoming repetitive or boring. Employees who enjoy learning new skills will find that they are not blocked from advancing their skill sets within small printing companies. Front-counter employees also have the opportunity to interact directly with customers. Cons of Working for a Small Printing Business. Because they usually have fewer than fifteen employees, small shops may sometimes be stressful places to work. It is not possible to move to a different department to avoid working alongside another employee, for example, and if someone is sick or otherwise absent, another employee must be found to cover for him or her.

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Small printing companies do not pay as well as do midsize and large printing companies. They provide little or no room for advancement and no way to avoid unpleasant tasks. Small shops may not provide health care coverage or disability insurance, and they may offer only a minimum amount of vacation and holiday time. Often, no one on staff has the technical expertise to solve problems or answer questions that may arise about software or equipment. Employees and owners must figure out solutions for themselves or pay consultants or information technology workers, decreasing profits. For employees, dealing with customers is not ideal because it takes away from the production time needed to complete assignments. Although managers and owners typically deal with customerrelated problems, some employees do not like a working atmosphere where they feel exposed to the public. Costs Payroll and Benefits: Small print shops generally hire just a few workers, but they pay more than minimum wage. Small shops are not mandated by the government to provide benefits, although many offer some vacation and sick leave to their employees. Supplies: Small print shops require standard office supplies and cleaning materials, as well as printing machinery, computer hardware and software, and specific cleaning materials for pressrooms. An assortment of ink and bindery supplies must be kept on hand. Paper is a large portion of any print shop’s budget and typically represents just about one-tenth of all expenses. External Services: Most small print shops rely on their landlords to supply landscaping and snow removal. Routine cleaning services may be taken care of by the shop staff or contracted out to a janitorial service. Small print shops generally lease space from office buildings or shopping centers. They carry property and casualty insurance to cover theft and damage, as well as liability insurance to cover personal injury. Small print shops may ship their finished products directly to customers and may use local couriers or delivery services. Occasionally, they may use a nationwide service such as FedEx or DHL. Utilities: Typical utilities for a small print shop include electricity, telephone, and Internet ser-

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Printing Industry

vices. Water and sewage expenses may be included in a lease or paid separately. Taxes: Small print shops must pay federal, state, and local income taxes. They are also responsible for collecting sales taxes on their sales. Midsize Businesses Midsize print shops offer a wide range of printing services. The majority of their customers are business clients. Midsize print shops are generally located in office parks or light industrial parks and have few walk-in customers. Most employ dedicated sales representatives. They are most likely to be limited liability companies or corporations. Potential Annual Earnings Scale. Midsize print shops have a wider range of job titles than smaller shops, and owners are not necessarily plant managers. A CEO or president of a midsize printing company may see a salary as low as $45,000 or as high as $300,000, according to the Printing Industries of America’s 2009-2010 Compensation and Benefits Report. The average annual take-home pay for a chief executive in those years was just over $136,000. The salaries for chief operating officers, vice presidents, and general managers ranged between $32,400 and roughly $190,000, with an average of just over $103,000. Salaries for plant managers, vice presidents for operations, and production managers ranged from $32,000 to $189,987, and salaries for financial managers ranged from $31,800 to $143,688. Sales manager positions at midsize printing businesses varied widely but averaged just over $92,000. Marketing and business development managers earned average salaries of $66,228, and human resources managers and directors averaged $52,500. Environmental health and safety managers averaged $66,859, while quality managers averaged $57,603. Bindery supervisors earned an average of $49,412; sheetfed pressroom supervisors earned $60,015; web-fed pressroom supervisors earned $52,323; and prepress supervisors earned $58,056 on average. Office managers averaged $44,000; human resources workers and administrators averaged $36,000; bookkeepers averaged $42,800; customer service representatives averaged $40,000; and cost estimators averaged just over $45,000. Clientele Interaction. Employees at most midsize shops have fairly limited exposure to customers. Typically, a company’s salespeople and cus-

tomer service representatives handle contact with the clients on a day-to-day basis. Shops that offer design services may invite customers to meet and work with their in-house design staffs on their premises. Amenities, Atmosphere, and Physical Grounds. Midsize print shops are generally situated in office parks or light industrial areas and are most likely in suburban areas rather than downtown city locations. They are typically not located close to restaurants and often provide food-vending machines for their employees’ convenience. They also generally provide refrigerators, microwave ovens, water fountains, and coffee service, and some offer small dining areas. The atmosphere of a midsize print shop is that of a manufacturing plant. A plant’s front office generally houses sales, administrative, and managerial staff. Its prepress department is also typically found in the front office area, so the department’s computers may be kept in a climate-controlled environment. The back of a typical printing shop includes presses, bindery equipment, a warehouse, and loading docks. Shops’ physical grounds are usually office parks, which are generally maintained by management companies. A printing plant may be in its own separate building or may occupy a portion of a larger warehouse. Free parking is typically available and is shared by all the companies within a given office park. Typical Number of Employees. Midsize print shops employ between sixteen and one hundred people. A typical staff includes a general manager, a production manager, a sales manager, a human resources manager, and several department supervisors, including prepress, press, and bindery supervisors. Employees typically perform one or two tasks each and tend to specialize more than workers in small print shops. Larger midsize shops may also employ quality managers. Additionally, midsize plants may have more than one work shift, and some are unionized. Employees may be required to work overtime in order to meet printing deadlines. Traditional Geographic Locations. Midsize print shops are located throughout the country, within suburban office parks and light industrial regions of most major cities. The top ten states for printing are California, Illinois, New York, Pennsylvania, Texas, Ohio, Wisconsin, Minnesota, New

Printing Industry Jersey, and Michigan. Large metropolitan areas, such as Washington, D.C., are also home to a large number of midsize print shops. Pros of Working for a Midsize Printing Business. Midsize printing companies are usually large enough to employ general managers and department supervisors to oversee daily plant operations. Owners maintain control over their businesses, but these managers relieve them of many of the chores associated with running a business. They can focus on marketing their businesses, usually through networking, while purchasing and hiring decisions are made by the management staff. Midsize print shops are also usually large enough to support several workers in each department, so the working atmosphere for employees is somewhat more professional and less intimate than that of small shops. These companies may offer their employees uniforms at no expense, saving them the costs of purchasing and laundering work clothes. Midsize shops may be unionized. Many employees consider this to be an advantage in dealing with their employers. Typically, unions offer pension plans and some kind of disability insurance, while companies offer health care packages, as well as holiday and vacation pay. Some unions offer their members training programs on specific software packages and equipment. Midsize companies may run several shifts and require some overtime. Front office staffs, which include human resources, accounting, sales, and support personnel, work normal business hours, while production employees work in multiple shifts. Second- and third-shift workers earn slightly higher wages than first-shift workers. Teamwork is a part of everyday operations at midsize print shops. With several workers per department, it is easier for an employee to get help with problems from other employees. While there is some variety to the work being done, the kinds of tasks that each employee performs are limited. Production employees are typically isolated from having to deal with customer problems, which allows them to focus on the tasks at hand. Cons of Working for a Midsize Printing Business. Because owners do not need to be involved in the daily task of running midsize businesses, there may be poor communication between an owner and his or her managers. This type of situa-

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tion can lead to poor working relationships among the managers, which may also affect the working atmosphere of the entire shop. Employees may have fewer opportunities for advancement within departments than they would have at larger businesses: Several other employees may perform the same job duties, and lateral movement from one department to another is rare. Some employees or owners consider unions to be a drawback instead of a benefit. Union dues are not optional for employees of union shops, and employees typically have little or no ability to negotiate pay or other employment benefits for themselves: They are bound by the terms of collectivebargaining contracts. Shift work is often undesirable for employees, particularly those with young children. A company may require only a “reasonable” amount of overtime, but what constitutes a reasonable amount is open to interpretation and, often, dispute. Thus, working hours tend to be somewhat unpredictable for production workers. Employees usually have little or no contact with customers and must receive their instructions indirectly, from sales or customer service representatives. Often, breakdowns in communication cause quality problems or prevent work from being completed on time, which usually reflects badly on the production staff and can be a cause for resentment between production and customer relations personnel, as well as harming their companies’ profits. Costs Payroll and Benefits: Midsize print shops have enough employees that they must pay for government-mandated benefits for their workers. Employees are paid more than minimum wage. Vacation, sick time, and holidays are offered to full-time employees and sometimes to part-time employees. A company may offer health care, insurance, and retirement plans. Supplies: Midsize print shops require standard office supplies, kitchen supplies, and cleaning materials. Pressrooms and binderies need heavy machinery and cleaning materials for that equipment. Pressrooms require printing plates, blanket rollers, developing chemicals for the printing plates, ink, and drying powder. Binderies need staples, comb bindings, and other supplies. Mail rooms and warehouses need contain-

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Printing Industry

ers, tape, and packaging materials. Paper costs are a major portion of a midsize print shop’s budget and represent an average of 8.5 percent of expenses. External Services: Landscaping, parking lot maintenance, and snow removal are usually included in a company’s lease. Midsize companies typically hire janitorial services to clean common areas and office areas, while equipment areas and equipment are maintained by shop employees. Midsize print shops typically lease their space in an office park or industrial center. They carry property and casualty insurance to cover damage to equipment from theft or natural disaster and liability insurance to cover injury to employees or visitors. Insurance represents only about 2 percent of expenses. Most midsize print shops have at least one truck or van for local pickup and delivery needs. They may use nationwide shipping and delivery services for customers outside their local areas. Utilities: Typical utilities costs include electricity, telephone, and Internet services. These costs average about 7 percent of a print shop’s expenses. Some utilities, such as water and sewage expenses, may be included in a company’s lease. Taxes: Federal, state, and local income taxes are required. Midsize shops are also responsible for state and local sales taxes. If they work with outof-state customers, they may be required to collect sales taxes for other locales. Large Businesses Large print shops offer the widest selection of printing processes to their customers. They are most likely to attract prestigious clients who want high-quality printing or customers who need large quantities and quick turnaround time. Large shops are almost always located in industrial parks and have dedicated sales representatives. Potential Annual Earnings Scale. Large print shops’ employees have a range of job titles similar to those of midsize shops, but each department tends to have a larger number of nonmanagement positions. Managers supervise more employees and consequently have greater responsibilities and receive increased compensation. As with midsize companies, owners may not be the managers of their plants. The average annual

take-home pay for a large printing company’s chief executive was just over $192,000 for 2009-2010. The salaries of chief operating officers, vice presidents, and general managers at such companies averaged $133,907. Salaries for plant managers, vice president of operations, and production managers averaged $99,922. Chief financial officers, controllers, and financial managers were paid an average of $108,699. Sales managers received $123,126, on average. Marketing and business development managers earned $93,958, and customer service managers earned $66,828. Human resources managers, directors, and personnel managers earned an average of $64,598; environmental health and safety managers were paid an average of $55,734; and quality managers received an average of $66,575. Information technology managers averaged $81,744, while prepress supervisors averaged $67,515. Sheetfed pressroom supervisors averaged $69,038, and webfed pressroom supervisors averaged $67,738. Bindery supervisors averaged $61,765; mail room and fulfillment managers averaged $54,254; and warehouse supervisors averaged $55,837. Office managers received average salaries of $50,966. Receptionists earned $28,467 on average. Human resources and administrative assistants earned $35,125; bookkeepers earned $43,288; purchasing agents earned $48,789; customer service representatives earned $43,517; and cost estimators earned $47,526. Clientele Interaction. Large print shops rarely host customers on site. There is almost no interaction between production employees and customers. Salespeople and customer service representatives handle contact with clients on a day-to-day basis. Companies that offer design services, whether print or Web design, may invite their customers into the shop to meet and work with their in-house design staff. Most clients will never see the pressroom, bindery, or warehouse areas of the shop unless they are on a tour, as allowing nonemployees in such areas is disruptive to the production workflow and represents a safety concern. Amenities, Atmosphere, and Physical Grounds. Large print shops may be situated in office parks, but they are more likely to be found in suburban industrial areas, where they typically occupy single buildings. Amenities for employees include one or more dining areas with refrigerators,

Printing Industry microwave ovens, water fountains, coffee service, and vending machines. There may be a waiting area in the front office for customers and at least one conference room. The atmosphere of a large print shop is that of a manufacturing plant. The front office is usually much smaller than the production area and houses sales, administrative, managerial, prepress, and information technology (IT) staff offices. The front office is climate controlled and generally resembles an ordinary office environment. The back of the printing shop houses the presses, bindery equipment, warehouse, and loading docks. The press and bindery areas are usually noisy, and safety regulations require workers to wear hearing protection. The physical grounds are usually industrial areas that have little or no landscaping. There is usually ample parking for employees and access to the loading dock large enough to accommodate tractor trailers. Typical Number of Employees. Large print shops employ more than one hundred people. These companies have a wider range of management functions, including presidents, vice presidents, plant managers, production managers, sales managers, human resources managers, customer service managers, production planners or schedulers, quality managers, and environmental health and safety managers. Department supervisors are responsible for several employees each, and these jobs include IT managers, prepress supervisors, sheetfed press and web-fed press supervisors, bindery supervisors, mail room supervisors, and warehouse supervisors. Employees typically are highly specialized and may be trained to operate one specific piece of equipment each. Usually, more than one employee is able to perform each job. Shift work is the norm, and employees may be required to work overtime in order to meet printing deadlines. Large print shops are very likely to be unionized. Traditional Geographic Locations. Large printing companies can be found in most large metropolitan areas. They often conduct business nationally instead of relying solely on local businesses for their customer base. Because they often ship their products nationwide, they tend to be situated where there is good access for truck traffic, often just off of main roads or interstates.

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Pros of Working for a Large Printing Business. Large printing companies’ daily operations are handled by plant managers. They are likely to be incorporated and have stockholders. They have several employees per department, and, because departments are large, there is more room for possible advancement within a department. Department supervisors can earn good incomes because they are responsible for large crews. Large print shops may offer uniforms to their production-line employees. They are likely to be unionized. Unions may offer pension plans, disability insurance, and training programs to their members. Large print shops nearly always run three shifts and may require some overtime. Second- and third-shift workers earn night differential or shift differential, which typically amounts to a 3 to 5 percent pay increase. Nonproduction employees work standard business hours. Production employees almost never have to deal with customer problems, since customer service representatives, department supervisors, and sales representatives act as intermediaries between clients and production staff. Thus, production employees can focus on the jobs at hand. Cons of Working for a Large Printing Business. Owners of large businesses are often absent, leaving management on its own to conduct business. This sometimes leads to a poor working relationship between an owner and management, which may also affect the entire shop. The higher number of employees at a large firm reduces the chances of any given employee being promoted to a management position. If such an opportunity does arise, there will be competition for the job, based upon seniority. Lateral movement within a shop is relatively rare. Some employees consider unions to be a drawback, since they are required to join the union to work in a union shop in most states. Union dues are not optional, and employees typically have little or no ability to negotiate pay or other employment benefits outside of their union contracts. Shift work is often undesirable for employees, but it is often the only option for a new hire. Also, some overtime is generally required of production-line employees. Thus, the work tends to be hectic and often tiring, and working hours are unpredictable. Large printing shops tend to have a number of presses and bindery equipment, which makes the working envi-

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Printing Industry

ronment very noisy. Employees in large print shops usually have no contact with customers, which may make it difficult to solve problems. Breakdowns in communication occur and can cause stress. Costs Payroll and Benefits: Large print shops must pay for government-mandated benefits for their workers. Vacation time, sick time, and holidays are offered to full-time employees and sometimes to part-time employees. Retirement plans may be offered, with or without company contributions. Supplies: Standard office and kitchen supplies are needed. Pressrooms require heavy machinery, printing plates, blanket rollers, developing chemicals, ink, drying powder, and cleaners. Binderies require staples and other supplies. Mail rooms and warehouses need containers, tape, labels, and packaging materials. Paper costs are a major expense, representing an average of 8.5 percent of total costs. External Services: If there is a lease, it may include landscaping, property and parking lot maintenance, and snow removal. Otherwise, a large printing shop may employ a landscaping service. Facilities maintenance may be a separate job role at the plant and include janitorial service. Equipment is maintained by press workers and other equipment operators. Large print shops may lease warehouse space or own their own building. Large print shops purchase property and casualty insurance to cover damage to equipment from theft or natural disaster and liability insurance to cover injury to employees or visitors. They may have their own fleets of trucks or vans for local pickup and delivery needs. They may use nationwide shipping and delivery services for customers outside their local areas. Utilities: Typical utilities costs include electricity, telephone, and Internet services. These costs average about 7 percent of a print shop’s expenses. If there is a lease, water and sewage utilities may be included in the lease. Taxes: Federal, state, and local income taxes are required, as well as any state and local sales taxes. Companies may be required to collect sales taxes for other states if they work with outof-state customers.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Most print shops are organized in a similar fashion, with production workers accounting for over half of the jobs in the industry. Printing machine operators alone make up 17 percent of the workforce. Other occupations in the industry include administrative functions, such as accounting and bookkeeping, office support, and sales staff. In large plants, jobs tend to be more compartmentalized. Employees typically handle one or just a few duties, and their tasks tend to be more highly specialized. Midsize companies have fewer departments and more streamlined management systems, with management employees often performing production tasks in addition to their management duties. Production personnel are typically asked to perform more than one task each. Small shops make up about 70 percent of the printing industry. They require workers who are versatile and willing to perform a variety of tasks. These shops generally employ fewer than ten people and are often owner-operated or family businesses. The following umbrella categories apply to the organizational structure of businesses in the printing industry: ■ ■ ■ ■ ■ ■ ■ ■

Business Management Office and Administrative Support Human Resources Sales and Customer Service Information Technology Desktop Publishing and Graphics Production Facilities and Distribution

Business Management Management roles in the printing industry vary widely according to the size of each business. At a small print shop, the owner is usually also the manager and oversees the entire operation of the shop, including production, inventory control, accounting and bookkeeping, customer service, and sales. The owner-manager may also be able to step in and perform production tasks when necessary. In midsize and large printing operations, general managers usually oversee all aspects of printing plants. The general manager position is usually

Printing Industry OCCUPATION

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SPECIALTIES

Cost Estimators Specialty

Responsibilities

Contractors

Perform specified construction work according to architects’ plans, blueprints, codes, and specifications, as well as estimating costs of material, labor, and equipment.

Jewelry estimators

Estimate the amount of material and labor required to produce particular types of jewelry.

Lumber estimators

Calculate the number of feet of lumber necessary to manufacture boxes and crates of specified size and number.

Material listers

Review blueprint and material specifications to determine amount, size, kind, grade, and place of delivery of materials for building construction projects.

Paperboard box estimators

Estimate cost of manufacturing paperboard boxes according to specifications and blueprints.

Printing estimators

Estimate labor and material costs of printing and binding books, pamphlets, periodicals, and other printed matter, based on outlined specifications.

Yardage estimators

Compute amount of fabric needed to produce specified styles of garments in various sizes.

a nontechnical one that does not require the ability to perform production tasks. All other department supervisors report to general managers. Large companies may have fairly large accounting departments, which are usually headed by chief financial officers who oversee the financial operations of entire businesses. This job may involve supervising the accounting or bookkeeping department. At midsize and large printing companies, production is overseen by shop foremen or supervisors. They inspect all aspects of prepress, press, and bindery work; help train apprentices; and are able to step in and perform production tasks as necessary. This position requires extensive knowledge and experience of printing processes. Supervisors schedule and assign jobs and overtime, perform inventories, order materials, and schedule equipment maintenance. They have usually ascended through the ranks and have vocational school or on-the-job training rather than management degrees.

At any printing company, at least one employee must function as a cost estimator. Cost estimators are responsible for determining the costs of materials, labor, time on press, delivery charges, warehousing fees, and any other business expenses involved in production. They add markup charges to these amounts and use them to determine the price for each job. In some smaller printing companies, salespeople may do their own cost estimating. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Owner President/Chief Executive Officer (CEO) General Manager Chief Financial Officer (CFO) Vice President of Sales and Marketing Comptroller Shop Foreman Shop Supervisor Cost Estimator

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Office and Administrative Support Office and administrative support personnel manage the daily operations of printing companies. They do not need any specialized training within the printing field but must be competent within their fields of expertise. Secretaries and administrative assistants perform a wide range of clerical duties within printing plants. They handle routine office tasks, manage reception areas, and greet clients. They order office supplies and handle mail and shipping tasks. Accountants analyze financial information and prepare financial reports. Most accountants have some formal training, and they must be familiar with financial and accounting software. They also need a firm grasp of federal, state, and local financial regulations. Accountants prepare tax forms and work closely with auditors to make sure that company financial records are complete and accurate. Office and administrative support occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Secretary Administrative Assistant Office Clerk Accounting Manager Accountant Bookkeeper Auditor

Human Resources Human resources personnel recruit, hire, and fire employees; administer payrolls and benefits, including insurance; grant promotions; and ensure that companies adhere to a wide range of federal, state, and local employment regulations. In union shops, human resources managers facilitate relations between unions and upper management and may participate directly in collective-bargaining negotiations. Small and some midsize printing companies may not have dedicated human resources directors. The department is responsible not only for placing job advertisements but also for ensuring that those advertisements comply with equal employment opportunity laws. Human resources directors and managers screen resumes, conduct initial job interviews, and administer any tests that may be required of applicants. One of the more important requirements of a human resources manager’s job

is to stay abreast of the many state and federal regulations that cover employee relations and to enforce hiring and promotion policies that are in accordance with these regulations. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Human Resources Coordinator Human Resources Generalist Benefits Specialist Payroll Clerk

Sales and Customer Service Sales representatives solicit work from clients and potential clients. They need to have general knowledge about the printing industry because they must understand what services their company has to offer and why those particular services are valuable to clients. Representatives identify potential clients, follow up on leads and referrals, and make client presentations. They often take paper samples, ink-swatch books, and finished printed materials to show to clients. Sales representatives are essential to the success of any printing plant, and clients often change printers in order to follow sales representatives who are sensitive and responsive to their business printing needs. Customer service representatives work closely with sales departments. As soon as sales representatives bring in new jobs, customer service representatives take over the management of those projects. They write up job orders, pass financial information to the accounting department, and put jobs into production. Customer service representatives order material and supplies for jobs and coordinate with subcontractors for finishing, shipping, or warehousing needs. They must have excellent organizational and communication skills and be able to work in high-pressure environments. Sales and customer service occupations may include the following: ■ ■ ■ ■ ■ ■

Customer Service Representative Customer Service Manager Sales Manager Printing Sales Executive Printing Sales Representative Sales Account Representative

Printing Industry Information Technology The printing industry is highly computerized, yet only the largest plants may employ full-time information technology (IT) specialists. Small quickprint shops may have a few desktop computers in the production department. Production-department computers may or may not be networked, although office computers generally have Internet access and e-mail capability. Midsize and large companies often have at least one dedicated IT staffer, and this employee is responsible for maintaining both a company’s computer hardware and its software. Database managers compile and maintain company databases. They may also create and maintain databases for customers, particularly for variableprinting projects. Database managers usually have some college or formal computer training. IT occupations may include the following: ■ ■

Computer Specialist Help Desk Specialist

■ ■

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Information Technology Specialist Database Administrator

Desktop Publishing and Graphics Desktop publishers and graphic artists typically work in an office environment. Desktop publishers must be able to work on the PC and Macintosh computer platforms and be fluent with page-layout and graphics software. They also commonly work with word processing software, database files, and presentation software and must know how to extract data from these files if necessary. Desktop publishers may on occasion also do some writing and editing of materials. While desktop publishing has largely replaced typesetting and paste-up, true typesetting is still performed by artisan letterpress companies. Graphic artists design and create the artwork for a wide variety of items, from books and newspapers to advertising, packaging, and Web sites. They usually have bachelor’s degrees or design school experience, and they must understand the printing process. Graphic artists also meet with clients to

OCCUPATION

PROFILE

Compositor and Typesetter Considerations

Qualifications

Description

Using mostly computers, puts written text into a form that printers can use to produce printed matter.

Career clusters

Arts, A/V Technology, and Communications; Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma/technical training; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; part-time work

Licensure and certification

Usually not required

Employment outlook

Decline expected

Holland interest score

CRE; RCE; RCS

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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discuss projects and make sure that designs stay on target and within clients’ budgets. Desktop publishing and graphic arts careers are likely to appeal to freelance workers, who often work at home on their own equipment. They often work irregular hours, including shift work and weekends. Desktop publishing and graphics occupations may include the following: ■ ■ ■ ■

Desktop Publisher Graphic Artist Graphic Designer Typesetter

Production Production is the largest labor segment of the printing industry, accounting for 53 percent of total employment. Printing-machine operators alone account for 17 percent of industry employment. Production roles within the industry fall into three broad categories: prepress, press, and postpress (also called bindery or finishing). Prepress technicians prepare materials to go on press. A prepress technician takes a customer’s electronic files and checks them for problems before outputting them to printing plates. In small

OCCUPATION

shops, prepress technicians may also do graphic design work. In midsize and large print shops, one prepress technician may do mostly layout and graphic-related work, while others specialize in color separations or imposition. In some shops, dedicated preflight technicians make sure that all of a customer’s files are present and are ready to go into production. Preflight technicians use software to scan files for problems and act as intermediaries between customer service representatives or salespeople and the prepress department. They are sometimes responsible for scheduling work. Printing-machine operators run presses and are responsible for routine equipment maintenance. They review materials coming from the prepress department and inspect printing plates for damage or problems. Presspersons or assistant presspersons deliver final printed materials to paper cutters, bindery departments, or warehouses as appropriate. Bindery workers assemble trimmed printed sheets into magazines, newsletters, or other finished products. They operate bindery equipment such as stitchers, folders, and other finishing equipment. Bindery work is highly automated.

SPECIALTIES

Bindery Workers Specialty

Responsibilities

Bindery machine setters

Set up machines that perform one or more bindery operations, such as folding, cutting, gathering, stitching, or gluing, following blueprint or job specifications. They gather signatures (pages) and form book bodies for binding.

Book-sewing machine operators

Tend machines that sew sheets of gathered and collated signatures (pages) into book form preparatory to binding.

Bookbinders

Cut, assemble, sew, and glue components to bind books according to specifications, using sewing machines, hand presses, and handcutters.

Case-making machine operators

Tend machines that glue covering material to cover boards to assemble covers.

Casing-in-line setters

Set up machines that convert signatures (pages) into a finished book.

Printing Industry Bookbinders finish printed pages into books. They cut, fold, and glue paper to create finished books. Bookbinders may produce perfect-bound paperback books, or they may work in hand binderies, creating specialty bindings for limited-edition books. Bookbinders may also repair and restore books. Production occupations may include the following:

as picking up supplies for the front office or materials for the shop floor. Facilities and distribution occupations may include the following: ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■

Preflight Technician Prepress Technician Pressperson Assistant Pressperson Cutter Folder Operator Platemaker Bindery Worker Bookbinder

Facilities and Distribution Small print shops are often located in office buildings or shopping centers and do not employ their own facilities managers. Typically, building and property maintenance is taken care of by a property’s owner. Print shop employees or owners clean their shops themselves, or the shops may employ independent cleaning companies. Midsize printing companies are often located in office parks that provide building and property maintenance. Large printing companies are most likely to employ full-time workers to provide building maintenance and to take care of routine tasks such as trash removal. Facilities managers also supervise the recycling of paper and chemicals. Warehouse employees unload raw materials from delivery trucks and store them or deliver them to the proper departments. They must perform routine lifting of materials and be trained in the use of forklifts. The job requires the use of safety equipment, such as steel-toed work books, hardhats, and hearing protection. Warehouse managers oversee the packaging of finished printed products and their preparation for shipment to clients. Boxed products may be loaded onto company vans or trucks for local delivery, or they may be held in warehouses to be picked up by third-party delivery services. Drivers deliver printed materials to clients or to other companies for finishing. They may also perform errands, such

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Facility Manager Warehouse Manager Warehouse Worker Shipping and Receiving Clerk Driver

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise, although growth is projected to be modest, averaging about 2 percent. The growth rate for domestic commercial conventional printing is expected to be less than 1 percent through 2020, while the growth rate for digital printing is expected to reach 7 percent or more. Ancillary services are expected to grow at a rate of about 4.5 percent. Printing is a major American industry, representing 1.2 percent of the total annual economic output of the United States. There are more than 36,500 printing plants within the United States, employing more than 965,000 people. This makes printing the second-largest manufacturing industry by number of plants and the third-largest manufacturing industry by number of employees. However, as printing processes have become more automated, fewer employees have been needed to perform tasks that used to be done by hand. Within the first decade of the twenty-first century, the number of employees in the domestic printing industry declined by approximately 300,000, or about 37 percent. The U.S. Bureau of Labor Statistics (BLS) forecasts that jobs in the printing industry and its associated support businesses will continue to decrease, and it expects that approximately 95,000 jobs will be lost between 2008 and 2018. Overall, this represents an approximate 16 percent employment decline within the industry. Bindery jobs are expected to decrease by 19 percent. Much of the projected decrease in industry jobs will result from reductions in the amount of advertising supplements being printed, as businesses

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Printing Industry

jobs, most of the decrease is projected to result from continued automation within the industry, which will reduce the need for large numbers of workers. Printing and Related Support This is often referred to in the industry Activities as “lights-out prepress.” Prepress technicians who have good customer serEmployment vice skills will continue to remain in demand, and those who can expand 2009 Projected 2018 Occupation their skill base to include Web design, 44,470 37,200 Bindery workers database management, or other IT functions will have the best job oppor23,470 20,900 First-line supervisors/ tunities. managers of production and Globally, the printing industry is operating workers predicted to grow from its 2008 value 25,130 22,800 Job printers of $401.1 billion to $455.5 billion in 2013, representing an annual growth 32,210 27,400 Prepress technicians and rate of 2.6 percent. Commercial printworkers ing represents 47 percent of the global industry’s revenue, while newspapers 95,830 96,300 Printing machine operators account for 29.7 percent of revenue. Book printing represents 7.4 percent Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment of global revenue, and magazine printProjections Program. ing represents just 4.9 percent. The Americas and the Asia-Pacific region each account for roughly 35 percent of global commercial printing volume. Europe represents 27.7 percent, and the continue to transition away from physical advertisrest of the world accounts for less than 2 percent. ing and toward electronic advertising methods. On The outlook for the global print market is expected the other hand, U.S. printing demand is likely to to remain good. Despite fears of outsourcing jobs, continue to be satisfied domestically. The need for most of the printing consumed in the United States quick turnaround times make it difficult to outis produced domestically. Print buyers tend to be source most printing tasks overseas. Thus, much less sensitive to printing costs and instead value bindery work will continue to be handled by doquick turnaround times and quality above price. mestic printers. Job prospects are best for experienced bindery workers and those who have certifiEmployment Advantages cation or experience in related production tasks. Careers in the printing industry appeal to peoJobs for printing-press operators are expected ple who enjoy working as part of a team in order to to decline by 5 percent through 2018, mainly beproduce finished products. Print production workcause fewer operators will be required to operate ers generally have a realistic outlook, like to work each of the newer, more efficient presses now in with machinery and computer equipment, and enuse. In particular, the newspaper industry should joy problem solving. expect to see a loss of press operator jobs, while the A college degree is not necessary to begin a cacontinued growth of digital printing will result in reer in the printing industry. Entry-level jobs, espeample job opportunities for workers who can opercially those in the postpress segment of the indusate digital presses. Also, as the current workforce try, often require only a high school diploma or the ages, retiring employees will leave room for new equivalent. Most press operators have some techniworkers to enter the industry. cal training, and they may get their education Prepress technician jobs are expected to decline through a technical college. However, many press by 13 percent through 2018. As is true of bindery PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Printing Industry operators gain experience by working as pressroom assistants and receive on-the-job training. Many have a combination of formal schooling and experience. Prepress operators may have formal graphic arts training from community colleges, technical colleges, or associate’s or bachelor’s degree programs, although their jobs do not typically require such degrees. Wages in the printing industry are very good. For instance, prepress technicians earn a median salary of just over $19 per hour, while press operators earn $22 or more per hour, depending on the equipment being used and the skill of the operator. Even bindery workers usually earn more than minimum wage, starting around $12 per hour.

National Association for Printing Leadership 75 W Century Rd., Suite 100 Paramus, NJ 07652 Tel: (201) 634-9600 Fax: (201) 634-0324 http://www.napl.org

Annual Earnings The domestic printing industry as a whole has remained fairly strong, even through the recession of 2007-2009. According to a 2009 report by the Printing Industry of America, the domestic industry is expected to grow by an average of 2 percent per year through 2020. In 2008, domestic revenues for the printing industry were $166.6 billion. This number represents both conventional and digital printing, as well as printer’s ancillary services (desktop publishing, Web production, database management, and other information services). Conventional ink-on-paper printing represented 76 percent of the total revenue, digital printing represented 12 percent, and ancillary services represented 12 percent. The global printing industry is similarly robust. Its global revenues in 2008 were $401.1 billion, and it grew at a rate of 2.4 percent per year from 2004 to 2008. The global financial crisis is not expected to prevent this rate from reaching an average of 2.6 percent per year between 2008 and 2013.

Printing Industries of America 200 Deer Run Rd. Sewickley, PA 15143 Tel: (412) 741-6860 Fax: (412) 741-2311 http://www.printing.org

RELATED RESOURCES FOR FURTHER RESEARCH Graphic Arts Education and Research Foundation 1899 Preston White Dr. Reston, VA 20191 Tel: (703) 264-7200 Fax: (703) 620-3165 http://www.gaerf.org

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National Association of Printing Ink Manufacturers 581 Main St., Suite 520 Woodbridge, NJ 07095 Tel: (732) 855-1525 Fax: (732) 855-1838 http://www.napim.org

Seybold Report, Beard Group P.O. Box 4250 Frederick, MD 21705-4250 Tel: (240) 629-3300 Fax: (240) 629-3360 http://www.seyboldreport.com

ABOUT

THE

AUTHOR

Karen S. Garvin has more than thirty years of experience in the printing industry. She has set type by hand, operated a Linotype machine, and run a letterpress. She has worked as a typesetter, graphic artist, paste-up artist, prepress technician, and production manager. Witnessing firsthand the digital revolution in the printing industry, including the advent of desktop publishing and digital printing, she has run her own graphic design business for fifteen years and has also taught classes in desktop publishing and word processing. She holds a bachelor’s degree in communications from the University of Maryland University College.

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Printing Industry FURTHER

READING

Career Overview. “Prepress Technician Careers, Jobs, and Employment Information.” http:// www.careeroverview.com/prepress-techniciancareers.html. _______. “Printing Machine Operator Careers, Jobs, and Employment Information.” http:// www.careeroverview.com/printing-machineoperator-careers.html. Casals, Ricard. The Future of Printed Signage: Market Opportunities. Leatherhead, Surrey, England: Pira International, 2008. Clark, Richard P., and Pamela Fehl. Career Opportunities in the Visual Arts. New York: Checkmark, 2006. Davis, Ronnie H. Beyond the Horizon: Key Dynamics Shaping Print Markets and Printers over the Next Decade. Sewickley, Pa.: Printing Industries of America, 2009. _______. Profiling the Economy and Print Markets, 2009-2010. Sewickley, Pa.: Printing Industries of America, 2009. Febvre, Lucien, and Henri-Jean Martin. The Coming of the Book: The Impact of Printing, 14501800. 3d ed. New York: Verso, 2010. Flecker, Sally Ann, and Deanna M. Gentile. Careers in Printing: The Original Information Media. Sewickley, Pa.: Graphic Arts Technical Foundation, 2002.

MacDougall, Andy. Screen Printing Today. Cincinnati: ST Books, 2005. Parker, Philip M. The 2009-2014 World Outlook for Printing and Binding of General and Trade Books. San Diego, Calif.: ICON Group, 2008. Rose, David S. Introduction to Letterpress Printing in the Twenty-first Century. http://www.fiveroses .org/intro.htm. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Webb, Joe. “How Printing Industry Employment Has Changed Since 2000.” WhatTheyThink?, February 10, 2010. http://blogs.whattheythink .com/economics/2010/02/how-printingindustry-employment-has-changed-since2000.

Private Education Industry ©Monkey Business Images/Dreamstime.com

mary sources of funding are student tuition, endowments, and private investments, rather than government General Industry: Education and Training grants and tax funds. There are Career Cluster: Education and Training some exceptions to this rule, howSubcategory Industries: Elementary and Secondary ever (most notably charter schools Schools; Exam Preparation and Tutoring; Fine Arts and some for-profit degree-granting Schools; Language Schools; Sports and Recreation higher education institutes). By the Instruction; Technical and Trade Schools same token, whereas public schools Related Industries: Higher Education Industry; Public are ultimately answerable to the enElementary and Secondary Education Industry tire electorate of their jurisdiction— Annual Domestic Revenues: $25 billion USD (First which elects and holds accountable Research, 2009) the government officials who overNAICS Numbers: 6111, 6115-6116 see them—private schools are accountable primarily to those who give them money, including tuition payers and donors. Private schools may be for profit or nonprofit. The industry offers INDUSTRY DEFINITION many teaching opportunities, and it also includes numerous supporting occupations such as adminSummary istration, management, marketing, and finance. The private education industry includes all jobs associated with providing educational services History of the Industry through private entities, rather than through pubWhile Massachusetts is often considered the lic institutions. Thus, it includes private, religious, birthplace of formal education in America, there is and parochial elementary and high schools, vocaevidence that the first private schools were actually tional schools, test-preparation service providers, established by Catholic missionaries in what evenprivate tutors, group instruction programs (such as tually became Florida and Louisiana during the language schools), and, to some degree, charter seventeenth century. These schools served the schools. The private education industry differs dual purpose of teaching basic skills and instilling from the public education system in that its priINDUSTRY

SNAPSHOT

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Private Education Industry

A gym is set up for students taking a standardized admission test. Private schools offer classes to help students prepare. (©Betty Copeland/Dreamstime.com)

specific religious values in their students. Throughout the eighteenth century and into the nineteenth, the line between public and private schools was not especially clear. Most schools received their funding from a mixture of private and public sources, but there was not a comprehensive system of public education in place. Without specific government oversight, most schools operated in a way that more closely followed a private education model. Many of these schools focused on a particular specialty, such as religious education, reading and writing, or vocational skills. By the early nineteenth century, a variety of school programs were available, but there was still no comprehensive oversight. The programs generally operated independently of one another and without any mandates from the government as to admissions or curriculum requirements. By the middle of the nineteenth century, factors such as industrialization, urbanization, and immigration led to a need to establish regulated, publicly funded schools to provide education for individuals who were unable to attend private institutions.

Government regulation of school programs increased markedly following the Civil War, and the availability of public schools at all levels brought a dramatic decline in the popularity of private learning institutions. Since the advent of public schools, private schools have found themselves at the center of numerous debates concerning their curriculum choices and funding sources. For example, as World War I unfolded, private schools that taught foreign languages and adhered to particular ethnic customs (especially German) were often accused of promoting American disloyalty. Several state legislatures attempted to pass laws outlawing certain private school practices, but these laws were generally struck down by the courts. Private schools experienced a surge in popularity following World War II but ended up in the middle of another debate in the mid-twentieth century. This debate concerned whether it was appropriate for private schools, particularly those with religious affiliations, to receive public funding of any kind. Debates about funding and revenue are not un-

Private Education Industry common in the academic world. While many private schools are operated on a nonprofit basis, the concept of for-profit educational institutes has been around since ancient Greece. This concept lost favor during the Middle Ages but rose in popularity once again during the fifteenth century Renaissance. It has continued to grow and evolve since that time. Within the United States, for-profit educational programs gained popularity with the founding of private business and accounting schools during the nineteenth century. This popularity was relatively short-lived, however, because public secondary and vocational schools were established during the late nineteenth and early twentieth centuries. For much of the twentieth century, private forprofit educational programs saw their enrollment numbers dwindle, as students favored public institutions for their educational needs. Since the 1970’s, however, for-profit educational programs have seen a significant resur-

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gence. Part of this growth is due to the renewal of the Higher Education Act in 1972, which increased the amount of federal student aid available to students at private, for-profit schools. Additionally, for-profit education programs have become adept at identifying gaps in the availability of educational opportunities in specific subject areas or for specific students and then creating programs designed to fill those gaps. The Industry Today The contemporary private education industry is enormous and includes many different types of programs. These can include private, religious, parochial, or charter elementary and secondary schools; vocational high schools and postsecondary programs; courses to prepare for various school entrance exams or licensing exams; and private tutoring in a wide variety of subjects. As many public schools experience increased enrollment and decreased funding, some parents are turning to

As many public schools experience increased enrollment and decreased funding, some parents are turning to private or religious schools to provide for their children’s education. (©Monkey Business Images/Dreamstime.com)

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Private Education Industry

private or religious schools to provide for their children’s education. Many towns are also experiencing a growth in the number of charter schools establishing themselves within their school districts. Charter schools are publicly funded schools that are operated by private organizations under contracts or charters with the state. These schools obtain a significant portion of their revenue directly from the city or state in which they operate, and they are exempt from certain state and local rules and regulations that usually govern public schools. A school’s charter is reviewed every three to five years to ensure that minimum standards of educational quality are being met. Despite the controversial nature of this arrangement, the number of charter schools continues to increase in the early twenty-first century, particularly in urban school districts. As of the 2004-2005 school year, according to the U.S. Department of Education, approximately 4 percent of publicly funded schools were privately operated charter schools. Some private schools are specifically designed

to serve the needs of children with special needs. These special needs may include language-based learning difficulties, dyslexia, attention or hyperactive disorders, autism, and hearing impairments, as well as more severe learning disorders or complex medical conditions. Parents, knowing that their children require specific services and accommodations, may choose to place them in one of these private schools. Further, in some states, state law allows public school systems and parents to place those students who are not adequately served in the public school system at one of these private special-needs schools, and local and state public school funds are allocated for part or all of this expenditure. As many public schools reduce funding for academic enrichment programs, students are engaging in enrichment activities at private learning centers. Additionally, as classrooms become more crowded and teachers have less time to spend with individual students, parents are obtaining private tutoring services for their children to assist them

Large private schools may have facilities such as computer rooms. (©Dreamstime.com)

Private Education Industry

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A nun teaches at St. Cecilia Academy in Nashville, Tennessee, a Catholic high school. (AP/Wide World Photos)

in their academic development. These services were traditionally provided by individuals or small groups, but they are increasingly the domain of large regional and national companies that provide a variety of tutoring programs and other educational services. Students of all ages attend private test-preparation programs to help them prepare for the standardized admissions tests for high school, college, professional schools, and licensing exams. As school admission at all levels has become more competitive, enrollment in private test-preparation programs has increased. Students are also engaging in test preparation earlier than ever before, because standardized tests are growing steadily in importance. For example, scores on the early high school Preliminary SAT (PSAT) are now very important for obtaining financial aid awards to attend college. The Secondary School Admission Test (SSAT), administered to middle-school students, has also become extremely important to students seeking admission into competitive private high schools.

For students who choose not to attend a traditional four-year college program, private postsecondary vocational education is growing in popularity. These types of programs educate students for particular fields, such as automotive repair, medical technical support, business administration, and computer network administration. Many of these private schools offer two-year associate’s degrees or other formal certification in particular fields, and they may offer job-placement assistance, making them an attractive and affordable alternative to four-year colleges.

INDUSTRY MARKET SEGMENTS The private education industry encompasses many different types of programs. The following sections provide details on different sized programs within the industry. Even within a particular size range, the specifics of a program will be influ-

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Private Education Industry

enced by the type of education it provides and whether it operates on a nonprofit or for-profit basis. Small Programs A typical small educational program serves about one hundred students or fewer. The smallest type of business within the industry can be as simple as one individual offering private tutoring for an hourly rate. The most common small businesses are groups of tutors offering private instruction and small test-preparation companies offering small group classes. Some very small schools may also qualify as a small program, although most are considered midsize because of their larger staffs and facilities. Small programs offer more personalized attention than larger programs, and they may be better equipped to provide specialized training or to handle students with special needs, but they will likely not have the same resources and amenities as larger programs. Potential Annual Earnings Scale. Instructors in small programs are likely to earn less than the industry average salary. The U.S. Bureau of Labor Statistics (BLS) reports that, in general, private elementary and middle school teachers earn about 30 percent less than their counterparts in public schools. Secondary and postsecondary teachers’ wages, by contrast, are on par with those of their public school colleagues. Overall, the average hourly wage for an education, training, or library employee in the private education industry is $26.51, or $29.33 for those in nonprofit schools. Elementary and middle school teachers average $25.34 per hour in private schools or $25.32 per hour in nonprofit schools. Secondary school teachers average $32.47 per hour in private schools or $33.99 per hour in nonprofit schools. Educational administrators average $29.20 per hour in private schools, or $31.39 per hour in nonprofit schools. Various school counselor positions average $20.80 per hour in private schools, or $21.02 per hour in nonprofit schools. Pay scales for ancillary positions, such as maintenance and clerical workers, are similar to those for other employees in their respective industries. Clientele Interaction. The clientele of a business in the private education industry are its students and, often, their parents. Most employees in small companies within the private education in-

dustry have plenty of opportunity to interact with the students, although the nature of this interaction will vary depending on the position held and the type of school or program. Individuals in positions such as teacher, instructor, tutor, and coach have frequent interactions with students, and the qualifications and abilities of these individuals are often the reason why the students (and their parents) choose to participate in a particular program. Individuals in administrative positions may not need to interact with students as frequently, but they will often have the opportunity if they choose to do so. This frequent interaction is one of the primary benefits of small private education programs, for both the employees and the students. Small programs can be a good fit for students looking for specialized instruction in a particular subject area or for students who have special learning needs. Small programs have small staffs, who can work together closely to ensure that their students’ needs are met. Amenities, Atmosphere, and Physical Grounds. A small company that focuses primarily on tutoring may not have any facilities at all; instead, the tutors may travel to the students’ homes. Other small companies might have offices with a few rooms, including space for an administrator, an area for tutors to meet with students, and classrooms for group instruction. Small private, religious, parochial, charter, and vocational schools usually have dedicated buildings, much like small public schools. The buildings have classrooms and administrative offices and some have cafeterias, libraries, and facilities such as gyms with locker rooms, auditoriums, music rooms, computer labs, and science labs. Specific amenities depend on the size of the school, the grade levels taught, and any specific areas of focus. Additionally, most schools employ some type of security personnel, even if it is only a single hall monitor, to ensure that no one gains unauthorized entry to the building. Vocational schools have facilities similar to those of a high school or junior college, with added facilities as needed for the school’s specific programs (for example, an automotive shop or medical equipment). Typical vocational schools have classrooms and administrative offices, and some provide cafeterias, auditoriums, large lecture halls,

Private Education Industry computer labs, science labs, and athletic facilities such as gyms or pools. These schools also have some security personnel to ensure no one gains unauthorized access to the building and to keep track of any expensive equipment on the premises. Typical Number of Employees. A typical small education program will have between one and thirty employees, including instructors and teachers, managers, administrators, and support staff. It may also employ additional support positions, such as maintenance or cafeteria workers, but these services could also be provided by an outside company. Traditional Geographic Locations. Private educational programs can be found all over the country, in towns and cities of all sizes, including rural, suburban, and urban locations. Religious schools are likely to be located next to the religious institutions with which they are affiliated. The physical size of an institution can vary considerably. The smallest programs, particularly those that specialize in private tutoring, might not have any facilities at all, or might have a small suite of offices and small classrooms. Other programs, such as private, religious, charter, or vocational schools, will have their own dedicated buildings containing classrooms, administrative offices, computer and science labs, libraries, and athletic facilities. A program that resides in its own dedicated space will have a more cohesive feel than one with just a few administrative offices for its staff. If the students have a place to congregate, they will feel like they are part of a greater whole, which fosters a more cooperative learning atmosphere. This is particularly important for any group instruction program, including private elementary, secondary, postsecondary, and vocational schools. Pros of Working for a Small Education Program. Small private education programs generally offer excellent opportunities to interact with students on an individual basis. This is a benefit to both the staff and the students, who often value smaller programs for this reason. With fewer employees, there are fewer layers of management and thus less bureaucracy when seeking to implement a new idea or to make changes to a program to meet the needs of a particular student. This may lead to greater flexibility in the programs offered, which will allow for more tailored instruction. This flexibility can be of great benefit to students seeking

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specialized instruction in a specific subject area or those with specific learning needs. Cons of Working for a Small Education Program. Many small programs operate with a small staff, so instructors may frequently need to perform administrative and maintenance tasks. Their smaller infrastructures may provide fewer opportunities for advancement than would be available in a larger program. Smaller operating budgets may also limit opportunities to develop new programs or courses, as well as the resources from which to draw when creating such courses and programs for students, particularly those with special needs. Smaller companies may also pay lower salaries than larger institutions pay employees with comparable positions. Costs Payroll and Benefits: Tutors and instructors at test-preparation programs are typically paid by the hour. Instructors at full-time programs, such as small schools, usually earn annual salaries, although some are paid only during the nine or ten months per year that school is in session. Benefit packages can be quite generous or nonexistent, depending on position and employment status (full- versus part-time). Potential benefits include health insurance, retirement packages or pension plans, paid time off, and reduced or free tuition for the institute’s programs. Supplies: Education programs require standard office supplies, telecommunication equipment, computer hardware and software, networking equipment, and audiovisual equipment. Programs with classrooms require desks, chairs, and chalk- or white boards. Many programs provide common areas, which require items such as study carrels, couches, tables, chairs, refrigerators, and microwave ovens. Libraries require a variety of books, journals, and other research materials, as well as subscriptions to computerbased academic research databases. Schools that offer laboratory facilities require benches and stools, fume hoods, glassware, chemicals, storage cabinets, and safety equipment, such as laboratory coats, gloves, and eye protection. Schools that offer athletic facilities require cleaning and maintenance supplies, sporting and exercise equipment, and shower facilities,

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Private Education Industry

and they may provide some basic amenities for spectators. External Services: Education programs may contract landscaping of outdoor facilities, maintenance of athletic facilities, cleaning and janitorial services, and security services. Some small programs may also contract telecommunication and computer networking services. Utilities: Common utility costs include electricity, heat, air-conditioning, water, telephone, and Internet access for classrooms, administrative offices, and common spaces. Taxes: Applicability of state and local taxes depends on many factors, including whether the institution is designated as a nonprofit or forprofit corporation, whether it is affiliated with a religious organization, and whether there is some specific state or federal program affecting taxation. Regardless of tax-exempt status, all institutions must pay payroll taxes on employee salaries. Midsize Programs A midsize education program serves between two hundred and one thousand students. These programs include private, religious, parochial, and charter elementary and secondary schools; secondary and postsecondary vocational schools; and small chains of private tutoring, group instruction, and test-preparation centers. Midsize private schools operate very much like their public counterparts and generally have the same management structure and basic amenities as would a public school of similar size. The differences can include factors such as religious affiliation, educational background of instructors, the possibility for specialization (in the case of a vocational school), and the school’s ability to assist students with special needs in a way that might not be practical in a public school setting. Midsize test-preparation and other group instruction programs are likely to operate more like similarly sized corporations, with a similar management structure. Potential Annual Earnings Scale. Instructors in midsize programs are likely to earn salaries in line with the industry averages. The BLS reports that, in general, private elementary and middle school teachers earn about 30 percent less than their counterparts in public schools. Secondary and postsecondary teachers’ wages, by contrast, are

on par with those of their public school colleagues. Overall, the average hourly wage for an education, training, or library employee in the private education industry is $26.51, or $29.33 for those in nonprofit schools. Elementary and middle school teachers average $25.34 per hour in private schools or $25.32 per hour in nonprofit schools. Secondary school teachers average $32.47 per hour in private schools or $33.99 per hour in nonprofit schools. Educational administrators average $29.20 per hour in private schools, or $31.39 per hour in nonprofit schools. Various school counselor positions average $20.80 per hour in private schools, or $21.02 per hour in nonprofit schools. Pay scales for ancillary positions, such as maintenance and clerical workers, are similar to those for other employees in their respective industries. Clientele Interaction. As is true in small programs, most employees of a midsize education program have plenty of opportunities to interact with students, although the nature of this interaction will vary depending on the position held and the type of school or program. Individuals in positions such as teacher, instructor, tutor, and coach have frequent interactions with students; individuals in administrative positions may not interact with students as frequently, but they often have the opportunity to do so if they choose. A midsize private education program often represents a good compromise between the personalized attention students receive from small private school programs and the amenities offered by large programs. Midsize programs are valued by many families because of the high academic standards and individualized attention afforded students. Many private schools, designated as college preparatory schools, are valued for the high caliber of their college placements, and the competition between these institutions and their students for spots in top colleges and universities can be fierce. Midsize schools can also be a good fit for students with special needs, as they are small enough to give individualized attention to particular students but have large enough student populations to provide the necessary student services, amenities, and equipment for particular learning needs. Amenities, Atmosphere, and Physical Grounds. A midsize company that focuses on tutoring, test preparation, and other group instruc-

Private Education Industry tion will have classrooms, administrative offices, and student lounge areas. It may have an auditorium, computer labs, a library, and a cafeteria, but it is unlikely to have athletic facilities or science laboratories, unless they are necessary for the specific type of instruction offered. Midsize private, religious, parochial, and charter schools have dedicated buildings, much like similarly sized public schools. They have classrooms, administrative offices, cafeterias, auditoriums, music rooms, computer labs, science labs, and facilities such as gyms with locker rooms, athletic fields, and possibly swimming pools. Some midsize private schools also provide room and board for students. In these cases, dormitories with resident advisor (staff) housing are provided. Cafeterias provide three meals each day for these students, and on-campus housing for all staff is often the norm. Some midsize private high schools have very competitive sports teams and may have significant athletic facilities devoted to these teams, including special fields, stadiums, and amenities for spectators. The specific amenities depend on the size of the school, the grade levels taught, and any specialty the school might have. These schools can be located in a rural area, town, or city; a religious school is likely to be located next to the religious institution with which it is affiliated. Additionally, most schools employ security personnel to ensure that no one gains unauthorized entry to the campus. Midsize vocational schools can also be located in any town or city and have facilities similar to a high school or junior college, with added equipment as needed for the school’s specific programs (for example, an automotive shop or medical training facilities). Vocational schools generally include classrooms and administrative offices, cafeterias, auditoriums or large lecture halls, computer labs, science labs, and possibly some athletic facilities such as gyms or pools. These schools also employ security personnel to ensure no one gains unauthorized access and to keep track of any expensive equipment on the premises. Typical Number of Employees. A typical midsize private education program has between thirty and one hundred employees, including full- and part-time staff, such as instructors, principals and assistant principals, managers, directors, and ad-

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ministrators. This number may include additional support positions such as maintenance or cafeteria workers, but it is also possible that those services may be contracted through outside companies. Traditional Geographic Locations. Midsize private education programs can be found all over the country in a variety of geographic areas, but they are most often found in suburban or urban locations, with boarding schools often located in more rural areas. The physical size of the institution can vary considerably. Midsize tutoring, testpreparation, and group instruction programs might still reside in a small office building or a single floor in a larger building, as they do not require as many additional facilities. Midsize private, religious, charter, and vocational schools often have many additional facilities, including outdoor sports fields and recreation areas, and will accordingly require more space. Regardless of the type, programs that offer common meeting and recreation areas for students and staff foster a more cooperative learning atmosphere than programs that do not have such spaces. This is particularly important for programs such as private, religious, parochial, charter, and vocational schools, as well as other group instruction programs. Pros of Working for a Midsize Education Program. Many midsize private education programs offer a satisfying balance between the individualized student interaction of small programs and the greater amenities of large programs. The greater numbers of staff, enrollment, and revenue may provide more opportunities to create or expand programs and course offerings. Larger staffs result in more hierarchical business structures, which may provide greater opportunities for advancement or for lateral moves between instruction and administration. Additionally, some private schools offer discounted or free tuition to their employees’ children. Cons of Working for a Midsize Education Program. Since midsize schools employ more people, the hierarchical management structure may create more bureaucracy, making it logistically more difficult to implement new ideas than one might find in a smaller school. There may also be greater competition between instructors for funds for academic programs, extracurricular activities, and classroom supplies. Additionally, many

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Private Education Industry

private schools do not pay as well as their similarly sized public counterparts, and they may not offer perks such as tenure or benefit and pension plans comparable to those offered by public schools. Costs Payroll and Benefits: Teachers and instructors in schools generally earn salaries. Instructors in midsize test-preparation programs and tutoring companies are often paid hourly wages. Those wages may include travel time for tutors who drive to their students’ homes. Benefit packages range from generous to nonexistent, depending on position and employment status (fullversus part-time). Potential benefits include health insurance, retirement packages or pension plans, paid time off, and reduced or free tuition. Supplies: Supplies include all standard office supplies, plus telecommunication equipment, computer hardware and software, networking equipment, and audiovisual equipment. Programs with classrooms require desks, chairs, and chalkor white boards. Programs that provide common areas require items such as study carrels, couches, tables, chairs, refrigerators, and microwave ovens. Libraries require a variety of books, journals, and other research materials, as well as subscriptions to computer-based academic research databases. Laboratory facilities require benches and stools, fume hoods, glassware, chemicals, storage cabinets, and safety equipment, such as laboratory coats, gloves, and eye protection. Dormitories are required for boarding schools. Schools that offer athletic facilities require cleaning and maintenance supplies, sporting and exercise equipment, and shower facilities, and they may provide some amenities for spectators. External Services: External services commonly contracted by midsize education programs include landscaping, maintenance of athletic facilities, cleaning and janitorial services, and security services. Some programs may contract out telecommunication and computer networking services. Utilities: Common utility costs include electricity, heat, air-conditioning, water, telephone, and Internet access for classrooms, administrative offices, and common spaces.

Taxes: Applicability of state and local taxes depends on many factors, including whether the institution is designated as a nonprofit or forprofit corporation, whether it is affiliated with a religious organization, and whether there is some specific state or federal program affecting taxation. Large Programs A large program within the private education industry will generally serve more than one thousand students. These programs include private, religious, parochial, and charter elementary and secondary schools; secondary and postsecondary vocational schools; and large chains of private tutoring, group instruction, and test-preparation centers. Large schools operate very much as do their public school counterparts and generally have the same management structures and basic amenities as public schools of similar size. The differences can include factors such as religious affiliation, quality of instructors, possibility for specialization (in the case of vocational schools), and ability to assist students with special needs in a way that might not be practical in a public school setting. Potential Annual Earnings Scale. Instructors in large programs are likely to earn salaries slightly above industry averages. The BLS reports that, in general, private elementary and middle school teachers earn about 30 percent less than their counterparts in public schools. Secondary and postsecondary teachers’ wages, by contrast, are on par with those of their public school colleagues. Overall, the average hourly wage for an education, training, or library employee in the private education industry is $26.51, or $29.33 for those in nonprofit schools. Elementary and middle school teachers average $25.34 per hour in private schools or $25.32 per hour in nonprofit schools. Secondary school teachers average $32.47 per hour in private schools or $33.99 per hour in nonprofit schools. Educational administrators average $29.20 per hour in private schools, or $31.39 per hour in nonprofit schools. Various school counselor positions average $20.80 per hour in private schools, or $21.02 per hour in nonprofit schools. Pay scales for ancillary positions, such as maintenance and clerical workers, are similar to those for other employees in their respective industries.

Private Education Industry Clientele Interaction. Within a large private school, there is generally still much opportunity to interact with students. Employees in positions such as teacher, instructor, tutor, and coach do so frequently, and administrators often have the opportunity for student interaction if they so desire. Large tutoring, test-preparation, and group instruction programs are likely to have more corporate structures than their smaller competitors, and administrative staff members may have fewer opportunities for student interaction. Large private education programs have more students, staff, and revenue and can provide more amenities to the students. As a result, many of these programs provide excellent facilities for students seeking specialized instruction in particular subjects or for students with special needs. As in midsize schools, some college preparatory schools are extremely competitive in the area of college admissions, and their reputation depends heavily on the caliber of schools to which their students are accepted. Large programs that follow a more corporate model may have less opportunity for student interaction and less program flexibility, so they may not be able to provide the individualized attention to these students that a smaller program might provide. Amenities, Atmosphere, and Physical Grounds. Large companies that focus on tutoring, test preparation, and other group instruction have dedicated buildings, or occupy several floors of large buildings. These buildings house classrooms, administrative offices, and student lounge areas. They may have auditoriums, computer labs, libraries, and cafeterias, but they are unlikely to have athletic facilities and science laboratories unless they are necessary for the specific type of instruction offered. Large private, religious, parochial, and charter schools have dedicated buildings, much like similarly sized public schools. These buildings have classrooms, administrative offices, cafeterias, auditoriums, music rooms, computer labs, science labs, and facilities such as gyms with locker rooms, athletic fields, and possibly swimming pools. Again, these schools may board students, requiring dormitories with resident staff housing. Many large private high schools have very competitive sports teams and may have significant athletic facilities devoted to these teams, including spe-

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cial fields, stadiums, and amenities for spectators. The specific amenities depend on the size of the school, the grade levels taught, and any specialty the school might have. These schools can be located in any town, city, or rural area; a religious school is likely to be located next to the religious organization with which it is affiliated. Additionally, most schools employ security personnel to ensure that no one gains unauthorized entry to their buildings. Large vocational schools can also be located in any town or city and have facilities similar to a high school or junior college, with added equipment as needed for the school’s specific programs (for example, an automotive shop or medical training facilities). Vocational schools generally include classrooms and administrative offices, cafeterias, auditoriums or large lecture halls, computer labs, science labs, and possibly some athletic facilities such as gyms or pools. These schools also hire security personnel to ensure that no one gains unauthorized access to the building and to keep track of any expensive equipment on the premises. Typical Number of Employees. A typical large private education company has more than one hundred employees. This number includes fulland part-time staff, such as teachers, instructors, principals and assistant principals, directors, managers, administrators, and numerous support staff positions. Some large companies may contract out maintenance, janitorial, cafeteria, or security work, while others have their own in-house staff to fill these positions. Traditional Geographic Locations. Large private education programs can be found all over the country in a variety of geographic areas, but they are most often found in suburban or urban locations. Large tutoring, test preparation, and group instruction programs may have dedicated office buildings, or they may occupy several floors inside a larger building. Often, these companies are chains and will have facilities in multiple locations, as well as a central office located in a major city. Large private, religious, parochial, charter, and vocational schools often have many additional facilities, some in a campus setting that includes outdoor sports fields and recreation areas that require more space. Pros of Working for a Large Education Program. Large private education companies usually have more amenities and more funding than their

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Private Education Industry

smaller counterparts. Accordingly, they provide a greater variety of programs and more opportunities to create and expand programs for students. Because of their larger staffs, the hierarchical management system may provide greater opportunities for career advancement than are to be had in smaller programs. Increased funding and availability of support staff may create more opportunities to establish or expand programs to better serve students. Larger programs, particularly private forprofit companies, may provide higher salaries and more comprehensive benefits packages than do smaller programs of a similar kind. Some offer discounted or free tuition for their employees’ children. Cons of Working for a Large Education Program. The hierarchical management structure within a large school creates more bureaucracy, which may make the implementation of new ideas logistically difficult. There will also be more departments competing for funds and other resources. Large programs in the tutoring, test-preparation, and group instruction business may also operate more like large corporations, which does not always mesh well with educational ideals. While the salary and benefits available at a large private education company may be better than those offered at smaller companies, they may still not be as good as what one could obtain from a similarly sized public school. Costs Payroll and Benefits: Teachers and instructors in schools generally earn salaries. Instructors in midsize test-preparation programs and tutoring companies are often paid hourly wages. Those wages may include travel time for tutors who drive to their students’ homes. Benefit packages range from generous to nonexistent, depending on position and employment status (fullversus part-time). Potential benefits include health insurance, retirement packages or pension plans, paid time off, and reduced or free tuition. Supplies: Supplies include all standard office supplies, plus telecommunication equipment, computer hardware and software, networking equipment, and audiovisual equipment. Programs with classrooms require desks, chairs, and chalkor white boards. Programs that provide com-

mon areas require items such as study carrels, couches, tables, chairs, refrigerators, and microwave ovens. Libraries require a variety of books, journals, and other research materials, as well as subscriptions to computer-based academic research databases. Laboratory facilities require benches and stools, fume hoods, glassware, chemicals, storage cabinets, and safety equipment, such as laboratory coats, gloves, and eye protection. Dormitories are required for boarding schools. Schools that offer athletic facilities require cleaning and maintenance supplies, sporting and exercise equipment, and shower facilities, and they may provide some amenities for spectators. External Services: External services commonly contracted by large education programs include landscaping, maintenance of athletic facilities, cleaning and janitorial services, and security services. Some programs may contract out telecommunication and computer networking services. Utilities: Common utility costs include electricity, heat, air-conditioning, water, telephone, and Internet access for classrooms, administrative offices, and common spaces. Taxes: Applicability of state and local taxes depends on many factors, including whether the institution is designated as a nonprofit or forprofit corporation, whether it is affiliated with a religious organization, and whether there is some specific program affecting taxation.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Because of the wide variety of programs that fall within the private education industry, any particular company may or may not have specific individuals or departments fulfilling all of these positions. However, all of these different areas represent vital functions for a private education company of any type or size. Some of the smaller organizations may simply combine multiple functions into a single position or department. The following umbrella categories apply to the organizational structure of businesses in the private education industry:

Private Education Industry ■ ■ ■ ■ ■

■ ■

Business Management Customer Service Sales and Marketing Facilities and Security Technology, Research, Design, and Development Operations Human Resources

Business Management Many private education companies employ a staff dedicated to performing a variety of occupations, both academic and administrative. The business structure of a private, religious, parochial, charter, or vocational school is likely to differ from that of a tutoring, test-preparation, or group instruction company. The former will have a more academic-oriented structure, while the latter will have a more corporate structure. Regardless of type, all private education companies have one or more individuals who fill important managerial roles. Schools are generally led by principals or headmasters and possibly several assistant principals. The principal or headmaster is in charge of setting the overall vision and direction for the school, as well as for providing general oversight to all departments. He or she may also have significant decision-making power concerning academic program

OCCUPATION

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development and budgets. Large schools may employ one or more assistant principals to assist with this task. These individuals have at least four-year degrees and usually have master’s degrees or doctorates in education or educational administration. Within a school, individual departments are led by department chairs, who are often also teachers within those departments. These chairs are responsible for guiding the overall direction of their departments and may have significant decisionmaking power with regard to setting curricula, choosing textbooks, and allocating funding. They have four-year degrees, often in their areas of interest or in education, and often have significant teaching and management or administrative experience as well. Programs with more corporate structures are generally led by presidents, who are in charge of making top-level decisions governing their companies. The largest companies may have boards of directors, who are responsible for setting broad policies and directions for their companies and answering to the companies’ private investors and shareholders. In such a case, the president is responsible for making decisions that execute the board’s policies. The president may be assisted by one or more vice presidents, who are each in charge of specific

SPECIALTIES

Education Administrators Specialty

Responsibilities

Education supervisors

Develop program curriculum, evaluate teaching techniques, and supervise and assist in the hiring and in-service training of teachers.

Principals

Direct and coordinate the educational, administrative, and counseling activities of elementary, junior high, or high schools.

School superintendents

Direct and coordinate activities concerned with the administration of city, county, or other school systems in accordance with board of education standards.

Vocational training directors

Supervise and coordinate vocational training programs according to board of education policies and state education code.

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business functions (for example, finance or marketing). These vice presidents each supervise several department managers, who are responsible for making and executing decisions with respect to their specific departments and managing the employees within those departments. Employees in these various management positions generally have four-year degrees and may have graduate degrees in business or finance, as well as backgrounds in education. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Principal Headmaster Assistant Principal Department Chair Facility Manager President Vice President Department Manager

Customer Service The customers of private education companies are students and sometimes the students’ parents. Depending on the size of a given program, many administrative support services may be required to help students make the most of their experience. There are many positions within private education companies that involve direct interaction with students, but some positions are more customer service oriented than others. Within a private school, many administrative assistants act as gatekeepers to the higher-level managers, such as the principal or headmaster. Employees in these positions frequently interact with students and are responsible for deciding which higher-level administrator should address a particular student’s question or concern. This role is best suited for individuals who are highly organized and extremely patient and who work well with young people. Employees in these positions may have two- or four-year degrees in business administration or another liberal arts field. Additional customer-service positions within schools include those that help students make the most of their education. These include such positions as guidance counselors, psychologists, social service providers, and nurses. Often, those serving in guidance positions in private schools are under

pressure to place students in top academic colleges and universities. These individuals often build strong networks with college and university recruiters and often can expect a high level of parent involvement and interaction related to this process. All of these support positions require individuals who have a great deal of patience and enjoy working with young people. Many, particularly counselors and nurses, require specialized degrees and licenses related to their specific fields. In a company with a more traditional corporate structure, customer service positions usually include receptionists and telephone support staff. Individuals in these positions may have two- or four-year degrees in business, educational administration, or a liberal arts field. They need to have a friendly, helpful, service-oriented demeanor, as well as a great deal of knowledge about their companies and the programs they offer. Customer service occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Administrative Assistant Guidance Counselor Career Development Counselor School Psychologist School Nurse Social Service Provider Social Worker Receptionist Telephone Support Staff

Sales and Marketing Any institution in the private education industry is ultimately a business and must attract new students each year in order to remain in business. The details of how a sales and marketing department operates vary depending on the specific program of which it is a part, but its basic responsibility is always to bring in new students to keep the program alive. In a typical private, religious, parochial, charter, or vocational school, there are several different departments that can be described as sales and marketing. First, the admissions department is responsible for attracting new students by developing promotional materials for the program and sending representatives out to meet prospective students. Second, the external relations department is responsible for interacting with the community

Private Education Industry as a whole to maintain a positive image for the school and, in some cases, to seek outside funding sources. Finally, the alumni relations department is responsible for maintaining strong ties between alumni and the school, in order to foster positive networking connections and raise revenue in the form of donations and scholarship funds. Individuals who work in these positions generally have fouryear degrees in education, communication, marketing, or public relations. The admissions department is also responsible for selecting which students to admit to the school. This requires reviewing application materials and conducting interviews with individual students. Employees who serve this function in the admissions department generally have degrees in education or educational administration and often have either teaching or school administration experience at the appropriate level. In corporate private educational programs, the sales and marketing department more closely resembles that of a traditional company. It prepares promotional materials explaining the program’s details and benefits, and publicizes the program to the larger community. In addition to advertising, this publicity may be accomplished by attending events such as career fairs and trade shows. The purpose of a sales and marketing department is to attract new students and to make enrollment a quick and easy process. Employees of such departments generally have four-year degrees in communications, marketing, or public relations and may have some experience in the education field as an instructor or administrator. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Admissions Director Community Relations Director Alumni Relations Director Public Relations Director Marketing Director Sales Director Graphic Designer Copywriter Photographer

Facilities and Security Any private education company with physical facilities requires maintenance and security services.

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Smaller programs require less maintenance, and they often contract most of the necessary services from external vendors. Even very small programs require security to ensure that only authorized individuals have access to their facilities, for the safety of the students and staff. They either assign this task to a permanent staff member or hire an outside company to provide security personnel. Midsize programs with larger facilities require more maintenance of both indoor and outdoor facilities. They are likely to maintain at least a small staff of permanent workers to fulfill this need. Other services may be provided by outside contractors. Midsize schools require more security staff to monitor access to buildings. This function also may be served by permanent staff members or by outside security firms. Many midsize programs—particularly private, religious, parochial, and charter secondary schools—have athletic programs that require additional maintenance for their physical facilities and corresponding equipment. Depending on the facilities, these needs may be addressed by staff members or by outside companies. Large programs with extensive facilities require a great deal of maintenance, both indoors and out, and they often maintain a significant staff of permanent workers in addition to contracted labor. All programs and companies require janitorial services for classrooms and administrative offices and a staff of individuals ready to make small and moderate repairs quickly. Programs with athletic facilities (generally large private, religious, and charter schools) require maintenance for their fields, gyms, and pools; these services may be provided by full-time dedicated staff members or by outside contractors. Employment requirements vary depending on position. Basic maintenance or janitorial positions may require no advanced education or experience, while more specialized facilities positions may require both special licenses and relevant experience. Qualifications for security positions vary but likely include at least some level of education or certification beyond a high school diploma. Facilities and security occupations may include the following: ■ ■

Building and Grounds Facility Manager Building Maintenance and Repair Worker

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Private Education Industry

Building Security Manager Security Guard Athletic Director

Technology, Research, Design, and Development Many private education companies rely heavily on technology to support their programs. The type of technology employed varies depending on the type of program and the size of the company. Most programs have computers for use by students and staff and maintain local-area networks as well as Internet connections. The more extensive the network (and the more that students and staff rely on it), the more support and assistance are required to keep it functioning at all times. This task may require a dedicated staff of network administrators to keep the system functioning, as well as a help desk available to answer questions. Since most schools and companies maintain all of their records on computers, this is an extremely important function. Information technology (IT) jobs are well suited for people who enjoy problem solving and are willing to work under time constraints when network repairs are needed. Employees in these occupations often have two- or four-year degrees in computer programming, computer systems engineering, or information technology, with concentrations in network systems. Many classrooms are now equipped with audiovisual equipment such as SMART Boards, projectors, televisions, and digital video disc (DVD) players to allow instructors to make multimedia presentations in their classes. This equipment can require a great deal of support and maintenance to ensure that instructors know how to use it properly and to keep it in good working order. The presence of this equipment may require additional security personnel and precautions to ensure its safety from theft. Employees in audiovisual departments may have two- or four-year degrees in computer programming, electrical engineering, or information technology. Private education companies are always working on research and development to ensure that their products provide the greatest possible benefit to their students, the companies, and their investors. As a result, tutoring, test-preparation, and group instruction companies, as well as private schools of all kinds, employ curriculum development pro-

fessionals to regularly review and update the programs offered. Employees in these positions generally have four-year degrees in education and sometimes in the specific subject they are teaching, and they may have additional certification or graduate-level training, such as doctorates in education or curriculum development. In more corporate environments, particularly in for-profit education companies, there may be a research and development team that includes individuals trained in market research. The role of this team is to determine what kind of programs potential students are looking for and what changes they might want to see in currently available programs. This is a very important function, because private for-profit companies need to maximize the value of their programs to students, themselves, and their shareholders in order to maintain a viable business model. Researchers generally have backgrounds in communications and statistical analysis, as well as in education. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Information Technology Manager Network Specialist Computer Support Specialist Audiovisual Support Specialist Curriculum Development Specialist Research and Development Director Market Research Analyst

Operations Since the customer of a private education company is the student and sometimes his or her parents, the “operations” role is that of the educators, including teachers, researchers, and librarians. Qualifications for teachers vary considerably in different private education companies. In private, religious, parochial, and charter schools, teachers are generally expected to have four-year degrees in education or in their specific subjects (particularly in high school). In most states, elementary and secondary school teachers are required to pass licensing exams to teach in public schools, but many states do not require this certification for private school teachers. Vocational schools that are also secondary schools have the same academic and licensing requirements as other high schools, but those that are postsecondary institutions do not. In

Private Education Industry OCCUPATION

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PROFILE

Secondary School Teacher Considerations

Qualifications

Description

Instructs students at the secondary level and creates instructional plans.

Career clusters

Education and Training

Interests

Data; people

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; volunteer work; part-time work

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

SAE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

either case, vocational instructors are expected to have any necessary degrees and qualifications for the specific programs they teach, as well as experience working in the relevant fields and prior teaching experience. In tutoring and group instruction programs, instructors are generally expected to have degrees in the appropriate subject area, and often some prior teaching experience is preferred. There usually is not a licensing requirement to teach in these types of private programs. Librarians and library staff play a very important role in the academic experience at private elementary and secondary schools. Librarians are in charge of selecting library materials, maintaining organized facilities, and helping students find the materials they need for their research and projects, as well as teaching students how to use library resources to conduct research. Librarians usually have master’s degrees in library science, while library support staff may have bachelor’s degrees in related fields.

Operations occupations may include the following: ■ ■ ■ ■ ■ ■

Teacher Instructor Teaching Aide/Assistant Teacher Tutor Librarian Library Support Staff

Human Resources Regardless of size, any private education company is likely to employ at least one individual in a human resources role. The responsibility of such employees is to hire new employees, handle the necessary paperwork, and ensure that the needs of the current staff are being met. This can include anything from processing benefits paperwork to resolving disputes between employees and supervisors. The smallest of programs, such as a small tutoring company, may have a single person (sometimes

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Private Education Industry OCCUPATION

PROFILE

Teacher Assistant Considerations

Qualifications

Description

Helps teachers maintain order in classrooms, assists students with tasks, and helps with instruction.

Career clusters

Education and Training; Human Services

Interests

Data; people

Working conditions

Work inside

Minimum education level

High school diploma or GED; high school diploma/ technical training; junior/technical/community college; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; volunteer work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ESC; SCE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

the company owner or president) serving as the human resources manager, as well as fulfilling many other unrelated roles. Other small or midsize programs may have one or two individuals dedicated to human resources. These employees are required to fill a variety of roles within the department. Larger programs have entire, fully staffed departments dedicated to human resources and are able to hire individuals to specialize in specific areas. Human resources staff members often have four-year degrees in business administration or management, possibly with a concentration or emphasis on higher-education administration. Department managers may also have M.B.A.s and significant related experience. Within larger institutions, individuals who specialize in benefits management may have backgrounds in finance, while those who specialize in handling employee complaints and disputes may have backgrounds in me-

diation or dispute resolution. The largest institutions may also have in-house employment-law attorneys to ensure that all policies and procedures meet legal requirements. Human resources occupations may include the following: ■ ■ ■ ■ ■

Human Resources Manager Human Resources Generalist Benefits Specialist Mediation/Dispute Resolution Specialist Employment Attorney

INDUSTRY

OUTLOOK

Overview The U.S. Department of Education projects an increase of 9 percent in total elementary and secondary education enrollment (both private and

Private Education Industry public) between 2004 and 2016. A significant portion of this growth is expected in the private education industry, particularly in early childhood and postsecondary programs, and is largely attributed to population changes (migration, immigration, and increased births), as opposed to attendance rates. As enrollment increases, there will be an increased demand for individuals to work in private education companies of all kinds and in all occupations within the industry. There will be an increased need for teachers and instructors, particularly those who have credentials and experience in popular industries and trades. There will also be a greater demand for administrators at all levels to help oversee these programs as they expand. Demand for the highest-level managerial positions, such as school principals, corporate directors, presidents, and vice presidents, may grow somewhat, but the growth will not be as dramatic since fewer positions exist at this level within each institution. Many of these anticipated opportunities will come in alternative education programs, such as vocational training institutes, online and correspondence courses, and group instruction programs in specialized subjects such as computer skills, languages, and professional certification. Many private education companies are looking toward the large pool of working adults who are seeking to advance or change their careers as a source of new students and new income streams. These programs will present many opportunities for individuals with specialized experience and an interest in teaching and will also provide many administrative positions for those with strong backgrounds in computers and technology. Employment Advantages Most people choose to work in the private education industry because of the enjoyment and satisfaction of teaching and working with students. This field can be incredibly rewarding, as there are many opportunities to help individuals make a difference in their own lives through education. It can be easier to get a job in the private education industry than in a public school, as hiring decisions may be less influenced by local politics. Additionally, some people find that there is less bureaucracy in private schools of all sizes than one might find in a comparably sized public school.

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Individuals who enjoy working with young people and who are willing to provide a high level of personalized service are likely to succeed in this industry, and they will find they are able to make satisfying and lasting interpersonal connections with the students whose lives they influence in a positive way. Even those who choose to fill administrative roles within the industry often find the work to be satisfying, because their efforts to maintain the required infrastructure ultimately support students as they strive to meet their goals. Annual Earnings The most common sources of revenue for private education companies include student tuition, private gifts, endowments, and contracts with other private companies. Many private education companies are operated on a for-profit basis and generate billions of dollars in revenues every year. There are some exceptions to this model. Many private elementary and secondary schools, particularly schools with religious affiliations, operate as nonprofits. They still receive funding primarily from sources other than the government, but they do not have the same objective of generating profits for shareholders as the for-profit companies within the education industry. It is difficult to track revenue numbers for these schools, as they are not subject to the same reporting requirements as forprofit institutes, and the Department of Education has only recently begun tracking data for private schools. Charter schools present an interesting model. These schools receive most of their funding from state and local governments, but they are run by private organizations. They receive a charter to operate from the state in which they are located, but they are exempt from certain rules and regulations ordinarily governing publicly funded schools. In exchange, the charter must be reviewed and renewed every three to five years. This arrangement generates a great deal of controversy, as some argue that it takes away much-needed funds from local public schools and only benefits the few children who are able to attend the charter schools. However, others argue that, because charter schools are operated by private companies rather than by the government, they tend to be more efficient than public schools, benefiting their students and raising standards across the board. There is so far

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very little objective evidence that charter schools provide better educations than public schools. For-profit institutions of any level operate explicitly to make money for their shareholders, and they are treated as businesses by the government. They are generally subject to corporate taxation and oversight by regulatory bodies such as the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC). These institutes include two-year, four-year, and graduatelevel degree programs, as well as a variety of certification programs and other courses that require less than two years to complete. This last category has been a source of significant growth in the forprofit education industry in the past few decades, as public institutions have been slow to fill the demand for these types of programs. However, they have also become controversial, because some programs misrepresent both the likelihood of employment for, and the likely salaries commanded by, their graduates. According to the Center for College Affordability and Productivity, for-profit schools in the United States receive an average of $15,063 in revenue per student. As of 2006, there were approximately 1 million students enrolled in for-profit schools, making the total revenue more than $15 billion annually. This number represents for-profit highereducation programs, including two-year, four-year, and graduate programs, as well as certification and vocational programs. Approximately 90 percent of this revenue comes from student tuition and fees. SBOMAG claims that nondegree-granting programs, commonly referred to as the “supplemental education market,” are a $102 billion industry in the United States. These programs generate big business. The private tutoring market alone generated approximately $2.7 billion in revenue in 2001 alone. In 2006, the Department of Labor reported that there were approximately 13.2 million individuals employed in the educational services industry generally, of whom approximately 63 percent (8.3 million) were employed in both public and private elementary and secondary education. While data were not provided relating to the breakdown between public and private school employees, the Department of Labor reported that private schools made up approximately 25 percent of all schools

and educated approximately 10 percent of students. Around 4.5 percent of the sector’s employees were employed in other private educational programs, such as test-preparation and certification programs. These statistics include instructors, administrators, and office staff. The Department of Labor predicts wage and salary employment growth of 11 percent across the entire educational services sector over the 2006-2016 period, with much of this growth occurring in early childhood education, postsecondary education, English as a second language (ESL) instruction, and special education. Slightly less growth is expected in elementary and secondary schools.

RELATED RESOURCES FOR FURTHER RESEARCH Association of Private Enterprise Education 313 Fletcher Hall, Dept. 6106 615 McCallie Ave. Chattanooga, TN 37403-2598 http://www.apee.org Center for Teaching Excellence, University of Dentistry and Medicine of New Jersey, School of Health Related Professions 65 Bergen St. Newark, NJ 07107 Tel: (973) 972-8576 http://cte.umdnj.edu College Board 45 Columbus Ave. New York, NY 10023 Tel: (212) 713-8000 http://www.collegeboard.com National Education Association 1201 16th St. NW Washington, DC 20036-3290 Tel: (202) 833-4000 http://www.nea.org National Independent Private Schools Association 10134 SW 78th Ct.

Private Education Industry Miami, FL 33156 Phone: (305) 630-2557 http://www.nipsa.org U.S. Department of Education 400 Maryland Ave. SW Washington, DC 20202 Tel: (800) 872-5327 http://www.ed.gov

ABOUT

THE

AUTHOR

Tracey M. DiLascio is a practicing small business and intellectual property attorney in Newton, Massachusetts. Prior to establishing her practice, DiLascio taught writing and social science courses in Massachusetts and New Jersey colleges and served as a judicial clerk in the New Jersey Superior Court. She is a graduate of Boston University School of Law.

FURTHER

READING

Associated Press. “Career Education 4Q Profit Up, Revenue Down.” Boston.com, February 19, 2009. http://www.boston.com/business/ articles/2009/02/19/career_education_4q _profit_up_revenue_down. Bailey, Thomas, Norena Badway, and Patricia J. Gumport. For-Profit Higher Education and Community Colleges. Stanford, Calif.: National Center for Postsecondary Improvement, 2001. Available at http://www.stanford.edu/group/ ncpi/documents/pdfs/forprofitandcc.pdf. Bensinger, Greg. “Washington Post Reports Profit on Education Revenue.” Bloomberg.com, July 31, 2009. http:// www.bloomberg.com/apps/news?pid =20601204&sid=a99eeXcdQ4Z4. Burch, Patricia. Hidden Markets: The New Education Privatization. New York: Routledge, 2009. Butler, Amy. Wages in the Nonprofit Sector: Occupations Typically Found in Educational and Research Institutions. Washington, D.C.: U.S. Bureau of Labor and Statistics, 2009. Available at http://www.bls.gov/opub/cwc/ cm20081124ar01p1.htm.

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Coleman, James, and Richard Vedder. For Profit Education in the United States: A Primer. Washington, D.C.: Center for College Affordability and Productivity, 2008. Available at http://www.centerforcollegeaffordability .org/uploads/For-Profit_corr_2.pdf. Hallinan, Maureen T. Handbook of the Sociology of Education. New York: Springer Press, 2006. The Handbook of Private Schools: An Annual Descriptive Survey of Independent Education. Boston: Porter Sargent Handbooks, 2009. Herrera, Debbi. Resource Guide for Private School Administrators. Danvers, Mass.: LRP Publications, 2007. “Institutional Eligibility Under the Higher Education Act of 1965, as Amended, and the Secretary’s Recognition of Accrediting Agencies; Proposed Rule.” Federal Register 74, no. 150 (August 6, 2009). http://edocket .access.gpo.gov/2009/pdf/E9-18368.pdf. Jones, Steven L. Religious Schooling in America: Private Education and Public Life. Westport, Conn.: Praeger, 2008. Morphew, Christopher C., and Peter D. Eckel. Privatizing the Public University: Perspectives from Across the Academy. Baltimore: The Johns Hopkins University Press, 2009. Sandler, Michael R. Social Entrepreneurship in Education: Private Ventures for the Public Good. Lanham, Md.: Rowman & Littlefield Education, 2010. StateUniversity.com. “Private Schooling: What Is a Private School? History of Private Schools in the United States.” http://education.state university.com/pages/2334/PrivateSchooling.html. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

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U.S. Department of Education. Institute of Education Sciences. National Center for Education Statistics. “The Condition of Education.” 2007. http://nces.ed.gov/ programs/coe/2007/section4/ indicator32.asp.

_______. “Private School Universe Survey.” 20072008 ed. http://nces.ed.gov/surveys/pss/ index.asp. _______. “Projections of Education Statistics to 2016.” 2007. http://nces.ed.gov/programs/ projections/projections2016/sec1a.asp.

Public Elementary and Secondary Education Industry ©Kristin Schmidt/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Education and Training Career Cluster: Education and Training Subcategory Industries: Disabled Education; Elementary School Education; High School Education; Kindergarten Education; Middle School and Junior High School Education Related Industries: Corporate Education Services; DayCare Services; Higher Education Industry; Private Education Industry Annual Domestic Revenues: $631 billion USD (National Center for Education Statistics, 2009) Annual International Revenues: $15.4 trillion USD (National Center for Education Statistics, 2009) Annual Global Revenues: $16.1 trillion USD (National Center for Education Statistics, 2009) NAICS Number: 61

INDUSTRY

functional members of society. Elementary school is the first formal stage of public education, where children are introduced to core skills of literacy and computation, such as reading, writing, and mathematics. Secondary education follows elementary studies and often is split between middle school and high school study levels. Secondary education provides general, technical, and professional curricula and also prepares the higherachieving students for postsecondary, or “higher,” education.

History of the Industry American formal education has its roots in the British educational tradition. The curriculum applied in American public schools is derived from ancient ideas about education, dating back to the philosophies of Plato and Aristotle in the fourth century b.c.e. and to the medieval schools of the Catholic tradition, grounded in Aristotelian philosophy. The fundamental areas of educational concern today match the liberal arts that ancient and medieval scholars believed to be fundamental to the life of the mind and necessary to full human intellectual development.

DEFINITION

Summary The public elementary and secondary education industry exists worldwide and is the cornerstone of most countries’ formal education structure, fulfilling a commitment to provide youths with the skills and knowledge necessary for fully 1537

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Public Elementary and Secondary Education Industry

American secondary education has its origin in the artes liberales of the Middle Ages. These comprise the seven liberal arts, which include the trivium (grammar, logic or dialectic, and rhetoric) and the quadrivium (arithmetic, geometry, astronomy, and music). In the earliest public schools in America, children began their formal education with grammar, considered the “lowliest of the seven arts,” and later advanced to the more difficult subjects and ultimately the quadrivium. Sometimes religion was added to the curriculum to provide a moral component to the educational agenda. Religious teachings at the elementary level traditionally focused on moral teachings and biblical study. In the tradition of European schools, which channeled education through grammar schools, gymnasia, and university colleges, the North American system offered grammar schools, academies, and liberal arts colleges. Given the religious component of public education in the United States and the fact that public schools also could be counted on to produce religious professionals such as priests as well as counselors, diplomats, physicians, and teachers, it is hardly surprising that churches were from the outset allied with the government in the sponsorship of secondary education. Families tended to seek the highest available education for their children, as a means of improving the living standards of the family, but it was not until the mid-nineteenth century that Americans began to acknowledge a distinction between secondary and higher education. This distinction marked the beginning of the modern era in education. In the early 1820’s, free urban public high schools emerged in the United States to provide alternatives to Latin grammar schools and other private and fee-charging schools. These schools were fostered with the expectation that the secondary education of the country’s youths would promote economic development. The first public high school opened in Boston in 1821. Other major cities in the Northeast soon followed the example; by 1839, twenty-six high schools had been established in Boston, and the trend had spread to Philadelphia and Baltimore. Before long, Latin grammar schools were well established throughout Massachusetts, New York, Pennsylvania, New Jersey, and Maryland. The teachers in these early schools usually were ministers with dedicated teaching mis-

In elementary school, children are introduced to core skills of literacy and computation, such as reading, writing, and mathematics. (©Andres Rodriguez/Dreamstime.com)

sions. These earliest schools were aimed primarily at preparing students to enter colleges, which were strictly for men. By 1851, an estimated eighty cities had established high schools. The curriculum of the Boston schools was typical, encompassing subjects such as English, geography, history, arithmetic, algebra, geometry, trigonometry, navigation, surveying, and natural and moral philosophy. After the United States gained independence in 1776, new educational movements arose. Most notably, monitorial schools, an educational tradition imported from England, were opened to provide inexpensive general education for the masses. However, these monitorial schools did not last. By 1840, they had all been closed because they had not produced the results to justify their existence. Another educational innovation of the time was the Sunday School, through which churches aimed at

Public Elementary and Secondary Education Industry providing rudimentary academic and moral education to the poor. Its pioneer, Robert Raikes of Gloucester, wanted to “rescue children of factory workers from their filth, ignorance and sin.” Free School Societies organized and developed monitorial schools, Sunday Schools, and free public schools in Connecticut and New York, and again, the trend soon spread to other areas of the country. The Industry Today By the final decade of the twentieth century, the enrollment rate in American public schools had reached overwhelming numbers. In 2006, about 49.3 million students were enrolled in public elementary and secondary schools. Of this number, 34.2 million were enrolled in prekindergarten through eighth grade, while 15.1 million were enrolled in grades nine through twelve. These numbers are projected to increase each year. It is estimated that by 2018, the number of students enrolled in public schools will be 53.9 million. Between 1985 and 2007, enrollment in public elementary and secondary schools rose by 26 percent, with the fastest growth occurring in elementary levels (prekindergarten through eighth grade). This increase was matched by an increase in teachers. About 3.7 million full-time-equivalent (FTE) elementary and secondary school teachers were engaged in classroom instruction in the fall of 2007. The average salary for teachers in 2005-2006 was $49,109. About 3 million high school students were expected to graduate during the 2007-2008 school year. Another important development in modern American schools is their initiation into the electronic age. The number of computers in public schools has increased dramatically in recent years. In 2005, the average public school contained 154 instructional computers, compared with 90 in 1998. The important technological advance that spurred that use of computers in the classroom is the introduction of the Internet. The percentage of instructional rooms with access to the Internet increased from 51 percent in 1998 to 94 percent in 2005, and nearly all schools had access to the Internet in 2005. Today, elementary and secondary public schools continue to expand to accommodate the fast-growing American population. Demographic reports indicate that, nationwide, 1.3 percent of U.S. pub-

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lic school students are American Indian/Alaska natives, 3.9 percent are Asian/Pacific Islanders, 16.8 percent are African American, 17.7 percent are Hispanic, and 60.3 percent are white. The racial makeup of public schools varies from region to region. For example, in 2007, the West was reported to have the highest enrollment of African American, Hispanic, Asian/Pacific Islander, and American Indian/Alaska native students compared with other regions. In the South, enrollment of African Americans remained around 25 percent between 1972 and 2007, while Hispanic enrollment increased from 5 percent to 19 percent. White enrollment in public schools decreased from 70 percent to 51 percent. Several laws have had, and continue to have, an enormous impact on American educational practices and policies. Among these laws is the Equal Protection Law, the Fourteenth Amendment to the Constitution, which guarantees that “no State shall . . . deny to any person within its jurisdiction the equal protection of the laws.” This federal law protects the rights of students in the United States. An important legal milestone in education history was the Supreme Court’s decision in Brown v. Board of Education of Topeka, Kansas (1954), which outlawed institutionalized segregation. As a result, schools sought to balance the quality of education for students of all races by integrating African Americans into public schools previously restricted to white students. Another critical law affecting education is the Equal Access to Federal Financial Assistance Law, or Title VI of the Civil Rights Act of 1964, which outlawed discrimination in financial assistance on the basis of race, gender, or ethnicity. This law continues to guarantee universal financial access to Department of Education funding in all educational settings. Another important law is the Bilingual Education Act of 1968. This law requires that programs for English language learners (ELLs) be held to high standards and meet special needs of the broad cultural and linguistic diversity of American students. This law continues to play a crucial role in the United States’ linguistically diverse student population. The most recent law to have an important (and highly controversial) impact on American education is the No Child Left Behind Act (NCLB), which President George W. Bush signed in 2001 in an effort to improve the educational standards of

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Public Elementary and Secondary Education Industry

America’s public schools. This law is the key conduit through which federal funds are directed to state departments of education for operations and administration of schools. NCLB holds schools and states accountable for students’ academic performance by requiring the public reporting of students’ scores known as Adequate Yearly Progress (AYP) reports. The objectives of NCLB are to make schools accountable for results, to give states and communities freedom in distributing federal funds, to use effective educational methods, and to provide parents with informed options regarding school choice for their children. With the passage of the federal NCLB Act, all states are now expected to publicly announce standards, standardized tests, and accountability methods. Standardized tests are to be conducted in reading and mathematics from grades three through eight. Science was added to the list in 2008, from grades nine through twelve. Since testing has become standardized, accountability has come under harsh criticism from parents and educators. Corporate and political leaders have defended the current program of standard-

ized tests, arguing that this is the only way that students and the nation can monitor educational quality and student performance. The NCLB additionally requires that a school failing to meet AYP goals must provide students with options for seeking supplemental instructions, such as tutoring, after-school programs, remedial classes, or summer school. These programs should be provided by nonprofit agencies or for-profit agencies funded by the students’ schools. Schools failing to meet AYP goals for four years must take drastic corrective measures that involve replacing school faculty, introducing new curricula, and appointing an expert to advise the school. The current student assessment requirements under Elementary and Secondary Act (ESEA) Title 1-A began with the Improving America’s Schools Act (IASA) of 1994, which required “contributing states to adopt curriculum content standards, pupil performance standards, and assessment” for subjects like mathematics and reading/language arts. The NCLB Act expanded these requirements and demanded that contributing states implement assessments relative to state content and align academic achievement standards for every student in every state. Furthermore, the participating states were required to develop and implement assessments at three grade levels for science by the 2007-2008 school year. Special education programs form a crucial element of elementary and high school education in the United States. The Individuals with Disabilities Education Act (IDEA), enacted in 1975, mandates that children and young people with disabilities be provided public education. The number of students receiving special education services increased between 2004 and 2005, but again declined between 2006 and 2007. The current economic downturn has since taken its toll on education, and curriculum restrictions tend to be the first signs of fiscal cutbacks. Curriculum often is vulnerable as well to the vicissitudes of public Public high schools provide opportunities for teenagers to participate in opinion. For example, art, music, sports. (AP/Wide World Photos) and physical education often are the

Public Elementary and Secondary Education Industry first programs to be cut during budget shortfalls, despite evidence that student performance in mathematics has been shown to be improved by exposure to music instruction. Social studies now receives more attention in many public schools than does spelling. Physical education enjoys fluctuating popularity; at the present time, the addition of physical health components to the curriculum, whether in the form of structured sporting activities or simple free play during recess, are receiving renewed attention, and efforts are currently being made to recruit instructors in the area. New subjects have been added to the curriculum as society recognized growing needs; these include sex and health education, conflict resolution, and multicultural studies, among others. The structure, administration, and curricula in American schools evolve with changing times and societal needs. Teachers are increasingly becoming specialized experts in their fields, especially in the subject areas of art, speech correction, and counseling, among others. Public schools also are being used as a venue for addressing diverse societal problems, such as poverty and child hunger. Programs that provide federally subsidized or free lunches are available in most public schools. Furthermore, a great variety of extracurricular activities have been introduced in the majority of elementary and secondary schools.

INDUSTRY MARKET SEGMENTS Elementary and secondary schools in the United States serve a broad multicultural student population from rural, urban, and suburban areas. The following sections provide a comprehensive breakdown of each of these different educational venues. Small Schools This sector includes traditionally small public schools ranging from elementary to high school. Charter schools, which are supported by public funds, fall in this category. Currently there are few definitive research definitions of a “small” school; typically, they are defined variously by each state based on the number of students in the school. For example, in Chicago, small schools are those hav-

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ing fewer than four hundred students. The number of supervisors and faculty are concomitantly low, with one to two administrators and five to eight faculty members. Potential Annual Earnings Scale. Because there are educators and administrators at all levels of public school systems, pay for those who work in the public education industry is wide ranging. Average earnings for school principals vary from one region to another, with some states paying more than others. In North Carolina, a principal’s salary is determined by the number of students and teachers the principal oversees. In general across the United States, the smaller the school, the more modest the principal’s salary. The average salary in the United States for a principal in an elementary school is $85,907; for an assistant principal, the average salary is $71,192 per year. The national average salary for a secondary school teacher is $51,230 per year, with special and vocational education teachers earning $49,740 per year (at the middle school level) and $49,370 per year (at the elementary school level). Clientele Interaction. Small schools offer students and parents a more personalized learning environment and greater opportunities for interaction. Teachers in small classrooms, as well as principals in smaller schools, are more capable of maintaining personal relationships with their students, enhancing their capacity to address individual student problems that might impede learning. Teachers share the goal of meeting individual student needs, counseling students and parents about a variety of problems, and recommending strategies and counselors who may be of use to families in need. However, this goal is best served when the teacher is not overstretched in her or his duties; that is, the smaller the class, the more effective the teacher can be. When teachers have adequate time and energy to devote to each student, students’ motivation level is increased, academic results tend to improve, and dropout rates are reduced. Amenities, Atmosphere, and Physical Grounds. Many schools are equipped with a wide range of structural amenities that include swimming pools, tennis courts, athletic tracks, football and soccer fields, and gymnasiums. However, these amenities vary greatly with the school size and local economy. Small schools generally lack many amenities, including basic “green space” or lawns and

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Public Elementary and Secondary Education Industry

fields for physical education, although often districts share resources with neighboring schools. Typical Number of Employees. The number of employees in a public school depends on its size, neighborhood, and state. As in any other industry, mushrooming costs constitute one of the key challenges for public education and can cause fluctuations in staffing levels. Small schools have an average of one administrator, five to eight administrative staff members, one janitor, and one secretary. Other staff, such as school nurses and psychologists, often are shared among schools in a district, appearing on site once or twice a week. In districts where there is a growing population of linguistically and culturally diverse students, bilingual teachers often are hired to cater to the needs of these students. Traditional Geographic Locations. Except in a few big cities, small public schools generally are found in suburban neighborhoods or rural areas. The majority of the student population of suburban schools is generally white, while small urban high schools enroll mostly minority students. Alternative high schools are small public schools of choice enrolling mainly white students. Some small urban schools have been created to serve the specific needs of children from lower economic backgrounds, and part of the mission of these special schools is to fight the violence prevalent in these poor neighborhoods. Pros of Working for a Small School. Small schools enhance the capacity for interpersonal relations among students and between staff and students. Small class sizes allow teachers to pay more individual attention to students. Smaller schools encourage stronger bonds among principals, teachers, students, and parents, and promote a level of mutual caring that is often lacking in larger schools. In small schools, students tend to demonstrate healthier attitudes toward school, and they have higher attendance rates. Students in small schools often report feeling safer and more secure, partially because the smaller environment replicates the more intimate conditions of home and community life. Moreover, smaller schools tend to command a higher level of parent and community involvement. In the best cases, parents and teachers become allies in fostering students’ academic achievement. Local businesses and community organizations also find it easier to collabo-

rate with small schools, providing internships and other collaborative projects. In smaller schools, teachers more often report positive teacher working conditions and greater job satisfaction. Cons of Working for a Small School. Small schools have greater restrictions on budget and fewer faculty and thus must limit their study offerings to a constricted curriculum, often offering only academic courses geared to the midlevel student, with few opportunities to tailor their programs or curricula to meet the special needs of their gifted or academically challenged students. Often, courses such as music and art must be cut and services for students with disabilities are limited or lacking. Because the staff is limited, each will take on multiple roles. For instance, some teachers may be required to take on administrative duties, serve on school committees, and administer extracurricular activities. Resources and technical assistance are often limited or lacking at small schools. Costs Payroll and Benefits: Salaries in small schools are determined by the state legislature and the amount of available district funds. Thus, salaries vary greatly by state. Licensed personnel, such as teachers, are paid monthly salaries, and nonlicensed personnel, such as janitors, are paid hourly wages. Benefits such as health and dental insurance, paid vacation time, and sick leave vary by state. Supplies: Small schools require instructional supplies that include books, papers, pens, markers, erasers, and other office supplies. Technological equipment such as computers, calculators, television sets, and telephones, as well as the supplies to maintain them, also are necessary. External Services: Small schools contract outside services for maintenance work and professional development. Other professional workers who may be contracted are nurses, social workers, psychologists, and tutors for after-school programs. Utilities: Typical utilities for a small school include water and sewer, electricity, gas/oil service, telephone, and Internet. Taxes: Small public schools do not pay taxes because they are supported by federal and state taxes. However, in many states they are required

Public Elementary and Secondary Education Industry to pay sales taxes on construction materials and other supplies. Arizona, California, Hawaii, North Carolina, South Carolina, and Washington are some of the states that require their public schools to pay sales taxes. Midsize Schools Midsize schools are determined by the number of students enrolled, although the designation varies by each region. For example, Telecommunication Arts High School in Brooklyn, whose enrollment of 1,250 students and 80 teachers would make it a large school in most cities, is considered a midsize school by New York standards. Typically, schools that are considered midsize have between 500 and 900 students and 50 to 100 employees. Potential Annual Earnings Scale. In general, public schoolteachers’ earnings are not determined by the school size, but by experience and level of academic degree. The salary is therefore determined by the state and district and is relatively standard according to experience and academic degree across the state. Nationally, the average salary of a teacher is $50,000 per year but varies from one state to the other. Teacher assistants earn an average of $22,700 per year. These are national averages; teacher salaries vary by state and region. For example between 2004 and 2005, teachers’ beginning salary in Alabama was $31,368 while average salary was $38,186. In California, teachers’ beginning salary was $35,760 while average salary was $57,604. Clientele Interaction. While educators in small schools have close interactions with students and parents, this interaction lessens in midsize schools. Teachers’ and administrators’ interaction with parents will not be as frequent or personal as in smaller schools. Amenities, Atmosphere, and Physical Grounds. At midsize schools, students have access to more space, and the buildings are relatively large and spacious. These schools exist at both elementary and secondary levels. They typically have athletic fields, theaters or auditoriums, and cafeterias. Typically, the physical grounds of these schools depend on the neighborhoods. Some midsize schools, especially in affluent neighborhoods, are beautiful, sprawling sites with gymnasiums, swimming pools, and the latest technology. On the other hand, midsize schools in low-income neigh-

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borhoods lack expansive facilities; the buildings may be run-down and the grounds poorly kept. Typical Number of Employees. Midsize schools typically have fifty to one hundred teachers and an average of forty administrative employees. Some temporary employees may be contracted from time to time to engage in maintenance work and other menial jobs. Traditional Geographic Locations. Midsize schools are found mainly in cities. While some are found in suburban areas, the majority of these schools exist in the inner cities, where infrastructure and communication systems are well developed. Many midsize schools serve students from diverse backgrounds, especially those from low socioeconomic backgrounds. These schools are found in urban areas where poverty and unemployment are endemic. For example, many midsize schools in New York and Los Angeles are found in heavily populated ethnic neighborhoods. Pros of Working for a Midsize School. While small schools might have limited staff, such as only one special education teacher, midsize schools have extensive programs and adequate personnel to cater to a diverse student population. For example, Telecommunication Arts High School in New York has fifteen full-time special education teachers, an on-site staff psychologist, an assistant principal in charge of budgets and security, and services such as occupational and physical therapy for disabled students as of 2010. Foreign-language classes, Advanced Placement courses, and other programs typically lacking in small schools are available in midsize schools. Midsize high schools have much higher graduation rates than large high schools. A 2010 analysis conducted by Center for New York City Affairs concluded that “on average, the city’s forty high schools with enrollments between six hundred and fourteen hundred are just as good as or better than smaller schools in terms of graduation rates, attendance and the ability to serve struggling students.” Cons of Working for a Midsize School. Many midsize schools are located in poor, inner-city areas and tend to be underfunded in comparison with larger schools. In 2005, the Kansas Supreme Court ordered the state to spend $285 million more on schools after midsize school districts sued the state for underfunding. Another challenge that midsize schools face is the limited interaction be-

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Public Elementary and Secondary Education Industry

tween teachers and students and their parents. Teachers do not get to know all their students well because of the greater student population. Also, not all students know one another in a midsize school. Costs Payroll and Benefits: Full-time teachers and other employees of midsize schools are paid monthly or bimonthly. Other temporary or part-time workers are paid hourly wages. Benefits such as vacation and sick days are provided to full-time employees. Supplies: Midsize schools require stationery, textbooks, and technological and audio-visual equipment such as computers, calculators, projectors, and television sets. Other supplies for extracurricular activities and physical education programs are needed. Assistive technology to cater to a diverse student population, especially those with special needs, also is required. Office and classroom supplies include telephones, furniture, and filing cabinets. External Services: While external services are not common in midsize schools, any that are needed are contracted and paid for by the school district. Some of these services may include professional development, interpreters, computer maintenance, vending machines, landscaping, and construction services. Utilities: Typical utilities for these schools include water and sewer, electricity, gas/oil service, telephone, and Internet service. Because of the size of the school, utility bills tend to be higher in midsize schools than in their smaller counterparts. Taxes: Unlike for-profit organizations that are required to pay taxes to the government, midsize schools do not pay taxes. However, they pay sales taxes, which are eventually returned to them. Large Schools Typically, large public schools have student populations of more than 900. While some large schools are found at the elementary level, most schools in this class are high schools. The number of teaching staff and other employees varies accordingly, usually between 150 and 250. Potential Annual Earnings Scale. Teachers’ salaries typically are based on experience and level of academic achievement. A principal, who is the

instructional leader and chief administrator of the school, is paid according to the school size, number of students, and the number of employees in the school. According to Education Week, as of 2005 the average salary for the principal of a large elementary school was $82,283; principals of large high schools made an average of $93,749. Assistant principals of large elementary schools earn average salaries of $64,587, $68,608 for junior high schools or middle schools, and $72,868 for high schools. Salaries for permanent employees such as school nurses, counselors, secretaries, and library clerks range from $17,000 to more than $50,000. Clientele Interaction. Teachers’ interaction with students is limited compared with that at small and midsize schools. Most of their attention often focuses on the highest- and lowest-performing students, leaving those in the middle in danger of being overlooked or neglected. Large schools also make it difficult for teachers to connect with the parents of many students. Amenities, Atmosphere, and Physical Grounds. Large schools often offer a wide range of amenities that include gymnasiums, athletic fields, swimming pools, tennis and other ball courts, libraries, and auditoriums that support a range of extracurricular activities. Physical grounds vary by school, although larger schools generally offer larger and greener playing grounds. For example, large elementary schools in affluent neighborhoods are equipped with outdoor playground equipment and sport courts. While smaller schools may have only one building, large schools have multiple buildings. These buildings are further subdivided into segments based on grade level, subject taught there, or other functions. Some large schools are known to host small schools, creating “schools-within-schools,” to achieve a distinctive curricular focus. For example, Henrico County in Virginia has a “center of excellence,” a specialty school-within-a-school that attracts students from neighboring high schools as well as the host school. Other schools-withinschools are alternative schools, which are mainly for students who have been expelled or suspended from regular schools or who experience academic challenges such as learning disabilities. A large high school may house an alternative school, which can operate either during regular school hours or as an after-school program.

Public Elementary and Secondary Education Industry Typical Number of Employees. The number of employees in large schools varies by region. In large cities such as New York or Los Angeles, large schools can have 2,500 students or more, while large schools in the rural areas have an average of 1,500 students. The number of employees in large schools is determined by the number of students in the school. However, the typical number of employees in a large school ranges from 150 to 250. Traditional Geographic Locations. Large schools traditionally are found in big cities. Some occupy multistory buildings in metropolitan centers, whereas others are constructed near airports and other major transit centers. Many are situated at, or are part of, convention centers, located outside downtown areas but still connected near them. Pros of Working for a Large School. Large schools provide a more vibrant school atmosphere. Many of these schools are found in larger cities where they attract students from diverse backgrounds. Large schools provide more academic clubs, after-school programs, special education programs, foreign-language classes, and a host of extracurricular activities. Large schools, especially those in the wealthy neighborhoods, often are well equipped with advanced technology. Cons of Working for a Large School. Larger schools tend to have larger classes, which in turn affect the degree of interaction and teacher attention that can be afforded to each student. Because of large student populations, some students are likely to miss out on opportunities to develop their leadership skills and participate in school activities. In view of this, students may feel overlooked and less motivated. Safety issues often are a challenge in these large schools as well. The sheer complexity of a large institution, with its vast physical property and myriad working parts, can prove extremely difficult to manage and monitor safely. Costs Payroll and Benefits: The salaries of workers in large schools vary by region. A principal in a large urban elementary school earns an average salary of $85,958, while in an urban junior high school the average principal’s salary is $90,133. At a large high school, the principal earns an average of $96,998. Teachers in large schools earn an average salary of $46,527. Counselors, librari-

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ans, school nurses, secretaries, and payroll clerks earn salaries ranging from $31,000 to $54,000. Benefits such as vacation and sick time vary by school district. Supplies: Stationery and technological, communication, and fitness equipment are required. Several assistive technology supplies also are needed to cater to special-needs students. Some of these assistive technology devices include specialized keyboards, e-readers, tape recorders, magnifying glasses, books on tape, arm supports, and touch screens. External Services: In most cases, large schools are self-sufficient in terms of professional workers such as nurses, psychologists, and special educators. External services that may be needed involve yearbook publication, senior portraits, professional development, vending machines, and general maintenance. Utilities: Typical utilities for a large school include water and sewer, electricity, gas/oil service, telephone, cable, and Internet service. Taxes: Large schools are nonprofit institutions; therefore they do not pay taxes. Instead they operate with federal and state funds disbursed through school districts. These schools may only pay sales taxes, but those are eventually reclaimed at the end of the year.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and jobs roles of elementary and secondary schools are determined by the size and needs of the individual schools. Specific job titles and descriptions vary by district and state. While public schools do have some leeway to affect decision making, they do not exist as autonomous entities but operate under the supervision of district and state-level administrations. The following umbrella categories apply to the organizational structure of small, medium, and large elementary and secondary schools: ■ ■ ■ ■

District-Level Administration School-Based Administration Licensed Instructional Faculty Student Support Services (Licensed)

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Public Elementary and Secondary Education Industry ■

Administrative Support Media and Technology Specialists Paraprofessionals Bus Drivers Maintenance and Custodial Services School Nutrition

■ ■

■

■

District-Level Administration District-level administration provides supervision of schools and support with services related to academics, transportation, discipline, technology, safety, finance, facilities, and health and nutrition. Operations such as payroll, purchasing, hiring, curriculum, and training are handled by the district office rather than at the individual school level. Employees in upper-level positions tend to have advanced degrees. The number of employees at the district administration level varies according to the size and location of the school district. Common district-level occupations include, but are not limited to, the following:

OCCUPATION

■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Superintendent Assistant Superintendent Director of Curriculum and Instruction Assistant Director of Curriculum and Instruction Director of Athletics Assistant Director of Athletics Director of Technology Assistant Director of Technology Director of Payroll Assistant Director of Payroll Academic Coach Chief Financial Officer (CFO) Budget Director Payroll Specialist Program Administrator Human Resources Director Human Resources Assistant Nutritional Services Personnel Curriculum Development Specialist

PROFILE

Principal Considerations

Qualifications

Description

Directs the activities of a school, particularly its teachers, and manages school staff.

Career cluster

Education and Training

Interests

Data; people

Working conditions

Work inside

Minimum education level

Master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

SEI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Public Elementary and Secondary Education Industry OCCUPATION

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PROFILE

Elementary School Teacher Considerations

Qualifications

Description

Instructs students at the elementary level and creates lesson plans.

Career cluster

Education and Training

Interests

Data; people

Working conditions

Work inside; work both inside and outside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Volunteer work; part-time work

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

SEC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

School-Based Administration School-based administrators are responsible for the day-to-day operations of individual schools. Duties include overseeing instruction, discipline, transportation (buses), and school budgets. Administrators hold advanced degrees and credentials in school administration. Salaries vary according to the size of the school and years of experience in education. The number of administrators employed at each school varies according to the school size. Occupations in the area of school-based administration include, but are not limited to, the following: ■ ■ ■

Principal Assistant Principal Dean of Students

Licensed Instructional Faculty As of 2010, licensed instructors account for 47 percent of all workers in the industry, according to

the U.S. Department of Labor. Licensed instructional faculty are responsible for planning, organizing, and presenting instruction that helps students learn content and skills. The major job functions licensed instructional faculty perform include management of instruction time, management of student behavior, instructional presentation, and monitoring of student performance. Instructional faculty are required to hold a bachelor’s degree and state credentials (licenses or certifications). Advanced degrees are not required; however, instructional personnel routinely pursue them to enhance content knowledge and pedagogical skills. Elementary teachers do not normally specialize in a particular content area, because they teach all subjects. Middle school and high school teachers, however, specialize in a specific content area, such as English, math, a foreign language, biology, or music. Salaries of instructional personnel are set by the state department of education and are based on level of education and years of experience.

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Public Elementary and Secondary Education Industry OCCUPATION

SPECIALTIES

Special Education Teachers Specialty

Responsibilities

Teachers of physically impaired students

Instruct students in the elementary and secondary levels who are physically impaired. They evaluate students’ abilities to determine the best training program for each individual.

Teachers of the emotionally impaired

Teach elementary and secondary school subjects, including education on socially acceptable behavior to students with emotional impairments.

Teachers of the hearing impaired

Teach elementary and secondary school subjects and special skills to deaf or hard-of-hearing students using lip reading, manual communication, or total communication.

Teachers of the mentally impaired

Teach social skills or basic academic subjects in schools, hospitals, and other institutions to mentally impaired students.

Teachers of the visually impaired

Teach elementary and secondary school subjects to visually impaired and blind students using large-print materials or the Braille system.

Occupations in the area of licensed instructional faculty include, but are not limited to, the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Elementary School Teacher Middle School Teacher Special Education Teacher High School Teacher (All Content Areas) Curriculum Facilitator Curriculum Coach Literacy Facilitator or Coach Teacher Mentor Reading Teacher

with students, support staff offer training services to all stakeholders who impact the education of children and youths. This includes parents, teachers, and members of the community. All support personnel positions require a college degree and state licenses or certifications. Some positions require advanced degrees. Occupations in the area of student support services include, but are not limited to, the following: ■ ■ ■ ■

Student Support Services (Licensed) Student support services include a variety of positions that supply direct services to students who may have special needs and difficulties that interfere with their learning. The types of services offered include training, counseling, assessment, and consultation. In addition to working closely

■ ■ ■

■ ■ ■

Counselor Career Development Counselor School Psychologist School Social Worker Speech-Language Therapist Student Intervention Specialist English as a Second Language Interpreter School Nurse Physical Therapist Occupational Therapist

Public Elementary and Secondary Education Industry Administrative Support Administrative support personnel perform a variety of clerical, bookkeeping, receptionist, secretarial, and general office duties. Staff members in these positions are responsible for a number of specialized tasks, including maintaining student information files, compiling and administering school financial and accounting records, purchasing office and instructional supplies, processing incoming and outgoing correspondence and telephone calls, and maintaining receipt books, school records, and inventories. While a college degree is not always required for these positions, advanced knowledge of computer-based accounting systems and word-processing, spreadsheet, and database management applications is necessary. Occupations in the area of administrative support include the following:

cal support for students, administrators, and instructional faculty. Library media specialists are required to hold graduate degrees and licenses or certifications in library science or instructional technology. Technology assistants perform clerical and technical duties related to the maintenance of school computers while also providing support for the school library, computer labs, instructional faculty, and students. Occupations in the area of media and technology include, but are not limited to, the following: ■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■

Treasurer-Data Manager Secretary-Treasurer School Treasurer General Office Clerk Office Assistant Receptionist Data Manager Administrative Assistant

Media and Technology Specialists Media and other technology personnel serve a variety of functions in elementary and secondary schools. They oversee the coordination of the activities of the school library and provide technologi-

OCCUPATION

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Library/Media Specialist Library/Media Assistant Technology Specialist Technology Assistant Instructional Technology Specialist/ Assistant Audiovisual Specialist

Paraprofessionals Paraprofessionals support teachers and students by carrying out a variety of duties in the classroom. Individuals in these support positions are not licensed to teach, but they are assigned a range of support duties, working closely with the teacher and the students. Because the specific role of the paraprofessional often is loosely defined, the individual needs of the teacher and/or school administrator can require the paraprofessional to play a multitude of roles. The No Child Left Behind Act requires that paraprofessionals be “highly qualified.” The specific requirements for this distinc-

SPECIALTIES

Educational Counselors Specialty

Responsibilities

College career planning and placement counselors

Assist college students in examining their own interests, values, abilities, and goals in exploring career alternatives and in making career choices.

Employment counselors

Deal with career planning, placement, and adjustment to employment of youths and adults.

School counselors

Assist the personal and social development of students and help them plan and achieve their educational and vocational goals.

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Public Elementary and Secondary Education Industry

tion, however, have been left up to individual states and include two years of college, paraprofessional certifications, and a passing score on a paraprofessional examination. Paraprofessional occupations in elementary and secondary education include, but are not limited to, the following: ■ ■ ■ ■ ■ ■

Teacher Assistant Special Education Assistant Student Intervention Specialist Counseling Assistant Bilingual Aide Tutor

Bus Drivers Bus drivers provide transportation by operating a school bus according to a specified route and schedule. In addition to this, bus drivers are responsible for completing inspections of the school bus before and after driving their routes. Moreover, they must monitor and maintain student discipline. Bus drivers are required to know safety and traffic regulations, to complete a driver training course, and to obtain a commercial driver’s license. In May, 2008, school bus drivers earned an average hourly wage of $12.79. Occupations in the area of bus driver include, but are not limited to, the following: ■ ■ ■

maintenance and custodial services include, but are not limited to, the following: ■ ■ ■ ■

Head Custodian Custodian/Janitor Groundskeeper Heating, Ventilation, and AirConditioning (HVAC) Specialist

School Nutrition Individuals who work with school nutrition services are responsible for preparing and serving nutritious meals and snacks and for the subsequent cleanup. Food service managers are also responsible for ordering and maintaining food and supply inventories. The number of staff members employed in each school varies according to the size of the school and the number of meals served. Food service workers normally are paid by the hour. Occupations in the area of school nutrition include, but are not limited to, the following: ■ ■ ■ ■

Cafeteria Manager Cook School Nutrition Assistant School Nutrition Services Business Manager

Bus Driver Bus Driver Trainer Bus Mechanic

Maintenance and Custodial Services Maintenance and custodial staff are responsible for the general cleaning, care, maintenance, and groundskeeping of school buildings and facilities. Duties may include cleaning floors, walls, furniture, and fixtures; collecting and discarding trash and debris; performing minor repairs; securing rooms and buildings; and assisting in grounds maintenance and landscaping. Occupations in the area of

The school bus is a familiar sight in the city and the country. (©Jorge Salcedo/ Dreamstime.com)

Public Elementary and Secondary Education Industry INDUSTRY OUTLOOK

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PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Overview Educational Services This industry’s history demonstrates that public education Employment is a stable area of employment 2009 Projected 2018 Occupation for a great variety of functionaries and experts. Although school 216,220 233,000 Education administrators, funding varies widely and deelementary and secondary pends on many factors, includschool ing population demographics, 1,532,990 1,760,800 Elementary school teachers, geographical location, and the except special education economy, teachers and other education personnel always will be 661,700 752,800 Middle school teachers, except needed to ensure the education special and vocational of millions of youths. Governeducation ment regulations and standards 1,084,060 1,170,300 Secondary school teachers, concerning the goals and pracexcept special and vocational tices of public education will be a education major factor in determining the employment outlook and job se1,098,920 1,195,900 Teacher assistants curity of workers in this industry. Among the major concerns in Source: U.S. Bureau of Labor Statistics, Industries at a Glance, public elementary and secondOccupational Employment Statistics and Employment ary education are achievement Projections Program. gaps based on race, gender, and socioeconomic status; raising the achievement of students whose to enhance secondary education. The Los Angeles first language is not English; and improving literUnified School District also has executed a plan acy across the board. to reorganize its high schools, creating smaller With the institution of the NCLB Act, education “learning clusters” in an effort to provide a more bodies and legislators have worked tirelessly to intimate and supportive learning environment. come up with strategies for holding schools acAmerican public schools continue to suffer countable for students’ learning. Value-added modshortages of teachers at the primary through high els have been proposed as a means of establishing school levels, especially in mathematics, sciences, how much students learn in schools and classrooms and special education. The National Academy of throughout the year. One aspect of these models is Sciences, the National Research Council, and the an attempt to link teachers’ salary and tenure to the U.S. Department of Education have linked matheperformance of their students. While this issue has matics and science teacher shortfalls to overall been widely criticized, Tennessee is the only state quality of education and future economic and that has embraced the idea, although some other technological development. Some states, such as states are investigating and considering its use. Arizona, have raised math and science requireCurrent efforts in the United States to improve ments for high school students, further increasing secondary education focus on the size and structure demand for teachers in these subjects. of large schools. With the support from the Bill and Melinda Gates Foundation, the Annenberg FounEmployment Advantages dation and other nonprofit groups, the New York Teachers and other workers in the public educaCity school system has completed significant extion industry play a critical and influential role in perimentation with small high schools in an effort

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Public Elementary and Secondary Education Industry

the intellectual and social development of young people. They have the opportunity to enrich lives, provide opportunities, and motivate children to greater achievement. According to the U.S. Department of Education, enrollment at all levels of public education is increasing. The National Center for Education Statistics projects record increases in enrollment through 2017. With the rise in enrollment, the number of teachers will concomitantly increase. In 2008, 3.2 million public school teachers were engaged in the classroom, a 15 percent increase from 1998. However, salaries are not expected to increase in the wake of the current economic crisis. In poverty-stricken areas such as urban and rural districts, the National Center for Education Statistics reported that more than 700,000 new teachers will be required over the next decade. Among those subject areas that are most in demand are mathematics, sciences, special education, English as a second language, and foreign languages. All states require certification of teachers, while recruitment standards vary from one state to the other. Various schools offer professional development training and other staff-related programs to ensure efficiency of their staff.

Center for Public Education 1680 Duke St. Alexandria, VA 22314 Tel: (703) 838-6722 Fax: (703) 548-5613 http://www.centerforpubliceducation.org

Annual Earnings The total revenue earned in the elementary and secondary public schools combined has increased in recent years. From 1989-1990 through 20052006, public school revenue from federal, state, and local sources increased from $348 billion to $554 billion. Federal funding, the smallest of the three sources, increased 139 percent, state funding increased 57 percent, and local revenue increased 51 percent. Revenue and its rate of increase also varies by state.

U.S. Department of Education, Office of Elementary and Secondary Education 400 Maryland Ave. SW Washington, DC 20202 Tel: (202) 401-0113 Fax: (202) 205-0310 http://www2.ed.gov/oese

RELATED RESOURCES FOR FURTHER RESEARCH American Federation of Teachers 555 New Jersey Ave. NW Washington, DC 20001 Tel: (202) 879-4400 Fax: (202) 879-4406 http://www.aft.org

National Center for Education Statistics 1990 K St. NW Washington, DC 20006 Tel: (202) 502-7300 http://nces.ed.gov National Education Association 1201 16th St. NW Washington, DC 20036 Tel: (202) 833-4000 Fax: (202) 822-7170 http://www.nea.org Public Education Network 601 13th St. NW, Suite 710 South Washington, DC 20005-3808 Tel: (202) 628-7460 Fax: (202) 628-1893 http://www.publiceducation.org

ABOUT

THE

AUTHORS

Wendy C. Hamblet is a Canadian philosopher with a specialization in conflict studies, peace education, and ethics. She is a tenured professor at North Carolina Agricultural and Technical State University in Greensboro, North Carolina, and director of Therapeia Ethics Consulting. Ruth Omunda is a graduate student in the special education program at North Carolina Agricultural and Technical State University in Greensboro, North Carolina. She also holds a master’s degree in English from the university, with a specialization in African American literature.

Public Elementary and Secondary Education Industry FURTHER

READING

Caillier, James. “Paying Teachers According to Student Achievement: Questions Regarding Pay-for-Performance Models in Public Education.” The Clearing House 83, no. 2 (2010): 58-61. Fry, Richard. The High Schools Hispanics Attend: Size and Other Key Characteristics. Washington, D.C.: Pew Hispanic Center, 2005. Gardiner, Mary E., Kathy Canfield-Davis, and Keith LeMar Anderson. “Urban School Principals and the ‘No Child Left Behind’ Act.” The Urban Review 41, no. 2 (September, 2008): 141-160. Graves, Michael F., Bonnie B. Graves, and Connie Juel. Teaching Reading in the 21st Century. 4th ed. Boston: Pearson/Allyn & Bacon, 2007. Herbst, Jürgen. The Once and Future School: Three Hundred and Fifty Years of American Secondary Education. New York: Routledge, 1996. Hursh, David. “The Growth of High Stakes Testing in the USA: Accountability, Markets and the Decline in Educational Equality.” British Educational Research Journal 31, no. 5 (October, 2005): 605-622. Johnson, James Allen, et al. Foundations of

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American Education: Perspectives on Education in a Changing World. 15th ed. Boston: Pearson/ Allyn & Bacon, 2010. Lee, Valerie E., et al. “Inside Large and Small High Schools: Curriculum and Social Relations.” Educational Evaluation and Policy Analysis 22, no. 2 (Summer, 2000): 147-171. “No Child Left Behind Revisited: The New Debate on Education Reform.” Congressional Digest 87, no. 5 (May, 2008). Parkay, Forrest W., and Beverly Hardcastle Stanford. Becoming a Teacher. 3d ed. Boston: Allyn & Bacon, 1998. Pulliam, John D., and James J. Van Patten. The History of Education in America. 9th ed. Upper Saddle River, N.J.: Merrill, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

AP/Wide World Photos

Public Health Services

INDUSTRY

SNAPSHOT

General Industry: Health Science Career Clusters: Health Science; Law, Public Safety, and Security Subcategory Industries: Communicable Disease Programs; Coroners’ Offices; Environmental Health Programs; Food Inspection; Health Inspection; Immunization Programs; Public and Military Hospitals Related Industries: Civil Services; Public Safety; Federal Public Administration; Hospital Care and Services; Local Public Administration; Medicine and Health Care Industry Annual Domestic Revenues: $2.2 trillion USD (total health care expenditures; TheMedica.com, 2009) Annual International Revenues: $2.5 trillion USD (total health expenditures; TheMedica.com, 2009) Annual Global Revenues: $4.5 trillion (TheMedica.com, 2009) NAICS Numbers: 622, 923120, 926140

INDUSTRY

public safety officials, elected and appointed government leaders, emergency personnel, medical professionals, and scientists and researchers. The mission of this industry is threefold. First, it assesses and monitors the health of populations and groups in order to identify and gauge the extent of health problems. Second, it creates policies by which these issues may be remedied. Third, it studies and promotes the use of health systems.

History of the Industry Public health concerns and policy have been manifest for millennia. Two thousand years before the first century c.e., ancient civilizations in northern India, and later in Egypt, built cities complete with drainage systems designed to draw away unclean water runoff and sewage from pedestrian walkways and roads. For many of these ancient civilizations, cleanliness was a religious tradition, giving rise to the expression or principle “cleanliness is next to godliness.” Still, epidemics and transmissions of communicable diseases have been prevalent throughout human history. During the great “liberation of

DEFINITION

Summary The public health industry addresses health issues that face both individuals and entire communities. The industry is multifaceted, comprising 1554

Public Health Services thought” in the fourth and fifth centuries b.c.e. in Greece, considered one of the major milestones in the history of human thought, a serious study of the causes of disease and epidemics was undertaken. Prior to this, disease and epidemics were largely attributed to the meddling of otherworldly beings and gods. The new school of thought in Greece, spearheaded by great philosophers such as Hippocrates (c. 460-370 b.c.e.), sought more earthbound causes. (Hippocrates himself is often referred to as the “father of medicine.”) The collapse of the Roman Empire around 476 c.e. brought with it a corresponding collapse of public health infrastructures. The Romans, who were famous for their water management and public health systems, suffered defeats by invading forces from European and Arab nations, both in Rome and throughout their realm. Lacking attention, the aqueducts and water systems that charac-

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terized the Roman Empire fell into disrepair. The Byzantine Empire, to which much of the former Roman regime migrated after Rome’s fall, assimilated many of the ancient Greek and Roman writings on public health practices. Europe, however, reverted to religious-based thought, and the Dark Ages followed. During the Dark Ages, sanitation and health issues in Europe increased, exacerbated by the development of large, crowded cities. In fact, Rome’s collapse was immediately followed by a plague. In the centuries that followed the Dark Ages—from which Europe emerged in the eleventh century— European governments began implementing strict cleanliness policies. These policies were designed to keep waste off the streets and to keep markets clean, not only to protect the public health but also to attract traveling consumers. This renewed focus on public health did not

A quarantine public health officer with the U.S. Centers for Disease Control and Prevention at Chicago’s O’Hare International Airport is charged with stopping infectious diseases from entering the United States. In 2007, an American with drug-resistant tuberculosis flew to several countries before being placed in isolation. (AP/Wide World Photos)

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prevent devastating pandemics, particularly as humanity grew closer together through trade and exploration. In the early fourteenth century, the disease known as Black Death arrived in Italy from central Asia. This pandemic originated in China then spread to India, moving along trade routes via fleas that resided on both rats and human travelers. In only a few years, about one-third of the entire population of Europe was dead, having succumbed to the violent illness. The root causes of the illness remain shrouded in mystery. Naturalists at the time speculated that the disease was born in the swamps adjacent to large cities. Later scientists believed it was an outbreak of the bubonic plague, which had appeared on numerous occasions throughout history. Others believed it was a hemorrhagic fever akin to Ebola. The disease itself remains a mystery, as did its cessation: It abruptly disappeared in 1351. During the era of exploration, European sailors introduced new diseases to the New World. Among these virulent strains was smallpox, a disease prevalent for millennia prior, but not present in either North nor South America. Millions of Native Americans were exposed and died as a result. It was believed that many of the items brought with these Europeans contained the agents of this disease. In 1918, another public health crisis erupted, this time in an industrialized society. Soldiers returning from World War I had been exposed to countless contaminants and germs while living in the trenches. This exposure was due to the close quarters and unsanitary conditions of the battlefield. Veterans returned home to the United States and elsewhere with coldlike symptoms. Those symptoms erupted into a far more significant and threatening illness—influenza. Influenza would eventually affect one-fifth of the human population. Over a two-year period, 675,000 Americans died of the illness, a number that surpassed the combat deaths in World War I. The number and severity of the pandemics and outbreaks that have occurred throughout human history have led to an evolution of public health services. Over time, medical experts and political leaders have been joined by policy makers, educators, emergency personnel, and public safety officials seeking to combat threats to public health. Agencies such as the Centers for Disease Control and Prevention (CDC) have been created not only to assess public health risks but also to trace the

roots of diseases as they occur. Agencies such as the CDC work alongside the numerous local, state, and national public health departments. The Industry Today The public health services industry is a vast network of interconnected agencies, businesses, and institutions. According to the American Public Health Association (APHA), the industry is dedicated to meeting ten goals: ■

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Monitoring the public’s health status to identify community health problems Diagnosing and investigating risks and threats Informing, educating, and empowering the public Mobilizing community partnerships Developing policies and plans that protect and maintain public health Enforcing public health laws and regulations Providing links and information to people with personal health needs Ensuring a competent public health workforce Evaluating and reporting on the industry’s effectiveness Conducting research to develop new insights into public health threats and innovative solutions to those threats

Because the health of individuals is often connected to the health of others (which is the very principle behind the concept of public health), medical practitioners such as doctors, nurses, and allied personnel are but one part of the broad public health services industry. In fact, the total population of people who work in public health, either directly or indirectly, is innumerable. The APHA, for example, has 500,000 public health workers in its ranks, which does not include its local, state, and federal government partners and associated groups. Educational opportunities for training in public health are equally innumerable, and there are dozens of major public and private universities that offer advanced degrees in public health. Harvard University, for example, offers one of the country’s leading programs. The program features students

Public Health Services from a wide range of backgrounds, including doctors, nurses, researchers, and social scientists. The field of public health entails an equally broad combination of disciplines, including epidemiology (tracing diseases to their sources), sociological analysis, statistics, environmental studies, and even history. Although the field of public health services is broad and multifaceted, it is not without connectivity. In fact, it is designed to be a network, taking into account elements that previous fields could not because of their historical limitations. Today’s public health services industry is organized in such a way that it can quickly assess public health risks and dangers, trace them back to their foundations, isolate and treat illnesses, implement protective government policies, communicate with the public on the issues at hand, and even introduce programs designed to prevent further spread of the negative agent or illness.

INDUSTRY MARKET SEGMENTS There are several major components to the modern public health industry. Among the longeststanding members of this network are the health care provider and institution. Doctors, nurses, and other medical professionals in hospitals, community health centers, private practices, and local clinics are at the forefront in the effort to combat public health dangers. In many cases, these health care professionals treat those afflicted with disease and other health conditions before their afflictions are known to represent community-wide risks. Because of their role in public health arenas, hospitals and medical facilities have also been focal points of health care reform proposals in the United States. This is particularly true because many poor and uninsured people turn to hospital emergency rooms for treatment of ill health, rather than seeking preventive care from primary care physicians. Another important component of the public health services industry is the government. Most political systems at their various levels (national, state, county, or municipal) have entities dedicated to initiating programs to promote good health, enforcing public health laws within their jurisdictions, and quickly assessing and reporting ep-

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idemiological risks and threats as they arise. Legislators and executive agencies are often on the tail end of public health issues, reacting to risks after the fact and issuing public policies designed to contain risks or to promote alternative behaviors that will mitigate them. The U.S. federal government has four agencies dedicated to public health, while a number of other agencies (such as the Department of Defense and the Environmental Protection Agency) also address public health as part of their functions. The military may be called in during disaster situations from which public health dangers may arise. Additionally, the contributions of the nonprofit sector to the public health services industry are invaluable. Nonprofit organizations are myriad in nature, and many of them have access to information about their constituencies that medical practitioners and researchers (as well as sociologists) may not. Some, such as the American Red Cross, the American Diabetes Association (ADA), and the AIDS Coalition to Unleash Power (ACT UP), may have data and perspectives on their respective constituents that may suggest better vehicles for preventing public health risks. The industry also relies heavily on the research of academic institutions. Schools of public health, medical schools, and other such programs conduct studies of existing public health systems and the dangers thereto. These studies help the industry as a whole not only address those dangers but also evolve in response to the altered conditions of an ever-changing population. Often, these schools and programs use grant monies from corporations and governments to conduct their research. Finally, the role of the public safety agencies in public health services cannot be discounted. Paramedics, police officers, and firefighters are invaluable agents of quick containment in the event of a public health emergency. They are typically the first responders to a disaster scene, such as a fire, earthquake, or severe weather event, all of which may create peripheral health risks even after the event has ended. The public health services industry is a vast network whose total population of workers is difficult to gauge. The constant evolution and adaptation of this industry to changing environmental conditions in the twenty-first century remain invaluable to the well-being of residents.

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Medical Practitioners Doctors and other health providers are often the first to encounter emergent public health threats. In the course of treating patients, they note patterns of illness and unusual symptoms, and they are responsible for notifying public health agencies of any worrisome anomalies. In addition, in the twenty-first century, it is possible for groups of medical practitioners to identify patterns accidentally: Reports of symptoms observed at clinics, hospitals, and other sites are aggregated and analyzed by agencies such as the CDC, so no individual frontline doctor needs to recognize an anomaly in order to sound the alarm. Conscientious reporting of seemingly innocuous data may be enough. Potential Annual Earnings Scale. According to Allied Physicians, physicians’ average annual salaries may be as low as $80,000 (for specialists in ambulatory medicine) and as high as $1.4 million (for specialists in orthopedic sports medicine or spine surgery). The U.S. Bureau of Labor Statistics (BLS) reports that, as of 2009, registered nurses earned an average of about $64,000 per year, depending on experience, education, and union contracts. Additionally, according to the BLS, medical technologists and clinical laboratory personnel earned about $54,000 per year on average, while orderlies and nursing assistants earned about $25,000. Clientele Interaction. The relationship between medical professionals and their patients is held in the highest regard. Patients under the care of a medical professional must feel that the individuals who are caring for them are focused fully on their needs. Put simply, the medical professional’s interaction with the patient is the most important part of the job. Amenities, Atmosphere, and Physical Grounds. The environment in which a medical practitioner works is highly professional. Medical facilities, by the nature of the work performed in them, are normally impeccably clean and bound by professional protocols and rules. These rules are imposed either by the institutions themselves or by the local, state, or federal government. The environment is typically very high paced, with a great many bureaucratic systems in place to ensure that each patient is properly attended, in spite of the high volume of patients who may be on site. Typical Number of Employees. The number of employees working in a health care institution

varies. Some hospitals employ hundreds of doctors and nurses, while some smaller medical groups may employ only a dozen or fewer. These employees include doctors and nurses and may also include on-site medical technicians, such as laboratory assistants and phlebotomists (blood work specialists), as well as physician assistants. Traditional Geographic Locations. Facilities that house medical practitioners are found in or near most cities and towns and in central locations in rural areas. They are typically situated near the highest concentrations of current and potential patients. Pros of Working for a Medical Facility. A medical facility such as a hospital, medical practice, or physician group offers employees a fast-paced workplace with numerous challenges. There is no typical work schedule, as medical workers encounter an unpredictable environment in which the treatment required for each patient is different. Medical facilities also make available to employees a wide range of resources, such as medical labs, libraries, and medical technologies. Such facilities also present medical professionals with candidates for case studies and, as a result, opportunities to write and publish scholarly articles. Cons of Working for a Medical Facility. Medical facilities are bound by budgetary constraints that are dictated by the revenues generated by patients and their insurance carriers. In medical facilities that administer to poor patients, reimbursement by the government is considerably less than reimbursement from insured patients. Budgets are therefore often very tight in such instances, limiting medical professionals’ ability to earn higher salaries, as well as the resources available to address public health needs. Additionally, nurses are often part of a union, which means that salaries and benefits must be negotiated at the end of every contract. Medical professionals also work long hours, as patients may require around-the-clock care. Costs Payroll and Benefits: Doctors are generally paid either on a salary or on a fee-for-service basis. The latter requires them—or their home institutions—to navigate both private and public bureaucracies in order to receive payment, arguing with insurance claims departments and Medicare administrators, for example, over

Public Health Services whether a given service was covered. Other medical staff may be paid annual or hourly wages, depending on the position. In many cases, they are represented by collective bargaining units. Supplies: Medical facilities and practices require a number of supply types. For the purposes of patient recording and management, they require a number of office supplies, such as computers, paper products, and other administrative goods and hardware. They also need a great deal of medical products and hardware, ranging from stethoscopes, intravenous (IV) bags, and surgical tools to heavy machinery such as computed tomography (CT) scanners and electrocardiographs (ECGs). They must also have basic supplies for patients, such as gowns, bedding, and other materials. Finally, they must have on site a sizable volume of medications, surgical supplies (such as gloves, scrubs, and masks), and other important items. External Services: Medical facilities may outsource security, cafeteria positions and catering, audiovisual support, and maintenance and custodial services. Utilities: Depending on the size of the medical institution, a sizable portion of its budget may be dedicated to electricity, water, and sewage. Telephones, cable television, and Internet access are also common expenses. Taxes: Medical professionals are subject to income taxes and sales taxes. In the United States, federal and state exemptions from commercial real estate, sales, lodging, and other taxes vary based on state law. For example, hospitals are generally exempt from local commercial real estate taxes, but private practices may not be granted similar exemptions. Government Agencies Federal and local governments monitor public health and formulate and implement plans to safeguard and improve health, both over the long term as a matter of policy and in response to short-term crises and disasters. Potential Annual Earnings Scale. The pay scale for public health personnel employed by local, county, regional, state, or federal government agencies and departments varies based on the position held and the level of government, as well as the geographic location of the position. The overall av-

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erage annual salary for a manager of a public health agency is $88,750, according to the BLS. Clientele Interaction. Client interaction is extremely important to public health officials’ endeavors. Departments of public health must frequently create and maintain outreach programs that provide the public with the most up-to-date information about public health risks and threats. Such programs involve frequent meetings with private citizens, in either group or individual settings, to ensure the delivery of the information. Public health departments must also enforce relevant laws and, because of this mandate, must consistently be in direct contact with individuals, businesses, and others within their jurisdictions. Amenities, Atmosphere, and Physical Grounds. The atmosphere of a national, state, county, regional, or local department of public health is a professional one. Most are located in government buildings, either occupying space in larger office buildings or as sole tenants. Much of their work entails managing a great deal of paperwork, including research reports, program summaries, and inspection reports. Depending on the size of the organization and the project or issue with which the department is faced, the work environment may be slow- or fast-paced. Nonetheless, the environment demands a high level of clerical organization and administrative order. Typical Number of Employees. Government agencies and departments dedicated to public health services vary in size based on the level of government, as well as the jurisdiction involved. Some local public health departments are composed of only a few employees (such as an office administrator and local inspectors), while larger departments, particularly those on the state and national levels, employ hundreds if not thousands of people to oversee their coverage areas. Traditional Geographic Locations. Departments of public health and other government agencies dedicated to addressing public health concerns are located throughout a given political system. Federal agencies in the United States are based in Washington, D.C., but they have offices in each of the states in order to coordinate with Washington. County and regional governments usually have public health departments located in the largest city or town in the area, usually a county seat. The CDC is headquartered in Atlanta, Georgia.

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Pros of Working for a Government Agency. Government agencies and public health departments have access to a wide range of resources that may be of great use to them in their pursuits. This range extends to Washington, D.C., in the case of the United States, where many of the nation’s public health policies and regulations are created. This point is important, as it means that even local government employees have the same information available to them. Benefits may also be above competitive levels, since governments negotiate reasonable rates for employee insurance, investment strategies, and other benefits. Cons of Working for a Government Agency. Because national, state, and local laws and regulations pertaining to public health are either uniform or expected to be compatible with one another, it may be a challenge to implement a new regulation in an area that may not fit the profile of the regulation. Regulations that are broadly imposed may not be easily enforced by a given local agency as a result of geography, sociological differences, or other factors. As a result, public health agents may become frustrated in their attempts to implement strategies that are not specific to their regions’ demographics. Additionally, funding for programs is not always consistent or equitably distributed among agencies. Some cities receive more money from a state or national government than do others for a number of reasons, and this imbalance of distribution may affect an agency’s ability to meet its goals and requirements. Costs Payroll and Benefits: Most public employees are paid salaries that are regulated by set pay scales and rules created and modified by legislative bodies. Public employees also tend to receive generous benefits. In some cases, much of public health policy implementation falls not to a paid staff but to a volunteer board of health (some members of which may earn small stipends for their work). Supplies: Departments of public health and other government agencies must have the necessary supplies to operate a strong administrative system, such as office supplies, computers, copiers, and similar equipment. They may also require field supplies, including hazmat (or hazard-

ous materials) suits, vehicles, and contaminantdetection hardware. External Services: Public health agencies and departments may outsource a number of duties, including building security, transportation, printing, public relations, and custodial and maintenance services. Government agencies, particularly national agencies, may also engage private laboratories to analyze contaminants and other substances to determine their public health implications. Utilities: Like most office environments, public health agencies pay for utilities such as telecommunications services, electricity, water, sewage, and similar services. Their rates may be less than those paid by private companies, as government agencies often negotiate lower rates directly with utility companies. Taxes: Government agencies require their employees to pay income taxes. In many cases, however, employees on official government business are exempt from state and local sales taxes, excise taxes, and other assessments; such exemptions tend to occur on a state-by-state basis. Nonprofit Organizations Nonprofit organizations relating to public health range from professional advisory organizations, such as the American Heart Association, to political advocacy groups, such as ACT UP, to nongovernmental organizations, such as the Red Cross. All attempt to improve public health, whether by demanding that more public resources be spent on a particular health problem or constituency, by disseminating useful information to the public, or by administering directly to those in need. Potential Annual Earnings Scale. Nonprofit organization salaries tend to be lower than the salaries of equivalent functions in the private and public sectors. Executive directors and association leaders tend to earn the highest salaries in such organizations, while administrative assistants and similar personnel are paid at the lower end of the organization’s salary schedule. According to PayScale, as of September, 2009, the salary of a nonprofit director or president ranged from about $44,000 to $180,000 per year, depending on experience. Clientele Interaction. Nonprofit public health organizations usually spend the bulk of their time

Public Health Services working with clients, communicating with them directly via local or regional meetings. Such an approach gives an organization opportunities to have a more intimate relationship with the people it serves and therefore helps it increase its impact on those people. Client interaction is therefore essential for nonprofit organizations. Amenities, Atmosphere, and Physical Grounds. Nonprofit organizations operate in professional office environments, but because of their client- and public-service-oriented missions, they may occupy smaller offices, preferring their employees to work with clients in the field. They are often less formal in terms of dress code but nonetheless remain dedicated to meeting their stated goals and benchmarks. Typical Number of Employees. Nonprofit organizations vary in size, depending on the scope of services they provide and the number of clients served. Some are very small, employing only a handful of full-time personnel. Others, however, may be considerably larger, with subsidiary organizations serving as part of a national or international network. These organizations may employ hundreds and even thousands of people on a full-time or consultative basis, as well as engaging a large number of volunteers. Traditional Geographic Locations. Nonprofit organizations are often located in major urban centers and capital cities, as many of them have vested interests in social and budget policy decisions at the government level. Additionally, many are found in areas heavily populated by those with whom they work, such as Native American reservations and other impoverished regions where public health issues may become manifest. Pros of Working for a Nonprofit Organization. Individuals who work at nonprofit public health organizations enjoy an ability to interact more directly and consistently with affected clients than do the employees of hospitals and government agencies. Those with a passion for addressing a specific public health issue—such as acquired immunodeficiency syndrome (AIDS), cancer, or childhood obesity—may enjoy the one-on-one interaction with clients that nonprofits create. Additionally, the relative informality of many nonprofit organizations may appeal to those who do not wish to wear professional clothes to work or be bound by strict professional codes of conduct.

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Cons of Working for a Nonprofit Organization. Nonprofit public health organizations are often hampered by a lack of donations or government grant monies, particularly during economic downturns. In the light of this fact, many of their programs may be cut short by budgetary constraints. Similarly, employees tend to have lower salaries and more limited benefits than do workers in other sectors of the industry. The relatively small size of many nonprofits limits opportunities for upward career mobility. Costs Payroll and Benefits: Nonprofits’ employees are usually paid on a salary or contractual basis. Organizations funded primarily by grants often tie salaries to grants. That is, a grant will fund a particular position or positions for the duration of a particular project. For the position to continue beyond the term of the project, further grants must be found. Supplies: Nonprofit public health organizations predominantly require stationery, filing materials, and related office supplies. They also need computers, telecommunications hardware, and other administrative supplies and equipment. Organizations whose personnel work in the field may also require cellular telephones, smart phones, laptop computers, and radios. External Services: Smaller nonprofits in particular often outsource computer and networking support, publishing and copying services, and accounting and tax services. Organizations that hold large events and charitable receptions usually contract event planners, caterers, and related services. Utilities: Nonprofit organizations are expected to pay basic utilities, such as electricity, telephones, and heat. In many cases, however, their rates are considerably lower than normal, negotiated with providers on the basis of the organization’s limited budget and altruistic nature. In other situations, many of the utilities will be included in the organization’s lease, creating a one-payment system. Taxes: Nonprofit public health organizations are typically exempt from a wide range of taxes, including federal income taxes, provided they meet certain government-imposed criteria. For example, in the United States, charitable orga-

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nizations that spend no more than 10 percent of their time on lobbying and that do not share profits among shareholders may qualify as 501(c)(3) groups. This status exempts them from most federal taxes and many state and local taxes, although personnel must still file personal income tax returns, and the organizations are still responsible for payroll taxes on employee salaries. Academic Institutions Academic institutions conduct research critical to understanding the nature of illnesses and other public health and safety threats. Like nonprofit organizations, academic institutions’ activities are often funded on a project-by-project basis by specific government or private grants. Indeed, academic scholars in the sciences are expected to conduct research precisely because it brings funding into their home institutions. Potential Annual Earnings Scale. Salaries and earnings among academic institutions dedicated to public health research vary based on the size of the university’s endowments and any grants that are provided either by the university or by external sources (such as corporate groups or the government). Academic clinical researchers earn an average of about $47,000 per year, while public health researchers may earn about $46,000 per year. Clientele Interaction. Client interaction among university-based public health researchers varies based on the requirements of the grant or program being conducted. The client of an academic researcher is usually the researcher’s host university or the company or government entity providing the grant. Researchers may be required to report their findings to their clients on a quarterly or annual basis, if not upon completion of the project. Amenities, Atmosphere, and Physical Grounds. Academic public health faculty and researchers tend to be based at larger universities, which provide them with access to a greater amount of resources. The environment of research institutions is typically professional and may or may not require business attire, depending on the nature of the work performed. Academic institutions are dynamic, and public health research departments may abut other departments that provide undergraduate and graduate education as well as research.

Typical Number of Employees. Academic institutions’ public health research offices vary in size based on the scope of the work performed. Some groups are very small, composed of a single researcher and an administrative assistant, while others are much larger, as they require the analysis of a great deal of data. The amount of available grant money and other funding also contributes to an institution’s ability to expand its staff to conduct larger analytical activities. Traditional Geographic Locations. Public health departments are usually located near or within university campuses. Their geographic locations often determine the resources that are available to them, including recruiting pools and technological systems that will aid them in conducting their research. In other cases, they have smaller operations located closer to their areas of study, such as impoverished rural areas or regions affected by environmental hazards. Pros of Working for an Academic Institution. Academic institutions offer a wide range of resources, often across the spectrum of public health (including economics, sociology, environmental engineering, and public policy, as well as medicine). Public health researchers may therefore enjoy an ability to conduct research that encompasses a broader perspective than they might find in a hospital or as part of a government agency. Many of these work environments are not as formal in terms of professional decorum, which may appeal to those who prefer to work in a less structured environment. Cons of Working for an Academic Institution. One of the most difficult challenges of working on a public health-related project within an academic institution is the fact that such projects rely on grants, endowments, and governmentimposed budget earmarks that may not be renewed from one year to the next. A team may thus go from operating with a sizable budget to working under extremely strict conditions (if its project does not lose funding altogether). Additionally, those personnel who prefer a degree of client interaction may not find a solely academic setting conducive to such interaction. Finally, those who are used to working in a corporate or government setting that establishes strict benchmarks and goals may find the flexibility and informality of academic work frustrating.

Public Health Services Costs Payroll and Benefits: Academic workers are often paid salaries or contractually through projectbased grants. Full-time academics earn salaries but may supplement those salaries with grants, while they are often expected to secure sufficient grant money to pay the wages of their research assistants. Supplies: Academic institutions performing public health studies require basic office supplies, such as telecommunications equipment, computers, and basic desktop materials. In addition, they must be equipped with laboratory materials and supplies, waste-management facilities (if medical waste is produced), and the necessary computer modeling and statistical software. External Services: Although many major universities and academic institutions are self-sufficient, a number of important external vendors may be called upon. For example, a public health department that utilizes medical samples may need a vendor that is equipped to dispose of such waste. Universities also often contract telecommunications providers. Utilities: Universities must pay for telephone, electricity, and energy usage, as well as water and sewage. Large institutions often negotiate lower than average rates for such utilities. Taxes: In general, institutions of higher learning are exempt from real estate taxes and federal taxes. In the United States, those exemptions require that any revenues generated from grants, philanthropic donations, and endowments be used to fund research and education and not to generate profits. Public Safety Public safety personnel are the first responders to any public health crisis. They rescue those in danger, treat people suffering from illness and other health defects, and protect and separate the general public from sources of danger. Potential Annual Earnings Scale. Salaries for public safety personnel vary based on experience, geographic location of the position, seniority, and the frameworks established by collective bargaining. According to salary survey Web sites such as PayScale.com and Salary.com, the national range for police officers in the United States is between about $31,000 and $81,000 per year. The range for

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firefighters is about $30,000 to $78,000 per year, and the range for emergency medical technicians (EMTs) and paramedics is about $9.80 to $20.50 per hour. (Similar salary ranges are reported by the BLS.) Clientele Interaction. Police, firefighters, paramedics, and other first responders encounter and aid people in crisis. In the event of a dangerous public health event, they are typically the first units to arrive on the scene. Client interaction is therefore a constant component of the job. Because such personnel are called upon to intervene in emergency situations, the interaction between them and private citizens can be of a confrontational nature. Amenities, Atmosphere, and Physical Grounds. Public safety officers are usually expected to be mobile. Some work in patrols, while others stay in their headquarters until called by emergency dispatchers. All are subject to such emergency dispatch calls. When they are at headquarters, they fill out reports, conduct inventory, and perform maintenance on vehicles and equipment. Public safety is a high-stress environment, largely because it generates often confrontational relationships between officers and the many private citizens with whom they must interact. Typical Number of Employees. Public safety departments vary in size based on the size of the jurisdiction covered. For example, major cities such as New York and Chicago each employ thousands of police officers, while many smaller communities employ only a few dozen. The number of paramedics in a particular location also depends on the size of the community, as well as the nature of the department (some are privately owned and operated, while others are publicly operated through fire departments). Traditional Geographic Locations. Police, fire, and paramedic personnel are located in or near every municipality and county in the country. In most urban and suburban locations, there are a number of fire stations. In many cities, there are multiple police district offices in addition to the main police headquarters. In rural environments, public safety departments are usually based in county seats or larger municipalities, and personnel patrol outlying areas. Pros of Working for a Public Safety Department. Working as a police officer, firefighter, or

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paramedic can involve a great deal of excitement. Such employees often place themselves at great risk to protect the lives of others. When they retire, they and their families generally receive strong retirement benefits, including insurance. Cons of Working for a Public Safety Department. Public safety work is dangerous. In public health situations, officers may be exposed to dangerous chemicals or fumes, virulent diseases and blood, and violent patients and situations. Additionally, police and firefighters are paid by way of contracts negotiated with the cities or counties in which they operate; when budget dollars are short, they may lose pay or even their jobs as a result of budget austerity. Many officers, paramedics, EMTs, and firefighters experience trauma in their daily work that can have serious psychological repercussions over time. Costs Payroll and Benefits: Pay and benefits for public safety officers are dependent on the geographic location of the posting and the negotiated salary structure (unless, like many ambulance companies, the organization is private). According to the BSL and annual salary surveys such as those conducted by PayScale.com, the highest-paid leaders are chiefs of police (who earn a national average of $88,000 to $99,000 per year) and fire chiefs (who earn a national average of $73,000 to $95,000 per year). Supplies: Public safety officials require office supplies, uniforms and protective clothing, and hardware and vehicles, including weapons, firefighting equipment, trucks, radios, and logistical systems. External Services: Most public safety departments are self-sufficient or maintained by other government entities. However, in many cases, police, fire, and paramedic vehicles must be maintained and repaired by external mechanics. Additionally, most equipment, such as weapons, bullet-proof vests, flame-retardant suits, and medical supplies may be maintained by the private vendors from whom it is purchased. Utilities: Public safety departments use a great deal of electricity, water, and telephone services, which come out of department or city budgets. Additionally, they use a large amount of fuel, particularly for trucks and patrol vehicles.

Taxes: Public safety departments are public, government entities and, as such, are exempt from most state and federal taxes. Personnel must, however, pay personal income taxes and other assessments. Many paramedic and ambulance organizations are privately owned and operated, and their tax-exempt status is determined on a state-by-state basis.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of the public health services industry is both compartmentalized and designed to interconnect its various components based on the demands of a given situation. For example, in the event of a natural disaster, emergency response, government, and health practitioners must all work in such a way that each segment is synchronized with the others. In the event of a disease outbreak or epidemic, government, health practitioners, and nonprofit organizations may work together to combat emergent illnesses, as well as to prevent dangerous behavior that might perpetuate the spread of such illnesses. The following umbrella categories apply to the organizational structure of entities providing public health services: ■ ■ ■ ■ ■ ■

Leadership First Responders Research and Analysis Communications and Public Affairs Policy Making Medical Care

Leadership Those who lead public health organizations, both public and private, are skilled administrators who are capable of organizing groups of people with diverse backgrounds and professional skills. They manage the overall operations and organizational structure of their agencies and institutions, and they oversee all aspects of an organization’s endeavors. They set goals and strategies, assign tasks to personnel, draft and implement budgets, and review all data and information that is to be issued to the public.

Public Health Services OCCUPATION

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PROFILE

Firefighter Considerations

Qualifications

Description

Controls and extinguishes fires, protects lives, and conducts rescue efforts.

Career cluster

Law, Public Safety, and Security

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

On-the-job training; junior/technical/community college; apprenticeship

Physical exertion

Heavy work

Physical abilities

Unexceptional/basic fitness; must lift/carry heavy objects

Opportunities for experience

Apprenticeship; military service; volunteer work; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

RES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Public health leaders generally earn higher salaries than anyone else in their organizations. Their job is to manage the overall functions of an agency or association, address systemic issues, guide any political activities when necessary, and ensure that all departments function effectively to address all relevant public health concerns. In most cases, they are also the public faces of their agencies, issuing statements and fielding questions from the media. A public health leader is generally well educated, usually holding a master’s degree in public health or business administration or a medical degree. Nonprofit leaders may not have such advanced degrees, but they often have undergraduate degrees and advanced training in organizational management. Public safety officials are also well educated in law enforcement training and disaster response. Leadership occupations may include the following:

■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Executive Director Secretary Board Chair Department Chair Department Chief

First Responders Law enforcement officers, firefighters, and field medical personnel such as paramedics and EMTs are charged with intervening in situations that represent a danger to public safety. They are often the first people on the scene when an incident occurs. In the event of a public health incident—a fire, chemical spill, or terrorist attack—they must contain the incident area, redirect crowds, mitigate the incident (by extinguishing a fire, for example), and accomplish similar tasks. Law enforcement officers may have college degrees and will have graduated from a police academy, where they learn disaster preparedness and crisis intervention skills in addi-

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PROFILE

Medical Scientist Considerations

Qualifications

Description

Seeks to improve human health by studying the causes of diseases and other health problems.

Career clusters

Health Science; Science, Technology, Engineering, and Math

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

Doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; volunteer work; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

IRA

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

tion to anticriminal actions. Firefighters, paramedics, and emergency medical technicians (EMTs) must similarly pass examinations and conduct specialized training before they can work in the field. First response occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Police Officer Firefighter Emergency Medical Technician Paramedic Hazardous Materials Specialist Health Inspector Fire Inspector Detective

Research and Analysis Public health researchers and analysts are called upon to compile and study data pertaining to public health risks and threats. They may study social behaviors and environmental conditions. In the case of epidemiologists, they may trace the occurrences of

disease outbreaks back to their sources. These workers analyze the effects of treatments, outreach programs, and public policies pertaining to the cessation of a health danger, gauging their effectiveness. Researchers, analysts, and epidemiologists are generally well educated and hold advanced degrees in public health, sociology, medicine, or a social science that entails statistical analysis. They must be able to operate across a number of disciplines in order to better understand the risks and benefits of public health issues. The average salaries for personnel working in this field are between $45,000 and $51,000 per year. Research and analysis occupations may include the following: ■ ■ ■ ■ ■ ■

Research Director Research Coordinator Project Manager Researcher Analyst Epidemiologist

Public Health Services ■ ■

■

Intern Administrative Assistant

■ ■

Communications and Public Affairs The task of issuing public statements about ongoing public health issues and risks falls to an organization’s communications and public affairs staff. This group is responsible for issuing media releases, drafting and distributing public-service information (via pamphlets, brochures, e-mails, Web sites, and other media) to alert the public to threats, and helping citizens prevent the development of negative health conditions. Communications and public affairs staff are college-educated, usually with undergraduate and graduate degrees in communications, marketing, or similar fields. They must be experienced in all forms of media, including Web-based communications and other cutting-edge technologies, as well as traditional forms such as print media, television, and radio. The U.S. average salary for a public affairs and communications specialist is about $57,000 per year. Communications and public affairs occupations may include the following:

■

Press Secretary Director of Communications/External Affairs

OCCUPATION

Public Affairs Manager Public Relations Coordinator Administrative Assistant

Policy Making The responsibility for formulating public health policy falls to government legislators and executive departments. Legislators write laws to regulate businesses, protect the environment, govern health care reporting and services, and provide emergency funds to mitigate disasters and epidemics (such as outbreaks of H1N1 and avian flu). Executive departments implement and enforce these laws by establishing oversight mechanisms and writing the regulations authorized by the laws. Lawmakers and executive department leaders are generally well educated, with advanced degrees in public policy and administration, law, business, or health care. Salaries vary widely, depending on the level of government, the individual’s professional experience, and government-set pay scales. Policy-making occupations may include the following: ■ ■

■

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■ ■ ■

Member of Parliament Representative Senator Legislative Aide Secretary

SPECIALTIES

Medical Technologists Specialty

Responsibilities

Bacteriologists

Study growth, structure, and development of bacteria and other microorganisms. They observe action of microorganisms upon living tissues of plants and higher animals, as well as on dead organic material.

Hemotherapists

Collect blood components and provide therapeutic treatments, such as replacement of plasma or removal of white blood cells, to patients and donors.

Histotechnologists

Prepare sections of human or animal tissue for immediate examination of specimens received from surgery.

Immunohematologists

Perform tests, recommend blood problem solutions to doctors, and serve as consultants to blood banks and the community.

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Public Health Services

Undersecretary Deputy Secretary Governor President Prime Minister

■ ■ ■ ■ ■ ■

Medical Care Hospitals, medical centers, clinics, and group practices play an integral role in the public health services sector. Doctors, nurses, and related medical staff are fully trained in the causes, transmission, and treatment of disease and other public health conditions, so they are able to work with patients to mitigate health risks. Medical professionals work as a team, caring for urgent care patients, drawing blood for tests, treating symptoms, and providing patients with information about the prevention of public health dangers. Medical professionals have advanced degrees in their fields, such as M.D.s, nursing degrees, D.D.S.s (doctors of dental surgery), and physician assistant or master’s degrees. Some have vocational training in medical assistance, such as medical technology, phlebotomy, or physician assistance. Salaries vary based on the field involved, the individual’s amount of experience, collective bargaining arrangements (for those positions that are managed by unions), and the geographic location of the position. Medical care occupations may include the following:

■ ■ ■

Physician Registered Nurse Dentist Licensed Nurse Practitioner Nursing Assistant Physician Assistant Medical Technologist Phlebotomist Laboratory Technician

INDUSTRY

OUTLOOK

Overview The public health services industry is a diverse and complex network, composed of a number of large individual industries. Its composition is reflective of the complexity of public health itself. Public health services do not focus entirely on treating epidemics of disease or other emergencies; they also take into account lifestyle issues, such as obesity, diet, tobacco use, sexual activity, and alcohol abuse, because such issues can create social groups whose conditions affect others in the community. Additionally, public health has a political significance. Many government social services are geared toward those with health conditions who cannot afford treatment. Increased volumes of people with tobacco-related illnesses (such as lung cancer and emphysema) who receive health care through Medicaid and other government care programs increase the financial strains on such programs. Furthermore, because public health emergencies warrant emergency money and services, political leaders have a vested interest in implementing preventative public health policies and regulatory measures. The public health industry continues to grow. Several of its components form some of the largest industries in the world. In 2006, for example, the U.S. health care industry provided about 14 million jobs, and it is expected to add A woman wears a protective mask at the Bangkok airport after an outbreak of 3 million more jobs by 2016. Nonprofit organizations that focus on swine flu in 2009. (©Dreamstime.com)

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public health, already one of the largest sectors of the nonprofit industry, account for as much as half of the entire industry’s revenue and employment, with millions of jobs and hundreds of billions of dollars in revenues for more than thirty thousand American nonprofit organizations. In the United States, public health is expected to hold the spotlight both as a political issue and as a critical public service. In the early 1990’s, the Bill Clinton administration attempted to pass comprehensive reform of the health care system, citing the need to provide affordable health care to all American citizens. Ear tags were used to trace the origin of a cow that came down with bovine The Barack Obama administration spongiform encephalopathy (known as mad cow disease) in 2003. Canrenewed this effort, successfully passada and the United States have banned certain types of feedstuffs thought to ing through Congress the Patient transmit the disease. (©Dreamstime.com) Protection and Affordable Care Act of 2010. It was repeatedly pointed out throughout the yearlong debate over this meaacross the globe. The continuing need to protect sure that total health care expenditures in the against epidemics and outbreaks, coupled with United States account for approximately one-sixth the recognition that dangerous lifestyles have an of the entire U.S. economy. impact on entire communities, leads to the conThe continuing emergence of viruses and disclusion that public health services remain an imeases in the integrated global community gives rise portant part of the twenty-first century global comto a continued need for public health outreach. munity. The so-called swine flu (also known as H1N1), eastEmployment Advantages ern equine encephalitis (EEE), Creutzfeldt-Jakob The diversity of the public health services indusdisease (the human form of “mad cow disease”), try offers potential employees an extremely broad and fears of transmission of avian flu to humans range of subfields in which to operate. Employees provide evidence of the ongoing need for active in this industry may have backgrounds in politics, public health services in the twenty-first century. medicine, sociology, environmental studies, eduSimilarly, the fact that so many developing nations cation, public relations, or law enforcement. While are still experiencing communicable diseases in this diversity allows for a great deal of individual canearly epidemic proportions represents an imperreer growth, people who work within the industry ative for public health services to continue to work are part of a network, working as an interconwith poor countries to combat the spread of HIV/ nected team either in the event of a public health AIDS, tuberculosis, hemorrhagic fever, and other emergency or when addressing ongoing public epidemics. These diseases, which may be treatable health issues. As was the case in both ancient and curable, if left unchecked can afflict large popGreece and Rome, this network is integral to ensurulations and ultimately spread to the rest of the ing that public systems and infrastructures do not world, as residents of affected regions travel to create public health dangers. other countries. While public health work requires a focus on the The public health services industry will most individual tasks of each component of the industry, likely continue to remain one of the most vibrant public health services personnel also have the benefit of taking a broader view of the effects of certain industries, not just in the United States but also

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conditions and behaviors on communities at large. Individual patients are important, but the systematic effects of their conditions on finances, emergency capabilities, and response times are equally critical in the eyes of public health professionals. This distinction is notable because such a broad focus can help prevent major public health crises from beginning or spreading. Annual Earnings The public health services industry is difficult to quantify in terms of earnings, particularly because a large percentage of it is nonprofit. Many activist organizations, community health centers, universities, and political institutions do not generate revenues or have government-initiated appropriations that mandate both public health services and extraneous activities in the same appropriation. According to the U.S. Internal Revenue Service, however, nonprofit hospitals in the United States generate about $8.3 million in excess profits after expenses. Overall, according to First Research, the U.S. hospital industry (nonprofit and for-profit) generates about $575 billion. Nonprofit health care organizations, according to a 1997 study, generated $385 billion in revenues. Around the world, the total health care expenditures of developed and developing countries amounts to $4.5 trillion, much of which is spent on public health services and programs. Industry earnings for nonsupervisory personnel working in the public health sector are generally higher than those working in other industries. It is believed that, in times of both economic boom and stagnation, this industry will continue to expand and hire individuals at pay scales above the national average in the United States and abroad.

American Public Health Association 800 I St. NW Washington, DC 20001-3710 Tel: (202) 777-2742 Fax: (202) 777-2534 http://www.apha.org Centers for Disease Control and Prevention 1600 Clifton Rd. Atlanta, GA 30333 Tel: (800) 232-4636 http://www.cdc.gov Harvard School of Public Health 677 Huntington Ave. Boston, MA 02115 Tel: (617) 384-8990 Fax: (617) 384-8989 http://www.hsph.harvard.edu U.S. Department of Health and Human Services 200 Independence Ave. SW Washington, DC 20201 Tel: (202) 619-0257 http://www.hhs.gov World Health Organization Ave. Appia 20 1211 Geneva 27 Switzerland Tel: 41-22-791-2111 Fax: 41-22-791-3111 http://www.who.int

ABOUT RELATED RESOURCES FOR FURTHER RESEARCH American Diabetes Association 1701 N Beauregard St. Alexandria, VA 22311 Tel: (800) 342-2383 http://www.diabetes.org

THE

AUTHOR

Michael P. Auerbach has over sixteen years of professional experience in public policy and administration, economic development, and the hospitality industry. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He is a veteran of state and federal government, having worked for seven years in the Massachusetts legislature and four years as a federal government contractor.

Public Health Services FURTHER

READING

Allied Physicians.com. “Physician Salaries and Salary Surveys.” June, 2006. http://www.alliedphysicians.com/salary_surveys/physiciansalaries.htm. Bayer, Ronald, et al. Public Health Ethics: Theory, Policy, and Practice. Rev. ed. New York: Oxford University Press, 2007. Billings, Molly. “The 1918 Influenza Pandemic.” Palo Alto, Calif.: Human Virology at Stanford University, 1997. Available at http:// virus.stanford.edu/uda/index.html. Experience.com. “What Sectors Make Up the Nonprofit Industry?” http://www.experience .com/alumnus/article?channel_id=nonprofit &source_page=additional_articles&article_id= article_1159823736672. First Research.com. “Hospitals Industry Profile Excerpt.” June 22, 2009. http://www.first research.com/Industry-Research/ Hospitals.html. Harvard School of Public Health. “About HSPH.” http://www.hsph.harvard.edu/about. Jenkins, Wiley D. Public Health Laboratories: Analysis, Operations, and Management. Sudbury, Mass.: Jones and Bartlett, 2011. Loue, Sana. Forensic Epidemiology: Integrating Public Health and Law Enforcement. Sudbury, Mass.: Jones and Bartlett, 2010. MedicineNet. “Definition of Public Health.” October 2, 2001. http://www.medterms.com/ script/main/art.asp?articlekey=5120. PayScale.com. “Salary Snapshot for Medical and Public Health Social Worker Jobs.” http:// www.payscale.com/research/US/Job=Medical _and_Public_Health_Social_Worker/Salary. Rosen, George. A History of Public Health. Baltimore: The Johns Hopkins University Press, 1993. Rosner, David, and Gerald E. Markowitz. Are We Ready? Public Health Since 9/11. Berkeley: University of California Press, 2006.

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Salary.com. http://swz.salary.com. Schneider, Mary-Jane. Introduction to Public Health. 2d ed. Sudbury, Mass.: Jones and Bartlett, 2006. Scutchfield, F. Douglas, and William Keck. Principles of Public Health Practice. 3d ed. Clifton Park, N.Y.: Delmar Cengage Learning, 2009. “Statistics on Nonprofit Hospital Revenue, Expense, and Excess Revenue.” Becker’s Hospital Review, February 26, 2009. http:// www.hospitalreviewmagazine.com/news-andanalysis/current-statistics-and-lists/statistics-onnonprofit-hospital-revenue-expenses-andexcess-revenue.html. Styles, Paula. “The Black Death, 1347-1351.” http://medievalhistory.suite101.com/ article.cfm/the_black_death_13471351. Themedica.com. “Medical Industry Overview.” http://www.themedica.com/industryoverview.html. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Internal Revenue Service. Colleges and Universities Compliance Project. http:// www.irs.gov/charities/article/ 0,,id=186865,00.html. _______. Exemption Requirements. http:// www.irs.gov/charities/charitable/article/ 0,,id=96099,00.html.

©Norman Chan/Dreamstime.com

Publishing and Information Industry

INDUSTRY

SNAPSHOT

General Industry: Communications Career Clusters: Arts, A/V Technology, and Communication; Information Technology Subcategory Industries: Art Publishing; Book Publishing; Calendar Publishing; Directory and Mailing List Publishing; Greeting Card Publishing; News Syndicates; Newspaper Publishing; Periodical Publishing Related Industries: Advertising and Marketing Industry; Broadcast Industry; Internet and Cyber Communications Industry; Motion Picture and Television Industry Annual Domestic Revenues: $157.9 billion USD (SAGE Glossary of the Social and Behavioral Sciences, 2007) Annual Global Revenues: $444.1 billion USD (Companies and Markets, 2007) NAICS Numbers: 5111, 519110

INDUSTRY

works may convey information, entertain, persuade, or engage in all these activities simultaneously. Databases and guides such as telephone directories also fall within the scope of the industry, which is an important component of the overall information and communications sector.

History of the Industry Published print was the earliest form of mass communication. Although the written word has been used since ancient times to convey messages to multiple readers or listeners, it was only after the printing press made it possible for a printed text to become standardized that print could become a mass medium. As literacy among the population grew, so did the industry. Before the advent of the printing press, most writing was done by hand. Producing written materials was a time-consuming and difficult process completed by scribes, often in monasteries. A single copy of the Bible took up to five years to complete. The audience for these manuscripts (often religious or Latin texts) was the educated class and the clergy, as the general population was illiterate.

DEFINITION

Summary The publishing and information industry mass produces and distributes written materials, including printed books, newspapers, magazines and other periodicals, as well as electronic or digital media that convey the same content, such as ebooks and online full-text databases. Published 1572

Publishing and Information Industry

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Publishing was revolutionized with the developThe Internet began to influence the publishing ment of the printing press in Germany in 1450 industry at the end of the twentieth century. Elecby Johann Gutenberg. Gutenberg’s press, the tronic rather than paper publishing presented optechnology of which spread throughout Europe portunities to significantly reduce costs associated quickly, eliminated the need for manual transcripwith printing and distribution. However, the fact tion and made books more accessible to everyone. that consumers were beginning to get information In the centuries that followed, the mechanized online meant decreases in sales, circulation, and printing press underwent many improvements, advertising revenue for the paper products that making the mass production of printed material had sustained the industry throughout its history. quicker and more affordable. By the eighteenth century, books were widely available throughout The Industry Today the world. Regular publications such as newspaThe publishing industry is facing radical chalpers also began to be produced. As printing techlenges and poorly defined opportunities in the nology advanced, making books easier to print, early twenty-first century. These challenges reflect other labor-saving technologies increased the averthe impact of the Internet. Reading habits are age amount of leisure time and wealth. Thus, more changing, and the industry has so far struggled to people had time to learn how to read and to exeradjust to these changes. cise this ability once they acquired it. Both literacy Serial publications such as newspapers have sufand printed materials designed to be read during fered significant declines in both readership and leisure time increased. These societal changes acrevenue in the early years of the twenty-first cencompanied calls for democratic reforms within the tury. One standard measurement of publication Church and within nations. Thus, the publishing readership is circulation, or the total number of industry became inextricably tied to the democopies produced and distributed. As of 2009, newscratic notions of a free press, free will, self-actualpaper circulation was down an estimated 10 perization, and autonomy. cent from its peak in the early 1990’s. Another meaIn many ways, the twentieth century was the sure of readership is household penetration, which golden era of publishing. By the early part of the is a ratio of newspapers read per household. At its century, regular publications such as magazines peak, the household penetration of all print newsand newspapers were produced in every corner of papers reached 130 percent, since many housethe world. Even after the advent of other modes of mass communication, such as radio and television, newspapers remained the most popular way for people to find out about current events. The second half of the twentieth century saw a strong trend toward consolidation within the industry. Smaller publishing companies, catering to local markets, increasingly came under corporate control. Part of the reason for this trend was that newer printing equipment was very expensive to purchase and maintain. Many small companies were unable to cover the high cost of equipment upgrades and were Many of the publishing industry’s products are sold in bookstores. (AP/Wide forced to sell out to large, cashWorld Photos) rich publishing concerns.

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pers into bankruptcy. This occurred even in large cities with traditionally strong markets. For example, both of Chicago’s major newspapers, the Chicago Tribune and the Chicago Sun-Times, declared insolValue Added Amount vency in late 2008 and early 2009. Many Gross domestic product $145.5 billion large publishing companies opted to stop Gross domestic product 1.0% print production of their flagship prodPersons employed 957,000 ucts. Instead, they switched to an InternetTotal employee compensation $85.8 billion only format. The Seattle Post-Intelligencer, for instance, ceased print publication in Note: Includes software publishing. early 2009. Source: U.S. Bureau of Economic Analysis. Data are for While the decline of newspapers has 2008. been the development of most concern in publishing, other branches of the industry have been suffering as well. The magazine industry has suffered similar drops in circulation and advertising revenue, largely as a reholds read multiple newspapers. In the early sult of the Internet’s impact. The global recession twenty-first century, household penetration fell to of 2007-2009 dealt a fatal blow to many magazines 54 percent. (This measure, however, only accounts that had enjoyed decades of success, including for print readership and does not take into account Conde Nast’s Gourmet and Modern Bride. Book sales Internet readership.) also declined in the wake of the global recession, Print newspaper and magazine revenue is also causing most of the largest book publishing firms down significantly since the end of the twentieth to take austerity measures. Many companies froze century. Classified advertising, traditionally a lusalaries and hiring and cut back on development crative revenue stream for newspapers, began to expenses. migrate to online venues such as Craigslist. Display Although publishing is in a moment of crisis in advertising, the mainstay of serial publications, has the early twenty-first century, there are many who also dropped. Whereas newspapers used to command profit margins of more than 20 percent, those margins fell to 610 percent in the early twenty-first century. The global recession of 20072009 also dealt a significant blow to the publishing industry. Major market newspapers saw unprecedented drops in advertising revenue because of the recession. The largest serial publishing company in the United States, Gannett Newspapers, experienced a 60 percent decline in revenue in early 2009. The New York Times Company, as another example, saw a drop in income of more than 50 percent in the last quarter of 2008. The dramatic drop in revenues that occurred in the early twenty-first century forced a Newspapers have lost advertising revenue to online venues such as number of well-established newspaCraigslist. (©Norman Chan/Dreamstime.com)

The Publishing Industry’s Contribution to the U.S. Economy

Publishing and Information Industry

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The Amazon Kindle is one of several e-book reading devices on the market. (AP/Wide World Photos)

feel that the Internet will provide opportunities to rejuvenate the industry. A recent study from Scarborough Research shows that readership is actually on the rise, as many publishing concerns have made their content available through multiple online sources. A 2009 study from Scarborough also found that newspaper readership in the United States was at 74 percent. Initial attempts to move print content online have so far had mixed commercial success, however. Some media outlets receive up to 20 or 30 percent of their revenues from online products, but online revenue still only accounts for around 6 percent of revenue industrywide. What is clear is that the industry must rethink its business model, and some publishing concerns have done so with success. Some community newspapers are seeing a rise in readership. Instead of requiring their readers to pay for subscriptions, they are making their papers available to a wide range of demographics—something that advertisers appreciate. Another threat to the publishing industry is the introduction of e-book readers such as Ama-

zon.com’s Kindle, Barnes and Noble’s Nook, and Apple’s iBooks application for iPad. Each e-book platform negotiates book pricing and profit share with publishers. When Amazon’s Kindle dominated the market, publishers feared the power that one distribution network would have on book pric-

Inputs Consumed by the Publishing Industry Input

Value

Energy Materials Purchased services Total

$1.7 billion $27.6 billion $163.4 billion $192.7 billion

Note: Includes software publishing. Source: U.S. Bureau of Economic Analysis. Data are for 2008.

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ing, marketing, and other elements. When Apple entered the market, however, contracts were renegotiated, and the prices of some e-books increased as publishers were able to use Apple’s more generous terms to force Amazon to improve its terms. This event was widely covered as a rare example of a situation in which increased competition resulted in increased prices for consumers.

INDUSTRY MARKET SEGMENTS Publishing companies range from fairly small to very large. Historically, most publishing businesses were very small and often family owned. This changed in the twentieth century, when many larger publishing corporations took over smaller concerns. The following sections give an overview of how differently sized companies operate. Small Businesses A small business in the publishing industry is likely to have annual revenues between $200,000 and $2 million. It will normally employ ten to fifty people, including distribution staff. Small publishing businesses are often dependent on larger companies to fulfill certain business processes, especially printing, because the costs associated with owning and maintaining modern printing presses are extremely high. Small presses or independent publishers (known as the “indie press”) also fall under this category, although they may also be considered midsize businesses. In 2005, small presses numbered sixty-three thousand and realized total sales revenues of $14 billion. Generally, small presses—as opposed to small publishing businesses that lack their own presses—have annual revenues of less than $50 million. Small presses are characterized by smaller print runs for titles and can include niche publishers, such as do-it-yourself (DIY) titles, poetry, or collectible books. Small presses typically release about twenty titles each year. As occurs in the newspaper industry as well, there is a constant cycle of small publishing houses being purchased by larger corporations, and the same concerns about independence and maintaining local editorial control arise. In general, though, because of the opportunities available through

multiple media outlets, the publishing industry is constantly renewing itself and new, independent houses spring up when more established small houses are absorbed into larger companies. Potential Annual Earnings Scale. According to Simply Hired, the average salary in the publishing industry in 2009 was $58,000. Individual salaries are dependent on many factors, including experience, location, and size of the publisher or company. Clientele Interaction. Publishers generally have two types of clients: readers and advertisers. For many kinds of small publishers, advertisers are the more important—and possibly the only—source of revenue. Small publishers sometimes actively solicit subscribers and book purchasers through telemarketing and promotional events. More often, they rely on their own advertising and word of mouth to acquire new readers. They solicit advertisers far more aggressively. Even small publishing companies usually have dedicated sales staffs whose primary job is to visit potential and active clients throughout their publications’ distribution areas. The sales staff is responsible for tracking clients’ marketing needs and providing them with appropriate advertising programs to meet those needs. Small presses have had some success using the Internet to advertise and market their products. Additionally, they have had success developing partnerships with small independent booksellers, who both support and market their products through their stores. Amenities, Atmosphere, and Physical Grounds. Small publishing companies may or may not have their own presses. If they do not, they require far less commercial space in which to operate: Three thousand square feet is about average. These small publishers require a space for interaction with the public, usually a reception desk and waiting area. They often display their products in these public spaces. Sales staff often have their own offices near the reception area and meeting spaces suitable for client interaction. Since there is often a fair amount of traffic into their offices, small publishing companies tend to be located in central, downtown areas. A good deal of space in publishing firms is dedicated to the electronic production of printed products. In this space, workers create and manage written content, design ads, and electronically lay out

Publishing and Information Industry publications. This area is generally not accessible to the public, but some clients may want to work directly with production staff to create their advertisements. If a small publisher owns its own presses, these may be located in the same building as the offices or at a remote and more industrial location. Printing presses are very large pieces of equipment, and they increase space requirements by several thousand square feet. The printing process is messy, loud, and potentially dangerous. Therefore, the public is generally not admitted to areas dedicated to printing. Some small presses have begun to offer print-ondemand or publish-on-demand (POD) services. With digital printing capabilities, these companies only need print the number of publications ordered, avoiding costly print runs and warehousing costs. This technology also makes it more feasible for authors to self-publish their works, footing the entire bill for printing costs and selling their publications on their own. Typical Number of Employees. Most small publishing businesses employ between ten and fifty people, including office support and reception staff, advertising and marketing representatives, production workers, and skilled and unskilled press workers (in firms that own presses). Distribution may be conducted by dedicated employees or independent contractors. Traditional Geographic Locations. Small publishing companies tend to be located in the largest city in a region. They typically have offices downtown to maximize accessibility to the public and potential clients. A small publishing business may also have presses at a remote location, possibly an industrial area, to mitigate space and noise concerns. Pros of Working for a Small Publisher. Employees of a small publishing business often have opportunities to learn about all aspects of the business. Smaller companies have freedom to control the content of their products. They also have more flexibility to develop marketing strategies to suit local client needs. Cons of Working for a Small Publisher. Small publishers have smaller cash reserves than do larger businesses, making them far more vulnerable to market fluctuations. They also have more limited access to new equipment, especially expensive printing presses and other equipment. This

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can put them at a major competitive disadvantage to larger businesses. Costs Payroll and Benefits: Small businesses generally pay employees an hourly wage or annual salary. Sales staff are often paid on a commission basis. Employees sometimes receive benefits including vacation and sick time, health insurance and 401(k) plans, though this is rarer among smaller businesses. Supplies: Small publishing businesses require computers, printers, telephones, fax machines, and general office supplies. Those that own their own presses require paper, ink, and machine parts. External Services: In addition to contracting printing to dedicated external presses, small publishers may contract collections and proofreading. They may also hire external cleaning, maintenance, or security companies. Post office boxes are commonly used by small businesses in this sector. Utilities: Small publishers have typical office utility expenses, such as heat, water, electricity, telephone, and Internet access. The utility costs associated with running a press are high and can add signifcantly to overhead. Taxes: Small publishers pay typical business taxes, including state and federal taxes on revenue, as well as payroll and property taxes. Midsize Businesses Midsize businesses in the publishing industry are generally defined as those with annual revenues of between $2 million and $50 million. They usually employ between 50 and 250 people, and they are likely to have multiple branches, often within a single geographic region. They generally own at least one printing press, which is sometimes shared by several publications in different communities. Some small presses fall within the category of midsize businesses. These largely independent ventures run fairly lean operations. Potential Annual Earnings Scale. According to Simply Hired, the average salary in the publishing industry in 2009 was $58,000. All other things being equal, employees of midsize publishers can be expected to earn salaries in line with the national average.

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Clientele Interaction. As is true of small publishers, midsize publishers serve both readers and advertisers. Reader relations are usually handled by a designated circulation or marketing department. Midsize publishing businesses strongly rely on local, regional, and national businesses’ advertising purchases. Interaction with advertising clients is typically handled by salespeople. Off-site sales visits to client businesses are important to maintaining strong advertising revenues. Some midsize publishers may also sell a sizable portion of their advertising space to advertising firms, which then resell the space to their clients at marked up prices. Amenities, Atmosphere, and Physical Grounds. Midsize publishing businesses are likely to have multiple locations, often in a single region. Offices range in size from modest (three thousand square feet) to large (ten thousand square feet). Offices typically include reception areas with secretarial desks and displays of print products. Advertising sales departments often have designated conference rooms for meeting with clients. These spaces are the most accessible to the public and are marked by a comfortable and inviting atmosphere. Publishing offices usually include clusters of offices used by written content developers such as writers and editors. Separate areas are usually devoted to graphic production, and there are often circulation departments as well that oversee the distribution of print products. The public is generally not allowed in these areas, which tend to be fast-paced and deadline-driven environments. Presses may be housed at the same location as main offices, or they may be at other sites. It is typical for a midsize publishing company to have several satellite offices that share a single press. Press areas are noisy, industrial, and potentially dangerous, and the public is usually forbidden from entering them. Typical Number of Employees. Most midsize publishers employ between 50 and 250 people. Generally, these employees will work in specific departments, such as reception, sales, editorial, graphic production, circulation, and printing. Traditional Geographic Locations. Midsize publishing companies often have several locations. These typically include offices in each of the larger cities in their regions. Having offices in multiple municipalities facilitates interaction with potential

clients. Traditionally, publishing companies have preferred downtown locations. Being close to population centers is often helpful to sales and circulation departments. Press operations are often conducted at separate locations. Printing presses are large and noisy, so they tend to be housed in industrial areas. A single press may serve multiple offices in a region. Pros of Working for a Midsize Publisher. Midsize publishers have a number of competitive advantages. They tend to have far higher equipment budgets than do small companies. Computer and office equipment is updated on a regular basis, boosting worker efficiency. Having the capital to own and maintain dedicated presses helps such companies control printing costs. Wider circulation in multiple markets allows midsize firms to attract regional and national advertisers in addition to their smaller local clients. Cons of Working for a Midsize Publisher. Some clients may feel more comfortable dealing with smaller and more local publishing companies than with midsize, regional companies. Larger companies, moreover, tend to have deeper cash reserves, allowing them to weather temporary drops in revenue better than midsize companies can. Moreover, large companies command higher purchasing power with regard to supplies such as paper and ink, so they can better control these costs. Costs Payroll and Benefits: Midsize companies employ a mix of compensation strategies. Higher-level employees tend to be paid annual salaries with benefits such as vacation, sick days, and 401(k) plans. Lower-level workers are usually paid hourly wages without benefits. Salespeople are often paid a commission based on advertising sold. Circulation workers are compensated as individual contractors and get a flat fee per unit delivered. Supplies: Publishers need regularly upgraded office equipment, including telephones, computers, and printers. Additionally, presses require fairly large investments in paper and ink supplies. External Services: Midsize publishing companies require at least one post office box per location. They may contract technical consultants to maintain telecommunications infrastructure, com-

Publishing and Information Industry puter networks, and press equipment. They also depend on external collection agencies to go after unpaid client bills. Utilities: Typical utility expenses include heat, water, electricity, telephone, and Internet access. Normally, by maintaining one or more printing presses, midsize publishing companies can accrue industrial-level utility charges. Taxes: Publishing firms must pay state and local tax on revenues. Additionally, they are liable for payroll taxes for all employees and property taxes on their offices. Large Businesses The publishing industry is increasingly dominated by large businesses, whose revenues range from $50 million to more than $1 billion. Large publishing houses are characterized by the great variety of publications under their control. Large newspaper publishers such as Gannett (USA Today) and McClatchy (Star Tribune of Minneapolis) publish more than twenty newspapers nationwide. Large periodicals publishers, such as Meredith (Better Homes and Gardens and Family Circle) and Time Warner (People, Time, and Sports Illustrated) are responsible for a similar number of major publications. Major book publishers, such as Random House and the Penguin Group, publish all over the world and in a variety of media including print, electronic, and audio. Many of these large publishing companies are divisions of even larger multimedia companies. Large publishing businesses employ more than 250 people and compete at a national and international level for revenue. They are often fragmented into regional offices, allowing sales staff to deal directly with local and regional clients. Potential Annual Earnings Scale. According to Simply Hired, the average salary in the publishing industry in 2009 was $58,000. All other things being equal, large publishers can be expected to pay above-average salaries in order to attract and retain the most qualified possible candidates for positions. Clientele Interaction. Large publishers deal with clients on a number of levels. Readers are usually contacted over the phone, through the mail, or on the Internet. In some ways, large publishing companies are less accessible to the public than their smaller counterparts.

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Advertising clients are often the most important source of revenue for publishers. They are served by staff located at local branch offices. Meetings with important clients often involve company staff traveling around the country and internationally. Large publishing companies also do quite a bit of business with advertising firms who represent clients, rather than just the clients themselves, as these firms typically purchase advertising space in bulk, at wholesale prices, and then resell the space to individual advertisers for a profit. Amenities, Atmosphere, and Physical Grounds. Most large publishing companies have multiple locations. These usually include several headquarters throughout the world, which tend to be fairly large buildings in excess of ten thousand square feet. Large publishing companies also often have many satellite offices, which may be as small as five thousand square feet. There is usually a reception area at the front of each office, where the company’s products are displayed. Guests are generally greeted at this reception area before being directed to the appropriate floor, office, or conference room. The headquarters of larger publishing companies tend to dedicate one or more floors to each business function or specific publication. They usually have large common conference rooms, which can be used for internal meetings or for client interaction. Smaller satellite offices tend to be organized more like midsize companies’ headquarters, with sales, editorial, and production departments for creating the print products, as well as circulation offices. They also tend to be located downtown in order to encourage interaction with local business clients. Large publishing companies own multiple, very large press operations, in excess of ten thousand square feet each. These are usually located in industrial areas, since they are massive, noisy, and must be accessible for trucks. Typical Number of Employees. Large publishing companies have more than 250 employees. They are significant employers in the areas in which they operate. Since they usually have multiple offices located around the world, they may employ thousands of employees. Some of the largest companies employ around fifty thousand people each. Traditional Geographic Locations. Large publishing firms are almost always headquartered in

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the most important cities in their areas of operation. They are typically located in the most expensive business districts of those cities, both to encourage client interaction and to bolster their prestige. Satellite offices, which typically deal with a single publication or region, are much more like the offices of midsize publishing companies. They tend to be located in the downtown areas of regional cities. Press operations, on the other hand, are housed in massive industrial buildings and tend to be located in the industrial outskirts of the cities in which their companies have offices. Pros of Working for a Large Publisher. Larger publishing businesses are among the largest multinational companies in any sector. They are publicly traded and have access to a scale of capital not paralleled elsewhere in the industry. With such massive cash reserves, the largest publishing companies are best positioned to survive industry changes. Cons of Working for a Large Publisher. Most of the employees of large publishing companies do not have very much decision-making power. Job functions, positions, and even regions of operation may change without local employee input. This situation translates into a kind of job insecurity that many workers find stressful. Costs Payroll and Benefits: Large publishing companies compensate workers in a number of different ways. Higher-level white-collar workers earn annual salaries and full benefits, such as health insurance, 401(k) plans, vacation, and sick time. Lower-level white-collar employees are normally paid an annual salary as well but may have limited benefits. Other workers are paid hourly wages with limited or no benefits. Delivery personnel are usually independent contractors paid per piece delivered. Supplies: Large publishing companies are major purchasers of office supplies such as computers, printers, fax machines, telephones, and so forth. They are also the largest buyers of press equipment, paper, and ink. External Services: Large publishing companies may outsource collections and press or computer maintenance, as well as legal and accounting services. Many, however, handle all these functions in-house. While they most likely have

large marketing departments, it is nonetheless common for large publishers to contract external public relations and marketing firms to design major ad campaigns. These external vendors will work in cooperation with a publisher’s own advertising and marketing staff. Utilities: Since they tend to operate a number of large offices throughout the world, large publishing companies have massive utility expenses. These include heat, water, electricity, and Internet access for offices. Large presses are massive industrial operations and are extremely utility intensive. Taxes: Large publishing companies often operate in more than one country, making their tax liabilities quite complicated. They must pay all appropriate federal, state, provincial, and local taxes on revenues. They are also responsible for payroll taxes in all areas of operation, as well as property taxes on their real estate and any applicable tariffs on imports and exports.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Regardless of size or products, all publishing companies require similar business activities to function. Division of labor becomes more specialized in larger companies, while employees in the smallest organizations have the broadest range of responsibilities. Duties are conducted on a single floor or building. At larger companies, job functions are executed in isolation from one another. The following umbrella categories apply to the organizational structure of businesses in the publishing industry: ■ ■ ■ ■ ■ ■

Business Management Office Management Sales and Marketing Editorial Production Printing

Business Management Business managers provide their companies with leadership. These white collar, salaried employees plan and implement company strategy at

Publishing and Information Industry the executive level. Business management positions are normally filled by employees with higherlevel degrees and years of experience in the industry. They have often worked in other roles within the same company. It is typical for the majority of upper management workers to be located in their companies’ main headquarters. Lower-tier business management staff are assigned to oversee operations at each location and publication. Job activities for business managers tend to be strategic, oriented toward maximizing profits for the overall company or for a specific product. Report generation is an important part of business management, and managers’ reports are sent up the chain of command to inform bigger picture decisions. The level of executive management varies with the size of a company. For example, a company that consists of a single newspaper may be overseen by the newspaper’s editor in chief. By contrast, a company that publishes dozens of newspapers and magazines will include many editors in chief and will likely be overseen by a president or chief executive officer. Business managers include a number of support staff positions, such as legal and accounting services. These employees are also consulted in developing actionable business plans. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Editor in Chief Managing Editor Regional Manager General Manager Office Manager Legal Counsel Vice President of Accounting

Reception workers provide the first level of interaction with the public. They act as the main telephone operators, directing calls to appropriate offices. They also greet guests to offices and are responsible for determining how best to serve each visitor’s needs. Administrative staff, meanwhile, directly support their respective departments by taking messages, keeping track of schedules, and ordering necessary supplies. There is often a subgroup of office managers dedicated to billing. These workers are responsible for all accounts receivable and accounts payable. They draft invoices and purchase orders, keep track of incoming payments, make bank deposits, and transfer funds to corporate headquarters. Most companies have dedicated human resources staffs to handle all employee issues. These staff members hire and fire employees, administer benefits, keep employee records, make sure the company is following fair labor standards, and oversee payrolls. Some companies, especially larger ones, have specific members of the office management staff who are in charge of department payrolls. Staff engaged in these roles at a specific location normally report to a superior, usually an office manager. These managers are ultimately responsible for all the activities having to do with the business functions of their offices or branches. Office management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Office Management Office managers include those workers who perform the functions necessary to the day-to-day operations of a specific regional branch or publication as a business. These jobs tend to be clerical in nature, including keeping records, ordering supplies, answering phones, and greeting visitors. Workers in this category usually have degrees in business administration, accounting, transcription, or related fields.

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■

Receptionist Administrative Assistant Billing Manager Human Resources Manager Payroll Administrator Benefits Specialist Accounts Payable Specialist Accounts Receivable Specialist Office Manager

Sales and Marketing The revenue that sustains publishing companies comes primarily from sales of print products or advertising space. Therefore, most companies dedicate significant resources to their sales and marketing departments. These departments are the ones primarily responsible for interacting with clients.

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If a publication runs classified ads (either print or online), which many newspapers and magazines do, it is likely to have a staff of inside salespeople dedicated to this revenue stream. Inside salespeople answer questions about classified ad rates, take orders, process payments, and make sure ads run correctly. Display advertising is the primary source of revenue for many publishing businesses. Sales and marketing staffs usually include several outside salespeople who reach out to potential business clients, help these clients develop advertising strategies and ads, and facilitate payment from clients. It is common for outside sales personnel to be divided among senior executive positions and junior assistant positions. Both inside and outside sales departments usually answer to a single manager, who is ultimately responsible for the sales revenue of one or more publications. This person works with sales staff to set advertising rates and strategic approaches in order to maximize revenue. In the case of companies that derive their income from the sale of products such as books and calendars, marketing department staffs are responsible for facilitating sales to retail outlets. Again, divided into executive- and assistant-level positions, marketing departments work with bookstores and other outlets to maximize product sales. Marketing approaches are usually overseen by marketing managers, who work with other departments to determine the potential economic viability of prospective products. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Sales Manager Inside Salesperson Outside Sales Executive Outside Sales Assistant Marketing Executive Marketing Manager Marketing Assistant

up with the words and images that draw readership. Employees in this category generally have higher degrees in English, journalism, or photography. Many publishing companies maintain staffs of reporters to investigate noteworthy events or topics. These reporters are responsible for submitting stories to run in their companies’ print products. In some companies, written content is provided by contributors rather than reporters. These contributors may be company employees, or they may be freelance writers who are paid per piece. Although some reporters and contributors also take pictures, many publishing companies employ dedicated photographers. These specially trained photojournalists use their skills to capture images that complement written stories. All potential content is screened and organized by editors. A single publication’s staff usually includes a number of different editors. Some specialize in writing headlines, some in selecting photographs, and some work in a single subject area. This latter type of editor may focus on news, sports, or entertainment. All editors within a single office usually report to a chief editor, who is in charge of the day-to-day management of publication content. All members of an editorial staff answer to a publisher, who is ultimately responsible for the overall content and layout of print products. Publishers may be removed from daily editorial operations, but they serve as conduits between the editorial department and business management staff. Editorial occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Editorial An editorial department primarily determines product content. Whether working with newspapers, magazines, books, or other publications, members of editorial teams develop the specific character of their companies’ products. They come

Reporter Contributor Photographer Photo Editor Headline Editor Subject Area Editor Chief Editor Publisher

Production A production department is where a given publication is electronically produced. Production workers design and coordinate all elements of a publication before it is sent to press, turning

Publishing and Information Industry OCCUPATION

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SPECIALTIES

Journalists Specialty

Responsibilities

Columnists

Analyze news and write columns or commentaries based on personal knowledge and experience with the subject matter. They gather information through research, interviews, experience, and attendance at functions such as political conventions, news meetings, sporting events, and social activities.

Critics

Write critical reviews of literary, musical, or artistic works and performances.

Editorial writers

Write comments on topics of reader interest to stimulate or mold public opinion in accordance with the viewpoints and policies of publications.

News writers

Write news stories from notes recorded by reporters after evaluating and verifying the information, supplementing it with other material, and organizing stories to fit formats.

Reporters and correspondents

Gather and assess information, organize it, and write news stories in prescribed styles and formats. They may also take photographs for stories and give broadcast reports, or they may report live from the site of events.

unformatted text and graphic elements into fully laid out, print-ready publications. Production workers often have degrees in art, graphic design, or computer science. A good deal of the production work that goes into serial publications involves ad design. This is usually handled by designated graphic artists, who work with sales personnel to create ads that suit client specifications. Graphic artists also create other elements of publications, including cover design. Since the advent of online publications, graphic artists have been required to be well acquainted with digital and desktop publishing applications. Layout is also a major responsibility within this department. Layout designers, usually overseen by a layout manager, coordinate with editorial staff to give publications their desired visual characteristics. In some publishing companies, especially those that produce magazines, one person is responsible for the overall look and style of publications. This person is often called the creative director and usu-

ally answers directly to higher-level business management staff. Production departments rely heavily on computer software to render publications suitable for printing. Since this area of a publishing company tends to use the most advanced computer technology, production departments usually include computer specialists. These computer specialists may provide support to other departments, but they are primarily responsible for maintaining the computer systems used in electronic publication development. Production occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Graphic Artist Art Director Layout Designer Layout Manager Creative Director Computer Technician Network Administrator

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Publishing and Information Industry OCCUPATION

PROFILE

Prepress Technician Considerations

Qualifications

Description

Prepares printed material for printing presses by transforming text and pictures into finished pages and making printing plates of those pages.

Career clusters

Arts, A/V Technology, and Communications; Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

High school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; part-time work

Licensure and certification

Usually not required

Employment outlook

Decline expected

Holland interest score

RIE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Printing The printing department of a publishing company is responsible for the physical printing of all publications. It is an industrial department, using large and mechanically sophisticated pieces of press equipment. Presses are extremely expensive, starting at $1 million. Since printing departments often operate a series of presses, they are responsible for a large part of a company’s monetary investment. Presses are often run twenty-four hours a day, so printing department workers are employed in multiple shifts. Workers in printing departments vary in skill level. The less-skilled employees, who engage in more menial physical tasks such as stacking publications as they come off the press, are usually paid by the hour. Less-skilled press workers often also serve as maintenance and janitorial support staff for other departments. Other workers who are licensed to operate heavy machinery such as forklifts

may be paid by the hour or given an annual salary. Skilled press operators are usually salaried employees, as are the specialists who maintain the presses. There are two main kinds of printing press in modern use. The older and more common is the offset-type press, which uses a reverse image on a plate or film to print on paper. The industry is now transitioning to digital presses, which print in much the same way as modern laser printers, driven by computer software that describes the image to be printed. While offset presses are still the cheapest to purchase and operate, many press workers believe that everything will be done digitally in the future. Thus, there is an emerging need for career press workers to have advanced computer skills. Printing occupations may include the following: ■ ■

Postpress Assistant Assistant Press Operator

Publishing and Information Industry ■ ■ ■ ■ ■

Press Operator Lead Press Operator Platemaker Press Maintenance Mechanic Press Department Manager

INDUSTRY

OUTLOOK

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line content, hoping to balance advertising revenue and reader subscriptions. Other organizations have decided to make all of their content accessible, relying most heavily on advertising revenue to maintain their positions. Serial publications are feeling the impact of both long-term and short-term drops in revenue. Normal revenue within the industry has traditionally been around 20 percent annually. In the early twenty-first century, this figure dropped to less than 10 percent. Further, the recession of 20072009 did significant damage to newspaper revenues. Most of the major newspaper publishing firms reported 40 to 50 percent drops in revenue during this period. The Department of Labor projects that book, periodical, and directory publishing will remain relatively stable. However, it notes that even these components of the publishing industry are sensitive to economic fluctuations. In the wake of the recession, book sales immediately declined 7 percent. This was a greater revenue decline than book publishing companies anticipated, and it demon-

Overview The outlook for print publications in this industry shows it to be in decline. By any measurement, the publishing industry is in a moment of flux, a crisis of identity that many analysts consider to be the end of traditional publishing. According to U.S. Department of Labor projections, employment in the industry will decline 7 percent between 2006 and 2016. Total employment in all industries is predicted to increase 11 percent in the same period. Readership of serial publications has declined throughout the twentieth century. Whereas the average American household in the 1920’s read 1.3 newspapers on a regular basis, now only around half of households report reading newspapers. PROJECTED EMPLOYMENT Declining readership reflects the FOR SELECTED OCCUPATIONS impact of the Internet. As the public increasingly finds its news Publishing Industries and entertainment online, there is less demand for print publicaEmployment tions. Younger people are more 2008 Projected 2018 Occupation likely to use the Internet to find information, and this trend is re53,300 43,500 Advertising sales agents flected in the fact that the lowest 69,500 88,300 Computer software engineers levels of newspaper readership are in the younger demographic. The 4,400 5,300 Database administrators trend toward lower levels of print 10,300 7,000 Desktop publishers newspaper readership is therefore likely to continue into the future. 66,100 55,300 Editors It is incumbent on news orga27,010 29,000 Graphic designers nizations, if they are to remain in business, to re-create the way they 5,100 4,200 Proofreaders and copy markers deliver the content they produce. 9,100 7,400 Writers and authors Some news organizations are succeeding, although the most sucSource: U.S. Bureau of Labor Statistics, Industries at a Glance, cessful method of maintaining Occupational Employment Statistics and Employment readership is still undetermined. Projections Program. Some organizations are requiring paid subscriptions for their on-

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strated that no sector was entirely immune to the changes taking place within the industry. Although many analysts consider the publishing industry to be in serious trouble, it is not going to vanish. Instead, it will transform. The Internet is creating information services that incorporate written articles and videos. As the Department of Labor’s projections indicate, this is helping blur the traditional distinctions between media industries. Though sustainable business models that embrace the new online reality have yet to be invented, there is every reason to believe that the Internet’s blurring effect will create new opportunities for many kinds of companies in the publishing industry. Employment Advantages The publishing industry is currently in a moment of profound change and a crisis of identity. Traditional business models are beginning to fail. However, it will survive in some form as long as the written word remains an important mode of communication. Despite the fact that publishing careers are increasingly unstable, working in this industry is the best way to gain media experience. All forms of media and entertainment rely heavily on talented writers. Individuals with an interest in the written word can gain a level of writing experience in the publishing industry that would be hard to achieve elsewhere. The deadline-driven nature of most publishing companies teaches writers to produce quality copy in a limited time frame. This is a valuable skill for an employee in any business sector to have. The publishing industry also remains an excellent place for people who enjoy research. Whether producing newspapers, magazines, or books, publishing businesses rely on investigative talent. Few other jobs can give an individual as many opportunities to hone qualitative research skills. Perhaps the most attractive reason to consider a career in publishing is precisely that the industry is changing so rapidly. People entering the world of publishing now will have unparalleled opportunities to help shape the future of the industry. Pioneering sustainable business models in the age of the Internet will be an incredible challenge, and those involved will be able to define publishing for future generations. Moreover, those who are among the first to formulate successful revenue

models for online publishing stand to become not only influential but also incredibly wealthy. Annual Earnings Rising interest in online media has led to longterm revenue stagnation throughout the print industry. Global economic woes have made it clear that publishing is very fragile. Although analysts at such organizations as the Datamonitor Group originally forecast that the $157.9 billion U.S. industry would grow at a modest rate of 3.4 percent, the global economic crisis erased that expected growth entirely. Some sectors of the industry are in fairly dramatic decline. Publishing businesses that depend on advertising revenue are in the most serious trouble going forward, as online advertising operates largely indepently of the content in which it appears. According to respected market research firm PricewaterhouseCoopers, advertising revenue is expected to remain lower than 2008 levels through 2013. The firm’s report warns that advertising revenue may remain down permanently, as advertisers reconsider their options. Newspaper companies are expected to be hurt the most by advertising losses. Magazine advertising revenue also felt the impact of the recession. According to the industry association Magazine Publishers of America, U.S. magazine ad revenue dropped 21.2 percent in the first half of 2009. The third quarter represented a slight improvement, as losses posted in September, 2009, were only 18.6 percent, year over year. Book publishers are also suffering drops in revenue. The recession hurt book sales in 2008. According to the Association of American Publishers, U.S. book sales fell 2.8 percent in 2008. However, this sector is expected to rebound modestly. Although the global industry is stagnant overall, there are exceptionally robust domestic publishing industries in some countries. In India, for instance, publishing is expected to grow by 5.6 percent annually between 2009 and 2013.

RELATED RESOURCES FOR FURTHER RESEARCH American Society of Newspaper Editors 11690-B Sunrise Valley Dr. Reston, VA 20191

Publishing and Information Industry

poration that owned it. He is currently conducting research into the role the Internet plays in shaping future business trends in South Asia.

Tel: (703) 453-1122 http://www.asne.org Association of American Publishers 50 F St. NW, 4th Floor Washington, DC 20001 Tel: (202) 347-3375 Fax: (202) 347-3690 http://www.publishers.org International Publishers Association 3 Ave. de Miremont 1206 Geneva Switzerland Tel: 41-22-704-1820 Fax: 41-22-704-1821 http://www.internationalpublishers.org Magazine Publishers of America 810 7th Ave., 24th Floor New York, NY 10019 Tel: (212) 872-3700 http://www.magazine.org Newspaper Association of America 4401 Wilson Blvd., Suite 900 Arlington, VA 22203 Tel: (517) 336-1000 Fax: (571) 366-1195 http://www.naa.org Small Publishers Association of North America 1618 W Colorado Ave. Colorado Springs, CO 80904 Tel: (719) 475-1726 Fax: (719) 471-2182 http://www.spannet.org

ABOUT

THE

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AUTHOR

Adam Berger holds a Ph.D. in social anthropology from the University of St. Andrews and maintains a strong interest in the interplay between technology and human communication. He has been working in the market research and print journalism fields for over a decade. Berger was the general manager of a small newspaper for two years, until his branch was closed by the large cor-

FURTHER

READING

Burns, A. The Power of the Written Word. New York: Peter Lang, 1989. “Chicago Sun-Times Files for Bankruptcy.” Chicago Tribune, March 31, 2009. “Conde Nast to Close Gourmet Magazine.” The Guardian, October 5, 2009. Henderson, J. The World of the Ancient Maya. Ithaca, N.Y.: Cornell University Press, 1997. “Indian Media Industry to Outshine Global Peers.” Financial Express, July 31, 2009. Madigan, C. The Collapse of the Great American Newspaper. Chicago: Ivan R. Dee, 2007. Martin, S., and D. Copeland. The Function of Newspapers in Society: A Global Perspective. Westport, Conn.: Greenwood Press, 2003. Meyer, P. The Vanishing Newspaper. Columbia: University of Missouri Press, 2004. Moorehouse, A. C. The Triumph of the Alphabet: A History of Writing. New York: Henry Schuman, 1953. Moscati, S. The Face of the Orient: A Panorama of Near Eastern Civilizations in Pre-classical Times. Chicago: Quadrangle Books, 1960. “The New Austerity in Publishing.” The New York Times, January 4, 2009. Peddie, R. A. Printing: A Short History of the Art. London: Grafton, 1927. “Seattle P-I to Publish Last Edition Tuesday.” Seattle Post-Intelligencer, March 17, 2009. “Tribune Co. Files for Bankruptcy.” Chicago Tribune, December 9, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

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Real Estate Industry

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Real Estate Career Clusters: Business, Management, and Administration; Marketing, Sales, and Service Subcategory Industries: Escrow Agencies; Lessors of Miniwarehouses and Self-Storage Units; Lessors of Nonresidential Buildings (Except Miniwarehouses); Lessors of Other Real Estate Property; Lessors of Residential Buildings and Dwellings; Offices of Real Estate Agents and Brokers; Offices of Real Estate Appraisers; Real Estate Asset Management Services; Real Estate Property Managers Related Industries: Banking Industry; Building Architecture Industry; Building Construction Industry; Environmental Engineering and Consultation Services; Financial Services Industry; Home Maintenance Services; Legal Services and Law Firms Annual Domestic Revenues: $1.3 billion USD (U.S. Census Bureau, 2009) Annual International Revenues: $35 billion USD (Urban Land Institute, 2009) Annual Global Revenues: $90.2 billion USD (Urban Land Institute, 2009) NAICS Number: 531

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DEFINITION

Summary The real estate industry affects many aspects of the United States’ financial stability. This industry comprises both residential and commercial real estate. It includes anything from the disposition of raw land to development and the value of goodwill in the sale of a commercial establishment. The industry provides real estate services for others and does not include private investors dealing on their own without the use of licensees. Industry employees facilitate the sale, exchange, rental, and leasing of tangible and intangible assets. They also manage, market, and procure those assets, whether with private individuals, with investment corporations, through the banking industry, or through government entities. Real estate licensees provide their services and expertise to assist clients in procuring real estate for the clients’ benefit and to ensure that all laws and regulations regarding those transactions are followed. History of the Industry What could be termed the first real estate law in England was enacted in 1066, when King William decreed that he owned all of England by right of conquest. He thus had the right to

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deed the land to other English nobility, who subThe financing arm of real estate evolved to inleased it to commoners in exchange for goods or clude mortgage bankers and mortgage brokers. services. This decree later led to a compilation of Mortgage bankers fund their own loans as direct English common law and the beginnings of a mortlenders and have warehouse lines (lines of credit gage system. That law included a provision that a through different banks) to close loans. Just as increditor would be given an “interest,” or protection surance brokers attempt to find the best policies in getting his debt paid, by the new owner of a sold for their clients’ needs from among their selected property. According to this law, a mortgage was not panels of insurers, loan brokers act as financial a final but only a conditional sale until payment was intermediaries between borrowers and lenders. made in full. Loan brokers originate loans and then broker After the Industrial Revolution, the banking inthem to banks or financial institutions. These instidustry began to provide mortgages. Early mortage tutions provide loans to brokers at wholesale rates recipients were often required to make 50 percent and pay commissions or fees to brokers for bringdown payments on five-year mortgages. At the end ing them loan applications. All these financial entiof that term, the unpaid balance would have to be ties are governed by the department of financial ineither paid or, if possible, refinanced. stitutions or the department of real estate. The earliest real estate agents were termed “esFrom that small group of people that banded totate agents,” as they were responsible for managing gether to form one unified organization, the Naan estate. That role evolved into the role of real estional Association of Realtors (NAR) has grown to tate salesperson. Salespeople worked exclusively cover all aspects of real estate. Over the years, addifor property owners and were given the task of findtional divisions of the industry have occurred to ading buyers. Buyers, for their part, could work only dress new specialties and the needs of the public. with the agents attached to the properties they In the wake of the financial crisis of 2007-2009, the wished to purchase. There were no formal stanindustry continues to evolve, creating training and dards for conducting this business. By 1913, a business practices for handling foreclosures and group of American real estate agents created byshort sales. laws to govern the industry and a code of ethics. In 1916, the term “Realtor” began to be used to idenThe Industry Today tify real estate professionals who were members of Today, the NAR has over 1.2 million members. the new national association, the National AssociaIn addition to the specialty divisions of the association of Real Estate Boards (later the National Association of Realtors), and who adhered to its bylaws and code of ethics. With the Great Depression and the collapse of the banking industry, the Federal Housing Administration (FHA) was created to insure mortgage lenders against losses from default. The FHA developed a thirty-year, fixed-rate loan program. Payments under this program were lower than they had been, so purchasing a house became more feasible for lowerincome Americans. Loan terms and interest rates were usually set according to local economies that varied from state to state. In 1938, the government established the Federal National Mortgage Association Whether representing a client as a buyer or seller, a broker has a duty (FNMA), known as Fannie Mae. It bought to negotiate a purchase offer at a price and terms acceptable to that those FHA-insured loans and sold them as client. (©Dreamstime.com) securities on the financial markets.

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tion, affiliates include the National Association of Home Builders Urban Land Institute and Appraisal Institute. Government agencies oversee the licensing guidelines and practices of real estate agents, as well as employing county and city assessors to evaluate private and institutional properties. The U.S. Bureau of Labor Statistics (BLS) projects that real estate broker and sales agent jobs will increase by 14 percent between 2008 and 2018, faster than the average of 11 percent for all occupations. The NAR is one of the largest trade organizations in the country, and it is active in protecting the rights of real estate ownership. While any individual has the right to contract with another individual to purchase or sell real estate, the complexities and legal ramifications of these transactions motivate most people to use the services of licensed real estate agents. In every U.S. state and the District of Columbia, real estate brokers and sales agents must be licensed. They must pass written examinations according to the guidelines of their states and complete a specific number of hours of classroom instruction. When a real estate broker is hired to provide a service, an agency relationship is created between the broker and another person, called the principal. All states have laws governing the relationship between real estate agents and clients, whether agents represent buyers, sellers, or both parties. In dual agency, one agent represents both the buyer and the seller in the same transaction. Dual agency is not allowed in some states. Where it is permitted, it must be disclosed to all parties. The buyer and seller must both consent to the dual-agency relationship.

Inputs Consumed by the Real Estate Industry Input

Value

Energy Materials Purchased services Total

$22.9 billion $63.0 billion $641.0 billion $726.9 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

Brokers have fiduciary duties to their clients or principals. They must act in their clients’ best interests and put those interests above all others, including their own. They must also exercise diligent use of their real estate skills and knowledge to represent their clients and carry out all responsibilities of the agency relationship. Brokers are required to safeguard their principals’ confidentiality and not disclose any details that could adversely affect a principal unless given permission. However, they are also required to disclose any details of a negotiated property’s condition, even if doing so would violate disclosure requirements. If they are involved in property management or in any way handling funds for principals, they must account for all of those funds. Whether representing a client as a buyer or seller, a broker has a duty to negotiate a purchase offer at a price and terms acceptable to that client. The broker must deliver the offer to the listing agent in a timely manThe Real Estate Industry’s ner, and the listing agent is to present any offers to purchase to the seller as soon as Contribution to the U.S. Economy is reasonably possible. Brokers are required to provide clients with copies of Value Added Amount any agency disclosure forms before writGross domestic product $1.647 trillion ing offers or presenting sellers with ofGross domestic product 11.4% fers, so there will be no misunderstandPersons employed 1.534 million ing as to where their loyalties lie. Total employee compensation $80.3 billion A real estate agent must be supervised by a real estate broker. Even though the Source: U.S. Bureau of Economic Analysis. Data are for agent may be the only one meeting a 2008. given client and drawing up relevant documents, the agent is acting under the au-

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A listing is an agreement between a property owner and a real estate agent, whereby the agent agrees to find a buyer for the property at a stated price and terms in return for a commission. (©Olivier Le Queinec/Dreamstime.com)

thority of the broker. If an agent leaves a broker’s office, the broker’s listings—including the ones on which the agent has worked—remain with the broker. Some real estate designations require apprenticeships or specific training programs. These include appraising and commercial sales and leasing. However, all offices train their employees in their specific office procedures. In the field of residential real estate, individual offices also provide some hands-on assistance to new agents to help them through their first few transactions. Real estate brokers can open their own offices to sell real estate, operate escrow companies, make loans, perform appraisals, provide property management, and run real estate auctions. All these actions entail specific government regulations that attempt to prevent conflicts of interest. Any business associations that have affiliated interests, whether by corporate charter or familial relationship, must be disclosed. Any financial interest gained by completing a real estate transaction must be disclosed,

whether it is an actual part ownership, commission, or potential for profit sharing. As an example, if a real estate brokerage used its own financing company to finance a transaction, it would need to disclose the actual commission on the sale and whether the finance company provides profit sharing to those who work for the brokerage. Both agents and brokers are required to undergo continuing education as a condition of license renewal. Specific courses required differ from state to state. Failure to complete a state’s continuing education requirements within the mandated time frame can result in tempoary suspension of one’s license. Some real estate offices are one-person operations, handling only specific types of real estate transactions, such as property management, appraisals, loans, or sales of specific property types, from residential to commercial. Some offices employ many agents at only one location. Others are parts of national franchises. Many such franchises

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During the 2007-2009 economic downturn, many agents and brokerages began specializing in foreclosures. (©Dreamstime.com)

offer full concierge services for their clients. They stage properties for sale, negotiate loans, provide home inspection services, initiate relocation services, and provide referrals for moving companies. During the financial crisis, many businesses shut down or consolidated offices. However, there is always a need for more agents, as some retire from the industry and others leave to find new careers. During the downturn, many agents and brokerages began specializing in foreclosures, hoping to capture a share of this lucrative field. As many properties began selling at as little as half their previous values, home and commercial ownership became much more affordable than they were at the market’s height. These low prices have drawn more buyers into the marketplace. There is a greater need for licensees to work in the foreclosure segment. Those who have good networking skills and who are willing to research asset management companies can land large contracts with banks and other financial services. This

potential has also increased the need for property management, as financial institutions need assistance in handling their newly foreclosed assets. An agent who can adapt and change will always find a niche in real estate.

INDUSTRY MARKET SEGMENTS The real estate industry comprises myriad different specialized segments that can be run as individual entities or part of a larger organization including some or all of its aspects. Residential clients can be first-time home buyers, those buying large dream homes, or those downsizing. Agents also work for developers in the tract sale of homes. The investment side of real estate breaks down into more segments, including transactions for single-family residences, small multiunit dwellings, or large apartment complexes. In commercial real

Real Estate Industry estate, agents deal with sales, exchanges, and leases of commercial buildings, retail centers, or development projects that start from raw land and progress to full construction and development. Property managers handle all types of real estate, from homes to apartments to commercial and business structures. A small subset of the market deals with the exchange of real estate, which can comprise anything from raw land to homes to multiunits to commercial or industrial projects, as well as the exchange of real estate securities. There are nearly 2 million active real estate licensees across the country. Of these licensees, 1.2 million are Realtors, who account for approximately 60 percent of the licensees nationwide. Although approximately 82 percent of all Realtors specialize in residential real estate, most also have secondary focuses. Small Businesses The majority of real estate offices are small businesses. The median staff size is fewer than twenty-

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five licensees and five or fewer nonlicensed employees. Just over 51 percent of real estate offices are independently owned and run as nonfranchised firms. Firms that are part of larger franchise organizations vary in size from location to location. Some may just be satellite branches of larger offices. While most agents work at offices, more than seven out of ten Realtors have home offices as well. Computer access is the lifeblood of the business, and agents make that access a priority. Potential Annual Earnings Scale. According to NAR statistics, the median income among Realtors was $36,700 in 2008, down from $42,600 in 2007. Licensed brokers earned a median of $49,300, while sales agents earned a median of $28,400. The gap in income between brokers and agents is accounted for by the fact that they brokers have others working for them and also have more experience in the business. Realtors in the business for two years or less earned a median of $8,600, while those with three to five years of experience earned $27,100. For those with six to fifteen years of expe-

In commercial real estate, agents deal with sales, exchanges, and leases of commercial buildings and retail centers. (AP/ Wide World Photos)

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rience, the median was $42,400, while members in the business for sixteen years or more earned a median of $53,900. A real estate broker who is a strong producer and who manages a team of agents working exclusively for that broker may be able to earn in excess of $100,000 or even $250,000. As real estate is predominantly a commission-based business, individual earnings can vary greatly depending on the effort put into the business. Clientele Interaction. Most agents, even those working as members of an office, are responsible for their own business. New agents may be given leads or direct clients to get started. However, to increase their income, they must bring in new clients by promoting their business to family, friends, and other business affiliates. For a business to continue to grow, it requires a base of repeat clients. Real estate is a person-toperson business in which client relationships are central. Agents must communicate weekly if not daily with active clients to keep them informed of the progress of their transactions. Most real estate business is lost not because an agent is not likable or proficient but rather because a client feels forgotten in the process. Agents should continue to keep in touch with clients after their transactions are complete. Even if one’s clients are not seeking help with any further transactions, they are an important promotional resource. Past and current clients should account for a minimum of 20 percent of an agent’s referrals. For new agents, that figure decreases to just 1 percent, as such agents may not have realized the value of referrals to their business—or may not have enough clients to produce sufficient referrals. Most agents do not work nine-to-five daily schedules. They must be available when their clients are available. Since most clients work themselves, agents must be available during off hours, when the clients themselves are not working. Only 12 percent of Realtors work fewer than twenty hours per week. Some 31 percent work twenty to thirtynine hours per week, 43 percent work forty to fiftynine hours per week, and 14 percent work at least sixty hours per week. Amenities, Atmosphere, and Physical Grounds. Most real estate offices that are run in commercial settings have visible access for new and current clients to find. They include reception areas designed to promote a professional yet relaxed

atmosphere for clients. In many instances, frontdesk personnel are licensees who are the first contacts for clients. The back office consists in most cases of attached cubicles for individual agents. Those agents who bring in a larger portion of the business may have their own private offices, as well as subordinate staff working for them. Managers also often have private offices. Office personnel that are nonlicensed may have cubicles or sections of private offices. All offices have conference rooms where agents can meet with clients in private. Separate areas are usually set aside for shared office equipment, and most offices have break rooms for coffee. Depending on the size of the office, there may be shared computers or agents may be responsible for providing their own computers. Typical Number of Employees. According to the BLS, about 61 percent of all business establishments employ fewer than five workers. The median staff size of real estate firms is less than thirty employees. The number of employees at a given firm or in a given area may ebb and flow with the real estate cycle. Only during the boom cycles will a large number of offices employ more thanone hundred people each in a set location. Traditional Geographic Locations. Most real estate offices are centrally located in business parks or cities for high visibility and easy client access. Some occupy separate buildings, while others are attached to other businesses in strip malls or office complexes. Offices that promote resort properties may be located in tourist-friendly areas, the better to capture potential clients’ interest. However, those who specialize in appraisals or residential property management may not have traditional storefronts at all but rather work solely out of their homes. With the growing importance of the Internet and smart phones, physical business storefront locations are no longer necessary for all professionals. Pros of Working for a Small Business. New agents are likely to receive one-on-one training in small offices. They have greater access to colleagues and superiors to observe the workings of the industry than do agents at larger firms. Seasoned professionals who have opened their own small firms gain control over their business environments, costs, and major decisions. Small businesses are sometimes able to avoid the office politics that are often part of larger offices.

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Cons of Working for a Small Business. Small offices are generally limited in scope and must specialize in particular types of real estate or particular services. Employees may find that the particular areas of specialization of their employers do not fit their needs or skills. Moreover, those starting out will be unable to try a full range of transactions and real estate segments to determine which best suit their skills and temperament. Costs Payroll and Benefits: Many of the employees in the real estate industry are independent contractors working entirely or partly on commission. Managers are usually the only employSome real estate agents specialize in residential properties, such as these Victoees given vacation or sick leave. rians in San Francisco. (©Dreamstime.com) Agents control their own time, planning work schedules, vacaservices as necessary. Though not a requirement tion, and sick leave as appropriate. If business is in most states, many real estate companies also steady, they may need to work many days in a purchase a type of malpractice insurance called row without taking any days off. Paid health care errors and omissions insurance. benefits are usually reserved for management, Utilities: Standard utilities for a small office inbut other employees may have the option of parclude electricity, telephone, and Internet acticipating in company health care plans at their cess. If the office is a freestanding building or in own cost. Depending on the size of the office a fully self-contained office space, it may also pay and its affiliation with a franchise, there may be for water and sewage services. options for profit sharing, though that is unTaxes: Small businesses are required to pay corpousual. rate taxes at the local, state, and federal levels. Supplies: Small real estate offices require paper They are also responsible for any applicable and postage, as well as filing cabinets, copiers, business taxes, local and state licensing fees, and scanning equipment, desks, and reception-area property taxes. Self-employed agents may refurnishings. They also need information techport their business income on personal returns, nology equipment, such as digital cameras, in which case they must pay self-employment computers, faxes, and telephones. Those that taxes. Otherwise, employers must pay payroll handle their own cleaning require cleaning suptaxes for their employees. plies. Other Expenses: Other costs include affiliation External Services: Depending on the expertise of membership fees and dues. management, small real estate offices may contract accounting services or computer mainteMidsize Businesses nance services. Those in freestanding buildings Midsize firms generally employ between twentyoften contract landscapers or groundskeepers. five people and one hundred people. They may ocThey may also contract security, cleaning, advercupy a single office location or multiple locations. tising, legal, maintenance, and paper-shredding

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They often include ancillary services that are housed on site or in adjacent locations. Potential Annual Earnings Scale. Earnings of agents are based on individual productivity, rather than business size. Managers in midsize businesses have greater opportunities to increase their own incomes by motivating their staffs to increase their productivity. According to the BLS, the middle 50 percent of wage earners earned between $27,370 and $63,510 in 2009. During the same period, the middle 50 percent of brokers earned between $35,090 and $93,300. Depending on specialization, there could be as much as a 35 percent difference in income. Clientele Interaction. In a midsize business, front-office personnel are usually office workers and not licensees. Client interaction is still handled on a one-to-one basis. All licensees are responsible for their own business. However, there is a greater possibility that they will work as teams. Within each team, some members work on paperwork and analysis, while others handle all client interaction. Managers are generally more involved in promoting their companies through their business and social affiliations, increasing the name recognition and prestige of their firms. They also need to maintain close interactions with their employees to make sure that policies are followed and any issues are promptly addressed that could otherwise cause problems for the firm. Amenities, Atmosphere, and Physical Grounds. To accommodate a larger staff and to generate more revenues to cover their related costs, midsize offices are usually located either in separate buildings or in large sections of office buildings. They tend to have larger front reception areas to accommodate more waiting clients. They are designed to promote a professional atmosphere and to showcase some of their awards and related business affiliations. Midsize offices have several conference rooms and private offices, as well as large areas for office cubicles or freestanding desks. Break rooms may include some vending machines, and technology rooms are larger and contain more shared equipment on average than those of small firms. Midsize businesses may also manage affiliated businesses located within close proximity to facilitate better working relationships. If an office’s location is freestanding, it may feature an outdoor patio area with tables and benches.

Typical Number of Employees. Midsize businesses generally employ twenty-five to one hundred people. Staff size often rises and falls as business volume changes. Traditional Geographic Locations. Midsize offices are predominantly located in suburban or metropolitan areas that are centrally located in business sectors. Real estate offices often seek locations with heavy foot traffic, at busy intersections, or in close proximity to freeways to increase visibility and accessibility. Pros of Working for a Midsize Business. Employees of midsize businesses have greater opportunities to see how different segments of the real estate business work. They enjoy greater interaction with agents at all different stages of the business. Midsize firms may offer apprenticeship programs, and they generally provide more office promotions and advertising to enhance their corporate image, as well as that of individual agents. Office production is motivated by contests and sales drives for prizes and awards of merit, which are publicized in local media. New agents receive personalized training, and managers are generally available to counsel and guide them. Those ready for management positions will find more options available in midsize companies, as their greater diversity entails a greater variety of managerial roles. Cons of Working for a Midsize Business. New employees of midsize firms are expected to get up to speed quickly after their initial training and orientation. They must quickly learn to work independently and produce results. They are expected by their supervisors to engage in significant selfpromotion and to bear the costs of doing so themselves. Employees of midsize firms must generally attend weekly marketing or regional meetings. They are more likely to be in competition with fellow staffers for awarded clients based on merit. Costs Payroll and Benefits: The greatest portion of the staff at midsize firms work entirely or partly on commission. However, these firms have more hourly and salaried employees than do small firms to free up agents to have more time to bring in new business. Paid health care benefits are reserved for management, but highly productive agents may also be given paid health care benefits as retention incentives. Offices

Real Estate Industry with franchise affiliations often have options for profit sharing or provide other cash incentives. Supplies: Real estate offices require marketing materials, paper, and postage, as well as filing cabinets, copiers, scanning equipment, desks, and conference room and reception-area furnishings. Additional needs are pinpoint presentation materials and equipment for office or client meetings, as well as other information technology equipment such as digital cameras, computers, faxes, and phones. External Services: Real estate companies may contract accounting services and computer maintenance services. They usually contract interior maintenance service and secure disposal of old files by paper shredders. They may also contract Web design services or other public relations, groundskeeping, landscaping, legal, security, and cleaning services as appropriate. Although not a requirement in most states, midsize offices usually purchase errors and omissions insurance. Utilities: Standard utilities for midsize offices include electricity, telephone, and Internet access. If the office is freestanding or in a fully selfcontained office space, it might also be responsible for water and sewage services Taxes: Midsize businesses are required to pay corporate taxes at the local, state, and federal levels. They are also responsible for any applicable business taxes, local and state licensing fees, and property taxes. Other Expenses: Other costs include advertising and affiliation membership fees and dues. There will be additional corporate fees if the business is part of a franchise operation. Large Businesses Large real estate businesses may be located in single structures or in multiple locations as part of corporate or franchise operations. They often include ancillary services that are housed on-site or in adjacent locations to offer complete concierge services for their clients. Large businesses employ more than one hundred people. Potential Annual Earnings Scale. According to the BLS, in 2009, the top 10 percent of real estate sales agents earned more than $96,410 in 2009, while the top 10 percent of brokers earned well in excess of $166,400. It is not usual for top producers

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to earn in the $250,000 to $500,000 range, and superstars earn in excess of $1 million per year. However, as business cycles change and large contracts move from one office to another, these high income levels may not be consistent from year to year, office to office, or agent to agent. Clientele Interaction. In large businesses, client interaction is usually more compartmentalized than at smaller firms. Front-office personnel are office workers assigned strictly to meet and greet clients, direct them to the correct associates, and answer incoming telephone calls. Client interaction remains one-to-one, but there are more layers of staff involved that at smaller offices. This staff takes on much of the day-to-day client interaction, freeing agents to bring in more clients. Individuals still need a base of repeat clients, but they also have staff or automated systems to help them keep in touch with past clients for continued business and referrals. Managers are involved in promoting their companies through business and social affiliations, as well as charitable fund-raisers, to increase the name recognition and prestige of their firms. Amenities, Atmosphere, and Physical Grounds. Large businesses promote themselves by choosing prestigious locations. The layout and design of front offices and client access areas are intended to enhance their images as leaders in the industry. They have separate reception areas for the different concierge services they offer. Each reception or conference area has promotional materials at hand to familiarize clients with all the services the firms provide and to showcase the awards won by offices and individuals. Large firms are located in their own buildings or occupy multiple floors of office buildings. Back offices, not accessible to clients, include areas for office cubicles or freestanding desks. Large break rooms or multipurpose rooms accommodate the large staffs of these firms and may include vending machines and small kitchen areas. Large technology rooms include shared equipment, and conference rooms are set up to accommodate video meetings or special presentations. Although large businesses may be in just one location, they usually consist of several satellite or branch offices located throughout a region, state, or country. They may even have international locations. In most cases, they are held by private individuals or investment groups. Branch or satellite

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offices have amenities similar to those of small or midsize companies. Typical Number of Employees. Large real estate businesses employ at least one hundred people, and some employ several hundred in differing locations. These numbers increase or decrease in tandem with corporate market share. Traditional Geographic Locations. Large businesses usually have flagship locations in major metropolitan business districts. Branch locations may be located in suburban, rural, or resort areas or in retail mall settings. Pros of Working for a Large Business. In a large organization, there are more opportunities to move up the corporate ladder than there are in smaller businesses. Large firms offer concierge services to promote and enhance their business. Employees can see and interact with more fellow agents who work in different aspects of the real estate industry, providing a better idea of what segment of the industry one may wish to specialize in. Large companies expend greater resources on promotional materials and advertising, enhancing both their corporate images and the images of individual agents. Office production is motivated by contests and sales drives for prizes and awards of merit, which are publicized in the media. New employees receive personalized training, and apprentice programs compensate those who assist new hires. Management staff are available to counsel and guide them as necessary. A greater variety of management positions exists than in smaller firms, providing more opportunities and options for career growth. Cons of Working for a Large Business. The greatest drawback to working in a large company is its compartmentalization. While large firms are diverse, individual employees may be forced to specialize. They may be assigned to segregated divisions and expected to refer clients who prefer other services to other divisions or branches of their companies, rather than providing those services themselves. Agents may lack one-on-one relationships with clients, as most client needs are handled by support staff and others. In addition, larger offices have greater potential for backbiting and politics, which may not only affect morale but may also draw away clients. Managers at large firms must attend to more and greater complexities and details, which can easily spin out of control and

lead their businesses into downward spirals or total shutdowns if specific licensing requirements are not adhered to properly. Costs Payroll and Benefits: Large companies’ payrolls are complicated by the several layers of staff the companies employ, as well as the graduated payments involved in commission structures. They employ a greater number of hourly or salaried employees than smaller firms, as well as those temporarily hired to cover large projects. Paid health care benefits are still reserved for management, but other high-revenue-producing employees may also be given such benefits as retention incentives. Many large firms offer profit sharing, stock options, or other cash incentives. Supplies: Real estate offices require marketing materials, paper, and postage, as well as filing cabinets, copiers, scanning equipment, desks, and conference room and reception-area furnishings. Additional needs are pinpoint presentation materials and equipment for office or client meetings, as well as other information technology equipment such as digital cameras, computers, faxes, and phones. External Services: Real estate companies may contract accounting services and computer maintenance services. They usually contract interior maintenance service and secure disposal of old files by paper shredders. They may also contract Web design services or other public relations, groundskeeping, landscaping, security, and cleaning services as appropriate. Large companies purchase errors and omissions insurance or have affiliates that provide it. They usually employ their own in-house legal staffs. Utilities: Standard utilities for large offices include electricity, telephone, Internet access, water, and sewage. Taxes: Large businesses are required to pay corporate taxes at the local, state, and federal levels. They are also responsible for any applicable business taxes, local and state licensing fees, and property taxes. Other Expenses: Other costs include advertising and affiliation membership fees and dues. There will be additional corporate fees if the business is part of a franchise operation.

Real Estate Industry ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure within the real estate industry and the tasks related to specific job categories are typically based on the size of the company. In small offices, managers deal with most of the major tasks and delegate duties to employees as necessary. In midsize and large offices, managers oversee defined departments, and each employee generally has specific tasks related to his or her position. The duties and responsibilities of those in the real estate industry remain similar, however. The following umbrella categories apply to the organizational structure of businesses in the real estate industry: ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Support and Educational Training Sales and Marketing Real Estate Licensees Information Technology Human Resources Administrative Support Maintenance and Security

Executive Management Executive management handles the general operations of the business. These individuals oversee major operations, set corporate objectives, handle brand development, and chart the financial courses of their organizations. They may manage regional areas or departments within the corporate structure. Executive managers may have advanced degrees in business administration, finance, accounting, or marketing. As real estate is a growing and evolving industry, in many cases experience has served as a substitute for advanced college education; however, industry-related courses and designations are generally necessary for upward mobility in the business. Executive managers usually earn higher salaries than anyone else in their specific sectors of the industry. They are responsible for franchise sales, brand development, corporate communication, implementation of corporate systems, recruiting, training, marketing, and regional development.

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Executive management occupations may include the following: ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■

General Manager Chief Executive Officer (CEO) Chief Financial Officer (CFO) Executive Officer for Affiliated Companies Executive Officer for Member Services Marketing Director Sales Director Business Development Director Senior Information Technology Officer Senior Customer Relations Officer General Counsel

Support and Educational Training Training personnel handle the development of educational materials and training in regards to specific areas of expertise. All segments of real estate entail continuing-education requirements to maintain licensure. Courses to meet these requirements need to be developed within the industry and then approved by relevant state or federal licensing boards as fulfilling their educatioanal criteria. Training materials may be designed for online access only, or they may be intended for use in classrooms. These materials, including curricula, workbooks, quizzes, and other instruction guides, may be developed by a franchise for system-wide use, as general designs applying to a broad range of real estate fields, or as specific to a particular designation. Support and educational training occupations may include the following: ■

■

■ ■ ■ ■

Institutional Accrediting Development Specialist Instructional Research and Development Specialist Compliance Officer Graphic Designer Customer Service Representative Course Instructor

Sales and Marketing Sales and marketing personnel handle both the expansion and the development of franchises and individual corporations. Their duties may include the design of corporate logos or trademarks, de-

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Real Estate Industry OCCUPATION

SPECIALTIES

Property and Real Estate Managers Specialty

Responsibilities

Apartment house managers

Collect fees for rent, direct maintenance, inspect apartments, and perform other duties.

Land development managers

Negotiate with various organizations to acquire and develop land.

Land leases and rental managers

Direct and manage land leases relative to rights for drilling oil or gas wells.

Leasing managers

Secure leases and other agreements for land, as well as rights for gas and oil companies.

Public events facilities rental managers

Negotiate contracts for arenas, stadiums, or other facilities.

Real estate land agents

Negotiate the purchase and sale of properties and coordinate real estate departments.

Right-of-way agents

Negotiate with property owners and public officials for utilities and other projects.

sign of advertising materials, and placement in the media and implementation of campaigns to enhance revenues within offices. Upper-end sales and marketing personnel usually have at least undergraduate degrees in business management, marketing, or finance-related disciplines, although that may not be the case in more localized operations. Their salaries are competitive and often include performance incentives. The primary tasks of sales and marketing personnel on a larger corporate level are to track and analyze the production levels of offices and design materials or programs to enhance their revenues. They also promote their companies at trade shows, conferences, and sales conventions. On a more individual-office level, these personnel are responsible for corporate branding, public relations, sponsorship, advertising design and placement, and sales campaigns and incentives. Sales and marketing occupations may include the following: ■ ■

Corporate Sales Manager Sales Director

■ ■ ■

Marketing Director Advertising Manager Office Manager

Real Estate Licensees The bulk of real estate industry employees are licensees. These include independent agents, as well as those working within offices. All real estate offices are required to have licensed brokers in charge of their overall operations. A broker may be in charge of one office or several. Most upperlevel managers either are or once were licensed real estate brokers. All personnel who perform the duties of a real estate broker or agent must be licensed according to state and federal regulations. Agents may handle only their own sales or work in teams with other agents or brokers. All licensees are required to complete continuingeducation courses to retain their licenses. Their duties include promoting their individual business to the general public, performing specific analyses related to their specialties, meeting with the public, and preparing marketing plans. They also need to adhere to all rules and regulations

Real Estate Industry pertaining to their associational and affiliate designations. Real estate licensee occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Real Estate Broker Mortgage Loan Broker Real Estate Securities Broker Title Officer Escrow Officer Office Manager Property Manager Leasing Agent Real Estate Counselor Real Estate Developer Auctioneer Asset Manager Appraiser Exchanger Real Estate Trainer

Information Technology Depending on the size of a business, it may employ on-site personnel to manage its computer and video systems. Smaller firms may contract these services from independent providers. Information technology (IT) personnel are responsible for setting up all devices and hardware typically used during meetings and presentations. They maintain an office’s computer networks and systems, and they may also create video presentations or support others in the use of multimedia technology. They must have training in computer and information technology and need to keep abreast of changes in the field and upgrades to existing technology. IT occupations may include the following: ■ ■ ■ ■

OCCUPATION

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Information Technology Director Network Administrator Multimedia Technician Video Assistant

PROFILE

Real Estate Sales Agent Considerations

Qualifications

Description

Rents, buys, or sells property for owner; prepares documents.

Career clusters

Business, Management, and Administration; Marketing, Sales, and Service

Interests

Data; people

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; junior/ technical/community college

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Real Estate Industry

Human Resources Human resources personnel are responsible for salaried, commissioned, and contract employees. They will usually handle employee hiring and dismissal, employee relations, and benefits (such as employee incentives, insurance, and profit sharing). They also assist employees seeking relocation services. Human resources managers are well trained in management, through experience and industry-related, as well as college-level education. Human resources occupations may include the following: ■ ■ ■ ■

Human Resources Director Human Resources Coordinator Human Resources Manager Administrative Assistant

Administrative Support Administrative personnel are located throughout all levels of the industry, assisting each department in its operations. Administrative staff may be part of the front office or any other office. They may prepare client packages, communicate with clients, input data, assign or perform pickup and delivery of promotional materials, maintain records, or provide support to managers or other employees as the need arises. In some cases, they are— or begin employment as—temporary personnel, but in most instances they are in-house staff. They will usually earn salaries but in some cases earn base pay plus bonuses based on the productivity of the personnel they directly assist. In larger offices, these personnel are overseen by administrative managers who maintain the smooth operation of their offices. Managers are responsible for the front office, budgeting for equipment and its maintenance, reconciling accounting services or financial departments, and maintaining proper licensing. Occupations in this area include the following: ■ ■ ■ ■ ■ ■ ■ ■

Operations Director Office Manager Accounting Manager Administrative Assistant Secretary Front-Desk Staff/Receptionist Transaction Coordinator Intern

Maintenance and Security Usually only the larger real estate firms employ in-house maintenance or security personnel. In most instances, they contracted such services. Maintenance staff repair malfunctioning building systems. While not an integral part of operations, without their assistance businesses could come to a halt or be financially damaged. Security personnel ensure that any emergency situations are addressed and monitor surveillance cameras, conduct periodic rounds, and respond to relevant calls. Maintenance and security occupations may include the following: ■ ■

■ ■ ■

Chief Engineer Heating, Ventilation, and AirConditioning (HVAC) Specialist Plumber Security Operations Manager Security Officer

INDUSTRY

OUTLOOK

Overview The outlook for this industry tentatively shows it to be on the rise. Real estate was at the center of the financial crisis of 2007-2009. In the wake of that crisis, real estate will continue to be a prime indicator of recovery and national economic strength or weakness. When recovery does take place, it will encompass the residential sector first, as the commercial real estate sector traditionally lags behind the former sector. Over the long term, there will always be a demand for real estate, as it is a good longterm investment, and thus there will be increasing demand for agents and brokers as the economy improves. According to U.S. Census Bureau statistics, housing starts hit a record high of 2.07 million in 2005 and then began to decline. Unemployment in the United States is expected to remain higher than average through at least 2015 or 2020. Mortgage rates are extremely likely to rise in the next decade from the lows they reached during the first decade of the twenty-first century. In addition, the credit crunch instituted during and in the wake of the global financial crisis will continue to affect underwriting guidelines, so home financing will be-

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come more difficult to secure for PROJECTED EMPLOYMENT the average borrower. FOR SELECTED OCCUPATIONS Real estate offices are becoming leaner and more productive as broReal Estate Industry kers trim staff and reduce their marketing and advertising expenses to Employment survive the downturn. However, the 2009 Projected 2018 Occupation same offices are increasing their spending on technology and agent 50,860 58,800 Bookkeeping, accounting, recruitment. To stay competitive, and auditing clerks they are focusing on technology and 25,950 25,300 General and operations online marketing. managers Of considerable concern is what has been termed “shadow inven33,220 41,100 Landscaping and tory.” These are properties that have groundskeeping workers been foreclosed, or with loans delin234,980 273,600 Maintenance and repair quent ninety days or more, that are workers, general not officially on the market. The number of shadow properties has 90,460 115,500 Office clerks, general been on the rise, while traditional 112,610 134,800 Property, real estate, and inventory has only moderately decommunity association creased. Depending on how and managers when these shadow properties come onto the market, they could pose a 43,270 52,200 Real estate brokers significant risk to future home-price 117,440 156,300 Real estate sales agents stability. Many experts believe price stability is what many buyers and Source: U.S. Bureau of Labor Statistics, Industries at a Glance, sellers are looking for before they Occupational Employment Statistics and Employment make the decision buy or sell a propProjections Program. erty. The sought-after price stability is emerging in some markets, while in other markets a pent-up demand for homes is being released as a result of their relative many large investors staying on the sidelines for the affordability. The latter markets are seeing multitime being. In Latin America, most economies ple offers per property and bidding wars. have been damaged or are unstable—with the exEconomic growth throughout Europe is exception of Brazil, which is flourishing. In Mexico, pected to be subdued, as unemployment is exthe real estate markets are still dropping substanpected to remain high. Capital values of real estate tially, mostly as a result of the U.S. recession. are bottoming out in some cases and then rising quickly in anticipation of recovery. However, the Employment Advantages fundamentals of the real estate market in all secAmbitious, people-oriented, persevering, and tors are still deteriorating and will remain under self-motivated people may find that careers in real pressure. Those institutions and corporations that estate can help them achieve their goals. In most plan to expand in the real estate sector are focusing cases, income is reflective of effort, and significant on prime income-producing properties. In the skill and hard work can result in very high earnings. Asian markets, there has been a small rebound in Working in real estate allows for independence, the real estate markets and a projected prospect of but it requires flexibility in making time for one’s renewed profits. However, transaction levels have clients. remained depressed by historical standards, with The real estate industry provides a broad range

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Real Estate Industry PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Real Estate Rental and Leasing Employment 2009

Projected 2018

Occupation

202,870

221,100

Counter and rental clerks

245,700

285,700

Maintenance and repair workers, general

112,760

134,900

Property, real estate, and community association managers

43,310

52,300

117,630

156,900

Real estate brokers Real estate sales agents

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

of career options, from residential sales to industrial property sales and leasing, land development, property management, mortgage banking, urban planning, real estate counseling, appraisal, real estate investment trusts, and marketing and sales. One may work with a large or small firm or as an independent brokerage. Most individuals begin their real estate careers as sales trainees or in apprenticeship programs in brokerage firms. Through industry-taught continuing education courses or through college courses and work experience, trainees move up the corporate ladder. Employees have the option of developing specialty skills that make the best use of their personal abilities. Real estate is a rewarding career, offering the opportunity to build a secure future for oneself and also to help shape the future of one’s community. Annual Earnings The real estate sector has been greatly affected by the global financial crisis of 2007-2009. As property values have decreased, so has the income related to their sales and leasing. The Mortgage Bankers Association and the NAR both project

minimal increases in median home prices, whereas Fannie Mae economists expect a slight decline. Fannie Mae does expect sales of new and existing homes to rebound, however. The commercial real estate market is in a much greater state of decline because of uncertainties relating to changing governmental regulations, financing guidelines, and unemployment. Commercial real estate and rental and leasing job openings fell by 40 percent in 2009. In a slowing economy, well-developed analytical skills and marketing capabilities can often make the difference when downsizing occurs. Graduates of specialized master’s degree programs in real estate enjoyed a 1 percent increase in salaries from 2003 through 2007; however, starting salaries for the 2008 graduates of such programs decreased by 4.3 percent. The real estate market overall remains on shaky ground.

RELATED RESOURCES FOR FURTHER RESEARCH Appraisal Institute 550 W Van Buren St., Suite 1000 Chicago, IL 60607 Tel: (888) 756-4624 Fax: (312) 335-4400 http://www.appraisalinstitute.org CCIM Institute 430 N Michigan Ave., Suite 800 Chicago, IL 60611 Tel: (800) 621-7027 Fax: (312) 321-4530 http://www.ccim.com Council of Residential Specialists 430 N Michigan Ave., Suite 300 Chicago, IL 60611-4092 Tel: (800) 462-8841 Fax: (312) 329-8882 http://www.crs.com

Real Estate Industry Institute of Real Estate Management 430 N Michigan Ave. Chicago, IL 60611 Tel: (800) 837-0706 Fax: (800) 338-4736 http://www.irem.org National Association of Realtors 430 N Michigan Ave. Chicago, IL 60611-4087 Tel: (800) 874-6500 Fax: (312) 329-5962 http://www.realtor.org U.S. Department of Housing and Urban Development 451 7th St. SW Washington, DC 20410 Tel: (202) 708-1112 http://portal.hud.gov

ABOUT

THE

AUTHOR

Christine Henderson has been working in the real estate industry since the mid-1980’s, through the characteristic upturns and downturns experienced by the market. She has continually updated her education and has educated both her clients and other Realtors. She has been the editor of a regional real estate newspaper and has worked on both the Grievance and Professional Standards Committees of the Inland Valley Association of Realtors in Calfiornia to review cases and make decisions on the validity of charges brought against members of the regional board of Realtors.

FURTHER

READING

CB Richard Ellis Group. “CB Richard Ellis’s 2009 Review and 2010 Outlook for Commercial

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Real Estate in Europe.” December, 2009/ January, 2010. http://www.cbre.com/EN/ AboutUs/MediaCentre/2010/Pages/ 011110.aspx. Harkins, Phil. Everybody Wins: The Story and Lessons Behind RE/MAX. Hoboken, N.J.: John Wiley & Sons, 2004. Keller, Gary, with Dave Jenks and Jay Papasan. The Millionaire Real Estate Agent: It’s Not About the Money . . . It’s About Being the Best You Can Be! New York: McGraw Hill, 2004. Lindahl, David. Emerging Real Estate Markets: How to Find and Profit from Up-and-Coming Areas. Hoboken, N.J.: John Wiley & Sons, 2008. Malpass, Peter, and Robert Rowlands. Housing, Markets, and Policy. New York: Routledge, 2010. National Association of REALTORS. Field Guide to the History of the National Association of REALTORS. July, 2008. http://www.realtor .org/library/library/fg002. Plunkett, Jack W. Plunkett’s Real Estate and Construction Industry Almanac, 2010. Houston, Tex.: Plunkett Research, 2010. Riley, Rowan. Real Estate: An All-in-One Guide to Navigating Toward a New Career. New York: Ferguson, 2010. Urban Land Institute and PricewaterhouseCoopers. Emerging Trends in Real Estate, 2009-2010. Washington, D.C.: Author, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

©Dreamstime.com

Rental and Leasing Services

INDUSTRY

SNAPSHOT

General Industry: Personal Services Career Clusters: Architecture and Construction; Manufacturing; Marketing, Sales, and Service; Transportation, Distribution, and Logistics Subcategory Industries: Automotive Equipment Rental and Leasing; Consumer Goods Rental; General Rental Centers; Commercial and Industrial Machinery; Equipment Rental and Leasing Related Industries: Automobiles and Personal Vehicles Industry; Construction Equipment Industry; Freight Transport Industry Annual Domestic Revenues: $90.6 billion USD (U.S. Census Bureau, 2010) Annual International Revenues: $560 billion USD (Leasing News and World Leasing Yearbook, 2009 and 2010) Annual Global Revenues: $650 billion USD (Leasing News and World Leasing Yearbook, 2009 and 2010) NAICS Numbers: 532, 5321, 5322, 5323, 5324

INDUSTRY

tings, such as stores, car lots, and warehouses, for a specified period of time without buying the products. This industry provides people an affordable alternative to purchasing equipment that may be expensive or needed only for a short period of time. It also allows them to avoid being financially responsible for upkeep, insurance, and legal costs associated with ownership of those goods. Internationally, this industry thrives by meeting customer needs for common products frequently used by businesses and individuals. Contracts specify the cost and duration of the lease. Some leases incorporate provisions for lessees to purchase rental items.

History of the Industry The rental and leasing industry has existed for several thousand years. The earliest known lease, in Mesopotamia around 2010 b.c.e., was of agricultural equipment. Ancient Romans, Greeks, Phoenicians, and Egyptians benefited financially from rental agreements, including leasing ships and vehicles for traders to transport goods to markets and providing military

DEFINITION

Summary The rental and leasing services industry involves businesses that allow consumers to use diverse products distributed from various commercial set1606

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troops with weapons and supplies. DurThe Rental and Leasing Industry’s ing the following centuries, the rental and leasing industry expanded to other Contribution to the U.S. Economy continents, where people leased modes of transportation, tools, and equipment Value Added Amount for diverse purposes. Gross domestic product $195.5 billion In the nineteenth century, expenses Gross domestic product 1.4% associated with railroad technology rePersons employed 649,000 sulted in an early form of equipment Total employee compensation $30.0 billion leasing. Investors bought costly locomotives and railcars directly from manufacSource: U.S. Bureau of Economic Analysis. Data are for turers and lent them to railroads. Les2008. sees also rented cargo space on ships. Henry Ford’s Model T automobile was the catalyst for the rental car industry. In 1916, Nebraskan Joe Saunders began renting out his Model T Ford to traveling salespeoflying, creating a need for rental cars to provide ple. In 1918, Chicagoan Walter L. Jacobs began transportation from the airport to their final destileasing a fleet of Model T Fords to customers, and nations. In 1932, Hertz created a rental car facility five years later, he was earning $1 million per year. at Chicago’s Midway Airport; it later would estabJohn Hertz, the president of the Yellow Cab lish franchises at most major airport hubs. In 1946, Company and the Yellow Truck and Coach Manuformer pilot Warren Avis started Avis Rent A Car at facturing Company, acquired Jacobs’s business, a Detroit airport. which he renamed the Hertz Drive-Ur-Self System. Consumers, ranging from individuals to corpoHe sold it to General Motors Corporation in 1926, rations, demanded more rental opportunities durbut when the Hertz Corporation was formed in ing the 1950’s, seeking leases for items as diverse as 1954, Hertz became its president. medical devices and furniture used in homes and The leasing industry slowed because of the ecohospitals and machinery and construction equipnomic crisis during the Great Depression. By the ment needed for postwar building and interstate early 1940’s, World War II manufacturing dehighway projects. Leasing appealed to businesses mands had reinvigorated the rental industry. The that manufactured products incorporating new U.S. federal government leased equipment to comtechnologies, such as televisions, and that needed panies that produced goods necessary for the war modern machinery for production. Automobile, effort. After World War II, more people began railroad, and aviation manufacturers relied on leased equipment to manufacture large quantities of vehicles efficiently and profitably. The Internal Revenue Service (IRS) approved Inputs Consumed by the generous deductions for equipment lessors in the Internal Revenue Code of 1954. Lessors were perRental and Leasing Industry mitted to declare deductions on their taxes for recently acquired equipment for several years, motiInput Value vating leasing businesses to acquire more rental Energy $4.6 billion goods from manufacturers for these tax perks, thus Materials $8.8 billion aiding economic growth. As the equipment leasing Purchased services $93.8 billion industry expanded, the IRS adjusted its provisions, Total $107.2 billion clarifying taxable aspects of rental equipment. In 1963, the U.S. Comptroller of the Currency Source: U.S. Bureau of Economic Analysis. Data stated that banks could be lessors, buying equipare for 2008. ment and other rental properties and seeking lessees, in addition to lending money for leasing pur-

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poses. During the 1960’s, rent-to-own businesses increased to meet customer demand. Companies such as International Business Machines (IBM) and the Xerox Corporation recognized the value of leases in expanding the use of their products, offering businesses rental contracts for access to the most recent computer and electronic equipment. During the 1980’s, some automobile manufacturers invested in car rental businesses that bought the manufacturers’ vehicles, providing a way to expose the cars to potential buyers. By the 1990’s, about 10 percent of the automobiles sold in the United States were purchased by rental businesses. Consumers also benefited from leasing franchises such as Rent-A-Center, which offered items such as furniture, appliances, and electronics. The Internet made it possible for people to enter into leases electronically, giving birth to the term “e-lease.” The Industry Today The rental and leasing industry retains its core characteristics, relying on its highly developed reservation systems and offering the same types of products, including vehicles and medical, office, and construction equipment. However, advances in telecommunications technology energized the early twenty-first century rental and leasing services industry, increasing options for consumers, employees, and investors. As more people are able to access the Internet with smartphones and other electronic devices, rental businesses have begun appropriating that technology to market products and services and interact with customers, using social networking sites such as Twitter and Facebook. Although the rental and leasing industry was negatively affected by the terrorist attacks of September 11, 2001, it resumed growth in the following years. The economic recession of 2007-2009 both negatively and positively affected the rental industry. Consumer demand for the vehicle rental industry decreased, so car rental companies decreased their purchases of vehicles by 63 percent from 2008 to 2009. However, because many consumers were unable to purchase expensive items, such as stereos, appliances, and computers, they leased those items. Rent-to-own options became popular, allowing customers to attain products such as plasma, high-definition, and flat-screen televisions. Many consumers recognized that renting equip-

ment for parties, meetings, and weddings enabled them to stretch budgets. The furniture rental industry experienced growth as some real estate agents leased attractive furnishings to enhance vacant properties to increase their chances of selling in a slow market. Industry magazines emphasized how rental businesses could use their down time to identify the leasing deals that would appeal to customers with reduced finances. Online booking of rental cars enables customers to explore the companies’ Web sites and discover the available services, including the vehicles offered, rental terms, and prices. Many car rental companies post incentives online, in e-mails, or in collaboration with travel sites to convince customers to choose them. Car rental businesses appeal to customers by offering lower prices, fuel-efficient vehicles, and perks such as Global Positioning System navigation. Businesses stress the convenience

Many car rental companies allow customers to reserve cars online. (©Dreamstime.com)

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of their rental procedures, offering services such as transporting customers to their rental vehicles. Some rental businesses focus on providing specialty vehicles such as limousines. The automobile rental industry faces new rivals. Car-sharing businesses, such as Zipcar.com, present an alternative option. Members pay fees to have access to vehicles in their communities for brief rentals at hourly rates. Established in 2000, Zipcar uses wireless technology to process member reservations on the company’s Web site and, through an iPhone application, enables renters to use their smartphones to unlock the vehicles’ doors. In 2009, Zipcar College textbooks can be rented through college bookstores and online. counted about 325,000 people, 8,500 (AP/Wide World Photos) companies, and 120 universities as members and generated revenues of $130 million. A year later, U.S. membership Textbook rentals are a quickly expanding sector reached 400,000. Annually, Zipcar has achieved 30 in the leasing services industry. The rising cost percent growth. Enterprise Rent-A-Car, Hertz, Uof college textbooks motivated entrepreneurs to Haul, Avis Rent A Car, and other major rental busidevelop rental alternatives. Inspired by Netflix nesses have developed similar services. (the video rental company), businessman Aayush The early twenty-first century rental and leasPhumbhra started the textbook rental industry by ing industry has become more environmentally establishing Chegg.com in 2007. Students can rent friendly. Some rental car companies include hytextbooks through the company’s Web site. Some brid and electric cars in their fleets. Ryder System campus bookstores have begun offering rental offers RydeGreen hybrid vehicles to customers. textbooks. Textbook rentals are also provided by Many rental services emphasize their use of recyclacorporations, such as Barnes & Noble, which proble materials, energy-efficient equipment, and vides them online and through its bookstores at maintenance products that do not harm the envischools, and the Follett Higher Education Group, ronment. which created Rent-A-Text in 2009. Most services Worldwide, increasing numbers of construction attain profits from a textbook after renting it to projects ensure a constant demand for equipment three customers. leasing for excavation and earth-moving machinAbout three hundred bookstores rented textery, scaffolds, hoists, cranes, generators, and other books in 2009. That number increased to fifteen essential resources needed to prepare sites and hundred the following year. By fall semester, 2010, build structures. Many corporations lease multialmost 50 percent of campus bookstores rented million-dollar equipment such as oil rigs, power textbooks, according to the National Association of plants, satellites, and jumbo jets to conduct their College Stores. Recognizing the importance of this businesses. industry, the U.S. Department of Education funded In the worldwide rental industry, chemical leascosts associated with textbook rentals at twelve uniing emerged as a thriving sector in the early twentyversities. Expenses incurred by universities include first century. Many manufacturers recognize the fiinvesting in textbooks to rent, fees for warehouses to nancial benefits of leasing expensive chemicals store textbook inventories, training staff to perform used in industrial processes as catalysts, cleaning tasks involved in these rentals, and electronic equipment and software to process and track rentals. solvents, and for other roles.

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Rental and Leasing Services Some groups, such as the Canadian Rental Association, present scholarships to students aspiring to rental and leasing services careers. Starting in 2009, the association established the Rental Market Monitor to provide information and research from market analyst IHS Global Insight regarding the leasing industry’s future. This service includes access to a current report on the outlook of the industry.

INDUSTRY MARKET SEGMENTS The rental and leasing services industry is represented by businesses ranging from small to large that lease equipment or other products to individuals as well as companies securing furnishings and devices for hundreds to thousands of employees.

Although most brides buy their gowns, grooms often rent a tuxedo. (©Dreamstime.com)

Rent the Runway also designed its rental services based on Netflix. Customers examine leading designer fashions, many of which are valued at thousands of dollars, on the Rent the Runway Web site and reserve outfits, which the company ships to them. After wearing the rented garments, lessees return them to Rent the Runway, which arranges for the clothing to be dry-cleaned before it is rented to another customer. The Web sites of rental and leasing industry associations report industry news and legislation affecting the industry. The American Rental Association (ARA) sponsors one of the leasing industry’s most significant conventions, the Rental Show. It also offers training courses on topics such as event rentals and an online driver education course for employees of rental services. Service technicians can be certified through the association’s program with the Equipment and Engine Training Council.

Small Businesses Drugstores, hardware and farm supply stores, groceries, jewelers, boutiques, and other local businesses often offer rental services aimed at supplying individuals with medical equipment, tools, carpet cleaners, and items for health care, home improvement, or social events. Small leasing businesses sometimes are dealers for manufacturers and specialize in the manufacturer’s brands. Patrons often purchase consumer products from these local businesses and choose to rent from them because it is convenient. Potential Annual Earnings Scale. Most employees receive salaries that cover both their leasing-associated activities and their other tasks such as sales. Some employees are hired specifically for rental work and are compensated depending on their qualifications and experience, starting with minimum wage entry-level positions and increasing to larger amounts for skilled technicians and managers. Commissions and bonuses for performance associated with rentals occasionally supplement incomes. Clientele Interaction. Small renting and leasing businesses usually rely on a steady customer base that they strive to retain by offering quality rental supplies and responding to customers’ concerns. Employees usually know local renters and are familiar with their interests and needs regarding projects, events, or health issues that require

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be used to enhance clients’ venues. These busirental equipment. Such knowledge helps these nesses are sometimes associated with caterers, resbusinesses appeal to customers by personalizing taurants, home-design studios, and similar serservices and anticipating demands for specific vices, so that their offerings can be combined into products, enhancing client satisfaction. Party and convenient packages. Some small party service event planners emphasize the uniqueness of their companies have rooms, tents, arbors, gazebos, or rental services, often incorporating local themes landscaped sites on their grounds, where customand imagery associated with schools. Some rental ers who lease products can hold their events. businesses offer customers workshops to teach Rental services include parking lots and storage them how to use the tools and equipment they and maintenance areas to keep and repair invenlease. Leasing services deliver rental medical prodtory until it is displayed. These businesses typically ucts to homebound lessees and transport large provide offices for customers and employees to disfarming and construction equipment to the sites cuss leasing terms or plan how they will use rented where renters will use them. Some contracts initems at their events. They may also provide reclude demonstrations by experts to help lessees freshments and hand out promotional materials learn how to operate machinery. and samples to welcome customers. Small leasing businesses participate in commuTypical Number of Employees. Small rental nity chamber of commerce programs and join in and leasing businesses hire from one to twenty emholiday celebrations or other civic promotions that ployees, depending on financial resources, locahighlight local merchants. These businesses sometion, and demand. Some owners of small rental sertimes create Web sites advertising items available vices perform the majority of their business’s for renting and including information regarding leasing work. Small leasing services occasionally prices and leasing terms. These online resources employ part-time or temporary workers to suppleoften are designed to process reservations elecment their staff for peak rental times. tronically. Some small rental businesses send poTraditional Geographic Locations. Small tential and existing customers e-mail messages derental and leasing services are distributed in both scribing products for lease and rental specials, rural and urban areas of the United States. They including previously leased items being offered for often meet consumers’ needs for specific items sale. that those businesses specialize in providing or Amenities, Atmosphere, and Physical are convenient to customers’ homes or farms. Grounds. Buildings and sites associated with small rental and leasing businesses vary according to the products they stock and any other commerce and activities they offer. These services are usually located in stores, with rental items displayed on shelves. Larger equipment is stocked in sheds or yards. Many small rental businesses are utilitarian and functional, displaying products for lease by categories so that customers can easily locate items. Lots containing agricultural and construction machinery are designed for safety, with hazardous mechanical parts covered to protect customers. Displays in small party and event rental businesses tend to be attractive to appeal to customers and indiKayaks and paddle boats for rent. Recreational equipment is often available cate how those stores’ products can for rent. (©Dave Wetzel/Dreamstime.com)

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Rental and Leasing Services

These businesses can be found in downtown locations or on the edge of communities near farms. Some community airports, marinas, train and bus depots, and car dealers maintain small fleets of rental vehicles. Many small rental and leasing services, particularly party and event businesses, located in rural areas are the only source of rental items in the area. Pros of Working for a Small Rental and Leasing Service. Owners or managers of small rental and leasing businesses often enhance workplace conditions and camaraderie by hiring people from their communities, including friends and relatives. Those positions sometimes are teenagers’ first jobs and provide them with the credentials to secure later positions. Most of these positions do not require college degrees, and employees can quickly learn how to perform their assignments from supervisors and colleagues. They sometimes are able to receive training and licenses to operate heavy equipment and commercial vehicles. Employees at small rental and leasing services occasionally contribute their ideas and affect decisions. Recognition for exceptional rental services sometimes includes tips, commissions, or other forms of compensation. Employees often receive discounts for products they lease. Peak rental seasons can provide employees with supplementary income. Cons of Working for a Small Rental and Leasing Service. Working conditions at small rental and leasing services can be stressful to employees who are responsible for multiple tasks associated with securing, maintaining, and leasing products. Workers may prefer to conduct sales rather than deal with rental contracts. They may feel pressured to acquire training and certification to use heavy equipment or operate commercial vehicles. Recurring contacts with some customers might become unpleasant if those clients frequently complain, expect to receive special discounts, or make other unreasonable demands. Some employees might dislike handling machinery and coming into contact with the grease, oil, or other residues associated with their maintenance. Some rental equipment can be hazardous to employees. Small rental and leasing businesses might expect employees to work extra hours during peak rental times, holidays, weekends, and evenings.

Costs Payroll and Benefits: Many small rental or leasing employees earn hourly wages. People who provide customers with instruction or other special services associated with using rental equipment often are compensated extra for those assignments. Many small leasing businesses do not hire enough employees for the government to require them to provide benefits. Small rental businesses arrange for vacation and sick leave with their employees based on scheduling needs, in particular coverage during peak periods. Supplies: Small rental and leasing services use shelving and displays commonly found in most stores to organize their rental products. Larger equipment is often stored outside in warehouses or on fenced lots covered with gravel for drainage. Furniture, such as chairs, couches, and desks, and appliances, such as coffeemakers and water coolers, are placed in areas where customers and employees discuss rental agreements and arrange for credit terms associated with some leases. Most small rental businesses use computers to inventory rental products and process financial transactions. They also use office supplies and cleaners. External Services: Although employees might perform some routine maintenance tasks, small rental and leasing businesses generally contract with other businesses, such as custodial, pest control, security, and landscaping services, to keep their facilities and grounds clean and safe for both employees and customers. External services sometimes are hired to deliver diesel fuel and repair equipment. These small businesses occasionally use accountants. Legal consultants assist with devising contracts, securing business licenses, and meeting municipal codes. Insurance agents help small leasing businesses secure sufficient coverage in case of theft or damages and to cover liabilities. Utilities: Small rental and leasing services typically pay for electricity, gas, oil, telephone, and water and sewer. These expenses might be incorporated in real estate leases if businesses rent the buildings and sites where they operate their services. Taxes: Small rental and leasing services pay local, state, and federal income taxes. Businesses that own buildings and land pay property taxes.

Rental and Leasing Services Rental and leasing services pay taxes for registration and licenses to operate vehicles. These businesses collect sales taxes associated with rental transactions. Midsize Businesses Midsize rental and leasing services are primarily regional businesses and rental franchises. These businesses often represent manufacturers of equipment and tools and lease customers those manufacturers’ brands. Leasing services operating in transportation hubs and car dealerships in midsize cities provide vehicle rentals for travelers, government fleets, and motorists who prefer leasing cars. Potential Annual Earnings Scale. Incomes for midsize rental and leasing services employees vary according to their position, credentials, experience, and length of employment with a rental franchise or business. Managers’ salaries in midsize rental and leasing businesses differ depending on the companies that employ them, their responsibilities, and performance record, but usually range from $45,000 to $100,000 yearly. Clientele Interaction. Employees working for midsize rental and leasing businesses often have direct contact with customers. Workers guide clients who seek products to rent, providing information and explaining terms for leases and of rent-to-own payment plans. Veterans and college students who work for rental and leasing establishments recognize the needs of their peers for furnishings and equipment for short-term lodgings; they can recommend products they have used and describe available choices. Rental and leasing workers demonstrate how to use rental items when requested. They process rental contracts and advise customers regarding any extra fees they may have to pay for fuel, cable, or Internet service while operating leased items. Workers alert renters to any insurance or maintenance costs associated with renting, provide information on whom to contact if technical problems occur, and inform renters of penalties for damaging leased items. Employees may deal with customers dissatisfied with products they rented. Workers who remain at midsize renting and leasing businesses for several years may become familiar with returning customers and tell them about products that might meet their professional or personal interests. Employees at midsize rental businesses providing party ser-

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vices sometimes assist with civic and sporting events involving celebrities or other prominent people visiting their communities and their discretion regarding arrangements is demanded. Amenities, Atmosphere, and Physical Grounds. Midsize rental and leasing services facilities, often located by cities’ main roads or near shopping or industrial areas, differ in external structure and appearance although they incorporate many similar elements, such as shelving to store and display products, loading docks to receive and ship products, and chairs, couches, and desks for customers and employees to use for business discussions. They may have sound systems to broadcast music or announcements to customer and employee areas. Stores leasing furnishings, electronics, and other household-related products or party and event rentals usually have an attractive exterior that welcomes customers. Interiors are often designed with neutral paint, lighting, and decorative items appealing to most customers. Party rental businesses may have an area decorated for a sample event to show customers the quality of their merchandise and services. Exterior areas include parking and displays of items too large for showrooms or associated with outdoor use on patios or other sites. Landscaping typically includes shrubbery, trees, and flowers. Midsize equipment leasing businesses tend to be utilitarian, providing a building where customers can examine tools, offices, and employee areas. Machinery is stored and displayed in adjacent warehouses, sheds, or lots. Function is emphasized over appearance. Typical Number of Employees. Medium rental and leasing services typically hire twenty to fifty employees, depending on the quantity of merchandise stocked. Specific roles, such as maintenance, might require more workers to keep rental products ready for leasing. Peak rental periods might necessitate hiring more temporary and part-time employees to handle demand. Traditional Geographic Locations. Midsize rental and leasing services are usually located in cities with a minimum population of fifty thousand people. Many of these businesses are established in college towns or in urban communities adjacent to military bases, industrial parks, airports, depots, or marinas, where rental and leasing services can ex-

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Rental and Leasing Services

pect consistent demand for their products and equipment from local businesses, governments, school systems, and residents. They are also located in areas where construction is occurring. Pros of Working for a Midsize Rental and Leasing Service. Workers employed by midsize services are assured job stability because their communities usually are large enough to produce a sufficient supply of customers. Their work schedule is usually consistent, and overtime, weekend, or holiday hours are typically voluntary and not demanded. Employees may enjoy the quality, diversity, and modern technology available in the products their businesses offer and welcome opportunities to lease those items at reduced rates or purchase discontinued products at reduced prices. Midsize rental and leasing businesses sometimes provide employees with training on the use of rental equipment or computers, which can heighten their professional qualifications and often results in promotions or raises. Cons of Working for a Midsize Rental and Leasing Service. Employees at midsize rental and leasing services might feel overwhelmed if they are expected to perform numerous roles at their business. Some might feel uncomfortable assisting customers with unfamiliar products, such as heavy equipment, if no specialists are available to handle those requests. Employees might not be interested in learning about new technologies and gaining computer skills associated with their assignments. Some products, especially machinery, might have dangerous components, leak fluids, or present safety concerns. Customer complaints can frustrate employees who lack the authority to resolve issues or adjust contracts and pricing to appease clients. Costs Payroll and Benefits: Midsize rental and leasing businesses pay employees based on hourly, monthly, or yearly rates. Temporary and parttime workers receive wages compensating them for the number of hours they work or specific services they perform. Consultants receive fees according to contracts outlining their contributions to businesses. Full-time employees typically receive benefits, including vacation and sick time. They are often provided health care insurance and sometimes company stock and

pension plans. Some employees may be given commissions, bonuses, or reduced rental costs, extended lease periods, and upgrades for products they lease. Supplies: Shelves and display cases are essential to midsize rental and leasing services. These businesses are equipped with office supplies and computers and printers to process transactions. Most midsize rental and leasing services provide basic furnishings in areas where customers and sales representatives can sit to discuss leasing and credit options. These businesses display large rental products in sheds and yards usually adjacent to the stores. Outdoor rental areas are often bordered with fences and sometimes paved or graveled to make it easier for customers to walk around and examine rental equipment. Stereo systems often broadcast music inside and outside rental businesses and occasionally deliver messages about specials. Stores usually stock basic cleaning supplies to keep aisles and rental goods free of grime. External Services: Midsize rental and leasing businesses use attorneys to prepare leasing agreements. These rental companies frequently contract with external services to clean internal and external areas of stores and warehouses and to maintain yards where large equipment, vehicles, and trailers are stored, thereby ensuring that their sites are clear of hazards that might injure customers and employees. They often contract for fuel deliveries. Some midsize rental businesses purchase employees’ clothing from uniform companies and arrange for laundering services. They often hire pest control, security, and landscaping businesses. Utilities: Midsize rental and leasing businesses typically pay for common utilities, including electricity, gas, oil, water and sewer, and telephone. Utility fees for businesses that lease properties or are located in airports or other large buildings such as malls are often included in property rental costs. Taxes: Midsize rental and leasing services pay local, state, and federal income taxes in addition to collecting sales taxes from customers. Business owners also pay property tax for any buildings and land belonging to them and used for leasing activities, as well as vehicle registration and license fees.

Rental and Leasing Services Large Businesses Large rental and leasing services are often national and international corporations that typically concentrate on securing contracts with other corporations that require sizable quantities of heavy machinery, office furnishings, and electronic equipment, or services and products leased in bulk amounts. They also provide expensive shipping equipment for manufacturers and luxury goods for individual and corporate clients. Potential Annual Earnings Scale. Employees working for large rental and leasing services earn varying wages depending on their position, qualifications, responsibilities, and contributions. Compensation ranges from minimum-wage hourly pay for entry-level positions such as rental clerks to salaries in excess of six figures for executives. Workers holding educational credentials for specialized positions can earn salaries from $50,000 to more than $100,000 and often receive bonuses for professional achievements that increase their rental services’ profits. Clientele Interaction. Employees in large rental and leasing services have varied experiences with customers. Some personnel, such as clerks renting transportation, communicate directly with clients, but many executives and managers have limited contact with lessees, interacting primarily by telephone, e-mail, and Internet conferencing with colleagues holding similar positions in companies that are seeking leasing services and products. Workers performing maintenance and other support tasks usually do not meet with customers. Some employees in large rental and leasing businesses are responsible for handling customer complaints, although they may work in a satellite office removed from headquarters or under contract. Amenities, Atmosphere, and Physical Grounds. Facilities housing large rental and leasing services represent diverse structures. Many of these businesses are located in office buildings. Many companies maintain attractive lobby areas, with furnishings, decorative items, and plants, to accommodate their corporate clients. Executives and employees work in various office spaces, including cubicles, which contain furnishings, computers, telephones, and other supplies. Conference rooms contain electronic and audiovisual equipment for presentations. Large rental and leasing services may provide background music

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and offer coffee and other drinks or foods to clients. Parking garages or small lots are available for employees and customers. Skyscrapers may have landing pads for helicopters. Many employees at large rental and leasing businesses are assigned cards with bar codes that enable them to access restricted areas. Some large rental and leasing companies maintain offices and counters within airports or other business facilities. These sites are usually functional to encourage quick transactions and are often painted in the businesses’ colors and designed with their names and logos. Parking access is usually provided by the airports or malls in which these rental and leasing services are located. Large rental and leasing companies might also have warehouses containing the businesses’ products or be adjacent to yards, sheds, and garages where vehicles and heavy equipment are stored. Many buildings have docks for delivery or loading equipment. These facilities are often surrounded by security fences and tend to be unattractive because they focus on maintaining large inventories. The areas occupied by these businesses, sometimes vast acreages, are designed for safety, not aesthetics. Parking lots are provided for employees and clients who wish to examine rental equipment before signing contracts. Security and safety equipment includes surveillance cameras, alarms, and intercoms. Some large rental and leasing services require employees and visitors to move through metal detectors at various entrances and exits to prevent theft and sabotage. Typical Number of Employees. The number of employees working for large rental and leasing services is in the hundreds to thousands depending on the business’s staffing requirements. Some rental business employees may be in a central location that includes the company’s headquarters, while other workers may be spread throughout a region, a country, or the world, staffing the company’s numerous facilities. Traditional Geographic Locations. Large rental and leasing businesses are often in metropolitan areas with populations exceeding 100,000 people; these areas may include college campuses, military bases, industrial parks, and other institutions with significant populations. Large leasing corporations frequently are established in state capitals. Large rental services maintain sizable fleets of vehi-

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Rental and Leasing Services

cles at major airports, ports, depots, and rail yards. Although offices are usually located in urban areas, large rental services often store rental equipment and products at warehouses and yards at rural sites near transportation routes. Pros of Working for a Large Rental and Leasing Service. Large rental and leasing businesses often provide entry-level positions to people who are seeking their first job, lack educational credentials, or are unskilled. These workers often appreciate being part of a corporation and the identity and benefits that affiliation offers them. Travel is occasionally involved in some employees’ leasing assignments. Large rental and leasing businesses employees sometimes receive perks such as stock dividends, performance awards, commissions, and gifts for employment anniversaries. These services often treat their employees as valued members of the overall corporate community by acknowledging their contributions in company newsletters and offering other forms of recognition. Large rental and leasing businesses sometimes provide employees with training and access to educational, safety, and professional workshops that help them advance professionally. Cons of Working for a Large Rental and Leasing Service. The size and complexity of large rental and leasing services can make workers feel insignificant and unappreciated. Workers may feel pressure to convince customers to agree to unnecessary extras or add-ons. Personnel who staff rental counters in airports and other large transportation hubs might become tired of people requesting information, complaining, or demanding revised rental agreements and upgraded equipment. Other employees sometimes miss the opportunity to interact with customers, particularly when lessees reserve rental equipment by using company’s Web sites or kiosks. Leasing representatives who have to travel for their jobs may dislike being away from home. Employees who work with heavy equipment and chemicals associated with large rental and leasing services risk being injured or exposed to toxins. Costs Payroll and Benefits: Salaries paid by large rental and leasing services vary depending on the employee’s role, credentials, and contributions to the company’s financial status. Entry-level positions, such as rental clerks, often are paid hourly

wages. Consultants, part-time, and temporary laborers receive compensation according to the time they work and the type of service performed. Most large rental and leasing businesses offer workers paid vacation and sick leaves. Health insurance, stock options, and pension plans are frequently provided. Employees sometimes receive commissions and bonuses. Large rental services occasionally reward employees with reduced prices for luxury rental goods. Supplies: Large rental and leasing services need state-of-the-art telecommunications and computer technology to maintain their inventory and reservation databases, to contact rental goods suppliers, and to coordinate with franchises and other facilities functioning within their overall business network. Computers and printers are essential to process credit verifications, rental agreements, and payments, and to print contracts and receipts. These services use large quantities of furnishings, equipment, and office and cleaning supplies to maintain interior and exterior areas where customers interact with rental staff and lease products. External Services: Most large rental and leasing businesses rely on various professionals to provide essential services. They consult with lawyers to develop contracts. Security is crucial for rental and leasing services, particularly those that own millions of dollars in merchandise, such as thousands of vehicles or high-priced aircraft and yachts. Large rental and leasing businesses usually hire professional cleaners to sanitize their facilities. Specialists are often used to clean upholstery on rental furniture and in rental vehicles. Some large rental and leasing businesses contract for mechanics to repair damaged rental vehicles and equipment. Companies deliver diesel and other necessary fuels. Uniform businesses frequently provide standardized clothing featuring company logos for rental clerks and sales personnel as well as laundry services. Large rental businesses often hire pest control services and landscapers. Utilities: Large rental and leasing services typically use electricity, gas, oil, water and sewer, and telephone services, which are paid by those businesses or incorporated in leases if the services operate on rented properties.

Rental and Leasing Services Taxes: Large rental and leasing businesses usually pay local, state, and federal income taxes. These businesses also collect sales taxes associated with customers’ rental contracts and purchases. Companies that own the buildings, land, and vehicles they use for rental business pay property taxes and license and registration fees.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of the rental and leasing services industry and the roles of its employees are similar in small, midsize, and large companies. The roles of employees vary based on their education, training, and experience, but they tend to fall into employment categories that are standard throughout the industry. The following general job categories apply to the organizational structure of small, midsize, and large rental and leasing services:

delegating assignments to managers. Some department and warehouse managers focus on specific rental products offered by their companies. Larger rental and leasing services often retain finance specialists who oversee securing credit to purchase equipment. Most rental and leasing services require their managers to have a bachelor’s degree in business or an affiliated field and previous employment and leadership experience in the industry. Managers often have obtained a master of business administration (M.B.A.). Managers usually receive the highest salaries at their businesses. The average annual salary for rental and leasing services managers was $95,420 in 2009, ranging from $62,950 to more than $164,120. Business management occupations may include the following: ■ ■ ■

■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Business Management Customer Services Purchasing Sales and Marketing Reservations Facilities and Maintenance Security Research and Development Mechanical and Technical Services Operations Distribution Groundskeeping Human Resources Information Technology Administrative Support

Business Management The rental and leasing services industry depends on managers to oversee various facets of its business. Owners who also are managers direct many of the business decisions associated with small and midsize rental and leasing services. In larger businesses, a chief executive officer and chief financial officer provide leadership, determining financial goals, dealing with payroll, and

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Chief Executive Officer (CEO) Chief Financial Officer (CFO) Rental and Leasing Services General Manager Warehouse Manager Rental and Leasing Services Department Manager

Customer Services Customer services employees in rental and leasing companies assess how existing clientele and the public perceive their companies and determine ways to improve their image. Some employees develop surveys asking rental customers to comment about their experiences and to offer suggestions for products they would like the company to offer. Customer services employees also deal with customers’ complaints. Many customer services personnel have completed programs in public relations or business at universities, community colleges, or vocational schools. Communication skills are necessary for these positions. Some rental and leasing businesses contract customer services through outsourcing. Customer services occupations may include the following: ■ ■ ■

Customer Services Director Customer Services Representative Public Relations Specialist

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Purchasing Rental and leasing services employ people whose job is to identify sources of rental products and equipment. Purchasing personnel choose specific products and suppliers and place and handle the orders. These employees often attend conferences that showcase products that rental and leasing services might want to procure for their businesses. They acquire information about new products that can supplement or replace existing inventories. Most rental and leasing services purchasing personnel have a bachelor’s degree in a businessrelated field. Upper-level personnel often have a master of business administration. Businesses value purchasing personnel with knowledge of construction and other industries that frequently rent equipment. Annual salaries for purchasing employees depend on their responsibilities and qualifications. Purchasing occupations may include the following: ■ ■ ■

Purchasing Director Senior Purchasing Manager Purchasing Agent

Sales and Marketing Rental and leasing services employ personnel to market their businesses by promoting their rental equipment and products. These businesses also hire people who specialize in convincing customers to rent their merchandise. Marketing personnel often develop appealing perks to persuade customers to choose their businesses. Sales coordinators talk with customers regarding leasing services. Some sales representatives concentrate on leasing accounts with contractors. Sales personnel examine renters’ identification, take deposits, and process rental transactions. Some sales employees are responsible for selling vehicles and equipment removed from leasing stock because of their mileage or age. Marketing and sales personnel working for the rental and leasing services industry usually have bachelor’s degrees in marketing or business. Some may have advanced degrees such as an M.B.A. and specialize in a particular area, such as the leasing of luxury items. Employers often seek Web site designers, photographers, and graphic artists for promotional work. Most people working in these de-

partments receive annual incomes based on their qualifications and experience. Sales personnel sometimes earn commissions. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■

Sales Director Senior Sales Manager Marketing Director Senior Marketing Manager Salesperson Marketing Personnel

Reservations The rental and leasing services industry relies on reservations. Customers can reserve rental vehicles, products, and equipment in various ways, all of which require reservations personnel to record and process these requests. Some rental and leasing reservations personnel answer telephone calls, during which they discuss rental options and terms with clients. Other reservations clerks interact directly with clients who visit their businesses to arrange for leases. Reservations employees also monitor reservations placed through Internet sites. Most rental and leasing services do not require reservations employees to have education beyond a high school diploma. Reservations work is often entry level. Sometimes rental and leasing companies outsource reservations, using remotely located clerks who may serve more than one business. People with college degrees or experience are usually considered for managerial positions. Counter and rental clerks average $11.38 hourly and $23,670 yearly wages. Reservation occupations may include the following: ■ ■

Reservations Manager Reservations Personnel

Facilities and Maintenance Facilities and maintenance personnel ensure that rental and leasing companies can operate with few disruptions caused by problems associated with electrical, heating, air-conditioning, and plumbing systems. They routinely examine, maintain, and repair machinery. Maintenance personnel are often hired for their specialized skills, including air-conditioning or plumbing expertise. Facilities

Rental and Leasing Services OCCUPATION

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PROFILE

Counter and Rental Clerk Considerations

Qualifications

Description

Helps customers find appropriate rental equipment and products, prepares rental applications, and processes transactions.

Career clusters

Business, Management, and Administration; Marketing, Sales, and Service; Transportation, Distribution, and Logistics

Interests

Data; people

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

CRE; CSE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

and maintenance employees for rental and leasing companies also include custodians. Facilities and maintenance personnel in this industry typically have studied machinery and systems at vocational schools or other institutions. Some have completed engineering or technology degrees at universities. Others are high school graduates hired for entry-level maintenance positions. Facilities and maintenance personnel often have licenses for their specialties. Qualifications and experience determine these employees’ incomes, which range from hourly wages to yearly salaries. Facilities and maintenance occupations may include the following: ■ ■ ■

Chief Engineer Facility Manager Heating, Ventilation, and AirConditioning (HVAC) Engineer

■ ■ ■

Electrician Plumber Custodian/Janitor

Security Rental and leasing companies hire people to secure their facilities from potential threats. Security personnel protect employees and customers and guard rental equipment, patrolling facilities and monitoring surveillance camera images to apprehend people stealing merchandise or carrying weapons. Security personnel guard against attempts to sabotage rental equipment and are on the lookout for signs that a customer intends to use rental equipment to commit an illegal act or engage in terrorism. Guards observe people and vehicles accessing restricted parts of rental facilities. They also monitor sensors that detect smoke, hazardous chemicals, and carbon monoxide.

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Rental and Leasing Services

Security personnel hired by rental and leasing services usually have completed training in public safety and have prior professional experience in that field. Many have worked as firefighters or police officers. Some have performed similar roles while serving in the military. Security personnel typically have completed criminal justice programs and are certified to use firearms. They have usually completed instruction regarding industrial security technologies. Individuals’ qualifications and responsibilities determine their wages. Security occupations may include the following: ■ ■ ■

Security Guard Security Specialist Firefighter

Research and Development Rental and leasing services often hire consultants to evaluate renting and leasing services and suggest how those businesses will be affected in the future by economic and market changes, consumer demand, and other factors. Market analysts and researchers monitor the development of new technologies and methods that can be applied to leasing services. They inform executives regarding technological changes that will affect their businesses and identify new markets for their services. People seeking research and development roles within the rental and leasing services industry usually have bachelor’s degrees in business subjects or fields such as engineering, and some have masters of business administration. Income varies based on the individual’s credentials and contributions, ranging from payments for specific assignments to annual salaries. Research and development occupations may include the following: ■ ■ ■

Market Analyst Researcher Consultant

Mechanical and Technical Services Rental and leasing services rely on mechanics and technicians to ensure the proper functioning of equipment used in the course of business, such as delivery trucks, as well as equipment rented to customers. Technicians inspect and maintain vehicles, machinery, and equipment. Mechanics repair vehi-

cles returned with damage, often arranging for external services to perform paint and body work as needed. These personnel sometimes go to the rental customer’s location to repair leased equipment. Mechanics and technicians hired by rental and leasing services usually have completed training at technical schools, in the military, or in special certification programs that teach people how to service vehicles and equipment. Even after being certified, many mechanics seek additional training to learn about new computerized devices used to assess systems in rental equipment. Mechanics and technicians working for rental and leasing services earn annual salaries averaging $38,990 to $57,010, depending on their credentials. Mechanical and technical services occupations may include the following: ■ ■ ■

Head Mechanic Mechanic Technician

Operations Rental and leasing services employ entry-level personnel to perform necessary tasks in day-to-day operations and supervisors to oversee those workers. These employees are often assigned to specific duties such as unpacking deliveries of rental equipment. Others may be asked to focus their efforts on a specific type of rental goods, such as being responsible for all power tools offered for leasing. Supervisors might be designated to monitor workers in one or more departments within a rental business. Rental and leasing services industry supervisors earn yearly salaries averaging $50,270, according to their qualifications. Entry-level workers typically earn hourly wages, with employees often starting at the minimum wage and receiving raises as they gain experience and complete any training associated with their jobs. Operations occupations may include the following: ■ ■ ■

Head Supervisor Department Supervisor Operations Personnel

Distribution Some rental and leasing personnel deliver rental equipment and products to customers’ homes or

Rental and Leasing Services to construction sites. Those workers are often expected to set up equipment and demonstrate how it works to lessees. They also are responsible for moving those goods within rental and leasing services facilities, unloading items on delivery docks, placing products in warehouses, and parking equipment in lots. Managers schedule distribution, keeping records noting delivery dates and the distances personnel travel transporting leased equipment. They secure any documents, such as permits, required for moving rental equipment across state or country borders. Distribution employees for rental and leasing services usually are entry-level workers. They typically have received training, such as driver education programs sponsored by the ARA, and have earned licenses qualifying them to operate a variety of motor vehicles. These personnel might also receive training and be certified to use forklifts and operate large equipment that their businesses rent. Distribution personnel’s wages range from minimum wage to yearly salaries of $24,660 to $38,350, with managers receiving annual incomes averaging $50,000. Some distribution workers are paid by the mileage for each delivery. Distribution occupations may include the following:

Groundskeeping occupations may include the following: ■ ■

■

Distribution Manager Distribution Worker

Groundskeeping Groundskeeping employees are essential to maintain the safety and appearance of the rental and leasing services industry. These personnel clear exterior areas of rental businesses, including parking lots and equipment yards, of hazards that might injure visitors or employees. Rental and leasing businesses focusing on event and party products use landscaping personnel to create appealing areas with shrubbery and flowers where events can be held. Groundskeeping employees usually have professional gardening experience. Some groundskeeping personnel have educational credentials or certification in horticulture or related fields. Workers performing groundskeeping tasks receive hourly or annual wages according to their qualifications and assignments.

Head Groundskeeper Groundskeeper

Human Resources Human resources personnel evaluate and interview applicants for available positions in rental and leasing service businesses. Employees in human resources departments occasionally identify successful rental and leasing services employees at other businesses and offer them incentives to transfer. After employees have been hired, human resources personnel advise them regarding any training necessary to begin work and about benefits, including retirement plans. Human resources personnel working in the rental and leasing services industry usually have bachelor’s degrees in business or human resources management. Many of these employees have previously held similar human resources positions at rental and leasing businesses or at other businesses. Human resources occupations may include the following: ■ ■

■

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■

Human Resources Director Human Resources Manager Human Resources Assistant

Information Technology Rental and leasing businesses rely on employees who can develop and maintain computer systems and other electronic devices essential to process digital information. These employees ensure that equipment is upgraded to enable their companies to be competitive. Specialists in information technology are responsible for maintaining computer systems by installing antivirus programs. Some information technology employees write computer programs for their businesses to inventory and track rental equipment and leasing transactions. Most rental and leasing services employers require information technology employees to have studied and completed degrees or certification in computer science or information technology at vocational schools or universities. Employees sometimes pursue advanced training and degrees to study new computer and electronics technologies.

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Information technology occupations may include the following: ■ ■ ■

Information Technology Director Computer Programmer Information Technology Technician

Administrative Support Administrative employees in small rental businesses are often responsible for numerous clerical roles. Personnel at midsize and large leasing services may be assigned specific responsibilities according to their qualifications. Bookkeepers maintain records of business transactions. Many administrative workers are assigned clerical tasks such as answering telephones, scheduling appointments, typing correspondence, and filing purchasing orders and invoices. Administrative employees sometimes begin working for the rental and leasing services industry as temporary or part-time workers. Bookkeepers might have accounting degrees. Some services provide training for administrative support personnel so that they can learn how to use new technologies for office procedures. Administrative support occupations may include the following: ■ ■

Bookkeeper Administrative Assistant

INDUSTRY

OUTLOOK

Overview The outlook for the rental and leasing services industry shows it to be stable. According to the Equipment Leasing and Finance Foundation, the global economic recession that began in late 2007 made it difficult for businesses to obtain the financing necessary to lease equipment. The industry suffered economic losses because of the tight credit situation and a drop in consumer demand. During 2008, the volume of leasing in the top fifty countries fell 15.3 percent. Recovery from the recession has been gradual, with revenues increasing in some rental and leasing services sectors and decreasing in others. Market analysts project this industry will eventually regain its prerecession growth rate because rental

and leasing businesses must acquire sufficient rental equipment and products to meet the rental needs of individuals and corporations as they recover economically and can invest in leases. North American leasing led the industry internationally through 2005 but was surpassed in 2006 by European leasing services. Toward the end of the first decade in the twenty-first century, some countries significantly increased their leasing productivity. The Chinese leasing industry reported an 87.5 percent increase from 2007 to 2008, and Peru expanded leasing activity 60 percent. European leasing represented 48.6 percent of leasing volume in the global industry during 2008, with North America accounting for 20.9 percent, Asia 19.3 percent, and South America 8.7 percent. An estimated 80 percent of businesses worldwide, ranging in size from small stores to large international corporations, have recognized the benefits, including tax incentives, of leasing equipment to operate their businesses. The World Leasing Yearbook 2010 evaluated the rental and leasing services industry in one hundred countries, noting that the top fifty markets for leasing were located in the United States, Europe, Asia, and the Pacific region. That yearbook reported that the rental and leasing services industry was expanding in previously undeveloped leasing markets such as Russia and African countries, particularly Nigeria. According to the China Financial Leasing Industry Report, 2009-2010, financial leasing in that country grew 138.7 percent from 2008 to 2009. Before the 2007-2009 recession, Datamonitor had stated the global car rental market was worth $37.7 billion in 2005 and projected that it would increase by 27.5 percent to reach $48 billion by 2010. This report indicated that the Americas, including the United States, Mexico, Canada, and Brazil, represented 60.3 percent of the global car rental market. Within the global car rental market, the United States represented 50.2 percent, the most of any country. In the late twentieth century and beyond, the car rental industry underwent some consolidation. Major corporations such as Avis Budget Group (Avis, Budget, and Ryder), Enterprise Holdings (Enterprise, Alamo, and National), and Hertz Global Holdings (Hertz and Advantage) purchased midsize car leasing businesses but continued to use these companies’ names in order to retain custom-

Rental and Leasing Services ers loyal to those businesses. As the economy began to rebound after the recession, consumer demand for rental vehicles for business and leisure purposes increased. In 2010, U-Haul International, owned by Amerco International, reported doubling its 2009 profits, with a total of $637 million in revenues. According to the November, 2010, Research and Markets’ report on automobile rental and leasing, about five thousand companies in the United States generated an estimated $40 billion in revenues in 2010. Market researchers Frost & Sullivan projected car-sharing rentals could reach $6 billion annually and be used by 10 million people worldwide as of 2016. Employment Advantages The U.S. Bureau of Labor Statistics (BLS) predicts that the number of employees in the rental and leasing services industry will increase during the early twenty-first century. It estimates that rental clerk employment will grow by 3 percent from 2008 to 2018, expanding from 448,200 positions to 461,900. About 40.5 percent of leasing executives at the Equipment Leasing and Finance As-

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sociation’s 2010 convention stated that their businesses would hire new employees in the following year. People with minimal work experience can find entry-level, temporary, and part-time positions in various categories in this industry, which often provides people with their first jobs. Many employers provide training for their employees, which allows them to advance within their job category or transfer to another specialty. As the industry uses more digital information, leasing companies will train their workers in the appropriate computer skills or seek people with computer competency. Skills gained in this industry can often be applied to other industries and enhance people’s employability. Because many rental and leasing services promote diversity, these companies provide women and members of ethnic groups with opportunities to advance professionally.

Annual Earnings According to World Leasing Yearbook and Leasing News statistics in 2009 and 2010, yearly revenues generated by the rental and leasing services industry globally totaled at least $650 billion. By 2010, yearly international revenues for the inPROJECTED EMPLOYMENT dustry were at least $560 billion. FOR SELECTED OCCUPATIONS According to the U.S. Census Bureau, annual revenues of the Rental and Leasing Services U.S. rental and leasing services industry reached about $90.6 Employment billion in 2010, a 0.9 percent 2009 Projected 2018 Occupation growth from $89.793 billion in 2009. 20,410 26,400 Cleaners of vehicles and The U.S. industry segments equipment generating the most revenue were 136,540 159,200 Counter and rental clerks commercial and industrial machinery and equipment rental 30,160 32,700 First-line supervisors/managers of and leasing at $41.1 billion, a 3 retail sales workers percent increase since 2009, and 15,650 20,700 Retail salespersons automotive equipment rental and leasing, at $32.3 billion, which 24,770 25,700 Truck drivers, light or delivery was 0.2 percent less than 2009 services because of a 1.7 percent decline in automobile rentals, offset by a Source: U.S. Bureau of Labor Statistics, Industries at a Glance, gain of 3.6 percent in the truck, Occupational Employment Statistics and Employment Projections trailer, and recreational vehicle Program. category. Consumer goods rental, estimated at $14.0 billion, de-

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clined 1.7 percent, and general rental centers, at $3.9 billion, dropped 2.9 percent. In August, 2010, the Equipment Leasing and Finance Association noted that new commercial equipment financing had expanded 16 percent since the previous year. Corporate profits rose 37 percent since mid-2009, suggesting corporations’ investment in leasing equipment was likely to increase.

RELATED RESOURCES FOR FURTHER RESEARCH American Rental Association 1900 19th St. Moline, IL 61265 Tel: (800) 334-2177 Fax: (309) 764-1533 http://www.ARArental.org Association of Progressive Rental Organizations 1504 Robin Hood Trail Austin, TX 78703 Tel: (800) 204-2776 Fax: (512) 794-0097 http://www.rtohq.org Canadian Rental Association 112B Scurfield Blvd. Winnipeg, MB R3Y 1G4 Canada Tel: (800) 486-9899 Fax: (888) 270-4440 http://www.CRArental.org Equipment Leasing and Finance Association 1825 K St. NW, Suite 900 Washington, DC 20006 Tel: (202) 238-3400 Fax: (202) 238-3401 http://www.elfaonline.org Truck Rental and Leasing Association 675 N Washington St., Suite 410 Alexandria, VA 22314 Tel: (703) 299-9120 Fax: (703) 299-9115 http://www.trala.org

ABOUT

THE

AUTHOR

Elizabeth D. Schafer earned a Ph.D. from Auburn University in 1993, focusing on the history of technology and science. She specializes in agricultural history, especially the contributions of engineering fields in the designing and improvement of tools, equipment, and machines. Her research and publications have included studies of manufacturers whose equipment and products are frequently leased by agriculturists. She has experience as both a lessee and lessor, primarily concerning the use of goods and services related to livestock, crops, and property.

FURTHER

READING

Auto Rental News. “U.S. Car Rental Revenues Rise in 2010.” December 1, 2010. http://www .autorentalnews.com/News/Story/2010/12/ Revenues-Rise-in-2010.aspx. Barton, Robert. “American Car Rental Association Chief: I’m ‘Adamantly Opposed’ to á la Carte Pricing.” Interview by Christopher Elliott. Elliott Blog, April 24, 2009. http:// www.elliot.org/first-person/6333. The Economist. “Wheels When You Need Them: Car-Sharing.” 396, no. 8698 (September 4, 2010): 70. Jahn, Tim. “Creating the Textbook Rental Industry—With Aayush Phumbhra, Founder of Chegg.com.” Beyond the Pedway, November 9, 2010. http://www.beyondthepedway.com/ chegg-interview-aayush-phumbhra. Jakl, Thomas, and Petra Schwager, eds. Chemical Leasing Goes Global: Selling Services Instead of Barrels: A Win-Win Business Model for Environment and Industry. New York: SpringerWien, 2008. Kazanjian, Kirk. Exceeding Customer Expectations: What Enterprise, America’s Number-One Car Rental Company, Can Teach You About Creating Lifetime Customers. Foreword by Andrew C. Taylor. New York: Currency Doubleday/Random House, 2007. Keegan, Paul. “Zipcar: The Best New Idea in Business.” Fortune 160, no. 5 (September 14, 2009): 42-52.

Rental and Leasing Services Lacko, James M., Signe-Mary McKernan, and Manoj Hastak. Survey of Rent-to-Own Customers. Washington, D.C.: Federal Trade Commission, Bureau of Economics, 2000. Menkin, Christopher. “The $650 Billion Leasing Industry Has Dramatically Changed.” Seeking Alpha: Financial Stocks, March 27, 2009. http:// seekingalpha.com/article/128189-the-650billion-leasing-industry-has-dramaticallychanged. Monitor Daily. “Equipment Finance Industry Confidence Shows More Improvement.” November 19, 2010. http://www.monitor daily.com/story_page.asp?news_id=26889. Paul, Lisa, ed. World Leasing Yearbook 2010. Colchester, Essex, England: Euromoney Institutional Investor, 2009. Phelan, Kim. “Soaring Inflatables Industry Gets a Second Look from Insurance.” Rental Pulse. http://www.rentalpulse.com/Article/tabid/ 95/smid/426/ArticleID/234/reftab/113/ Default.aspx. Roseman, Brett T. “Rental Car Industry Starts to Emerge from the ‘Perfect Storm.’” USA Today, April 5, 2010. http://www.usatoday .com/travel/news/2010-04-06-rentalcars06 _CV_N.htm. Saunders, Harris, Sr. Top Up or Down? The Origin

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and Development of the Automobile and Truck Renting and Leasing Industry—Since 1916. Birmingham, Ala.: Harris Saunders, 1985. Smith, Brandey. “Dreamgirls: Women Succeeding in the Rental Industry.” Rental Equipment Register, April 1, 2007. http://rermag.com/ features/equipment_dream_girls. Stoller, Gary. “Hertz to Acquire Dollar Thrifty; Cash, Stock Rental Car Deal Valued at $1.2B.” USA Today, April 27, 2010, 3B. Transportation Security Administration. Safeguarding America’s Transportation System: Security Guide for Truck Rental Company Employees. Washington, D.C.: U.S. Department of Homeland Security, 2005. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Counter and Rental Clerks.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos117.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. Wortham, Jenna. “Haute Couture, Available Through the Netflix Model.” The New York Times, November 9, 2009, B-1.

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Residential Medical Care Industry

care. Residential care facilities are also known as skilled nursing facilities (SNFs). Their primary mission is to provide proGeneral Industry: Health Science fessional nursing care in an inpatient Career Clusters: Health Science; Human Services setting, with a goal of discharging paSubcategory Industries: Community Care Facilities tients to their homes or other approprifor the Elderly; Group Homes for the Disabled; ate residential environments. Nursing Care Facilities; Residential Mental SNFs offer a full spectrum of rehabiliRetardation, Mental Health, and Substance Abuse tative and recovery services, including Facilities occupational therapy, physical therapy, Related Industries: Counseling Services; Hospital and speech therapy. Registered nurses Care and Services; Hotels and Motels Industry; (RNs) and physicians oversee the care Insurance Industry; Medicine and Health Care plan of each patient. Twenty-four-hour Industry; Scientific, Medical, and Health care is a feature of this care delivery sysEquipment and Supplies Industry tem. Sometimes diagnostics, such as Annual Domestic Revenues: $165 billion (Nursing phlebotomy and radiology, may be availhomes and assisted living; Hoovers, 2010) able on-site; if not, they may be brought Annual Global Revenues: $4.5 trillion (Total health via mobile unit, or patients may have to care expenditures; The Medica, 2006) be transported to external testing faciliNAICS Number: 623 ties. Treatments and care are delivered by a number of professionals, from licensed care technicians to RNs and pharmacists. Limited access to hospitals, cost issues, and adINDUSTRY DEFINITION vances leading to better survival rates for the chronically ill have led to the development of the Summary specialized services of SNFs. These facilities deliver The residential medical care industry serves paskilled care much more economically than do tients who require skilled medical or rehabilitative acute care facilities, and most insurance compacare but who do not carry an illness or injury burnies now mandate transfer to such facilities when den serious enough to qualify for acute hospital INDUSTRY

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Residential Medical Care Industry patients no longer meet hospital criteria. SNFs pay rigorous attention to the appropriateness of the care they provide, and patients must meet a minimum level of illness severity to qualify for insurance coverage of SNF care. This is especially true of those covered by Medicare. There are over sixteen thousand SNFs in the United States. This number is projected to grow as a result of the aging of the U.S. population and the longer life spans made possible by medical technology. Health care reform and escalating costs have resulted in a push to deliver more services in SNF settings when appropriate. Medicare and Medicaid, both governmental insurance programs, are the primary payers in the residential care industry, modifying their reimbursement schemata to save their programs from financial crisis. As one example, patients on assisted ventilation used to remain hospitalized until they were weaned from their ventilators. Now, these same patients go to SNFs, whose care and technological expertise has

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been shown to be successful in achieving more rapid patient recoveries and discharges. In short, hospitals have become places where only the sickest and most resource-intense patients are admitted, and acute inpatient recovery care is being redirected to SNFs. Jobs opportunities in this sector are many and growing. History of the Industry In the early twentieth century, senior citizens and others who needed continual care were either housed in private institutions that had been established by ethnic or religious communities or left to their fates in state-supported almshouses. Private institutions had strict criteria for entrance, usually based on moral character, financial means, or social standing, and they housed only a small portion of the people who needed their services. For the rest of the population, who relied on almshouses for care, no regulations or criteria for wellness or illness were established. To call them nursing facili-

The residential medical care industry serves patients who require skilled medical or rehabilitative care but not acute hospital care. (©Alexander Raths/Dreamstime.com)

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ties would be to employ a misnomer; often, people went to almshouses to live out their lives in meager and substandard conditions. Workers staffing these facilities were unskilled and often were not even qualified to offer custodial care. Medical care was not available, and mortality rates were high. In 1935, the federal government instituted Old Age Assistance (OAA), a program for retired workers. As residents in almshouses could not qualify for OAA funds, private institutions began to spring up whose residents would be eligible for OAA payments, which they used to pay for their care. By the end of World War II, governmental oversight structures for elderly care facilities began to mandate that such facilities receive licenses and meet codified standards of care in order to qualify for OAA payments. In the mid-1950’s, federal monies started to be-

This resident’s hair is being fixed by a nurse’s aide, but some residents get their hair done by visiting beauticians. (©Alexander Raths/Dreamstime.com)

come available to construct more standardized nursing care facilities. The residents of such facilities had greater needs for regular medical treatment and attention than they had had in the past, so the facilities evolved to embrace more medical missions. They became recognizable as health care institutions and were no longer treated just as elderly homes for the impoverished. Nurses, physicians, and other skilled personnel composed the labor force in these more advanced facilities. Both the law and federal funding provisions continued to evolve over time; reforms to payment mechanisms occurred, and some monies were withdrawn in response to funding crises. These spending cuts caused difficulties for people who had previously qualified for support and found themselves newly uninsured. Many frail and elderly persons faced barriers to obtaining medical care outside of acute care hospitals. Federal regulatory mandates grew unpopular, and the large number of uninsured citizens was widely publicized. As a result, a new category of “intermediate” care facilities was created to serve elderly and disabled patients and provided federal funding support. Intermediate care facilities had to meet rigorous standards to be paid, and care standards suffered when funding decreased. As a result, more administrative positions were created to monitor and report on facilities’ adherence to federal standards. In 1965, Medicare was enacted to provide health care to senior citizens. SNFs were eligible to receive Medicare reimbursements for their services. More strict eligibility requirements for patient coverage emerged, along with even more strict regulatory oversight of facilities. Nurses, physicians, and administrators ran their facilities and cared for patients, but they found themselves spending increasing amounts of time on compliance and reporting to the government. The SNF designation was not established until the early 1990’s. Originally, these entities were referred to as extended care facilities. SNFs are not custodial care facilities. The federal Medicare regulations spell out the difference between reimbursed medical care and unreimbursed custodial care. The projected growth of the medical industry will make employment in an SNF a secure career choice for the foreseeable future. The industry, however, is not immune to economic pressures,

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and difficult financial times can result in unexpected hiring freezes or reductions in noncritical positions. Direct patient care positions are missioncritical and are some of the most secure in the industry. The average age of nurses in the United States is in the mid- to late forties; with an aging workforce and smaller numbers of younger people, jobs will continue to open up as baby boomers retire. The Industry Today SNFs are sometimes referred to as nursing homes, a broad term for facilities that offer skilled residential care in combination with restorative or custodial care. Of the sixteen thousand SNFs registered in the United States, about two-thirds are owned by for-profit companies, with the remaining portion owned by not-for-profit organizations. Fewer than 10 percent are owned by the federal government. Some patients are admitted to SNFs for shortterm medical recuperation or rehabilitation; costs of this recuperation are generally borne by a patient’s private health insurance carrier. Elderly persons who are unable to care for themselves at home pay for assisted living facilities privately, often through pensions, retirement savings, or the proceeds of selling personal assets such as homes. Those needing more extensive medical care may find that paying for care in skilled nursing facilities becomes more complex, based on medical conditions, functionality, and financial means. In spite of the complex nature of SNF revenue sources, Medicaid is the primary payer for the SNF population in the United States. However, many people qualify for Medicaid only after they have expended their private assets. People working in residential care facilities currently face stringent expectations for efficiency and economy. Most facilities operate with just enough staff to deliver quality care in a timely manner, and are accountable to the economic bottom line. Because life expectancies are increasing, medical and long-term care costs are rising significantly toward the end of life. Compounding the issue is the fact that aging slows one’s recovery processes in general and can make going home immediately posthospitalization challenging. For these reasons—and because extended families are no longer the norm in the United States—

Some nursing homes have gardens in which patients can walk with visitors. (©Lisa F. Young/Dreamstime.com)

SNF care represents a burgeoning business. RNs with associate’s degrees can find supervisory and direct medical positions within SNFs. Licensed patient care technicians or licensed nursing assistants, under the supervision of RNs, provide custodial care and medical treatments within the scope of their licensure. Phlebotomists, radiology technicians, ultrasonographers, and respiratory therapists are just a few of the numerous professionals who may be employed or contracted to care for patients in the residential medical care industry. SNF employment opportunities are growing faster than are opportunities in acute hospital care facilities. Gone are the days when patients were admitted to hospitals for weeks or months. Exceptional costs preclude long hospital stays, increasing the demand for skilled recuperative care in appropriate and fiscally responsible settings. Common partnership industries to residential

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medical care include long-term residential care facilities. Long-term care facilities and residential care facilities may be owned and operated alongside parent hospitals, or they may be privately owned. Transitioning patients too sick to go home but too well to stay in the hospital is of key importance to hospitals. Keeping patients in the bed too long increases costs and can prevent admissions of sicker patients by limiting bed capacity. Allowing patients who recover well to return home is certainly desirable, but when doing so proves impossible, residential care facilities allow hospitals to shift as much nonnecessary inpatient care as possible to an outpatient setting as soon as it can be done safely.

INDUSTRY MARKET SEGMENTS Individual skilled nursing facilities range in size from small establishments with only a few beds to large facilities with more than one hundred beds. These facilities may be individual private entities, or they may be owned and managed by larger corporations. For example, Genesis HealthCare CorporaA doctor checks the blood pressure of a nursing home resident. (©James tion operates more than two hundred Steidl/Dreamstime.com) SNFs in thirteen states. Some corporations specialize in managing SNFs, whereas others may also own and operate hospitals $10.20. Employees of small SNFs are likely to earn and private medical office buildings, among other wages at or below the median. Clientele Interaction. Patients, their families, properties. government payers, federal facility surveyors, colleagues, referring hospitals, and vendors are the Small Skilled Nursing Facilities primary clients for SNFs. Patients in SNFs, as inpaSmall SNFs have fewer than fifty beds and emtients, are often in a highly vulnerable state, frightploy as few as twenty-five people full time. They are often rural facilities, since most urban areas supened and suffering maladies of various sorts. Many port significantly larger establishments. arrive at SNFs from independent homes and find Potential Annual Earnings Scale. According themselves in unfamiliar surroundings, feeling a to the U.S. Bureau of Labor Statistics (BLS), an RN loss of autonomy and self. Patients rarely arrive in a nursing care facility in 2008 earned a median alone, and employees of SNFs must be cognizant of extended families’ pressures and fears. annual income of $57,060; a licensed practical Financial worries, child care, lost wages, and sonurse earned an annual salary of $40,580; and a cial concerns for the patient and the family require home health aide earned a median hourly wage of

Residential Medical Care Industry care providers to have compassion, understanding, a good sense of timing, and empathy. SNF nursing staff face particular challenges posed by competing demands for their time. High levels of bureaucracy and regulated oversight of staff make it all the more important for them to make the effort to connect directly with their patients. Everyone, from physicians to housekeepers, must maintain professional and respectful decorum; they should promote the quality of their SNFs to help allay fears and aid recovery, and they must be ever aware of the need to protect patients’ privacy and confidentiality. In short, taking on the responsibility of working in health care requires employees to provide the medical, social, and psychological support necessary for recovery. Amenities, Atmosphere, and Physical Grounds. Cleanliness and a calm atmosphere are critical in the SNF setting. Surgical-patient recovery requires sterility and designated treatment areas. Increasingly, SNFs are developing a patientcentered approach, with innovative designs that strive to be more “homelike,” as comfort and peace of mind speed the recovery and discharge processes. Facilities seek to make access for family members relatively simple, providing sufficient parking and clear signage. Within an SNF, an attended receiving area assists in quickly routing visitors. However, the most important consideration within the care delivery areas is the comfort of the patients. Controlled humidity and temperature, rigorous attention to maintaining modest noise levels, and utmost attention to privacy and confidentiality are important to recovery. Typical Number of Employees. Small SNFs of less than fifty beds generally employ a total of around twenty-five persons. They are often situated in sparsely populated areas, so they may find it difficult to find sufficient staffing for even those few positions. However, these smaller SNFs are likely to be fairly near acute-care facilities, and they provide strong economic stability in their locales, employing staff of all grades, from entry-level personnel to professional physicians and chief operating officers. Traditional Geographic Locations. Small facilities are likely to be located in rural communities, with populations of under twenty thousand within their service areas. It is not uncommon to find such SNFs colocated with hospitals. While staff

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are drawn primarily from the immediate locale, higher-level administrative positions are attractive for their growth potential, and SNFs cast wide nets when recruiting for such positions. Finding physicians to staff SNFs can be challenging, because such a high proportion of the facilities’ payments are made through Medicare and Medicaid, which have relatively low reimbursement rates. Contracts are required to reimburse physician travel time to small rural facilities. Pros of Working for a Small Residential Care Facility. Providing local care at a small SNF allows employees to work in a more intimate community atmosphere. Direct health care providers at such facilities see many types of diagnoses and are exposed to stimulating technical and cognitive challenges in their work. Small SNFs are therefore attractive to many who value the unique learning opportunities they provide. Smaller facilities often involve less bureaucracy and greater personal relations for employees with patients and their families. The U.S. Centers for Disease Control and Prevention Nursing Home Statistics Database suggests that smaller facilities have higher staff-to-patient ratios than do larger facilities. This higher ratio is likely to decrease stress levels and facilitate better distribution of workloads among caregivers. Small SNFs are likely to provide more intimate settings for staff and patients than do large SNFs, and those seeking close relationships with their patients should seek facilities housing no more than fifty to seventy-five beds. Cons of Working for a Small Residential Care Facility. One challenge that professional staff face in an SNF is the lack of continuous and personal relationships with patients, given the technical resource requirements of their jobs. Nurses, therapists, and others delivering skilled services spend much time attending to medications, technologically administered treatments, and oversight of less skilled staff. Time spent in a nurturing role can be limited, which can be a dissatisfying situation. Small SNFs may not have the financial resources of their larger counterparts, depending on whether they are run for profit. For-profit facilities tend to seek lower staff-to-patient ratios, raising concerns over patient safety and staff burnout due to stress and overwork. Capital dollars to improve equipment or enhance facilities may be more limited

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than at larger facilities. Additionally, small SNFs may have trouble recruiting and retaining trained staff, including physicians. Their lack of resources and inability to match the salaries of larger organizations are two primary drivers behind staffing challenges. At small SNFs that lack sufficient depth in their work pools, employees are at risk of being required to work extra shifts or, at times, to work on shifts that are short-handed. The purchasing power that comes with a large workforce can also be compromised at small facilities, and employee benefits may not be as robust at smaller SNFs as they are at larger SNFs. Larger organizations have better risk ratings and can likely offer employees more and better benefit options. However, small SNFs that are part of larger chains may be able to offer the benefits common at larger organizations. Small SNFs provide high-level medical and procedural services, but health care providers who value the opportunity to work with the latest technology, with critically ill patients, or with younger populations may not feel fully challenged in these facilities. Costs Payroll and Benefits: SNFs employ both hourly and salaried employees, and benefits include health and dental insurance, long- and shortterm disability, and Family Medical Leave Act coverage. Continuing professional education time and dollars are usually provided, as are malpractice insurance and sick and earned time. According to the U.S. Census Bureau, the vast majority of health care employees work part time, probably owing to the high proportion of them who are women either starting or raising families. Benefits, if available to part-time staff, are prorated to their total work commitments. Supplies: SNFs require general medical supplies, disposables, pharmaceuticals, radiological products, and surgical and wound-care supplies and equipment; capital costs include such equipment investments as physical therapy equipment and whirlpools. Administrative and general operating supplies, such as cleaning and sterilization products, as well as office supplies, are also required. External Services: SNFs experiencing a shortage of doctors or nurses may contract temporary

physicians or travel nurses. They may also contract outside legal counsel, accountants and tax preparation professionals, medical recordkeeping services, information technology experts, or billing consultants. Utilities: Utilities for any medical facility are critical and include electricity, heat, backup energy sources, telephone, and Internet access. Taxes: Governmental and publicly owned SNFs may enjoy tax breaks; not-for-profits are exempt from many taxes. Privately owned facilities, the majority of those in operation, must pay corporate income and property taxes. All facilities must pay employer payroll taxes and withhold payroll and income taxes from employees. Midsize Skilled Nursing Facilities Midsize SNFs have bed capacities of from fifty to one hundred. Net income after expenses varies widely, depending on the amount of bad debt burden, insurance payments (including Medicare and Medicaid, which pay poorly compared with private pay or other insurers), direct and indirect expenses, and overhead. SNFs’ margins can be very small as the result of external factors; the broader economy plays a role, especially in driving competition to obtain privately paying patients who can afford skilled care. Potential Annual Earnings Scale. According to the BLS, an RN in a nursing care facility in 2008 earned a median annual income of $57,060; a licensed practical nurse earned an annual salary of $40,580; and a home health aide earned a median hourly wage of $10.20. Employees of midsize SNFs are likely to earn wages that approximate the median salaries for their occupations. Clientele Interaction. For the most part, the core mission of an SNF is to deliver medical and rehabilitative services. Working purely in a service industry, staff must be customer-focused, possess excellent communication skills, and have a desire to work in a hands-on, interactive, and caring industry. Midsize SNFs are likely to have lower staff-topatient ratios than do small facilities, putting more pressure on care staff to maintain a safe and personal environment for their patients. The reputation of a facility is public knowledge because Medicare survey results on safety and quality are publicly accessible. Similarly and importantly to businesses, word-of-mouth referrals are more likely

Residential Medical Care Industry when personal service and good client interaction are delivered. Facilities have far too many overhead expenses to be able to leave beds unfilled, so reputation and interaction are priorities. Amenities, Atmosphere, and Physical Grounds. Cleanliness and a calm atmosphere are critical in the SNF setting. Surgical-patient recovery requires sterility and designated treatment areas. Increasingly, SNFs are developing a patientcentered approach, with innovative designs that strive to be more “homelike,” as comfort and peace of mind speed the recovery and discharge processes. Facilities seek to make access for family members relatively simple, providing sufficient parking and clear signage. Within an SNF, an attended receiving area assists in quickly routing visitors. However, the most important consideration within the care delivery areas is the comfort of the patients. Controlled humidity and temperature, rigorous attention to maintaining modest noise levels, and utmost attention to privacy and confidentiality are important to recovery. Typical Numbers of Employees. A midsize SNF of up to one hundred beds will likely employ fifty to sixty staff members. Patient-to-staff ratios need to be explicitly understood, so employees are ensured of a responsible and manageable workload. A major factor in total staffing numbers is the centralization of functions or external contracting of services such as billing, collections, and communications systems. Traditional Geographic Locations. Midsize facilities are typically located near populated areas. Two-thirds of SNFs are located in metropolitan areas. This makes sense, given that a sufficient population density is needed to support such a facility. Most U.S. SNFs are located in the Midwest and the South. (Retirement to warmer climes and older populations in these areas probably explain this distribution.) Many SNF admissions come from discharges following surgery or medical service; the closer it is to referring physicians and hospitals with technology and ancillary services, the more attractive an SNF will be to investors (if privately run) and to patients. Close links to physician staff and private-practice physicians should be paramount to maximize referral sources. While socioeconomics in the SNF’s local area can play a role, the demand for easily accessible SNFs can bring midsize facilities to more populated

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locales despite sour economic conditions. Reputation and quality reports play a much larger role than location in an organization’s sustainability, however. Pros of Working for a Midsize Residential Care Facility. Well-established organizations provide employment security, and their purchasing power allows them to offer better benefits at more favorable rates for their employees, especially if they are part of larger chains of privately owned nursing facilities. Employees of midsize SNFs have access to health insurance for themselves and their families at group rates, which are more favorable than those a smaller employer might be able to offer. Pay incentives may be available as well, usually based on productivity and expense controls. Every employee of an SNF is responsible for contributing to the financial bottom line of the organization. Physicians, nursing leaders, and administrators generally share responsibility for being on call at night and during weekends. Midsize and larger facilities are able to spread this responsibility out over larger staffs, making the burden less onerous on each individual. Any facility providing service twenty-four hours a day, seven days a week faces unique staffing challenges, but skilled employees are in high demand, creating a favorable scenario for job seekers. Cons of Working for a Midsize Residential Care Facility. Midsize SNFs are more complex organizations than their smaller counterparts. Their higher patient-to-staff ratios can contribute to staff dissatisfaction. With complexity comes increased communication challenges and, potentially, less autonomy; this situation is sometimes challenging for medical service professionals. When ratios are low, staff can become antagonistic to coworkers who call in sick or are not seen as pulling their weight. The danger of overwork, including mandatory overtime, is one of many factors affecting employee retention and satisfaction. Multiple equally worthy individuals and units may have to compete for limited resources. Thus, medical staff—in addition to already demanding jobs—may need to be strong advocates for themselves and their clients when confronting their own institutions’ bureaucracies. Pressures to be more efficient and work with fewer staff while providing excellent care will be felt.

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Costs Payroll and Benefits: Midsize SNFs hire professional staff and pay on salary. Benefits often include health insurance, dental coverage, shortand long-term disability, malpractice premium reimbursement, continuing education funds (including money and time), and retirement plans such as 401(k)s. Supplies: SNFs need paper or electronic medical records, basic office supplies, computers, telephones, décor conducive to a health care setting, disposable medical supplies, uniforms, and other noncapital supplies, among many other necessities. Capital expenses relative to medical equipment vary, depending on the tests and services available on-site, but equipment investments and maintenance costs can be considerable. External Services: SNFs may contract external vendors to clean their facilities or linens and to provide uniform services, accounting, legal advice, public relations and marketing services, cell phones and pagers, medical records storage and destruction, and hazardous waste removal. Nonfederal consultants may be contracted to assure continued licensure. Utilities: SNFs must pay for electricity, water, backup systems, telephone service, and Internet access. Taxes: Governmental and publicly owned SNFs may enjoy tax breaks; not-for-profits are exempt from many taxes. Privately owned facilities, the majority of those in operation, must pay corporate income and property taxes. All facilities must pay employer payroll taxes and withhold payroll and income taxes from employees. Large Skilled Nursing Facilities Large SNFs have more than one hundred inpatient beds. Their patient demographics and staffing qualifications are identical to those of small and midsize SNFs. Patient-to-staff ratios tend to be higher in large SNFs, likely as a result of economies of scale, though larger SNFs that are privately owned are known to cut staffing and costs to improve their financial bottom lines. Higher patient-to-staff ratios can raise safety and quality concerns. Large facilities can draw business from up to 100 miles away or even further, depending on competition and patient willingness to travel. Com-

petition exists in the health care industry, and grappling for market share while maintaining sufficient staffing is a constant challenge for a large SNF. Revenue from patient care services is in the millions of dollars for large chain SNFs. Earnings in these settings are targeted at maintaining favorable operating margins. A favorable margin, depending on the legal structure of the organization, can result in profits for stakeholders or reinvestment into not-for-profit entities. Not-for-profits struggle for revenues and a sustainable bottom line because of their charity-care and uncompensated-care requirements (as well as their expensive medical education missions if they are associated with training programs). Facilities seeking to remain current, viable, and competitive in the industry must reinvest in their capital funds and infrastructure. Continuing to pass federal site reviews is even more important, as negative findings can result in loss of Medicare funding or even threaten facilities with closure. Potential Annual Earnings Scale. According to the BLS, an RN in a nursing care facility in 2008 earned a median annual income of $57,060; a licensed practical nurse earned an annual salary of $40,580; and a home health aide earned a median hourly wage of $10.20. Employees of large SNFs are likely to earn wages at or above the average for their occupations. Clientele Interaction. Larger organizations offer more diversity and opportunity for professionals. SNF care, which can be long term (months), can force patients to spend months away from their homes and familiar environments. Removing patients from familiar settings and family can delay recovery, however. Physicians, nurses, and other staff can become surrogates for family, and they must have excellent interpersonal caring skills. Staff should advocate for patients and encourage their families to assign guardians or family advocates to closely monitor patient care and progress. Physicians and nurses employed by large SNFs work as part of a large group of similar professionals, sharing on-call duties. Collaboration and patience are required, and staff may face challenges scheduling their obligations around holidays and school vacations. Professionals represent their organizations and their colleagues when they interact with clients, and they are expected to be available and responsive when they are on call.

Residential Medical Care Industry Amenities, Atmosphere, and Physical Grounds. Large SNFs are typically freestanding, with sizable grounds. Investments in aesthetics are important to develop client security and trust in an organization, which in turn is important for maintaining the organization’s client base. Open space and a trend toward less clinical environments are common, as the focus of those designing amenities and interiors lies more on patient comfort than on optimal medical-care-delivery design or the convenience of deliverers. Typical Number of Employees. Large health care facilities employ thousands of staff members, including medical, administrative, financial, operations, and support staff. From the first phone call, to patient admission, to patient discharge and follow-up, numerous staff members representing a given SNF come in direct or indirect contact with patients. This size and structure requires a synergistic, well-coordinated effort to meet the needs of patients and to fulfill the mission of the SNF. Traditional Geographic Locations. Large SNFs are generally located in densely populated areas, mostly in the Midwest and the South. A sufficient population base, with actuarial promise of growth, is critical to the livelihood of a medical facility. Unlike a business that relies on product sales through the Internet, for example, a health care facility provides a face-to-face service to its clients. Pros of Working for a Large Residential Care Facility. Large health care facilities offer many people the opportunity for advancement. Throughout their careers, people working in SNFs can develop leadership skills and move into growth positions, such as administrative or management roles. Large SNFs provide significant areas for growth, especially if employees are motivated and committed to learning. Larger organizations tend to have the financial capacity and structure to promote such advancement, particularly if their missions include academic opportunities alongside clinical care. The SNF industry, embedded in an overarching and mammoth health care industry that contributes nearly 20 percent of the U.S. gross domestic product (GDP), offers job security and strong opportunities for advancement. Cons of Working for a Large Residential Care Facility. Internal politics become more evident in larger service organizations. The employees of large SNFs can expect more bureaucracy and

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delays inherent in decision making; sometimes, it can take what seems a very long time to move initiatives forward. The higher ratio of patients to each nurse creates employee tension, as well as higher risks for patients. While minimum staffing ratios are set by oversight bodies such as Medicare, the higher the ratio of patients to staff members, the longer recovery will take for patients. No area of SNFs is exempt from financial challenges: Leadership and managers must advocate regularly for resources and be mindful of staff burnout and overwork. Working in any large organization can cause employees to feel unnoticed or underappreciated. Large SNFs with robust postsurgical and medical services must remain competitive. Investment in facilities for growth is a priority. Information technology, for example, is exploding in SNFs, as diminishing revenues force greater efficiency and rapid management to discharge. Surgical and diagnostic advances represent major capital investments, but without them SNFs can lose their competitive edge. Costs Payroll and Benefits: Large organizations hire professional staff under a salary structure. Common benefits include health and dental insurance, disability coverage, Family Medical Leave Act protection, retirement accounts, malpractice insurance, continuing medical education (including reimbursement for travel, time, and registration for courses), and even tuition reimbursement for additional degree work. Benefits are generally prorated to the standard number of hours worked, with a minimum set for eligibility. Supplies: SNFs need paper or electronic medical records, basic office supplies, computers, telephones, décor conducive to a health care setting, disposable medical supplies, uniforms, and other noncapital supplies, among many other necessities. Capital expenses relative to medical equipment vary, depending on the tests and services available on-site, but equipment investments and maintenance costs can be considerable. External Services: SNFs may contract external answering services, cleaning services, sterile supply companies, uniform services, cell phone and pager providers, waste disposal companies,

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medical records storage and destruction services, and risk management and legal counsel, among other medical, support, and business services. Utilities: SNFs must pay for electricity, water, backup systems, telephone service, and Internet access. Taxes: Governmental and publicly owned SNFs may enjoy tax breaks; not-for-profits are exempt from many taxes. Privately owned facilities, the majority of those in operation, must pay corporate income and property taxes. All facilities must pay employer payroll taxes and withhold payroll and income taxes from employees.

ical functions to interrelate daily. At small facilities, multiple functions and roles may be filled by the same individual. Large facilities are more likely to employ specialists in each role. The following umbrella categories apply to the organizational structure of businesses in the residential medical care industry: ■ ■ ■ ■ ■ ■ ■ ■

ORGANIZATIONAL STRUCTURE AND JOB ROLES Any size entity providing medical services has to function as a business. An SNF represents a complex, integrated system that requires many key crit-

OCCUPATION

■ ■

Business and Operations Management Medical Staff Contracting, Reimbursement, and Billing Human Resources Customer Services/Risk Management Public Affairs and Marketing Facilities and Security Housekeeping Nutrition Information Technology and Communication Systems

Business and Operations Management Business and operations managers guide the business decisions of their organizations. They set

SPECIALTIES

Activities Therapists Specialty

Responsibilities

Art therapists

Plan and direct activities that help mentally ill and physically disabled patients use art for nonverbal expression and communication.

Dance therapists

Plan, organize, and lead dance and body movement activities to improve patients’ mental outlook and physical well-being.

Horticultural therapists

Plan, coordinate, and conduct therapeutic gardening programs to facilitate the rehabilitation of physically and mentally handicapped patients. They conduct gardening sessions and revise the programs to conform and grow with the progress of the patients.

Manual-arts therapists

Plan and organize woodworking, photography, metalworking, agriculture, electricity, and graphic arts activities in collaboration with a rehabilitation team and prepare reports that show development of patient work tolerance, emotional and social maturity, and ability to meet physical and mental demands of employment.

Music therapists

Plan, organize, and direct instrumental and vocal music activities and experiences to help patients with their communication, social, daily living, or problem-solving skills.

Residential Medical Care Industry OCCUPATION

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PROFILE

Medical Records Administrator Considerations

Qualifications

Description

Helps plan, design, develop, evaluate, and manage health care record systems.

Career clusters

Business, Management, and Administration; Health Science

Interests

Data

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest score

SIE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

goals and measure success. They drive any moves toward expansion or consolidation of services or facilities. Underlying these decisions is the company’s financial success. The business and operations group is also responsible for financial management—budgeting for revenues, expenses, and capital investments. The chief executive officer (CEO) and chief financial officer (CFO) work together to manage financial performance and oversight. A business and operations group protects the jobs of everyone working in their organization by ensuring fiscal stewardship and maximizing financial performance. Typical employees in this area have undergraduate or graduate degrees in finance or business. Many management positions are salaried, and they are often the highest-paid positions within an organization. Managers’ relationships with stakeholders both within and outside the SNF are important. Good relations with referring hospitals are needed for consistent business. In particularly large organizations, chief officers direct from the highest levels,

leading vision, strategy, and investment goals for their organizations, and their compensation reflects the risk involved in decision making when more is at stake. According to the BLS, the median annual income in 2008 for a medical and health services manager in a nursing care facility was $71,190. Business and operations management occupations may include the following: ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Nursing Director

Medical Staff SNFs depend heavily on their reputations, which can make or break them. The quality and professionalism of those providing medical care, from doctors to health aides who work directly with patients, determine the greatest share of their facilities’ reputations. They have the most direct contact

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Residential Medical Care Industry OCCUPATION

PROFILE

Nurse Practitioner Considerations

Qualifications

Description

Performs both nursing and other medical duties that may include treating uncomplicated illnesses in infants, children, and adults; conducting a physical exam; developing a plan of patient care; providing emergency treatment; and teaching and counseling patients on matters such as prevention of illness, family planning, and care of the terminally ill.

Career cluster

Health Science

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Volunteer work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

ISA

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

with patients and guide their care. Successful organizations thrive on high standards of patient care, excellent communication, and a shared understanding of best practices in providing care. Compensation is tied to training and expertise; according to the Medical Group Management Association’s Physician Compensation and Production Survey, the 2008 median annual salary for a primary care physician was $186,044. According to the BLS, the average salary for an RN was $57,060; a licensed practical nurse earned an average of $40,580; and a home health aide earned a median hourly wage of $10.20 during the same period. Medical staff occupations may include the following: ■ ■

Physician Registered Nurse

■ ■

Licensed Practical Nurse Home Health Aide

Contracting, Reimbursement, and Billing Contracting, reimbursement, and billing personnel ensure that their SNFs are reimbursed as expected by Medicare and other payers. They submit all charges and documentation and manage accounts receivable, as well as accounts payable. For nongovernmental contracts, rate negotiation and oversight are the responsibility of contracting departments. Personnel also work with in-house legal counsel and inside and outside stakeholders to develop fair and reasonable contracts, and they work with business and operations managers to ensure that contractual conditions are met. They also contract with private physicians to provide medical care and directorship. Contracting personnel gen-

Residential Medical Care Industry erally have bachelor’s or advanced degrees, and some may require legal expertise as well. Contracting, reimbursement, and billing occupations may include the following: ■ ■

■ ■ ■ ■ ■ ■ ■

Chief Financial Officer (CFO) Chief/Vice President/Manager of Contracting Revenue and Reimbursement Manager Financial Analyst Charge Master Manager Denials Manager Data Entry Clerk Accounts Receivable Clerk Accounts Payable Clerk

Human Resources Human resources (HR) personnel recruit, hire, train, and fire staff. They administer payrolls and benefits, evaluate employee performance, and provide performance management expertise. A growing area of responsibility within the domain of human resources is employee wellness and function. In larger organizations, human resources staff members hold undergraduate or graduate degrees, sometimes with training in social work or counseling. Human resources professionals are responsible to managers and supervisors, providing them guidance in all functions of human resources and ensuring fair and equitable treatment of employees. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■

Nurse Recruiter Development and Education Specialist Benefits Manager Human Resources Manager Payroll Clerk Employee Health Adviser

Customer Services/Risk Management Customer services and risk management staff are responsible for responding to patient complaints and protecting their SNFs from legal actions. They receive and resolve customer concerns, direct front-line managers and employees in how to interface with customers, and handle malpractice claims, injuries, and other legal liability issues in collaboration with legal and senior medical

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counsel. Pertinent to SNFs are the routine quality surveys conducted by external auditors. Negative findings are publicly reported and must be managed appropriately to mitigate damage to a facility’s reputation and market share. According to Salary.com, the median annual salary for a risk management specialist in 2010 was $94,606. Customer services and risk management occupations may include the following: ■ ■ ■ ■

Relations Manager Risk Management Specialist Legal Counsel Service Recovery Specialist

Public Affairs and Marketing Marketing and public affairs personnel maintain and grow their organizations’ market share. Despite an aging population driving more need for SNF care, competition for their business is real. Public affairs personnel advertise their facilities, interact with customers inside and outside the organization, and develop marketing strategies alongside operations strategy. They cooperate closely with operations, overseeing and directing local departmental initiatives to retain and grow their customer base. They also work closely with the customer services and risk management department. Public affairs and marketing occupations may include the following: ■ ■

■ ■

Referring Physician Liaison Administrator of Public Affairs and Marketing External Relations Manager Advertising Executive

Facilities and Security Facilities and security are responsible for maintaining the buildings, equipment, and grounds of SNFs, as well as controlling access to the facilities. Keeping buildings in good repair is both a safety requirement and a marketing and public relations requirement. Included in this area of responsibility are snow removal, ice management, signage, parking, and some transportation. Security professionals provide twenty-four-hour service and usually bring with them law enforcement or similar backgrounds. Nurses and others finishing shifts after dark should have escorts avail-

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Residential Medical Care Industry

able, vehicle assistance if needed, and the ability to request assistance if necessary. Depending on the level of security responsibility, a high school diploma or a bachelor’s degree is required. Facilities and security occupations may include the following: ■ ■ ■ ■ ■ ■

Security Director Facility Management Director Security Guard Parking Attendant Building Engineer Maintenance Contractor

Housekeeping Housekeepers maintain a clean, safe environment for patients, visitors, and employees. They interact with people during much of their workdays. Because SNFs provide hospital-level services, housekeepers must have specialized training and expertise in maintaining a hygienic environment, knowing standards, and protecting employees and patients alike from biological, chemical, and physical hazards. Housekeepers typically have high school diplomas or college degrees, depending on the level of their positions. Wages are generally hourly, with shift differentials for evening and night work. These positions are staffed twenty-four hours a day, seven days a week. Housekeeping occupations may include the following: ■ ■

Housekeeping Director Housekeeper

Nutrition Nutrition and dietary personnel prepare patients’ meals. Dieticians must provide for those patients with food restrictions related to pathologies such as diabetes, kidney disease, or hypertension and must coordinate with food managers to ensure safety and compliance. Nutrition staff also work in employee dining areas, and they can provide healthful eating education to patients and employees alike. Nutrition occupations may include the following: ■ ■

Nutritionist Chef

■ ■ ■ ■ ■

Cook Dietician Food Preparer/Kitchen Staff Meal Delivery Staff Cashier

Information Technology and Communication Systems Networking systems, computer workstations, electronic medical records, and related software are the responsibility of the information technology (IT) department. Communications, interconnectivity for programs supporting clinical care, and diagnostic technologies such as radiology, laboratory, and medication management systems are examples of the high-end technological needs in this setting. IT professionals generally have bachelor’s or advanced degrees in computer science or related fields and often have practical experience in IT support as well. IT and communication systems occupations may include the following: ■ ■ ■ ■

Systems Analyst Hardware Specialist Help Desk Staff Computer Security Specialist

INDUSTRY

OUTLOOK

Overview The outlook for the residential medical care industry shows growth to be an ongoing trend. Demand for workers and career opportunities are very favorable. Growth in this industry is steady, with health care contributing 17 percent to the U.S. GDP. Contributing to this growth is the largest aging population in U.S. history. Americans expect to live longer and are treating illnesses aggressively, creating a market for skilled nursing facilities that will extend for a significant portion of the early twenty-first century. Threats to the industry come from diminishing Medicare and Medicaid funds. State-run Medicaid funding is also under threat, as the recession of 2007-2009 threatens the financial health and stability of state governments across the country. Employment and job security in this sector are strong. Challenges for those entering the industry

Residential Medical Care Industry

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time, these positions are often salaried and very secure relative to the general economic environment. Those interested in medical technical work will find much opportunity, as complex treatments require increasing use of medical technology in the industry. Shortages in key professional positions help keep salary and benefits competitive. Additionally, SNFs hire skilled, white-collar workers in such fields as administration, finance, and management. Professionals in such careers may find SNFs to be rewarding settings in which to work. Caring for the elderly or debilitated provides the personal reward of seeing patients through to recovery and back home. The challenges in this area lie in the balance of providing excellent care while managing operating expenses. SNFs offer work experiences that were once found only in hospitals. Nursing and medical students will likely find themselves doing clinical rotations in these settings, but they may find that working in acute-care hospitals initially after graduation will hone their skills and confidence prior to working in SNFs. Clinical academic rotations can only Employment Advantages give a flavor of the independence that professionPositions in medicine, nursing, and pharmaals may enjoy in SNFs. Today, one of the greatest cology are in demand. Whether part-time or fulladvantages of SNF work is job security, as millions of baby boomers are aging and demand in this PROJECTED EMPLOYMENT area is growing. FOR SELECTED OCCUPATIONS include greater competition for college-educated professionals in direct care positions and some administrative roles. Physicians, psychologists, pharmacists, and other direct care providers with advanced degrees should see greater opportunities in this highly competitive job market. SNFs seek those who are self-directed and have an affinity for the elderly and disabled. SNFs have the potential to earn significant profits if managed closely and efficiently. Troublesome trends are emerging, however, in which investors purchase facilities and then cut corners in terms of cost and quality. Whether privately or publicly owned, regulatory complexity and declining Medicare funds suggest challenging times for SNFs. Overall, nursing homes collected more than $75 billion in revenues from federal (Medicare) and state (Medicaid) funding, money that presents an attractive opportunity for investors. The aging U.S. population will keep SNFs in business, but astute management will be of utmost importance for them to remain financially viable.

Nursing and Residential Care Facilities Employment 2009

Projected 2018

Occupation

399,600

546,100

Home health aides

263,520

315,900

Licensed practical and licensed vocational nurses

34,100

38,900

Medical and health services managers

797,110

956,700

Nursing aides, orderlies, and attendants

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Annual Earnings Reports of annual earnings and revenues in SNFs are usually combined with the revenues from assisted living facilities, which usually work closely with skilled nursing organizations. In fact, many of those in the aging population, as they become less able to care for themselves or develop debilitating illnesses such as Alzheimer’s or heart disease, are moved from assisted living to skilled nursing care because SNFs are better equipped to administer the full range of medical procedures such patients may require. While assisted living costs are

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Residential Medical Care Industry

calculated at a monthly rate, skilled nursing care rates are significantly higher and, because of specific Medicaid requirements, are calculated on a per diem basis. More complex patients and conditions require costly procedures that only licensed facilities can provide. Some insurers pay flat day-or-stay rates, while other insurers negotiate discounted fees. Revenues vary by facility, the number of beds, the severity of the illnesses being treated, and billing conventions. Gross fees never translate to net fees in the medical industry; allowances (discounts) that vary by payer and by contract prohibit reliable projections of annual revenues. That said, Hoovers estimates the 2010 revenues of all U.S. nursing homes and assisted living facilities at $165 billion. According to the U.S. Census Bureau, 2007 revenues in the areas of continuing care retirement communities grew by 10.1 percent, while the growth rate for hospital revenues in the same year was 6.5 percent. SNFs have a proven track record of growth and are also proving to be sound investments and to constitute a solid industry for career development.

RELATED RESOURCES FOR FURTHER RESEARCH AARP 601 E St. NW Washington, DC 20049 Tel: (888) 687-2277 http://www.aarp.org American College of Healthcare Executives 1 N Franklin, Suite 1700 Chicago, IL 60606-3529 Tel: (312) 424-2800 Fax: (312) 424-0023 http://www.ache.org American Hospital Association 155 N Wacker Dr. Chicago, IL 60606 Tel: (312) 422-3000 http://www.aha.org

Healthcare Financial Management Association 2 Westbrook Corporate Center, Suite 700 Westchester, IL 60154 Tel: (708) 531-9600 Fax: (708) 531-0032 http://www.hfma.org Medical Group Management Association 104 Inverness Terrace East Englewood, CO 80112-5306 Tel: (303) 799-1111 http://www.mgma.com

ABOUT

THE

AUTHOR

Nancy Sprague holds a bachelor of science degree from Granite State College and a master of science in health policy from the Dartmouth Institute, Dartmouth College. She is a member of the National Medical Group Managers’ Association, the Healthcare Financial Management Association, and the American College of Healthcare Executives. She is a fellow in the American College of Healthcare Executives, a registered nurse, and a health care operations consultant. Sprague has spent her career in medical practice and hospital operations, both in private practice and in a large academic tertiary hospital. She has extensive experience in physician and staff relations, and she is an expert in human resources, compliance, risk, billing, health care business management, hospital administration, and patientcentered care.

FURTHER

READING

Giacolone, Joseph A. The U.S. Nursing Home Industry. Armonk, N.Y.: M. E. Sharpe, 2001. New Strategist Publications. American Health: Demographics and Spending of Health Care Consumers. Ithaca, N.Y.: Author, 2005. Parker, Philip M. The 2007-2012 Outlook for Nursing Homes in the United States. San Diego, Calif.: ICON Group, 2006. Santerre, Rexford E., John A. Vernon, and the National Bureau of Economic Research. Testing for Ownership Mix Efficiency: The Case of

Residential Medical Care Industry the Nursing Home Industry. Cambridge, Mass.: National Bureau of Economic Research, 2005. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Congressional Budget Office. The Impact of Medicare’s Payment Rates on the Volume of Services

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Provided by Skilled Nursing Facilities. Washington, D.C.: Author, 2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Verity, Jane, and Daniel Kuhn. The Art of Dementia Care. Clifton Park, N.Y.: Thomson Delmar Learning, 2008.

©Danie Nel/Dreamstime.com

Restaurant Industry

INDUSTRY

SNAPSHOT

General Industry: Agriculture and Food Career Clusters: Agriculture, Food, and Natural Resources; Hospitality and Tourism Subcategory Industries: Drinking Places; FullService Restaurants; Limited-Service Eating Places Related Industries: Farming Industry; Fishing and Fisheries Industry; Food Manufacturing and Wholesaling Industry; Food Retail Industry; Food Services; Livestock and Animal Products Industry; Themed Entertainment Industry; Travel and Tourism Industry Annual Domestic Revenues: $566 billion USD (National Restaurant Association, 2009) Annual Global Revenues: $1.367 trillion USD (Research and Markets, 2007) NAICS Number: 722

INDUSTRY

dine after purchasing a meal. The restaurant industry is one of the largest service industries in the United States and is closely related to the tourism and leisure industry. Restaurants can be divided into numerous subcategories, including quick service or fast food, casual dining, and fine dining. As of 2009, there were an estimated more than 945,000 restaurants employing more than 13 million full- or parttime workers in the United States.

History of the Industry Restaurants were an essential part of the economies of ancient societies, including those of preindustrial China, Japan, Europe, and the Middle East. In thirteenth century China, the affluent city of Hangzhou, the most populous city of that time, was the site of many cultural and technological innovations. It was there that restaurants began to develop into something resembling their modern incarnation. Food was cooked to order, and guests chose their meals from a menu. Before this, most early restaurants were inns or boarding houses that offered food to guests for an additional fee. Food at these establishments was usually served “family style,” with guests gathering at tables to serve themselves from communal dishes.

DEFINITION

Summary The restaurant industry is a segment of the food service industry, which includes all businesses that prepare and sell food that is ready for consumption. Restaurants differ from other types of food vendors in that they provide an area for patrons to 1644

Restaurant Industry Though food vendors were common in medieval Europe, the first public cafés, or restaurants, serving gourmet food to customers appeared in the mid-seventeenth century in Paris, France. (The term “restaurant,” in fact, first appeared in the sixteenth century and is derived from the French word restaurer, which means “to restore” and which originally referred to a medicinal soup. Early purveyors often marketed their restaurants as providing a medicinal service and concentrated on the healthy aspects of their cuisines.) Seventeenth century Paris was one of Europe’s largest cities and the center of the French economy. As in thirteenth century China, the proliferation of the economy and a large population with sufficient disposable income created a niche within the food market. By the mid-eighteenth century, Paris had a variety of restaurants that concentrated not only on

Restaurants can be divided into numerous subcategories, including quick service or fast food, casual dining, and fine dining. (©Dreamstime.com)

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preparing food but also on providing an atmosphere for socializing. Dining in Parisian restaurants soon became a symbol of status and a fixture of the metropolitan entertainment market. It was not long before technological innovations followed and the modern restaurant spread throughout Europe—by 1770, restaurants were using printed menus and the burgeoning industry had diversified into a number of specialized establishments selling different types of cuisine. The evolution of the dining industry in the United States resembled the development of the European industry. The early inns and boarding houses serving food gave way to simple food vendors operating on the streets and eventually to small cafés and taverns selling food from menus. The first “official” restaurant on record in the United States was Jullien’s Restarator, which opened in Boston, Massachusetts, in 1794. The restaurant was operated by Jean-Baptiste Gilbert Payplat, who came to be known as the Prince of Soups, reflecting the French origins of the word “restaurant.” (Boston is also home to the oldest continuously operating American restaurant, the Union Oyster House, which opened its doors in 1826.) Early eating establishments in the United States were characterized by heavy and mostly mediocre—if not outright poor—food. Few were successful. The development of the restaurant industry during the nineteenth century was soon driven by competition among eating establishments. Some restaurants specialized in extravagant cuisine or presentation, while others capitalized on unique cuisine. As the twentieth century unfolded, the restaurant industry began to develop in the opposite direction. A number of restaurants began offering simple, affordable cuisine that contrasted with the elaborate, gourmet fare of earlier restaurants. These new establishments became widespread since they catered to the general population and not just the upper classes. The simplification of restaurant food eventually led to the establishment of the fast-food industry, which concentrates on providing simple, quick, low-cost food. The origins of fast-food restaurants are usually traced to New York City, where vendors working at fairgrounds began to sell precooked items such as hot dogs to passing customers. At the 1904 World’s Fair in St. Louis, Missouri, vendors sold a variety of fast, affordable food items, provid-

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Restaurant Industry

ing a model for what would become one of the largest facets of the food industry. By the 1920’s, small establishments such as White Castle (which eventually became a national chain of restaurants) cropped up, offering “to-go” food items such as hamburgers and soft drinks. By the 1930’s, the first fast-food chains began to appear all over the United States. This growth was spurred by the development of the automobile industry in the 1930’s and 1940’s, which helped usher in the next wave of the quick-service industry: drive-in restaurants. The prototypical fast-food model was established by McDonald’s restaurant, which emerged in 1940 in San Bernardino, California. McDonald’s became the first restaurant chain to employ an assembly line in the food preparation area, increasing efficiency and speed. This trend was soon employed by hundreds of similar establishments. By the twenty-first century, American cities boasted a variety of eating establishments, drive-in and fast-food eateries, banquet centers, full-service casual or fine dining, and specialty restaurants. Restaurant offerings range from healthy or organic food options to any type of international cuisine. The restaurant industry has continued to grow, as entrepreneurs attempt to compete in a crowded marketplace by introducing innovations across the board, whether in cuisine, presentation, or price.

Inputs Consumed by Food Services and Drinking Places Input

Value

Energy Materials Purchased services Total

$14.5 billion $123.3 billion $106.6 billion $244.4 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

verse service industries in the nation. Restaurant sales accounted for more than $500 billion in 2008, nearly 4 percent of the U.S. gross domestic product (GDP), and the industry employed some 13 million full- and part-time workers, 9 percent of the workforce. In fact, more than 40 percent of U.S. adults will work in the restaurant industry at some point in their lives. More than 90 percent of restaurants are considered small or midsize and employ fewer than fifty people. Even as the industry continues to diversify, most restaurants can still be placed into one of three categories: quick service, casual dining, or fine dinThe Industry Today ing. The latter two categories encompass fullIn the first decade of the twenty-first century, the service establishments, which provide table service U.S. restaurant industry was one of the most dito patrons. Quick-service restaurants, which include fast-food purveyors, specialize in fast preparation time and affordable menu options, while casual restaurants occupy a The Contribution of Food Services middle ground between quick service (in which turnover is more intimately tied to and Drinking Places to the U.S. revenue) and fine dining. (Restaurants Economy termed “fast casual” represent another, emerging category.) The vast majority of Value Added Amount restaurants fall under the casual-dining Gross domestic product $288.3 billion umbrella, which includes pubs, cafés, and Gross domestic product 2.0% most national chains. Fine-dining estabPersons employed 9.691 million lishments are typically characterized by Total employee compensation $188.2 billion quality and reputation, rather than value and volume. There are many varieties of Source: U.S. Bureau of Economic Analysis. Data are for fine-dining establishments, ranging from 2008. small neighborhood eateries to large, banquet-style restaurants.

Restaurant Industry

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Within each category, restaurants may specialize in one or more ways. They may, for instance, limit their hours and menus to cater to specific clienteles or meals. For example, restaurants in areas with heavy foot traffic at midday often specialize in serving lunch to business customers, and they may remain open for only five or six hours each day. Other restaurants specialize in evening dining and may therefore remain closed throughout the morning and afternoon. Regardless, factors such as atmosphere and type of cuisine vary across all three categories; for example, international cuisine is represented across the service spectrum, and atmosphere may be as important to the success of a pub or national chain as it is to a fine restaurant. The industry continues to evolve, incorporating such trends as organic, vegan, and vegetarian dining; restaurants that serve only locally produced ingredients; and fusion cuisine, in which chefs blend favors from different geographic areas. There are hundreds of fusion varieties, including FrenchAsian and Afro-European. Combining the basic restaurant concept The vast majority of restaurants fall under the casual-dining umbrella, which with the many categories of interincludes pubs, cafés, and most national chains. (©Diego Vito Cervo/ national and fusion cuisine creates Dreamstime.com) a multitude of possibilities, from quick-service Indian food to fine Afro-Asian cuisine. advertise their products in terms of value to gain a The 2007-2009 global economic crisis proved a competitive edge. challenge to the national restaurant industry. Since While economic factors and consumer trends restaurants tend to depend on the disposable inpresent challenges to restaurant operators, the come of consumers to survive, and many AmeriU.S. restaurant industry remains robust, as patroncans consider dining out to be a luxury rather than izing restaurants has become an ingrained and a necessity, the restaurant industry is particularly central part of American recreation and entertainsusceptible to economic downturns. From January ment. On an average day, more than 130 million to May of 2009, for example, approximately 60 perAmericans eat out, whether purchasing a hamcent of restaurants experienced sales lower than burger from a fast-food vendor or enjoying a gourtheir average. During such periods, restaurants ofmet meal at a fine-dining establishment. ten seek to make their food more affordable and

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Restaurant Industry

Small-restaurant chefs may earn anywhere from $15,000 to more than $100,000. (©Monkey Business Images/ Dreamstime.com)

INDUSTRY MARKET SEGMENTS Each of the three basic restaurant categories can be further divided into small businesses, midsize businesses, and large businesses. Each type of restaurant, from large quick-service provider to small fine-dining establishment, offers specific advantages and challenges. An analysis of each business category, organized by size, is provided below. Small Businesses Small restaurants are those with twenty or fewer employees and a capacity to serve fifty or fewer clients at a time. Small restaurants may provide quickservice, casual, or fine dining and are often closely linked to their immediate communities. The vast majority of independent restaurants in the United States fall into this category. Potential Annual Earnings Scale. Earnings for restaurant owners and managers depend less on

the size of the restaurant than on location, type of food served, and the average turnover rate—that is, the average time needed to service a single group of customers and turn the tables for the next seating. The salary range for restaurant managers ranges from $20,000 to over $100,000 per year, with the majority earning an annual average salary of about $50,000 in 2005, according to Star Chefs. Owners of small restaurants can be expected to earn salaries in the lower half of that scale. According to Star Chefs, executive and head chefs in the United States earned an average of $75,000 per year in 2005, but individual salaries vary widely depending on the type of restaurant and location. Small-restaurant chefs may earn anywhere from $15,000 to more than $100,000. In 2008, the average annual salary for chefs and head cooks was $42,410 according to the U.S. Department of Labor. Some restaurant owners calculate employee earnings based on the percentage of sales to which they contribute.

Restaurant Industry Kitchen staff, including dishwashers, line or prep cooks, and other “back of the house” workers, make a modest wage—often the federal minimum wage, which was $7.25 in 2009. The U.S. Bureau of Labor Statistics (BLS) reports that the 2008 estimated median hourly wage for dishwashers was $8.19. For food prep workers, it was $9.39. Wait staff and “front of the house” staff generally rely on an hourly base wage plus tips. Because a small restaurant can be an exclusive bistro with a highpriced menu or a small café serving coffee and baked goods, earnings vary widely. Assuming an average of between 15 and 20 percent for tips at all establishments, wait staff at expensive restaurants can earn dramatically more than wait staff at inexpensive cafés that serve the same number of customers each day. The BLS estimates that the median hourly wage of waiters and waitresses in 2008 was $8.01 per hour. Bartenders, like waitresses, rely heavily on tips. The BLS estimates the 2008 median hourly wage of a bartender at $8.54. Clientele Interaction. The level of client-staff interaction at a restaurant depends on the size of the restaurant and the type of service offered. The nature of the quick-service industry, which focuses on affordable fare and efficient turnover time, generally prevents customers and staff from developing a high level of familiarity, regardless of restaurant size. By contrast, employees of small fine and casual restaurants have the opportunity to cultivate relationships with frequent customers. In fact, small fine and casual restaurants often rely on repeat customers and may be heavily tied to a certain neighborhood or area. It is more common in small restaurants for members of the staff to know customers by name and to develop working friendships with members of their clientele. Amenities, Atmosphere, and Physical Grounds. The décor of a small restaurant depends largely on the type of food being served. Whether quick-service, casual, or fine, small restaurants have to find a balance between making the most of their limited space and creating a friendly, inviting environment. Smaller quick-service restaurants are usually organized so as to maximize efficiency, including the placement of the service counters, the arrangement of seating, and the location of restrooms and other facilities. Small casual and fine restaurants are more concerned with environment and ambience. For example, small casual

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restaurants may choose eclectic decorations, opting to make the space appear unique rather than elegant. By contrast, small fine restaurants may choose minimalist decorations in an effort to create an environment of elegance. The choice of decoration also generally reflects the type of cuisine being served. A small French restaurant might, for instance, attempt to replicate the environment of a Parisian café with its table linens and other decorations. National or regional music and arts also play a large part in setting the ambience of small international restaurants. Amenities in smaller restaurants are often basic. In larger cities, where space is often limited, many restaurants lack environmental controls such as airconditioning. Even fine restaurants, which focus on creating a luxurious atmosphere, are often forced to make do with fewer amenities in urban areas.

Smaller quick-service restaurants are usually organized so as to maximize efficiency. (©Monkey Business Images/ Dreamstime.com)

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Typical Number of Employees. Small businesses are typically not as insulated against changes in patronage as are larger restaurants because they often operate on lower levels of income. The number of employees working at a small restaurant may range from four or five to more than twenty employees, depending on the size of the space, the volume of customers, the number of shifts available per day, and the type of cuisine served. It is not uncommon for small restaurants to have only a single server working during any given shift, though some restaurants require several staff members to accommodate heavy customer traffic. A small breakfast restaurant might, for instance, have to employ several servers during Saturday and Sunday service because of increased patronage, while a single server might suffice during a Tuesday or Wednesday morning. The number of employees in a restaurant kitchen also varies widely. The smallest establishments may have only one or two kitchen workers for any shift. They will prepare food, prep ingredients for service, and clean the kitchen area. Other restaurants may hire additional support staff, including dishwashers, prep cooks, line cooks, and other kitchen employees. Traditional Geographic Locations. Small restaurants may appear in a variety of locations, from residential neighborhoods to busy commercial areas. They are especially common in large cities, where they are ideally situated to make use of the limited commercial space available. Many small towns and rural communities have one or more small restaurants in the center of town, and these establishments often serve as gathering places for their communities. The only areas in which small restaurants do not often appear are those that are very sparsely populated, such as the long stretches along interstate highways that are more often populated with midsize casual and quick-service restaurants situated in strip malls and similar commercial areas. The lack of foot traffic and repeat clientele make these areas unattractive to the typical freestanding small restaurant. Pros of Working for a Small Restaurant. Small restaurant environments are often extremely closely knit and may be informal by comparison to larger restaurants. Often, the intimate, community environment lends itself to personal interaction.

Even in the more formal environment typical of the fine-dining industry, smaller restaurants tend to have a more unique and personal feel. During periods of economic turmoil, as many larger businesses are unable to afford their overhead, small restaurants may have an advantage in that they require fewer customers to generate sufficient revenue to afford ingredients and staffing costs. In addition, small restaurants are better able to adjust to changing market trends by altering their approach or presentation to suit their changing clientele. Because small restaurants are often tied closely to the surrounding community, owners may benefit from a more loyal base of customers, who feel personally invested in the success or failure of the restaurant. This customer loyalty can benefit restaurant owners in times of financial turmoil, as regular customers will often continue to patronize their favorite establishments even while cutting back on other spending. Cons of Working for a Small Restaurant. Because of limited space and staff, small restaurants are limited in the total revenues that they can generate during an average business day. Lower revenues ultimately render small restaurants vulnerable to economic changes. When consumer spending falls, small restaurants must adjust quickly to avoid financial collapse. About 30 percent of new restaurants fail within the first year and the number climbs to 60 percent within three years of opening, according to the Cornell Hotel and Restaurant Administration Quarterly. Restaurants fail for a variety reasons but mostly because of poor financials, bad marketing decisions, and inadequate management. Another limitation of the small restaurant business is that the cost of ingredients and other supplies is higher when they are purchased in small quantities, preventing small restaurants from maximizing their profits. Limited resources for supplies also force small restaurants to avoid wasting material as much as possible, because their costs per unit for raw ingredients are higher. In addition, some owners and employees of small restaurants may find that the familiarity and informal interactions between staff and clients create a unique set of interpersonal problems. For instance, if a staff member develops a personal issue with a certain customer, that customer may decide

Restaurant Industry not to return to the restaurant. Losing a single repeat customer may not significantly affect a midsize or large restaurant, but it might affect the daily income of a smaller establishment. Costs Payroll and Benefits: While payroll costs vary widely depending on the average daily income of each restaurant, payroll expenses generally constitute about 30 percent of every revenue dollar according to Restaurant Resource Group. Many small restaurants do not offer insurance and other benefits to most employees. However, small quick-service restaurants may offer such benefits, especially if they are part of a larger chain. Supplies: In addition to ingredients for cooking, small restaurants require cookware and utensils for preparation and food service. The most costly expenditure for many restaurants is purchasing stovetops, ovens, and ventilation equipment for their kitchens, as well as cold-storage units to keep perishable supplies. Numerous other necessary supplies include linens, sanitary supplies, and cleaning products. External Services: Many small restaurants hire a credit card service to process credit and debit transactions. They may also contract accounting and payroll services to handle monetary transactions and bookkeeping, as well as uniform companies to bring clean napkins, linens, rugs, and other supplies. Utilities: Restaurants may need to pay for water and sewage, electricity, heating (gas or electric), and telecommunications and Internet services. Utilities may vary depending on whether the restaurant owner also owns the property in which the restaurant is housed. Taxes: Small restaurants pay federal, state, and sometimes city taxes. Many restaurants also pay additional annual licensing costs, including liquor license fees, food preparation permits, and inspection permits. Property owners also need to pay property taxes annually. Midsize Businesses Midsize restaurants seat between fifty and one hundred customers. There are many different types of midsize restaurants, from quick-service restaurants and diners to fine-dining establishments.

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Most midsize restaurants fall into the casual-dining category, which includes a number of national and statewide chain restaurants that offer affordable, basic meals and welcome groups. Potential Annual Earnings Scale. The earnings of midsize restaurants often exceed those of small restaurants, but they vary widely depending on the type of restaurant, location, and average number of clients served per dining period. Typically, the investment in staff and materials for midsize restaurants is only slightly more than for small restaurants. However, midsize restaurants often provide higher profit margins because they can serve more clients. Owners and managers of midsize restaurants generally earn more than $60,000 annually. Similar to small restaurants, the individual salaries of executive or head chefs range widely depending on the type of restaurant and location, though a high percentage draws annual salaries between $70,000 and $90,000. As of 2008, the average annual salary for chefs and head cooks was $42,410. Clientele Interaction. The environment of a midsize restaurant is often more formal than that of a smaller restaurant, with less personal interaction among members of the staff and between staff and customers. Midsize restaurants must be prepared to serve large groups and therefore require a more rigid system for determining roles and functions among the staff. While midsize restaurants may attract repeat customers, their larger volume requires them to draw customers from outside the immediate community. These customers are less likely to become regulars and therefore less likely to form personal attachments to the restaurant. In addition, because midsize restaurants may serve one hundred or more customers during a lunch or dinner rush, members of the staff have less time to engage in casual, friendly interactions with their customers. Staff at midsize restaurants must therefore find a balance between presenting a friendly, inviting atmosphere and maximizing efficiency. Amenities, Atmosphere, and Physical Grounds. Unlike smaller restaurants, which can still attract clientele while maintaining an informal atmosphere, midsize restaurants must provide certain basic amenities for their customers. Air-conditioning is essential in midsize restaurants, where the volume of customers can have a significant ef-

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Restaurant Industry

fect on the ambient temperature. In addition, midsize restaurants may, for example, provide changing tables in restrooms for the convenience of customers with infants and young children. Midsize restaurants also typically have high chairs and booster seats available for young children. Other amenities in “family style” midsize restaurants may include toys such as crayons and coloring books for children. Many midsize restaurants are part of restaurant chains, and their choices in décor and atmosphere may reflect decisions made by the owners of the chain, rather than the local management and staff. A popular decorative scheme in midsize casual dining is the “knick-knack” approach, where the restaurant is decorated using a variety of eclectic items intended to give customers something to look at while they enjoy their meal. For example, sportsthemed establishments are often decorated with a variety of athletic equipment, sports team memorabilia, and similar items. Midsize fine-dining establishments often use sparse decoration and strategically contrasting colors to create a dignified, luxurious look. Black and white is a common color scheme in fine-dining establishments, along with candles for the tables, fine art pieces on the walls, and soft, ambient lighting. Typical Number of Employees. Midsize restaurants typically handle large volumes of customers and must therefore hire sufficient employees to facilitate efficient service. While small restaurants sometimes expect servers to clean and reset tables between customers, midsize restaurants usually hire support staff to assist the servers and kitchen staff. Midsize restaurants might have as many as thirty employees working during a busy shift, including servers, support staff, kitchen workers, and a floor or shift manager. Traditional Geographic Locations. Midsize restaurants may appear in a variety of geographic areas but are usually concentrated in areas with significant automobile or foot traffic. The vast majority of midsize restaurants are quick-service and casual-dining establishments that attempt to attract customers who are already in the area for other reasons. Midsize restaurants are especially common in commercial zones, along portions of an expressway or highway, where they can benefit from proximity to other retail stores and shopping malls.

Many midsize restaurants establish themselves near a major recreational venue, such as a concert hall or sports stadium. A small number of midsize finedining establishments may also choose a strategic location next to upscale recreational venues, such as opera houses or symphony orchestra venues. Some midsize fine restaurants appear in busy downtown areas, where they can capitalize on a variety of foot traffic. Pros of Working for a Midsize Restaurant. Midsize restaurants offer several advantages over small restaurants. With increased capacity and customer volume, restaurant owners stand to make more profit and have a better chance of insulating their business to withstand slow periods. In addition, because a midsize restaurant often employs a larger staff, the business is protected in case a staff member must leave unexpectedly, a situation that can be disastrous for smaller restaurants. For the staff in midsize restaurants, the division of labor that comes with having a larger staff provides the opportunity to do less work than in a small restaurant for similar pay. Unlike the situation in small restaurants, servers, chefs, and other workers at midsize restaurants have well-defined roles and are usually only responsible for one part of the service. Cons of Working for a Midsize Restaurant. While midsize restaurants have greater earning potential than do small restaurants, they are also dependent on attracting a larger number of customers to make ends meet. On a slow business day at a midsize restaurant, the restaurant may waste a significant amount of the material that was prepared to cook the day’s meals. Similarly, the cost of maintaining a large staff can become financially draining when business lulls. Utility and rent payments are also significantly higher for a typical midsize space. Costs Payroll and Benefits: Kitchen staff and other support staff are usually paid hourly wages and are more likely to be given benefits at midsize restaurants and chain restaurants. Servers and other support staff (bussers, bartenders, hosts/ hostesses, and so forth) are often paid a small hourly wage and expected to supplement this base wage with tips. Supplies: Midsize restaurants require a variety of supplies for daily operation. In addition to in-

Restaurant Industry gredients, they must have cleaning supplies, cookware, dishes, utensils, linens, and sometimes uniforms for the staff. Most midsize restaurants also have computer systems to handle orders and payment and may require various other electronics, such as telephones, televisions, and stereo systems. External Services: Many midsize restaurants hire external companies to handle credit and debit transactions and to aid with bookkeeping and other financial data. They may also hire supply companies to deliver sanitary supplies, dishware, linens, and other items that must be renewed or replaced on a regular basis. Restaurants may also contract outside services to provide royalty-free music and gaming entertainment, while some establishments maintain an entertainment budget that includes payments for live music. Utilities: Midsize restaurants must typically pay for gas/oil, telephone, Internet access, sewage, water, and electricity. Taxes: Midsize restaurants must pay local, state, and federal income taxes, as well as property taxes. They may also need to pay annual licensing fees to maintain their liquor licenses, vending licenses, and other permits that must be renewed. Large Businesses Large restaurants are the most specialized of the three size categories. With the capacity to serve between one hundred and one thousand diners at a time, large restaurants specialize in attracting large groups and catering to special events. Banquet halls and country clubs are the standard models for large restaurants, but there are some large fine and casual restaurants in metropolitan areas. These include very large themed restaurants that market themselves as tourist destinations, as well as niche restaurants that cater to many customers at once, such as dim sum palaces. Potential Annual Earnings Scale. While management in large restaurants may earn salaries exceeding those offered in midsize and small restaurants, the standard wage for staff members differs little between large and midsize restaurants. Large restaurants also incur the highest costs for materials and staffing, which offset their earnings from increased volume.

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Within a general salary range of $20,000 to $100,000 for owners and managers in the United States, those operating large restaurants tend to earn salaries in the upper half of the scale. However, a manager of a large chain restaurant may not earn more than a similar manager in a smaller chain restaurant. Executive chefs in large restaurants, such as those serving country clubs or banquet halls, also tend to earn salaries at the upper end of the scale, ranging from $70,000 to $100,000 per year. Clientele Interaction. Because large restaurants more often serve large groups, the environment of such establishments is less intimate and less personal than those of midsize and small restaurants. To handle a large volume, larger restaurants require a well-defined division of labor and usually require that all members of their staffs concentrate on efficiency, without sacrificing friendliness and basic customer relations. Large restaurants often employ a staff of greeters, whose role is to welcome customers as they enter and show them to their seats, among other small tasks. Amenities, Atmosphere, and Physical Grounds. Depending on the type of cuisine being served, the atmosphere of a large restaurant can range from basic to elegant. Banquet centers are often established in historic buildings, with attractive interiors adding to the elegance of the atmosphere. Employees of large restaurants commonly wear formal uniforms. Large restaurants may choose from many different potential organizational styles, depending on the space. Some large restaurants have single, large dining rooms with many tables organized in such a way as to facilitate efficient service. Others have several dining rooms in order to accommodate multiple parties or to better partition service. Because they serve many customers, large restaurants must be equipped with basic amenities, including bathrooms capable of accommodating multiple occupants. Large restaurants often also have public telephones and may provide wireless Internet for business customers. They usually require attached parking facilities or at least paid parking areas that are within a convenient distance. Often, they have amenities designed to accommodate large parties, such as weddings and other celebrations. For example, a restaurant might have a lawn with a tent in summer or a large func-

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Restaurant Industry

tion hall with or without a separate kitchen, restroom facilities, a bar, dance floor, and small rooms for bridal parties. Typical Number of Employees. A large restaurant may have anywhere from thirty or forty fulltime employees to more than one hundred, depending on the size of the company and the number of customers served on an average business day. The division of labor for service personnel usually requires one server and at least one server’s assistant for every three to five tables. More may be required if tables have more than five to ten seats. Large restaurants also typically have sizable staffs to support the chefs in the kitchen. Dishwashers, expediters (food runners), and cleaning staff may be required, in addition to persons responsible for preparing raw ingredients and handling inventory. Some restaurants also hire staff specifically to deal with their liquor inventory, including purchasing and organizing stock. This may include a bar manager, who is also responsible for tending bar. Traditional Geographic Locations. Large restaurants are usually found only in cities, either in busy downtown areas or on the outskirts of the city. Some large country clubs, resorts, and hotels also have large restaurants on the premises. Business for large restaurants typically comes from preplanned events rather than from customers who walk into the restaurant in passing (called “walkins” in the industry). Though a large restaurant is perhaps best situated in a location that is convenient for potential customers, these restaurants rarely rely on their locations as the primary means of attracting customers. Pros of Working for a Large Restaurant. Owners and managers of large restaurants have a high earning potential and are often provided with competitive benefits. Employees of large restaurants typically earn wages commensurate with those of the staff at smaller restaurants, but they are more likely to be offered benefits such as health insurance and retirement plans in addition to their wages. Because large restaurants typically have a sufficient number of supporting staff members, workers in any one position may not be required to handle as many competing tasks as are employees of small restaurants. Because large restaurants often focus on catering large events, parties, and other social events,

they are not as reliant as are small and midsize restaurants on impulse customers. Large restaurants may therefore enjoy continued revenues during times when consumers’ impulse spending is in decline. Cons of Working for a Large Restaurant. Working at a large restaurant is an entirely different type of experience than working at a small or midsize establishment. Employees at large restaurants must function as a team, so personality conflicts among staff members can harm the business, and the need for teamwork can complicate the tasks associated with serving, cleaning, or working in the kitchen. In addition, the cost of purchasing huge quantities of ingredients and paying for a large number of staff members hampers large restaurants’ ability to endure extended periods without significant business. Costs Payroll and Benefits: Most employees at large restaurants are paid hourly wages, and many are offered benefits packages. Having a large number of employees working in different positions complicates the salary and wage structure within a large restaurant. Managers and chefs generally receive a salary and are usually given some form of benefit package. Supplies: The most significant expenditure for a large restaurant is food, alcohol, and ingredients. In addition, large restaurants require dishes, cookware, utensils, cleaning supplies, and linens, as well as computer systems to facilitate ordering and payment and other electronic items to facilitate high-volume business. External Services: Large restaurants typically hire outside companies to deliver basic restaurant supplies, including laundered goods, paper goods, and other dry goods. They may also use payroll services and accounting services, and many restaurants use outside laundry services to clean uniforms, rugs, and other items. Other services include pest control and maintenance for utility units, including heating and air-conditioning. Utilities: Most large restaurants pay for gas/oil, electricity, telephone, Internet access, and water. Many pay additional fees for use of public parking areas and other services that are shared with other businesses.

Restaurant Industry Taxes: Large restaurants pay local, state, and federal income taxes, as well as property taxes where applicable. Large restaurants also need to pay annual fees to keep their licenses in order, including liquor licensing and food permits.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The division of labor within a restaurant depends on a number of factors, including the size of the restaurant and the type of food being served. Larger restaurants tend to have more employees and usually use a more defined and sometimes hierarchical division of labor. Similarly, fine-dining establishments typically have a pronounced division of labor, especially in the kitchen, where there may be multiple personnel, each specializing in one facet of food service. In the smallest restaurants, job roles tend to blend together, as a single individual may need to handle tasks from a variety of categories. Small cafés, coffee shops, and family-run restaurants often have fewer employees, each of whom is responsible for duties ranging from sanitation and cleaning to customer service and accounting. The following umbrella categories apply to the organizational structure of restaurants: ■ ■ ■ ■ ■ ■ ■

Management Advertising and Marketing Kitchen Staff Kitchen Support Liquor and Beverage Staff Dining Staff Dining Assistants

Management A manager at a typical restaurant is responsible for a wide variety of tasks. Few restaurants have separate human resources departments, so managers are responsible for hiring and firing employees, mediating conflicts between staff members, and overseeing the daily operations of the restaurant. Some restaurant owners function as managers, while other owners hire managers. Depending on the size of a restaurant, management may be divided into several levels. Many res-

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taurants, for instance, have one manager who is responsible for overseeing business in the dining and service areas while another manager oversees the kitchen. Each is responsible for overseeing operations, hiring and firing staff, and handling inventory in his or her respective area. Restaurants that handle large volumes of customers may hire multiple dining and kitchen managers, each responsible for a specific shift. Other restaurants hire special managers to oversee certain functions of the restaurant, including accounting, human resources, and inventory management. Managers are typically salaried, and many restaurants choose to promote former servers or other dining staff to management positions to ensure that their managers are familiar with all procedures in the kitchen and dining areas. Similarly, kitchen managers are usually former chefs or at least individuals with significant prior cooking experience. Management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

General Manager Kitchen Manager Dining Manager Shift Manager Executive Chef Financial Manager Inventory Manager

Advertising and Marketing The amount of money spent on advertising varies widely among restaurants. Small, independent restaurants typically spend little on advertising, other than placing occasional ads in local publications, while many quick-service restaurants and casual-dining chains spend a significant amount on ads, including radio, television, and print campaigns. While few small restaurants hire full-time staff for advertising and marketing, larger restaurants and chain restaurants often have at least one employee who is responsible for facilitating and updating their advertising. Advertising specialists may also be responsible for finding alternative ways to market their restaurants, such as by participating in local and national charities or catering prominent public events. Advertising and marketing specialists are typically salaried and usually

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earn pay commensurate with that of restaurant managers. Advertising and marketing occupations may include the following: ■ ■ ■ ■

Advertising Director Marketing Director Special Events Coordinator Advertising and Marketing Manager

Kitchen Staff The chef or head cook of a restaurant is typically the head of the kitchen, except in cases where the owner or general manager hires a kitchen manager to take executive control of food preparation. The role of a chef or head cook differs depending on the type of restaurant and the type of cuisine being served. In addition, a restaurant may hire a number of employees to assist the head cook in the kitchen. The difference between a cook and a chef is imprecise and often based on qualitative charac-

teristics, such as the prestige of the restaurant, the individual’s level of training, and the quality of the cuisine being served. Executive chefs oversee all aspects of the business related to the kitchen, including cost control for staff and ingredients, menu design and creation, and the hiring and firing of kitchen staff. Many fine restaurants also have sous chefs (under chefs), who serve as the second in command of the kitchen and principal assistant of the executive or head chefs. Executive and sous chefs function as members of both the kitchen staff and the management staff. Beneath head chefs and sous chefs, many restaurants employ a variety of line cooks, also called chefs de partie, who are responsible for various food preparation activities. Each line cook may be responsible for a variety of preparation tasks or may be highly specialized. In some fine restaurants, individual chefs are assigned such tasks as grilling, baking bread and pastries, preparing fish, preparing

OCCUPATION

PROFILE

Cook/Chef Considerations

Qualifications

Description

Plans and prepares food for consumption in restaurants and other eating facilities.

Career cluster

Hospitality and Tourism

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

ESR; RES; RSE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Restaurant Industry OCCUPATION

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SPECIALTIES

Cooks/Chefs Specialty

Responsibilities

Bakers

Prepare bread, rolls, muffins, and biscuits and supervise other bakers in various institutions.

Chefs de froid

Design and prepare decorated foods and artistic food arrangements for buffets in formal restaurants.

Institutional cooks

Prepare soups, meats, vegetables, salads, dressings, and desserts in large quantities for schools, cafeterias, hospitals, and other institutions.

Pie makers

Prepare and bake pies, tarts, and cobblers.

Short-order cooks

Prepare and cook to order foods requiring short preparation time.

Specialty fast-food cooks

Prepare such foods as fish and chips, tacos, and pastries for window or counter service.

sauces and condiments, cooking vegetables, making soups, and staffing other specialized stations. While most executive chefs and other managing members of a kitchen staff are usually on salary, many line cooks and subordinate cooks are paid hourly wages. The leading chefs in a fine restaurant usually occupy the highest-paying positions in the restaurant. Kitchen staff occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Chef Head Chef Line Cook Junior Cook Sous Chef Saucier (Sauce Chef) Pastry Chef Grill Chef Fish Chef

Kitchen Support In addition to a head chef and a supporting chef, many kitchens also hire a number of supporting personnel who do not cook or prepare ingredients. Instead, they support cooks and other kitchen workers and may be responsible for tasks such as

dishwashing, waste disposal, cleaning and sanitization, and other general services. In large restaurants and ones that handle large numbers of customers during a typical shift, supporting kitchen staff members and cooking personnel are equally essential to the functioning of the kitchen. Most supporting kitchen staff members are paid hourly wages and generally earn less than cooking staff. In large restaurants and restaurant chains, supporting kitchen staff may be offered benefits in addition to their regular wages. Kitchen support occupations may include the following: ■ ■ ■ ■

Dishwasher Cook’s Assistant Cleaning Assistant Kitchen Maintenance Worker

Liquor and Beverage Staff Some restaurants, especially fine-dining establishments, hire liquor and beverage specialists to maintain their liquor stocks, assist chefs and cooks in pairing liquor with certain dishes, and aid customers in choosing and purchasing beverages and liquor. Restaurants with full-service bars usually hire bartenders with knowledge of cocktails,

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wine, and other types of spirits and liquor. The sommelier is the pinnacle of restaurant liquor specialists. Sommeliers are specialists in wine and aid restaurants by handling all aspects of wine service, including purchasing wine from distributors, organizing storage and inventory, and recommending and serving wine to customers. Sommeliers are usually salaried employees, while bartenders and liquor-service assistants may be paid hourly wages. Liquor and beverage staff occupations may include the following: ■ ■ ■ ■ ■

The quality of any restaurant, whether quick service, casual dining, or fine dining, depends on the customer-relations skills of the restaurant’s service personnel. (©Dreamstime.com)

Sommelier Assistant Sommelier Liquor Manager Bartender Bartender’s Assistant (or Barback)

Dining Staff The quality of any restaurant, whether quick service, casual dining, or fine dining, depends on the customer-relations skills of the restaurant’s service personnel. The service personnel are responsible for taking customer orders and delivering orders to the kitchen. The exact duties of servers and other service personnel differ depending on the structure of the restaurant and the type of food being served. Some restaurants, especially fine-dining establishments, hire a headwaiter, or maître d’, who acts as head of the dining department. This individual functions as both a manager and a member of the service staff and is usually responsible for handling server assignments, greeting customers, handling problems with dining service, and overseeing servers and server assistants. Alternatively, some restaurants hire hosts and hostesses to perform some of the duties typically assigned to a maître d’. These employees are generally given similar authority to that of servers rather than functioning as managing servers. While a maître d’ may work on salary, most other

positions in the service department are paid hourly wages. Salaries for many service personnel are low, because it is expected that servers and other dining workers will earn some or most of their income from customer gratuities (tips). Dining staff occupations may include the following: ■ ■ ■ ■ ■

Server Host/Hostess Maître d’ Head Server Greeter

Dining Assistants To ensure the efficient operation of the dining area, a variety of support personnel is often hired to assist servers and customer-service personnel. Servers’ assistants are responsible for cleaning tables and refilling beverages, and they often help servers keep track of customer needs. Dining assistants are also usually responsible for turning over tables—that is, cleaning them after one service and setting them up for new customers. An expediter (or aboyeur) is part of both the kitchen and the dining staff. Expediters retrieve food from the kitchen and deliver it to either the tables or the servers. Expediters are also typically re-

Restaurant Industry sponsible for ensuring that orders brought to the kitchen are completed in the correct order. An expediter therefore serves as an important line of communication between the kitchen and the dining area. Most dining assistants earn hourly wages, and they are not usually offered benefits, except in larger restaurants. Server assistant positions typically have high turnover rates in many restaurants, as employees in assistant positions often transition to become servers. In addition, assistant positions often attract individuals who want temporary or seasonal work, such as students who want to work during the summer before returning to classes. Dining assistant occupations may include the following: ■ ■ ■

Server’s Assistant Expediter Maintenance Staff

INDUSTRY

OUTLOOK

Overview Growth and decline in the restaurant industry are closely tied to recreational consumer spending. During an economic surge, the industry thrives, as customer volume increases and the average customer spends more on a typical meal. During a recession, customer numbers fall, as does average spending per customer. While the restaurant industry is closely linked to economic performance, restaurants are often better able to withstand economic fluctuations than are other types of recreational businesses. Food and drink are essentials of everyday life, rather than pure indulgences. While individuals can choose to prepare their own meals in order to save money, they must continue to eat, and the vast majority will frequently turn to restaurants, whether out of necessity, convenience, or pleasure. Restaurants, moreover, are a basic and ingrained part of social culture around the world. From business lunches, to romantic dinners, to family meals, individuals often justify recreational spending in favor of the social benefits of eating out with friends, colleagues, and family. The 2007-2009 global economic crisis provides a recent example of how the restaurant industry

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can fare in times of economic decline. According to the National Restaurant Association (NRA), restaurants across the board—from independent establishments to local and national chains— reported declines in sales for more than twelve consecutive months between summer, 2008, and summer, 2009. Though the NRA predicted that nationwide sales would rise by as much as 2.5 percent in 2009, when the statistics are corrected to account for inflation, the result was a net decline of more than 1.3 percent. Full-service restaurants, which have greater expenditures compared to income, were expected to suffer declines of as much as 2.5 percent in 2009. While the NRA report painted a poor picture for the industry, Technomic, a consulting firm specializing in food-industry analysis, believed that losses would be even more significant in 2009, with as much as a 6 percent decline in sales for U.S. restaurants. Technomic also predicted that the casual dining industry would bear the brunt of the economic collapse because there are simply too many casual restaurants to compete in a flooded market. Technomic predicted in early 2009 that more than one thousand casual restaurants would close in the United States by the middle of the year. (In contrast, fast-food outlets stand to gain from economic downturns, as some spending-cautious consumers opt for waiter-free and more affordable dining options.) Fine-dining establishments are also vulnerable during an economic downfall, because the price of an average meal at a fine dining restaurant may be too high for consumers wary of spending and concerned about job losses. Fine restaurants, however, have one major advantage—their marketing is based on offering high-quality or unique cuisine, whereas the quality of fare offered at casual restaurants differs little from restaurant to restaurant. Diners seeking a meal that cannot be duplicated at home or looking for a place to celebrate a major event often turn to fine and unique independent restaurants before they choose to spend their money at casual restaurants or chains. Some fine restaurants modify their menus during economic downturns to offer high-quality but lighter and less expensive meals. French restaurants convert to bistros (or open bistros next door to their flagship restaurants). Italian osterias similarly convert to or open supplementary trattorias.

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Another factor that plays a major role in the fortunes of the industry is the price of ingredients. Rising food costs in 2007 and 2008 severely cut into the profits of many restaurants. Food cost fluctuations stem from a variety of factors, including production levels in the agricultural industry, plant and animal illnesses, fossil fuel prices (industrial agriculture is heavily dependent upon fossil fuel), and seed monopolies, as well as the ongoing evolution of foreign trade agreements. Even as profits decreased in the United States in 2008 and 2009, food prices began to fall, owing to bumper crops (unusually large or productive harvests) of some ingredients and discounts from vendors designed to offset loss of business during the recession. Between January and May of 2009, average food costs declined by almost 12 percent, providing muchneeded relief for many restaurants struggling to stay in business during the fiscal crisis. While many organizations, including the NRA and Technomic, report that the recession-related declines in sales were the worst recorded in as many as forty years, economic booms and declines have always played an important role in the evolution of the restaurant industry. As many casual

chains and fine-dining establishments are forced to close, space opens for new restaurants and concepts. Restaurants that fail to survive in times of recession are often those whose services and cuisine fail to meet the needs of a changing consumer climate, and their decline paves the way for restaurateurs nimble enough to respond to and address consumer needs. Food trends, like fashion, also have a significant impact on the industry. One of the most significant dining trends in the early twenty-first century has been restaurants’ promotion and support of locally procured and organic ingredients. In its annual survey of member chefs, conducted in 2009, the NRA found that local produce was the top choice for the hottest food industry trend, especially at fine dining establishments. More than 80 percent of chefs surveyed reported using locally grown or locally sourced ingredients on their menus. In addition, more than 70 percent of adults interviewed reported that they would be more likely to visit a restaurant that offered local produce, meat, and other items. The same trend has been responsible for an increase in the number of small, independent businesses in cities across the country, as consumers are more likely to favor spending to support their own communities rather than opting PROJECTED EMPLOYMENT for the convenience of nationwide FOR SELECTED OCCUPATIONS chains and brands. The local food trend is also linked Restaurants to an overall increase in health consciousness among U.S. consumers. Employment This increasing focus on healthy eat2009 Projected 2018 Occupation ing has affected every facet of the food industry, from snack-food purveyors 31,780 38,400 Bartenders to fine restaurants. According to Chi2,229,440 2,536,300 Combined food cago-based analysis firm Mintel Interpreparation and serving national Group, more than 50 perworkers, including fast food cent of food products launched in 2007 used the terms “organic” or “nat514,660 570,800 Cooks, fast food ural” in their advertisements. The 849,920 910,900 Cooks, restaurant trend has also begun to see expression in governance and legislation. 2,128,120 2,319,100 Waiters and waitresses New York City, for instance, passed an ordinance in May, 2008, requiring Source: U.S. Bureau of Labor Statistics, Industries at a Glance, that quick-service and chain restauOccupational Employment Statistics and Employment rants post calorie counts on their Projections Program. menus to help consumers make more informed decisions in the effort to re-

Restaurant Industry duce obesity. Many restaurants are also offering smaller portions, healthier dining options for children, and dishes low in salt and fat. Another related trend affecting the restaurant industry is the demand for restaurants to become more ecologically conscious, both in terms of their menu options and in terms of community involvement, which includes proper waste disposal and charitable and community-building activities. Restaurants around the country are advertising their use of recycled materials, their contributions to local and national environmental organizations, and their choice to purchase produce and meat products from sources using only sustainable agricultural practices. The combination of economic changes and trends in consumer spending may give an advantage to smaller, independent restaurants. It is easier for a small restaurant to alter its menu, advertising strategies and overall approach to the market than for larger restaurants and chains, which may require a considerable expenditure to alter their basic approach. Moreover, any individual restaurant will have an easier time finding local ingredients than will a nationwide chain, which would likely need to change its entire distribution structure if it wished to adopt a local food or sustainable model. Conversely, while smaller restaurants are more adaptable, larger restaurants and chains have greater investment capital and can therefore afford to invest in new menu items and décor as consumer preferences evolve or change. As the healthy, organic food trend progresses, the cost of organic ingredients will likely increase, which may in turn prove an advantage for restaurants with the financial capability to buy in bulk. Employment Advantages The BLS predicts that restaurant-industry jobs will increase by 11 percent between 2006 and 2016, which is about the same rate as the overall rate of job increases during the same period. Employment opportunities at the bottom level of the food service industry, which will include maintenance, cleaning, and serving positions, are expected to remain steady in coming years. Opportunities for management in restaurants is expected to grow more slowly, at only 3 to 6 percent. While economic stagnation has caused full-

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service casual and fine restaurants to decline in the short term, demographic trends suggest that, overall, these restaurants will increase as a proportion of the total restaurant market during the 20062016 period, as the number of families with children and the number of affluent older consumers increases to represent a larger proportion of the total population. One of the primary economic benefits of the restaurant industry is the number of employment opportunities it provides for unskilled, semiskilled, and young workers. More than 20 percent of those employed in restaurants in 2009 were between the ages of sixteen and nineteen. That proportion is more than five times the proportion for similarly aged workers in other industries. Restaurants also provide a variety of temporary, part-time, and supplementary employment opportunities, which are in higher demand as economic conditions increasingly require individuals to seek additional sources of income. The restaurant industry is one of the largest private sector employers in the United States, and employment opportunities within the industry are expected to continue increasing. The NRA predicts that the industry will add more than 10 million jobs between 2010 and 2020. In addition, the industry will continue to be an important source of employment and career opportunities for women and minority workers in the United States, making the industry an important factor in maintaining the diversity of the national workforce. Annual Earnings The fallout from the 2007-2009 global economic crisis may continue to have a negative effect on the restaurant industry for several years. Estimates of annual revenues vary widely among sources, but the U.S. restaurant industry earned $566 billion in 2009, and it should continue to constitute roughly 4 percent of the national GDP. Measurements of the global restaurant industry are less precise, as many countries produce no internal estimates regarding earnings from their restaurant industries. However, the global industry is worth roughly $1.367 trillion in revenues. A 2009 study by Global Industry Analysts indicates that the global food service industry, which also includes catering and grocery services, will reach $2.2 trillion in revenues by 2015.

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According to the U.S. Department of Labor, average weekly earnings for nonmanagement food service employees were $215 in 2006, which is well below the national average of $533 for the private sector as a whole. However, this low figure does not include tips, which typically constitute a large percentage of a service person’s annual income. In addition, many restaurants provide bonuses to employees, including discounted or staff meals and other perks that do not figure into measurements of income.

Fax: (202) 331-2429 http://www.restaurant.org Technomic 300 S Riverside Plaza, Suite 1200 Chicago, IL 60606 Tel: (312) 876-0004 Fax: (312) 876-1158 http://www.technomic.com

ABOUT RELATED RESOURCES FOR FURTHER RESEARCH American Culinary Federation 180 Center Place Way St. Augustine, FL 32095 Tel: (800) 624-9458 Fax: (904) 825-4758 http://www.acfchefs.org American Institute of Wine and Food 26364 Carmel Rancho Ln., Suite 201 Carmel, CA 93923 Tel: (800) 274-2493 Fax: (831) 622-7783 http://www.aiwf.org International Association of Culinary Professionals 1100 Johnson Ferry Rd., Suite 300 Atlanta, GA 30342 Tel: (404) 252-3663 Fax: (404) 252-0774 http://www.iacp.com International Hotel and Restaurant Association 41 Ave. General Guisan (Lausanne) 1009 Pully Switzerland Tel: 41-21-711-4283 http://www.ih-ra.com National Restaurant Association 1200 17th St. NW Washington, DC 20036 Tel: (202) 331-5900

THE

AUTHOR

Micah L. Issitt is a freelance writer and researcher working in Philadelphia, Pennsylvania. He has been involved in the restaurant industry since 1994, working in various capacities from clerk to manager. Issitt has written industry profiles for the International Directory of Company Histories and Standard Business, published in the United Kingdom.

FURTHER

READING

Beriss, David, and David Evan Sutton. The Restaurants Book: Ethnographies of Where We Eat. Oxford, England: Berg, 2007. “Economics and the Origin of the Restaurant.” Cornell Hotel and Restaurant Administration Quarterly, August, 2002. http://www.arts .cornell.edu/econ/kiefer/Restaurant.PDF. Fine, Gary Alan. Kitchens: The Culture of Restaurant Work. Berkeley: University of California Press, 2008. Fullen, Sharon L. Restaurant Design: Designing, Constructing, and Renovating a Food Service Establishment. Ocala, Fla.: Atlantic, 2002. Gabriel, Vincent A. Success in the Food Business. Singapore: Rank Books, 2008. Lee, Ronald. The Everything Guide to Starting and Running a Restaurant. New York: Everything Books, 2005. Miller, Richard K. The 2009 Retail Business Market Research Handbook. 11th ed. Loganville, Ga.: Richard K. Miller and Associates, 2009. National Restaurant Association. “Restaurant Industry: Facts at a Glance.” http://www .restaurant.org/research/ind_glance.cfm. Pilzer, Paul Zane. The New Wellness Revolution:

Restaurant Industry How to Make a Fortune in the Next Trillion Dollar Industry. New York: John Wiley & Sons, 2007. Research and Markets. “Leisure: Global Industry Guide.” http://www.researchandmarkets .com/reports/838291/leisure_global _industry_guide. Simon, Michèle. Appetite for Profit: How the Food Industry Undermines Our Health and How to Fight Back. New York: Nation Books, 2006. StarChefs.com. “Salary Survey.” http://www .starchefs.com/features/editors_dish/ salary_survey/2008/html/index.shtml. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry

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Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Internal Revenue Service. “Food Industry Overview.” http://www.irs.gov/businesses/ article/0,,id=175715,00.html. Walker, John R. The Restaurant: From Concept to Operation. New York: John Wiley & Sons, 2007. Watson, James L., and Melissa L. Caldwell. The Cultural Politics of Food and Eating: A Reader. New York: Wiley-Blackwell, 2005.

©Outline205/Dreamstime.com

Retail Trade and Service Industry

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Clusters: Manufacturing; Marketing, Sales, and Service Subcategory Industries: Automobile Dealers; Automotive Parts, Accessories, and Tire Stores; Building Material and Garden Equipment and Supplies Dealers; Clothing and Clothing Accessories Stores; Electronics and Appliance Stores; Food and Beverage Stores; Furniture and Home Furnishings Stores; Gasoline Stations; General Merchandise Stores; Health and Personal Care Stores; Miscellaneous Store Retailers; Motor Vehicle and Parts Dealers; Nonstore Retailers; Other Motor Vehicle Dealers; Sporting Goods, Hobby, and Music Stores Related Industries: Household and Personal Products Industry; Motion Picture and Television Industry; Textile and Fabrics Industry; Travel and Tourism Industry Annual Domestic Revenues: $4.1 trillion USD (U.S. Census Bureau, 2009) Annual International Revenues: $9.8 trillion USD (U.S. Census Bureau, 2009) Annual Global Revenues: $13.9 trillion USD (Economist Intelligence Unit, 2010) NAICS Numbers: 44-45

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DEFINITION

Summary The retail industry is one of the most significant components of the economies of most developed and a growing number of less-developed countries. The industry focuses on the sale of finished products to consumers. Retailers are found in a wide range of industry areas, such as automobiles and other vehicles, clothing and accessories, furniture, electronics, grocery stores, and gasoline stations. The industry is represented in virtually every country around the world, employing countless individuals who work in a broad array of professional fields. History of the Industry The practice of selling finished products finds its roots in ancient civilizations. The ancient Egyptians were known to engage in commercial trade with their Mediterranean neighbors, purchasing and selling cloth, utensils, pottery, and foodstuffs. Over time, trade and commerce would become the most prominent driving force for the expansion of the human populace around the world. During the eighth century b.c.e., the Greeks developed the use

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of buying goods wholesale (purchasing products in of gold and silver as currency for the purchase of large quantity for resale), which cut costs and regoods and honed their commercial skills, thanks duced retail prices. in large part to their conquering and assimilation During the twentieth century, shopping centers of the Phoenicians (a civilization that excelled in and malls, reminiscent of historical marketplaces, trade and commerce). During the second century were introduced. They combined independent b.c.e., the rising Roman Empire developed a type stores, parking, and other services in a single locaof commerce that lasted for five hundred years, estion. The first enclosed mall, the Southdale Mall, tablishing trade guilds and manufacturing netopened in 1956 in Minnesota. In the 1980’s, enorworks. The retail industry thrived during this pemous malls, some of which included hundreds riod, with a broad array of goods and products for of stores, hotels, amusement park rides, and other purchase and sale throughout the Empire’s vast amenities, opened. Malls continue to operate, alreach. though economic and market conditions (includFor several centuries after the fall of Rome, the ing changes in consumer behavior that favor lessearly retail industry (like other trades) remained irhectic shopping environments) have caused a relevant to the tribal and nomadic cultures of Eudecline in the long-term health of malls since the rope. In the eighth century, however, Charlemid-1990’s. magne, king of the Franks and emperor of the In the latter decades of the twentieth century, Romans, breathed new life into commerce and rethe rapid growth of the Internet enabled retailers tail, and over the next several centuries, trade beto generate business with customers around the gan to evolve in Europe, representing the foundaglobe. The Internet has also helped retailers retion of such commercial cities as Genoa, Sicily, and duce costs by, in many cases, eliminating the need Venice (now in Italy). Commerce also played a mafor storefronts and large staffs to manage them. Tojor role in the age of exploration, particularly in day, retail is a thriving industry, fueled by the develtrade with India, China, Africa, and the Americas. opment of the Internet and the continued viability It was in North America that the first retail stores of retail stores around the world. began to appear. These general stores, established in the eighteenth century, offered consumers a The Industry Today wide range of products and goods. Not long after The retail industry is expansive and diverse. Of these smaller stores emerged, larger, “departthe ten largest retailers in the world, five are from ment” stores evolved, offering larger inventories of the United States and five are from Europe. Howgoods. Simon Lazarus, an immigrant from Poland, ever, there are a number of growing retailers in established such a store in Columbus, Ohio, in 1851. In 1858, Rowland Hussey Macy founded a store that would become Macy’s. Many historians argue that the first true department store, Zions Cooperative Mercantile Institution, was founded in 1868 in Salt Lake City by Mormon leader Brigham Young, although many others point to The Wanamaker’s Grand Depot, opened by John Wanamaker in 1876 in Philadelphia, as the first incarnation of the modern department store. Wanamaker would also be credited with creating the first modern price tag, in-store restaurants, and white sales (sales of linens and towels). Wanamaker and other department store entrepreneurs soon realized the value One way to attract customers is with sales. (©Infomages/Dreamstime.com)

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Smaller stores include convenience stores, boutiques, and kiosks. These stores are usually independently owned or franchised (the operators purchase the rights to use the trademarks and business pracValue Added Amount tices of a larger, parent company) and Gross domestic product $866.0 billion employ only a few employees. Such stores Gross domestic product 6.0% are sometimes located in a separate buildPersons employed 15.563 million ing, although many owners of small stores Total employee compensation $503.9 billion rent space in a larger building, such as a mall or shopping center. Source: U.S. Bureau of Economic Analysis. Data are for Like small stores, many larger retail 2008. stores occupy rent space in larger shopping centers and malls, although some are located in their own individual buildings. Larger retail stores hire more employees to perform tasks such as sales, delivery, or China, India, and Dubai, United Arab Emirates, all shelf stocking and organization. Larger stores are of which have the potential to become major usually independently owned or part of a larger global retailers. The global retail industry employs corporation, although some retailers are francountless individuals. In the United States alone, chised. about 15 million people work in this industry. AlRetail stores, depending on their size, must though this industry (like most other industries) be staffed with competent employees. In smaller has been affected by the 2007-2009 global ecostores, employees tend to do more—restocking nomic crisis, the industry remains strong. Because shelves and storerooms, handling purchases, perretailing is such a tremendous contributor to the forming accounting, addressing customer comgross domestic product of the United States, any plaints, and ordering new inventory. In larger upward or downward trend in retail sales is considstores that employ greater numbers of employees, ered a major economic indicator. those employees’ respective tasks may be more The two general areas in which this industry opcompartmentalized. erates are in the store and online. There are countWith the development of the Internet, the retail less storefront retailers of varying size and focus. industry began to surge. The Internet has created Stores are alike in that they are designed to provide the second major vehicle for retail sales. The direct, personalized service to customers, but they World Wide Web has proven invaluable for attractvary considerably in size, type, and clientele. Stores may be traditional, owner-managed establishments, or they may offer more specialized products and have a less typical appearance. For example, kiosks Inputs Consumed by the are small stores that do not have an entrance at all and are situated in high-traffic areas such as street Retail Trade Industry corners, shopping centers, and public transportation stations, where they offer inexpensive, disposInput Value able goods such as periodicals, snacks, and souveEnergy $16.6 billion nirs. Some other stores—such as used automobile Materials $93.7 billion dealers and consignment shops—do not offer new Purchased services $309.2 billion products but rather pre-owned goods at lower Total $419.5 billion prices. Warehouse stores and shopping clubs, such as BJ’s and Sam’s Club, provide items in bulk, Source: U.S. Bureau of Economic Analysis. Data rather than in individual packaging, to provide cusare for 2008. tomers with items at prices that resemble wholesale prices.

The Retail Trade Industry’s Contribution to the U.S. Economy

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ing customers to stores and providing pricing and information about goods available at a store to make the shopping process easier. Increasingly, however, retailers are becoming online stores, enabling retail customers to shop for and purchase products from their home computers and mobile devices. The prevalence of online retailing has presented the retail industry with a number of challenges. Among these issues are matters of customer privacy and protection. Just as a thief would rob a retail store at Some stores try to offer a little of everything, while others specialize in one product. gunpoint, identity thieves are (©Matty Symons/Dreamstime.com) constantly attempting to illegally access online stores’ payment systems in order to gain credit card numbers and other personal financial information. Retailers INDUSTRY MARKET continue to seek ways to secure their payment proSEGMENTS cessing systems, as would-be thieves continue their efforts. The retail industry ranges in size from smaller to Another issue facing online retailers is that larger stores and also encompasses online stores. there are literally thousands of sales tax codes in These segments have varying characteristics and isthe United States alone. If an individual in one sues. state purchases a new computer from a retailer based in another state (which has lower tax rates), Small Stores the individual’s resident state stands to lose tax revSmall stores typically have ten or fewer employees and occupy a limited amount of real estate. enues from that sale. Without uniformity in the Work at such a store is diverse, primarily because sales tax code, retailers, their customers, and the such establishments employ so few workers. Small states involved in that purchase are often caught in stores succeed largely because they are able to offer confusion, lawsuits, and even reciprocity issues (a products that attract consumers over the long term state seeking to compensate for lost tax revenues by and to generate enough sales to enable them to afimposing heavier taxes on other transactions with ford rent, utilities, and other monthly expenses. another state). As online stores evolve within the Potential Annual Earnings Scale. The average retail industry, these issues are likely to continue earnings for a storekeeper vary from region to reand new issues to develop. gion. However, the range in the United States Because of its sheer breadth and tremendous for such positions is between about $26,000 and diversity, the retail industry remains a powerful $35,000 per year. contributor to any economy. Although the moreClientele Interaction. Small retail store owners developed countries of Western Europe, East Asia, and storekeepers work directly with customers. and North America continue to dominate the inThey must be prepared to help customers find the dustry in terms of sales and profits, retailers in lessproducts that best fit their needs, to answer any developed countries, powered by local and regional questions about use, and to know enough about consumer demand, are also showing continued the product to provide the best service. Because growth in this area.

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small stores succeed largely on the basis of the service they provide, small storekeepers must have strong communication and interpersonal skills (including diplomatic skills when customers have a complaint). Furthermore, as some small stores (such as antique shops and used goods establishments) may be flexible in their asking price for certain goods, a small store owner or storekeeper must develop good business skills. Willingness to lower a price must take into account the store’s needs as well as those of the customer. Amenities, Atmosphere, and Physical Grounds. In many cases, small stores (such as boutiques, kiosks, and shops that cater to tourists) must be attractive to those who are passing by. Furthermore, most small stores must have their items in plain view for customers to see, with prices well marked. Small stores are often at their busiest during high-traffic periods, such as during morning and evening rush hours, at lunch, and during holiday shopping periods. Consumers expect small stores to foster a personable, relaxed atmosphere, particularly in comparison with larger businesses. Those who work in such establishments must therefore be personable, friendly, helpful, and knowledgeable. Furthermore, to compete with larger stores, many stores seek to offer products that cannot be found elsewhere. With the exception of kiosks, small stores typically occupy only one or two main rooms, either in a stand-alone building or as part of a larger shopping center or mall. These establishments often have a store room and office adjacent to the main store (and, in the case of clothing retailers, changing rooms). Typical Number of Employees. Small storeowners must work to ensure that their profits are not lost to major expenses. Therefore, most small stores have only a handful of staff, many of whom are part time and hourly. In peak seasons and during holiday periods, many small retail establishments temporarily hire additional personnel on an hourly basis to handle the larger number of customers. Traditional Geographic Locations. Small stores are found in most areas in which consumers live and visit. They may rent space in malls or shopping centers, but many are located in stand-alone buildings that the owner may or may not own. Small

stores do not require a great deal of geographic space, but they do need to be located in areas where there is consumer need. These areas include downtown areas, tourist attractions, along major roadways, and near major businesses. Pros of Working in a Small Retail Store. Employees of small retail stores, by virtue of not being subject to a corporate mentality, tend to experience a less formal and more relaxed working atmosphere. Such an environment fosters a spirit of camaraderie among the relatively small number of employees. Additionally, the work performed at a small retail establishment is highly diverse. Employees rarely fall into a rut, as they may need to meet with customers, take inventory, order new products, restock shelves, and perform many other tasks. Because the jobs performed by employees at small stores are myriad, workers rarely are idle. Cons of Working in a Small Retail Store. Individuals who work in a small retail store are often called on to manage multiple tasks simultaneously. During peak customer times, juggling these responsibilities can be challenging. Furthermore, because these establishments have only a handful of employees, they often do not provide health care and other benefits that larger stores typically offer full-time employees. Additionally, salaries for employees of small retail establishments are not highly competitive. Significant pay increases are not easily obtained, especially during down times. Small stores, especially those that cater to tourists and passers-by, are subject to peaks and valleys in terms of their business. When business becomes stagnant, employees can lose benefits or suffer layoffs. Costs Payroll and Benefits: With the exception of the store proprietor, most workers at a small retail establishment earn hourly wages. The cost of living and the store’s fiscal health play a major role in the determination of employee wages. Because small retail stores employ so few individuals, these establishments are generally not required to offer health care or other benefits, although many employers do in order to retain employees. Supplies: Small stores require a wide range of supplies to ensure effective operation. Among these items are office supplies (including com-

Retail Trade and Service Industry puters, file cabinets, and telephone systems), price tags, cash registers, credit card machines, and cleaning supplies. Additionally, small stores will need bags, boxes, and wrapping paper for customers. External Services: Many owners of small retail stores use an external accountant to manage tax filings and the employee payroll. Those with a Web site and online purchasing services must also hire a Web designer and Web site administrator. Furthermore, stores that provide deliveries, towing, and other customer services often use external contractors, such as moving companies, parcel companies, and tow truck providers. Finally, these establishments look to external wholesalers for products that they may sell to the consumer. Utilities: Typical utilities for a small retail store include water and sewer, electricity, gas or oil service, telephone, cable, and Internet access. Taxes: Small retail stores are required to pay local, state, and federal income taxes as well as applicable property taxes. They must also withhold and pay state and federal income taxes for hourly employees and collect and repay sales taxes collected from consumers. Midsize and Large Retail Stores Potential Annual Earnings Scale. Wages for employees working at midsize and large retail stores vary based on the position and the particular industry segment in which the work is performed. In 2008, for example, U.S. retail salespeople working in clothing stores earned $8.94 per hour, while automobile dealer salespeople earned $18.94 per hour. Store managers and supervisors earned between $30,480 and $37,710 in 2008, depending on the industry. Clientele Interaction. Employees working in midsize and large retail stores have varying degrees of customer interaction. Those working in stockrooms and warehouses, for example, interact less with customers than floor salespeople and cashiers do. However, during times of peak activity in such stores, most employees are expected to assist in checkout areas, near shelves, and in other parts of the store where customers need assistance. Most individuals employed at midsize and large retail stores must therefore demonstrate a degree of customer relations skills.

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Amenities, Atmosphere, and Physical Grounds. Midsize and large retail establishments will typically be found in stand-alone facilities or as part of a larger shopping center or mall. Some warehouse and shopping club establishments may even have other stores—such as fast food restaurants and coffee shops—operating independently within them. Midsize and large retail stores will typically be compartmentalized, with aisles and departments separated for easy customer access. Because of the occasional complexity of such store layouts, these establishments may be hectic during peak shopping periods. Employees are expected to quickly become familiar with the various departments and sections of these establishments to better serve customers. Many larger stores will have lounge areas, cafeterias, locker rooms, and other employee-oriented facilities and services. Midsize and large retail stores usually have ample parking for their customers and for their employees as well. Typical Number of Employees. Midsize and large retail stores can have dozens, if not hundreds, of employees working in shifts throughout the day. The number of employees on staff at a given establishment depends on the size of the store and whether the store is operating during peak shopping hours. Traditional Geographic Locations. Midsize and large retail establishments are typically located in stand-alone buildings or as part of larger shopping centers and malls. Such stores are ideally established in or near high-traffic areas, such as a city’s downtown or outskirts, or along major roadways. Midsize and large retail stores are limited by their need for a large parcel of land for the store itself and off-street parking, as well as to provide access for large delivery trucks. Pros of Working in a Midsize or Large Retail Store. Working in a midsize or large retail store offers a sense of job security that smaller retailers cannot often promise. Additionally, these establishments often offer health care and other benefits (including discounts on store merchandise) to employees as a way to ensure that they are happy and loyal to the store. Furthermore, midsize and large retailers are often linked to much larger corporations (either through franchising or directly), giving employees the opportunity to rise up the corporate ladder or transfer to different locales.

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Retail Trade and Service Industry

Presentation of the merchandise and service are important for a retailer’s survival. (©Marco Scisetti/Dreamstime.com)

Cons of Working in a Midsize or Large Retail Store. Although there is stability in working for a midsize or large store, the corporate mentality that typically exists in such establishments leaves very little room for individual creativity. Additionally, midsize and large retail establishments may be too complex and high-pressure for some people, especially because they must work with a diverse group of fellow workers. From a management point of view, midsize and large retail stores are extremely challenging to operate, particularly because of the number of employees who require compensation and the significant number of other expenses that must be covered regularly. Costs Payroll and Benefits: Payroll and benefits are some of the most significant portions of a midsize or large retail store’s budget. This figure varies based on job description, the industry, and the fiscal health of the business itself. As for many other businesses, health care coverage

is one of the largest expenditures paid by a midsize or large retailer. Supplies: Midsize and large retail stores require items such as office supplies, computer and telephone equipment, intercom systems, storage room hardware (such as ladders and dollies), cash registers, and credit card payment systems. External Services: Although larger than small stores, midsize and large stores must call on external vendors to help with operations. For example, accounting professionals, external security personnel, information systems technology professionals, and even marketing consultants are often called into service. External consultants are also used to manage Web sites and online purchasing centers, marketing campaigns, and legal affairs. Utilities: Typical utilities for midsize and large retail stores include water and sewer, waste disposal, electricity, gas and oil service, telephone, cable, and Internet access.

Retail Trade and Service Industry Taxes: Midsize and large retail stores are required to pay local, state, and federal income taxes as well as applicable property taxes. They must also withhold state and federal income taxes from employees and collect and report all sales taxes collected from consumers. Online Retail Stores Potential Annual Earnings Scale. Salaries for professionals working at online retail stores vary based on the position, the individual’s experience, the cost of living, and the financial strength of the company itself. In one region, for example, average salaries for online retail sales people are approximately $72,000 per year. Clientele Interaction. Online retail sales require a somewhat different form of customer service. Although direct client interaction is rare, online stores still require communication with customers, typically through e-mail or by telephone. Such in-

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teraction usually occurs when the customer has a problem using the system, seeks a refund, or seeks information on the status of an order. Amenities, Atmosphere, and Physical Grounds. Online retail stores are not typical brickand-mortar storefronts. Rather, these facilities usually take the form of offices, with no inventory visible. Online store facilities are usually staffed by younger individuals. As such, they may feature flexible schedules and a relaxed atmosphere. Some online stores even include some on-site perks for employees, such as lounges, video games, and other amenities. Still, employees are expected to meet their sales goals. Online retailers must take the initiative to seek out the best venues for generating business. Typical Number of Employees. The number of employees working at an online retailer varies based on the size and financial strength of the company as well as the service area in which the online

OCCUPATION

PROFILE

Merchandise Displayer Considerations

Qualifications

Description

Designs, builds, and arranges displays of merchandise to attract the attention of prospective buyers through eye-catching displays in windows, in showcases, and on sales floors.

Career clusters

Marketing, Sales, and Service

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma/technical training; junior/technical/community college

Physical exertion

Light work; medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

AES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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store operates. One of the world’s largest online retail stores, Amazon, has more than twenty-four thousand employees, although some retailers are one-person operations. Traditional Geographic Locations. Online retailers may be found in any geographic location. As business is conducted on the Internet, an online retailer needs only a computer, Internet access, and space to store inventory for shipping. Many online retailers work out of their own homes. Even developing nations are starting to see an increase in the number of online retailers because of the ease of launching such businesses. Pros of Working in an Online Retail Store. For many online retailers, the greatest benefit is the ability to work from home. Also, because most independent online retailers use an established Internet commerce system to process transactions, the work is often easy. The offices of larger online retailers are typically casual workplaces, and if the enterprise is profitable, salaries and benefits are highly competitive. Cons of Working in an Online Retail Store. Individuals who enjoy a high level of customer interaction or a highly professional environment are likely to be a good fit for the online retail industry. Additionally, the burst of the dot-com bubble that occurred at the beginning of the twenty-first century demonstrates the unpredictability that characterizes the online industry. Companies in this industry may be quickly bought, sold, or put out of business. Furthermore, if the business fails to generate strong profits over the long term, online retailers who are sole operators and proprietors may suffer a loss. Costs Payroll and Benefits: For online retailers with staff, employee pay and benefits are some of the most critical elements of the budget. To attract the best and brightest employees, online retailers must offer competitive salaries and excellent benefits. For online retailers who are sole proprietors, this area of the business is not an issue, except in terms of the owner’s income. Supplies: Central to an online retailer is the necessary computer hardware to conduct business, including a high-quality computer system, server, and relevant equipment. For online stores with office space, office supplies, including comput-

ers and printers, are important. Because shipping plays a central role in online sales, mailing supplies (such as overnight forms and packing materials) are essential. External Services: Online retail stores rely on a Web site administrator to oversee the effective operation of the site. For understaffed retailers, these services are acquired from external consultants. Additionally, shipping is conducted by such companies as FedEx, UPS, DHL, and the U.S. Postal Service. Furthermore, many retailers may turn to accountants and financial advisers to ensure that the company’s money is well managed. Utilities: Online retailers use a number of utilities, such as electricity, telephone, cable, and Internet access. Those companies with office space must also pay for water, sewer, and garbage disposal. Taxes: Online retailers must pay corporate income taxes based on profits earned as well as property taxes (for office space). If the company has full-time employees, it must withhold federal and state income taxes. Online retailers must collect sales taxes, where applicable, although the rates of those taxes vary based on where the purchase was made.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and distribution of tasks within a retail establishment are typically based on its size. The owner and sole operator of a small retail store or online business usually handles most of the major tasks because he or she is the only major employee, and an executive or senior manager of a larger retail establishment organizes and distributes tasks among a team of employees. Nevertheless, the tasks themselves, in a general sense, remain similar throughout the retail industry. The following general job categories apply to the organizational structure of small, midsize, and large retailers and online retail businesses: ■ ■ ■

Executive Management Sales Cashiers

Retail Trade and Service Industry ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Delivery Personnel Accounting Purchasing Managers Stockroom Clerks Maintenance Personnel Security Human Resources Web Designers/Administrators Marketing Customer Service Administrative Personnel Front-Line Personnel

Executive Management Executive management handles the general operations of the retail business. Employees in this area help oversee major operations, goal setting, and the implementation of business plans. They also manage individual teams and departments (or in the case of the chief executive officer, oversee all departments). Many executive managers have advanced degrees, particularly in business management, accounting, and similar fields. As with many industries, experience can sometimes serve as a substitute for advanced education. Executive managers generally earn higher salaries than people in other positions within the company. Their job is to manage the overall functions of the retail company, address systemic issues, and ensure that all departments are functioning in a fluid fashion. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) President Vice President of Sales Vice President of Operations Chief Financial Officer (CFO) Controller Director of Marketing Vice President of Human Resources

Sales Retail sales personnel are in many ways the business’s front line of customer relations. They will approach customers, answer any questions the consumer may have about products, and based on customer needs, work to present them with the

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best possible product to meet those needs. In this regard, sales personnel are essential business generators for retail establishments. Additionally, many store sales personnel will be asked to work in other areas of the store, including at the cash register and other locations, as needed. Retail sales personnel are expected to have strong interpersonal and customer service skills. Although advanced schooling is not typically a requirement for sales associates, they usually will undergo some form of training upon joining a company to familiarize them with the inventory and, where relevant, the corporate philosophy, systems, and expectations. Retail sales personnel salaries vary based on the position involved. Some work on an annual salary with bonuses, while others work on commission in addition to a modest base salary. Sales occupations may include the following: ■ ■ ■ ■

Retail Sales Associate Senior Sales Manager Director of Sales Business Development Associate

Cashiers Cashiers are individuals whose primary task is to process customer payments within the store. This responsibility entails operating cash registers and processing checks, credit cards, and coupons. At times, cashiers are called on to handle customer service activities, issuing refunds and replacing defective products. Cashiers are expected to keep a careful accounting of all monies they manage during their shifts. Cashiers are paid hourly and are often offered benefits packages based on union negotiations. Pay varies based on the industry and experience, although the median salary for cashiers in all industries for 2008 was about $8.50 per hour. Such positions do not require any formal education, although some in-house training does occur. Delivery Personnel Many retail stores hire personnel whose primary responsibility is to deliver purchased items to customers. These individuals load the items onto a delivery truck, organize the truck inventory to match customer invoices, and retain any relevant paperwork.

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Delivery personnel do not necessarily require any formal education, although they are expected to have a valid driver’s license and may be required to obtain a truck driver’s license as well. Furthermore, drivers must have strong interpersonal skills to maintain a professional attitude when working with customers in their own homes. In addition, they may require some training on how to assemble the items being delivered, as they may be asked to do so by the customer for an additional fee. Accounting Accounting personnel are responsible for maintaining a careful record of the retail store’s finances. They must collect, record, and file receipts; review expenses; and file tax returns. Store accountants do not have much direct interaction with customers, as their jobs focus more on the store’s internal operations. As the fiscal watchdog of the business enterprise, these accountants must have a careful eye for details, a strong grasp of numbers, knowledge of state and federal corporate tax laws and requirements, and an understanding of the company’s activities and departments. Additionally, they will need computer skills, as many stores use software to categorize various products to better record sales. Full-time accountants are usually paid on an annual basis, although some receive an hourly wage, with competitive benefits. Most have some postsecondary education and ideally have received certification as a Certified Public Accountant (CPA). Accounting occupations may include the following: ■ ■ ■ ■

Store Accountant Steward Accounts Payable/Receivable Manager Administrative Assistant

Purchasing Retail stores rely on a team of personnel who purchase goods and products wholesale from merchants for resale at their respective stores. Purchasing requires strong business and negotiating skills and an appreciation of product quality. As many merchants offer their wares at convention-style marketplace events in large exhibit halls, purchasing agents may be required to travel as part of their jobs.

Merchandise purchasers must also be careful analysts of market trends, competitors’ prices, and consumer behavior. Such skills are useful in their pursuit of top-quality goods that consumers will purchase. Additionally, because of their central role in delivering products for resale at the store, purchasing professionals may also be called on to offer their insights to marketing and advertising departments on how best to promote the items in question. Furthermore, purchasers must be proficient in understanding the merchants themselves, assessing their manufacturing and delivery schedules and taking into account any issues these companies may be experiencing. Because purchasing requires a great deal of business savvy, technical skills (such as computer software and even engineering,) and careful analytical skills, many larger retailers require a bachelor’s, master’s, or professional degree, and many are professionally certified as accredited purchasing practitioners or certified purchasing managers. Smaller retailers may not have such requirements, however. Purchasing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Retail Planner Retail Buyer Associate Buyer Online Buyer-Merchandiser Purchasing Manager Merchandise Manager Purchasing Clerk Junior Buyer

Managers Managers are the individuals responsible for ensuring that the retail business operates smoothly and according to the business plan. Managers set employee schedules, lead individual departments and teams, address employee concerns and disciplinary actions, and ensure that corporate goals are met. Every facet of the store requires the oversight of a manager, including a store manager, who oversees the entire establishment. Managers come from a variety of backgrounds and areas of expertise. They must be knowledgeable of the department in which they work as well as the enterprise as a whole. They must be capable of leading others and working with customers.

Retail Trade and Service Industry OCCUPATION

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PROFILE

Retail Store Sales Manager Considerations

Qualifications

Description

Plans and controls some or all of the sales activities of retail organizations, stores, and departments, generally supervising stock clerks, sales clerks, and assistants.

Career clusters

Agriculture, Food, and Natural Resources; Business, Management, and Administration; Marketing, Sales, and Service

Interests

Data; people

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

They are responsible for submitting staff and sales reports and, in the case of store managers, opening and closing the establishment. Many senior managers have an undergraduate degree or other advanced educational credentials. Other managers are promoted from lower-level hourly wage jobs and have no advanced degree, although they are highly experienced and knowledgeable about the company. Salaries vary based on the level of management, the industry, and the individual’s experience. For example, a store manager may earn nearly $42,000 per year, while a district manager may earn about $65,000 per year. Manager occupations may include the following: ■ ■ ■

Store Manager Senior Sales Manager Director of Sales

■ ■

Human Resources Manager Department Manager

Stockroom Clerks Stock clerks control the flow of merchandise and supplies into and out of the stockroom, warehouse, or other storage facility. They track inventories, and reorder products when supplies are low. Stockroom clerks receive incoming deliveries and open and examine the products to ensure there are no defects and no damage has occurred. If the products are acceptable, they place them in an easily cataloged and retrievable location in the facility. Clerks keep track of products using a variety of methods, including electronic scanners, coding systems, and other approaches. There is no general educational requirement for stockroom clerks, although individuals who assume such responsibilities must have strong read-

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Retail Trade and Service Industry

ing, mathematical, and writing skills to perform their tasks. Entry-level stock clerks usually begin their jobs at the minimum wage, but may receive pay increases as they become experienced. Stockroom clerk occupations may include the following: ■ ■ ■ ■ ■

Shipping/Receiving Clerk Inventory Clerk Warehouse Manager Traffic Clerk Order Filler

Maintenance Personnel Maintenance personnel are responsible for ensuring that the many systems of the retail establishment are operating properly. They monitor and, where necessary, repair heating, ventilation, and air-conditioning systems (HVAC), bathrooms, lighting, and other elements of the business’s infrastructure. Maintenance employees must be generally proficient in a wide variety of fields, including electrical, plumbing, carpentry, and heavy equipment systems. Maintenance professionals generally have vocational educational training in several fields, and some have degrees in engineering. Salaries for these employees vary based on the industry, the position involved, and the individual’s experience. Building maintenance professionals earn an average of $46,000 per year. Custodians are at the low end of the pay spectrum, earning $19,000 per year, and heavy equipment repair personnel and licensed electricians earn about $36,000 annually. Maintenance personnel occupations may include the following: ■ ■ ■ ■ ■

Custodian Electrician Heavy Equipment Repairer Mechanic Plumber

Security The security of the customers and staff of a retail establishment is charged to a security team. Store security personnel ensure that unruly customers are disciplined or removed from the premises, that no illegal activity takes place in or around the property, and that emergency situations are addressed.

Security personnel conduct periodic rounds on foot and in parking lots, monitor surveillance cameras, write reports on daily activities, and respond to relevant calls for assistance. Store security personnel are expected to have training in public safety that varies based on the job level. They may obtain this training through vocational education or a number of security certification programs. Additionally, they may be required to obtain certification in cardiopulmonary resuscitation (CPR) and other first-aid techniques. Salaries vary based on experience and job responsibilities. Security occupations may include the following: ■ ■ ■

Store Detective Entry-Level Personnel Technical Support

Human Resources The human resources department oversees employee relations. Human resources professionals hire and dismiss employees, interview candidates, and evaluate employees. They also help employees obtain on-the-job and off-site training to enhance their skills and professional qualifications. Furthermore, human resources professionals administer employee benefits, such as insurance, retirement funds, and other employee incentives. Human resources professionals must demonstrate a number of important professional skills and attributes. They have a strong understanding of the business itself, its goals and expectations— an attribute that is useful for recruiting strong candidates for vacant posts that facilitate the pursuit of those goals. Additionally, these professionals must be knowledgeable about insurance, retirement funds, stock options, and other employee benefits to offer the best possible employment packages to staff. Human resources departments may be responsible for designing in-house training courses, and therefore human resources professionals must have effective communication and presentation skills. They often have the responsibility of hearing and resolving employee complaints and must use conflict resolution skills to address these issues in such a way that the company is best served. Human resources managers are well trained in human resources management, which is learned both through experience and college-level train-

Retail Trade and Service Industry ing. On average, human resources managers in the retail industry earn about $57,000 per year, although salaries vary from business to business. Human resources occupations may include the following: ■ ■ ■ ■

Director of Human Resources Human Resources Coordinator Human Resources Manager Administrative Personnel

Web Designers/Administrators Retail stores and online retailers alike use Web designers and administrators to develop and maintain their Web sites. These individuals will work with company executives, managers, and other personnel to create a Web site that is attractive and easy to navigate and that generates profits for the business. As such, they must be able to work with others, have an understanding of the store and its clients, and be competent in the latest in Web site software and technology. Web designers and administrators generally have bachelor’s degrees in computer science, engineering, or similar fields. Salaries in this area vary based on the business, industry, and individual experience. Some Web site administrators earn more than $52,000 per year, including bonuses and other benefits such as profit sharing. Web site design and administration occupations may include the following: ■ ■ ■ ■

Web Developer Web Content Administrator Webmaster Information Technology Manager

Marketing The job of promoting the retail business and enticing customers to patronize the establishment falls to the store’s marketing department. Marketing professionals are very well trained in understanding customer behavior and develop and implement campaigns that are designed to meet consumer demand. Marketing professionals work at the heart of the retail business, as they carefully research market and consumer preferences and coordinate with executives, managers, and other professionals throughout the retail organization to create and set forth marketing strategies, such as

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sales, coupons, and customer satisfaction programs. Marketing professionals have exceptional business, analytical, and communications skills. These professional attributes are important because these individuals must understand the type of customer the store seeks to attract, create and work within marketing budgets, and effectively present marketing campaigns to the rest of the employees of the retail establishment. Additionally, they should have strong computer skills so that they can use software for research and presentations. Marketing personnel usually have undergraduate degrees in marketing, business, or similar professional areas. Senior personnel in the marketing field may have advanced degrees, such as an M.B.A. Salaries for marketing professionals vary based on the position level, the industry, and the amount of experience the individual has. Entry-level marketing positions in the retail field generally earn just more than $43,000 per year, according to the U.S. Bureau of Labor Statistics (BLS), while marketing managers can earn nearly $109,000 per year. Marketing occupations may include the following: ■ ■ ■ ■ ■

Marketing Coordinator Marketing Manager Director of Marketing Account Manager Intern

Customer Service Customer service personnel are charged with addressing the needs and concerns of consumers who have purchased or seek to purchase goods from a retail store. They field customer complaints, handle refunds and exchanges, and special order items that are not in stock. Online retailers use customer service personnel in a similar vein, through telephone, e-mail, or Internet chat room features. Customer service employees should have a strong understanding of the store’s policies, demonstrate knowledge of its products, and above all, have strong interpersonal and problem-solving skills, particularly when customers are unhappy with their shopping experience. Customer service personnel are generally paid by the hour, at salaries that vary based on the industry, employee experience, and the financial

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Retail Trade and Service Industry

strength of the store. They do not necessarily require a formal education but will need some training on store policies as well as the computer systems they will use during the course of their jobs. Customer service occupations may include the following: ■ ■ ■

Help Desk Consultant Customer Services Representative Technical Support Specialist

Administrative Personnel Administrative personnel are located in the retail establishment’s office, assisting with the overall operations of the business. Administrative staff may be needed to answer telephones during hightraffic periods, run errands for managers, make photocopies, send faxes, and perform other tasks. In many cases, they are the nucleus of the store, providing support to managers through scheduling, data entry, filing, and other activities as warranted by the organization. Administrative personnel have a wide range of backgrounds and professional experience. Many are temporary employees, and others are brought in as entry-level staff to assist managers and other personnel. Administrative occupations may include the following: ■ ■ ■ ■

Administrative Assistant Secretary Intern Cooperative Employee

Front-Line Personnel Many major retailers have employees who are responsible for enhancing the customer experience. Some stores, for example, have greeters to welcome customers and answer any questions they may have. Other front-line personnel include baggers, shopping cart attendants, and other individuals. Front-line staff are usually paid minimum wage and do not necessarily require a formal education to perform their tasks. Front-line personnel occupations may include the following: ■ ■

Greeter Bagger

■ ■ ■

Shopping Cart Attendant Sample Provider Valet

INDUSTRY

OUTLOOK

Overview The two periods of economic decline and stagnation that constituted much of the first decade of the twenty-first century have taken their toll on the retail industry. The impact was particularly significant during the 2007-2009 economic crisis, when a collapsing mortgage system, a subsequent consumer credit crunch, and a combination of high food and energy prices spurred a severe recession. Consumer spending spiraled downward while the costs of managing a business continued to increase. Many retailers of all sizes and industries severely cut budgets and staffs, closed stores, reorganized, or simply went out of business during this period. Recovery has been slow, primarily because of tightening credit market conditions, which means that sales and mergers and acquisitions are severely hampered. The end of the recession has not sent consumers flocking back to retail stores. Rather, the recession left consumers far more wary of spending their money. Retailers had to find ways to entice customers back to stores and to their Web sites, and many have significantly shifted their strategies. The first change in strategies is from large stores to smaller, more specialized storefronts. This approach is motivated by two factors. The first is that retailers save significantly on rent, utilities, and other expenses, including large staffs. The second is the notion that smaller stores will cause customers to make short, frequent shopping trips. Retailers hope that customers will take note of the personalized approach offered in the smaller stores. They also believe that this approach will generate more profits. As larger retailers focus on ways to lower prices to better compete with rivals, the socalled niche approach may improve profit margins. The second major change is taking advantage of consumer sentiment regarding the environment. Going green is an extremely popular theme in many industries, including the retail field. The green approach has become an effective marketing strategy, one that is increasingly popular among re-

Retail Trade and Service Industry

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panies are launching marketing campaigns designed to reach out to existing and past customers. By using social networking systems and other approaches, retailers seek to drive repeat business. By opening up communication with customers, retailers are also able to gauge consumer behaviors, identify trends and attitudes, and as a result, provide customers with the type of service and products they seek. The retail industry has long been one of the largest employers of and contributors to the U.S. and global economy. The industry has a vast number of subindustries, and demand for retail goods remains strong. A recent study by the National Retail Federation showed that consumer spending began to rebound in 2010, led by a double-digit increase in online sales. The study also showed that members of Generation X, who are in a position to shop more for themselves and their families, are more careful and savvy about spending but are still willing to do so. Higher-income consumers are also showing an increased willingness to go shopping. In the light of these trends, the retail industry is expected to continue its evolution to meet the needs of customers. The outlook for the industry around the globe, at least in the short term, is one marked by cautious optimism. Worldwide PROJECTED EMPLOYMENT national leaders in this industry FOR SELECTED OCCUPATIONS continue to be found in the United States and Europe, but Retail Trade Industry recovery from the recession has been modest at best. Meanwhile, Employment the industries of India, China, 2009 Projected 2018 Occupation and northern Africa are growing in size and global influence, al2,828,730 3,012,400 Cashiers though it remains to be seen if 243,080 281,800 Customer services these rising retail powers will representatives continue their upward trend after the global economy fully re1,037,570 1,091,100 First-line supervisors/managers covers from the recession. of retail sales workers

tailers and their customers. Merchants are offering more eco-friendly products, including offering reusable bags instead of plastic bags. They are also promoting their use of clean energy, such as solar and wind power, to power stores and servers. A retailer’s efforts to highlight recycling programs, waste reduction, and energy efficiency can drive customers to shop at the store. Additionally, such endeavors can render the retailer eligible for government benefits, such as tax credits and lower fees, which can further lower costs. In addition to the smaller, greener store approach to retailing, companies are investing more heavily in their online stores. The prevalence of the BlackBerry, iPhone, and other smart phones means that more and more shopping will be done using mobile technology. Retailers are taking note of this evolution and directing more resources toward accommodating this demand. Some are even offering multichannel retailing, moving from simple Web sales to using social networking and other multimedia vehicles to build relationships with entire communities of customers. Retailers are embracing an important element of the business—business development. Many com-

3,891,310

4,299,600

Retail salespersons

1,303,730

1,345,200

Stock clerks and order fillers

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Employment Advantages According to the BLS, the retail industry will continue to grow at a modest pace over the next decade. The BLS estimates that by 2018, the number of wage and salary jobs in all fields within the retail industry will increase

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Retail Trade and Service Industry

by 11 percent. Although there are changes occurring in how the industry is shaped, there will be a continued growth. The diversity of the industry in terms of the broad range of career paths continues to be a great benefit to those seeking advancement. Most employees begin in an entry-level position, such as cashier or customer services representative, moving upward within the store or at another store. Most major retailers offer management training, certification, and other programs designed to give employees the opportunity to thrive in their current positions and move upward in the future. The new directions in which the retail industry is moving are exciting, particularly for younger employees who have grown accustomed to the technological advances that are helping reshape the industry. Potential employees of the retail industry have an opportunity to be a part of building a new shopping experience that their parents never knew. Annual Earnings Because of the lingering effects of the economic recession of 2007-2009 and its effects on consumer behavior, it is believed that the retail industry will grow at a modest rate. According to Moody’s, the U.S. retail industry will most likely see earnings increase by about 3.5 percent in 2011. Most industry analysts estimate that this increase will depend highly on the overall condition of the economy as it slowly rebuilds. During the recession, most major retailers saw declines in their sales. At the end of 2010, however, these stores saw significant increases over the previous year. Abercrombie and Fitch, for example, saw a 32 percent increase in sales in September, 2010, over the same period a year earlier. Most retailers saw improvement during the holiday season of 2010 when compared with the same period in the previous two years.

RELATED RESOURCES FOR FURTHER RESEARCH Global Entertainment Retail AssociationEurope Colonnade House, 1st Floor 2 Westover Road

Bournemouth, Dorset BH1 2HY United Kingdom Tel: 44-1202-292063 Fax: 44-1202-292067 http://www.gera-europe.org International Council of Shopping Centers 1221 Avenue of the Americas, 41st Floor New York, NY 10020-1099 Tel: (646) 728-3800 Fax: (732) 694-1755 http://www.icsc.org National Grocers Association 1005 N Glebe Rd., Suite 250 Arlington, VA 22201-5758 Tel: (703) 516-0700 Fax: (703) 812-1821 http://www.nationalgrocers.org National Retail Federation 325 7th St. NW, Suite 1100 Washington, DC 20004 Tel: (800) 673-4692 Fax: (202) 737-2849 http://www.nrf.com Retail Industry Leaders Association 1700 N Moore St., Suite 2250 Arlington, VA 22209 Tel: (703) 841-2300 Fax: (703) 841-1184 http://www.rila.org/pages/default.aspx

ABOUT

THE

AUTHOR

Michael P. Auerbach has over sixteen years of professional experience in public policy and administration, economic development, and the hospitality industry. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He is a veteran of state and federal government, having worked for seven years in the Massachusetts legislature and four years as a federal government contractor.

Retail Trade and Service Industry FURTHER

READING

Fisher, Marshall L., and Ananth Raman. The New Science of Retailing: How Analytics Are Transforming the Supply Chain and Improving Performance. Boston: Harvard Business Press, 2010. JobBank USA. “Training, Certifications, Skills and Advancement: Purchasing Managers, Buyers, and Purchasing Agents.” http:// www.jobbankusa.com/career_employment/ purchasing_managers_buyers_purchasing _agents/training_certifications_skills _advancement.html. Krafft, Manfred, and Murali K. Mantrala. Retailing in the Twenty-first Century: Current and Future Trends. New York: Springer, 2010. Lichtenstein, Nelson. The Retail Revolution: How Wal-Mart Created a Brave New World of Business. New York: Metropolitan Books, 2009. Miller, Michael. Selling Online 2.0: Migrating from eBay to Amazon, Craigslist, and Your Own Ecommerce Website. Indianapolis, Ind.: Que, 2009. Moody’s Investor Services. “Annual Outlook: U.S. Retail Industry.” Alacra Store. http://www .alacrastore.com/research/moodys-global-credit -research-Annual_Outlook_U_S_Retail _Industry_Sluggish_Economy_Will_Limit _Earnings_Growth_in_2011-PBC_128312. PayScale.com. “Salary for Industry: Retail.” January 11, 2011. http://www.payscale.com/ research/US/Industry=Retail/Salary.

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_______. “Salary Snapshot for Web Administrator Jobs.” January 7, 2011. http://www.payscale .com/research/US/Job=Web_Administrator/ Salary. Salary.com. “Salary Wizard: Storekeeper.” http:// www1.salary.com/Storekeeper-salary.html. Simply Hired. “Average Building Maintenance Salaries.” http://www.simplyhired.com/a/ salary/search/q-building+maintenance. _______. “Average Online Retail Sales Salaries.” http://www.simplyhired.com/a/salary/ search/q-online+retail+sales/l-logan,+ut. StateUniversity.com. “Stock Clerk Job Description, Career as a Stock Clerk, Salary, Employment.” http://careers.stateuniversity .com/pages/633/Stock-Clerk.html. U.S. Bureau of Labor Statistics. “Clothing, Accessory, and General Merchandise Stores.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/cg/cgs022.htm. _______. “Retail Salespersons.” In Occupational Outlook Handbook, 2010-2011 ed. http:// www.bls.gov/oco/ocos121.htm. _______. “Sales Worker Supervisors.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos025.htm #earnings. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

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Scientific and Technical Services

velopment services in the life sciences and engineering, as well as those that supply scientific and techGeneral Industry: Science, Technology, Engineering, nical consulting services to others. and Math People working in this industry usuCareer Cluster: Science, Technology, Engineering, and ally have education and training in Math the sciences or engineering; many Subcategory Industries: Engineering Services; Research have advanced degrees. and Development in Biotechnology; Research and One of the major services proDevelopment in the Physical, Engineering, and Life vided by this industry is research and Sciences development, in which workers with Related Industries: Environmental Engineering and scientific and technical expertise apConsultation Services; Pharmaceuticals and ply their skills to make scientific disMedications Industry; Scientific, Medical, and Health coveries or develop new products. Equipment and Supplies Industry Biotechnology and pharmaceutical Annual Domestic Revenues: $279.1 billion USD (U.S. companies, for example, conduct Census Bureau, 2007) biomedical research and developAnnual International Revenues: $10.2 billion USD ment, including biochemistry, mo(U.S. Census Bureau, 2007) lecular biology (such as recombiAnnual Global Revenues: $289.3 billion USD (U.S. nant deoxyribonucleic acid [DNA] Census Bureau, 2007) and genetic engineering), protein NAICS Numbers: 54133, 54169, 54171 engineering, nanotechnology, and materials science research. Practically all of the research activities at for-profit biotechnology and pharmaceutical companies are focused on or relate to INDUSTRY DEFINITION the discovery of new tools and therapies to prevent and treat diseases. These companies are funded by Summary profits from product sales and by money from inThe scientific and technical services industry investors and venture capitalists. cludes organizations that provide research and deINDUSTRY

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Publicly traded companies also reThe Contribution to the U.S. ceive funding from selling shares on the stock exchanges. Nonprofit organizaEconomy of Scientific, Technical, tions, including government laboratoand Miscellaneous Professional ries, universities, and research institutes, Services perform a broader range of scientific and engineering research services to adValue Added Amount vance scientific knowledge and deliver Gross domestic product $691.3 billion clinical and technological benefits. This Gross domestic product 4.8% research addresses a wide range of quesPersons employed 5.313 million tions and knowledge gaps in science, enTotal employee compensation $426.7 billion gineering, and medicine. Some of the research at nonprofit establishments is Source: U.S. Bureau of Economic Analysis. Data are for geared toward understanding the mech2008. anism of diseases and how to treat them, while other research advances scientific knowledge in a particular area but may not have a large impact on disease treateral, state, and city laboratories and private compament. Much of the research at nonprofit organizanies provide forensic laboratory services to untions is funded by competitive grants from federal cover causes of death and help to solve homicides entities such as the National Institutes of Health and other crimes. and the National Science Foundation, or by grants Forensic laboratory services are provided by fedfrom private and/or charitable foundations. Fed-

The scientific and technical services industry includes organizations that provide research and development services in the life sciences and engineering, as well as those that supply scientific and technical consulting services to others. (©Imagez/ Dreamstime.com)

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Inputs Consumed by Scientific, Technical, and Miscellaneous Professional Services Input

Value

Energy Materials Purchased services Total

$6.1 billion $47.9 billion $314.1 billion $368.1 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

Meteorologists apply knowledge of weather patterns, climate, and principles of physics to predict weather patterns. Meteorologists work in a variety of industries including television or radio broadcasting, air pollution, and hydrology. Some meteorologists perform research at academic institutes or government organizations in areas such as climate change, oceanography, polar meteorology, and desert meteorology. History of the Industry The history of the scientific and technical services industry can be broken down by the type of service provided. The biotechnology industry has its origins in the field of zymotechnology, which is the production of beer using fermentation. Life science research and development received an enormous boost in 1953, when the discovery of the structure of DNA ushered in the field of molecular biology. Recombinant DNA techniques and the polymerase chain reaction (PCR), a method for amplifying specific genes or sections of DNA, made it possible to produce large amounts of human proteins in the laboratory using such humble vehicles as bacteria and yeast. Genentech, arguably the first biotechnology company, opened in 1978 with a single product—human insulin. More drugs were subsequently produced and marketed, including human growth hormone, hepatitis B vac-

eral and state laboratories as well as by private companies. Forensic specialists use their expertise in molecular biology, microbiology, chemistry, ballistics, and materials to help solve crimes; they may also act as expert witnesses in criminal trials. Academic and research institutes, as well as forprofit companies, provide a variety of engineering services, including services in the fields of chemical engineering, mechanical engineering, materials engineering, environmental engineering, and waste management and decontamination. Individuals working in these organizations apply engineering principles to designing and building structures, machines, instruments, materials, and systems. Engineers also use their scientific and mathematical training to improve production processes, making them more efficient and economical, and to solve technical problems affecting machines and electronics. They use their knowledge to turn raw materials into useful and/or consumable products such as paper products, plastics, metals, detergents, gasoline, and pharmaceuticals. Other engineering services include overseeing production of electronic parts and industrial machines in factories and testing or Forensic specialists use their expertise in molecular biology, microbiology, quality control of the products. chemistry, ballistics, and materials to help solve crimes. (©Dreamstime.com)

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Engineers use their scientific and mathematical training to solve technical problems affecting machines and electronics. (©Dreamstime.com)

cine, alpha-interferon, and tissue plasminogen activator, a protein that breaks down blood clots. Advances in synthetic organic chemistry also facilitated the chemical synthesis of many medically important compounds in the laboratory, including drugs active against different types of cancer. The origins of chemical engineering can be traced back to the ancient Greeks and Chinese, who invented methods of distilling alcohol. Aristotle described a strategy for purifying fresh water from the sea by evaporation and condensation. Modern chemical engineering began during the Industrial Revolution in eighteenth century England, when a growing need for chemicals such as sulfuric acid, alkali (used in soap, glass, and textiles) and potash spurred the development of industrial methods of producing chemicals. Chemical methods and instruments for large-scale production were developed and fine-tuned to produce these

chemicals on a large enough scale to meet huge demands. In 1887, George Davis, an alkali inspector in England, delivered a series of lectures at the Manchester Technical School about operations in the chemical industry. This was probably the first chemical engineering course; formal education programs in chemical engineering were still lacking. The first bachelor’s degree course in chemical engineering started in 1888 at the Massachusetts Institute of Technology, and it was followed by similar courses at the University of Pennsylvania and Tulane University within the next decade. In Germany in the nineteenth century, batch reactors started to be used for large-scale production of chemicals. Following a decline in the industry during the stock market crash of 1929, production ramped up again during World War II and expanded even more rapidly after the war.

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Mechanical engineering started with the invention of the steam engine in the eighteenth century, which provided an impetus for the invention of other machines that were put to use in the Industrial Revolution. The Institution of Mechanical Engineers was founded in 1847 in Birmingham, England, providing credibility and momentum to the burgeoning field. Electrical engineering originated in the 1600’s, when William Gilbert discovered magnetism and static electricity. Later, Alessandro Volta discovered the electric current. This was followed by the invention of the telegraph, the telephone, the lightbulb, and the electric motor in the 1800’s. The American Institute of Electrical Engineers was formed in 1884. The Industry Today The scientific and technical services industry is one of the fastest-growing industries today, spurred by the revolutionary scientific and technical advances of the previous century and by discoveries that are continuing to occur on a daily basis in the twenty-first century. The workforce has also grown in number and qualifications, supplied by the increasing ranks of newly minted Ph.D.s and engineering graduates. Today’s Ph.D. scientists and specialized engineers usually undergo extensive education and training before they embark on their first jobs. Many hold internships at laboratories or companies while undergraduates, earn advanced degrees, and undergo further training and mentorship years after receiving those degrees. Scientific and engineering research in the twentyfirst century is a collaborative and interdisciplinary enterprise. To be successful, scientists and engineers must be cognizant of scientific and technical areas outside their chosen specialties. In academic institutions and companies, researchers with different expertise frequently collaborate on a project. The National Institutes of Health, which provide funding for the majority of academic research projects, favor projects that propose a multidisciplinary approach to scientific questions. Presentday science has many tools that can be used to discover new therapies and decipher the mechanisms of diseases. These biotechnology tools include recombinant DNA technology, stem cells, cancer cell lines (cells cultured from cancer patients that are propagated for research use), and X-ray crystallog-

raphy to determine how drugs interact with proteins and DNA in the body at the atomic level. Engineering research is also progressing rapidly, with exciting advances in the fields of nanotechnology and robotics. For example, nanotechnology research has been explored for drug delivery in medicine. “Smart” particles are attached to substances that are made to function as “homing missiles,” directing them to specific cells or tissues in the body. The idea is for these smart particles to deliver drugs or gene sequences only to affected cells or tissues (such as cancer cells), selectively killing these cells without damaging surrounding healthy tissue. Nanotechnology is also being applied to the production of novel materials and devices for medical and industrial purposes. Chemical engineering today is a sophisticated profession that uses engineering principles to solve complex problems in many different fields, ranging from medicine to the petroleum industry. Chemical engineers also turn raw materials into an ever growing array of useful products.

INDUSTRY MARKET SEGMENTS Scientific and technical service providers range in size from individual self-employed consultants to major research and development corporations with budgets in the billions of dollars. Small Businesses Small biotechnology (biotech) and pharmaceutical companies, academic and research institutes, and small companies providing engineering services, meteorological services, and forensic laboratory services fall under this category. Small biotech and pharmaceutical companies include start-up businesses that have a modest amount of funding capital and one to several potential drugs or therapies in development. The goal for most of these companies is to produce their therapies (sometimes only one therapy), test them in clinical trials, and obtain approval for treating specific diseases from the Food and Drug Administration (FDA). After FDA approval, the company can sell its therapies on the market. Small companies providing engineering services, meteorological services, or forensic laboratory services are usually private and

Scientific and Technical Services provide services for large companies or other industries that occasionally require these services. They may also offer consulting services. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary for an engineer in the engineering services industry in 2009 ranged from $74,900 for a marine engineer to $129,890 for a nuclear engineer. The most common type of engineer in the industry was a civil engineer, with a mean salary of $82,300. Engineering managers earned an average of $123,510. In the scientific research and development services industry, scientists’ average salaries ranged from $60,510 for zoologists and wildlife biologists to $107,660 for physicists. The most common type of research scientist in the industry was a medical scientist, with a mean average salary of $925,350. Natural sciences managers earned an average of $152,200. Average annual salaries at small companies or academic centers are $33,200 for research technicians (almost all of whom have at least a bachelor’s degree) and $83,000 for “Scientist I” workers (about 60 percent of whom have Ph.D.s). Many Ph.D. scientists undergo further training as postdoctoral fellows in academia or in companies before starting their own laboratories in universities or research centers or taking jobs as research scientists at private companies. The National Institutes of Health publishes pay recommendations for postdoctoral fellow stipends. As of fall, 2009, the institute-recommended pay scale ranged from $37,368 for a fellow with no experience to $51,552 for a fellow with seven or more years of postdoctoral experience. Postdoctoral fellows’ salaries generally follow this pay scale across company size. Clientele Interaction. Because of the relatively small number of employees at small firms, engineers in small engineering companies may have a considerable amount of interaction with customers, typically project managers working for government organizations or private companies. Business skills are essential for engineering managers; many engineers take business courses to help them move up the management ladder. Research and development scientists in small biotechnology companies have little contact with customers unless they are providing a contract research service and need to clarify experimental details with their clients. Scientists in academia do not have customers as

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such, although they have certain obligations to the government bodies that fund their research. Amenities, Atmosphere, and Physical Grounds. Employees at small companies may work a forty-hour week, but most work longer hours because the workload of an individual employee is often greater at smaller establishments than at larger ones. Also, because of smaller amounts of capital or tighter profit margins, small companies may offer fewer amenities such as free meals and free gym memberships. Because engineering, biotech, and pharmaceutical companies depend on productive scientific and technical ideas, these companies usually cultivate an open atmosphere to facilitate discussion and communication among technical workers (scientists or engineers) and between technical workers and administrators. Small companies may resemble small universities or colleges. The physical grounds vary from converted office buildings or warehouses to small but landscaped compounds; some companies may even have small cafeterias and gyms. Typical Number of Employees. According to the Small Business Administration’s Small Business Size Standards, a small company conducting research and development in the physical, engineering, and life sciences is defined as one having five hundred or fewer employees. However, other sources define a small business as one that has one hundred or fewer employees. Traditional Geographic Locations. Small businesses in this industry can be found in a variety of locations, including in small towns, suburban areas, and metropolitan downtown areas. Although many small businesses have limited capital, owners may decide that the convenience and easy access to clients provided by a metropolitan location justifies the higher costs. Pros of Working for a Small Scientific Service Provider. It may be easier for an individual with less work experience to secure a position at a small business than at a larger establishment. Working in a small business also allows employees to gain broader professional experience; for example, a scientist at a small biotechnology company could have the opportunity to conduct research as well as manage projects and laboratory operations. It may also take less time to get promoted or become a manager with reporting employees at a small business than at a bigger company. Some small compa-

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nies provide more paid vacation time and the options of flexible work hours and part-time or fulltime telecommuting to compensate for lower average salaries and less attractive benefit packages. Cons of Working for a Small Scientific Service Provider. On average, workers in small businesses earn less than those in midsize and large businesses. Employee benefits, such as medical, dental, and vision plans, as well as performancebased bonuses, stock options, and reimbursements for gym memberships and utilities, may be more limited than at larger businesses. Although some small companies offer better nonmonetary benefits than their larger counterparts, other small companies provide less paid vacation time and pressure employees to work longer hours in order to match the output of larger competitors. Although the opportunities for promotion may be better at a small company, titles may mean less. For example, a director at a small company may manage one or two (or even no) employees, whereas directors at midsize or large companies could have entire departments with hundreds of employees reporting to them. Holding a position of seniority or authority at a small business does not necessarily equip an individual to transition smoothly to a management position in a larger business. Employees at small companies also gain experience working with the particular company’s management style and may be unfamiliar with processes common in larger companies, such as Six Sigma streamlining procedures, legal and compliance review, and coordination between many different departments or branches within the company. If an employee’s ultimate career goal is to work at a large company, he or she may gain valuable and more diverse work experience at a small company but will need to learn these “larger company” skills to be successful at a bigger establishment. Costs Payroll and Benefits: Small scientific service providers may be staffed entirely by salaried employees, or they may have salaried employees in managerial and professional positions (scientist or engineer level) and hourly employees in technician positions. Many businesses offer benefits, including medical, dental, and sometimes vision insurance; paid vacation time; retirement

programs with company matching contributions; and year-end bonuses. However, the company contribution may not be as generous as that of larger businesses. Almost all small businesses are privately owned, so they do not offer stock options to their employees. Supplies: Most small scientific service providers require specialized equipment. Some pieces of equipment are extremely expensive, costing hundreds of thousands of dollars, and purchasing such equipment could mean that small companies have to forgo other purchases. Small biotechnology and chemical engineering companies also require a continuous supply of chemicals, reagents, kits, and biological materials, such as cell lines, bacteria, and yeast. Businesses that conduct animal research also need laboratory animals, as well as food, cages, and bedding for the animals. External Services: Small businesses may contract some projects or parts of projects to other companies if they do not have the necessary expertise or resources to complete them in-house. Although many small businesses have several employees in charge of marketing and sales, they often contract outside vendors to fulfill their marketing and medical education needs. Small businesses also hire housekeeping, security, and landscaping staff from companies specializing in these services. Utilities: Utilities include water, sewage, gas, electricity, telephone, and Internet access. Taxes: Small businesses, the majority of which are for-profit, pay federal, state, and local taxes on revenue, as well as property taxes. Midsize Businesses Midsize companies providing scientific and technical services are more likely to be public than smaller companies. That is, they raise funding by selling shares to the public. Midsize academic and research institutes may be funded through a combination of federal grants (for example, from the National Institutes of Health) and grants from pharmaceutical companies and private foundations. Midsize biotechnology companies usually have several products either on the market or in the developmental pipeline. These companies may perform their own clinical trial research but often partner with a larger company to market and

Scientific and Technical Services sell their products, with profits shared between the partners. Midsize companies providing engineering services typically specialize in one or a few areas of engineering and also hire engineers as managers and in upper management positions. Midsize establishments providing meteorological services include state-run organizations and local television and radio stations. Midsize forensic laboratories offer consulting services for law enforcement and for legal cases. Potential Annual Earnings Scale. According to the BLS, the average annual salary for an engineer in the engineering services industry in 2009 ranged from $74,900 for a marine engineer to $129,890 for a nuclear engineer. The most common type of engineer in the industry was a civil engineer, with a mean salary of $82,300. Engineering managers earned an average of $123,510. In the scientific research and development services industry, scientists’ average salaries ranged from $60,510 for zoologists and wildlife biologists to

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$107,660 for physicists. The most common type of research scientist in the industry was a medical scientist, with a mean average salary of $925,350. Natural sciences managers earned an average of $152,200. Average annual salaries at midsize companies or academic centers are $50,000 for research technicians (almost all of whom have at least a bachelor’s degree). Scientists at midsize biotechnology and pharmaceutical companies, more than 60 percent of whom have doctoral degrees, earn an average annual starting salary of $85,000. An engineer at a midsize company, who typically has a bachelor’s or master’s degree, earns an average annual starting salary of $60,000 to $90,000. After five years, salaries increase to an average of $75,000, and engineers with twenty years of experience frequently earn more than $100,000. Engineering technicians such as biomedical engineering technicians, who maintain and operate medical equipment, earn an average starting salary of $53,000 per year.

SPECIALTIES

Engineering Technicians Specialty

Responsibilities

Civil engineering technicians

Help civil engineers plan and build highways, buildings, bridges, dams, wastewater treatment systems, and other structures; they also conduct related surveys and studies. Some inspect water and wastewater treatment systems to ensure that pollution control requirements are met. Others estimate construction costs and specify materials to be used.

Electrical technicians

Apply electrical theory and related knowledge to test and modify developmental or operational electrical machiner y and electrical control equipment and circuitry in industrial or commercial plants and laboratories.

Industrial engineering technicians

Study and record time, motion, methods, and speed of maintenance, production, clerical, and other work operations to establish standard production rates and improve efficiency.

Mechanical engineering technicians

Help engineers design, develop, test, and manufacture industrial machinery, consumer products, and other equipment.

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Clientele Interaction. Employees in midsize engineering companies may have a fair amount of interaction with customers, typically project managers working for government organizations or private companies. Business skills are essential for engineering managers; many engineers take business courses to help them move up the management ladder. Research and development scientists in midsize biotechnology companies have minimal to no contact with customers. Scientists in midsize academic centers do not have customers as such, although they have certain obligations to the government bodies that fund their research. Amenities, Atmosphere, and Physical Grounds. Midsize companies frequently offer onsite full-service cafeterias, cafes, gyms, and communal spaces where scientists and managers can meet and discuss ideas. These companies may also provide free or heavily discounted meals or vending machine food items for employees who need to work longer hours. Although a forty-hour workweek is fairly common, many employees work longer hours and on weekends when necessary. The physical grounds of midsize engineering services companies include office buildings and industrial plants. Midsize scientific research establishments, both academic and for-profit biotech companies, are often self-contained, landscaped campuses. Typical Number of Employees. Midsize businesses have 500 to 999 employees. Traditional Geographic Locations. Midsize scientific or technical service companies may be located in suburban or urban areas. Biotechnology companies are often located in research hubs, where there is a high concentration of academic institutions and biotechnology and pharmaceutical companies. Pros of Working for a Midsize Scientific Service Provider. Working in a midsize business offers a degree of interaction and camaraderie that may be similar to that of a small company, while providing some of the advantages of a large company (better benefits, more perks, and more delegation of responsibility). Cons of Working for a Midsize Scientific Service Provider. Midsize businesses may have more business-oriented managers than smaller establishments, which may emphasize profits over innovation and creativity. Scientists and engineers who want to rise up the corporate ladder in a midsize

business will need to have strong business and interpersonal skills besides their technical expertise. Costs Payroll and Benefits: Midsize businesses have a majority of salaried staff with full benefits, including medical, dental, and sometimes vision insurance; paid vacation time; retirement program with company match; and year-end bonuses. Publicly traded businesses also frequently offer stock options or a discounted stock-purchase plan to their employees. Supplies: Most midsize businesses in this industry require specialized equipment. Some pieces of equipment cost hundreds of thousands of dollars. Research centers and biotechnology and chemical engineering companies also require a continuous supply of chemicals, reagents, kits, and biological material such as cell lines, bacteria, and yeast. Businesses that conduct animal research also need laboratory animals as well as food, cages, and bedding for the animals. External Services: Midsize businesses may contract some projects or parts of projects to other companies if they do not have the expertise or resources. Midsize biotechnology companies frequently partner with larger biotechnology or pharmaceutical companies; after the midsize company develops the drug, the larger company produces the drug on a large scale and markets it. Although midsize companies have marketing and sales personnel as well as medical writers on staff, they often contract specific marketing projects to advertising and medical education companies. Midsize companies often hire housekeeping, security, and landscaping staff from companies specializing in these services, although some companies have their own staff on payroll. Utilities: Utilities include water, sewage, gas, electricity, telephone, and Internet access. Taxes: For-profit businesses pay federal, state, and local taxes on revenue, as well as property taxes. Some midsize establishments are nonprofit research centers, which are either tax exempt or considered government organizations (for example, state universities). These organizations do not need to pay federal taxes on surplus money that is used solely for the organization’s purposes and not to benefit individuals. Prop-

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erty and state tax exemption varies depending on the organization and the state. Large Businesses Large companies providing scientific and technical services are often publicly traded because the technology-intensive work they do requires a large amount of capital and overhead costs. Large academic and research institutes tend to receive a disproportionately large share of federal grants and grants from pharmaceutical companies and private foundations, compared to smaller institutes. One of the reasons for this is their ability to attract researchers with top-notch reputations who perform the type of cutting-edge, interdisciplinary research that is most attractive to grantors. Large biotechnology and pharmaceutical companies always have several to many products on the market and in the developmental pipeline. They typically have their own clinical trial divisions and have marketing and sales budgets and infrastructure. Large companies providing engineering services are either industries that manufacture products or design systems, or they are engineering consulting companies that provide engineering expertise on a project-by-project basis to industries. Government organizations such as the National Weather Service and the National Oceanic and Atmospheric Administration are large establishments that provide meteorological services that are useful for a wide variety of industries, including transportation, construction, and environmental engineering. National television and syndicated radio services are additional large employers offering meteorological services. Similarly, the largest forensic laboratories are operated by federal government agencies, such as the Federal Bureau of Investigation. Potential Annual Earnings Scale. According to the BLS, the average annual salary for an engineer in the engineering services industry in 2009 ranged from $74,900 for a marine engineer to $129,890 for a nuclear engineer. The most common type of engineer in the industry was a civil engineer, with a mean salary of $82,300. Engineering managers earned an average of $123,510. In the scientific research and development services industry, scientists’ average salaries ranged from $60,510 for zoologists and wildlife biologists to $107,660 for physicists. The most common type of research scientist in the industry was a medical sci-

Scientists at large biotechnology and pharmaceutical companies, more than 60 percent of whom have doctoral degrees, earn an average annual starting salary of $85,000. (©Paul Hakimata/Dreamstime.com)

entist, with a mean average salary of $925,350. Natural sciences managers earned an average of $152,200. Average annual salaries at large companies or academic centers are approximately $55,000 for research technicians (almost all of whom have bachelor’s degrees and some of whom have master’s degrees). Large biotechnology or pharmaceutical companies sometimes employ postdoctoral fellows. These fellows often earn higher salaries than their counterparts in academia and often transition to scientist positions at the same company after completing their postdoctoral training. Scientists at large biotechnology and pharmaceutical companies, more than 60 percent of whom have doctoral degrees, earn an average annual starting salary of $85,000. An engineer at a large engineering services company, who typically

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has a bachelor’s or master’s degree, earns an average annual starting salary of $60,000 to $100,000, depending on experience. Large companies are more likely to hire a larger number of engineering technicians, earning an average of $58,000 per year, than smaller companies. Clientele Interaction. Employees in large engineering companies may have a fair amount of interaction with customers, typically project managers working for government organizations or private companies. Business skills are even more important for engineering managers in large companies because these companies place more emphasis on streamlining costs and driving profits. Research and development scientists in large biotechnology companies have minimal to no contact with customers. Scientists in large academic centers do not have customers as such, although they have certain obligations to the government bodies that fund their research. Amenities, Atmosphere, and Physical Grounds. In a larger company supplying scientific and technical services, the importance of cultivating and nurturing effective communication between scientific and technical workers and management is even greater. Management needs to understand the realities of developing products, the challenges to development and production time lines, and the complexity of research data. The physical grounds of a large scientific and engineering services company is usually a selfcontained campus with several large buildings, multiple cafeterias and break rooms, a gym, and several conference rooms of different sizes to accommodate smaller group meetings as well as meetings for the entire company. Typical Number of Employees. Employees number from one thousand up to tens of thousands. Traditional Geographic Locations. Large scientific companies are located in suburban areas close to major metropolitan areas or in and around technology hubs. Large businesses in this industry rely heavily on finding the most talented and experienced workers. Being situated in these locations increases the chances of businesses finding such employees from surrounding academic centers and companies. Pros of Working for a Large Scientific Service Provider. Workers in large businesses earn

more on average than workers doing similar jobs in small and midsize businesses. They may also enjoy better benefits such as a more comprehensive health plan, reimbursement for further education, and an expense account. In addition, employees at larger research and engineering companies have the experience of working at a well-known, established company, which will help them find jobs at similar or even larger companies in the future. If a researcher or engineer at a large business makes a discovery or invents a new device, the company has the legal resources and experience to carry out the patent process in an efficient way. Cons of Working for a Large Scientific Service Provider. Getting a job at a large business can be difficult, especially for workers with little experience in their particular fields. Once an employee is hired, it may be more challenging to distinguish himself or herself from the crowd. There is often a steep learning curve at the beginning while the new employee becomes familiar with the many processes that the company has in place. Some large businesses are also very hierarchical, and it can take several years to be promoted to the next level. Costs Payroll and Benefits: Large businesses have key staff, including management, professional, technical, and administrative employees, in salaried positions with full benefits, including medical, dental, and sometimes vision insurance; paid vacation time; retirement program with company match; and year-end bonuses. Some large businesses have a large number of hourly laboratory technicians, usually with full benefits. Many large businesses are publicly traded and offer stock options or a discounted stock purchase plan to their employees. Supplies: Large businesses in this industry have a wide range of specialized equipment, some of which is very costly. Research centers and biotechnology and chemical engineering companies also require a continuous supply of chemicals, reagents, kits, and biological material such as cell lines, bacteria, and yeast. Businesses that conduct animal research periodically purchase laboratory animals as well as food, cages, and bedding for the animals. External Services: Large businesses usually conduct all of their research in-house, but they may

Scientific and Technical Services contract parts of their production process or testing to other companies. Likewise, many large companies have their own marketing, sales, and medical writer employees, but they may contract specific marketing projects to advertising and medical education companies. Large companies commonly have their own housekeeping, security, and landscaping staff, although some companies hire external companies to provide these services. Utilities: Utilities include water, sewage, gas, electricity, telephone, and Internet access. Taxes: For-profit businesses pay federal, state, and local taxes on revenue, as well as property taxes. Some large establishments are nonprofit research centers, which are either tax exempt or considered government organizations (for example, state universities). These organizations do not need to pay federal taxes on surplus money that is used solely for the organization’s purposes and not to benefit individuals. Property and state tax exemption varies depending on the organization and the state.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Research and development in the physical sciences, life sciences, and engineering is conducted in laboratories in government organizations, academic institutions, and companies. For meteorological research and services, organizational structures and job roles vary according to the type of organization. One-third of meteorologists are employed at National Weather Service weather stations, which are operated by the federal government. Other meteorologists work for television and radio stations, for academic institutions, and for environmental consulting companies. Meteorologists at small weather stations or television and radio stations may work alone, while those at companies and in academia often work in collaboration with other meteorologists or scientists from other disciplines. Biotechnology and pharmaceutical companies typically have a scientific advisory board to oversee the scientific direction of the company. The scientific advisory board is closely linked to the corpo-

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rate board of directors, which provides business direction for the company. The chief executive officer (CEO) is responsible for putting the scientific and business advice of the boards into action to generate profits for the company. A chief operating officer (COO) oversees the daily operations of the company. Most companies have vice presidents or directors of research and development, marketing, finance, business development, and investor relations, who are in charge of their respective divisions. Engineers working in-house for manufacturing, petroleum, energy, and water treatment companies design processes and equipment to improve production and delivery of services. Some engineers are responsible for maintenance of processes, machines, and equipment. Engineers working in engineering consulting companies usually work as part of a team, with a supervising engineer in charge of a project. These supervising engineers may meet with clients to pitch projects when vying for a contract and to present updates throughout the project. Supervising engineers require considerable business and management skills in addition to engineering knowledge and experience. Generally, engineers need to acquire such business and management skills in order to advance their careers to the next level. The following umbrella categories apply to the organizational structure of businesses in the scientific and technical services industry: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Research and Development Business Management Technology and Design Production and Operations Sales and Marketing Administrative Services Intellectual Property/Legal Services Regulatory Affairs Human Resources Facilities and Security

Research and Development One of the most important departments of a technical services company is research and development. Because many of these companies sell products or services that are based on intellectual property, their success depends on the quality and innovativeness of their research. For example,

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Scientific and Technical Services OCCUPATION

SPECIALTIES

Science Technicians Specialty

Responsibilities

Artificial breeding laboratory technicians

Measure the quality of animal semen to improve artificial breeding.

Assayers

Test ores and minerals for values and components, and separate and weigh components.

Biological aides

Assist researchers with experiments in agricultural sciences by setting up, testing, record keeping, and cleaning.

Chemical laboratory technicians

Assist chemical engineers and chemists in laboratory work.

Food testers

Test and report on food for flavor, color, purity, odor, and content quantities.

Laboratory animal care veterinarians

Examine, diagnose, and treat diseases of laboratory animals to ensure health of animals used in scientific research and to comply with regulations governing their humane and ethical treatment.

Laboratory testers

Examine, measure, test, and photograph synthetic fiber samples to assist quality control.

Scouts

Collect information about oil and gas drilling, geological prospecting, and land or lease contracts.

Spectroscopists

Examine metals and minerals for density and intensity, and record procedures and results.

Weather observers

Observe weather and visibility using various equipment for pilot briefings or forecasts.

choosing the right treatment to develop and bring to market is crucial to the success of biotechnology or pharmaceutical companies. Developing a treatment (for example, a drug for atherosclerosis) is a lengthy process. Out of multiple promising drug candidates, for example, only a small fraction will be selected for clinical trial testing. Out of these, only the candidates that show efficacy in clinical trials and do not have detrimental side effects will be earmarked for further development. Drug characteristics and clinical trial data are then submitted to the FDA and, following approval for a specified disease state and

sometimes in specific patient types, the drug can be marketed and promoted. Biomedical engineers also engage in research and development activities that are related to health care and diseases. They are more concerned with applying engineering principles to the design and development of prosthetic limbs, medical instruments, and medical devices, including heart valves, catheters, and imaging systems (such as magnetic resonance imaging and ultrasound). Led by a vice president or director, this department may be divided into several divisions based on broad research areas (for example, biochemistry,

Scientific and Technical Services chemistry, immunology, and molecular biology) or by target disease classifications (for example, oncology, autoimmune diseases, and endocrinology). Scientists and technicians work in teams under the supervision of a principal scientist or director, performing scientific research in laboratories that is focused on a particular purpose. Although companies and government organizations providing forensic services focus more on processing specimens and generating data, some establishments perform research to develop better techniques, reagents, and equipment to help determine the cause of death and solve crimes. Forensics research and development occurs across a broad range of forensics specialties, including ballistics, chemistry, molecular biology, microbiology, and biometrics (fingerprints). Larger engineering services companies may also have research and development departments that develop new processes, machines, and instruments for specific purposes. Burgeoning new fields such as nanotechnology provide the opportunity for innovative engineering research, producing new tools that can be used for a wide range of applications in fields such as materials science, electronics, and medicine. Research meteorologists, who usually work for the government or in industries requiring weather prediction, are involved in researching air pressure, temperature, and impact of weather on the environment. Meteorologists may also develop new devices and methods for detecting weather changes and predicting weather patterns. Research and development occupations may include the following: ■

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Vice President of Research and Development Research Director in Chemistry Research Director in Immunology Principal Investigator/Scientist/Engineer Scientist Research Engineer Scientific Associate Research Technician

Business Management Although businesses in this industry are mostly driven by intellectual knowledge, with the scientifically and technically trained employees making up

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the core, a significant proportion of upper management consists of people with business rather than technical experience. These business managers, including the CEO, the director of business development, and the director of investor relations, use their business knowledge and experience to identify business opportunities, products to develop, and the business direction of the company. The business managers are in charge of ensuring strong returns on investment (ROI) for investors and for increasing profits for the company as a whole. In a publicly traded company, the business managers are also responsible for driving profits for stockholders. Business management occupations may include the following: ■ ■

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Chief Executive Officer (CEO) Vice President/Director of Communications and Investor Relations Vice President/Director of Business Development Vice President/Director of Product Development Business Development Analyst Account Manager

Technology and Design Chemical engineers participate in design and development processes for chemical manufacturing, as well as energy, paper, clothing, and food production. Some chemical engineers specialize in nanotechnology, which uses nanoparticles (microscopic particles in the nanometer size range) for a wide range of applications. Electrical engineers design and develop production of electrical components and machines, including electric motors, wiring in buildings, radar and navigation instruments, telecommunications components, and instruments involved in the generation and distribution of electricity to homes and businesses. Electrical engineers are also involved in developing and fine-tuning processes for more efficient transmission of electricity. Mechanical engineers design and develop machines, tools, and devices for a variety of purposes, ranging from manufacturing and agriculture to energy production and utilization. Technology and design occupations may include the following:

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Chief Information Officer (CIO) Technology Director Design Engineer Applications Engineer Testing Engineer

Production and operations occupations may include the following: ■ ■ ■

Production and Operations Although some research and development activities produce intangible results (for example, a weather forecast or increased scientific knowledge of a disease), biotechnology research often produces a drug, therapy, or medical device that has to be produced on a large scale and distributed to customers. Because large-scale production is extremely expensive, small companies often license the intellectual property of their product to larger companies that are responsible for large-scale production, distribution, and, in some cases, marketing. Midsize and large companies may have production facilities in different locations from their administrative or research facilities. For example, a company’s research and administrative offices may be located in an expensive town in New Jersey, while its production facilities may be situated in a more rural location where leasing and employment costs are lower. Quality control and assurance are an essential function during the production process. Quality control specialists are trained in different characteristics of the product and are responsible for performing testing and verification procedures to ensure that national and international standards are met. In engineering services companies, many engineers are involved in some aspect of production, and some engineering jobs are focused on one or more steps in the production process—streamlining, troubleshooting, or testing and quality control. For example, production engineers are involved in day-to-day operations and responsible for production efficiency, scheduling of workers, and worker safety. Project engineers are responsible for managing all aspects of a specific project, including time line, resources, workers, and meeting client needs. Testing and systems engineers are involved in testing and improving equipment and processes in industrial manufacturing and in the delivery of utilities to consumers. These engineers may work collaboratively with design engineers to refine the design of machinery and processes throughout a project.

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Chief Operating Officer (COO) Operations Director Production/Manufacturing Director Production/Manufacturing Manager Technician, Production/Manufacturing Manager Plant Manager/Supervisor Plant Maintenance Manager Production Engineer Systems Engineer Maintenance and Repair Technician

Sales and Marketing Marketing managers and the sales force are integral to the success of a scientific and technical services company. Depending on the type of services provided and the size of the company, the number of marketing managers and the size of the sales force can range from a few people to thousands. In a pharmaceutical or biotechnology company, marketing managers are often involved in marketing a specific brand, usually a drug or type of treatment. The brand managers are in charge of shaping and controlling the marketing message for the drug, through advertising as well as promotional and continuing medical education (CME) programs tailored for the target group (clinicians who treat patients with diseases targeted by the drug). Often, these marketing personnel may work with research directors in research and development to pinpoint the drug characteristics that make the drug stand out among its competitors. Marketing managers then incorporate these characteristics into the marketing message; this message will be a thread running through the advertising and educational programs, which include presentations at national conferences by key opinion leaders (usually clinicians or researchers who are well known and highly respected in their field), scientific articles, printed materials, and online content. Marketing managers are also in charge of conveying the marketing message to the sales force attached to that drug. As a brand evolves, brand managers often streamline the marketing message to focus on emerging aspects of the drug that can be translated into a competitive advantage, such as

Scientific and Technical Services the efficacy of the drug for a particular patient group or a better side-effect profile compared to competitor drugs. These qualities may be apparent only after the drug has been on the market for a while and used by a sufficient number of patients. Although marketing personnel decide whom to target and what to say, they do not usually interact directly with the target audience, the clinicians. Instead, the face of the company is its sales force. Salespeople see clinicians regularly and develop relationships with them; these relationships allow salespeople to convey the latest results, advances, and marketing messages directly to clinicians. Pharmaceutical and biotechnology salespeople are often scientifically trained and receive further training about the company, the drug, and the diseases targeted by the drug; they may also receive more in-depth training about drug characteristics and disease states that provides competitive advantages. For drugs that are used by specialists, salespeople with specialized knowledge and experience may be employed to more effectively engage the target group. Marketing and sales at engineering services companies focus on discovering and addressing specific client needs. Marketing and sales personnel include engineers who have firsthand knowledge of the problems clients face and can propose practical engineering solutions. Engineering sales personnel often interact directly with clients to identify key issues and needs and devise the best strategies to meet these needs. Some of these salespeople have titles such as technical sales engineer, reflecting the fact that they are trained engineers who are experienced in selling specialized products and services. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Vice President of Marketing Marketing Director Marketing Manager Market Analyst Medical Education Director Medical Writer Technical Writer Medical Science Liaison Vice President of Sales Regional Sales Director District Sales Director

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Sales Representative Technical Sales Engineer

Administrative Services This group of employees provides support functions for the company, ranging from accounting and billing to administrative services. Some departments, including accounting and payroll, support the entire company. Administrative assistants, by contrast, may support an individual manager, several managers, or a team. Administrative services occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Controller Accountant Payroll Services Director Payroll Services Manager Payroll Coordinator Billing Operations Director Billing Operations Manager Billing Specialist Executive Assistant Administrative Assistant Receptionist

Intellectual Property/Legal Services Intellectual property lawyers in the legal departments of scientific and engineering companies are responsible for analyzing the intellectual value of each new drug or technique and whether it can be patented. These employees also monitor similar products or techniques in other companies or in academia to determine if there is a patent infringement. Intellectual property lawyers have degrees from law schools; many also have degrees such as doctorates in science or engineering. They may have worked as intellectual property lawyers in law firms before taking a job in industry. Some companies employ patent agents, many of whom have scientific or engineering education and training. Patent agents work with intellectual property lawyers to determine the patent value of discoveries and inventions. Intellectual property and legal services occupations may include the following: ■ ■ ■

General Counsel Intellectual Property Attorney Litigator

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Patent Agent Paralegal Legal Secretary

Regulatory Affairs Biotechnology companies have regulatory departments that are responsible for putting together new drug applications to the FDA. The FDA requires a comprehensive and rigorous assessment of a drug’s efficacy, side-effect profile, safety, and other characteristics. If these are favorable and the drug’s efficacy compares well with other drugs in its class, the FDA will approve the drug for sale. Regulatory specialists and regulatory medical writers usually have science degrees and training in regulatory processes and FDA rules. Regulatory services occupations may include the following: ■ ■ ■ ■

Regulatory Affairs Director Regulatory Affairs Manager Regulatory Affairs Specialist Regulatory Writer

can create tense, disruptive situations with coworkers or managers that may escalate to the point that human resource specialists or managers need to intervene. The role of the human resource specialist or manager is to help resolve these and other disagreements as quickly and completely as possible to avoid lost productivity, resignation of talented employees, and lawsuits by employees or former employees. All these situations can have negative ramifications for the institute or company as a whole. It is also common for the human resources department in larger companies to perform employee surveys to determine if employees are contented (or not) with the work environment, company management, their managers, salaries, benefits, advancement, and professional development opportunities. Human resource specialists will highlight areas that need improvement and work with managers to implement appropriate action. Human resources occupations may include the following: ■

Human Resources The human resources department is in charge of hiring and terminating employees, as well as mediating disagreements between employees and between employees and their managers. Human resources personnel in the scientific and technical services industry encounter unique challenges, including having to hire highly qualified and specialized individuals for research, administrative, marketing, and legal positions. For many of these positions, the management will highlight specific qualities and experience that the successful candidate should possess. Depending on the candidate pool at the specific location and the attractiveness of the package, it can be challenging to find suitable candidates who meet these requirements. Another unique challenge involves the personalities and working styles of many research scientists and engineers. For example, the field of academic science, where many scientists are trained, encourages creative, unconventional thinking and sometimes emphasizes results over personal interactions. Some scientists thus emerge from graduate school with difficulty interacting with others in a respectful and tolerant way, especially with those whom they perceive as less intelligent. This attitude

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Vice President/Director of Human Resources Human Resources Manager Human Resources Specialist Administrative Assistant

Facilities and Security Biomedical research facilities in academic centers and companies are typically state-of-the-art, with equipment that can cost up to millions of dollars. Facility personnel are in charge of maintaining these pieces of equipment and fixing problems that arise, even if they occur after the regular workday. Refrigerators, freezers, incubators, and cold rooms need to be maintained at constant temperatures to preserve the integrity of research materials such as chemicals, cell cultures, bacteria, protein, and DNA. These pieces of equipment are fitted with sensors, and some are wired to call the researcher or facilities worker in charge if a problem occurs. Regardless of the time of day, the facilities worker is expected to go to work, check the equipment, and repair it if possible to prevent the loss of valuable samples. Most research facilities have security guards who check employee identification cards and patrol the facilities. These guards work in shifts to provide se-

Scientific and Technical Services curity coverage twenty-four hours per day. Security in research facilities is important to prevent industrial spies, rival research groups, and animal right activists from breaking into laboratories and removing animals or removing and destroying laboratory records, data, and equipment. The laboratories can be a security challenge because they are typically open throughout the day, and also open at night if researchers are working late. Security guards and security managers are even more important in facilities conducting primate research, which are at higher risk of invasion and vandalism by animal rights activists. These places tend to be very low-key and to avoid publicizing the type of research that they do, even to other departments within the same organization (if there is a sign on the outside the building, it usually does not include the words “primate research”). Facilities and security occupations may include the following: ■ ■ ■ ■ ■

Security Manager Security Guard Maintenance Manager Maintenance and Repair Worker Custodian/Janitor

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OUTLOOK

Overview The scientific and technical services industry is a growing field, driven by advances in science and technology and increasing awareness of environmental concerns. The employment outlook for engineers and research and development scientists is good. However, competition is expected to be strong in all scientific fields, partly because of the increasing number of science graduates. In 2008, approximately 91,300 biological scientists (who perform medical and genetic research) were employed; this number is projected by the BLS to increase by 21 percent to approximately 110,500 in 2018. Research chemist jobs are projected to grow by 3 percent between 2008 and 2018, which is lower than the 11 percent average rate of increase for all occupations. In 2008, there were an estimated 84,300 employed chemists. This number is expected to grow very modestly to 86,400 in 2018. Most of these chemists will be employed in scientific and technical service companies, especially biotechnology firms, where they are needed for discovery and manufacture of new drugs for diseases that will likely increase in severity and compli-

A genetic engineer at work. (©James Steidl/Dreamstime.com)

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cations as the population ages. Chemist jobs in the manufacturing industry are expected to decline in the coming years. Materials scientist jobs are projected to increase by 12 percent between 2008 and 2018 (from 9,700 to 10,900), which is similar to the projected growth for all jobs. However, the relatively small total number of materials scientist jobs may skew the percentage increase. Thus, job growth in this field may not be as rosy as it appears. The outlook for engineering jobs is also somewhat mixed. In 2008, there were 1.6 million engineering jobs. This total number is projected to increase by 11 percent between 2008 and 2018, on par with the projected growth for all occupations. However, not all engineering specialties will experience growth similar to the overall rate, while other specialties are projected to undergo enormous growth, far beyond the overall rate for all jobs. Biomedical engineers, for example, are expected to experience 72 percent job growth between 2008 and 2018, largely because of the increasing medical needs of an aging population. Engineers working in the field of nanotechnology are also expected to have good job prospects. In 2007, the global medical market for nanotechnology products was $1.7 billion. As the field con-

tinues to advance and more products using nanotechnology reach the market, revenues should increase accordingly. The total number of chemical, mechanical, and electrical engineering jobs is expected to remain stable or increase slightly. Most of the increase is predicted to be caused by job growth in engineering consulting companies rather than in traditional industries. This shift is because industries are expected to cut down on the number of in-house engineers employed in favor of contracting engineering consultants when projects require their services. Scientists and engineers with advanced degrees may have better opportunities for obtaining a job in their field and for being promoted to senior and upper management positions. Research jobs in academic research institutions will remain scarce, and competition for these jobs will continue to be very intense. In addition, researchers may have to compete more aggressively for fewer and smaller research grants.

Employment Advantages Overall, technical and scientific jobs have remained relatively stable in the face of the worldwide recession because of the dependence on federal funding for nonprofit research centers, which has not been as severely affected by the economic downturn as many other sources of funding. Many forPROJECTED EMPLOYMENT profit companies in this industry FOR SELECTED OCCUPATIONS also provide essential goods and services, including drugs for chronic Professional, Scientific, and Technical diseases, making them relatively reServices cession-proof. Workers in this industry have the advantage of being Employment highly trained and technically profi2009 Projected 2018 Occupation cient, making them attractive candidates for a wide variety of jobs in 371,430 540,200 Accountants and auditors other industries. Some companies, 86,390 105,100 Architectural and civil drafters for example management consulting firms, actively recruit scientific 372,050 424,800 Lawyers and engineering employees because 215,500 359,400 Management analysts of their ability to think critically and unconventionally about problems. 70,200 107,400 Market research analysts Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Annual Earnings The 2007 annual earnings for this industry were estimated at $279.1 billion by the U.S. Census Bureau.

Scientific and Technical Services RELATED RESOURCES FOR FURTHER RESEARCH American Institute of Chemical Engineers 3 Park Ave. New York, NY 10016-5991 Tel: (800) 242-4363 Fax: (203) 775-5177 http://www.aiche.org American Society of Mechanical Engineers 3 Park Ave. New York, NY 10016 Tel: (800) 843-2763 Fax: (973) 882-1717 http://www.asme.org Biotechnology Industry Organization 1201 Maryland Ave. SW, Suite 900 Washington, DC 20024 Tel: (202) 962-9200 Fax: (202) 488-6301 http://www.bio.org National Institutes of Health 9000 Rockville Pike Bethesda, MD 20892 Tel: (301) 496-4000 http://www.nih.gov National Science Foundation 4201 Wilson Blvd. Arlington, VA 22230 Tel: (703) 292-5111 Fax: (703) 292-9055 http://www.nsf.gov National Society of Professional Engineers 1420 King St. Alexandria, VA 22314 Tel: (703) 684-2800 Fax: (703) 836-4875 http://www.nspe.org

ABOUT

THE

AUTHOR

Ing-Wei Khor holds a bachelor’s degree in zoology, a master’s degree in marine science, and a Ph.D. in biochemistry. She discovered the exciting

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world of scientific research during an off-campus semester in college when she interned at a national government laboratory for five months. This experience was followed by more than a decade of scientific research experience in academia, where she delved into the fields of fish immunology, parasitology, virology, cell biology, and cancer biology. During her time in academic research, she published several peer-reviewed articles in scientific journals and presented posters at numerous national and international conferences. In 2006, she became a medical writer, combining her love of both science and communication. Her clients have ranged from pharmaceutical and biotechnology companies to the diagnostics industry to general reference publishers, and she has researched and prepared educational materials from CDROMs, Web site content, slide presentations, and video case studies. Her work is geared toward condensing a large amount of scientific literature and research data into clear, simply stated, and easily read educational pieces for busy clinicians. The ultimate goal of these pieces is to drive better and more informed health care decisions for patients.

FURTHER

READING

Adeola, Bayo. Engineering Is Development: Towards a New Role for Consultancy in Nation Building. Lagos, Nigeria: Comprehensive Project Management Services, 2009. Camenson, Blythe. Opportunities in Forensic Science Careers. New York: McGraw-Hill, 2009. Careers in Focus: Engineering. 2d ed. New York: Ferguson, 2007. Erickson, Aaron. The Nomadic Developer: Surviving and Thriving in the World of Technology Consulting. Upper Saddle River, N.J.: AddisonWesley, 2009. Gartner, John. Confessions of a Consultant: Survival Business Skills for Scientists and Engineers. Belleville, Ont.: Epic Press, 2008. Kenney, Martin. Biotechnology: The UniversityIndustrial Complex. New Haven, Conn.: Yale University Press, 1986. Simon, Françoise, and Philip Kotler. Building Global Biobrands: Taking Biotechnology to Market. New York: Free Press, 2003.

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Skrzeszewski, Stan. The Knowledge Entrepreneur. Lanham, Md.: Scarecrow Press, 2006. U.S. Bureau of Labor Statistics. “Biological Scientists.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos047.htm. _______. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/oco/cg. _______. “Engineers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos027.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://

www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. _______. Service Annual Survey. 2008. http:// www.census.gov/services/sas/historic _data.html. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Yates, J. K. Global Engineering and Construction. Hoboken, N.J.: Wiley, 2007.

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The scientific, medical, and health equipment and supplies industry engages primarily in the development, manufacturing, and distribution of equipment that is utilized by the health care industry. Products manufactured by this industry span a wide range of technologies. From disposable rubber gloves, to syringes, to high-tech diagnostic imaging systems and linear accelerators, an extensive assortment of supplies, instruments, and devices is produced by this industry. The industry also drives the innovation and development of new healthscience technologies that are designed with the ultimate goal of optimizing patient care.

General Industry: Health Science Career Cluster: Health Science Subcategory Industries: Dental Equipment and Supplies Manufacturing; Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers; Medical Diagnostic Apparatus Manufacturing; Ophthalmic Goods Merchant Wholesalers; Ophthalmic Instruments and Apparatus Manufacturing; Orthopaedic Appliances Manufacturing; Prosthetic Appliances Manufacturing; Surgical and Medical Instruments Manufacturing; Surgical Appliance and Supplies Manufacturing Related Industries: Medicine and Health Care Industry; Scientific and Technical Services Annual Domestic Revenues: $130 billion USD (Market Research, 2009) Annual International Revenues: $160 billion USD (Market Research, 2009) Annual Global Revenues: $290 billion USD (Market Research, 2009) NAICS Numbers: 42345-42346, 334516334517, 339112-339114

History of the Industry Up until the nineteenth century, the world of medical technology was very small and specialized. Doctors were dependent on their creativity and whichever instruments they carried in their black bags to provide patient care. Their instruments were often designed and fabricated by themselves or by local blacksmiths. The twentieth century heralded a new age of advances in technology and the sciences. The world of medicine was given a dramatic face-lift with the advent of improved anesthesia, biotechnology, and radiology. Some of the most important inventions of the 1703

©Søren Sielemann/Dreamstime.com

Scientific, Medical, and Health Equipment and Supplies Industry

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Endoscopy tools. (©Dreamstime.com)

twentieth century were in the field of diagnostic medicine. Near the turn of the century, Wilhelm Röntgen discovered the X ray, one of the eminent discoveries of modern medicine. In 1905, Willem Einthoven developed the electrocardiograph (ECG), a tool that measures the electrical activity of the heart and provides crucial information to diagnosticians. The endoscope, developed in 1956, is able to examine the interior of hollow organs or body cavities and helped replace exploratory surgeries. The field of radiology uses various noninvasive imaging technologies to diagnose and assess disease. From the plain X ray, to the ultrasound scanner, to more advanced technologies, such as computed tomography (CT), magnetic resonance imaging (MRI), and positron emission tomography (PET) scans, the twentieth century has given physicians an array of tools to aid in the diagnosis of disease. Medical laboratory equipment has become increasingly efficient at analyzing blood, urine, and deoxyribonucleic acid (DNA) samples from patients. The automation of such analysis has resulted in quicker diagnoses and more efficient treatment plans. Therapeutic medical equipment has seen a similar growth over the last century. Although the skilled hands of a surgeon are irreplaceable, new technologies aid in the management of patients; these include infusion pumps, medical ventilators,

anesthetic machines, medical lasers, and dialysis machines. The treatment of cancers has been revolutionized through the clinical use of linear accelerators to irradiate tumors. Health care equipment is no longer confined to hospitals or medical clinics, as an increasing amount of such equipment is being produced for use within the home. For example, patients with diabetes possess glucometers to monitor their blood-sugar levels at home, and those with high blood pressure can check their pressures at home with portable blood-pressure cuffs. Medical technology is forever being researched and improved. The twenty-first century will see continued advances in the field of therapeutic and diagnostic health care equipment. As with all other industries, the scientific, medical, and health equipment and supplies industry is driven by profit. In becoming more profitable, new technologies must strive not only to reduce production costs but also to optimize patient care, for example, by treating more patients per day, reducing recovery times, providing early diagnosis of medical problems, and providing patients with a higher quality of life. The Industry Today Establishments within the industry are primarily engaged in manufacturing medical equipment and supplies. Today, the main industry-manufactured products fall into the following categories: surgical appliances and supplies (which account for 28 percent of the U.S. market), surgical and medical instruments (25 percent), dental equipment and supplies (16 percent), ophthalmic equipment (9 percent), electromedical equipment (8 percent), in vitro diagnostic devices (4 percent), and irradiation equipment (3 percent); 7 percent of products fall in other minor categories. The surgical appliances and supplies sector includes products ranging from sutures to artificial limbs, from cervical collars to infant incubators, and from safety masks to surgical implants. Electromedical equipment includes the various types of

Scientific, Medical, and Health Equipment and Supplies Industry endoscopes (such as colonoscopes and bronchoscopes); X-ray, ultrasound, CT, MRI, and PET scanning devices; and pacemakers and dialysis machines. Dentists’ tools, instruments, enamels, teeth, and so on are all supplied by the dental equipment and supplies sector. The ophthalmic equipment sector produces equipment for opticians, optometrists, and ophthalmologists. The field of irradiation is a small but high-value sector, as it is responsible for producing machines such as the linear accelerator, which irradiates cancer tumors. Laboratory equipment and furniture also constitute major sources of revenue for this industry, with products such as operating tables, hospital beds, and centrifuges. As the population ages, the number of diseases and illnesses that require advanced medical equipment rises. Today, the medical equipment and supplies industry is driven by the expectation that new technologies will enhance the quality of patients’ lives as they get older. The U.S. medical equipment industry is known for producing high-quality devices using advanced technology resulting from heavy investment in research and development. There are nearly eight thousand medical equipment companies in the United States, employing over 300,000 individuals. Most firms are small startup companies, but there are a limited number of large firms and relatively few midsize businesses. More than 80 percent of medical technology companies have fewer than fifty employees. The U.S. medical device market, the world’s largest, was worth $130 billion at the end of 2009. The industry is highly concentrated, as the fifty largest companies account for approximately 75 percent of industry revenue. Seven of the world’s top ten medical device manufacturers are U.S. companies. The top ten U.S. companies in the medical device sector are Johnson & Johnson, GE Medical Systems, Baxter International, Tyco Healthcare, Medtronic, Abbott Laboratories, Becton Dickinson, 3M Healthcare, Guidant, and Stryker. During the early 1990’s, rising health care costs led many hospitals to form alliances and make group purchasing decisions in order to buy equipment in bulk at lower costs. In order to sell to these large buying groups, sellers needed to provide a wide assortment of products. This development left suppliers facing unprofitable margins, and many smaller companies folded or were acquired

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by larger companies. Other factors that have driven consolidation among supply firms are shorter product life cycles and the high cost of new technology development. Moreover, the medical community has faced increasing pressure to reduce its impact on the environment, as costs related to the disposal of medical waste have been mounting. These increasing costs have resulted in a demand for medical products that are able not only to serve patients’ needs but also to reduce waste—a demand that increases production costs. Many of the larger firms have therefore been investing heavily in research and development in order to develop innovative products, as such products remain the key to market success. In the United States, imports are beginning to form an increasingly significant part of the medical equipment and supplies market, accounting for approximately 34 percent of the total market. The growth in this sector is explained by the lower man-

Equipment for surgery. (©Andrei Malov/Dreamstime.com)

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ufacturing costs that can be achieved by producing goods in other countries, such as Mexico, and then reimporting the goods back into the United States. The U.S. market is highly regulated and can be an expensive one in which to operate. The process of product regulation can be very extensive and timeconsuming. In 1992, the Global Harmonization Task Force (GHTF) was conceived to help achieve uniformity among global regulatory systems. The GHTF is a collaboration among the United States, the European Union, Canada, Japan, and Australia. Medical device companies have also begun applying for regulatory approval in other countries concurrently, or prior, to seeking approval from the U.S. Food and Drug Administration (FDA). These ventures have helped ensure that this transparent and rules-based industry continues to appeal to entrepreneurs and professionals alike. Reimbursement rates for medical devices are a primary concern not only for American manufac-

A patient receives ultrasound. (©Stephen Mcsweeny/ Dreamstime.com)

turers but also for the global market as a whole. In the United States, there are several key organizations involved in establishing reimbursement rates. The Department of Health and Human Services’ Centers for Medicare and Medicaid Services (HHS/CMS) is the central agent of control. The HHS/CMS is very closely involved in determining the rates of reimbursement paid by Medicare and Medicaid. Within the U.S. market, health maintenance organizations (HMOs) and private health insurance companies set or negotiate their own reimbursement rates. A low reimbursement rate for a medical device in the U.S. market can make the device uneconomical to produce elsewhere in the world because the United States represents such a large percentage of the global market. The complementary industries on which the medical device industry relies include microelectronics, telecommunications, instrumentation, biotechnology, and software development. The growth in recent years of these sectors has positively affected the medical device industry. Announcements of progress in medical technologies that allow for earlier detection of diseases and more effective treatment options are now almost daily occurrences. As an example, the integration of radiology with information systems is the most significant trend affecting diagnostic imaging. The Picture Archiving and Communications Systems (PACS) store medical images digitally, eliminating the need for film or chemical processing. Doctors can access these images remotely, increasing efficiencies within health care. Broad nationwide initiatives, such as the adoption of electronic health records and the use of personal health records, are another way in which technology has the potential to transform the health care system. Medical device manufacturers are benefiting from a new generation of materials and manufacturing processes. As medical device and biotechnological products converge, one area that is seeing tremendous growth is drug-delivery devices: Many treatments and therapies derived from research will not necessarily be available in pill form. Medical devices will act as delivery systems for new products that result from genetic engineering and biotech research. Technological advances in areas separate from the medical equipment industry are also having an impact on that industry’s trends. One of these ar-

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panies. More than 80 percent of medical technology companies have fewer than fifty employees. The customers of these companies are primarily resellers of their equipment. The success of a small firm normally depends on its ability to find a specialized niche in which to market and sell its products. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary of an electro-mechanical technician working in the medical equipment and supplies manufacturing industry in 2009 was $48,750. The average salary of a mechanical engiA patient with diabetes monitors his sugar levels with a glucometer. (©Robneer was $74,810, the average salary of ert Byron/Dreamstime.com) a materials engineer was $87,260, and the average salary of a biomedical engineer was $81,590. Medical scientists eas is harnessing the power of the Internet. Online in the industry earned $91,200, on average, while purchasing of medical products has proliferated, laboratory technologists earned $54,440 and labosaving both time and money for buyers and sellers. ratory technicians earned $39,710. The average salThe medical device industry is at the forefront ary of all production positions in the industry comof health care delivery, as it manufactures the tools bined was $34,380, and production supervisors necessary to provide patient care. The health care earned an average of $58,110. Medical managers industry as a whole remains the largest and fastestearned $133,980, engineering managers earned growing industry market worldwide. The intimate $119,320, general and operations managers earned relationship shared by the medical device and $128,990, and chief executives earned $203,900. health care industries ensures that the medical Employees of small start-ups are likely to earn salasupplies sector remains competitive in today’s ries below these averages, although they may be ofmarket. fered stock options and other forms of deferred compensation should the venture succeed. In general, small businesses in the medical supplies inINDUSTRY MARKET dustry generate yearly revenues of $200,000 to SEGMENTS $3,500,000. Revenues are directly related to the number of employees within the business, as well as The medical equipment and supplies industry the number of years the firm has been in business. encompasses businesses ranging in size from small Clientele Interaction. Small-business propristart-ups to large multinational enterprises. It caetors tend to be more intimate with their customters to a wide range of clients, from small medical ers and clients than are owners and managers of clinics, to research laboratories, to large tertiarylarger firms. The relationships that small busicare hospitals. The following sections provide a nesses cultivate lead to a greater degree of loyalty comprehensive breakdown of each of these differon the part of customers and accountability on the ent segments. part of producers. Face-to-face interactions are often necessary when presenting new technologies. Small Businesses Sales personnel have to be well-versed in how a Most of the firms in the health care equipment particular medical device operates. For example, and supplies industry tend to be small start-up comwhen introducing a new surgical device, a salesper-

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Scientific, Medical, and Health Equipment and Supplies Industry

son may scrub into the operating room with surgeons to ensure the device is functioning properly. For small businesses, keeping travel costs to a minimum is a necessity, but clientele interaction can often take place via telecommunication. Gaining the trust of clients is paramount for small businesses. Because they often work in niche markets, small companies have to overcome barriers relating to the abilities of their products. Clients need to feel confident that a company’s products are suitable as well as reliable. Because of their size, small companies usually lack brand power and, therefore, need to work harder to convince their clients of their products’ capabilities. Amenities, Atmosphere, and Physical Grounds. The smaller the business, the more intimate the office space. Normally, small medical equipment and supply companies have team office spaces, as well as some private executive offices and at least one meeting room. Amenities for employees are usually minimal, with restrooms and small kitchen facilities being necessities. At a minimum, all business offices need private telephone lines, fax machines, and Internet connectivity. Small businesses’ office spaces are usually rented within business centers, and, as a result, some services such as parking and security are often shared with other businesses. Many small businesses employ professional receptionists to greet visitors and answer phones. The manufacturing areas of small medical equipment firms are often crowded; free space tends to be scarce. As a result, it is vitally important for small businesses efficiently to lay out their manufacturing equipment to make the best use of the area. Many smaller companies have limited storage space for raw materials and finished goods. Their loading docks often become overcrowded, hampering deliveries and shipments. Typical Number of Employees. Small medical equipment and supply businesses try to minimize costs wherever possible. Each employee usually adopts numerous roles within such businesses. Normally, these firms have fewer than one hundred employees, and most have less than fifty employees. Traditional Geographic Locations. Medical device manufacturers are dispersed throughout America. The states with the highest concentrations of medical equipment companies are California, New York, Florida, Massachusetts, Illinois,

Minnesota, and Georgia. Medical equipment firms consider several factors when deciding where to locate a new facility. The four main considerations include the following: ■

■

■

■

Being in close proximity to a knowledgeable, highly trained, and productive workforce. This consideration normally requires businesses to locate in metropolitan areas. Being part of a cluster of other medical device or high-tech companies to share in the infrastructure built to support such industries. Locating facilities near education and research institutes. Locating near customers in order to minimize transportation and travel costs.

Pros of Working for a Small Medical Equipment Manufacturer. A small business can often be started at low cost and on a part-time basis. There is a level of satisfaction associated with being a small-business owner and making one’s own decisions, albeit within the constraints imposed by one’s economic environment. Small businesses have greater flexibility in changing their profiles to meet the changing needs of their customers. As a result, they are often able to move quickly to exploit new technologies or methodologies in order to gain a competitive advantage. Another pro of working in a small business is the ability to learn a variety of processes. Because small businesses often require their employees to wear multiple hats, employees gain a better understanding of how their companies’ products pass through the many stages of the production cycle. Cons of Working for a Small Medical Equipment Manufacturer. Small firms often have a difficult time marketing new products. Introducing a new product requires devoting a significant amount of financial resources to research, development, and marketing. Such resources are often not available in the smaller firms. Another hindrance for small businesses is their limited geographic and commercial range. Larger firms are able to export their products on a global scale, whereas smaller firms are usually limited to local markets. Moreover, it is difficult for smaller businesses to negotiate deals with group purchasing organizations (GPOs), such as HMOs and health care companies.

Scientific, Medical, and Health Equipment and Supplies Industry Costs Payroll and Benefits: Most workers in this industry have professional designations, and they usually earn annual salaries. Paid vacation and sick leave are normally included in compensation packages. Small companies do not always provide health care benefits, although many professionals require them. In addition, it is unusual for small firms to offer employees other than executives any type of profit-sharing incentives. Supplies: Depending on the products being produced, medical equipment manufacturers may require raw materials such as glass, steel, or plastics; assembly-automation equipment; packaging equipment; information technology; office furniture; and so on. Because they require commodity raw materials, such firms are susceptible to price changes in these commodities that result from changes in supply and demand. In addition, small firms do not have much bargaining power with their suppliers and are unlikely to receive major discounts. External Services: In order to focus on the manufacturing process, many small companies employ external accounting, legal, and human resources firms, as well as external janitorial, cleaning, and delivery companies. Utilities: Small businesses pay for electricity, water, cable television, telephone, Internet access, and gas. Taxes: Companies are responsible for federal, state, and local income and property taxes. Midsize Businesses Midsize companies attempt to sell their products directly to end users, such as hospitals and medical laboratories. With increasing business volume, these companies have to learn to streamline administrative aspects of the business and decentralize decision making. Like small firms, midsize businesses tend to operate in specialized niches. For example, Medrad, a midsize medical equipment company located in Pittsburgh, operates in three product market groups: vascular injection systems, ancillary magnetic resonance products, and imaging products. Potential Annual Earnings Scale. According to the BLS, the average annual salary of an electromechanical technician working in the medical

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equipment and supplies manufacturing industry in 2009 was $48,750. The average salary of a mechanical engineer was $74,810, the average salary of a materials engineer was $87,260, and the average salary of a biomedical engineer was $81,590. Medical scientists in the industry earned $91,200, on average, while laboratory technologists earned $54,440 and laboratory technicians earned $39,710. The average salary of all production positions in the industry combined was $34,380, and production supervisors earned an average of $58,110. Medical managers earned $133,980, engineering managers earned $119,320, general and operations managers earned $128,990, and chief executives earned $203,900. Midsize businesses are likely to pay salaries roughly in line with these averages. They generate revenues of between $4 million and $30 million annually. Clientele Interaction. Midsize businesses are more likely to sell directly to end users of their products than are small businesses, which sell more at wholesale to retailers. While this arrangement still requires midsize businesses to cultivate close relationships with their customers, they are likely to have far more customers than small businesses. As a result, midsize companies cannot deal with each client as intimately as small businesses do. Midsize companies do not generally have sufficient sales forces to assign individuals to specific products. Instead, their salespersons are responsible for one or more lines of products. Selling different products to different customers requires salespersons to be very well rounded, as they must understand the workings of multiple products. For example, when introducing a new surgical device, a salesperson may have to scrub into the operating room with a surgeon to ensure that the device is functioning properly. Many midsize firms are attempting to grow and seek clients in other countries. Their salespersons thus need to be trained to interact with clients whose social and business cultures differ substantially from their own. Midsize companies may be able to attract larger clients. These clients have higher expectations regarding the quality of their interactions with their medical equipment suppliers. They may expect suppliers to train their staffs to use the equipment they purchase. As a result, midsize businesses have higher costs associated with developing and maintaining their clients than do small businesses.

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Scientific, Medical, and Health Equipment and Supplies Industry

Amenities, Atmosphere, and Physical Grounds. Midsize firms often have more than one office, and their offices can be regional, national, or international. Each office is usually more expansive than those of smaller firms. They include team office spaces for separate departments and private executive offices. Conference facilities are also generally available. In addition to restrooms and kitchenettes, amenities available to employees may include exercise facilities, free parking, and daycare centers. Employers try to ensure availability of food services, including cafeterias, fast-food courts, and coffee bars. Midsize companies may separate their business offices from their production and design plants, locating their headquarters in downtown office buildings rather than industrial parks. The atmosphere at midsize businesses is likely to become more segmented than at small firms, as a gap appears between the manufacturing and the business sides of companies. A less family-oriented atmosphere prevails. Manufacturing at this scale requires a larger space, and it may not be possible to combine the two separate aspects of the business in the same building. Typical Number of Employees. Midsize businesses have a structure, similar to that of many large firms, in which decision making is decentralized. Managers are hired to be responsible for the functioning of each department within the company. A midsize company normally has less than five hundred employees spread out over more departments than at small businesses. Those employees are less likely to have dual roles and are instead more likely to specialize in one specific function. Traditional Geographic Locations. Medical device manufacturers are dispersed throughout America. The states with the highest concentrations of medical equipment companies are California, New York, Florida, Massachusetts, Illinois, New York, Minnesota, and Georgia. Corporate headquarters are often located in downtown cores, while manufacturing plants are usually located in industrial areas, where costs are less. In addition, some midsize firms conduct manufacturing operations in developing countries, such as Mexico or India, where labor costs are far less than they are in North America. Medical equipment firms consider several factors when deciding where to locate a new facility. The three main factors include the following:

■

■

■

Being in close proximity to a knowledgeable, highly trained, and productive workforce. Being part of a cluster of other medical device or high-tech companies to share in the infrastructure built to support such industries. Locating facilities near education and research institutes.

Pros of Working for a Midsize Medical Equipment Manufacturer. Midsize businesses offer opportunities that small businesses cannot, while at the same time they do not have the inbuilt bureaucracy that is often found in large businesses. This situation provides employees with more opportunities to transfer to a different department or to seek promotion. Employees also get to work with a greater range of products at midsize firms than at small ones, not only because midsize firms produce more products but also because their product teams are less specialized than are those of large companies. Midsize companies are also able to allocate greater funds to research and development than can smaller firms, while at the same time being more flexible than large companies. Cons of Working for a Midsize Medical Equipment Manufacturer. Midsize businesses face many of the same problems faced by small businesses. Raising funds for expansion can be problematic, as a result of relying on a relatively small number of customers. Successful midsize companies are also seen as threats by larger companies that may target their customers or suppliers in an attempt to impede their success. Costs Payroll and Benefits: Most workers in this industry have professional designations, and they tend to be salaried. Paid vacation and sick leave are normally included in compensation packages. Health care benefits are usually provided by midsize companies. Other benefits may include pension plans, flex hours, bonuses, dental insurance, parental leave, and the ability to telecommute from home. Supplies: Depending on the products being produced, medical equipment manufacturers may require raw materials such as glass, steel, or plastics; assembly-automation equipment; packaging equipment; information technology; office furniture; and so on. Because they require com-

Scientific, Medical, and Health Equipment and Supplies Industry modity raw materials, such firms are susceptible to price changes in these commodities that result from changes in supply and demand. External Services: Midsize businesses make less use of external services than do small businesses; however, they are still likely to contract external auditing, consulting, employment, and logistics companies. They must also carry insurance against legal action. Utilities: Manufacturing firms pay for electricity, water, cable television, telephone, Internet access, and gas. Taxes: Employers are responsible for federal, state, and local income and property taxes. Large Businesses Large medical manufacturing companies are likely to have operations and customers in multiple countries, as well as a wide range of products. In addition, they are more likely to be vertically integrated along their supply chains. Such integration entails a company producing the components needed for its products, as opposed to purchasing them. Large businesses also outsource many aspects of their operations that fall outside their core competencies. These include accounting, finance, and human resources. While small and midsize businesses hire firms to deal with these aspects of their operations, large companies outsource the entire function, giving control of those aspects to other companies. Large companies also have far greater economies of scale in manufacturing and research and development. Potential Annual Earnings Scale. According to the BLS, the average annual salary of an electromechanical technician working in the medical equipment and supplies manufacturing industry in 2009 was $48,750. The average salary of a mechanical engineer was $74,810, the average salary of a materials engineer was $87,260, and the average salary of a biomedical engineer was $81,590. Medical scientists in the industry earned $91,200, on average, while laboratory technologists earned $54,440 and laboratory technicians earned $39,710. The average salary of all production positions in the industry combined was $34,380, and production supervisors earned an average of $58,110. Medical managers earned $133,980, engineering managers earned $119,320, general and operations managers earned $128,990, and chief execu-

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tives earned $203,900. Large corporations generally pay salaries equal to or greater than these averages. They often consist of a main company and several other companies that operate within the control of the main company. The annual revenues of such consolidated entities range from $30 million to $2 billion. Clientele Interaction. Large companies often interact with their clients at the executive level. Very large clients need to be treated more as partners than as customers, and they often dictate the features of the products they purchase. Thus, manufacturers and clients must attain a high level of mutual trust. In addition, large businesses often try to impose high switching costs on their clients to ensure that clients do not replace them with one of their competitors. Large businesses often spend a lot of money to keep their most important clients happy. They send private jets to collect clients for meetings, entertain clients by taking them to sporting events, and hold meetings in exotic locations. Amenities, Atmosphere, and Physical Grounds. Large businesses can afford to offer their employees in-house amenities that are not often available at smaller firms. In addition to a kitchen, a company may provide its employees with free beverages and a full-service cafeteria. They may also provide gymnasiums, swimming pools, neck and back massages, mailing services during holidays, day-care services, or lactation rooms. The atmosphere at many of the larger businesses is one of “work hard, play hard.” Expectations are very high in large companies, and competition among employees is rampant, as there are more employees than there are opportunities for advancement. Typical Number of Employees. Large firms have workforces of more than five hundred employees, sometimes far more. For example, Toshiba Medical Systems Corporation has 875 employees, while Johnson & Johnson has a total of 117,000 employees worldwide. Traditional Geographic Locations. Medical device manufacturers are dispersed throughout America. The states with the highest concentrations of medical equipment companies are California, New York, Florida, Massachusetts, Illinois, New York, Minnesota, and Georgia. Large businesses, however, tend to have offices in metropolitan areas throughout the world, as well as production facilities in many different countries. To take advantage

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Scientific, Medical, and Health Equipment and Supplies Industry

of low labor prices and tax rates, many large companies strategically place themselves in areas far away from their suppliers and customers. Medical equipment firms consider several factors when deciding where to locate a new facility. The three main factors include the following: ■

■

■

Being in close proximity to a knowledgeable, highly trained, and productive workforce. Being part of a cluster of other medical device or high-tech companies to share in the infrastructure built to support such industries. Locating facilities near education and research institutes.

Pros of Working for a Large Medical Equipment Manufacturer. Most large companies are publicly traded and are able to issue debt in the form of bonds. This enables them to invest a substantial amount of financial resources in research and development. Large companies are also able to acquire smaller companies that become threats to them or that offer new products that would be of interest to their customers. Cons of Working for a Large Medical Equipment Manufacturer. Employees of large businesses can often feel insignificant. They may find their working environment to be cutthroat, with each employee trying to stand out from the crowd. Large companies may have more legal battles to deal with, as they tend to attract the attention of government and regulatory agencies. They often have to engage in intellectual-property litigation to protect their innovations from competitors. As many of their sales are to overseas customers, they must also manage foreign currency exposure. Costs Payroll and Benefits: Large companies are often able to provide compensation packages that include base salaries and incentive pay, such as cash bonuses or stock-based compensation. They provide comprehensive benefits that vary by country, region, and role. Employers ensure that employees are able to meet their health care, income-protection, financial, retirement, and time-off needs. Paid vacation and sick leave, health care benefits, pension plans, flex hours, dental insurance, parental leave, telecommuting from home, and wellness packages are nor-

mally provided by such firms. However, many large firms are now trying to reduce their payrolls by carrying out certain business functions in developing countries, where the price of producing is far lower. Supplies: Large companies require an extensive amount of supplies. Because of their size, some companies produce the supplies they need themselves, thus reducing their overall costs. In addition, they are able to purchase the supplies they need at heavily discounted prices by buying in bulk. External Services: Large companies make use of many external services, including accounting, finance, human resources, and logistics. Many of the external vendors they engage are based in foreign countries. Utilities: Manufacturing firms must purchase electricity, water, cable television, telephone, Internet access, and gas. Taxes: Large companies, because of their international status, can often avoid paying high taxes through the use of tax-haven countries such as Ireland. Multinational firms are responsible for paying taxes required in each relevant local jurisdiction, as well as those required by the country in which they report their financial statements.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organization and structure of the medical equipment supplies industry is largely based on its size. Smaller firms devote fewer financial resources toward research and development; therefore, they have fewer employees in this division. Larger companies have highly specialized personnel involved in the development of specific kinds of new products. The organizational structure of most firms, however, is representative of the majority of business models, with departments involved in management, production, sales and marketing, accounting, and distribution. Additional departments may be needed as a company grows and diversifies its market interests. The following umbrella categories apply to the organizational structure of businesses in the scien-

Scientific, Medical, and Health Equipment and Supplies Industry tific, medical, and health equipment and supplies industry:

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■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Business Management Clinical and Medical Affairs Accounting and Finance Communications Engineering Sales Research and Development Production Quality Assurance Marketing Legal Counsel Information Technology Distribution Human Resources

Business Management The primary goal of business managers is to satisfy the stockholders of their companies. At small companies, this may simply mean satisfying themselves. Managers seek to ensure that companies realize profits, satisfy customers, and maintain effective working environments. Often, shareholders appoint boards of directors that hire senior managers. Senior managers then hire middle and lower-level managers, such as supervisors and team leaders. The salary for an administrative assistant averages $33,000 per year. Administrative managers have mean annual salaries of $40,000. Senior managers earn approximately $90,000 annually, although the range can be quite large. The average salary of a chief executive officer (CEO) varies greatly based on the size of the company, but the national mean in 2009 was $203,900. The CEO of a small business may earn a base salary of approximately $150,000, on average. The CEO of Johnson & Johnson has a base salary of $1.73 million, but with incentive pay and stock options, his annual salary amounts to well over $25 million. Business management occupations may include the following: ■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Chief Technology Officer (CTO) Vice President Supervisor

■ ■ ■

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General and Operations Manager Production Manager Engineering Manager Biomedical Manager General Counsel Administrative Assistant

Clinical and Medical Affairs Clinical and medical affairs personnel play an important role in the licensing and marketing of products worldwide. They design, conduct, and report on clinical studies for new and currently licensed products. They also provide clinical guidance for product development and represent their companies before professional regulatory agencies. A strong clinical background is usually required for these positions. A bachelor’s degree is a necessity; however, some roles require further clinical expertise, and advanced degrees in nursing or medicine may be necessary. Clinical and medical affairs occupations may include the following: ■ ■ ■ ■ ■

Clinical Analyst Clinical Technician Clinical Affairs Representative Medical Affairs Representative Chief Science and Technology Officer

Accounting and Finance The finance department plays a central role in driving the performance of a business. Accounting and finance personnel use financial tools and techniques to evaluate business opportunities and communicate their findings to decision makers in their organizations. Their skills—combined with their access to data and intelligence about their businesses’ performance, risks, and opportunities— are essential to making key business decisions. Larger companies often outsource these positions to established accounting firms. Financial professionals normally require bachelor’s degrees in finance or accounting. In addition, they need experience in financial analysis and decision making, accounting and reporting, risk management, and business management. Accountants hired in-house had average salaries of $67,460 in 2009, while financial analysts earned $74,000 on average. Firms may also utilize financial consultants, who bill at $100 to $500 per hour.

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Scientific, Medical, and Health Equipment and Supplies Industry

Accounting and finance occupations may include the following: ■ ■ ■ ■ ■

Communications occupations may include the following: ■

Financial/Business Analyst Financial Manager Accountant/Auditor Financial Consultant Chief Financial Officer (CFO)

■ ■ ■ ■ ■

Communications Communications personnel provide communications support across their companies’ operations. They are involved in media relations, internal employee communication, and community relations. Strong written and verbal skills are essential for these jobs. A high school diploma or bachelor’s degree may be necessary to secure a job in this field.

OCCUPATION

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Technical/Medical Writer Technical/Medical Editor Publications Editor Web Designer/Content Provider Electronic Communications Specialist Community Relations Staff Public/Media Relations Staff Corporate Identity Manager

Engineering Engineers play an essential role in the design, development, and manufacturing of new, innovative products. They work in three major areas within the medical supplies industry: research and development, manufacturing, and quality assur-

PROFILE

Biomedical Engineer Considerations

Qualifications

Description

Conducts research into the biological aspects of humans or other animals to develop new theories and facts or to test, prove, and modify known theories of life systems.

Career clusters

Agriculture, Food, and Natural Resources; Health Science; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; military service

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Scientific, Medical, and Health Equipment and Supplies Industry OCCUPATION

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PROFILE

Technical Sales Representative Considerations

Qualifications

Description

Sells goods and services that require technical expertise to describe and explain to potential buyers; their clients include retail, industrial, and commercial firms and institutions.

Career clusters

Agriculture, Food, and Natural Resources; Architecture and Construction; Business, Management, and Administration; Human Services; Marketing, Sales, and Service

Interests

Data; people

Working conditions

Work inside

Minimum education level

On-the-job training; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Average growth expected

Holland interest score

ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

ance. Larger businesses that are heavily involved in research tend to have very large engineering departments with heavy emphasis on research and development. Smaller businesses hire engineers in their manufacturing departments, where they focus on ensuring that manufacturing processes are efficient and effective. Engineers normally possess a bachelor or master of science degree in electrical, mechanical, computer, or biomedical engineering. Average salaries for engineers range from $75,000 to $90,000 annually. Engineering occupations may include the following: ■ ■ ■ ■ ■

Engineering Technician Mechanical Engineer Electrical Engineer Industrial Engineer Computer Engineer

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Software Engineer Biomedical Engineer Director of Engineering

Sales Sales personnel provide sales support to their firms’ buyers. They are often required to travel extensively to meet with potential buyers. When companies hire for sales positions, they normally look for individuals with sales experience in the health care sector who are well versed in medical jargon. Medical sales staff must be able to communicate proficiently with physicians and nursing staff. Their customers include not only medical professionals but also patients, payers, governments, purchasing groups, and others involved in the global delivery of health care. The base salary for salespeople is normally less than $30,000 per year. However, they have the po-

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Scientific, Medical, and Health Equipment and Supplies Industry OCCUPATION

PROFILE

Biomedical Equipment Technician Considerations

Qualifications

Description

Maintains and repairs the sophisticated electronic equipment used in the health care field.

Career clusters

Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

Junior/technical/community college; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; part-time work

Licensure and certification

Recommended

Employment outlook

Faster-than-average growth expected

Holland interest score

RIE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

tential for much higher earnings based on commissions. Thus, a career in sales requires strong and consistent motivation. Sales representatives had total mean incomes of $76,480 in 2009, while sales managers had mean salaries of $120,790. Sales occupations may include the following:

well-rounded research teams. Research and development occupations may include the following: ■ ■ ■

■ ■

Sales Manager Sales Representative

■ ■ ■

Research and Development Research and development is essential to the growth of a large medical manufacturing firm. New and innovative products are continuously being designed to meet the health care needs of a growing population. Most companies specialize in a select number of technical competencies, such as drug delivery, diagnostics, surgical supplies, or software development. Engineers compose a large proportion of research and development employees, although individuals with medical and scientific backgrounds are also required to form

■ ■

Mechanical Engineer Electrical Engineer Computer Engineer Software Engineer Biomedical Engineer Research Scientist Laboratory Technologist Laboratory Technician

Production The production department is the foundation on which a manufacturing company stands. Most production personnel work within a manufacturing plant, often as assembly line workers. This department has the role of safely, efficiently, and expeditiously producing goods. Production workers on average earn between $25,000 and $35,000 per year.

Scientific, Medical, and Health Equipment and Supplies Industry Production occupations may include the following: ■ ■ ■ ■ ■ ■

Team Assembler Machine Operator Production Supervisor Production Planner Service Operations Manager Laboratory Technician

Quality Assurance Quality assurance personnel ensure that the medical devices that reach patients and clinicians are both safe and effective. They protect the reputations of their companies, as well as guarding against civil and criminal liabilities for negligence or infringement of safety regulations. They normally have engineering, scientific, or manufacturing backgrounds. Quality assurance occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Mechanical Engineer Electrical Engineer Computer Engineer Software Engineer Biomedical Engineer Engineering Technician Scientist Laboratory Technician Compliance Officer

Marketing Marketing personnel determine the needs of the marketplace, communicate them to decision makers, and deliver products and services to meet those needs. Nearly every aspect of the medical manufacturing business involves the functions of marketing—from initial market research; to research and clinical trials; to product launches, pricing, and advertising; to postmarket surveillance. A marketing department’s goal is simply to increase the number of interactions between its company and potential customers, with the ultimate aim of generating a larger customer list. This depart-

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ment is essential for both small, up-and-coming companies that need to advertise their names and larger, well-established companies that need to market new products. The salaries of marketing managers vary based on the department in which they work. Annual mean salary for marketing managers is $121,520; for advertising and promotions managers, it is $93,700. Marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Market Development Manager Advertising and Promotions Manager Distribution Manager Marketing Representative Market Research Analyst Product Manager Media Relations Specialist

Legal Counsel The role of a legal department is to ensure that its company’s business activities comply with all ap-

An infant in an incubator. (©Alvera/Dreamstime.com)

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plicable laws and regulations and to represent its company’s legal interests in court proceedings and before other government entities, such as legislatures and regulatory agencies. Passage of the bar exam is necessary for all practicing attorneys, and all attorneys require either law degrees or formal apprenticeships as prerequisites for taking the exam. Medical attorneys must have knowledge and expertise in litigation, ethics, government affairs, patents, and regulations. The salary for a paralegal ranges between $35,000 and $50,000. Corporate attorneys are paid well over $100,000, salaries being largely dependent on the size of the firm. Lawyers directly employed by medical equipment manufacturers earned an average of $164,100 in 2009. Legal occupations may include the following: ■ ■ ■ ■ ■

General Counsel Paralegal Patent Counsel Legal Secretary Lobbyist

wide, utilizing the most efficient modes of transport they can find. Distribution occupations may include the following: ■ ■ ■ ■ ■ ■

Human Resources Human resources (HR) personnel recruit, hire, train, and fire employees. They administer payrolls and benefits, enforce company discipline, and respond to employee grievances. They may adopt roles such as employee advocates, strategic business partners, change agents, and process experts. HR occupations may include the following: ■ ■

Information Technology Information technology (IT) personnel are responsible for meeting their companies’ technology needs. They seek to improve operations while simplifying user experience. They require a thorough understanding of the various IT functions. Computer programmers in the industry earned an average of $70,500 in 2009, while computer support specialists earned $51,890 and system administrators earned $72,060. IT occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Computer Programmer Computer Support Specialist Software Engineer System Administrator Help Desk Staff Development Specialist Business Solutions Specialist Project Manager

Distribution Supply chain and distribution personnel ensure the safe and efficient delivery of products to patients and clinicians. At smaller companies, this involves ground transportation of products locally or regionally. Larger firms transport products world-

Customer Service Representative Shipping and Receiving Clerk Materials Manager Supply Chain Analyst Delivery Truck Driver Heavy Truck Driver

■ ■ ■ ■ ■

Recruiter/Hiring Manager Talent Manager Human Resources Manager Human Resources Director Human Resources Generalist Payroll Clerk Benefits Specialist

INDUSTRY

OUTLOOK

Overview The outlook for the medical supplies and equipment industry shows it to be on the rise. There are two competing factors in the outlook for this industry: an aging world population, which spends more on health and medical treatment as it ages, and the global recession of 2007-2009, which is prompting hospitals and consumers to decrease spending. Although the medical device market will continue to grow based on population demographics, its growth will be curbed by the global recession. Growth in the aftermath of the recession is expected to be slow initially, but the pace should increase within four years. The annual growth rate is expected to be around 4-6 percent. Major market reports estimate that the global market for medical devices will generate revenues of $367 billion by 2014. The global market for medical devices has been

Scientific, Medical, and Health Equipment and Supplies Industry affected by the 2007-2009 worldwide recession. According to the American Hospital Association, hospitals in the United States reduced their capital spending by 77 percent. Of health projects already in progress, 46 percent of hospitals scaled back and 14 percent of hospitals put a halt to such projects. Similar trends in health care spending are being seen worldwide. Cuts to spending by hospitals are expected in the United Kingdom and Japan. The Japanese government is looking at medical tourism as a way of generating revenue to keep up with domestic health care costs. Nonetheless, two of the world’s major emerging economies, India and China, are projecting increased spending in health care. The positive trend for the medical supplies industry is the aging world population. Baby boomers are fast approaching the ages when chronic conditions such as diabetes, arthritis, and heart disease traditionally emerge, and the number of U.S. seniors is expected to grow to 70 million by 2030, according to the U.S. Administration on Aging. As a result, the need for medical supplies and equipment will continue to grow. Specifically, cardiologic, neurologic, and orthopedic device manufacturers are expected to profit. As the population ages, there will be increasing pressure to discourage lengthy hospital stays and deliver health care in more cost-effective settings, such as patients’ homes. The home health care products sector is therefore expected to become one of the fastestgrowing segments of the medical equipment industry. Some of the types of medical products and technologies that are expected to grow most rapidly include technologies that allow for less invasive procedures and require less recovery time while improving clinical outcomes. Moreover, procedures performed in low-cost, less specialized settings that utilize fewer specialized professionals are also expected to rise. These trends apply to both the medical and the dental equipment industries. With greater awareness among the general population about dental health, the dental equipment and supplies industry is expected to experience continual expansion. The Internet is also driving new trends within the medical industry. Online medical equipment auctions are a growing trend, as they allow health care providers to buy and sell used medical devices

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conveniently. Members of the public are also purchasing medical devices over the Internet, to benefit both from increased convenience and from lower costs. Although the financial crisis has affected most major industry sectors worldwide, the medical devices industry appears to have a brighter future than do other sectors. Profits in this industry will continue to be driven by a demand for innovative products and by favorable demographic trends. Employment Advantages The medical equipment industry is continuing to grow and remains a source of high-income jobs within the United States. In 2008, the International Trade Administration reported that employees in the medical device industry earn 49 percent more than private-sector employees generally and 18 percent more than general manufacturing workers. According to the BLS, the average annual salary for all occupations within this industry is $46,270; the national average for all industries is $43,460. Nearly one-third of all U.S. bioscience jobs are found within the medical devices industry. According to the U.S. Labor Department, the number of jobs in this sector is increasing. The total number of employees in the industry is expected to rise from 308,690 to 312,000 by 2014. The states that are expected to see the greatest increase in industry jobs are California, Minnesota, Florida, Massachusetts, New York, and Pennsylvania. Employees in this sector tend to be highly educated and possess specialized training. Given the high salaries and prestigious positions available, competition for jobs is very robust in this field. Annual Earnings The medical device industry is expected to grow and will be fueled by an aging population, increased hospital visits, and product innovation. The global market reached $290 billion in 2009; by 2014, it is projected to be close to $367 billion. Growth between 2010 and 2013 is expected to be slow, but it should pick up immensely after 2013, as a result of emerging markets in India and China. The Chinese government plans to build two thousand new community hospitals and to spend $850 billion by 2011. Although the United Sates is by far the largest market for medical devices, with a market value of $130 billion (representing 44.8 per-

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cent of total market share), the markets emerging in Asia will provide significant competition in the future. Overall, the medical device industry is an increasingly competitive field with numerous multinational firms pursuing a global market. Over the next few years, greater attention will be paid to international sales and revenue, joint ventures, and mergers and acquisitions, as companies try to stay abreast of this competitive market.

Medical Technology and Practice Patterns Institute 4733 Bethesda Ave., Suite 510 Bethesda, MD 20814 Tel: (301) 652-4005 Fax: (301) 652-8335 http://www.mtppi.org

ABOUT RELATED RESOURCES FOR FURTHER RESEARCH Advanced Medical Technology Association 701 Pennsylvania Ave. NW, Suite 800 Washington, DC 20004-2654 Tel: (202) 783-8700 Fax: (202) 783-8750 http://advamed.org Association for the Advancement of Medical Instrumentation 1110 N Glebe Rd., Suite 220 Arlington, VA 22201-4795 Tel: (800) 332-2264 Fax: (703) 276-0793 http://www.aami.org Eucomed-Medical Technologies Industry in Europe Place des Maieurs 2 1150 Brussels Belgium Tel: 32-2-772-2212 Fax: 32-2-771-3909 http://eucomed.be MEDEC (Medical Devices Canada) 405 The West Mall, Suite 900 Toronto, ON M9C 5J1 Canada Tel: (416) 620-1915 http://medec.org Medical Equipment Suppliers Association 509 S Chickasaw Trail, Suite 178 Orlando, FL 32825 Tel: (800) 722-2310 http://www.mesanet.org

THE

AUTHOR

Ravinder Pandher is an alumnus of the University of British Columbia, Vancouver. She obtained a bachelor of science in biology in 2004 and a medical doctor degree in 2009. Dr. Pandher is currently a resident physician at the University of Calgary, pursing a specialization in the field of Radiation Oncology through the Tom Baker Cancer Centre. Her interest in and passion for the field of medicine and specifically for oncology are exemplified through her clinical and research pursuits.

FURTHER

READING

Babler, Scott D. Pharmaceutical and Biomedical Project Management in a Changing Global Environment. Oxford, England: WileyBlackwell, 2010. Baxter, Jenny. Market Report, 2009: Medical Equipment. Hampton, England: Key Note, 2009. Bronzino, Joseph D. Medical Devices and Systems. Boca Raton, Fla.: CRC Press, 2006. Mehta, Shreefal S. Commercializing Successful Biomedical Technologies: Basic Principles for the Development of Drugs, Diagnostics, and Devices. New York: Cambridge University Press, 2008. Parker, Philip M. The 2009-2014 World Outlook for Health Care Equipment and Supplies. San Diego, Calif.: ICON Group, 2008. _______. The 2009-2014 World Outlook for Surgical and Medical Instruments. San Diego, Calif.: ICON Group, 2008. Teixeira, Marie B., and Richard Bradley. Design Controls for the Medical Device Industry. New York: Marcel Dekker, 2003. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg.

Scientific, Medical, and Health Equipment and Supplies Industry U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. International Trade Commission. Medical Devices and Equipment: Competitive Conditions

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Affecting U.S. Trade in Japan and Other Principal Foreign Markets. Washington, D.C.: Author, 2007. Wiklund, Michael E., Jonathan Kendler, and Allison S. Yale. Usability Testing of Medical Devices. Boca Raton, Fla.: Taylor & Francis, 2011. Zenios, Stefanos, et al. Biodesign: The Process of Innovating Medical Technologies. New York: Cambridge University Press, 2009.

©Andrew Dobrzanski/Dreamstime.com

Shipbuilding, Submarines, and Naval Transport Industry

INDUSTRY

SNAPSHOT

General Industry: Transportation, Distribution, and Logistics Career Cluster: Transportation, Distribution, and Logistics Subcategory Industries: Boat Dealers; Boiler, Tank, and Shipping Container Manufacturing; Coastal and Great Lakes Freight Transportation; Coastal and Great Lakes Passenger Transportation; Deep Sea, Coastal, and Great Lakes Water Transportation; Deep Sea Freight Transportation; Deep Sea Passenger Transportation; Inland Water Freight Transportation; Inland Water Passenger Transportation; Marine Cargo Handling; Motorcycle, Boat, and Other Motor Vehicle Dealers; Navigational, Measuring, Electromedical, and Control Instruments Manufacturing; Other Support Activities for Water Transportation; Port and Harbor Operations; Ship and Boat Building; Ship Building and Repairing; Specialized Freight (except Used Goods) Trucking, Local Support Activities for Water Transportation; Water Transportation Related Industries: Defense Industry; Freight Transport Industry; Travel and Tourism Industry; Warehousing and Storage Industry Annual Domestic Revenues: $14.5 billion USD (2007 NAICS Economic Census) Annual International Revenues: $430 billion USD at contracted values (Clarkson Research, 2010) Annual Global Revenues: $442 billion USD at contracted values (Clarkson Research, 2010) NAICS Numbers: 336611-336612, 481-486, 488, 491-493

INDUSTRY

DEFINITION

cludes provisions for inland and oceanic trade, national defense, and international travel and recreation. Shipping is a capital-intensive mode of transport. It is one of the most expensive sectors of a nation’s economy. It is supported by complex,

Summary The water transportation industry supports a vast global network of goods and services that in1722

Shipbuilding, Submarines, and Naval Transport Industry tightly orchestrated sets of statutes established to protect the best interests of international governments, municipal port authorities, manufacturers, financiers, and labor organizations. Commercial shipping jurisdictions in the United States are monitored by the Maritime Administration (MARAD) agency within the Department of Transportation. The U.S. Coast Guard is a civilian organization within the Department of Homeland Security whose mission is to protect the nation’s ports and waterways. Within the U.S. Navy, the Military Sealift Command maintains a fleet of more than one hundred civilian cargo ships used to deliver military supplies to Navy ships worldwide. The Navsea Shipbuilding Support Office works directly with the Naval Sea Systems Command to monitor the Navy’s shipbuilding program as required by the Department of Defense. A shipyard is a fixed facility equipped to build and repair ships of different sizes and structures. There are more than 125 commercial and defense

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shipyards in the United States employing more than 145,000 people. Commercial vessels include barges, cargo and container ships, dredges, drilling platforms, ferryboats, fishing boats, oil and gas vessels, patrol boats, roll-on/roll-off (RORO) vessels, submersibles, towboats, tugboats, yachts and passenger liners, and recreational watercraft. Military watercraft include aircraft carriers, battleships, cruisers, destroyers, frigates, submarines, cargo ships, minesweepers, auxiliaries, and support craft. History of the Industry The design and use of watercraft is considered one of the greatest technological achievements of early human societies. Human waterborne transport and navigation are prehistoric skills whose origins are uncertain. Primitive shoreline communities became adept at binding together bundles of reeds and tree branches to create simple rafts that could be paddled by hand. The invention of the sewing needle and the art of basket weaving made

A U.S. Navy aircraft carrier docked in a New York harbor. (©Richard Goldberg/Dreamstime.com)

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it possible to sew together lengths of animal skin over a bone or wicker framework to create waterproof, lightweight floating vessels suitable for inland and coastal fishing, transport, and trade. In communities where greatwoods were plentiful, the axe, knife, and fire were used to fashion heavy wooden dugouts and outriggers, hollow log vessels from which all subsequent construction principles are derived. The progression and innovation of the shipwright’s craft is evident in cultures worldwide. Models of prehistoric vessels still remain in use. These include the madel paruwa of Sri Lanka, the Indian catamaran, the butuan boats of Southeast Asia, the sambuqs of Dhofar, the Arabian dhow, and the Indonesian jangollan. Archaeological excavations have made it possible to reconstruct or restore early models of sea transport. Advances in framing, planking, ribbing, dowelling, smithing, and joinery; the replacement of paddles with oars; and the use of the mast and sail transformed maritime commerce, greatly enriching those ancient societies that realized the lucrative potential of global maritime trade. The development of maritime transport in Egypt, Africa, China, India, Southeast Asia, the Middle East, the Mediterranean states, and Northern Europe and the Americas transformed the material and intellectual cultures of the known world. To the present day, the maritime arts have had a profound influence on the human mind and spirit, made manifest in countless cultural icons, artifacts, commodities, technologies, watercraft activities, and traditions.

The mastery of ancient mercantile trade routes and sea lanes gave rise to two classes of ships— those of trade and those of war. The enormous capital infrastructure needed to support maritime trade necessitated the concentration of national and private assets to underwrite the costs and risks of lengthy sea voyages. International financial markets and trading partnerships flourished as a consequence of the increasing sophistication and capacity of seaworthy ships capable of delivering and receiving cargo within networks of exchange that are thousands of years old. Piracy and conflict among nations have always been an inevitable part of the contest for markets. It is for this reason that navies are assigned to protect the ports and waterways vital to the commerce of sovereign nations. Small, locally built sailing vessels were essential to the commercial development of the early American colonies. By the eighteenth century, many ship designs had become standards of maritime trade; these included carracks, caravels, cats, cutters, ketches, galleons, snows, schooners, spritsails, barges, brigs, brigantines, floyts, frigates, and pinnaces. European shipwrights settled along the Atlantic seaboard and the Great Lakes and were quick to capitalize on the value of interior woodlands; by the early 1700’s, British shipwrights were calling for the suppression of shipbuilding in the colonies as a means of curtailing the booming American maritime industries. One of the first legislative acts of the newly formed Congress, under the leadership of President George Washington, was the creation of a merchant marine corps. Tonnage dues of fifty cents per ton collected from foreign vessels quickly offset the discriminatory duties and taxes suffered by The Water Transportation early American merchants. The maritime interests of the country Industry’s Contribution to the U.S. flourished up to the time of the Civil War. Economy During that period, massive capital outlays were diverted from shipping to the Value Added Amount railroads. The British Empire was at its zeGross domestic product $14.1 billion nith. It was not until the early twentieth Gross domestic product 0.1% century that American shipwrights would Persons employed 66,000 embrace the new power technologies of Total employee compensation $5.9 billion the Industrial Revolution, creating the impetus for the resurgence of American Source: U.S. Bureau of Economic Analysis. Data are for maritime influence. 2008. Marine insurance was essential to the conduct of business among colonial mari-

Shipbuilding, Submarines, and Naval Transport Industry

Inputs Consumed by the Water Transportation Industry Input

Value

Energy Materials Purchased services Total

$11.1 billion $1.6 billion $11.4 billion $24.1 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

time tradespeople. It is the subject of the most successful applications of general common law in American commercial litigation. Northern and southern colonists depended on established English entities such as Edward Lloyds Coffee House in London to leverage the risks of trans-Atlantic shipping. Ship logs, maps, and nautical instruments of increasing precision made it easier to calculate the risks of operable ventures. These risks were underwritten by private and corporate financiers. Over time, the corporate model of investment became dominant because of the higher risks investors were able to assume. As a result of the 1775 Royal Navy blockade of the Atlantic coast and subsequent colonial independence, American maritime interests scrambled to create their own network of underwriters for the nation’s fledgling European and Caribbean markets. Nevertheless, English investors continued to secure American maritime trade well into the nineteenth century. Early colonial insurers included principals from the Insurance Company of North America, the Virginia Marine Insurance Company, the Alexandria Marine Insurance Company, John Copson of Philadelphia, Joseph Marion and Benjamin Pollard of Boston, and John Benfield of Charleston. The Industry Today Two events occurred in 1890 that set the stage for the modern era of shipbuilding. Robert Gair, a Scottish printer living in Brooklyn, accidentally created a batch of corrugated papers when his ruler shifted position. That mechanical glitch was

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the foundation of a process for manufacturing folded corrugated boxes. Corrugated shipping materials have become a universal staple of the packing process, allowing merchants around the world to safely transport any number of delicate and perishable commodities. Refinement of container technologies during the twentieth century allowed exporters to crate their shipments into individual segments, reducing the time and labor of dockworkers who loaded and unloaded shipments for delivery. Post-World War II tankers in Europe were retrofitted in 1951 to carry large steel containers suitable for transport via rail and truck. In 1955, Malcolm McLean, a trucking fleet magnate, purchased a tanker and introduced container shipping in the United States. Today, more than 90 percent of the bulk cargo worldwide is delivered in container vessels. Also in 1890, Alfred Thayer Mahan published his classic work, The Influence of Sea Power Upon History, 1660-1783. It was one of several volumes of lectures he wrote in preparation for his career as a founding lecturer and president of the U.S. Naval War College, established at Newport, Rhode Island, in 1884. His published works caught the eye of Theodore Roosevelt, a War College lecturer known for his scholarly narrative The Naval War of 1812 (1882). Roosevelt later served as the assistant secretary of the Navy under President William McKinley. His clear-sighted understanding of the relevance of a strong naval fleet to national security set the groundwork for America’s rise as a sea power in the twentieth century. The settling of the American West, the annexation of Alaska and Hawaii, the completion of the transcontinental railroad, corporate investments in river transport, the opening of the Suez Canal, plans for a future canal in Panama, and a growing commitment to hemispheric autonomy initiated legislation to secure the country’s eastern, southern, and western oceanic borders. A strong navy and merchant marine were essential if the nation was to maintain its position in a rapidly changing economic world order. Labor unions played prominent industrial roles in the years after the Civil War. Massive dislocations of personal wealth and property followed in the upheaval of global industrialization and migration. Trade unions were essential in the early commercial ventures of the founding colonies. The right to organize to protect and to promote a trade or a

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Shipbuilding, Submarines, and Naval Transport Industry

A container ship heads toward Vancouver. (©Andrew Dobrzanski/Dreamstime.com)

skilled profession was a time-honored English tradition protected by common law. With the introduction of the factory system and the mass production of commodities, the role of the skilled worker often took a backseat to the mechanical uniformity of factory production. The shift to cheap, unskilled wage labor had a profound effect on shipbuilding, a highly skilled craft, and related manufacturing, warehousing, and transport industries. Early attempts to organize occurred along California’s Pacific coastline, where shipping industries worked feverishly to fulfill charters for the lucrative Alaskan trade. Between 1898 and 1900, seventy-four new ships were built along the Pacific coast. The American Federation of Labor was founded in 1886 by Samuel Gompers; six years later, the International Longshoremen’s Association (ILA) was formed to protect dockworkers on the Great Lakes. Today, the ILA represents sixty-five thousand workers from the Great Lakes, Canada, the Atlantic and Gulf coasts, Puerto Rico, and major U.S. inland waterways.

At the turn of the century, America’s city streets were crowded with myriad horse-and-carriage businesses. Teamsters and carriage drivers labored long hours for paltry wages. Without insurance, the individual driver was held accountable for the cargo he hauled. The Team Drivers International Union was formed in 1901 with a membership of seventeen hundred. In 1903, Gompers intervened in the union’s internal disputes to form the International Brotherhood of Teamsters. This organization expanded its influence to provide legal protection for a variety of transport industries, setting the stage for the organization of the trucking industries of the twentieth century. The Teamsters are proud of their legacy of racial and gender equality, established at a time when these principles were not always practiced in the workplace. Both labor organizations played important roles on dockyards across the nation. After the Civil War, the United States was far behind European nations in shipbuilding and design. Before the turn of the century, lawmakers

Shipbuilding, Submarines, and Naval Transport Industry made no provision for the construction of new warships. Great Britain capitalized on advances in naval architecture: armor plating, iron and steel hulls, screw propellers, compound and triple expansion engines, forced draught systems, life systems engineering, and efficient weapon carriers. Because of its plentiful natural resources of coal, Great Britain surged ahead in ironworks industries. The Aaron Manby and The Great Britain were among the world’s first iron ships. Wood continued to be the primary building material of all American ships, a material that beautifully supported paddleboats and steamers. Iconic vessels such as the Zebulon M. Pike, the Constitution, the Western Engineer, the Clermont, and the Mississippi transformed the inland rivers and port cities of the nation but proved inadequate for the rigors of ocean transport. As the nineteenth century came to a close, U.S. congressmen approved legislation drafted to bolster the status of the Navy and its maritime fleet. In 1880, the Report of the Commis-

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sioner of Navigation documented 902 new ships built that year; in 1901, the total number of ships built rose to 1,580. Inequality in the workplace was an inevitable reality of the seaman’s contract. The shipowner selected the captain, who wielded direct authority over all ship personnel for the duration of a voyage. Once a seaman agreed to work the voyage, he was legally compelled to complete it, with little leeway for compensation for injury during the contract. In 1920, Section 27 of the Merchant Marine Act (P.L. 66-261), also known as the Jones Act, was passed by Congress; it mandated that all U.S.-flagged ships be built, owned, operated, and documented within the United States. The Jones Act also provided legal redress for seamen injured because of negligence on the part of a shipowner, captain, or crew member. In 1927, the Longshoremen’s and Harbor Worker’s Compensation Act (LHWCA) was enacted by Congress, providing federal recourse for injuries occurring on navigable waters. This act

A tug assists a cargo ship in the port of Los Angeles. (©Dreamstime.com)

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Shipbuilding, Submarines, and Naval Transport Industry

was amended in 1972 to include shipbuilders, longshoremen, ship repairmen, and shoreside workers. On October 6, 2006, the Jones Act was restated and codified as 46 U.S.C. 30104. In 1893, Congress appropriated $200,000 for an “experimental submarine.” Designs and prototypes for submersible vessels had piqued inventive minds since antiquity. The Confederate H. L. Hunley was one of the first submarines successfully fitted with a torpedo. J. P. Holland won the 1893 congressional design contest; his USS Holland was the first submarine to be adopted by the U.S. Navy in 1900. In 1906, Germany launched the first Uboat (Unterseeboot). On the brink of war in 1914, a world fleet of four hundred submarines served sixteen navies. By 1918, German U-boats had destroyed more than four thousand vessels, nearly one-fourth of the world’s maritime fleet. In the postwar period, Japan began its own military buildup in anticipation of an attack on the

United States. The Pacific coast became an important front for U.S. naval operations. In 1913, the first U.S. submarine base opened at San Pedro, California. Critical submarine design issues included improvements in torpedo launch systems, radar intercept, and improved underwater fuel systems. In September, 1940, Germany launched its first “wolf pack”—a coordinated attack against merchant convoys in the Atlantic. Attacks against civilian vessels motivated a shift in American public opinion away from neutrality toward full engagement in the war. In December, 1941, Japan attacked the U.S. naval base at Pearl Harbor, Hawaii. This event transformed the nation’s naval operations; warships, aircraft carriers, and submarines were instrumental in the war effort. The USS Gato (SS-212) and the USS Baleo (SS-285) were classic vessels of the time. Nearly 60 percent of Japan’s merchant marine was destroyed by American submarines. Submarines continued to play an important role in

Fishing boats at a marina in Northern California. (©Daniel Raustadt/Dreamstime.com)

Shipbuilding, Submarines, and Naval Transport Industry global military defense during the Cold War era. The introduction of the U-235 isotope as a source of nuclear power transformed submarine technologies in the second half of the twentieth century. As the twentieth century came to a close, commercial and naval shipbuilders lobbied against legislation that slashed funding for the U.S. Maritime Administration (MARAD). After 1987, the nation’s fleet shrank from 600 to 327 ships, forcing shipyards across the nation to close or to consolidate their services. It was estimated that a build rate of 10 ships per year was required to secure a future minimum fleet of 300 ships. The Navy’s requirement is 313 vessels. In July, 2000, the American Shipbuilding Association reported that the Department of Defense’s thirty-year shipbuilding program did not provide sufficient funding to maintain a minimum fleet of more than 300 ships. The September 11, 2001, terrorist attacks on New York City and Washington, D.C.; military engagements in Iraq, Afghanistan, and Kosovo; and the aggressive military buildup of the People’s Republic of China highlighted the need for a coordinated Homeland Security program that included building a stronger naval fleet. In 2006, Admiral Michael C. Mullen, chief of naval operations, proposed a defense budget of $14.1 billion for new ships in 2008, with annual increases to $19.1 billion in 2012. In 2010, the fleet counted 290 vessels, the smallest fleet on record. On July 15, 2010, the fiscal year (FY) 2011 Homeland Security Appropriations Bill was passed by the Senate Appropriations Committee. This bill provided $966 million for Coast Guard surface ships. It also provided $648 million for the National Security Cutter program, completing funding for the fifth of eight cutters requested by the U.S. Coast Guard. On July 22, 2010, the Senate Appropriations Committee approved $5 million in new loan guarantees for the controversial Title XI Ship Loan Guarantee Program. The FY 2011 Transportation Appropriations Bill provided American shipowners with a federal guarantee of 87.5 percent on commercial bank loans over twenty-five years. This legislation provided essential capital to maintain the nation’s energy transport, commercial, and military capacity. These funds are administered by MARAD. On September 16, 2010, the Senate Appropriations Committee approved its version of the FY 2011 Defense Appropriations Bill,

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recommending $15.2 billion for the Navy’s Shipbuilding and Conversion account and $1.5 billion for the National Defense Sealift Fund. The shipbuilding and repair industries play important roles in the physical health of global ports and ocean communities. Sustainable development, the protection of marine biodiversity, biosecurity, and climate change are expected to challenge the maritime trades to take leading roles in promoting policies and practices that minimize their effect on marine ecosystems. For instance, Section 3516 of the 2004 National Defense Authorization Act required that MARAD and the U.S. Environmental Protection Agency (EPA) jointly develop an environmentally friendly best-practices program to prepare inoperable vessels for sinking in areas best suited for artificial reef habitat construction.

INDUSTRY MARKET SEGMENTS Small Shipyards On February 13, 2009, Congress passed the American Recovery and Reinvestment Act (ARRA). In August, 2009, the Department of Transportation designated $98 million in ARRA funding for seventy grants to be awarded through the Assistance to Small Shipyards program. On April 15, 2010, an additional $14.7 million was awarded to seventeen small shipyards by MARAD, funded through the FY 2010 Department of Transportation Appropriations Bill. Many of the shipyards receiving assistance will invest in new equipment, upgrades to dock areas, computer technology, storage systems, training systems, and environmental compliance programs. Small shipyards are defined as those that reported receipts of up to $500,000 in the 2007 Economic Census. Potential Annual Earnings Scale. The 2007 Economic Census posted that 621 small shipyards collected a total of $125.7 billion in receipts. This is an average of $203,000 in yearly earnings. A total of $30.557 million was paid in salaries to 1,037 employees for an average salary of $29,000. Clientele Interaction. Small shipyards play an important role in local communities, providing the resources needed to build and repair vessels for independent fleets and individual owners. They are producers of inland watercraft, such as boats and

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Shipbuilding, Submarines, and Naval Transport Industry

barges, intended for use on inland and coastal waters. Small shipyards may or may not have drydock capabilities for repairs. Amenities, Atmosphere, and Physical Grounds. Shipyards encompass a variety of open and closed environments. Working in a marine environment carries risks of exposure to changes in weather. Strenuous activity, heavy workloads, slippery surfaces, and cold and wet conditions are unavoidable in most working seaboard communities. Many shipyards are built within harbors or marine enclaves that provide secure docks and moorings for vessels needing repairs or for new construction. State-of-the-art railways, climate-controlled service bays, carpenters’ shops, and machine shops are important features of shipyard design. Three-dimensional computer-aided design (CAD) drawings offer the shipyard builder or renovator precise renderings for the effective staging of future projects. Some smaller shipyards still use vast lofts for the modeling and design of ships. Typical Number of Employees. Many small shipbuilding and repair businesses are sole proprietorships or family businesses. According to the 2007 Economic Census, small shipbuilding and repair enterprises employed a total of 1,037 people. That averages to about 2 employees per enterprise. Traditional Geographic Locations. Typically, smaller shipyards are located on inland waterways, suitable for the building and repair of barges, tugboats, and towboats. Pros of Working for a Small Shipyard. One of the great benefits of working in smaller shipyards is the opportunity to contribute to a unique communal culture and history. Many employees represent families whose involvement in a particular yard or community goes back several generations. Some operational yards have distinguished histories that go back to the colonies. Others have played memorable roles in world affairs and function as historical landmarks. Ships are some of the largest self-sufficient structures built. Regardless of the shipwright’s specialty, the building processes are always complex and synthetic, incorporating centuries-old practices with state-of-the-art technologies. Small businesses often contribute to the preservation and restoration of classic shipbuilding techniques and materials, creating new masterpieces of workmanship guaranteed to last several

generations. For those who love the challenges of owning a business, the trades and craft of shipbuilding can mean a lifetime of independent satisfaction and achievement. Cons of Working for a Small Shipyard. Marine environments are vulnerable to storms that can cause catastrophic damage to a facility. That is a particular danger to small shipyard owners and partners with personal investments in a shipbuilding enterprise. Market fluctuations also can play havoc with investments in a particular shipbuilding enterprise. Years of apprenticeship study and guided practice are required of anyone desiring to learn the essentials of building a ship. It is an art that is mastered over a lifetime. Costs Payroll and Benefits: A wide variety of payroll and benefits packages exist within the shipbuilding industry. Many tradespeople earn hourly wages; other professionals earn an annual salary. Health and retirement benefits also depend on the size of the operation. Small shipyard industries frequently are privately owned. Supplies: Shipyards require the materials used in shipbuilding as well as construction tools. Electronic as well as structural components all must be fabricated or purchased. Ships built for human habitation require heating, ventilation, and air-conditioning systems and indoor plumbing. Hotel and restaurant suppliers are essential providers for ships housing staffs or passengers. External Services: Basic external services include accountants, computation services, office supply vendors, food and beverage services, banking and credit card support, heating and airconditioning maintenance and repair, and general contractors as needed. Electronic fire and safety systems are essential. Utilities: Typical utilities for a small shipyard include electricity, water, sewer, telephone, cable, Internet, and fuel service. Taxes: Fees and taxes are assessed as applicable by local, state, and federal agencies. Insurance: Property insurance, particularly in hurricane-prone areas, is essential. Midsize Shipyards The 2007 Economic Census reported that 650 shipbuilding facilities collected receipts ranging

Shipbuilding, Submarines, and Naval Transport Industry from $500,000 to $5 million. These midsize shipyards have the capacity to produce seaworthy ocean vessels. They offer a full range of facilities with in-house design capabilities. There is some overlap in the size and types of ships built in midsize and large yards. Potential Annual Earnings Scale. The 2007 Economic Census reported that 650 midsize shipbuilding facilities collected $1.2 billion in revenues. Annual earnings averaged about $1.8 million per yard. A total of $307 million in payroll supported 8,750 employees for an average salary of $35,000. Clientele Interaction. Midsize shipyards typically offer a world-class program of commercial vessel construction and repair. Clientele interaction may not be as frequent or in-depth as at a smaller company, where more personalized attention is given to each job. Amenities, Atmosphere, and Physical Grounds. Shipyards encompass a variety of indoor and outdoor environments. Working in a marine environment carries risks of exposure to changes in weather. Strenuous activity, heavy workloads, slippery surfaces, and cold and wet conditions are unavoidable in most working seaboard communities. Marine environments are vulnerable to storms that can cause catastrophic damage to a facility. Many shipyards are built within harbors or marine enclaves that provide secure docks and moorings for vessels needing repairs or for new constructions. State-of-the-art railways, climate-controlled service bays, carpenters’ shops, and machine shops are important features of shipyard design. Threedimensional computer-aided design (CAD) drawings offer the shipyard builder or renovator precise renderings for the effective staging of future projects. Typical Number of Employees. In the 2007 Economic Census, midsize shipyards reportedly employed a total of 8,750 people for an average shop population of 14 people. Traditional Geographic Locations. Midsize shipyards are built on a variety of riverine and oceanic waterways, depending on the type of vessels they produce. Pros of Working for a Midsize Shipyard. Resilience is an important strength of midsize vessel construction and repair operations. Midsize shipyards that keep abreast of changes in shipping technologies and markets are able to serve a broad

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base of commercial interests. During economic downturns, flexibility is an asset, making it possible to consolidate or relocate key divisions and products. Those companies with diversified portfolios are able to integrate their shipbuilding services with contracts in complementary service sectors. Ships are among the largest self-sufficient structures built. Shipbuilding combines centuries-old practices with state-of-the-art technologies. Cons of Working for a Midsize Shipyard. One of the dangers of working in a midsize commercial or naval shipyard is the uncertainty of world markets and their effects on the shipbuilder. These vulnerabilities are greatly magnified in geographic areas heavily dependent on maritime commerce for their base economies. For instance, it is estimated that in 2005 hurricanes Katrina and Rita cost shipyards in Louisiana billions of dollars in damages, putting thousands of employees out of work. The recovery of ocean economies was complicated by the dramatic financial losses suffered in world markets beginning in late 2007. Gulf state officials are working hard to retain the viability of their shipbuilding industries. Mergers and buyouts continue to threaten the displacement of ship workers nationwide as large corporate entities struggle to leverage their risks and liabilities in a volatile commercial and defense contract environment. The architecture and systems design of commercial and naval vessels can be very complex, requiring advanced study in electronics, physics, and hydraulics. Years of apprenticeship study and guided practice are required of anyone desiring to learn the essentials of building commercial vessels. It is an art that is mastered over a lifetime. Costs Payroll and Benefits: A wide variety of payroll and benefits packages exist within the shipbuilding industry. Many of the tradespeople are paid hourly wages; professionals are paid an annual salary. Health and retirement benefits also depend on the size of the operation. Federal employees enjoy the full range of benefits supported by the U.S. government. Supplies: Shipyards require the materials used in shipbuilding as well as construction tools. Electronic as well as structural components all must be fabricated or purchased. Ships built for human habitation require heating, ventilation,

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and air-conditioning systems and indoor plumbing. Hotel and restaurant suppliers are essential providers for ships housing staffs or passengers. External Services: Basic external services include accountants, computation services, office supply vendors, food and beverage services, banking and credit card support, heating and airconditioning maintenance and repair, and general and private contractors as needed. Electronic fire and safety systems are essential. Utilities: Typical utilities for a midsize shipyard include electricity, water, sewer, telephone, cable, Internet, and fuel service. Taxes: Fees and taxes are assessed as applicable by local, state, and federal agencies. Insurance: Property insurance, particularly in hurricane-prone areas, is essential. Large Shipyards The 2007 Economic Census reported that five hundred shipbuilding facilities collected receipts from $5 million up to and above $100 million. Large shipyards produce world-class commercial and naval oceangoing vessels. They offer a full range of in-house design and construction services, including full dry dock capabilities for repairs. In 2009, the U.S. Coast Guard reported the delivery of seventeen large, deep-draft naval vessels, merchant ships, and drilling rigs. These included one U.S. Navy submarine, six commercial product carriers, one U.S. Coast Guard cutter, two assault ships, two destroyers, one fisheries research vessel, one aircraft carrier, two replacement ships, and one drill rig. These ships were built by companies such as Northrop Grumman, Aker Philadelphia, National Steel and Shipbuilding, and NG Ingalls. The Coast Guard also delivered eleven large oceangoing barges. In September, 2010, Bollinger Shipyards was awarded a $166.1 million U.S. Coast Guard contract for the construction of four Sentinel-class Fast Response Cutters (FRCs). Potential Annual Earnings Scale. The 2007 Economic Census (NAICS 3366) reported that 500 large shipyards collected some $27 billion in revenues, averaging $14.5 million in individual yard incomes. They paid a total of $6.1 billion in salaries to 138,781 employees for an average salary of $44,000. Clientele Interaction. Large shipbuilding enterprises provide the technology and expertise to produce vessels for government agency contracts

and large corporations. Some also manufacture submersibles for domestic and security purposes. Large shipbuilders tend to serve major corporations and U.S. government and military agencies. Amenities, Atmosphere, and Physical Grounds. Shipyards encompass a variety of open and closed environments. Working in a marine environment carries risks of exposure to changes in weather. Strenuous activity, heavy workloads, slippery surfaces, and cold and wet conditions are unavoidable in most working seaboard communities. Marine environments are vulnerable to storms that can cause catastrophic damage to a facility. Many shipyards are built within harbors or marine enclaves that provide secure docks and moorings for vessels needing repairs or for new constructions. State-of-the-art railways, climate-controlled service bays, carpenters’ shops, and machine shops are important features of shipyard design. Three-dimensional computer-aided design (CAD) drawings offer the shipyard builder or renovator precise renderings for the effective staging of future projects. Typical Number of Employees. Large shipyards employed a total of 138,781 people as of the 2007 Economic Census, for an average shop population of 278 people. Northrop Grumman is the nation’s largest private shipbuilder. Specializing in defense systems, it has a total employee base of 120,000 working in five production sectors: aerodynamics, electronics and information systems, shipbuilding, technical services, and life cycle. On October 7, 2010, it was announced that the U.S. Navy awarded the Northrop Grumman Corporation a $107.2 million contract for the construction of state-of-the art submarines, facilities, and interfaces. The work will be completed at the company shipyard in Newport News, Virginia, one of only two sites in the nation capable of building nuclearpowered submarines. The Norfolk Naval Shipyard in Virginia is owned by the U.S. Navy and is one of the largest in the world. Other prominent shipyards include Bollinger in Lockport, Louisiana; Ingalls Shipbuilding of Pascagoula, Mississippi (now a Northrop Grumman subsidiary), and North American Shipbuilding in Larose, Louisiana. Traditional Geographic Locations. Large shipyards typically are found on major waterways on the Pacific and Atlantic seaboards and the Gulf Coast. Pros of Working for a Large Shipyard. Many

Shipbuilding, Submarines, and Naval Transport Industry of the nation’s large shipyards are recognized for superior standards of health and safety. Competitive apprenticeships, excellent health and retirement benefits, opportunities for a lifetime of professional growth, and high levels of professionalism at all levels of organization are essentials of the trade. Many work closely with area unions. Some operational yards have distinguished histories that go back to the founding colonies. Others have played important strategic and commercial roles in world affairs and function as highly acclaimed military landmarks. Ships are some of the largest self-sufficient structures built. Regardless of the shipwright’s specialty, large ships are always complex and synthetic, incorporating centuriesold practices and know-how with state-of-the-art technologies using robotics, electronics, and computer design. Cons of Working for a Large Shipyard. One of the dangers of working in a large commercial or naval shipyard is the uncertainty of world markets and their effects on the shipbuilder. These vulnerabilities are greatly magnified in geographic areas heavily dependent on maritime commerce for their base economies. For instance, it is estimated that in 2005 hurricanes Katrina and Rita cost shipyards in Louisiana billions of dollars in damages, putting thousands of employees out of work. This is only one of many coastal areas that sustained catastrophic damages to their operations. The recovery of ocean economies was complicated by the dramatic financial losses suffered in world markets beginning in late 2007. Gulf state officials are working hard to retain the viability of their shipbuilding industries. Mergers and buyouts continue to threaten the displacement of ship workers nationwide as large corporate entities struggle to leverage their risks and liabilities in a volatile commercial and defense contract environment. The architecture and systems design of large commercial and naval vessels and submersibles can be very complex, requiring advanced study in strategic defense systems. Years of apprenticeship study and guided practice are required of anyone desiring to learn the essentials of building large ships. It is an art that is mastered over a lifetime.

industry. Many tradespeople are paid by the hour; other professionals are paid an annual salary. Health and retirement benefits also depend on the size of the operation. Larger shipbuilding enterprises offer excellent benefits for their employees. Federal employees enjoy the full range of benefits supported by the U.S. government. Supplies: Shipyards require the materials used in shipbuilding as well as construction tools. Electronic as well as structural components all must be fabricated or purchased. Ships built for human habitation require heating, ventilation, and air conditioning systems and indoor plumbing. Hotel and restaurant suppliers are essential providers for ships housing staffs or passengers. External Services: Basic external services include accountants, consultants, computation services, office supply vendors, food and beverage services, banking and credit card support, heating and air-conditioning maintenance and repair, and general and private contractors as needed. Electronic fire and security systems are essential. Transportation vehicles are either owned or leased. Utilities: Typical utilities for a large shipyard include electricity, water, sewer, telephone, cable, Internet, and fuel service. Taxes: Fees and taxes are assessed as applicable by local, state, and federal law. Insurance: Property insurance, particularly in hurricane-prone areas, is essential.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Shipyards, regardless of size, require employees in a number of positions. In small companies, one or a few employees may take on multiple tasks. The following umbrella categories apply to the organizational structure of small, medium, and large shipyards. ■

Costs Payroll and Benefits: A wide variety of payroll and benefits packages exist within the shipbuilding

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■ ■ ■

Management Ship Design Shipfitting Customer Services

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Shipbuilding, Submarines, and Naval Transport Industry

Sales and Marketing Facilities and Security Human Resources

Management The enormous expense and complexity of the shipbuilding process and the volatile effects of global markets on essential industrial production systems make the shipbuilding profession a tightly coordinated corporate venture. Public, private, and international stakeholders participate in a complex, reiterative process of contract negotiation, management, and review; cost control planning and procedures; project planning and management; procurement; quality control; research and development; human health and safety control; and environmental assessment. In a small business enterprise, these functions may be divided among a group of partners. The scope of production for larger vessels is managed by full corporate and government entities. Midshipmen may qualify for the Marine Engineering and Shipyard Management program offered by the United States Merchant Marine Academy. This training prepares qualified candidates to serve as licensed officers in the Merchant Marine; to understand the engineering principles required for the construction and maintenance of sophisti-

OCCUPATION

cated ships and their mechanical systems; to succeed in auxiliary business, manufacturing, and transportation professions; and to prepare as graduates for licensure as professional engineers or graduate studies. Occupations in the management category include the following: ■ ■ ■ ■ ■ ■ ■

■ ■ ■

■

■

Member of Board of Directors Financial Officer and Accountant Contract Supervisor Business Manager Purchasing Agent Travel and Transport Specialist Strategic Planning and Product Development Director Research and Development Specialist General Project Manager Health, Safety, and Environment Specialist Quality Assurance and Inspections Specialist Legal Arbitration and Negotiations Specialist

Ship Design The shipwright is the master builder of a ship. He or she works directly with the shipowner or cor-

SPECIALTIES

Marine Engineers and Architects Specialty

Responsibilities

Marine equipment design engineers

Design marine equipment and machinery.

Marine equipment research engineers

Conduct research on marine machinery and equipment.

Marine equipment test engineers

Test marine equipment and machinery.

Marine surveyors

Survey marine vessels and watercraft, such as ships, boats, tankers, and dredges, to check the condition of hull, machinery, equipment, and equipage and to determine the repairs required for vessels to meet insurance requirements.

Port engineers

Coordinate the repair and maintenance functions of operating fleets to minimize loss of revenue and costs of repairs.

Shipbuilding, Submarines, and Naval Transport Industry OCCUPATION

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PROFILE

Marine Engineer and Architect Considerations

Qualifications

Description

Designs, develops, and evaluates marine vessels and equipment.

Career clusters

Architecture and Construction; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; military service; part-time work

Licensure and certification

Required

Employment outlook

Slower-than-average growth expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

porate representative to determine the type of vessel needed and how the vessel is to be used, to prepare the ship’s specifications, and to clarify what special features need to be included in its design and construction. The shipowner can be an individual, a private or public entity, a government agency, or an international contractor. He or she is usually the owner of a merchant vessel designed to carry cargo or other commodities. The shipowner is legally and financially responsible for the ship’s maintenance and is officially registered in the Certificate of Registry for the vessel. Ship architects, systems (production) engineers, and draftsmen use computer-aided design software and traditional blueprint sketches to ensure that the components and logistics of a ship or submarine are seaworthy and built to code. Computeraided drafting programs and other interoffice communications software are essential tools for tracking a project and ensuring that the design meets the demands of the ship or submersible’s intended use. Foremen and computer draftsmen

earn anywhere from $30,000 to $60,000 in annual salaries. Architects’ and engineers’ salaries range from $50,000 to $95,000 per annum. Occupations in the ship design category include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Shipwright Naval Architect Marine Engineer Structural Designer Structural Engineer Electrical Designer Mechanical Designer Piping Designer Drafter Foreman Computer Technician

Shipfitting The term “shipfitter” refers to the coordinator of all the mechanical trades involved in the shipbuilding process. Ships are generally built from the

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keel up. Extensive modeling of the design and its components occurs either in traditional lofts or with the use of new computer technologies. Shipfitters are responsible for preparing the large plates, frames, and bulkheads for riveting and welding. Working with a construction supervisor, shipfitters create the major components of the ship, which are then connected and finished by riveters, welders, caulkers, and sanders. The shipfitter is skilled in the use of a variety of power tools and shop machinery necessary for the seamless and detailed construction of the ship. Final detailing is handled by the outfitter. Skilled craftspeople (welders, riggers, machinists, and carpenters) can earn $42,000 to $45,000 per annum. Occupations in this area include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Construction Supervisor Boilermaker Burner Carpenter Crane Operator Electrician Engineer Inspector Machinist Painter Pipefitter Riveter Sheet Metal Worker Welder Rigger Robotics Technician

Customer Services The shipbuilding industries serve a variety of international and domestic entities. Contractors include private individuals, corporations, cruise ships, passenger ferry providers, and fisheries. Other contractors include the U.S. Navy, the U.S. Coast Guard, the Military Sealift Command, the National Oceanic and Atmospheric Administration (NOAA) Marine Operations, and the U.S. Army. Occupations in the customer services category include the following: ■ ■ ■

Purchasing Agent Systems and Equipment Inspector Warranties Supervisor

■

■

Electronics Maintenance and Repair Worker Transportation and Delivery Worker

Sales and Marketing Sales and marketing is an important part of the corporate mission of professional shipbuilders. Whether large or small, each individual shipyard provides services that are valuable to a particular constituency or locale. The Internet, the proliferation of desktop publishing packages, and maritime trade shows and conventions make it possible to promote the key products that set a firm apart from its competitors. In some communities, bids for lucrative contracts are highly competitive and public approval ratings are essential, demanding a highprofile program of positive press releases and publications intended to keep a yard or program in the public eye. Occupations in the sales and marketing category include the following: ■ ■ ■ ■ ■ ■

Brokerage and Charter Salesperson Communications Specialist News and Media Coordinator Web Designer Community Relations Director Customized Project Design Specialist

Facilities and Security Shipyards may vary in size and location, but they are usually very large and open spaces. Some take on the dimensions of a small manufacturing city employing thousands of people. One of the first legislative acts to address vessel security was passed in 1914 after the catastrophic loss of the Titanic. The Safety of Life at Sea Convention was revised in 1929, in 1948, and in 1960, when it was adopted by the newly formed International Maritime Organization. It was amended and restated in 1974; subsequent amendments include provisions for tanker security; safety procedures for RORO vessels, bulk carriers, and high-speed craft; emergency towing and reporting procedures; fire safety; helicopter landing safety; and other general safety provisions. In response to the September 11, 2001, terrorist attacks, on July 1, 2004, the International Maritime Organization enforced the International Ship and Port Facility Security Code (ISPS). This protocol was initiated to enhance previous security policies.

Shipbuilding, Submarines, and Naval Transport Industry The U.S. Coast Guard played a lead role in drafting these protocols. The codes apply to cargo and passenger ships, drilling vessels, and port facilities. Security communications systems, personnel, and emergency planning programs are required. In the United States, maritime administrators also follow the Maritime Transportation Act of 2002. Industry leaders like Northrop Grumman specialize in cybersecurity systems to protect their facilities and their products. Occupations in this area include the following: ■ ■ ■ ■

Custodian/Janitor Maintenance and Repair Worker Security Supervisor Security Guard

Human Resources Shipyards comply with all federal laws and regulations regarding the health and security of grounds and personnel assigned to vessels and ports. Human resources employees monitor a company’s compliance with these regulations in addition to administering benefits, screening candidates for open positions, resolving employee inquiries or grievances, and other administrative duties. Staff members in this department also must be aware of applicable union rules and jurisdictions. Occupations in human resources include the following: ■ ■

■

■ ■

Benefits Specialist Industrial and Employee Relations Specialist Health, Safety, and Environment Compliance Specialist Computer Security Specialist Training Director

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise. In September, 2010, the International Union of Marine Insurance reported one of the deepest contractions in global trade output since the 1930’s. Seaborne trade dropped 4.5 percent in 2009; exports dropped seven times faster than the global gross domestic product (GDP). Never-

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theless, economic indicators show a steady comeback, with an expected 3.5 percent growth in 2010. In 2005, the Gulf Coast economies of Florida, Louisiana, Mississippi, Alabama, and Texas sustained about $85 billion in damages as a result of hurricanes Katrina and Rita. The economies of the coastal zones account for nearly 25 percent of the states’ total revenues. Ocean economies are based on key industries including marine construction, the harvesting of seafood resources, shipbuilding and boat building, oil and mineral extraction, and tourism and recreation industries. Nearly onethird of all marine construction, more than 20 percent of all shipbuilding and fisheries, and nearly half of all ocean-related oil and gas exploration and production in the United States takes place on the Gulf Coast. On June 15, 2006, Congress approved the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery. This bill approved emergency appropriations for operating expenses incurred by the U.S. Coast Guard and authorized funding for the Department of Defense to repair Gulf Coast naval shipyard infrastructures damaged during Hurricane Katrina. Emergency appropriations also were made for the Department of the Army and the Department of the Interior for dredging, flood control, inspections, and repairs of coastal facilities. In August, 2009, the state of Mississippi awarded a $20 million Housing and Urban Development community development grant for the construction of the Jackson County Maritime Trades Academy. The facility will be able to accommodate one thousand apprentices in the art of shipbuilding, securing the future of the Gulf Coast and its prominent role in shipbuilding. The crash of world financial markets in late 2007 had a sharp and lasting effect on global seaborne trade. The Clarksea Index is a weighted index of the value of earnings based on the number of vessels worldwide. Between the end of May, 2008, and April, 2009, the index fell from $50,000 per day to $7,350 per day. The value of the index as of January 8, 2010 was $16,783 per day. Employment Advantages One of the great advantages of a career in shipbuilding is the wide range of skills and technolo-

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Shipbuilding, Submarines, and Naval Transport Industry

gies available for career advancement. Excellent benefits, competitive salaries, educational stipends, and an opportunity to contribute to an industry that is vital to the commercial and security interests of nations around the world can open doors for a lifetime of achievement and job satisfaction. Annual Earnings GDP world averages are expected to rise by 3.5 percent over the next twenty years, with a doubling in world trade. Major developing countries are expected to increase their trade output by 5.9 percent. Shipweight capacity also increased in 2010. In its 2009 Review of Maritime Transport, the United Nations Conference on Trade and Development (UNCTAD) reported that sharp declines in global demand for goods has had a deleterious effect on orders for new ships. This trend is complicated by the numbers of new ships completed and delivered in compliance with orders placed before the 2008 financial slide. In 2009, the world merchant fleet capacity was estimated at 1.2 billion deadweight tons, with an annual increase of 6.7 percent. The oversupply is juxtaposed against falling freight and charter rates.

RELATED RESOURCES FOR FURTHER RESEARCH

International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers, and Helpers 753 State Ave., Suite 570 Kansas City, KS 66101 Tel: (913) 371-2640 http://www.boilermakers.org International Maritime Organization 4 Albert Embankment London SE1 7SR United Kingdom Tel: 44-020-7735-7611 Fax: 44-020-7587-3210 http://www.imo.org International Trade Administration, U.S. Department of Commerce 1401 Constitution Ave. NW Washington, DC 20230 Tel: (800) 872-8723 http://www.ita.doc.gov Maritime Administration, U.S. Department of Transportation 1200 New Jersey Ave. SE Washington, DC 20590 Tel: (800) 996-2723 http://www.marad.dot.gov

American Association of Port Authorities Headquarters 1010 Duke St. Alexandria, VA 22314 Tel: (703) 684-5700 Fax: (703) 684-6321 http://www.aapa-ports.org

Naval Vessel Register Norfolk Naval Shipyard Code 284, Building 705 Portsmouth, VA 23709-5000 Tel: (757) 396-0913 Fax: (757) 967-2953 http://www.nvr.navy.mil/class.htm

American Shipbuilding Association 600 Pennsylvania Ave. SE, Suite 305 Washington, DC 20003 Tel: (202) 544-8170 http://www.americanshipbuilding.com

Public Affairs Office, Military Sealift Command 914 Charles Morris Ct. SE Washington, DC 20398-5540 Tel: (202) 685-5055 http://www.msc.navy.mil

American Society of Naval Engineers 1452 Duke St. Alexandria, VA 22314-3458 Tel: (703) 836-6727 http://www.navalengineers.org

Shipbuilders Council of America 1455 F St. NW, Suite 225 Washington, DC 20005 Tel: (202) 347-5462

Shipbuilding, Submarines, and Naval Transport Industry Fax: (202) 347-5464 http://www.shipbuilders.org Society of Naval Architects and Marine Engineers 601 Pavonia Ave. Jersey City, NJ 07306 Tel: (800) 798-2188 Fax: (201) 798-4975 http://www.sname.org U.S. Coast Guard National Maritime Center 100 Forbes Dr. Martinsburg, WV 25404 Tel: (888) 427-5662 http://www.usgc.mil/stew

ABOUT

THE

AUTHOR

Victoria Breting-García is an independent scholar who studies and writes on topics in the fields of environmental history, science and technology, urban development, and global systems. She is a member of the North American Society for Oceanic History, the American Historical Association, the American Society for Environmental History, the American Chemical Society, and the American Medical Writers Association. A graduate of the University of Houston, she holds graduate degrees in public administration and history.

FURTHER

READING

Benamara, Hassiba. Shipping and Global Trade: A Review of Major Developments. New York: United Nations Conference on Trade and Development, 2010. Crowell, John Franklin. “Present Status and Future Prospects of American Shipbuilding.” Annals of the American Academy of Political and Social Science 19 (January, 1902): 46-60. De la Pedraja Tomán, René. A Historical Dictionary of the U.S. Merchant Marine and Shipping Industry: Since the Introduction of Steam. Westport, Conn.: Greenwood Press, 1994. Dear, I. C. B., and Peter Kemp, eds. The Oxford Companion to Ships and the Sea. 2d ed. New York: Oxford University Press, 2005.

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Finamore, Daniel. America and the Sea: Treasures from the Collections of Mystic Seaport. New Haven, Conn.: Yale University Press, 2005. Fox, Nancy Ruth, and Lawrence J. White. “U.S. Shipping Policy: Going Against the Tide.” Annals of the American Academy of Political and Social Science 553 (September, 1997): 75-86. Gardiner, Robert, and Arne Emil Christensen, eds. The Earliest Ships: The Evolution of Boats into Ships. Annapolis, Md.: Naval Institute Press, 1996. Harley, C. K. “On the Persistence of Old Techniques: The Case of North American Wooden Shipbuilding.” The Journal of Economic History 33, no. 2 (June, 1973): 372-398. Harris, Brayton. The Navy Times Book of Submarines: A Political, Social, and Military History. New York: Berkley Books, 1997. Havighurst, Walter. The Long Ships Passing: The Story of the Great Lakes. 1942. Reprint. Minneapolis: University of Minnesota Press, 2002. Heitzmann, William Ray. Opportunities in Marine Science and Maritime Careers. New York: McGraw-Hill, 2006. Keeny, Sandy. “The Foundations of Government Contracting.” Journal of Contract Management (Summer, 2007): 7-19. Kennedy, Greg. The Merchant Marine in International Affairs, 1850-1950. London: Frank Cass, 2000. Kotar, S. L., and J. E. Gessler. The Steamboat Era: A History of Fulton’s Folly on American Rivers, 18071860. Jefferson, N.C.: McFarland, 2009. Labaree, Benjamin W., et al. America and the Sea: A Maritime History. Mystic, Conn.: Mystic Seaport Museum, 1998. Landström, Björn. The Ship: An Illustrated History. Garden City, N.Y.: Doubleday, 1961. Levinson, Marc. The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger. Princeton, N.J.: Princeton University Press, 2006. National Academy of Sciences. Shipbuilding Technology and Education. Washington, D.C.: Author, 1996. Roland, Alex, W. Jeffrey Bolster, and Alexander Keyssar. The Way of the Ship: America’s Maritime History Reenvisioned, 1600-2000. Hoboken, N.J.: John Wiley, 2008.

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Stopford, Martin. Maritime Economics. 3d ed. New York: Routledge, 2009. Talley, Wayne K. “Dockworker Earnings, Containerization, and Shipping Deregulation.” Journal of Transport Economics and Policy 36, no. 3 (September, 2002): 447467. Thiesen, William H. Industrializing American Shipbuilding: New Perspectives on Maritime History and Nautical Archaeology. Gainesville: University Press of Florida, 2006.

U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. Walters, William D. “American Naval Shipbuilding. 1890-1989.” Geographical Review 90, no. 3 (July, 2000): 418-431.

Space Exploration and Space Science Industry NASA

INDUSTRY

SNAPSHOT

General Industry: Science, Technology, Engineering, and Math Career Clusters: Government and Public Administration Occupations; Information Technology; Science, Technology, Engineering, and Math; Transportation, Distribution, and Logistics Subcategory Industries: Computer Systems Design Services; Engineering Services; Geophysical Surveying and Mapping Services; Guided Missile and Space Vehicle Engine and Parts Research and Development; Guided Missile and Space Vehicle Manufacturing; Guided Missile and Space Vehicle Merchant Wholesalers; Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing; Nonscheduled Space Freight Transportation; Satellite and Satellite Antenna Manufacturing; Space Research and Technology; Testing Laboratories Related Industries: Alternative Power Industry; Defense Industry; Scientific and Technical Services; Scientific, Medical, and Health Equipment and Supplies Industry; Telecommunications Equipment Industry Annual Domestic Revenues: $139 billion USD (The Space Report, 2009) Annual International Revenues: $118 billion USD (The Space Report, 2009) Annual Global Revenues: $257 billion USD (The Space Report, 2009) NAICS Numbers: 334220, 336414-336419, 423860, 481212, 541330, 541360, 541380, 541512, 541712, 927110

INDUSTRY

DEFINITION

terrestrial resources, including extreme height—a resource used by satellites to study Earth itself and to enable mass communications, for example. The resources on Earth constitute only a tiny fraction of those available within an hour of light-travel time in the solar system. The space industry already reaches most technical and business sectors of in-

Summary The space exploration and space science industry creates piloted and unpiloted vehicles and devices that venture into space, study phenomena beyond Earth’s atmosphere, and make use of extra1741

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Space Exploration and Space Science Industry

Space flight seemed a closer reality after the launch of the first rocket from Cape Canaveral, Florida, in 1950. (NASA)

dustry, and as it transitions from an industry primarily of scientific exploration and military uses to one primarily of commercial development, it has the potential for unlimited expansion. The industry’s core sectors are launch, spacecraft, and ground operations. In the future, there may be large growth in a fourth sector, extraterrestrial operations. Communications, entertainment, and remote sensing are the industry’s largest civilian market sectors. Though only nine organizations operate independent launch facilities, dozens of nations own and operate satellites, and most use data feeds or results obtained by satellites. Weather prediction and navigation of aircraft, ships, and automobiles all depend on the space industry. History of the Industry Although humanity has dreamed of cruising the heavens for thousands of years, it was only in June,

1944, that the first human-built object crossed the Kármán line, the traditional boundary between Earth’s atmosphere and outer space (located 60 miles, or 100 kilometers, above sea level): A German V-2 missile reached 176 kilometers above Earth. In 1957, the Soviet Union’s Sputnik satellite became the first controlled spacecraft to achieve the speed and altitude required to go into a stable orbit outside Earth’s atmosphere; it transmitted radio signals back to Earth. The first man in space was Yuri Gagarin, and the first woman was Valentina Tereshkova, both of the Soviet Union. The application of space satellites for reconnaissance and then for remote sensing of terrestrial resources followed. Space law evolved, first to allow overflights of national territory and thus avoid shoot-down incidents, then to ascribe national responsibility for damage caused by objects in or falling from space, to declare the resources beyond

Space Exploration and Space Science Industry

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Earth as the property of all humankind, and to ban followed by the Galileo (1989) and Cassini-Huygens weapons and nuclear explosions in space. Nations (1997) missions, sent back spectacular images of the raced to place satellites in geostationary Earth orplanets and their moons. NASA’s NEAR-Shoemaker bit (GEO) above the equator. The Telstar satellite mission touched down on the near-Earth object relayed telephone signals around the world in (NEO) Eros, an asteroid, in 2001, and the Japanese 1963. Launchers first developed for intercontinenHayabusa mission (launched 2003) landed on a tal ballistic missiles were turned into increasingly NEO, lifted off from it, and returned to Earth, compowerful boosters, placing heavy reconnaissance pleting its mission in June of 2010. satellites and boosting equipment to build space NASA has landed and operated several solarstations, partly for military purposes. powered robotic rovers on Mars and, significantly, President Dwight D. Eisenhower established the has proved the existence of water ice there. Missions National Aeronautics and Space Administration to the Moon, including the Indian Chandrayaan (NASA) in 1958 to support the move toward humission (2008)—carrying a science payload coman spaceflight. On May 25, 1961, President John sponsored by the Indian Space Research OrganizaF. Kennedy announced the objective of landing tion (ISRO) and NASA—and the NASA LCROSS a human on the Moon before the end of the demission (2009), helped prove the existence of cade. The U.S. Mercury, Gemini, and Apollo programs and the Soviet Vostok, Voshkod, and Soyuz programs steadily increased the confidence of humans in space, building up to the landing of two men, Neil Armstrong and Buzz Aldrin, on the lunar surface in 1969. Five more successful human missions to the lunar surface followed. Before this, following several unsuccessful attempts, the Soviets’ Luna 9 lunar lander had delivered the Lunokhod rover to the Moon’s surface. Their Venera 7 spacecraft landed on Venus in 1970 and transmitted signals for fifty-eight minutes. The American Viking lander touched down on Mars in 1976. A total of nearly nine thousand space launches had occurred by 2010, the vast majority coming from the United States or the Soviet Union (later the Russian Federation). Missions to the outer planets became feasible with very low energy levels after the invention of the “slingshot,” or gravity-boost, maneuver, whereby a spacecraft would use the gravitational acceleration of a heavenly body to swing around it toward another destination. The Pioneer The Telstar satellite was designed by Bell Telephone Laboratories. (AP/ (launched in 1972) and Voyager Wide World Photos) (first launched in 1977) missions,

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significant amounts of water in the perpetually shaded regions of the Moon. Orbiting obervatories including the Hubble Space Telescope (launched 1990), Compton Gamma Ray Observatory (launched 1991), Chandra X-Ray Observatory (launched 1999), Spitzer Space Telescope (launched 2003), and Kepler Planetfinder Telescope (launched 2010) have collected data in both the visible and some nonvisible portions of the electromagnetic spectrum, opening up deep space astronomy, reinforcing the Big Bang theory of the universe’s origins, revealing cosmological phenomena such as dark matter and dark energy, and leading to the discovery of a growing number of planetary systems that could potentially support life. Between 1992 and 2010, astronomers using both earthbound and space-based telescopes discovered more than 450 planets outside the solar system, or “exo-planets.” This number continues to rise, and the belief that conditions might exist for life—even intelligent life—beyond the solar system has gained increasing acceptance by scientists. On Earth, radio telescopes constantly collect radio emissions from distant parts of the Milky Way galaxy and beyond, downloading these data to computers that search for patterns that would suggest the presence of intelligent life.

Closer to home, the GEO is now regulated by the United Nations to ensure that all nations can use this key region of Earth orbit. At GEO, satellites remain stationary above a particular point on Earth and are thus able to perform such important functions as relaying telecommunications and facilitating geopositioning. Specific parts of the GEO have been allotted to each nation. Large satellites at GEO enable tens of thousands of intercontinental telephone calls to be made simultaneously. The number of orbital slots at GEO is limited by the spread and interference of signal beams; as operating frequencies increase, beams get narrower and require less power, allowing closer spacing and hence more slots.

The Industry Today Over seventy nations participate in the space industry. As of 2008, the U.S. space industry alone employed over 262,000 people in forty-one states. There are six major governmental or multinational space agencies today: NASA; the Russian federal space agency Federal’noye Kosmicheskoye Agentstvo Rossii (FKA), often known as Roscosmos (RKA); the European Space Agency (ESA); the National Space Agency of the People’s Republic of China (CNSA); ISRO; and the Japan Aerospace Exploration Agency (JAXA). In addition, the French, Israeli, Iranian, and Ukrainian national space agencies are known to be capable of launching into space. A total of over seventy national and multinational space agencies exist. The total known annual budget of these agencies exceeds $44 billion. The Cold War U.S.-Soviet “space race” has given way to more collaborative multinational efforts, with launch facilities in the United States, Russia, Kazakhstan, Guyana (owned by the ESA), the United Kingdom, China, India, Japan, and both the Korean republics. The Soviet Mir space station (which was destroyed in 2001) and the U.S.-led International Space Station (ISS) have hosted astronauts and cosmonauts from several nations, and An artist’s rendering of a Mars Exploration Rover. (AP/Wide World the ISS has multinational scientific Photos) laboratories for microgravity research.

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Astronaut Shannon Lucid works out on a treadmill while in the Russian Mir space station. (NASA)

The U.S.-owned Global Positioning System, the European Galileo, and the Russian GLONASS operate constellations of navigational satellites in middle-altitude orbits, providing global coverage. Earth observation satellites and weather satellites provide early warning of storms and fires, enable prediction of crop yields, and help locate natural resources. Today, the space industry has three main components. The first is the launch enterprise. Space launchers are large vehicles consisting mainly of fuel tanks and rocket engines. These engines are chemical propulsion systems that use solid, liquid, or hybrid solid-liquid propellants. The payload to be delivered to space is placed near the top of a stack of two or three stages of such rockets, and each stage falls off sequentially as its propellant is exhausted. Liquid propellants include kerosene, nitric acid, liquid oxygen, and liquid hydrogen. Solid rocket boosters are cast from organic and inorganic chemicals into pressure vessels and transported as completed components to the launch

site. Launch facilities have the massive infrastructures necessary to assemble and handle such vehicles and to withstand the power of the launch process. Such facilities employ numerous technical and administrative personnel to conduct this process safely and efficiently. Payroll expenses greatly exceed fuel costs. The launch enterprise has much in common with chemical and mechanical heavy industries and power plants. Spacecraft, the second component of the space industry, are highly sophisticated packages of instrumentation. They have solar panels that can be deployed once in space to provide the bulk of their power. Orbit correction fuel and thrusters are carried on board. Because every kilogram placed in low Earth orbit requires some 10 or more kilograms of launcher mass, spacecraft components must be designed for minimal mass. At the same time, packages must be able to survive the stresses experienced during launch and the harsh radiation and temperature extremes outside Earth’s atmosphere. Typical large communications satellites

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The space shuttle Atlantis atop the shuttle carrier aircraft as it returns to the Kennedy Space Center. (NASA)

placed in GEO are built to last more than seventeen years with no prospect of repair or maintenance, so components are produced and installed with extreme care to avoid contamination. Redundant systems are installed to provide safety margins. Solar panels for these spacecraft use the most efficient conversion technologies, albeit at high cost. Fuel cells are used to release energy. The spacecraft industry strives to maximize the number of transmitter-responder units (transponders) that can be placed on a single satellite. The Space Systems-Loral Echostar 14 satellite— launched in March, 2010, to provide direct-to-home television services for the DISH network—has a mass of 6,384 kilograms (14,074 pounds), carries 103 Ku-band (11-18 GigaHertz) transponders, and is expected to reach over 13 million subscribers. This industry component has much in common with both the semiconductor electronic systems industry and the renewable power industry. Other spacecraft are designed for long-duration missions to distant destinations. These are powered by electric-propulsion engines, typically ion rockets using xenon or other rare-gas thrusters.

Nuclear power is used in the form of thermoelectric conversion of the heat from radioisotope decay. Future craft may use enriched-fuel nuclear reactors for direct heating of propellants. The third component of the space industry comprises the ground-based businesses that service mission operations, receiving data in the form of remote-sensing images or relayed radio, television, and telephone signals for sale in terrestrial markets. In addition to the communications industry, the entertainment industry is a major user of satellite services. With millions of customers as end users, this industry component includes telecommunication and entertainment distribution companies as well. Efforts to find other commercial applications of spaceflight have led to the establishment of over twenty different NASA space commercialization centers and several spaceport organizations. In addition to NASA’s centers, the U.S. Department of Commerce has an Office of Space Commercialization, based in facilities of the National Oceanic and Atmospheric Administration (NOAA), a major supplier of weather and resource data. The

Space Exploration and Space Science Industry ISS has been vigorously promoted by NASA as a multinational laboratory that could offer commercial product-development services in microgravity. These efforts have been limited by the delay in completing the ISS, which has also delayed ISS’s relocation to an orbit high enough to achieve true microgravity. At a higher orbit, the station would no longer experience “g-jitter,” a phenomenon caused by its proximity to the atmosphere and Earth’s gravity gradients. The Moon-Mars Constellation program envisaged shutdown of the ISS to redirect funding, but in 2010, the Constellation program was canceled and ISS funding was revived. NASA announced contracts in 2010 to develop commercial transportation of supplies to the ISS. Well-known U.S. corporate space entities around the world include Boeing, Lockheed-Martin, United Technologies, Northrop-Grumman, Orbital Sciences, Space Exploration Technologies Corporation (Space X), and Alliant Techsystems (ATK). International entities include the S. P. Korolev Rocket and Space Corporation (Energia) in Russia, European Aeronautic Defence and Space Company (EADS), China Aerospace Science and Industry Corporation (CASIC), Antrix in India, Japan Aerospace Corporation, and Mitsubishi International in Japan. Notable joint ventures include the United Space Alliance in the United States, the Arab Satellite Communications Organization (Arabsat), and the U.S.-Russia-NorwayUkraine Sea Launch venture. Entities such as COMSAT and Globalstar are well known in the satellite communications industry.

INDUSTRY MARKET SEGMENTS The space industry has three market segments. Beginning in 1998, commercial space expenditures have surpassed government space expenditures annually. The best-known market segment is still the government agencies that fund research and award operations contracts to advance their nations’ space programs. The second is the remote-sensing market, which depends on the space industry for data to assist weather prediction, crop monitoring and prediction, disaster response, monitoring of demographic changes, and identifying

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natural resources. The third and largest segment is the telecommunications and entertainment market, reaching billions of end users with products as diverse as television shows, telephone connections, and navigation data. Three more currently insignificant segments are held up as potentially very large future markets. The first is electrical power beamed from and through space to customers located on Earth and in space. The second is extraterrestrial natural resources and space-built products. (Space could become a limitless supplier of resources whose terrestrial supply is limited, and conditions in space may facilitate the construction of certain products at a level of quality beyond what could be achieved on Earth.) The third potential market is space tourism, which has so far sent only a few wealthy pioneers into orbit and sent several more on suborbital flights. If these three market segments are developed, each has the potential to become several times larger than today’s space market. Small Businesses Small businesses in the space industry develop a wide array of products and services. Components for satellites and launch vehicles are specialized devices with small production runs and high costs due to stringent quality requirements. Most products require sophisticated technical analyses and computations to design and to ensure compatibility with the major systems on which they fit. Several small companies have been started under the U.S. Small Business Innovations Research (SBIR) program, which translates the requirements of agencies such as NASA or the Deparment of Defense (DoD) into projects suitable for small teams. When a project results in components or software products that are adopted by federal agencies or are bought by larger companies, the scale of operations grows rapidly. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), in 2009 the average annual salary for an aerospace engineer was $87,730 and the average annual salary for an aerospace engineering and operations technician was $55,660. Software engineers in the aerospace field earned an average of around $97,000. Engineering managers earned $122,590 on average, while chief executives of aerospace companies earned $188,370. Many private companies in the

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industry pay bonuses and stock options in good years. Clientele Interaction. Employees of small spacerelated businesses must expect to play several roles. Typically, a component will be designed to work with a much larger system that incorporates products developed by many suppliers. Thus, every project involves much planning, coordination, and integration. Companies hope to be working on several products and projects simultaneously, and business development functions are shared by all workers. Amenities, Atmosphere, and Physical Grounds. Many space-related companies are located where opportunities for outdoor recreation are plentiful. Locations such as Washington State, California, Connecticut, the mountains of Utah, and the Florida coast are examples. Small companies that can offer their own recreational facilities are relatively rare. The physical amenities of the workplace are usually quite good, partly because small businesses are often in a nascent stage and occupy new buildings and partly because workplace organization and cleanliness are subject to regular inspection since they have significant implications for product safety and traceability of standards. The workforce is usually well educated and highly qualified. Employees generally work hard and are at comparable economic levels, making for good camaraderie. Many small companies strive for a collegiate environment. Workers tend to dress informally, except when customer interaction calls for semicasual business attire. Actual internal dynamics vary widely from one workplace to another and depend on the policies of owners and immediate team leaders, whose own experience may come from military, government, large-company, venture-capital, or university backgrounds. Unlike in the computer or pharmaceutical industries, being bought out by a large company is not a common dream in the space industry. Typical Number of Employees. A small spacerelated business may have anywhere from one employee to five hundred employees. Traditional Geographic Locations. There is a heavy concentration of space-related workplaces near NASA centers, near the seat of federal agency headquarters in Washington, D.C., and all over the West Coast. The states of California, Maryland, Vir-

ginia, Texas, and Florida have high concentrations of such companies. Connecticut, Washington, New York, and Ohio also have several because of the proximity of aerospace manufacturers and research establishments, which implies a large supply of technically qualified workers and expertise. Pros of Working for a Small Space-Related Business. Space-related businesses by definition work on the cutting edge of technological innovation. The environment in which their projects are assigned and executed is highly competitive and diverse, and employees who value such environments are likely to gain a sense of prestige simply by succeeding in the industry. They may find a level of fulfillment from seeing parts that they designed carried into space that is difficult to attain in other jobs. They will also be well compensated for their work. Competitors must be highly adaptive and technically nimble to see potential for their skills and ideas in a number of opportunities that are of interest to the federal agencies. Typically, successful companies cite a success rate of one in eight proposals, which implies an intense proposal development effort at all times, in addition to the work required to develop and validate new ideas. Many smaller companies in the space industry have grown steadily and manage to retain workers for decades, operating with good profitability. Typically, space-related small companies grow through steady project successes on a number of different projects. Cons of Working for a Small Space-Related Business. Since most space launches occur from government-affiliated facilities, even if the customer is not a government, employees and owners of space-related businesses are bound by detailed regulations and government oversight of all operations. Many jobs in the industry require U.S. citizenship because they involve working on government contracts that are themselves restricted to U.S. citizens. The competitive atmosphere of the industry is not for everyone, and those who blanch at the thought of a one-in-eight success rate for proposals are probably not well suited to work in this in dustry. Many space-related jobs involve some travel to collaborating companies; federal agencies; and product integration, launch, and test sites. Increas-

Space Exploration and Space Science Industry ingly, the space industry involves international collaboration at the marketing, design integration, testing, launch, mission control, and data collection stages. Outdoor testing environments are exciting, especially to younger employees, but they can be quite stressful and involve long hours. Costs Payroll and Benefits: Small company compensation includes attractive pay packages and stock but typically lacks complex benefit plans. Biweekly pay periods and participation in a 401(k) plan are general expectations. Consultants may be employed to meet the diverse demands of specific projects; if so, they may be paid hourly, weekly, or on a per-project basis. Supplies: Practically all space-related companies require advanced computer workstations and general office supplies. Those engaged in software development require relevant coding and engineering software as well, but little else. Those building hardware prototypes require specialized design software and equipment used to create and test such parts, which may be electrical, mechanical, materials-based, chemical, and so forth. Each type of development requires its own specialized raw materials and design and assembly equipment. External Services: Since many spacecraft components are built of special materials to meet stringent demands of weight reduction and strength and radiation resistance, small companies must typically use external specialist services for several aspects of their production processes. Testing also requires instrumentation with large capital costs, best addressed by using external laboratories and consultants. In addition, small companies may contract traditional business support services, such as accounting and tax preparation, legal counsel, cleaning, maintenance, or security. They may also hire government-relations consultants to help secure contracts. If they produce hazardous materials as by-products of their work, businesses may contract disposal companies to remove them. Utilities: Space-related companies must pay for electricity, heating, water, sewage, telephone, and Internet access. Taxes: Space-related companies must pay corporate and property taxes, as well as payroll taxes.

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Many items produced by such companies are covered under the International Traffic in Arms Regulations (ITAR) and require specific permission to export to other nations. Midsize Businesses Some jobs in the space enterprise are in university academic departments (schools) or in full-time research organizations. These are midsize employers, and, because of competitive aspects, there are many similarities between for-profit and nonprofit organizations, whether in academia or in other enterprises. There is considerable mobility between academic and commercial organizations because of similarities in types of work, working environments, and expectations to develop proposals and to “bring in” projects and customers. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), in 2009 the average annual salary for an aerospace engineer was $87,730 and the average annual salary for an aerospace engineering and operations technician was $55,660. Software engineers in the aerospace field earned an average of around $97,000. Engineering managers earned $122,590 on average, while chief executives of aerospace companies earned $188,370. Many private companies in the industry pay bonuses and stock options in good years, while universities and nonprofits typically pay neither bonuses nor stock options. Clientele Interaction. Midsize space-related companies tend to classify levels of clientele interaction more rigidly than do small companies, but less than do the mega-corporations. Workers are expected to interact with people who have similar work functions at other organizations—and probably with people a couple of organizational levels to either side. Clientele generally have highly technical education and training backgrounds. In the case of university and full-time research organizations, clientele interaction—writing proposals and making presentations—takes up a major portion of workers’ time. The major products of university research consist of the education, skills, and experience imparted to talented individuals, as well as published ideas and methods. Several small businesses started on SBIR funding have spun off, usually to exploit patentable inventions. One special sector of the space industry comprises midsize companies that are essentially clear-

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inghouses for payroll and benefits for a large number of employees who work as contractors at government sites. Their workplaces are the same as those of federal agency employees. Many such employees hold doctoral degrees and must write proposals to fund their own positions and necessary support staff. Amenities, Atmosphere, and Physical Grounds. Midsize companies have usually been located in established business parks or campuses for some years, so they provide good amenities. Many provide access to outdoor and indoor recreation facilities, as well as parklike campuses. However, this access may come at a substantial cost in commute times. Working from home may be possible, depending on the company and the type of project. Doing so comes with the responsibility for solving problems or developing proposals, so that many employees work much more than forty-hour weeks. Security regulations stemming from government requirements are more common in the space industry than are purely corporate proprietary concerns, and both types of requirments may be equally strict. Companies conduct thorough initial and periodic investigations of workers’ credit solvency, personal habits, and other aspects of their lives, requiring employees to cede some level of privacy and possibly freedom. University environments pose fewer access restrictions, since they must be open to students and researchers who come from all over the world. They typically work on more open-literature, publishable work. However, workplace safety and access controls are becoming more uniform, even in nominally academic environments. Typical Number of Employees. Midsize spacerelated businesses generally employ between five hundred and a few thousand people. Traditional Geographic Locations. There is a heavy concentration of space-related workplaces near NASA centers, near the seat of federal agency headquarters in Washington, D.C., and all over the West Coast. The states of California, Maryland, Virginia, Texas, and Florida have high concentrations of such companies. Connecticut, Washington, New York, and Ohio also have several because of the proximity of aerospace manufacturers and research establishments, which implies a large supply of technically qualified workers and expertise. Midsize companies that produce physical prod-

ucts, and even some that produce only software, can take up a fair amount of space, so their campuses are likely to be located in suburban or rural areas near cities or other industrial centers, rather than in such cities proper. Pros of Working for a Midsize Space-Related Business. It is a reality of the scientific and engineering workplace that there is a very large difference, equivalent to a factor of ten or more, between the actual worth of a top-notch employee and that of one whose resume looks nearly the same, when it comes to making progress. This is especially true in research and development. Large corporations and government organizations cannot recognize this difference easily, but midsize organizations can. Thus, such companies are less likely to employ “dead weight,” improving both their own bottom lines and the work life of their employees. Midsize space companies have usually been in business for over a decade and have established customer bases. Such a company’s organizational structure is likely to be flatter than that of a large corporation, with project directors typically reporting straight to the top executive layer. One wellestablished midsize business shows over 50 percent of its employees as engineers and scientists; over 25 percent as manufacturing, testing, and quality assurance specialists; over 15 percent as business support specialists; 5 percent as program managers; and only 2 percent as general managers or marketing managers. Of the scientists and engineers, over half are mechanical or electrical engineers, over 10 percent are software engineers, and some 20 percent are from other specialties such as aerospace aerodynamics, aerostructures and aero propulsion, guidance, navigation and controls, optics, antenna engineering, and mission operations. Another 15 percent are systems engineers, and some 5 percent are designers. New graduates employed by midsize companies may be given the opportunity and responsibility to take on assignments that would be reserved for much more experienced, senior employees in large companies. Cons of Working for a Midsize Space-Related Business. A midsize business is still dependent on a moderate number of projects, each of which comes with high risks. Because customers are likely to include government organizations and projects are likely to be at a level closer to flight systems, reg-

Space Exploration and Space Science Industry ulations on workplace conduct are likely to be as tight as in a large company. The level of responsibility given to new employees may be exciting and fulfilling, but it may also make employees feel as if they are being thrown in the water, to sink or swim. This situation arises because midsize companies often cannot draw on deep resources of experienced specialists for every new problem that comes along. They thus have no choice but to expect their in-house staffs to take on difficult problems on short notice. Successful companies and employees use professional development opportunities, including lunchtime seminars, formal classroom training, online learning, and on-the-job learning—such as special task force assignments and some coaching where possible— to prepare employees for such contingencies. Costs Payroll and Benefits: Midsize companies usually pay employees salaries, although some may earn hourly wages. Universities and nonprofits regularly fund employees with grants—often grants written by the employees themselves. These grants may involve fixed-term contracts. Benefits are common among midsize companies in the space industry. Supplies: Practically all space-related companies require advanced computer workstations and general office supplies. Those engaged in software development require relevant coding and engineering software as well, but little else. Those building hardware prototypes require specialized design software and equipment used to create and test such parts, which may be electrical, mechanical, materials-based, chemical, and so forth. Each type of development requires its own specialized raw materials and design and assembly equipment. External Services: Since many spacecraft components are built of special materials to meet stringent demands of weight reduction and strength and radiation resistance, small companies must typically use external specialist services for several aspects of their production processes. Testing also requires instrumentation with large capital costs, best addressed by using external laboratories and consultants. In addition, small companies may contract traditional business support services, such as accounting

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and tax preparation, legal counsel, cleaning, maintenance, or security. They may also hire government-relations consultants to help secure contracts. If they produce hazardous materials as by-products of their work, businesses may contract disposal companies to remove them. Utilities: Space-related companies must pay for electricity, heating, water, sewage, telephone, and Internet access. Taxes: Space-related for-profit companies must pay corporate and property taxes, as well as payroll taxes. Many items produced by such companies are covered under the International Traffic in Arms Regulations (ITAR) and require specific permission to export to other nations. Nonprofit ventures may be exempt from property and income taxes, but they must still pay payroll taxes. Large Businesses Large space-related businesses include private (and publicly traded) corporations, as well as government space agencies. Since both types of entity work on the same projects, there is much similarity between their work environments. Unionized shop-floor labor is a special feature. Potential Annual Earnings Scale. The difference in pay scales between private large corporations and government agencies is not seen as real any more, since competition based on cost per labor hour in project proposals drives these differences down, even as government pay scales have improved as a result of the high cost of living in the areas where many government jobs are located. Executive compensation at large corporations is reported to be around $2 million in salary and $4 million per year at the chairman level. The administrator of NASA earned $172,200 as of 2008. Clientele Interaction. Large companies have formal protocols governing their employees’ interactions with clients. Such clients often prominently include officials of the government, including military personnel. Companies must bid on contracts and then must deliver the products they have contracted to deliver in the time and for the amount of money specified. Amenities, Atmosphere, and Physical Grounds. In the contemporary space business, even the largest companies typically try to organize their workforce into small teams operating with

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substantial autonomy, in an atmosphere approaching that of a small business. The physical grounds typically resemble campuses and are located in office parks, except for major final assembly and testing facilities. All have tight security requirements. Typical Number of Employees. Large businesses in the space industry have more than one thousand employees. The largest ones have tens to hundreds of thousands of employees. These employees may be distributed among many different locations. Traditional Geographic Locations. As with midsize companies, large corporations locate their operations centers near NASA centers and military facilities, and their headquarters are typically located in major metropolitan areas close to government agencies and financial institutions. Pros of Working for a Large Space-Related Business or Agency. Unlike many other industries, large space corporations often organize themselves into smaller work groups, alleviating some of the cons typical of corporate employment. Large corporations are often much more financially stable and have signifant resources, enabling them to provide employees with more regular pay raises. Large companies also have well-organized programs through which employees can continue their education through distance learning or taking courses at local universities, and they reward employees for earning new degrees. They often have organized facilities for child day care and some medical care. The “graying” of the U.S. workforce has had significant effects in large government organizations, where many long-term staff have chosen to take early retirement, while continuing to be available to work as part-time consultants. Thus, thoughtful young employees can draw on experienced advice while enjoying the freedom to implement new ideas. Cons of Working for a Large Space-Related Business or Agency. There is significant movement of people between projects and groups within large space-related corporations. This mobility provides some freedom, but it also decreases the sense of stability usually imparted by working for a large company, especially given that entire groups may be expected to relocate geographically. Large corporations often demonstrate a degree of inertia in recognizing employee effort and suc-

cess, especially at the junior and middle levels. The ability to work in areas of one’s choice is often more limited at such corporations because such moves must be approved through several layers of management. Moreover, corporate human resources divisions may prefer to hire new workers whose resumes suit them for the narrow job descriptions of new projects, rather than allowing employees without direct experience fitting such narrow descriptions the freedom to branch out from their most obvious areas of expertise. Since the 1990’s, the expectation of well-funded corporate retirement programs has changed drastically. The seismic changes in the industry through corporate mergers, break-offs, and “rightsizing” took away much of the pride of large-corporation identity. The sharp economic downturn of 2002 destroyed the secure comfort of company stock options and employee stock purchase programs. The crash in 2007-2008 has further damaged the prior model. Corporate cost-cutting ideas have severely reduced retirement benefits. Costs Payroll and Benefits: In the space industry, large companies do not appear to offer higher salaries for technical positions than smaller and midsize companies. In a reversal from the pre1990 years, many employees switch from corporate to civil service (government) positions rather than the other way around, except at the executive level. Employee stock-purchase and retirement programs are no longer considered to be as secure and lucrative as they were in the days of steady government contracts. Against these considerations, the performance bonuses built into projects do offer good rewards when projects go well. Supplies: Large space companies have dedicated purchasing departments with their own highly evolved processes and regulations. Space system components often require supplies of rare and precious commodities to manufacture alloys, photovoltaic cells, nuclear reactor components, and fuels. Thus, the forecasting and acquisition of supplies is a specialized occupation requiring very experienced and capable specialists. External Services: Large companies often operate as prime contractors to the government and provide subcontracts for smaller companies and

Space Exploration and Space Science Industry university researchers, as well as outsourcing some limited aspects of their routine operations. Proprietary concerns and the regulatory and financial implications of any information on the scale of their programs limit the outsourcing of key functions. Utilities: Apart from the requirements of any large organizations with thousands of humans working on their premises, space companies often have specialized needs for large supplies of power and water to operate test facilities. Clean rooms, assembly lines, engine test stands, nuclear reactors, and fuel casting facilities all have special needs, and many have dedicated auxiliary power plants on their premises or located in close proximity. Taxes: Large corporations and their employees pay large amounts of money as taxes, and are hence highly valued employers in the states where they are located. As a result, these corporations are often able to negotiate advantageous deals with local governments with regard to taxes, land occupancy, transportation, and utility infrastructure. Within the terms negotiated, however, they must still pay corporate and property taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES While the core of the space industry is highly technical, there are layers of business development, management, and support functions around and among the technical teams. Thus, spacerelated companies employ a wide range of job roles. At the largest corporations, employees average over fifteen years of industry experience. The following umbrella categories apply to the organizational structure of businesses in the space exploration and space science industry: ■ ■ ■

■ ■ ■

Executive Management Program Management Technology, Research, Design, and Development Engineering Manufacturing Support Professionals

■ ■

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Executive Management The typical large space corporation is a subset of a larger aerospace enterprise. The space component is led by an executive vice president of the corporation, typically described as the executive vice president of space systems. Below this officer are a range of corporate managers who oversee all aspects of the space-related ventures of the corporation, ensuring that this division’s activities match and contribute to the goals of the larger enterprise. Smaller companies are more likely to be self-contained ventures run by a president or chief executive officer. The boardrooms of space businesses were populated some decades ago with people who rose through technology ranks or came with military and aviation experience. More recently, professional management talent has come from diverse corporations. A new generation of commercial space start-ups has also risen, led by aviation pioneers and successful entrepreneurs from venturecapital technology companies. These bring different approaches to technical and organizational barriers, often diverging from the traditional practices evolved from the military and governmental pedigree of the industry. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Chief Technology Officer (CTO) Vice President of Space Systems Vice President of Human Resources General Counsel Comptroller Treasurer Vice President of Mergers and Acquisitions

Program Management Managers and directors of programs and departments rank below the chief technology officer level. They are responsible for the overall progress of the development or manufacturing programs assigned to them. Directors are very experienced

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engineers and serve more technical functions than do managers. Program managers typically have bachelor’s or master’s degrees in science or engineering, and some have business management degrees. Directors may come from diverse backgrounds. The existence of a separate management track with higher financial rewards appears to be well-established even in some prominent midsize companies, though the rare experience of senior technical personnel is highly valued by knowledgeable directors and executives. Program management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Master Planner Senior Financial Analyst Proposal Analyst Senior Business Operations Manager Contracts Administrator Contracts Negotiator Business Operations Specialist Multifunction Financial Analyst Engineering Planner

Technology, Research, Design, and Development The space industry is intensely immersed in science and technology. The term “rocket scientist” oversimplifies the vast array of technical disciplines and research areas but captures the essence of the mental makeup of people in these positions. In nonprofit research organizations, the research ranks may go from research engineer 1 to research engineer 2, senior research engineer, and principal research engineer, the latter being generally equivalent to the rank of a full professor in an academic institution. Many people in research departments hold doctoral degrees (Ph.D.s or D.Sc.s) in science and engineering disciplines, only a few of which deal with rockets or aircraft. Researchers in the space industry may come from the fields of electrical engineering, materials engineering, medicine, atmospheric sciences, chemistry, physics, astronomy, computer science, and economics, to name a few, in addition to aerospace and mechanical engineering. Research and development jobs are exciting and provide nonstop challenges. People who go into such work enjoy solving technical problems. They enjoy a much greater degree of freedom to

search for solutions than do systems engineers and others in more structured careers. Researchers are also expected to generate proposals for funding to pursue their ideas, a skill that is associated with businesspeople. Those interested in becoming researchers in the space enterprise should plan to acquire research education in a good university graduate research program before attempting to pursue such a career path. The design function pervades the space industry at all levels. Each system is invariably designed to achieve better performance than was possible in prior systems, so every design requires innovation, risk taking, and problem solving. Design proceeds from analyzing market trends and from refining the definition of customer requirements. Trade studies are performed to arrive at a set of concepts for a system to be designed, followed by analyses to choose the best concept for that system. Modern design efforts are extremely complex and must go through several levels of risk assessment before any concept is chosen. Graphics and virtual-reality development skills are valuable in this line of work. Mathematical optimization tools are used to arrive at optimal design solutions satisfying the constraints and weighting factors of various parameters. Detailed design follows, where different discipline groups take on analyses, computations, testing, and simulation activities covering the full life cycle of the system. As various test results come in, the design may have to go through several iterations, involving intense discussions and team activities to solve problems. Once the desired performance is shown to be achieved in simulations and testing, a detailed manufacturing process is organized, established, staffed, and implemented. The focus then shifts to efficient routine production, and the research and development teams move on to new opportunities. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Principal Research Engineer Senior Research Engineer Research Engineer Research Engineering Technician Principal Research Scientist Senior Research Scientist Research Scientist Research Technician

Space Exploration and Space Science Industry ■

■ ■ ■

Molecular Discovery/Development Analyst Scientific Systems Analyst Senior Staff Chemist Bioinformatics Software Developer

Engineering Beyond research and development departments, engineering becomes somewhat more routine and involves a great deal of time spent in documentation and quality control using established operat-

OCCUPATION

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ing procedures. For instance, the operations at Kennedy Space Center related to the space shuttle, carried out by industry teams with NASA oversight, depend on very detailed documentation to ensure the safety of the system. Senior engineer and senior systems analyst positions are below the director level. Below this level are systems engineers; test engineers; aerospace, mechanical, and electrical engineers; network engineers; logistics engineers; and other designations that vary from one organization to another. Integrating the massive number

SPECIALTIES

Aerospace Engineers Specialty

Responsibilities

Aerodynamists

Analyze the suitability and application of designs for aircraft and missiles. They also plan and evaluate the results of laboratory and flight-test programs.

Aeronautical design engineers

Develop basic design concepts used in the design, development, and production of aeronautical and aerospace products and systems.

Aeronautical drafters

Draft engineering drawings and other equipment and scale models of prototype aircraft that are planned by engineers.

Aeronautical engineers

Design, develop, and test aircraft, space vehicles, and missiles. They test models to study how they operate under a variety of conditions in order to make the equipment safe.

Aeronautical project engineers

Direct and coordinate activities of personnel who design systems and equipment for aeronautical and aerospace products.

Aeronautical research engineers

Conduct research in the field of aeronautics.

Aeronautical test engineers

Plan and supervise the performance testing of aerospace and aircraft products.

Field service engineers

Study performance reports on aircraft and recommend ways of eliminating the causes of flight and service problems in airplanes.

Stress analysts

Study the ability of airplanes, missiles, and components to withstand stress during flight.

Value engineers

Plan and coordinate engineering activities to develop and apply standardized production requirements for parts and equipment used in aircraft and aerospace vehicles.

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of components of a space system and optimizing design and manufacturing to minimize life-cycle costs are the provinces of systems engineers, a title associated with a large number of positions. In addition to the reporting line of the engineering division, modern space companies also appoint technical fellows, who are engineers or scientists with doctoral degrees and distinguished records of achievement in the companies and the profession. Technical fellows are given large latitude in pursuing work of their choice in support of company objectives. They are expected to set new directions and develop methods to solve the difficult longterm technical challenges facing their companies. Engineering occupations may include the following:

■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

■ ■ ■ ■ ■

■

Staff Aerospace Engineer Staff Electrical Engineer Staff Electronics Engineer Staff Mechanical Engineer Software Architect

Project Engineer Staff Software Engineer Senior Staff Software Engineer Senior Programmer Analyst Staff Communications Systems Engineer Lead Engineering Staff Member Systems Engineer Chemical Engineer Construction Engineer Environmental Engineer Human Factors Engineer Materials Engineer Nuclear Engineer Reliability Engineer Safety Engineer System Safety Engineer Staff User Applications Analyst Integration Engineer

Manufacturing A company’s manufacturing operation is populated by production engineers, machinists, electri-

OCCUPATION

PROFILE

Aerospace Engineer Considerations

Qualifications

Description

Designs and develops spacecraft, satellites, and related equipment.

Career clusters

Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service; part-time work

Licensure and certification

Required

Employment outlook

Average growth expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Space Exploration and Space Science Industry cal technicians, materials engineers, and assemblyline technicians. Generally, manufacturing lot sizes are not large enough in the space industry to have fast-moving assembly lines. Thus, manufacturing assembly is performed by teams of technicians rather than by semiskilled assembly-line workers. In this process, many new problems are encountered that must be solved in collaboration between the technicians and the engineers present. Space industry components are expected to conform to an 80 percent learning curve, meaning that each time a product manufacture is implemented, the cost (mostly due to time spent) comes down to 80 percent of the previous cost. Manufacturing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Production Technician Quality Assurance Engineer/Analyst Manufacturing Engineer Engineering Planner Logistics Engineer/Analyst Industrial Engineer Multifunction Purchasing Manager Procurement Representative

■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■

Graphic Artist Multimedia Design Engineer Training Representative Audiovisual Technician/Support Specialist Configuration Control Specialist Publication Coordinator Network Engineer Database Administrator Enterprise Architect

Network Support Technician Security Officer

Human Resources Success in recruiting, retaining, and nurturing some of the best innovators in the world takes a great deal of expertise. The space industry’s workforce is very diverse, and the most talented workers come from all over the world and from different cultures. Barriers to competition from well-run foreign corporations and smaller and more nimble U.S. businesses are coming down. Thus, in the future, surviving large companies will likely devote more attention to the critical nature of human resources (HR) departments’ leadership and policies, making it easier for new talent to come to the notice of knowledgeable company insiders and get recruited. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■

Support Professionals The diverse positions needed to keep the space industry moving are populated by staff systems integrators, information technology professionals, facilities/maintenance professionals, legal professionals, administrative and accounting associates, media contacts, graphics artists, machinist professionals, security officers, and custodial staff. Together they do everything from cleaning office spaces, to investigating and enforcing corporate intellectual property claims, to guarding entrances, to auditing corporate finances. Support professionals may include the following:

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■

■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Senior Life-Cycle Recruiter Administrative Representative Diversity Coordinator Employee Trainer Senior Training and Development Specialist Senior Labor Relations Representative Organization Development Analyst Senior Employment Representative Payroll Clerk Benefits Manager

External Services Many interesting careers related to space are in organizations that monitor and analyze data. Examples are satellite ground monitoring stations, communications relay stations, astronomical observatories, ground-based radio telescope facilities, remote sensing data services, space debris monitoring, weather monitoring, and Global Positioning System satellite maintenance, as well as corresponding entities for the European Galileo system and the Russian Glonass systems. In the defense world, there are several areas of interest in satellite data analyses, early warning systems, and missile monitoring systems. External service occupations may include the following:

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■

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Space Exploration and Space Science Industry

Remote Sensing Scientist Geographic Information System (GIS) Analyst Hydro and Ecological Management System Analyst Senior Imaging Scientist Hardware Engineer Software Developer Optical Engineer

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise. The space industry is still young and is undergoing a basic transformation from its militarydominated origins in the 1950’s through the 1980’s to a more open, global commercial industry. As recently as the late 1990’s, there were optimistic projections of a “gold rush to orbit” based on demand for global positioning and satellite telephone constellations. However, with the collapse of the Iridium satellite telephone system and the economic decline following the September 11, 2001, terrorist attacks, commercial space-launch demand shrank. In 2002, the Walker Commission found that demand for commercial space launches was declining, partly because existing satellites were not failing and therefore did not need to be replaced and partly because new satellites could carry more transponders, so fewer satellites could perform more work. Launch costs per pound to Geostationary Transfer Orbit declined from $15,000 in 1990 to under $5,000 in 2002. The drastic reductions in workforce as military programs were reduced, combined with the failure of the early business models for commercial markets, resulted in reduced hiring and an increase in the average age of the technical workforce. The Aldridge Commission of 2004 looked at human exploration and development of space, specifically at plans to return to the Moon, Mars, and beyond. The Constellation project, established in 2004, would have created new heavy-lift boosters, albeit with existing technology, enabling more satellites in low Earth orbit and heavier satellites in GEO, as well as possibly supporting lunar development opportunities. This project was essentially canceled in 2010. The new objectives being consid-

ered by NASA appear to emphasize commercial space-launch operations and increased science missions. Meanwhile, robotic and micro/nano space operations have continued to grow, boosted by the availability of a number of missile launchers that must be verifiably disposed of under nuclear arms reduction agreements. The outlook for the global space industry is nonetheless bright, as capabilities improve around the world to access, inhabit, and develop resources in extraterrestrial environments. The newer space industries of China, India, Japan, and South America are investing heavily in both national and commercial space ventures. Whether this development leads to competition or collaboration, it bodes well for the future of the industry, as the resources and markets involved are potentially unlimited. There are three distinct schools of thought regarding the future of the space economy. The first envisioned future is the closest to today’s industry and involves incremental advances in propulsion systems, launch vehicles, and satellite-transponder technology as the growth path, constrained however by the difficulty of reducing launch costs. The second is born of the science enterprise and argues for investment in deep-space probes, observatories, and other exploration systems, including the mapping of asteroids and NEOs as generators of vital knowledge that can lead to many technological spin-offs. The third is born of the 1970’s efforts to extract resources from beyond Earth, including solar power from space. The quest to develop space solar power as a viable commodity has so far failed to break through the immense barriers in cost to create a working prototype, but international efforts by such entities as JAXA and the ESA continue to advance this dream. With evolutionary paths to space solar power being advanced, there is a real prospect of the barriers being circumvented, given international will and urgency. Some breakthrough technologies are well within sight. “Reboost packages” developed under funding from the Defense Advanced Research Projects Agency (DARPA) have demonstrated the ability to rendezvous with GEO spacecraft nearing the end of their useful lives and renew their life spans by several years, reducing the insurance risk. As on-orbit-servicing technologies transition from the military to the commercial world, they will enable

Space Exploration and Space Science Industry not only repair and refueling of satellites but also the creation of refuellable space-based orbit transfer vehicles. This will improve the payload fraction and reduce the need for redundant systems on many space launches. Thus, business models for the industry can improve substantially in the near future, driving demand for all sectors of the industry. Space tourism, while generating publicity, is likely to remain a niche market until costs come down and infrastructure in space expands greatly. Current trends appear to involve NASA leaving the business of running routine space-access operations and instead focusing on science missions. Exploration missions to distant planets and asteroids appear destined to remain within the realm of government programs until there is a global move toward infrastructure development and collaborative planning of business ventures. Employment Advantages Space jobs are typically regarded as exciting, high-tech jobs that pay well and offer a good work environment. The prestige factor is high, starting from the Apollo program days and the public perception of “rocket scientists.” This view was severely dented during the 1990’s aerospace recession and simultaneous computer-industry boom. As the space industry shifts more toward commercial projects and the computer industry becomes more commoditized and outsourced, however, the trend may be reversed, returning prestige to the space industry. A good cross-disciplinary understanding of the demands of large space systems and of the intense quality demands of space products is a valuable by-product of working in the space industry. It can serve experienced workers well in founding their own businesses or transitioning to other technology businesses for advancement. Annual Earnings The civil and commercial portions of the space industry exceeded the government space establishment in expenditures for the first time in 1998, and since then nongovernment revenues have continued to climb. American space industry sales have grown from $29 billion in 1996 to an estimated $41 billion in 2010, though in real dollars they have stayed flat at $31 billion. Employment related to guided missiles, space vehicles,

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and parts dropped from approximately 76,500 in 2001 to a low of 70,000 in 2003, but it had climbed back up to 76,000 by the third quarter of 2009. The number of production workers in these areas climbed from below 19,000 in 2001 to over 47,000 in 2007. Sales of U.S. products related to space, excluding missiles, have remained relatively steady, near $40 billion per year, from 1994 to 2008. U.S. exports of civilian-sector spacecraft, satellites, and parts rose from $453 million in 2005 to a high of $811 million in 2007, then fell to $535 million in 2008. U.S. imports of such products ranged from $779 million in 2001 to a high of $960 million in 2007 to $668 million in 2009. With increasing global commercial space capabilities and competition, the earnings of this industry are poised for continued growth.

RELATED RESOURCES FOR FURTHER RESEARCH Aerospace Industries Association 1000 Wilson Blvd., Suite 1700 Arlington, VA 22209-3928 Tel: (703) 358-1090 Fax: (703) 358-1151 http://www.aia-aerospace.org American Institute of Aeronautics and Astronautics 1801 Alexander Bell Dr., Suite 500 Reston, VA 20191-4344 Tel: (703) 264-7500 Fax: (703) 264-7551 http://www.aiaa.org Eighth Continent Project Center for Space Resources Colorado School of Mines 1310 Maple St. Golden, CO 80401 Tel: (303) 384-2300 Fax: (303) 384-2327 http://www.8cproject.com European Space Agency 8/10 rue Mario Nikis 75015 Paris France

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Tel: 33-15-369-7654 Fax: 33-15-369-7560 http://www.esa.int Institute of Electrical and Electronics Engineers 3 Park Ave., 17th Floor New York, NY 10016-5997 Tel: (212) 419-7900 Fax: (212) 752-4929 http://www.ieee.org National Aeronautics and Space Administration 300 E St. SW Washington, DC 20546-0001 Tel: (202) 358-1010 Fax: (202) 358-3469 http://www.nasa.gov Office of Space Commercialization, National Oceanic and Atmospheric Administration 6818 Herbert C. Hoover Bldg. 14th and Constitution Ave. NW Washington, DC 20230 Tel: (202) 482-6125 Fax: (202) 482-4429 http://www.space.commerce.gov Satellite Industry Association 1200 18th St. NW, Suite 1001 Washington, DC 20036 Tel: (202) 503-1560 Fax: (202) 503-1590 http://www.sia.org Space Studies Board, the National Academies 500 5th St. NW Washington, DC 20001 Tel: (202) 334-3477 Fax: (202) 334-3701 http://sites.nationalacademies.org/SSB/ index.htm Space.com, Space Library 470 Park Ave. South, 9th Floor New York, NY 10016 Tel: (212) 703-5801

Fax: (212) 703-5801 http://www.space.com/spacelibrary/ United Nations Office for Outer Space Affairs Wagramerstrasse 5 Vienna A-1220 Austria Tel: 43-126-060 4950 Fax: 43-126-060 5830 http://www.oosa.unvienna.org

ABOUT

THE

AUTHOR

Narayanan M. Komerath is a professor of aerospace engineering at the Georgia Institute of Technology. He has taught aerospace engineering subjects, including aerodynamics and aerospace propulsion, for more than twenty-five years. He directs the John J. Harper wind tunnel and research programs in experimental aerodynamics, fluid mechanics, and advanced space concepts. He is an associate fellow of the American Institute of Aeronautics and Astronautics and a fellow of NASA’s Institute of Advanced Concepts. In 2004, he served as a Boeing Welliver Summer Faculty Fellow and as an invited witness before the Presidential Commission on Implementation of United States Space Exploration Policy. He has also served as a senior fellow of the Sam Nunn Center for International Security, Technology, and Policy since 2004.

FURTHER

READING

Aldridge, Edward C., et al. A Journey to Inspire, Innovate, and Discover: Report of the President’s Commission on Implementation of United States Space Exploration Policy. Washington, D.C.: Government Printing Office, 2004. Augustine, Norman R., et al. Seeking a Human Spaceflight Program Worthy of a Great Nation. Washington, D.C.: National Aeronautics and Space Administration, 2009. Borrelli, Carmine, et al. The Space Industry. Ft. Belvoir, Va.: Defense Technical Information Center, 2007. Collins, P., and A. Autino. “What the Growth of a Space Tourism Industry Could Contribute to

Space Exploration and Space Science Industry Employment, Economic Growth, Environmental Protection, Education, Culture, and World Peace.” Acta Astronautica 66, nos. 11/12 (June/July, 2010): 1553-1562. Commercial Space Transportation Study Alliance. Commercial Space Transportation Study. Washington, D.C.: National Aeronautics and Space Administration, 1997. Available at http://www.hq.nasa.gov/webaccess/ CommSpaceTrans. Federal Aviation Administration. Office of the Associate Administrator for Commercial Space Transportation. The Economic Impact of Commercial Space Transportation on the U.S. Economy: 2002 Results and Outlook for 2010. Springfield, Va.: National Technical Information Service, 2004. Greenberg, Joel S., and Henry R. Hertzfeld, eds. Space Economics. Progress in Astronautics and Aeronautics 144. Washington, D.C.: American Institute of Aeronautics and Astronautics, 1992. Gunther, Jocelyn S. Commercial Space Transportation. Hauppauge, N.Y.: Nova Science, 2010. Jasentuliyana, Nandasiri, ed. Space Law: Development and Scope. Westport, Conn.: Praeger, 1992. Komerath, N. M., J. Nally, and E. Taing. “Policy Model for Space Economy Infrastructure.” Acta Astronautica 61, nos. 11/12 (December, 2007): 1066-1075. Lamassoure, E., J. H. Saleh, and D. E. Hastings. “Space Systems Flexibility Provided by OnOrbit Servicing: Part 2.” Journal of Spacecraft and Rockets 39, no. 4 (2002): 561-570. Lewis, J. S., and R. A. Lewis. Space Resources: Breaking the Bonds of Earth. New York: Columbia University Press, 1987. Longuski, Jim. Advice to Rocket Scientists: A Career

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Survival Guide for Scientists and Engineers. Reston, Va.: American Institute of Aeronautics and Astronautics, 2004. National Research Council. Defending Planet Earth: Near-Earth Object Surveys and Hazard Mitigation Strategies. Washington, D.C.: National Academies Press, 2010. _______. An Enabling Foundation for NASA’s Earth and Space Science Missions. Washington, D.C.: National Academies Press, 2010. Nicogaossian, Arnauld E., and Joseph H. Rothenburg. Commercial Development Plan for the International Space Station: Final Draft. Washington, D.C.: National Aeronautics and Space Administration, 1998. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. National Aeronautics and Space Administration. NASA History Office. “The Decision to Go to the Moon: President John F. Kennedy’s May 25, 1961 Speech before a Joint Session of Congress.” http://history.nasa.gov/ moondec.html. Walker, Robert Smith, et al. Anyone, Anywhere, Anytime, Anything: Final Report of the Commission on the Future of the United States Aerospace Industry. Arlington, Va.: Commission on the Future of the Aerospace Industry, 2002. Zubrin, R. Entering Space: Creating a Spacefaring Civilization. New York: Tarcher, 1999.

©Berlinfoto/Dreamstime.com

Spectator Sports Industry

INDUSTRY

and car racing. Participants in the industry include owners, athletes, trainers, managers, coaches, promoters, referees, and administrators, as well as groundskeepers and facility managers.

SNAPSHOT

General Industry: Sports Career Cluster: Business, Management, and Administration Subcategory Industries: Independent Athletes; Racetracks; Sports Agents; Sports Promoters; Sports Teams and Clubs Related Industries: Apparel and Fashion Industry; Broadcast Industry; Motion Picture and Television Industry; Sports Equipment Industry Annual Domestic Revenues: $31.3 billion USD (U.S. Census Bureau, 2008) NAICS Number: 7112-7114

INDUSTRY

History of the Industry The history of sports and games dates back to ancient times. Artifacts of an ancient Egyptian board game called enet have been extracted from pyramids, and the game’s origin has been traced back to 3000 b.c.e. Likewise, Egyptians were fond of sporting competitions that involved running, jumping, and fighting. Egyptian wall paintings from around 1850 b.c.e. depict a wrestling competition that involves techniques still used by wrestlers today. The ancient Greeks epitomized a culture obsessed with the human form and the pursuit of physical perfection. Competitive sport was a feature of many Greek religious and social ceremonies, and the Greeks constructed sporting arenas that were designed for spectator viewing. They also inaugurated the first sporting competition at Olympia in 776 b.c.e., founding a tradition that continued to be observed every four years for more than a millennium. The Olympic Games’ schedule would eventually be expanded from a singular running race to include sports such as javelin, discus, chariot racing, wrestling, boxing, and the pentathlon (featuring five events). The Olympics were out-

DEFINITION

Summary The spectator sports industry comprises professional, semiprofessional, amateur, and tournament sports that are conducted live before a paying audience. It includes high-profile sports leagues such as the National Football League (NFL) and Major League Baseball (MLB), as well as horse, dog, 1762

Spectator Sports Industry lawed in 393 c.e. by the Romans, but after a fifteenhundred-year hiatus the modern Olympic Games were founded in 1896, continuing the tradition of sporting competition among the world’s elite athletes. Horse racing also dates back to ancient times, when people held chariot races, jousted, and played a team game that was a predecessor of polo. The modern concept of horse racing, however, can be traced to England in the 1600’s, when it found favor with King Charles II and the English aristocracy. The sport popularized gambling and formalized the concept of pedigree in animal breeding. In fact, some scholars contend that the fascination with genealogy in horse racing has roots in English aristocrats’ obsession with their own lineage. Modern sport, with standardized rules and regulations, began evolving in the 1800’s in Europe as schools increasingly mandated sports in their curricula. At the same time, advances in transportation technology facilitated sporting competitions between villages and towns, and an increasing proportion of the population moved to large cities, where it became easier to form sporting leagues.

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Over time, standardized rules and faster, cheaper travel made it possible to conduct national and international sporting competitions. The development of spectator sports as an industry has been accelerated by communication technologies that make sports accessible to increasingly large audiences. Today, revenue generated from ticket sales and concession spending is dwarfed by the revenue generated from broadcasting rights, merchandising, advertising, and sponsorships. Consequently, sport in the United States and around the world has become big business. In fact, since the 1920’s, when expenditures in the spectator sports industry were first tracked in the United States, the industry has seen rapid growth. From 1920 to 1930 alone, spending on spectator sports more than doubled, from $30 to $65 million. In the 1990’s, spending was estimated at more than $11 billion. The Industry Today Sport cuts across national boundaries and demographics and is no less woven into the contemporary cultural fabric than it was woven into that of

Misters cool fans watching a baseball training game in Scottsdale, Arizona. (AP/Wide World Photos)

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Spectator Sports Industry

the ancient Greeks. Moreover, as a form of entertainment and recreation, sport is incredibly multifaceted. It accommodates players and managers from amateur to professional levels, and it offers a wide variety of allied pursuits, not least of which are gambling and spectating. The 2004 Summer Olympics in Athens, Greece, made history when television broadcasts of the competition were viewed by 3.9 billion people worldwide. They generated over thirty-five thousand hours of broadcast viewing spread across thousands of stations. In the United States, 203 million people—nearly 70 percent of the population—watched at least some part of the games. The 2008 Summer Olympics in Beijing, China, comprised more than 302 events involving around ten thousand competitors, and they were covered by 24,500 media representatives from fifty-nine countries. Audience demand for the Olympics has grown strongly, if the increase in supply is any indication. Measured by the number of broadcast hours dedicated to Olympic events, there was a 27 percent increase in the supply of Olympic coverage

between 1992 and 2004. In the United States, the spectator sports industry employs roughly 138,700 people, of whom 9,380 are professional athletes. The other leading occupations in the industry include office and administrative support; service and guest attendance (ticket takers, ushers, and so on); food preparation and service; maintenance and repair; security services; transportation and freight; general and operations management; coaching and training; and business support (human resources, convention planning, accounting, auditing, and so on). In 2009, the combined Big Four leagues—the NFL, the National Basketball Association (NBA), the National Hockey League (NHL), and MLB— accounted for an estimated annual revenue of $17.8 billion, according to Plunkett Research. Other significant spectator sporting leagues in the United States include the National Association for Stock Car Auto Racing (NASCAR), Indy Car, the Professional Golfers Association (PGA), the National Collegiate Athletic Association (NCAA), and Major League Soccer (MLS). Growing profes-

Horse racing is a popular sport, with well-attended events such as the Kentucky Derby. (©Dreamstime.com)

Spectator Sports Industry

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NASCAR fans often arrive before race day, camping in recreational vehicles in the parking lot. (AP/Wide World Photos)

sional sports subsectors include previously marginal sports such as motocross, skateboarding, monster trucks, aerobatics, and poker. Amateur and semiprofessional sports also create strong spectator demand. Some of these include cycling, poker, bowling, bodybuilding, beach volleyball, rodeo riding, figure skating, and rally-car racing. Today, the majority of spectator sports revenue is generated from the sale of broadcasting and sponsorship rights. If a league engages in a profitsharing business model, it distributes league-generated revenues among its franchisees. Coupled with salary caps that limit the earning potential of players, this arrangement can make franchise ownership incredibly profitable. However, statistics belie the vast scope of the disparity between the richest and the poorest sectors of the industry. In competitive leagues that do not engage in profit sharing, teams and individuals must privately fund their enterprises, and they must do so in an economy where consumer, sponsor, and investment spending can contract in response to economic downturns. As highlighted by the 2007-2009 global financial crisis and its economic impact on consumer spending, contracting spending in professional sports is a relatively new paradigm in an in-

dustry that has enjoyed decades of skyrocketing growth. The spectator sports industry is undergoing a transformation in the early twenty-first century, as teams and their governing bodies diversify their business interests. Likewise, the industry is coming to terms with new technologies and how these may change the way in which spectators view and interact with sports and sporting events. Some examples include online fantasy leagues, video gaming, digital television, and Internet video streaming. The domestic spectator sports industry is also challenged by questions of how best to market its products to potential international and foreign audiences. The sports agency field is dominated by IMG Worldwide, which manages professional athletes, coaches, celebrities, and events. Demonstrating the high value placed on sports managers and promoters in the industry, the career tournament earnings of Tiger Woods (the world’s highest-paid athlete in the early twenty-first century) were overshadowed by the $500 million he earned from endorsements and other activities. Other leading sports agencies include Octagon Worldwide, BDA Sports Management, and the William Morris Agency.

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Spectator Sports Industry INDUSTRY MARKET SEGMENTS

The spectator sports industry consists of organizations that range in size from individual athletes and agents operating as sole proprietors to multinational corporations. The following sections provide a more comprehensive breakdown of each of these segments. The average spectator sports organization employs only twenty-eight people. Such organizations often rely on a number of external business providers to coordinate and execute their complex operations. Individuals with career aspirations in the spectator sports industry should also not overlook opportunities in the amateur sports sector, which involves athletic associations and regulatory and governing bodies. The amateur sports sector offers participants valuable experience in sports administration, athletic talent identification and development, tournament and event coordination, and sports marketing. Small Businesses A small spectator sports business can have as few as one employee or as many as fifty. Annual revenues for small businesses range from $10,000 to $1 million or more, depending on the circumstances. While athletes in some sports are unionized, in other sports they operate as sole proprietors. Their earnings depend on their salary, competition winnings, and endorsements. Likewise, some agents, promoters, and event coordinators may operate as independent, sole proprietors. Some spectator sports also provide unique opportunities for small teams and individuals to compete alongside larger organizations. Sports such as racing are more accommodating of smaller teams than are leagues that require the acquisition of expensive franchises. Small business opportunities in very high profile team sports such as the Big Four leagues tend to be limited, although independent opportunities may exist for highly experienced or qualified specialists, including coaches, trainers, agents, marketers, and event coordinators. Individuals seeking direct involvement in sports operations may find that horse, dog, and car racing represent some of the easier subsectors for small-business owners to gain entry. Horse racing syndicates, for example, work by grouping individual investors together to

form small companies. The companies then purchase horses and pay to care for, maintain, and train the animals, as well as to enter them in competitions. The investors share any race winnings. NASCAR is composed of a cluster of small teams whose sole desire is to qualify for races to receive a share of the winnings that are awarded to all competitors, including those in last place. These teams are colloquially known as “start-and-park” teams because, having qualified, they retire from qualifying races early so as to reduce their operating costs and to protect their vehicles from potential damage. These teams are very small. Such teams generally consist of one or two owner-operators, a hauler driver, a small team of mechanics, and a contract driver. In most cases, they do not employ a pit crew or any engineers. A start-and-park team can win over $1 million per season without ever finishing an entire race. The operation does, however, entail considerable risk and demand substantial working capital. In some sports, small organizations can be very profitable, while in others small-business owners are considered hobbyists. They derive enjoyment from their business ventures but do not realize viable incomes from them. Sports memorabilia and collectibles trading, for example, attracts many small-business owners who utilize Web-based trading sites such as eBay to run full- or part-time businesses from home. Potential Annual Earnings Scale. According to PayScale.com, the median annual salary for an athlete working as an amateur independent contractor in 2009 was $42,250, with a salary range of $25,000 to $73,500. The median salary for a business specialist in a small sports business was $35,500. This figure represents the aggregated salaries of team agents, account executives, athletic trainers, marketing managers and coordinators, administrative assistants, and event coordinators. Self-employed people in the spectator sports industry earn a median income of $53,500, while self-employed sports and celebrity agents earn a median income of $87,500. According to the U.S. Department of Labor, the average annual wage for sports teams and clubs in 2007 was $181,384. Clientele Interaction. In the spectator sports industry, a company’s clientele consists of a broader range of stakeholders than is associated with traditional businesses, in which customers exchange

Spectator Sports Industry payment for products or services. In addition to direct paying customers (such as fans who buy game tickets and merchandise or athletes who pay agents for representation), the industry’s clients can include any stakeholders with a direct or indirect interest in an organization’s performance, including sponsors, investors, fans, and supporters. Small-business owners and their employees are likely to be required to fulfill multiple roles within the business, including promotions, financial management and accounting, contract management, and administration. Many small sports businesses are also likely to require professional assistance from contractors, such as accountants, lawyers, and publicists, as well as specific technical specialists. A small horse-racing syndicate, for example, may outsource its training, jockeying, handling, and veterinary requirements, while a small NASCAR team may outsource its engineering needs. Interaction with investors, sponsors, owners, and other stakeholders is likely to be exceptionally high in the small business sector. Amenities, Atmosphere, and Physical Grounds. Some small sports companies own or lease commercial space, while others are home based. Small sports businesses can avoid the expense of purchasing or renting real estate in hightraffic areas with street frontage because they do not generally market to consumers. Likewise, the overall quality of amenities offered by a business is predicated upon the organization’s budget and its stakeholders’ expectations. Where equipment, tools, or sensitive materials or information are involved, secure facilities are required. Small sports agencies and management firms are likely to require professional office space, although self-employed agents and consultants may elect to work from home. Their office arrangements need to present a professional and successful appearance, commensurate with the caliber of the athletes they represent. One of the common issues facing small-business owners is the cost of overhead. While larger companies are able to defray their overhead costs across larger operations, small businesses’ operating expenses can take up a significant proportion of their income. For this reason, small-business owners must attempt to minimize expenses by, for example, working from a home office, hiring the minimum number of employees, leasing affordable space,

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maximizing tax benefits, outsourcing nonessential services, and reducing energy and equipment costs. Sports that require expensive equipment and ongoing operating costs demand significant capital investment and financial resources. Typical Number of Employees. Small spectator sports businesses consist of between one and approximately fifty employees. Traditional Geographic Locations. With technological advances in transportation and communication, location is becoming less relevant to sports businesses. Small-business owners, however, need to establish their businesses in locations that reduce their overall running costs. For example, when the Team Valor International horse racing syndicate moved its administrative operations from California to Kentucky, it achieved closer contact with its horse handlers and trainers and was able to reduce the size of its administrative team and office space. This allowed Team Valor to reduce its costs and improve its client interactions. NASCAR is associated with North Carolina, and the vast majority of NASCAR teams are headquartered within a 40mile radius of Charlotte. Independent athletes may be able to choose their locations, but many elect to base themselves where quality coaching and training facilities are readily available. Sporting organizations that utilize Internet and other communication technologies, or those that have minimal face-to-face interaction with their clients or service providers, may find that their choice of location is much wider than those of companies that use dedicated sporting facilities. Online horse racing syndicates, for example, allow investors to influence training and management decisions through e-mail and online voting. Pros of Working for a Small Spectator Sports Business. The owner of a spectator sports company or agency can experience a great deal of independence and autonomy. Such owners are literally their own bosses, so they can set their own work hours and conditions and formulate their own strategies for performance. This ability may especially appeal to seasoned professionals who have many years of experience coupled with the expertise to apply skills and methods learned at a larger organization to a leaner, more tightly focused operation. Small-business employees are also likely to gain well-rounded experience across all parts of an operation.

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Cons of Working for a Small Spectator Sports Business. For small-business owners, autonomy and independence come with the vast responsibilities of running a small business. They are responsible for revenue generation, as well as for ensuring that their companies fulfill their legal and regulatory obligations. Where there is potential reward there is also potential risk, and owner-operators assume total responsibility for their organizations’ financial performance and viability. While these principles are true in any type of small business, the stakes are heightened in the spectator sports industry because both success and failure can occur in a much more public fashion than in other industries. Small organizations may often have to compete against bigger companies that have greater financial, human, and technical resources. Competitiveness in spectator sports does not stop at the end of the game. Businesses must also vie off the field for funding, sponsorship, talent, and other limited business resources. Depending on the type of business, the initial capital investment of a sports organization may be considerable, especially when expensive equipment, technology, infrastructure, or frequent travel is required. While small-business owners are able to set their own work conditions, many find that they need to work long hours to realize profits. It is also likely that they will assume a very significant level of personal financial risk. Costs Payroll and Benefits: Small businesses pay an hourly wage or annual salary, depending on the position. Sports businesses customarily pay bonuses based on winnings or on specific performance benchmarks agreed to in advance. Benefits such as vacation and sick days, health insurance, and 401(k) plans are offered at the discretion of the business owner. Supplies: Various types of sports businesses require office supplies and equipment, including computers, telephones, copiers, and so on; sporting equipment; training equipment, such as weights and gym machines; and mobile communications devices, such as smart phones or pagers. External Services: Small sports businesses may contract computing support, equipment and tool maintenance, security, groundskeeping, or

cleaning services, as well as renting post office boxes. They may also engage professional accountants, lawyers, tax professionals, or advertising and marketing services. Some companies may also elect to outsource technical services such as engineering, veterinary services, design, and logistics. Utilities: Typical utilities include electricity, airconditioning, heating, water, telephone, and Internet access. Taxes: State and federal taxes are payable according to business revenue. Self-employed individuals must pay self-employment tax, and those who own office space may need to pay property taxes. Midsize Businesses A midsize business in the spectator sports industry can have as little as fifty or as many as five hundred employees. Annual revenues of such businesses generally range from $1 million to hundreds of millions of dollars. Potential Annual Earnings Scale. According to the NFL Players Association, the average NFL player’s annual salary is $1.1 million. The average nonathlete salary in midsize spectator sports organizations, however, ranges from $41,700 to $47,600. Most professional spectator sports teams fall in the midsize range, although most of these organizations rely heavily on external business support services, especially in areas such as grounds and facility maintenance, security, waste management, catering, and remediation services, as well as in professional areas concerning legal matters and advertising. Clientele Interaction. With increasing size comes an opportunity for employees to specialize in certain organizational functions. Simultaneously, midsize businesses benefit from greater economies of scale that free up owners and managers to work as leaders of the business rather than as key producers. A professional spectator sports team, for example, employs around three hundred people, who are organized into professional categories such as athletes, coaches, administrators, sports operations staff, business operations staff, and stadium operations staff. This structure affords employees strong opportunities for specialization, while the manageable size of these organizations allows management to remain in contact with daily business operations.

Spectator Sports Industry Amenities, Atmosphere, and Physical Grounds. Sporting organizations require facilities appropriate to their specific activities. They generally own or lease dedicated space that also forms their headquarters or home. An increasing number of teams and leagues own or control their own stadiums as well, but many lease stadiums, racetracks, or other venues from independent or public owners. The leasing arrangement dictates how revenue from ticket sales is distributed. With increasing professionalism in spectator sports over the last few decades, sports organizations have built and developed increasingly stateof-the-art training, playing, and administration facilities, usually in prime locations. Many organizations design their facilities with the experience of fans and supporters in mind. Many provide supporters with opportunities to tour their facilities and to feel a sense of interaction with the team. The facilities and amenities demanded of spectator sports often make industry entry extremely expensive. Many leagues also operate on a franchise system, which severely limits entry opportunities and increases the cost of the few that exist. Typical Numbers of Employees. Midsize spectator sports businesses consist of between approximately fifty and five hundred employees. Traditional Geographic Locations. In professional spectator sporting leagues, location is often defined by a team franchise agreement. Sporting teams are generally tied to a specific city, town, or state. In other sports—such as motor racing, for example—location may be more flexible because audience loyalties tend to be tied to team or driver identities that are not necessarily linked to specific geographic locations. Pros of Working for a Midsize Spectator Sports Business. Employees of a midsize spectator sports organization may enjoy greater career advancement opportunities than their peers working in a small business, depending on the sport. The midsize sector offers opportunities to gain supervisory and management experience and to work in a very professional environment that provides exposure to a range of sports management areas. In fact, many midsize sporting businesses are world-class organizations. Employees in this sector may also benefit from receiving exposure to other functional areas of the operation, as well as formal training. Employees

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motivated to seek social recognition may find satisfaction and pride in working in an industry that has a high public profile. For people who thrive on fastpaced, high-pressure work, the midsize spectator sports sector may provide relentless daily and weekly deadlines, constant pressures, and unyielding performance scrutiny. In certain careers within the industry, remuneration can be extremely lucrative. Cons of Working for a Midsize Spectator Sports Business. In keeping with the competitive nature of sports generally, the administrative and operational environments within sporting organizations can be extremely competitive. This atmosphere often fosters a work culture that expects higher-than-usual levels of company loyalty, including evening and weekend work. Employees may find that success hinges on working long hours and making themselves highly accessible to their companies. This lifestyle may not suit employees who value work-life balance or who have other commitments. The competitive nature of professional sports can also manifest as job insecurity. While remuneration for some jobs may be extremely lucrative, one must keep in mind that careers in professional spectator sports (both athlete and nonathlete jobs) can be demanding and short. Costs Payroll and Benefits: Midsize businesses pay an hourly wage or a salary depending on the type of work. As is customary with competitive sports environments, positions in this industry are likely to provide bonuses and commissions. Benefits such as vacation and sick days, health insurance, and 401(k) plans are offered at the discretion of the business owner, although most employees receive comprehensive compensation and benefits packages. Supplies: Various types of sports businesses require office supplies and equipment, including computers, telephones, copiers, and so on; sporting equipment; training equipment, such as weights and gym machines; and mobile communications devices, such as smart phones or pagers. In addition, stadium-based teams require supplies related to operation and upkeep of their stadiums, including tickets, food-related supplies, and equipment necessary for field upkeep.

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External Services: Midsize sports businesses may engage business support services such as computing, bookkeeping, equipment and tool maintenance, security, groundskeeping, and janitorial services. They may also engage external professional experts such as accountants and tax professionals, as well as advertising and marketing companies (including merchandise design and manufacturing). Some companies may also elect to outsource technical services such as engineering, veterinary services, design, and logistics. Utilities: Typical utilities include electricity, airconditioning, heating, water, telephone, and Internet access. For teams with stadiums, these expenses can be significant. Taxes: State and federal taxes are payable according to business revenue. Businesses also need to pay applicable property and other taxes. A sports team, however, may be exempt from paying property taxes on its stadium as a condition of its contract with a city or state. Franchises often negotiate such contracts with governments that benefit from their presence. Large Businesses A large spectator sports business has between approximately five hundred and five thousand employees, with annual revenues of up to hundreds of millions of dollars. Some of the largest spectator sporting organizations in the world, such as McLaren Formula One and Manchester City Football Club (both in the United Kingdom), employ around six hundred people each. The largest organizations in the spectator sports sector are mainly global sports promotion and management agencies. IMG Worldwide employs around three thousand people globally, while Octagon Worldwide employs around one thousand people in sixty countries. Octagon claims to represent over one thousand athletes, personalities, sporting franchises, and corporate sponsors and to organize around five thousand sporting events annually. Octagon athletes earned twenty-two gold medals at the 2008 Olympic Games in Beijing, and Octagon managed many of the Olympics’ largest corporate sponsors. Octagon is owned by the publicly listed company Interpublic Group of Companies, which also owns other leading marketing and advertising agencies, such as Jack Morton Worldwide. Jack Morton produced the 2004 Olympic

Games’ opening and closing ceremonies. Interpublic’s combined advertising and marketing businesses employ more than ten thousand people and have annual revenues of more than $6 billion. Potential Annual Earnings Scale. Players and managers lead the earnings in this industry. The average nonathlete salary in large spectator sports organizations ranges from $42,500 to $64,000 per year. In the sports agency sector, the average nonathlete salary range is $51,400 to $65,000. According to the U.S. Department of Labor, the average annual wage for sports teams and clubs in 2007 was $181,384. Clientele Interaction. Employees’ level of client interaction in large businesses very much depends on their role. One of the advantages of large businesses is that those who seek career advancement without sacrificing client interaction have an opportunity to advance into key operations, account management, or senior relationship-management roles. Those who prefer less client interaction have an opportunity to advance into other management and executive positions. The large size of such businesses, however, makes it generally likely that senior and executive employees will experience less client interaction than do associatelevel staff. Owners and managers of large companies are not expected to be key producers. Their role is to provide strategic direction that maintains company performance and shareholder favor and to ensure that the company adheres to its legal and fiduciary obligations. Employees of large businesses experience less pressure to fulfill multiple job roles, and they have greater opportunities to specialize in niche areas. They are required, however, to adhere strictly to company policies and procedures. Corporate culture is also likely to entail committee-based decision making, as well as complex organizational hierarchies. Amenities, Atmosphere, and Physical Grounds. Sporting organizations require facilities appropriate to their specific activities. Generally speaking, very large sporting organizations have world-class facilities. McLaren Formula One’s facility in the United Kingdom, for example, mirrors the high level of engineering mastery found in the design of its race cars. Large sports agencies operate mainly from high-quality office spaces. These environments are highly professional and aligned

Spectator Sports Industry with well-developed corporate cultures. Firms such as IMG and Octagon are also becoming increasingly involved in athletic talent identification, testing, and development, which demand dedicated athletic and sporting facilities. Typical Numbers of Employees. Large spectator sports businesses consist of between approximately five hundred and five thousand employees. Traditional Geographic Locations. In professional spectator sporting leagues, location is often defined by a team franchise agreement. Sporting teams are generally tied to specifics cities, towns, or states. Sports management and promotional agencies tend to be located in large cities from which they can service large numbers of clients and stakeholders. Pros of Working for a Large Spectator Sports Corporation. Employees of large companies enjoy significant career-advancement opportunities that come from working within a highly structured organization. Such opportunities may include promotion into management, horizontal career progression into a different field or area of operations, national and overseas relocation, and professional specialism. Working for a large company is also likely to ensure exposure to leadingedge technologies, access to thought leaders in the industry, formal and on-the-job training, professional certifications, and other education opportunities. Job stability may also be greater at a larger company than at a smaller one. Corporate culture can be highly appealing to some people. While corporate culture is often associated with long work hours, employees may experience fewer work and performance pressures in large spectator sports organizations than at midsize ones because their involvement with the company’s core operations may be more peripheral. A design engineer working at McLaren Formula One, for example, is one of around 150 engineers working in a highly structured, hierarchical environment. An engineer on a midsize NASCAR team, on the other hand, is one of approximately 20 engineers in a much flatter organizational structure. Cons of Working for a Large Spectator Sports Corporation. While layers of management and highly developed corporate culture may serve to alleviate some of the work pressures experienced in the small and midsize sectors, employees

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of large companies can become stuck in peripheral jobs that do not satisfy their desire for close involvement with a wide variety of team operations and clients. By comparison, smaller organizations provide employees with better opportunities to gain experience in a wider array of functions. People who prefer high levels of personal contact with their clients or in operations—or who like to work autonomously, make their own decisions, do things their own way, express their individuality, and become involved across an entire organization—may find highly structured corporate environments stifling. The complexity of large business, moreover, can be vexing for individuals who are frustrated by committee-style decision making and authority structures. Those who rise to senior management positions are likely to spend an increasing amount of their time involved in business strategy, people management, and administration and less time working on the technical specifics of the sport. Costs Payroll and Benefits: Large businesses pay an hourly wage or a salary depending on the type of work. As is customary with competitive sports environments, positions in this industry are likely to provide bonuses and commissions. Large companies are more likely than smaller ones to offer above-average compensation and benefits packages, including vacation and sick days, health insurance, and 401(k) plans. Supplies: Various types of sports businesses require office supplies and equipment, including computers, telephones, copiers, and so on; sporting equipment; training equipment, such as weights and gym machines; and mobile communications devices, such as smart phones or pagers. In addition, stadium-based teams require supplies related to operation and upkeep of their stadiums, including tickets, food-related supplies, and equipment necessary for field upkeep. External Services: Large sports businesses may engage business support services such as computing, bookkeeping, equipment and tool maintenance, security, groundskeeping, and janitorial services. They may also engage external professional experts such as accountants and tax professionals, as well as advertising and marketing companies (including merchandise design and

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Spectator Sports Industry OCCUPATION

SPECIALTIES

Sports Instructors/Coaches Specialty

Responsibilities

Coaches of professional athletes

Work with groups of paid professional athletes and paid assistant coaches. Their duties often include not only game preparation and game coaching but also recruiting, assessing, and selecting new professional talent.

Head coaches

Work with groups of athletes through subordinate assistant coaches.

Physical instructors

Work with individuals and small groups in beginning or advanced exercises for reducing weight or improving health.

manufacturing). Some companies may also elect to outsource technical services such as engineering, veterinary services, design, and logistics. Utilities: Typical utilities include electricity, airconditioning, heating, water, telephone, and Internet access. Taxes: State and federal taxes are payable according to business revenue. Businesses also need to pay applicable property and other taxes. A sports team, however, may be exempt from paying property taxes on its stadium as a condition of its contract with a city or state. Franchises often negotiate such contracts with governments that benefit from their presence. International companies may face complex taxation structures, as they need to pay applicable taxes in multiple countries.

The following umbrella categories apply to the organizational structure of businesses in the spectator sports industry: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

ORGANIZATIONAL STRUCTURE AND JOB ROLES Any company in the spectator sports industry must account for activities in the following areas. In smaller companies, one person often holds several roles within several groups. In larger companies, specialists fulfill unique requirements in specific groups. Regardless of size and scope, the functions must be fulfilled. The spectator sports industry also demands a wide range of different technical specialties.

Athletes and Coaches Referees and Officials Business Management Team Operations Event Operations Sales and Marketing Administration Information Technology Facilities and Grounds Security Human Resources Health Care and Medical Entertainment Transportation and Logistics Professional Services

Athletes and Coaches Athletes, coaches, and trainers fulfill a sports organization’s core function. Coaches are responsible for managing a team or athlete’s performance, while athletes are responsible for executing the strategies and tactics developed by (or in consultation with) their coaching staff. While these jobs may appear glamorous, they are regularly characterized by grueling physical, mental, and emotional demands. Professional coaching and player salaries are extremely attractive (the average NFL player earns $1.1 million a season), but these are

Spectator Sports Industry high-pressure, highly competitive jobs, and relatively few are available for the number of people competing for them. Playing and coaching careers are subject to the vagaries of success and loss, as well as uncontrollable factors such as injury. The average NFL player’s career, for example, is only three years long. Athletes and coaches must also manage the pressures of dealing with the public and media. Players and coaches are the public face of their organizations, and they have the potential to become public figures in their own right. Invasion of privacy and public scrutiny can create additional psychological and emotional pressures. Athlete positions do not generally require formal education, although many professional athletes develop their playing ability through collegiate sports. Coaching staff are increasingly required to possess formal coaching and physical training qualifications.

OCCUPATION

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Athlete and coaching occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Athlete Player Driver Jockey Pit Crew Member Coach Trainer Personal Trainer

Referees and Officials Referees and officials oversee, or officiate, the conduct of play according to the rules and codes of their sports. Officiating is an increasingly high pressure role, given the large amounts of money and the high stakes riding on sports results—not only for the vying teams, their fans, and their sponsors but also for gamblers and the gambling industry. As a

PROFILE

Athletic Trainer Considerations

Qualifications

Description

Works with amateur and professional athletes to help prevent, evaluate, and treat injuries, as well as ensure that formerly injured athletes are ready to play.

Career cluster

Health Science

Interests

People; things

Working conditions

Work outside; work both inside and outside

Minimum education level

Bachelor’s degree

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; volunteer work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

SRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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result, many sports have introduced off-field media referees, video reviewing, and other technologies that assist referees to make accurate rulings. In some sports, referees and officials are contracted as full-time employees, while in other sports they are part time. This difference in status is generally reflected in their remuneration. The NBA, the NHL, and MLB offer their full-time referees salaries of more than $100,000 per year, whereas part-time professional referees may expect payments ranging between $25,000 and $70,000 per season. The national average annual salary for early-career referees and officials, including amateur and professional sports, is $23,500 to $50,800. Entry into this career is extremely competitive. Referee and official occupations may include the following: ■ ■ ■ ■ ■

Referee Umpire Line Judge Field Judge Official

Business Management Managers are responsible for an organization’s financial performance and for ensuring that it runs smoothly and efficiently. Responsibilities include establishing the company’s financial and operational objectives, as well as formulating its strategic direction. Day-to-day duties may include hiring, firing, and managing employees; managing finances and other resources; providing leadership, coaching, and direction; making high-level business decisions; and ensuring that the company fulfills its legal and fiduciary obligations. Business managers also coordinate key relationships with business partners and may be involved with important clients at an executive, nonoperational level. Where a business has a board of directors, the business manager reports to and follows direction from the board. Specialist business roles within the spectator sports industry include agents and promoters, who are responsible for assisting athletes and sporting organizations in managing their careers. They may, for example, secure endorsements and

OCCUPATION

PROFILE

Professional Athlete Considerations

Qualifications

Description

Performs athletic feats at the professional level.

Career cluster

Hospitality and Tourism

Interests

Data; people

Working conditions

Work outside; work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED

Physical exertion

Medium work

Physical abilities

Excellent fitness

Opportunities for experience

Internship; military service; volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Faster-than-average growth expected

Holland interest score

SRC

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Spectator Sports Industry sponsorships, book speaking engagements and public appearances, manage their clients’ public image, negotiate contracts, or advise clients on their investments and tax preparation. Agents are playing an increasingly important role in the spectator sports industry, as athletes derive smaller portions of their income from competition and greater portions from commercial endorsements. Agents generally work on a commission of 3 to 5 percent of their clients’ earnings. Some agents specialize in managing events rather than individuals. Increasingly, typical business managers possess advanced degrees in business administration, management, accounting, or other specialist areas. Extensive practical work experience at a senior level is also usually a prerequisite, and it may substitute for formal qualifications. Commensurate with the level of responsibility, typical salaries for business managers are higher than are the salaries received by employees performing other functions within the company. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) General Manager Business Manager Accountant Business Development Director President Vice President Sports Agent Promoter

Team Operations Team operations comprise the sorts of functions that are specific to a business that supports sporting performance. Team operations positions are differentiated from business operations positions because their outcome is focused on team and athletic performance, as opposed to financial performance. Salary, working conditions, and prerequisite qualifications vary according to the type of job and type of sport. In field sports, for example, team operations include equipment management, player coordination, team and competition administration, and talent scouting.

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Some professional teams have dedicated audiovisual personnel who assist coaches and scouts by preparing visuals for analysis and training purposes. Computing, communications, and other technical positions may belong to team operations when those roles are dedicated to supporting team or athletic performance. For example, most teams have a traveling information technology group to ensure that their computing and radio communications are working properly. They also have specialist administrative employees such as travel and competition coordinators. In the motor sports arena, engineers require a minimum bachelor’s degree in engineering, and experience in motor racing, even at the hobby level, is highly regarded. Specialist fields within engineering include aerodynamics, vehicle dynamics, research and testing, design, and simulation programming. Some engineering positions are shop based, while race engineers and crew chiefs attend race meetings where they manage their teams’ race strategies and car setups. Sponsor manufacturers (such as Toyota, Ford Bridgestone, and Goodyear) provide alternative job opportunities for engineers and technicians seeking nonteambased careers in motor sports. Mechanics may be shop based or members of a travelling race team. Fabricators, machinists, and engine tuners and assemblers tend to be shop based, as they prepare cars before races. Other operational positions in motor sports include competition coordinators, who oversee and manage key personnel at races, and spotters, who relay information to drivers during the race. In horse racing, operational roles include breeding managers, who manage equine reproduction; horse trainers, who develop and execute training programs to prepare horses for competition; grooms (stablehands), who provide hands-on care for horses and maintain their accommodations; exercise riders, who implement trainers’ exercise instructions during training sessions; farriers (also known as blacksmiths), who shoe horses; bloodstock agents, who are experts in pedigree; and veterinarians, who provide medical care to horses. While many of these positions do not require formal qualifications, increasing competition for employment in the industry makes it difficult for candidates without any formal training to find entry-level positions. Operational employees may

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expect to work long hours, including weekends, and to start at the bottom of the career ladder. Promotion and career advancement opportunities in this industry are based on proven abilities, as opposed to standardized progression, but successful employees can realize significant financial and personal rewards. Team operations occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Competition Coordinator Team Coordinator/Administrator Equipment Manager Talent Scout Engineer Crew Chief Mechanic Horse Trainer Veterinarian Groom/Stablemaster Bloodstock Agent

Event Operations Event operations staff are responsible for managing and coordinating tournaments, competitions, and other events. These events may be held in public venues (as is the case for marathons and triathlons) or in purpose-built sporting venues. Event operations subfunctions include food service and preparation; client services staff (including cashiers, ticket takers, ushers, and so forth); and stadium, race course, or event management personnel. Food and client services staff are likely to be engaged on an hourly basis. Stadium, course, and event managers coordinate event support personnel, as well as manage the financial, promotional, administrative, and physical requirements of venues. Some universities offer specialist degrees in sporting venue and track management. According to PayScale.com, the average annual salary for event coordinators in the spectator sports industry in 2009 was $37,000. Event operations occupations may include the following: ■ ■ ■ ■ ■

Event Coordinator Event Manager Stadium/Track/Race Course Manager Catering Manager Catering Assistant

■ ■ ■ ■

Food Server Cashier Usher Ticket Collector

Sales and Marketing Sales and marketing personnel manage the solicitation, acquisition, and expansion of revenue. They generate revenue by designing and executing campaigns that drive the sale of tickets, subscriptions, merchandise, broadcasting rights, advertising, and sponsorships. They usually possess undergraduate degrees in business, marketing, communications, or related disciplines, although practical experience is highly regarded. Marketing is usually an office-based function requiring incumbents creatively to synthesize market data into promotional and public-relations campaigns. The sales function, on the other hand, often demands face-to-face meetings, telephone conversations, and networking with prospects. In addition to traditional sales and marketing functions, the spectator sports sector includes specialist roles in public relations, community relations, broadcasting, new media, merchandising, image management, and cheerleader and mascot programs. According to PayScale.com, the average annual salary range in 2009 for a sales manager in the spectator sports industry was between $38,000 and $88,000. Marketing manager salaries averaged between $35,000 and $75,000. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Sales Manager Salesperson Sales Administrator Account Executive Territory Manager Marketing Manager Marketing Administrator Marketing Officer Sponsorship Manager Merchandising Director

Administration Administrative personnel support the general running of a company. They help with accounting and purchasing, provide secretarial and executive assistance, work in reception, staff switchboards,

Spectator Sports Industry and provide business support within other departments. Experience and qualifications vary. Transactional accounting personnel (for example, accounts payable and receivable clerks) may not have formal qualifications, while accounting managers who assume financial management and reporting responsibilities are likely to have undergraduate or advanced degrees. Secretarial and clerical roles may have special prerequisites depending on the type of company. Positions range from full to part time. Administrative remuneration varies significantly according to one’s area of administrative specialty. According to data from PayScale.com, average administration specialist salaries in 2009 ranged from $36,700 to $48,200 per year, while administrative management salaries ranged from $37,400 to $61,200 per year. Administrative occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Accounting or Finance Manager Accounts Payable Clerk Accounts Receivable Clerk Financial Clerk Secretary Executive Assistant Administrator Administrative Support Manager Administrative Assistant Payroll Administrator Purchasing Manager Contracts Manager

Information Technology While some companies may outsource some of their information technology (IT) requirements, most retain internal IT groups. An IT department maintains computer hardware and software, as well as a company’s overall technology infrastructure. Specialist IT roles in the spectator sports industry include audiovisual, communications, broadcasting, and Internet media technicians. IT personnel typically have degrees or industry certifications in fields such as computer science, computer networking, and software engineering. Some business services companies may also develop proprietary software. The average salary for an IT manager ranges from $59,000 to $99,400 per year.

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IT occupations may include the following: ■ ■ ■ ■ ■

Information Technology Manager Information Technologist Computer Support Specialist Network Administrator Webmaster

Facilities and Grounds Maintenance personnel are charged with the responsibility of maintaining an organization’s office, training, stadium, track, or course facilities. The facilities and grounds department includes, for example, janitorial duties, carpet cleaning, building maintenance and repair, building engineering, remediation services, landscaping, and groundskeeping. For most organizations, it also includes vehicle, equipment, and fleet maintenance. Maintenance, janitorial, and landscaping personnel are rarely required to possess postsecondary degrees. Depending on the facility, they may be hired on a full-time, part-time, or contract basis. They are likely to be paid an hourly wage. Groundskeeping and turf maintenance is becoming an increasingly specialized profession. Positions responsible for maintaining stadium and track surfaces tend to require associate’s or bachelor’s degrees in fields that have taught candidates the principles of horticulture, handling fertilizers and pesticides, and maintaining high-usage surfaces. Salaries in sports turf management commence at $28,000 per year, with the average salary being $44,000 per year. Job opportunities at world-class venues are extremely competitive, but allied opportunities exist at universities and other educational institutions, tennis centers, city parks, golf courses, minor stadiums, and race courses. Facilities and grounds occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Maintenance Manager Facility Manager Maintenance Officer Custodian/Janitor Landscaping Worker Building Engineer Groundskeeper Turf Manager

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Security A security department is responsible for protecting an organization’s facilities, equipment, and personnel. Given the high level of public interest and involvement in spectator sports, security services in this industry include surveillance, crowd management, personal security, and bodyguard services. Security personnel must have training in public safety, which may be obtained via undergraduate programs, vocational training, or a security certification program. Some companies may require their security staff to be trained in emergency response and first-aid techniques. Because security is highly specialized and demanding, organizations often elect to outsource their security needs to external experts. The average salary for security managers ranges from $41,700 to $72,500 per year. Security occupations may include the following: ■ ■ ■ ■ ■ ■

Security Manager Security Officer Security Guard Investigator Bodyguard Crowd Controller

Human Resources Human resources staff manage an organization’s personnel and employment requirements. They recruit, hire, and fire employees; administer compensation and benefits (including salaries, insurance, and retirement plans); and ensure that their company adheres to appropriate labor laws. In large organizations, human resources departments may include training and development, relocation, labor relations, and compensation specialists. Human resources specialists usually possess undergraduate or postgraduate degrees in human resources management. The national annual salary for a human resources manager averages between $46,900 and $73,300. Human resources occupations may include the following: ■ ■ ■ ■

Human Resources Manager Human Resources Coordinator Personnel Administrator Employee Services Officer

Health Care and Medical Health care and medical professionals provide remedial and preventative medical services to athletes and other team members. Medical and firstaid personnel in this industry are usually purposetrained and experienced in dealing with sports injuries and with health needs that are peculiar to athletes. Some of the specialist health care areas in the spectator sports industry include sports medicine, physical therapy, chiropractics, nutrition, dietetics, psychology, massage, orthopedics, and alternative medicine (such as acupuncture and herbal remedies). Candidates seeking a health care or medical role with a spectator sports team must undertake formal university studies or vocational training appropriate to their area of specialization. The median salary for a medical doctor specializing in sports medicine is $235,000 per year, while dieticians and sports nutritionists attract annual average salaries of $45,000. The average salary for team physical therapists ranges from $62,990 to $73,400; chiropractors earn an average of $40,000 to $78,600. The median salary for full-time massage therapists is $45,900. Health care and medical occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Physician Physical Therapist Dietician Sports Nutritionist Chiropractor Massage Therapist Nurse Medical Assistant Sports Psychologist

Entertainment Entertainment is a significant factor in spectator sports, so some spectator sporting organizations provide sundry entertainment services that can include musicians, mascots, cheerleaders, announcers, and comperes. No particular formal qualifications are required for these positions. Cheerleader salaries range between $200 and $1,000 per month, and some cheerleaders may receive payments for corporate appearances, as well as sharing in revenues from special merchandise sales. Salaries for full-time professional mascots begin at around

Spectator Sports Industry $25,000 per year. Entertainment positions in the spectator sports industry are highly competitive. Entertainment occupations may include the following: ■

■ ■ ■ ■

Cheerleading and Mascot Programs Director Cheerleader Mascot Musician Announcer

Transportation and Logistics Transportation and logistics are key functions in spectator sports organizations because of the large volumes of equipment involved and the fact that teams regularly travel to compete. Logistics administrators oversee operational personnel such as drivers, loaders, movers, and fabricator workers, who pack, assemble, and install equipment. Truck driver’s average salaries range from $11.00 to $21.50 per hour, depending on location and experience. Logistics manager salaries range from approximately $46,000 to $75,000 per year. Transportation and logistics occupations may include the following: ■ ■ ■ ■ ■

Truck Driver Transport Assistant Logistics Manager Transport Administrator Logistics Administrator

Professional Services Spectator sports organizations require professional services in areas such as accounting and auditing, legal counsel, and advertising. Some may also demand consulting services or speciality business and technical services, such as occupational health and safety advice. These roles require undergraduate or advanced degrees. Professional services occupations may include the following: ■ ■ ■ ■ ■ ■

Attorney General Counsel Accountant Auditor Consultant Public Relations Manager

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OUTLOOK

Overview The outlook for the spectator sports industry shows it to be stable. Between 1998 and 2005, revenue in the spectator sports sector skyrocketed by 32 percent, and that of the agency and promotion sector increased by 36 percent. Experts agree, however, that the meteoric growth of spectator sports will not be matched in the wake of the global economic recession of 2007-2009. High unemployment and reduced consumer spending is slowing the industry. For example, many more internships are transitioning to unpaid positions, and the NFL and NBA both cut jobs, by nearly 20 and 10 percent of overall staff, respectively, in response to the recession. As well as reduced revenues from game attendances, concession, and merchandise sales, reduced consumer spending results in decreased advertising and sponsorship revenues, on which many sporting organizations rely. While overall the industry is still expected to grow, observers can expect to witness corrections in overvalued salaries and company stocks. These pricing corrections follow decades of unfettered growth that resulted in ticket, merchandise, salary, and company values that cannot be sustained in the postrecession economy. In keeping with general employment trends, spectator sports organizations are working toward smaller, leaner workforces. While wage and salaried jobs in the arts, entertainment, and recreation industry are expected to grow generally, job competition in the spectator sports sector will tighten and intensify. This trend is likely to result in keener competition in the amateur and semiprofessional sectors as well. These economic factors are forcing sports businesses to look beyond their traditional markets and means of distribution. Foreign markets, especially in Asia, are proving particularly attractive. The key to opening these foreign markets, however, is to develop awareness and appreciation for new sports within them. Such initiatives demand long-term investment. The NFL, for example, has established a youth flag-football league in China. In 2007, the NFL also scheduled a regular season game at Wembley Stadium in the England, in an attempt to generate European interest in American football. NASCAR, meanwhile, is attempting

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to broaden its audience demographic by broadcasting in Spanish. Sporting organizations are also competing in the new media space, as consumer demand for instant and interactive services increases. The rising demand for Web-based services challenges traditional marketing paradigms, as the industry grapples with expanding its audience and cementing viewer loyalties beyond traditional broadcast technologies. The challenges of leveraging new communication technologies and media methods cannot be understated, given increased competition among various sports in a saturated domestic market. Revenue in the spectator sports industry is expected to grow generally, but many businesses (especially those competing in nonfranchise leagues) will experience lower profit margins resulting from increased competition. While revenue from consumer sales is likely to plateau, income from the sale of long-term broadcasting and sponsorship agreements assures financial security for most high-profile leagues. Business survival will be more cutthroat in sports whose officiating bodies do not share profits from broadcasting or event sponsorship with teams or athletes. NASCAR, a privately owned, family-operated business, is a good case in point: Sponsorship and broadcasting revenues earned by NASCAR remain solely with NASCAR. This situation can lead to tension when competing teams accuse NASCAR of stealing their sponsors and of pocketing huge broadcasting revenues that leverage the teams’ participation without providing any reimbursement. In 2005, NASCAR signed a $4.5-billion broadcasting deal that expires in 2014. Meanwhile, many teams are reducing their workforces, cutting salaries, and scrabbling for sponsorship dollars. Employment Advantages Despite slowing growth and increased employment competition in the spectator sports industry, opportunities will continue to exist for talented, motivated, and qualified individuals. Practical experience is highly regarded in this industry, so candidates are encouraged to seek relevant experience through volunteering, community involvement at local schools and clubs, amateur leagues, and hobby activities. Candidates who combine relevant practical experience with high levels of academic achievement or athletic talent will be best

positioned for opportunities, as will those who can apply their skills in new and high-demand areas. Although employment entry may be difficult, competition keen, and the work demanding, those who do become successful are likely to be remunerated generously. Annual Earnings The total sports industry in the United States is valued at $410 billion annually: This figure includes the spectator sports, sporting equipment and apparel, health, fitness and recreation, and promotions industries. The spectator sports industry specifically (including sports promoters, managers, and agents) contributes around $50 billion per year to these revenues. In 2007, the NFL was responsible for more than 10 percent of the industry’s earnings, which break down as follows: ■ ■ ■ ■ ■ ■ ■

NFL: $5.86 billion MLB: $5.2 billion NBA: $3.13 billion NHL: $2.2 billion Other sporting leagues: $3 billion Horse racing: $15 billion Promotion: $16.1 billion

The NFL is one of the world’s most profitable sporting leagues, with the average team valued at $957 million. Second place goes to MLB, with an average value of $295 million per team. The NFL’s value can be attributed mainly to broadcasting rights valued at $17.6 billion over eight years, and a player-salary cap that ensures that franchise teams realize strong profits. The top teams also own or control their own stadiums, which garner strong income from ticket and concession sales, as well as multimillion-dollar naming deals. The NFL has also identified unique business opportunities by entering into preferred supplier arrangements with relatively small, burgeoning organizations in return for stock options in these companies. This tactic has paid large dividends, as these partnerships drive up sales and company stock values. The NFL also owns its own broadcasting network. These domestic statistics are dwarfed by the potential revenues offered by burgeoning sports markets overseas. In China, for example, increasing professionalism in sports, coupled with wider media coverage, is resulting in massive growth

Spectator Sports Industry in the sports industry. As of 2010, the Chinese sports industry was valued at about 1.5 percent of China’s gross domestic product ($4.5 trillion), which equates to industry earnings of $66 billion per year—a number that is expected to increase rapidly as the Chinese consumer market continues to develop.

U.S. Olympic Committee 1 Olympic Plaza Colorado Springs, CO 80909 Tel: (719) 632-5551 http://www.olympic-usa.org

ABOUT RELATED RESOURCES FOR FURTHER RESEARCH Amateur Athletic Union P.O. Box 22409 Lake Buena Vista, FL 32830 Tel: (407) 934-7200 Fax: (407) 934-7242 http://www.aausports.org International Olympic Committee Château de Vidy Case postale 356 1001 Lausanne Switzerland Tel: 41-21-621-6111 Fax: 41-21-621-6216 http://www.olympic.org National Athletic Trainer’s Association 2952 Stemmons Fwy., Suite 200 Dallas, TX 75247 Tel: (214) 637-6282 Fax: (214) 637-2206 http://www.nata.org North American Society for Sport Management NASSM Business Office, West Gym 014 Slippery Rock University Slippery Rock, PA 16057 Tel: (724) 738-4812 Fax: (724) 739-4858 http://www.nassm.com Sports Turf Managers Association 805 New Hampshire, Suite E Lawrence, KS 66044 Tel: (800) 323-3875 Fax: (785) 843-2977 http://www.stma.org

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THE

AUTHOR

Kylie Grimshaw Hughes has had a fifteen-year professional career that includes experience with industry leaders such as Parker Hannifin, Honeywell, and the Hanover Finance group. She has a bachelor of arts degree with honors in labor studies and politics from the University of Adelaide and a master of arts degree in communication studies from the University of South Australia, as well as professional certifications in adult education and financial services. Hughes lives in the United States, where she works as a consultant and freelance writer.

FURTHER

READING

Bowles, Tom. “As NASCAR Money Gap Widens, Start and Parkers Soldier On.” Sports Illustrated, June 11, 2009. http://sportsillustrated.cnn .com/2009/writers/tom_bowles/06/11/Startand-park/index.html. Fowler, Elizabeth M. “Careers: Learning to Manage a Race Track.” The New York Times, May 1, 1990. http://www.nytimes.com/1990/ 05/01/business/careers-learning-to-manage-arace-track.html. Funk, Daniel C. Consumer Behaviour in Sport and Events: Marketing Action. Boston: ButterworthHeinemann/Elsevier, 2008. Hart, Chris J., Corinne M. Daprano, and Peter J. Titlebaum. “Rules of the Game: Ethics in Sports Marketing.” Sports Media 33 (March, 2005). http://www.sports-media.org/ newpedimension7.htm. Horrow, Richard B., and Karla Swatek. Beyond the Box Score: An Insider’s Guide to the $750 Billion Business of Sports. New York: Morgan James, 2010. Jozsa, Frank P. Global Sports: Cultures, Markets, and Organizations. Hackensack, N.J.: World Scientific, 2009.

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López-Egea, Sandalio Gómez, Kimio Kase, and Ignacio Urrutia. Value Creation and Sport Management. New York: Cambridge University Press, 2010. Mather, Victor. “Two Horse-Racing Syndicates Flourish on Line. The New York Times, June 4, 1998. http://www.nytimes.com/1998/06/04/ technology/2-horse-racing-syndicates-flourishon-line.html. PayScale.com. “Salary Survey for Industry: Spectator Sports.” http://www.payscale.com/ research/US/Industry=Spectator_Sports/ Salary. _______. “Salary Survey for Industry: Sports Agency.” http://www.payscale.com/research/ US/Industry=Sports_Agency/Salary/ by_Company_Size. _______. “Salary Survey for Job: Referee, Umpire, or Other Sports Official.” http://www.payscale .com/research/US/Job=Umpire%2c_Referee %2c_or_Other_Sports_Official/Salary. Plunkett, Jack W. Plunkett’s Sports Industry Almanac, 2010. Houston, Tex.: Plunkett Research, 2009. Quinn, Kevin G. Sports and Their Fans: The History, Economics, and Culture of the Relationship Between

Spectator and Sport. Jefferson, N.C.: McFarland, 2009. Szymanski, Stefan. The Comparative Economics of Sport. New York: Palgrave Macmillan, 2010. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Van Riper, Tom. “The Most Valuable Teams in Sports.” Forbes, January 13, 2009. http:// www.forbes.com/2009/01/13/nfl-cowboysyankees-biz-media-cx_tvr_0113values.html. Zimbalist, Andrew S. The Bottom Line: Observations and Arguments on the Sports Business. Philadelphia: Temple University Press, 2006. _______. Circling the Bases: Essays on the Challenges and Prospects of the Sports Industry. Philadelphia: Temple University Press, 2011.

Sports Equipment Industry ©Gualberto Becerra/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Archery Equipment Manufacturing; Athletic Shoes Manufacturing; Badminton, Squash, and Tennis Equipment Manufacturing; Ball Manufacturing; Boxing Equipment Manufacturing; Exercise Equipment Manufacturing; Fishing Supplies and Equipment Manufacturing; Golf Equipment Manufacturing; Golf Shoes Manufacturing; Gymnasium and Playground Equipment Manufacturing; Ice Skate Manufacturing; Roller Skate Manufacturing; Ski Equipment Manufacturing; Sporting Goods Stores; Sports Apparel Manufacturing; Team Sports Equipment Manufacturing; Track and Field Equipment Manufacturing; Wet Suit and Scuba Diving Equipment Manufacturing Related Industries: Apparel and Fashion Industry; Health and Fitness Industry; Retail Trade and Service Industry; Spectator Sports Industry; Toys and Games Industry Annual Domestic Revenues: $68.4 billion USD (Sporting Goods Manufacturers Association, 2008) Annual International Revenues: $44.28 billion USD (Global Industry Guide: Sports Equipment, 2008) Annual Global Revenues: $73.8 billion USD (Sporting Goods Manufacturers Association, 2008) NAICS Numbers: 315, 33992, 45111, 316219

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INDUSTRY DEFINITION Summary The sports equipment industry designs, produces, and distributes equipment for a wide range of sports and recreation activities. Products include balls, protective and other equipment, and apparel for team sports such as baseball, basketball, football, soccer, and hockey; adventure equipment for camping, hunting, and fishing; fitness equipment, including exercise bikes, resistance training machines, and treadmills; rackets, apparel, and other supplies for sports such as tennis and badminton; scuba gear, surfboards, and other waterrelated sporting goods; golf equipment and apparel; ice skates, skis, snowboards, and related equipment; roller skates, skateboards, and related equipment; and so on. The industry is present throughout the world and provides a wide range of employment options, from the initial design of

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The exercise and fitness equipment sector of the industry supplies both consumers and such institutions as health clubs, schools, and hotels. (©Andres Rodriguez/Dreamstime.com)

equipment down through the sale of products to consumers. History of the Industry Some experts in the industry trace it to the ancient chariot races and gladiatorial contests that entertained people of ancient Rome. In retrospect, the suppliers of chariots and swords can be seen as having produced sports equipment. In this period of history, sport and leisure was a reward for wealth and nobility and was not part of the common person’s life. Early sports such as golf, tennis, and even fishing began to demand specialized products. In the 1800’s, specialized companies began to form that concentrated solely on the production of leisure activity products. Some of those early companies have grown into today’s industry giants. In the early 1900’s, several companies banded together to form the Sporting Goods Manufacturers Association (SGMA). The goal of this organiza-

tion was to encourage participation in sports and to serve the interests of its member companies. The sports equipment industry experienced a surge in growth and recognition shortly after World War I, when organized team sports began to grow in popularity. The origin and early history of nearly every major sporting activity can be traced to this period. In 1957, the Sporting Goods Fair was started by the SGMA; it became the Super Show in 1986 and eventually became the single largest sporting goods product show in the world. Today, the SGMA also has a political presence, as was seen in 1997, when the organization was instrumental in eliminating the use of child labor to produce soccer balls in Pakistan. The main impetus for the industry’s rapid growth was the revolutionary growth in technology that took place during the twentieth century. Labor-saving devices and machines in the workplace and the home increased the average amount of leisure time, so there was a corresponding increase in

Sports Equipment Industry leisure activities. The SGMA became the leading organization representing manufacturers’ interest in the creation of standards for protective equipment. The National Operating Committee on Standards for Athletic Equipment (NOCSAE) was created in 1969. NOCSAE was required by sport governing bodies to establish standards for protective athletic equipment. The SGMA was very active in the creation and development of NOCSAE. In the last half century, sporting and recreational activities of all types have grown substantially. The sports equipment industry has profited from this growth by supplying sporting goods, and it has also helped spur further growth by making high-quality, safe, and ever-better products available to the public. Regardless of how much elite athletes and weekend recreationalists train, the quality of their equipment will always be a factor influencing the quality of their performance.

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ing design and materials technologies. Indeed, the materials used to manufacture sports equipment have constantly improved as a result of sustained research and technological advances. The main raw materials used in much of the production of sports equipment are steel, various plastics products, resins, carbon fiber, rubber, and leather. In recent years, advances in materials have enabled the development of new types of equipment with enhanced properties, improving overall product design and safety. Sports equipment manufacturers are continually redesigning their products to enhance performance and to keep pace with ongoing media exposure to many organized sports. More young athletes are motivated to perform more aggressively to obtain recognition and school scholarships. This increase in the performance of sports equipment and the intensity of youth competition leads to potential increases in sports-related injuries as well. NOCSAE continues to monitor the safety of sports equipment and to develop and enforce standards. The committee funds research on sports equipment and helps distribute findings pertaining to injury data, as well as closely related areas of sports medicine. For example, it may fund studies of the effectiveness of protective headgear when exposed to different levels of impact. Foot-

The Industry Today Despite the economic downturn of 2007-2009, the sports equipment industry remains steady, as Americans continue to participate in around one hundred different athletic, recreational, and exercise pursuits that use or rely on the industry’s products. People of a wide range of ages purchase sports equipment, including many retired baby boomers, who are buying and using fitness equipment to enhance their quality of life. Also, over the past two decades, the number of boys and girls participating in high school varsity sports teams has risen by 27 percent and 60 percent, respectively. Increases in the popularity of specific sports also affects the industry. Mixed martial arts styles, such as so-called extreme fighting, represent one example of an increasingly popular sector of the sports industry; snowboarding is another. Sales of martial arts equipment of all sorts, including boxing, have continued to grow, as have sales of tennis equipment. Sports equipment manufacturGame balls for Super Bowl XLV were made at the Ada, Ohio, factory of Wilers have kept pace with consumer son Sporting Goods, the official Super Bowl football manufacturer. (AP/Wide demand for high-quality and highWorld Photos) performance equipment by advanc-

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Sports Equipment Industry

ball helmets in particular have already been targeted as the subjects of one such study. Once it is designed, manufactured, and tested, sports equipment is distributed through several channels. Approximately 50 percent of all sports equipment is sold through sporting goods stores, while 35 percent is sold by discount chains, department stores, and other such general-purpose merchants. The last 15 percent is sold through other channels, including the Internet. Some of the larger sports equipment companies sell directly to consumers through company-owned retail outlets. Sports equipment specialty shops that focus on select product lines have become increasingly popular. These stores are generally smaller in size and attempt to recruit knowledgeable staff to offer quality service. They cater to such specific sports and activities as skateboarding, ice skating, and bicycling. Similar to these shops are multisport specialty shops, which are not as narrowly defined and which often originate from one-sport specialty shops that have broadened their product lines. Such stores often find that they need to expand to generate income throughout the year by providing equipment for both cold-weather and warmweather sports. For example, multisport specialty shops may operate chains of stores focusing on five sports: camping, climbing, cycling, paddling, and skiing. Equipment stores called pro shops are similar to specialty shops, with the biggest difference being

their location. Rather than stand-alone venues, pro shops are generally connected to and operate within or alongside sports facilities such as golf courses, tennis clubs, and ice rinks. They get their name from the fact that they provide not only equipment but also advice and instruction from professional athletes/trainers. Because they are highly specialized and sell merchandise to supplement and support instruction, pro shops are small and carry relatively few product lines. Rental shops are another venue for product sales by manufacturers. Rental shops buy equipment to rent out, and they also often sell accessory items, such as golf or tennis balls. Big-box stores are large, carrying thousands of equipment items. Manufacturer outlets represent another avenue of distribution, and some manufacturers have established chains of retail stores that sell their own brands and little else. To gain more publicity and promotion, rather than volume, some manufacturers establish concept stores that portray themes to help display products in exciting and entertaining settings. Many manufacturers open outlet stores to dispose of overstocked items. Such outlet stores can be near manufacturing factories or in outlet centers, which are often located in suburbs or near tourist destinations. To promote good locations and decrease competition, many outlet stores are located in areas at least thirty minutes away from metropolitan shopping malls. Many manufacturers establish mass merchandising channels through discount stores. These stores carry selected sporting goods at relatively low price points. Smaller full-line sporting goods stores may find it difficult to compete with discount stores because they generally cannot match their prices. They attempt instead to compete by offering greater selections and by cultivating reputations as experts in sports equipment who can provide consumers with better advice than can general-purpose, low-service discount stores. Some department stores also carry sports equipment. For example, Sears has become the largest retailer of fitness equipment. Two-piece golf balls have a solid rubber core with a plastic or urethane The exercise and fitness equipment cover. (©Gualberto Becerra/Dreamstime.com) sector of the industry remains stable.

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vorable to its members. For example, it is working to build congressional support for legislation to encourage fitness activities to improve Americans’ health. It also supports the Personal Health Investment Today (PHIT) bill, which would encourage physical activity by easing the financial burden to participate in health and fitness-related activities: The bill would allow workers to pay for expenses related to physical activity—including sports equipment—out of their pretax incomes.

INDUSTRY MARKET SEGMENTS Sports equipment businesses range in sizes from privately owned small specialized companies to major manufacturers. The following sections provide a comprehensive breakdown of each segment.

Rock climbing requires dependable equipment. (©Paulo Resende/Dreamstime.com)

This sector supplies both consumers and such institutions as health clubs, schools, and hotels. Today, over 44.1 million Americans are members of health clubs. This number increased by 21 percent over the first decade of the twenty-first century, and the sports equipment industry offers a huge variety of the exercise machines that help sustain the fitness industry. Free weights remain the most universal form of fitness equipment found in the home, yet more money is now being spent on treadmills. According to the SGMA, the sports experiencing the greatest sales growth in the early twenty-first century were fitness walking, lacrosse, running, and strength training. Challenges lie on the horizon for the industry, which will need to adapt to slower consumer spending and decreased availability of skilled labor. The availability and cost of materials will be another concern. The SGMA is an active voice for the industry in Washington, D.C., and advocates for government policies that are fa-

Small Businesses While some manufacturers of sports equipment establish brands used across many different sports, smaller specialist companies still account for a significant portion of the industry. New companies in particular may find it easier to gain entry to the industry by specializing in a specific product or sport. Such companies can produce successful products without needing to invest in large-scale manufacturing plants, and they can often sustain higher profit margins than can larger businesses by cultivating reputations for the high quality and relative rarity of their products. A good example of this phenomenon is a high-end pool cue made almost entirely by hand and with extreme precision. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), in the class of manufacturing to which the sports equipment industry belongs, the average annual salary of a commercial or industrial designer in 2009 was $54,630 and the average annual salary of a materials engineer was $87,020. Sales representatives earned an average of $61,260, product assemblers and fabricators earned $30,220, inspectors and testers earned $34,390, and general and operations managers earned $118,550. Employees of small businesses may earn considerably less than these averages. Clientele Interaction. Small businesses in general rely on repeat business from previous custom-

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ers. Some small sports equipment producers may sell their own equipment, as is the case with a shop specializing in custom-designed surfboards, and they go out of their way to emphasize not only the uniqueness of each product but also the personal relationship between producer and consumer. Other businesses may sell to retailers and have little direct consumer contact. Such businesses nonetheless seek to develop mystiques around their products, which often rely on the cache of unique qualities or features to drive sales. An owner or sales representative may cultivate personal relationships with retailers, seeking to convince them that they will enhance the reputations of their stores by carrying the manufacturer’s products. Amenities, Atmosphere, and Physical Grounds. Small sports equipment businesses may be small manufacturing concerns or they may be artisan shops hand-crafting a limited number of items. In either case, work areas are generally functional, including all tools and resources necessary to create products. Businesses may also feature showrooms or attached retail outlets where customers can view samples of and purchase products. Sales representatives and managers work in standard office settings, often decorated with images taken from the particular sport to which their companies cater. Typical Number of Employees. Small sports equipment businesses generally employ between one and fifty people. Traditional Geographic Locations. Small sports equipment businesses can be located nearly anywhere. Manufacturing concerns that sell only at wholesale generally seek to locate themselves near transportation infrastructure to facilitate shipping of their products to retail outlets. Small manufacturers and artisans that sell directly to consumers may locate themselves near the appropriate types of sporting venues. For example, surfboard shops are likely to be located near beaches popular among surfers, while skiing equipment manufacturers may locate themselves near ski slopes. Good locations for small businesses are also dependent upon the economic environment and local competition. Sports equipment outlet stores are often located near related manufacturing factories and within outlet centers to reduce the cost of transportation. To decrease potential competition, many sports equipment outlet stores are also located in

areas at least a half hour away from metropolitan shopping malls. Pros of Working for a Small Sports Equipment Business. Small sporting equipment businesses can often be started at low cost and on a parttime basis. A business of this size is well suited to Internet marketing, as it can easily serve specialized equipment niches that once were dependent upon direct mail. Change is inevitable in business, and small businesses tend to respond more easily to shifts in the marketplace. Small-business owners and employees tend to have more personal relationships with their customers and clients. These relationships can be fulfilling in themselves, improve business-customer communication, and lead to increased sales. Independence is one of the more popular rewards and advantages of owning a small sports equipment business. Many people prefer to make their own decisions within the constraints of economic and other environmental factors. Franchising may allow small-business owners to benefit from the scale of a big corporation yet work in a small-business environment. Franchises allow their owners to have greater physical presences in their stores, enabling each franchise to capitalize both on its brand name and on its identification with a particular owner. Cons of Working for a Small Sports Equipment Business. Small businesses in general often face a variety of problems related to their size. Not having enough capital is a common cause of financial and mental stress. Finding and retaining good employees is difficult for small-business owners, yet it is critical to the success of many small businesses. If a small business is located near a major brandname store in the same industry, it may have difficulty competing with the larger store’s name recognition and national reputation. In the United States, insurance costs are some of the largest concerns of small businesses. Larger businesses are better equipped to bear these costs, as they are to bear the costs of doing business in general. Small businesses generally have far smaller cash reserves on which to draw in times of financial difficulty. Costs Payroll and Benefits: Small sports equipment businesses may hire staff on an hourly or salaried basis. Seasonal businesses may hire tem-

Sports Equipment Industry porary staff for only part of each year. Selfemployed business owners must pay themselves out of their companies’ profits, only after all other financial obligations and employee salaries are paid. If there are no profits, owners may draw no pay. Benefits are rarer at small businesses than at larger companies and are offered at the discretion of owners or management. Supplies: Small sports equipment manufacturers require artisanal tools, industrial production equipment, or both, as well as raw materials and standard office supplies. External Services: Small sports equipment businesses may contract external vendors to provide cleaning and maintenance services, security, landscaping, accounting, and marketing and advertising. Legal services may also be required, especially to develop and protect intellectual property rights. Utilities: Small businesses typically require water, sewage, electricity, telephone, and Internet access. Taxes: Small businesses must pay applicable local, state, and federal income and property taxes. Sole proprietorships and some other small business partnerships pay no corporate taxes; instead, owners and partners must pay selfemployment taxes and pay taxes related to their businesses on their personal returns. Midsize Businesses Midsize sports equipment businesses typically create more types and even brands of equipment than small businesses and compete across more sports. They enjoy significantly lower profit margins, on average, than small businesses. Entering the market with less of a specific and specialized product increases the need to invest in production, as profits are driven not by high quality or rarity but rather by volume of product. Potential Annual Earnings Scale. According to the BLS, in the class of manufacturing to which the sports equipment industry belongs, the average annual salary of a commercial or industrial designer in 2009 was $54,630 and the average annual salary of a materials engineer was $87,020. Sales representatives earned an average of $61,260, product assemblers and fabricators earned $30,220, inspectors and testers earned $34,390, and general and operations managers earned $118,550. Em-

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ployees of midsize sports businesses may earn salaries equal to or somewhat less than these averages. Clientele Interaction. Repeat business from previous customers is important to any size business. Midsize businesses need managers and sales representatives knowledgeable about their products, about the sports and recreation activities supported by those products, and about their competitors. Managers and sales representatives must be able to cultivate relationships with purchasers and other decision makers at retail outlets in order to drive and maintain sales. Amenities, Atmosphere, and Physical Grounds. Midsize sports equipment manufacturers are generally located in industrial plants that include assembly lines and other production areas. Research and development facilities may include engineering stations and offices, as well as small athletic fields and other venues for testing new equipment in real-world conditions. Management offices and reception areas may be decorated in a style related to sports and fitness. Typical Number of Employees. Midsize sports equipment businesses typically employ between fifty and five hundred people. Traditional Geographic Locations. Midsize sports equipment businesses can be located nearly anywhere, but they tend to be close to metropolitan and industrial regions that have the infrastructure to support them. Production and distribution facilities are usually located near major transportation hubs where truck, rail, air, or water transportation is readily available. Corporate offices, if separate, are often located in urban business centers. Retail outlets tend to be located near areas where their products will be used. For example, outlets offering camping, hunting, and fishing supplies are often located near open, publicly accessible outdoor areas where such equipment can be used. Pros of Working for a Midsize Sports Equipment Business. While midsize sports equipment businesses require more capital than small businesses, they require much less capital than large businesses. They are well positioned to take advantage of Internet marketing because they can easily serve more generalized sports equipment needs. Change is inevitable in business, and small and midsize businesses tend to respond more easily to shifts in the marketplace than large businesses. Midsize businesses are often small enough that

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owners and employees are still able to develop personal relationships with their customers and clients, encouraging good word-of-mouth and repeat business. They also retain a certain degree of independence and lack of bureaucracy as compared to large corporations, but they are often able to realize greater earnings and profits than small businesses. Cons of Working for a Midsize Sports Equipment Business. Midsize businesses, like small businesses, often face a variety of problems related to their size. While they often have greater capital than small businesses, they usually have significantly lower capital than large businesses, and the capital advantage they enjoy over small businesses may well be overwhelmed by higher overhead costs from research and development, production, and distribution. They may also have trouble competing with large businesses for the best employees. In this and other ways, the success of midsize businesses may be disproportionately affected by competition from larger concerns, with which they are more direct competitors than are small, specialized companies. Costs Payroll and Benefits: Midsize sports equipment businesses may hire staff on an hourly or a salaried basis, and they sometimes hire other workers on an as-needed basis as well. However, they tend to need more full-time, permanent employees than small businesses. Benefits are more common at midsize businesses, especially those competing with large businesses for workers. Supplies: Midsize sports equipment manufacturers require industrial production machinery, as well as the tools necessary to maintain it and the raw materials that it manipulates into finished products. They also need standard office supplies, as well as computer workstations, laboratory equipment, and other supplies necessary to test and develop new products. External Services: Midsize sports equipment businesses may contract external vendors to provide cleaning and maintenance services, security, landscaping, accounting, computer networking and systems support, and marketing and advertising. Legal services may also be required, especially to develop and protect intellectual property rights.

Utilities: Midsize businesses typically require water, sewage, electricity, telephone, and Internet access. Taxes: Midsize businesses are required to pay local, state, and federal corporate taxes, as well as property taxes if applicable. Large Businesses Large sports equipment businesses are often well-diversified concerns that manufacture products for a wide range of sports and recreation activities. Some, by contrast, specialize in particular sports and seek to become the brand of choice for most enthusiasts of that sport. Both types of business often expend significant sums on advertising campaigns that incorporate professional sports figures, and their reputations and popularity derive in part from the popularity of the celebrities endorsing them, as well as from the quality of their products. In addition to marketing their products through sporting goods chains and other thirdparty channels, large manufacturers often have their own retail presence. Their retail stores generally sell only a small fraction of their total inventories, but their presence in shopping malls and elsewhere increases brand visibility and name recognition. Potential Annual Earnings Scale. According to the BLS, in the class of manufacturing to which the sports equipment industry belongs, the average annual salary of a commercial or industrial designer in 2009 was $54,630 and the average annual salary of a materials engineer was $87,020. Sales representatives earned an average of $61,260, product assemblers and fabricators earned $30,220, inspectors and testers earned $34,390, and general and operations managers earned $118,550. Chief executives earned an average of $187,780. Clientele Interaction. Repeat business from previous customers is important to any size business. Large businesses continue to need managers, sale representatives, and retail salespersons who are knowledgeable about the sports equipment within a particular department and about the athletes who require that equipment. In management and sales, employees should enjoy working with people, have the ability to communicate with customers clearly, have a pleasant personality, and present a neat professional appearance. Sales representatives at large corporations must understand

Sports Equipment Industry the place of their companies within the industry and the nature of the competition they face in various sectors, and they must be able to communicate effectively with purchasers and other decision makers at various retail corporations, sometimes playing competing retailers off against each other to ensure the widest possible market penetration of their products. Indeed, large corporations seek not only shelf space but also display space at significant retailers, and marketing staff must attempt to ensure that patrons of discount stores and sporting goods chains will see prominent displays featuring their companies’ products. Such displays not only drive immediate sales but also reinforce corporate branding and prestige among consumers who are in stores seeking unrelated products, laying the foundation for future sales. Amenities, Atmosphere, and Physical Grounds. Most employees in sports equipment and accessories retailing work in clean, well-lit conditions. Retail salespeople and cashiers often stand for long periods, and stock clerks may perform strenuous tasks, such as moving heavy, awkward boxes. Sales representatives and buyers frequently travel to visit clients and may be away from home for several days or weeks at a time. Those who work for large retailers may need to travel outside of the country on a relatively regular basis. Manufacturing employees work at large industrial plants that may occupy one building or several buildings. Production areas may contain heavy machinery, requiring safety equipment and precautions, and may be quite noisy. Research and development staff work in engineering and sports science laboratories designed to study both materials and the human body to facilitate the development of new products. Typical Number of Employees. Large sports equipment businesses typically employ more than five hundred people. Traditional Geographic Locations. Large businesses within the sports equipment industry can be located practically anywhere but are usually in highly populated areas for manufacturing and sales reasons. If the business actively manufactures its own products, the plant facility is usually closer to metropolitan and industrial areas that supply necessary labor. In terms of distribution, large businesses seek close proximity to appropriate transportation infrastructure, such as highways,

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railroads, ports, and airports. In terms of sales, visibility is important, especially for retail outlets designed to enhance brand at least as much as to sell product. Being near areas where their products will be used can be beneficial for sales. Outlets sports equipment stores of large parent operations are often located near those operations’ manufacturing factories or in outlet centers. Pros of Working for a Large Sports Equipment Company. Large sports equipment businesses generally have large amounts of capital and are publicly traded. Such companies can afford state-of-the-art research and manufacturing facilities. Larger businesses may offer the opportunity for managers and employees to share challenges and concerns. They are usually well established and have significant marketing and advertising departments that study how best to capitalize on brand recognition to drive sales. Their financial resources make it possible for them to purchase major sports celebrity endorsements, further enhancing their brands. Employees of large companies generally receive full benefits, including paid vacation, sick time, maternity leave, corporate education and training, and health insurance. They also receive better pay and more regular raises and enjoy greater opportunities for advancement and more well defined job titles and roles. Potential financial rewards in the way of salaries are often better in the larger businesses for most personnel. Cons of Working for a Large Sports Equipment Company. Large-business owners and employees may have less time to interact personally with customers and clients, and there may be no direct communication between consumers and the vast majority of company employees. Many large businesses outsource certain aspects of their labor, which can harm local and regional economies. Employees must follow more rigid corporate protocols and deal with company bureaucracies that afford less room for creativity. Finding good, knowledgeable employees often remains a difficult task for large businesses, which face significant competition for this valuable resource. Insurance and related costs are required for more employees, along with workers’ compensation claims and employee unemployment benefits that can potentially be more frequent and costly because of the size of the operation.

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Costs Payroll and Benefits: Large businesses usually hire staff on an hourly or annual salary basis. Because many of the employees work full time, benefits are required by government regulations. Benefits such as vacation and sick time are available and, to a certain degree, the amounts of each are at the discretion of the management. Supplies: Large sports equipment manufacturers require industrial production machinery, as well as the tools necessary to maintain it and the raw materials that it manipulates into finished products. They also need standard office supplies and equipment, as well as computer workstations, laboratory equipment, and other supplies necessary to test and develop new products. External Services: Large sports equipment businesses may contract external vendors to provide cleaning and maintenance services, security, landscaping, auditing, and computer networking and systems support. They generally have their own marketing and legal departments, but they may contract additional services in these disciplines, especially to develop major advertising campaigns and to lobby the government regarding proposed changes in regulations that could affect the industry. Utilities: Large businesses typically require water, sewage, electricity, telephone, and Internet access. Taxes: Large businesses are required to pay local, state, and federal corporate taxes, as well as property taxes if applicable. Multinational corporations and those with an international presence must pay taxes in multiple countries and may need to pay tariffs and other import fees and taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organization and distribution of tasks within the sports equipment industry are based upon the type and size of each business. In a small business, where one individual has manufactured a single specialized product, very few positions are needed to encompass the various tasks necessary to run the business. In contrast, a large company may rely on

engineers to research and develop sports equipment, a production unit to manufacture it, and a sophisticated distribution chain to ship products to retail stores—all in addition to the management staff that oversees operations and the various support positions that ensure things run smoothly. The following umbrella categories apply to the organizational structure of businesses in the sports equipment industry: ■

■ ■ ■ ■ ■ ■

Technology, Research, Design, and Development Business Management Production Customer Service Sales and Marketing Human Resources Security

Technology, Research, Design, and Development Engineers employed in the sports equipment industry develop and design new products and evaluate the effectiveness of existing products. They analyze the human body’s motion and performance to better understand the equipment and training needs of athletes and sports enthusiasts, and they study the properties of materials and devices to evaluate their ability to augment or facilitate human motion. Engineers also study how environmental factors such as temperature, rain, wind, and terrain affect the body, as well as how different surfaces act on skin and muscles. These studies allow them to increase equipment’s performance in a range of conditions and to help prevent injury. Sports equipment must comply with a specific set of standards and regulations before it is made available to the public. Mechanical and electrical engineers design instrumentation and testing procedures that measure, calculate, and assess each product’s specifications. For example, mechanical engineers can predict the levels and location of specific stress points on bicycle parts. This knowledge helps increase the performance and life span of bicycles. Testing and prototyping by industry engineers verifies the work done in the design phase. In some projects, physical models are constructed before actual prototypes are attempted. However, designers are beginning to employ virtual prototyping

Sports Equipment Industry technology, using computer-assisted design (CAD) programs to create three-dimensional models of proposed equipment. Such software may be helpful to establish a new product’s correct proportions, overall dimensions, or material specifications, among other properties. Technology, research, design, and development occupations may include the following: ■

■ ■ ■ ■

■

■ ■ ■

Vice President of Research and Development Lead Designer Product Tester Compliance Specialist Mechanical/Electrical/Materials Engineer Mechanical/Electrical/Materials Engineering Technician Mechanical Drafter Metals Scientist Biomedical/Biomechanical Engineer

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Business Management Business managers oversee overall companies and specific departments, ensuring that they remain efficient and profitable, setting goals, and evaluating success in meeting those goals. They approve new products, assign employees roles in producing, distributing, and marketing those products, and bear ultimate responsibility for product quality, regulatory compliance, and success or failure in the marketplace. Business managers are often involved in marketing, organizing sales and promotion events, and ensuring that merchandise is displayed effectively. Business managers oversee employees, implement work schedules, and supervise employee performance, and they are responsible for the overall sales and profitability of their departments. In small to midsize businesses, they may be responsible for all of these areas within a department or even within the entire business. In a small business, it is not uncommon for one person, such as the

Trek is a best-selling bicycle manufacturer. (AP/Wide World Photos)

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owner, to bear responsibility for all areas of management. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

President/Chief Executive Officer (CEO) Owner Chief Financial Officer (CFO) Chief Technology Officer (CTO) Chief Operating Officer (COO) General and Operations Manager General Counsel Engineering Manager Sales and Marketing Director

Production Production staff create the products that have been designed by research and development engineers and that will be sold by the sales and marketing staff. In small businesses, owners may both design and manufacture their companies’ products. Large corporations employ dedicated production crews, which often incorporate a mix of skilled and unskilled laborers working on production lines to fabricate and assemble finished products. Production occupations may include the following: ■ ■ ■ ■ ■

Owner/Craftsperson Production Manager Production Supervisor Assembly Team Member Machine Operator

Customer Service Customer service personnel ensure proper communication between equipment manufacturers and retail outlets, as well as handling inquiries, feedback, and complaints directly from consumers. Some of these inquiries and complaints they handle themselves; others, they forward to personnel or departments that are better equipped to resolve particular issues. Most customer service representatives in this industry perform their work by telephone from an office; in larger businesses, they may work in call centers. Most other interaction is done by e-mail, fax, or face to face. A large portion of customer service inquiries involves general questions about sports equipment. Thus, customer service representatives must know

a fair amount about the sports they serve in general and the culture of those sports, in addition to understanding the proper use of their companies’ products and anticipating common problems in their use. They may also receive many requests to provide purchasers with the current status of their orders or to update business records. Representatives employed by large companies are often required to follow company polices and take specific steps to resolve customer issues. They may have the authority to reverse fees that have been wrongly applied to customers and to send replacement equipment parts. Although selling sports equipment is not the role of customer service representatives, some may provide information to assist customers with their purchasing decisions. Thus, it may be necessary for each member of the department to have a good knowledge base of the industry, their companies’ products, and their competitors’ products. Customer service occupations may include the following: ■ ■ ■

Customer Service Manager Customer Service Representative Call Center Staff

Sales and Marketing Sales and marketing personnel develop and execute strategies to sell products. They include development managers, market research managers, and general sales personnel. Together, these employees evaluate current markets, identify potential new markets, and seek to ensure that their companies’ products achieve the greatest possible penetration into those markets. Important to the sports equipment industry is the task of monitoring trends that affect consumer demand. For example, winter sports equipment can be in higher demand and of more interest around the time of the winter Olympics. Marketing managers are involved in overseeing sports equipment development and help promote a company’s products and general image. The success of large sports equipment companies—and even of smaller ones, to a certain extent—is closely related to corporate branding. High-ranking marketing personnel have the important task of shepherding their companies’ brands, ensuring that all advertising, including store displays, reinforces and capitalizes upon overall brand strategies.

Sports Equipment Industry OCCUPATION

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PROFILE

Quality Control Inspector Considerations

Qualifications

Description

Inspects manufactured products, such as sports equipment, machinery, or furniture, to ensure compliance with contract specifications and consumer protection regulations.

Career clusters

Government and Public Administration; Manufacturing; Transportation, Distribution, and Logistics

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; junior/ technical/community college

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship

Licensure and certification

Required

Employment outlook

Decline expected

Holland interest score

REI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Marketing managers for an international sports equipment company are likely to be required to do some travel. Sales and marketing staff may also be responsible for arranging media coverage of product introductions. Good communication skills are essential for this position, since marketing managers need to interact with different departments in the company, along with various media contacts in television, radio, print journalism, and so on. Sales personnel convince stores to carry their companies’ products. They thus must be able to explain both the benefits of a product to a consumer and the benefits of carrying that product to a retailer. Sales and marketing occupations may include the following: ■ ■ ■

Vice President of Sales and Marketing Branding Expert Marketing Manager

■ ■ ■ ■ ■

Market Research Analyst Sales Manager Sales Representative Retail Sales Director Media Buyer

Human Resources Human resources personnel recruit and hire employees. In doing so, they seek to maximize a company’s return on investment in its workforce and to minimize its financial risk. They place each employee, aligning skilled and qualified individuals with an organization’s business plans. They develop policies, standards, systems, and processes to manage employees; train and develop employees; respond to grievances; enforce corporate discipline; and administer payrolls and benefits. Human resources occupations may include the following:

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Sports Equipment Industry

Human Resources Director Human Resources Generalist Benefits Specialist Payroll Clerk Quality Assurance Director Recruitment Director Director of Employee Drug Testing Safety Council Manager

Security occupations may include the following: ■ ■ ■ ■

Security Manager Armored Car Guard Security Guard Security System Technician

INDUSTRY OUTLOOK Security Small and large sports equipment businesses Overview rely on security to protect their assets against fire The outlook for the sports equipment industry and illegal activity such as theft, vandalism, and tershows it to be on the rise. According to Datarorism. Security personnel protect corporate propmonitor, the industry grew by 2.9 percent between erty, including intellectual property, enforce com2006 and 2008, and it is forecast to grow by 6.6 perpany protocols, and discourage illegal activity. cent between 2008 and 2013. The greatest factor Security services may be contracted by small busiinfluencing industry growth is the amount of disnesses, but large businesses often employ their own posable income among consumers. Between 2006 security personnel. and 2008, despite a slowing economy, personal Security personnel set up security systems, inconsumer spending for sporting goods increased cluding alarms and surveillance systems. They estabby 6 percent. This trend is expected to continue for lish procedures and protocols for using these sysat least five to ten years. tems, and they write reports outlining their observations and activities during their assigned shifts. One of the most imPROJECTED EMPLOYMENT portant attributes a security officer can FOR SELECTED OCCUPATIONS demonstrate is good judgment and common sense. Officers need to follow comSporting Goods, Hobby, pany policy and guidelines in the event Book, and Music Stores of an emergency, and they need to be comfortable taking charge in stressful Employment situations, such as when directing others to safety during emergencies. In large 2009 Projected 2018 Occupation businesses, a security manager might 103,690 111,800 Cashiers oversee a group of security officers. Security guards are often assigned to 55,120 55,400 First-line supervisors/ one location for a specific length of managers of retail sales time. Guards must be acquainted with workers the property they are monitoring and 335,760 353,400 Retail salespersons with employees and other people asso9,840 9,100 Shipping, receiving, and ciated with the business. Guards of large traffic clerks facilities may be assigned to mobile patrols to cover the grounds and conduct 21,420 20,700 Stock clerks and order security checks. They must be trained to fillers detain or arrest criminal violators, and many have backgrounds in law enforceSource: U.S. Bureau of Labor Statistics, Industries at a ment or military service. In some cases, Glance, Occupational Employment Statistics and security personnel are qualified to issue Employment Projections Program. traffic violation warnings on or around business properties.

Sports Equipment Industry Steady growth in the industry was seen in the 1970’s and continued throughout the rest of the twentieth century, driven largely by sales to members of the baby boom generation. Beginning in the 1990’s, as the baby boomers aged, they shifted their purchases from higher-impact sports to lower-impact sports and fitness activities, resulting in a shift in markets. Sales of exercise equipment to consumers remain steady at around $3.5 billion. Sales of exercise equipment to institutions such as clubs, schools, and hotels increased in 2007 by 2.7 percent. The exercise equipment sector remains very large and strong, with $4.7 billion sales in 2007 according to the SGMA. The market is thought to be driven by the availability of an ever-increasing variety of userfriendly machines. While the United States has the largest consumer market for athletic consumer goods, China’s impact on the consumer goods industry has been increasing for many years as companies send manufacturing operations overseas in an attempt to be more competitive. Employment Advantages According to a 2007 report of the SGMA, general sports merchandise stores (including sports equipment) will have numerous job openings over the 2008 to 2018 period. These openings will include many caused by worker transfers and turnover. The sports equipment industry is an extremely exciting and growing segment of the consumer goods industry and of the economy as a whole. Employment growth in the industry will be steady and determined primarily by the global and local economy and consumer spending. Consumer preference for the latest sports equipment is driven by increasing participation in recreational sports, awareness and interest in physical fitness, and the popularity of the athletes associated with particular sports equipment brands. Annual Earnings Today, the sports equipment industry is strongly influenced by the challenges of slower consumer spending and the availability and cost of skilled labor, quality materials, and energy. In 2013, the global sports equipment market is expected to reach a value of $81.7 billion, representing an increase of 10.7 percent since 2008. According to a survey conducted by the SGMA in 2008, the five

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fastest-growing sales sectors in the industry are products related to yoga and Pilates, fitness walking, lacrosse, running, and strength training.

RELATED RESOURCES FOR FURTHER RESEARCH American Society for Testing and Materials 100 Barr Harbor Dr. P.O. Box C700 West Conshohocken, PA 19428-2959 Tel: (610) 832-9500 Fax: (610) 832-9555 http://www.astm.org National Operating Committee on Standards for Athletic Equipment Executive Director/Legal Counsel 11020 King St., Suite 215 Overland Park, KS 66210 Tel: (913) 888-1340 Fax: (913) 498-8817 http://www.nocsae.org National Sporting Goods Association 1601 Feehanville Dr., Suite 300 Mount Prospect, IL 60056 Tel: (800) 815-5422 Fax: (847) 391-9827 http://www.nsga.org Sporting Goods Manufacturers Association 8505 Fenton St., Suite 211 Silver Spring, MD 20910 Tel: (301) 495-6321 Fax: (301) 495-6322 http://www.sgma.com World Federation of Sporting Goods Industry/Maison du Sport International Building C, 3d Floor Ave. de Rhodanie 54 1007 Lausanne Switzerland Tel: 41-21-612-6161 Fax: 41-21-612-6169 http://www.wfsgi.org

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Sports Equipment Industry ABOUT

THE

AUTHOR

Jeffrey Larson is the director of physical therapy at the Tioga Medical Center in Tioga, North Dakota. He is a graduate of North Dakota State University and the University of Utah. He holds degrees in both athletic training and physical therapy. He has been evaluating and treating the rehabilitative needs of athletes of all ages and sports for more than twenty years. He is also a medical writer and founder of Northern Medical Informatics, a medical communications business that he operates with a focus on continuing education for allied health care professionals, as well as consumer health education. He is a member of the American Physical Therapy Association and the American Medical Writers Association.

FURTHER

READING

Carbasho, Tracy. Nike. Santa Barbara, Calif.: Greenwood Press, 2010. Fenn, Dominic. Sports Clothing and Footwear. Hampton, Middlesex, England: Key Note, 2009. Fuss, F. K., A. J. Subic, and S. Ujihashi, eds. The Impact of Technology on Sport II. London: Taylor & Francis, 2008. Lipsey, Richard A. The Sporting Goods Industry: History, Practices, and Products. Jefferson, N.C.: McFarland, 2006. Museo Del Tessuto. Superhuman Performance: The Evolution of Textiles for Sports/L’evoluzione del tessuto per lo sport. Prato, Italy: Author, 2008.

Plunkett, Jack W. Plunkett’s Sports Industry Almanac, 2010: The Only Comprehensive Guide to the Sports Industry. Houston, Tex.: Plunkett Research, 2009. Ross, Stewart. Higher, Further, Faster: Is Technology Improving Sport? Hoboken, N.J.: Wiley, 2008. Smit, Barbara. Sneaker Wars: The Enemy Brothers Who Founded Adidas and Puma and the Family Feud That Forever Changed the Business of Sport. New York: Ecco, 2008. Sporting Goods Manufacturers Association. The State of the Industry, 2009: SGMA’s Annual Report on the U.S. Sporting Goods Market. Washington, D.C.: Author, 2009. “The Sports Industry.” BERA: Business and Economics Research Advisor 3/4 (Summer, 2005). http://www.loc.gov/rr/business/ BERA/issue3/issue3_main.html. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Sporting Goods Sales by Product Category, 1990 to 2003.” In Statistical Abstract of the United States, 2004-2005. Washington, D.C.: Author, 2004. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Telecommunications Equipment Industry ©Danil Chepko/Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary The telecommunications equipment industry manufactures devices that facilitate the exchange of information across distances. It provides hardware and systems for voice, video, data, image, media, Internet, financial services, and process control through wired, wireless, fiber, cable, and satellite services across the planet. Products include radio and television broadcasting equipment, antennas, cable television equipment, telephone handset and switching equipment, and data communications equipment. The infrastructure that the industry plugs into is often a combination of wire lines, fiber cables, and wireless and satellite link equipment. Customers range from government-owned telecommunications service providers to large public or privately held companies to individual consumers.

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Alarm System Monitoring Equipment Manufacturing; Data Communications Equipment Manufacturing; Global Positioning System Equipment Manufacturing; Mobile Communications Equipment Manufacturing; Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing; Telephone Apparatus Manufacturing; Telephone Central Office and Switching Equipment Manufacturing; Traffic and Railroad Monitoring and Signaling Equipment Manufacturing Related Industries: Computer Hardware and Peripherals Industry; Internet and Cyber Communications Industry Annual Domestic Revenues: $70 billion USD (Research and Markets, 2006) Annual International Revenues: $197 billion USD (Research and Markets, 2006) Annual Global Revenues: $267 billion USD (Research and Markets, 2006) NAICS Number: 3342

History of the Industry Optical telegraphy in the late 1700’s used a telescope to make possible transmission of information across long distances. A person with flags sent information by semaphore. Equipment started with basic telescopes and then included light signaling devices, which heralded the age of optical telegraphy. This then progressed to mechanical semaphore and light towers used to send 1799

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Telecommunications Equipment Industry

A Verizon lineman installs fiber optic cable on a telephone pole in Massapequa Park, New York, in 2006. (AP/Wide World Photos)

coded information. These forms of telecommunications depended on line-of-sight to see, record, and decode the message being sent. Electrical telegraphy was made possible by the growth of the science of magnetism and electrical signaling. Electrical technology replaced the optical (eyesight-based) forms of telecommunications by sending coded electrical impulses to mechanical devices which read the code and could record marks on paper. The use of copper and insulation gave rise to hardwired connections between continents, countries, and people in order to connect electronic forms of transmission with reception of the coded information. The speed of transmission and reception increased many times over the limited forms of optical telegraphy. Distances surpassed those available by optical means and the speed of transmission increased. The science of electromagnetic radiation enabled a change to wireless methods of transmission, eliminating the limitations of a hardwired

connection. The use of fiber optics enabled the development of optical transmission via glass fiber. This opened up high-speed communications for multimedia in an “always on” world of information exchange. Telecommunications services were often initiated to meet the needs of governments to govern, wage war, defend themselves, and communicate with other governments. The emergence of services for citizens and businesses was an extension of the postal systems of many countries. Government was the customer for large purchases of telephone communications equipment. Data services were added as technology allowed. In the United States in the 1920’s, American Telephone and Telegraph (AT&T) operated as a virtual monopoly. One of its divisions, Western Electric, was a primary manufacturer of telecommunications equipment. Until the breakup of the many AT&T Bell system entities in 1974, equipment manufacturing in the United States was dominated by Western Electric, while in

Telecommunications Equipment Industry

1801

bination of wired and wireless technology to its desEurope each country had a dominant supplier like tination. Alcatel, Nortel, Siemens, Marconi, or L. M. EricsThe environment for telecommunications serson. In Asia, European companies had licensee vice providers of the twenty-first century continues manufacture arrangements or European equipto evolve rapidly while providing simpler and more ment was imported by government entities to decomprehensive solutions to customers than beploy their systems. Japan started its own companies fore. Equipment reliability and flexibility requireand had its own standards for telecommunication ments for wireless communications are escalating equipment. to provide quality services anywhere and all the Equipment during the Industrial Revolution time. was characterized by large manual switchboards with many operators connecting calls to the wired The Industry Today network as requested by callers. ElectromechaniToday, the profile of companies in the industry cal switch bays replaced this type of equipment. is changing quickly. In 2005, British Telecom anMany jobs were created to manufacture, install, nounced the replacement of its traditional public and maintain large clickety-clack bays of equipswitched telephone network with a next-generament in central office locations. Third-generation tion multimedia infrastructure. Four of the ten equipment before the age of computers employed suppliers named in that announcement are better electronic switches: complex bays of electronic known as computer companies. (One of the semodules created connections in unattended buildlected ten telecommunications equipment suppliings with high requirements for environmental ers declared bankruptcy after the announcement). conditioning and maintenance. For equipment In the United States, there is an ongoing shift by manufacturers around the world, this was the heyconsumers to abandon services from traditional day of design, manufacture, installation, and maintelephone companies and depend solely on cell tenance. Rolling out this infrastructure to Asia and phones. However, with the introduction of the Inthe developing world created the illusion of an internet phone in wireless and cable networks, a dustry that would just keep growing. huge change is taking place in the way media, data, Wireless transmission technology in the twentimusic, video, and information are received by coneth century forever changed telecommunication sumers. Information technology merging with equipment. Radio and then television broadcasttelecommunications technology is enabling a new ing demonstrated the ability to transmit traditional world of always-on and always-connected devices voice and data traffic wirelessly over microwave links, then up and down to satellites across continents. This technology set the stage for the contemporary evolution of the industry. The construction of terrestrial microwave link stations and interface gear to the wired network created a rapid growth in manufacturing in the 1950’s and 1960’s. Then, it was found possible to connect satellite communications not only to microwave links but also through an underground cable network, connecting people across the world like never before. A communications signal would traverse many forms of equipment and over a comOptical fiber. (©Danil Chepko/Dreamstime.com)

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Telecommunications Equipment Industry

and consumers. Equipment is becoming more computer-like and less telecommunications-like. Equipment, therefore, has a completely new complexion. Television station transmission and signaling is now moving to all-digital, managed by computer-based programming. Unattended radio stations are the norm. Cable television systems provide telephone, Internet, and television services. Pay-per-view is a combination of wired telephone service to order and pay for the event being watched. Music, publishing, and video conferencing are increasing requirements for equipment performance in both the wired and the wireless world. The old design and manufacturing model was a large company decentralized into the countries it served. This met needs for distribution and design for the unique requirements of standards for that market. National pride and provision of jobs locally were the standard in the twentieth century. Many countries had their own unique telecommunication equipment manufacturers. In the late 1990’s, technological advancements, Internet protocol technology, privatization away from government monopolies, and opening of markets to competition caused the globalization of equipment vendors. In addition, vendors have become telecommunication carriers themselves by becoming integrators of end-to-end solutions. Old line equipment manufacturers have become shadows of themselves. The financial crisis of

2007-2009 has added to the downfall of established firms, and the environment for start-ups has also been dismal. Suppliers have had to favor standardsbased solutions (as opposed to proprietary ones) through loosely defined partnerships. The term “next generation” is used widely. That is a transitory term, as 3G networks compete with 4G networks and the lifetime of technology nomenclature can be a year or less. The demanding economic environment is forcing a rapid decline in what infrastructure providers can charge per minute for services. Aggressive pricing requirements are forcing a restructuring of core business definitions for equipment suppliers. Technology shifts are forcing traditional manufacturers to adapt their own technology or acquire new technology companies. An equipment supplier under siege today must deal with the necessity of finding core competencies, create least-cost operations, provide professional services, and demonstrate the ability to integrate products and manage network operations. Surprising to many in the business was the demise in 2009 of a traditionally excellent supplier, Nortel. Consolidations and mergers of traditional players will lead to the emergence of many new competitors, many of them from the computer industry. Increased use of the wired environment through compression techniques and encryption requires equipment more common to the computer equipment industry. Network management today is akin to the structure of computer networks more than the telecommunication network topologies of the past. Requirements for redundancy, network monitoring, and high-speed data reliability are increasing the use of traditional incumbent local exchange carriers (land based and undersea). Incumbent local exchange equipment is changing to a new world of information technology. In parallel to wire lines, there now exist cross-country, undersea, and cross-continent fiberoptic networks for telecommunications. Equipment is structured Converter boxes eased the transition from analog to digital television. (©Richie around a new language of enLomba/Dreamstime.com)

Telecommunications Equipment Industry coders, optical cable splicing, computer information encryption techniques, and standards. Existing networks, both over land and undersea, have a lot of unused capacity to be exploited with new technology. Wireless can be used over land and via satellite. Already enjoying the evolution of the use of cellular technology, WiFi and the coming WiMax technology will provide customers with telecommunications service virtually anywhere and anytime. Wireless equipment and information encryption use techniques from the field of computer information network technology. The need for equipment providing the key components for transmission paths, network management and monitoring, automated traffic management, and billing is creating opportunities for new entrants, as well as traditional network and computer equipment companies. Global equipment suppliers, therefore, are changing from build-ityourself companies to integrators of multivendor systems. Their advantage is their traditional presence and penetration of existing markets, along with staying power and financial strength to implement systems. Cisco Systems is an example of taking this to a new level. It is now a systems supplier creating infrastructure for new cities in China. Equipment not only for telecommunications but also for process control, video conferencing, and energy management for sustainable environmental monitoring are part of the new age for a computer component supplier of the twenty-first century. The fast buildup of wireless Internet is changing the profile of revenue streams from traditionally defined equipment suppliers to suppliers recording revenues in the information technology sector. Two suppliers in China, Huawei and ZTE, have emerged quickly with help from capital supplied by the Chinese government for large projects. Their emergence has changed the landscape for European and American companies. China Telecom could itself become a primary bidder in countries around the world, especially developing countries, as has been seen in their participation in major steel, mining, and seaport projects in the twentieth century. There is an opportunity for technology start-ups to gain traction and attention quickly, and be acquired. Cisco has had a history of acquiring up to twenty-five companies per year. Midsize equipment companies are those with a

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Telephone switching equipment. (©Sergei Butorin/Dreamstime.com)

critical technology that is publicly held; they are always a target for acquisition. Required skills will include being able to work with the large companies with market presence, providing end-to-end solutions and financing.

INDUSTRY MARKET SEGMENTS Many manufacturers specialize in either wired or wireless technology. Wired telecommunications equipment includes PBX equipment, LAN communications equipment, cable television equipment, and central office switching equipment. Wireless telecommunications equipment includes television broadcasting equipment, antennas, Global Positioning System technology, and cellular telephone and mobile communications equip-

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Telecommunications Equipment Industry

ment. Most manufacturers are midsize-to-large, publicly held companies. In other countries, government manufacturers have moved to co-owned entities or have transitioned to publicly held companies. Small Businesses Small businesses in the telecommunications equipment sector operate in niche markets. They may sell base stations for WiFi or WiMax installations; specialized devices for interface to undersea cables; system components such as terminals, interfaces, or bridges; or specialized fiber optic hardware. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary of all employees of the communications equipment industry was $66,390 in 2009. Industry engineering managers earned an average of $135,730, general managers earned an average of $143,160, and chief executives earned an average of $209,220. Systems software engineers earned an average of $93,960, application software engineers earned an average of $96,590, electrical engineers earned an average of $89,060, and electrical engineering technicians earned an average of $50,070. Sales representatives earned an average of $80,800, customer service representatives earned an average of $40,170, and electronic equipment assemblers on the production floor earned an average of $30,220. For all these occupations, salaries at small businesses are likely to be lower than these industry averages. Clientele Interaction. Small telecommunications equipment companies sell to private companies, systems integrators, and large companies. Internet marketing, trade shows, and conferences are primary ways to get noticed. To get new business there is a cycle of providing samples, an evaluation period including systems testing, and a final pricing proposal before a purchase is made. Small companies become candidates for acquisition if their technology is superior and priced right. The difficulty is that the price being negotiated for the acquisition is never enough for the owners of the start-up. Success for a small equipment manufacturer is to become a qualified vendor to an end user or larger company doing system integration. Amenities, Atmosphere, and Physical Grounds. Facilities are typically on one site. There

is a fast-paced environment with few employees. Engineers and technicians act as jack-of-all-trades, including client interaction to get the piece of equipment qualified for purchase. Available capital is always related to the amount of orders on the books or the entity supplying capital. Financing from venture capitalists or large telecommunications companies fronting money to small companies has waned. During the introductory phase of new product development, the atmosphere is one of applying technical people to complete the designs, reaching out to potential customers and working with the customer to get the item accepted for future purchase. Upon getting a purchase agreement, the emphasis shifts to manufacturing, electronic, and environmental testing. Contracts, order management, purchase of components, and assembly personnel will be required. The atmosphere then becomes closer to that of a fully functional manufacturer. The facility is most likely a laboratory environment, in leased space, with manufacturing in close proximity to where the design work is being done. The most significant requirement is security. Protection of proprietary designs is crucial to a small company. Typical Number of Employees. One of the largest issues facing a small telecommunications equipment company is money. Therefore, the employee count includes people working full time as well as those employed on a temporary, part-time, or contract basis. Often students from work-study programs will be working on various stages of design or manufacture. The combination of all of these categories can range from ten to one hundred, with the count at any time determined by the order book. Traditional Geographic Locations. Small telecommunications equipment companies are often created by people who leave a larger supplier or computer company in large metropolitan areas. They often occupy new business incubator locations, and are located near universities. They enjoy the benefits of access to technology, potential customers, and employees by being near technical universities and existing larger companies. Pros of Working for a Small Manufacturer. Because they are often owner-founded, small companies offer quicker decision making. It is possible to have a future stake in the company through

Telecommunications Equipment Industry stock ownership. The environment can be creative and entrepreneurial. As a jack-of-all-trades, the opportunity to use a combination of skills and contribute innovative solutions is high and satisfying. Working on a temporary or contractor basis also allows time to work at more than one venture. The opportunity to contribute to various technical subjects is much greater. The opportunity to work with customers in order to have the equipment accepted and then to manufacture it as well gives an overview of the complete design-to-delivery process that does not happen in larger work environments. Cons of Working for a Small Manufacturer. Money is always an issue at small companies, for the product and for the employees. There are highs and lows dependent on a limited product line, the achievement of working on designs, producing of samples, and acceptance or rejection by prospective customers. Responsibility for technical training and growth rests solely with the employee. There will always be a background strain on cash flow, which puts pressure on the longevity of employees; it takes a certain type of person to continue to work through the highs and lows. Variations in worldwide economics will flow back through the large telecommunication system manufacturers who quickly respond by adding or reducing orders to the midsize and small manufacturers, thus creating a whiplash effect. Highs become very high and lows can become disastrous. Company size is also a factor in whether a potential customer will have confidence in the ability of a smaller size supplier to produce adequate production quantities. Forced mergers and acquisitions are ways for a company to complete the adoption of a contributing piece of technology into the market. Costs Payroll and Benefits: Small telecommunications equipment manufacturers are caught in a squeeze by the necessity to pay for technical expertise while requiring highly paid skills. Benefits such as vacation and sick time are offered at

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A communications tower. (©Dreamstime.com)

the discretion of the owner and are usually lacking. Compensation is often a combination of low wages in the short term with a promise of future stock or performance bonuses in the future. Supplies: Site requirements for cleaning, office, and information technology supplies (ink, discs, paper) are sourced locally. External Services: Services for a small manufacturing company include security and cleaning. Utilities: Typical utilities include water, electricity, telephone, and alarm connections. Taxes: Small properties are required to pay local, state, and federal income taxes, as well as applicable property taxes.

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Telecommunications Equipment Industry

Midsize Businesses Midsize telecommunications manufacturers range in size from two hundred employees to five thousand. Many are technology-specific businesses concentrating on an interface to fiber or wireless technology networks. Some have created technology to extend the life of wired networks by increasing speed through compression technologies. Potential Annual Earnings Scale. According to the BLS, the average annual salary of all employees of the communications equipment industry was $66,390 in 2009. Industry engineering managers earned an average of $135,730, general managers earned an average of $143,160, and chief executives earned an average of $209,220. Systems software engineers earned an average of $93,960, application software engineers earned an average of $96,590, electrical engineers earned an average of $89,060, and electrical engineering technicians earned an average of $50,070. Sales representatives earned an average of $80,800, customer service representatives earned an average of $40,170, and electronic equipment assemblers on the production floor earned an average of $30,220. For all these occupations, salaries at midsize businesses are likely to be in line with these industry averages. Clientele Interaction. Midsize companies with specific products face the challenge of catching the attention of larger system manufacturers. They usually provide samples and engineering support to have their products evaluated for acceptance. The time required to reach production level depends on their customer rolling out their systems and then getting paid. Cash flow cycles in this business are lengthy, so investment up front is often required by investors or other stakeholders. Interaction is characteristically of business to business. This means all levels of management in the midsize manufacturer are involved with corresponding levels of their customer. Midsize companies have limited marketing and sales personnel. Often, engineering and technician resources are required for applying the product long before production quantities are achieved. The need to approach many prospects simultaneously stretches a midsize company’s management focus on its own needs. Amenities, Atmosphere, and Physical Grounds. A midsize manufacturer is under pressure to provide the amenities of a large one. The

competition for skills is more acute for management, engineering, and technical skill levels. Amenities at those levels therefore are similar to those of large manufacturers. At other levels in the organization, such as administration and manufacturing, amenities and benefits are provided relative to those available from competitors in the geographical area where the manufacturer resides. The atmosphere at a midsize manufacturer is dependent on the product life cycle of their technology. Early introductions are characterized by high involvement with potential customers and technical application to get the product accepted. Once a purchase contract is received, the momentum changes to manufacturing, materials, and final test of the product. A midsize manufacturer is highly likely to be producing mature and new products simultaneously. Technical and engineering workers are stretched to meet the needs of an ongoing product life cycle while putting attention on a product not yet released for production. The physical plant is usually a single site. This size manufacturer needs economy of scale so as not to have duplications caused by more than one site. Leases are more common than purchased property to direct capital toward product development and introduction. Typical Number of Employees. Midsize telecommunications manufacturers employ two hundred to five thousand people. The trend is to outsource manufacturing, so the profile of employees is weighted toward engineering, technical expertise, and marketing. Traditional Geographic Locations. A midsize manufacturer is likely to be close to potential customers or technology centers in the United States. This is because a combination of needs, including a nearby university, available sources of capital, and ready sources of key employees in technology niches, are likely to be met here. An example is the concentration of fiber-optic work in Petaluma, California, or the storage technology area around Denver, Colorado. Pros of Working for a Midsize Manufacturer. Midsize companies have attributes similar to large providers, with a defined management structure, and possibilities for advancement and training. Technical employees are likely to gain experience in development, introductions to cus-

Telecommunications Equipment Industry tomers, application of the product, and introduction to manufacturing in a short space of time. Finance and administrative skills can be broadly developed because a midsize manufacturer is always under pressure to keep overhead costs low. Human resources and legal work often are outsourced in an effort to keep ongoing overhead costs down. Cons of Working for a Midsize Manufacturer. Midsize in this industry is a transitory stage. Constant pressures for economies of scale create pressure to grow. A few large customers put pressure on to modify the product to meet just their needs, thereby inhibiting growth as a large-scale manufacturer. The employee must be flexible to bear the pressure of a boom or bust environment. Technologies move at a pace that puts pressure on product investment dollars for midsize companies who need to maintain their technical edge. Skill sets of existing employees are also under pressure as technology changes rapidly. Training and skills development are made possible by associating with local community colleges or universities. New technology training may rest on the shoulders of the employee, sometimes with the company paying for it. For employees, it is a fast-paced environment but the pressures on revenue and expenses might truncate spending on training. There is attendant stress that comes from working in environments that change while constantly requiring doing more with less. Costs Payroll and Benefits: Midsize telecommunications companies hire staff on a salary, hourly, or on-call basis. Benefits such as vacation and sick time are provided based on industry practices or requirements of the geography in which they operate. Geography and local competitors dictate levels of pay and benefits. Scarce technical skills in an emerging field can create bubbles of wages, beyond the norm. Supplies: The biggest expense-related items are laboratories, development, and high-technology equipment. In addition, costs related to land (either owned or leased) and access for their facilities is large. Site requirements for cleaning, office, and information technology supplies (ink, discs, paper) are sourced locally or based on purchase agreements.

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External Services: Security services, alarm monitoring, utilities, and backup power supply are the types of services required. Utilities: Water, power, and communication links are usually needed at a single location, whether owned or leased. Taxes: Taxes are corporate in structure to meet local, state, and federal requirements. Large Businesses Large telecommunications manufacturers employ thousands of employees and may have joint manufacturing agreements with other midsize or large manufacturers. With the growth in computer, software, and networking technology coming from the computer industry, it is becoming more difficult to identify a pure telecommunications equipment manufacturer. There are products within large computer companies that are solely telecommunications systems and devices. Potential Annual Earnings Scale. According to the BLS, the average annual salary of all employees of the communications equipment industry was $66,390 in 2009. Industry engineering managers earned an average of $135,730, general managers earned an average of $143,160, and chief executives earned an average of $209,220. Systems software engineers earned an average of $93,960, application software engineers earned an average of $96,590, electrical engineers earned an average of $89,060, and electrical engineering technicians earned an average of $50,070. Sales representatives earned an average of $80,800, customer service representatives earned an average of $40,170, and electronic equipment assemblers on the production floor earned an average of $30,220. For all these occupations, salaries at large businesses are likely to be equal to or higher than these industry averages. Clientele Interaction. Large telecommunications equipment providers often provide systems integration and operations management and finance services to their customers. Client interaction is very much business to business, with complex proposal and contracting stages in the sales and business development cycle. Interactions occur across all levels of management in the company, typically orchestrated by marketing and sales. A client decision to select a telecommunications provider often comes

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Telecommunications Equipment Industry

through a proposal stage of several competitors narrowed down to a final selection of a provider. Many governments and large customers have a preferred supplier list in order to reduce technical conflicts, adopt standards, and shorten acquisition processes for new solutions. Interaction is also required to stay current with regulations, industry standards, minority-owned sourcing, and government agencies concerned about monopolistic practices. Ignoring this area can often result in costs for fines and legal actions for noncompliance. Amenities, Atmosphere, and Physical Grounds. A large company has combined space for a large number of employees, proper laboratory facilities for engineers, and an attractive atmosphere for close employee interaction in the layout of the workspace. More hierarchy is involved in creating departments with specialties to operate in the enterprise. There are standards for documentation, specifications of equipment, and processes for purchasing in a large project management environment. The working culture is one where the tone is set by management and there is a history to be learned of how that culture works in both formal and informal organization links. A large company location can become a small city unto itself. Recreation and fitness facilities are often provided for employees. Multiple sites may exist, but there is always the pressure of economy of scale, even for a large manufacturer, to reduce duplication of costs. Many elements of the manufacture or design may be in offshore facilities or achieved through the use of contracted software and hardware development as is seen with Indian companies such as Wipro. Typical Number of Employees. A large telecommunications service provider employs tens of thousands of employees. Sites can be large and spread out. AT&T has approximately 126,000 employees worldwide, supporting a $51 billion revenue stream. Within that employee complement are manufacturing sites that supplement outside manufacture from other sources. Sites of several hundred employees are common, and the character of each site can be different within a large company according to the main business or engineering functions of that site. Traditional Geographic Locations. Headquarters operations and operating sites are chosen care-

fully for availability of employees, tax incentives, and quality of life profiles for their employees. Suboperations are specifically chosen for reaching their market, located within high technology areas or near a university. Pros of Working for a Large Manufacturer. Large telecommunications equipment providers offer a career that uses and grows skill sets inside its functions of engineering, administration, marketing, and manufacturing. The financial backdrop of a publicly held company takes away some of the highs and lows of employment as the existing lines of telecommunications equipment need to be supported in the telecommunications infrastructure. There is a chance to learn from longer-term employees, apply for new and challenging positions inside the company, and with experience, become a part of the emerging new technology areas. Because so much of the work is done in partnerships with outside companies, in offshore locations, and with suppliers, it is easier than in midsize companies to gain experience in managing contracts, overseeing quality, and building relationships with peers in business-to-business transactions. There are careers with an external focus like this in addition to careers which exist inside major entities of the company. With good performance and personal technical growth, there are more inside opportunities for change and trying a different application of one’s skill sets. If the company is making acquisitions, there are chances to work in the successful merger of a new acquisition. In large companies, there is a wider panorama of opportunities. Cons of Working for a Large Manufacturer. In recent times with large shifts of the economy, manufacturers have experienced declines in revenue of 25 percent. This has resulted in massive shifts and layoffs in this sector. This once-stable industry has joined the ranks of a cyclical industry with a subsequent reduction of employment at any single company. The impetus is on the employee to be flexible and plot a path through an industry experiencing turbulence. Installed base technology can mire a large company in the need to support old technologies and stagnate its employees in old technology. The rapid change from wired to wireless technology creates pressure on a large manufacturer to grow if it can or to acquire the technology. Employment in

Telecommunications Equipment Industry large companies has become far less certain than in the past. Costs Payroll and Benefits: The salary structure of a large telecommunications manufacturer includes hourly, annual, and contract employees. The overall compensation profile is designed to be competitive with others in the industry and the geography of the location. With economic upheavals causing disruption, all benefit areas are under scrutiny for reduction. It is possible in large companies to have health insurance, benefits, and pension-matching schemes that enhance the overall earnings picture for employees. A stock purchase plan for companies in this sector could be quite a wealth builder over a long period of time. Seminars and outside lectures on broad topics are often available for employee enrichment. Training to keep up on and introduce new technologies is a major benefit. On-site university extension course work through video links can be offered. Supplies: Large telecommunications providers require a wide range of items for running large sites. Besides cleaning and office supplies, there are also requirements for inside cafeteria-like food courts. Information technology is an inside function that requires supplies of paper, discs, ink, and hardware items for employees. Most purchases are done via national negotiated annual contracts. External Services: There is a trend to outsource functions to meet the needs of the company. Examples are: inside and outside maintenance, food service employees, and even computer help desks for office systems used by the employees at large sites. Certain human resource functions, and benefits for employee assistance, are contracted with outside specialist providers in the areas of legal assistance and psychological counseling. Utilities: Typical utilities for a large company site include water and sewage, electricity, backup power provision, and oil. As significant users in their community, they work with local sources to negotiate annual rates where possible. Taxes: Large telecommunications manufacturers are required to pay local, state, and federal income taxes, as well as applicable property taxes.

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ORGANIZATIONAL STRUCTURE AND JOB ROLES Telecommunications firms combine traditional engineering, marketing, and manufacturing with chief executive, financial, human resources, and administrative functions. In addition, a large manufacturer may have divisions of wireless, wired, Internet, and networks within its engineering, manufacturing, and sales and marketing functions. In smaller or midsize companies, where one or two businesses are served, the functions are more directly described with their direct titles, such as wireless services or Internet services. The human resources function is often nested under an administrative function. The following umbrella categories apply to the organizational structure of businesses in the telecommunications equipment industry: ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Marketing and Sales Engineering Manufacturing Administration, Finance, and Purchasing Human Resources Information Technology Public Affairs, Policy, and Government Relations

Executive Management Executive management handles the overall direction and operations of the company. Responsibilities for profit and loss, goal setting, direction of the company, and regulatory compliance rest in these functions in large telecommunications providers. In large providers, a vice president or director title is used for major functions. Since the telecommunications industry is highly technology driven in an environment where quality of service is paramount, executives require strong leadership skills and backgrounds in both business and technology. They are responsible for a large span of subjects within each heading in large companies and therefore have large support staffs and departments within their functions. Their purpose is to assure customers, employees, and stockholders of a viable, healthy, and growing presence in

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Telecommunications Equipment Industry

their chosen areas of the telecommunications industry. Executive management occupations may include the following:

■ ■ ■ ■ ■

■ ■ ■

■ ■ ■ ■ ■

■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Vice President of Public Affairs, Policy, and Government Relations General Counsel Marketing and Sales Director Engineering Director Manufacturing Director Administration, Finance, and Purchasing Director Human Resources Director Information Technology Director

Marketing and Sales Sales and marketing personnel solicit and acquire revenue streams for the various types of businesses that use telecommunications equipment. Large equipment and systems sales require complex proposal and contracting processes to win the business. Remuneration for marketing is on a salary basis, while sales functions are compensated with a low base salary upon which commission and bonus schemes are applied for meeting sales targets. The primary task of marketing personnel is to create an awareness of and desire for the company’s equipment. The primary task of sales personnel is to turn the prospect into a sale. Both use customer calls, trade shows, conferences, and other events to retain current clients as well as develop new ones for future business. People serving in these functions must have a high level of knowledge of the equipment they are promoting. Technical staff are often used as a backup as the discussions with the customer dig deeper into the technical details of equipment and systems performance. Contracting and proposal staff also support the business relationship that is achieved. Contact between business units is essential for marketing personnel to develop proposals for large sales. Sales and marketing occupations may include the following:

■ ■ ■ ■ ■

Engineering Engineering is central to the core technologies of the telecommunications enterprise. Engineers design equipment for the market. For equipment already released to manufacturing, they issue change orders to fix or improve existing equipment. Research and development of new equipment and technologies is the most prominent engineering function. Often, engineers specialize in voice, video, data, compression, or systems integration. Testing, regulatory compliance, documentation, and release to manufacturing are other components of the engineering function. The range of skills needed by engineers has to match the existing and proposed technologies of the business. Engineers work on advanced technologies for future needs, while maintaining and upgrading existing products. Reliability analysts report on installed base equipment so that engineering can provide solutions to improve the quality and performance of equipment already in use. Engineers utilize computer-aided modeling, schematics, simulation, design, and layout systems in order to turn their work into reality. Often, the manuals and designs for installation, commissioning, and maintenance of equipment are developed and produced in engineering. Technicians and technical writing specialists are employed at early stages of equipment design to create a release of the product to manufacturing. Members of the staff are commonly university and technical school graduates. Engineering occupations may include the following: ■ ■

■ ■

Corporate Sales Manager Government Sales Manager

Consumer Sales Manager Corporate Sales Representative Government Sales Representative Consumer Sales Representative Marketing Manager Market Research Analyst Proposal Writer Contract Writer Technical Support Specialist After-Sales Support Staff

■ ■

Electrical Engineer Electronics Engineer Electrical Engineering Technician Electronics Engineering Technician

Telecommunications Equipment Industry OCCUPATION

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PROFILE

Stationary Engineer Considerations

Qualifications

Description

Operates and maintains stationary engines and mechanical equipment to provide utilities or power for buildings and industrial processes.

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service

Licensure and certification

Required

Employment outlook

Slower-than-average growth expected

Holland interest score

REI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

■ ■ ■

■ ■ ■

■ ■

Industrial Engineer Industrial Engineering Technician Wired, Wireless, and New Technology Engineer Telecommunication Standards Specialist Network Interface Engineer Equipment Design and Layout Technician Technical Writer Regulatory Compliance Specialist

Manufacturing Manufacturing personnel build and ship equipment to meet a monthly plan that is developed by manufacturing managers, as well as marketing and sales personnel. Manufacturing operates from a bill of materials for each product, a manufacturing cycle time (time on the line to produce and test the piece of equipment), and a strategy for raw materials and finished goods inventory. This

job requires forecasts from marketing, planners, materials sourcing specialists, and supplier quality specialists to ensure 100 percent availability of components and materials in order to produce the equipment on time for shipment. Manufacturing systems, supporting equipment, and electronic test personnel (including automated assembly and test specialists) create and manage the manufacturing environment. If offshore manufacturing is employed, then selection of the manufacturing vendor is the responsibility of manufacturing engineers. Infrastructure requirements for a manufacturing line, such as gases and utilities, are designed and implemented working with the facilities group. Testing and quality assurance are vested within this function. Engineers and technicians ensure the production of the equipment to the original design. There often is a test engineering function, which develops automated testing to ensure lower

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Telecommunications Equipment Industry OCCUPATION

PROFILE

Production Coordinator Considerations

Qualifications

Description

Prepares production schedules and coordinates and expedites the flow of work within or between departments of manufacturing plants.

Career clusters

Architecture and Construction; Manufacturing; Marketing, Sales, and Service; Transportation, Distribution, and Logistics

Interests

Data; people

Working conditions

Work inside

Minimum education level

Junior/technical/community college

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

ESR

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

cost, more thorough quality testing, and shorter production times. Personnel in manufacturing range from the hourly employees for assembly and test through degreed engineers. By employee count it is the largest function within the company, unless all manufacturing is outsourced. Administrative positions in materials, supplier management, and quality assurance are also part of the manufacturing staff. Manufacturing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Production Manager Test Technician Production Operator Manufacturing Engineer Documentation Specialist Packaging and Shipping Specialist Industrial Engineer

■

Manufacturing Information System Specialist

Administration, Finance, and Purchasing Telecommunications manufacturers depend heavily on the finance staff to balance and manage the company’s balance sheet and income statement. Cycles of economic forces can affect the cost of capital and the business cycles of shipments to customers. Analysts provide forecasts and economic scenarios to the executive team. Predictive models are often required for monthly and quarterly reporting of financials and future results. For electronics manufacturers, not unlike the pharmaceutical industry, there is a long delay between expenditures for research of a product, its development for production, and receipt of purchase orders for the market-ready product. In the middle, a lot of money is expended in wages, equipment, facilities, and material. Administrative

Telecommunications Equipment Industry staff manage the details during these cycles and into the manufacturing phase. Therefore, purchasing and the material requirements planning systems are essential inputs for finance to have the cash available to the enterprise. Jobs in these functions include clerical staff (who enter data into computer databases), analysts (who constantly identify trends and opportunities to stretch scarce capital monies), and business professionals (who lead the strategy for the company’s cash flow and uses of funds). Financial software or enterprise management systems are heavily used to keep overhead costs low while speeding up the month and year-end financial closing cycles. Administration, finance, and purchasing occupations may include the following: ■ ■ ■

Accountant/Auditor Cost Analyst Contracts Manager

■ ■ ■ ■ ■ ■

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Materials Manager Supply Manager Shipping and Receiving Clerk Purchasing Agent Contracts Attorney Facility, Property, and Services Manager

Human Resources Human resources personnel handle employee hiring and dismissal processes, employee relations, and employee payroll and benefit administration (including insurance, retirement programs, and other employee benefit programs). Relocation expertise, training, and leadership development are often functions residing within human resources departments. In a union environment, it is important to have specific expertise and a talent for working with union representatives. In a large company, with over 100,000 employees, this function has the substantial responsibility

OCCUPATION

PROFILE

Telephone Installer and Repairer Considerations

Qualifications

Description

Installs, maintains, and repairs telephones and related equipment in homes, businesses, or central offices of telephone companies.

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work inside; work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Light work; medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

RCI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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for responding to changes in personnel needs, adding new locations, closing locations, responding to employment issues, and operating within various state or national laws. Payroll and benefits are subject to operations in various locales, requiring human resources to comply with hiring, payroll, and benefit issues by state or country. Training at all levels is a function of this unit. Employee growth, retention, and leadership training for supervisors and managers are specialties that are crucial to the involvement of human resources in the total business. Companies often contract through human resources with outside providers for services such as legal assistance, counseling services, and a health insurance service center. Online services, both from kiosks within the company information network and through access by Internet, require expertise in human resources to ensure security and privacy of personal information. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Coordinator Training Manager Administrative Assistant Benefits Manager Benefits Specialist Union Liaison Employee Information Specialist

Information Technology Telecommunications equipment manufacturers have extensive needs for manufacturing resource planning systems, sales tracking, market forecasting, financial systems, and design and modeling systems. Information technology (IT) is the service function that ensures the selection and operation of information systems for those jobs. The IT environment also provides computer services; voice, video, and data links; conferencing; hardware; software; computer design workstations; and networks for the company. IT generates recommendations for privacy, internal usage, Internet usage, standards, new technology adoption, retirement of old technology tools, and software. Projects can involve upgrades, new site start-ups or old site closures, and merging of the IT environment with that of a newly acquired

company. Outside providers, national computer supply contracts, network capacity planning and usage, disaster recovery, archival data, and systems software backups are some of the many responsibilities for IT. A new area is the use of social networking solutions in the conduct of daily business. Policies regarding privacy and protection of company data are new areas requiring IT to respond to the alwayson, always-connected world of work. Social networking solutions put a strain on the security and data protection needs of the company. IT occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Software Engineer Hardware Technician Response Center Specialist Network Administrator Manufacturing Systems Specialist Disaster Recovery Specialist Office Systems Specialist Design and Modeling Systems Specialist

Public Affairs, Policy, and Government Relations The telecommunications equipment industry is heavily affected by external requirements set by local, state, federal, and international legislative and regulatory bodies. The environment changes quickly, and there are always recommendations for changes that arise from government and the industry. Telecommunications standards are often in the purview of engineering. However, with such far-reaching implications to the viability of a telecommunications manufacturer, a company often has a specialist in government affairs. Government entities often request industry input, and members of this function supply individuals for working on task forces or for giving testimony to commissions. Areas of public policy, competition, regulation, and standards are constantly under discussion. The larger the company, the more subject it is to questions about becoming a monopoly. Expertise in this area is relied upon to be the interface to government on behalf of the executive committee. Smaller and midsize companies often rely on the chief executive officer or their managers for this function; a midsize company might use one or two persons. Engagement of an outside lobbying firm would be managed out of

Telecommunications Equipment Industry this function. Large industry associations conduct lobbying on behalf of the industry, but often depend on input from people working in this area. Decisions on corporate monetary support for outside associations, alliances and lobbyists are led by this function. Public affairs, policy, and government relations occupations may include the following: ■ ■ ■ ■

■ ■ ■ ■ ■

Telecommunications Attorney Policy Analyst Regulatory Specialist International Telecommunications Attorney Trade Association Liaison Lobbyist Communications Director Corporate Relations Specialist Vice President of Public Affairs

INDUSTRY

OUTLOOK

Overview The outlook for telecommunications equipment manufacturers is one of turbulence in the second decade of the twenty-first century. The worldwide economic crisis of 2007-2009 is changing the rules for investment and capital availability for infrastructure projects. Moreover, the rapid shift to broadband and wireless technologies has leveled demand for traditional wire- and fiberbased transmission equipment. The use of handheld and mobile devices instead of wire line-based services has experienced an exponential growth rate. Broadband access spending has tripled over four years at the expense of spending in the dial-up market. The introduction of Internet-connected phones and other devices will only exacerbate the spending shift to Internetbased infrastructure. Subscribers shifting exclusively to their cell phones and abandoning their land line phones are increasing. The opportunity for the traditional plain old telephone service providers and equipment manufacturers is to shift the usage of that installed infrastructure to higherspeed services. Using higher-speed interfaces to their wire line structure as well as coded information devices will open new markets to them for data transmission.

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In 2009, precipitous drops in shipments of telecommunications equipment were in the range of 24 percent. Looking inside that overall number, it is clear that the wireless and broadband increase in shipments helped to keep that number from being even larger. The rapid expansion of broadband wireless network equipment has come from the computer equipment sector. Many of the standard names shipping this equipment are Cisco, Juniper Networks, Huawei, ZTE, IBM, and HewlettPackard. Smaller equipment manufacturers are classified in the electronic component and network device sector of NAICS reporting. Therefore, the outlook for the telecommunications equipment industry is changing for three reasons: response by industry and governments to economic upheaval and shifting investments in telecommunications infrastructure; rapid shift to wireless broadband technologies; and shift in technology to chip integration, software, and network data management technology. What lies ahead in terms of applications in the way people of the world interact, conduct business transactions, and communicate with their governments is very exciting. Therein lies the very definition of telecommunications. Equipment and software providers of the future will be defined by new entrants, shifts in business by existing companies, and the adaptability of traditional telecommunications equipment providers to add new capabilities. Use of video and voice over Internet protocol (VOIP) will grow dramatically and offer opportunities for telecommunications equipment providers. The twentieth century saw early failures as the quality of the voice and video suffered from conflicts for use of Internet paths. With that period behind us, providers of video teleconferencing (Cisco and Hewlett-Packard), subscriber video telephony (Skype), and very low cost telephony (Vonage) all emerged, shifting the consumer away from cellular telephone companies and traditional land line service providers. Selling to consumers through business transactions coupled to video (real estate, travel destinations, or automobiles) with high-definition quality of video available twenty-four hours a day, seven days a week is a high growth area. Video technology for telecommunications providers is another niche for growth or acquisitions. Consumers expect wireless hot spot access to their portable devices (Internet phones, netbooks,

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Telecommunications Equipment Industry

PDAs) now. Wireless data available through the implementation of WiMax wider range coverage over many miles, instead of over a few feet (wireless hot spots) will set expectations of pervasive computing available anytime and anywhere. Because this allows simultaneous connection to multiple networks, the horizon will open up to collaboration amongst systems and users on common topics or commercial transactions that are currently limited by distance and technology. High definition for images (digital cameras), full-flow video, and text will allow us to be right next to the person to whom we are connected. What a distance the industry has come from peering into the optical telescope on a clear day to communicate over a few miles. Telecommunications equipment providers for today’s market will include technologies of computing, software, 4G network wireless technology, and applications not yet seen. Will this equipment come from innovators, existing equipment manufacturers, or businesses not yet defined in this business (Google, Yahoo, or You Tube)? In summary, the industry outlook for telecommunications equipment by the Telecommunications Industry Association over five years projects that broadband-wire line equipment will grow 6.7 percent as wireless equipment grows at nearly 80 percent. Wire line shipments are essentially flat during this period. One can expect that the top ten telecommunication providers of the twentieth century will be replaced by a top ten of new and surprising names. Employment Advantages With a projection of a nearly 80 percent expansion of wireless services over the next five years, new employees entering the telecommunications equipment manufacturing sector can expect exciting challenges and rewards. It is important to search within the computer manufacturing sector for divisions which supply telecommunication network and interface device infrastructure, as well. The challenges will be to hone technical skill sets and adapt business skill sets as the form of manufacturing continues to change to a combination of outsourced and in-house manufacture. Marketing and sales skill sets will be needed to work with nontraditional customers where an application, not just technology, is important. The spread of applications is keeping intense

pressure on the telecommunications manufacturing industry to respond and grow. It is also an industry that is international in nature as manufacturing will be subcontracted to other countries. Technical schools, colleges, and universities are adding course work in the fields of transmission and as a result draw new students to where they know their graduates can find employment. Graphics, video, television, live meetings, voice and image transmission, information compression on wire and wireless networks are all subjects of study leading to entry into the field of leading applications and technologies. There are exciting prospects for expansion now, such as increased usage of the satellite, wired, and wireless infrastructure for large-area coverage of wireless connections (WiMax). These will likely be eclipsed with new terminology in periods of three years or less. The environment is a constantly moving window of change, and the challenge will be to renew one’s skills to stay at the crest of the wave. Annual Earnings The Telecommunications Industry Association report for global revenue in 2008 for telecommunications service providers is $1.7 trillion, with the portion from the United States providers being $518.3 billion. The compounded growth rate is just over 10 percent. Revenue for the telecommunications equipment sector has typically been 16 percent of the total revenues for services. The growth rate for equipment is expected to also be just over 10 percent. The startling change for the equipment industry is flat growth for wire line and nearly 80 percent growth in wireless. The technologies in play are VOIP, WiMax, and Internet television, as well as higher-speed systems on both wireless and wire lines. A lot of this growth will occur as a shift from wire line services and utilizing existing overcapacity in wire and fiber routes. Technologies allowing for greater speed and compression of information will use the same service paths without adding employment. Computer hardware, semiconductor, and software companies will also be participating in this growth. The network infrastructure is heavily served by divisions of existing large companies, as well as small and midsize manufacturers. The revenues are not separated out in the statistics, nei-

Telecommunications Equipment Industry ther are many of the company’s revenues reported in the traditional telecommunications equipment sector.

RELATED RESOURCES FOR FURTHER RESEARCH Broadband for America P.O. Box 57244 Washington, DC 20037 Tel: (866) 646-8668 http://www.broadbandforamerica.com

Tel: (781) 769-9750 Fax: (781) 769-5037 http://www.mwjournal.com Telecommunications Industry Association 2500 Wilson Blvd., Suite 300 Arlington, VA 22201 Tel: (703) 907-7700 Fax: (703) 907-7727 http://www.tiaonline.org

ABOUT CTIA-The Wireless Association 1400 16th St. NW, Suite 600 Washington, DC 20036 Tel: (202) 736-3200 Fax: (202) 785-0721 http://www.ctia.org Institute of Electrical and Electronics Engineers 3 Park Ave., 17th Floor New York, NY 10016-5997 Tel: (212) 419-7900 Fax: (212) 752-4929 http://www.ieee.org International Telecommunication Union Place des Nations 1211 Geneva 20 Switzerland Tel: 41-22-730-5111 Fax: 41-22-733-7256 http://www.itu.int JOURNAL OF TELECOMMUNICATIONS AND INFORMATION TECHNOLOGY, National Institute of Telecommunications Szachowa St. 1 04-894 Warsaw Poland Tel: 48-22-5128-183 Fax: 48-22-5128-400 http://www.nit.eu MICROWAVE JOURNAL 685 Canton St. Norwood, MA 02062

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THE

AUTHOR

Charles L. Bonza has thirty years of experience in general management and CEO positions at Hewlett-Packard, Acterna, Sypris Electronics, and BSW South Africa in electronics equipment, telecommunications instrumentation and software, computers, and telecommunications software development, management, and systems implementation. He worked for fifteen years in international environments and engaged in career counseling and change coaching in working with employees during hiring, development, and layoff situations. His technical training in career coaching includes both course work and practical experience at the Hudson Institute for coaching.

FURTHER

READING

Buehler, Kevin S., Lee Scoggins, and Mark D. Shapiro. “Caveat Vendor.” McKinsey Quarterly, August, 2001. Business Communications Review. New World Telecom: A Survival Guide for Global Equipment Suppliers, September, 2005. Columbia School of International and Public Affairs. Career Opportunities in Telecommunications. http://sipa.columbia .edu/resources_services/career_services/ current_students/career_resources/ opportunities/CareerOpp _Telecommunications.pdf. Courcoubetis, Costas. Pricing Communication Networks: Economics, Technology, and Modelling. Hoboken, N.J.: John Wiley & Sons, 2003. Gruber, Harold. The Economics of Mobile

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Telecommunications Equipment Industry

Telecommunications. New York: Cambridge University Press, 2008. Huurdeman, Anton A. The Worldwide History of Telecommunications. Hoboken, N.J.: John Wiley & Sons, 2003. Laffont, Jean Jacques. Competition in Telecommunications. Cambridge, Mass.: MIT Press, 2001. Plunkett, Jack W. Plunkett’s Telecommunications Industry Almanac Statistics, 2010. Houston, Tex.: Plunkett Research, 2009. Rosenberg, Robert. The 2008 Telecommunications Industry Review: An Anthology of Market Facts and Forecasts. Boonton, N.J.: Insight Research, 2007. http://www.insight-corp.com/ ExecSummaries/review08ExecSum.pdf.

U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. A New Approach to Classifying Industries in the Information Sector. http://www.bls.gov/ opub/ils/pdf/opbils75.pdf. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Telecommunications Infrastructure Industry ©Eimantas Buzas/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Communications Career Cluster: Arts, A/V Technology, and Communication Subcategory Industries: Satellite Telecommunications; Wired Telecommunications Carriers; Wireless Telecommunications Carriers Related Industries: Computer Systems Industry; Internet and Cyber Communications Industry Annual Domestic Revenues: $518.3 billion USD (Plunkett Research, 2008) Annual International Revenues: $1.2 trillion USD (Plunkett Research, 2008) Annual Global Revenues: $1.7 trillion USD (Plunkett Research, 2008) NAICS Number: 5171-5174

INDUSTRY

range from individual subscribers to companies and governments throughout the world.

History of the Industry Optical telegraphy in the late 1700’s through the use of the telescope enabled the first practice of transmitting information across long distances by mechanical forms of signaling from a sender to a receiver: the telescope. Electrical telegraphy was enabled by the growth of the science of magnetism and electrical principles. This replaced the optical (sightbased) forms of telecommunications with forms of coded marks or sounds sent over a wire. The use of copper and insulation gave rise to hardwired connections between continents, countries, and people in order to connect transmission equipment to receivers of coded information. The speed of transmission and reception increased many times beyond the limitations of optical telegraphy. The science of electromagnetic radiation enabled the change to wireless methods of transmission, emulating and then surpassing the forms used in the copper wire era. Fiber optics enabled

DEFINITION

Summary The telecommunications infrastructure facilitates the transmission of voice, video, data, images, media, Internet, financial services, and medical data through wired, wireless, satellite, cable, and fiber connections throughout the world. Transmission methodologies may be based on a single technology or a combination of technologies. Customers 1819

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Telecommunications Infrastructure Industry

ments. Communication activity is a flow involving speed, time, and crossing of technologyprovider barriers among wireless, wired, and satellite technologies such that the value of a piece of transmitted information is a dynamic one within the reporting of revenue apportioning. The cost across these participants in the transmission pipeline becomes a complex equation, much more complicated than the situation when a single person looking through a telescope at a sender in the distance could figure out the cost to further transmit the sender’s Wired technologies include cable television, broadband Internet, and traditional message. Cloud computing and telephone lines. (©Kalina Vova/Dreamstime.com) cloud telecommunications challenge not only technologists in the telecommunications world but also business the development of optical transmission in glass fiprofessionals to keep up with changes. ber, opening up higher-speed communications for With parallel developments in computing, commultimedia in an “always on” world of information puting chips, communications, and Internet proexchange. Voice, data, and images sent over fiber tocols, the world stands at the precipice of a new exare of higher quality, with no delays evident in the plosion of information at very high speeds and low sound or picture. costs. At the same time, people excluded from the Telecommunications services were used to meet benefits of telecommunications are poised to bethe needs of governments to govern, wage war, decome directly connected to the cloud, bypassing fend themselves, and communicate with other govthe intermediate stages of development that started ernments. Over time, services were made available with optical telegraphy. Latest-technology installato traders, companies, and individuals. Finally, tions of wireless, cellular, and Internet will speed both wired and wireless telecommunications beconnections in developing countries. The environcame the veins and arteries for the Internet. Thus, ment for telecommunications service providers of services have become available to all without borthe twenty-first century will evolve rapidly while ders. From individuals to large entities, the need providing simpler and more comprehensive solufor instant information in all forms of data, voice, tions to customers than ever before. video, and images is changing the divisions within the wired and wireless industry segments. Divisions The Industry Today are becoming multifaceted, encompassing comToday, wired and wireless service providers puting, software, networking, protocols, encoding, range from small, regional providers to large multielectronics, materials science, and transmission nationals doing business in vast regions or across technologies that are all coming together to prothe country. A small provider can be a single vide the infrastructure. rancher with a cell tower providing services in a ruBusiness parameters involving cost and revenue ral area, a wireless Internet service provider inside accounting are being challenged. Revenues could a small town or section of a large city, or a small cain the future be based on the amount of data transble franchise providing media, Internet, and mitted or the time required for transmission. Costs phone service to a defined area. Midsize providers and where they are assigned to the transmission beare members of the same set but sell their services come an issue in traditional business income state-

Telecommunications Infrastructure Industry over wider geographical areas. Some have absorbed smaller providers into larger franchises. Large providers are publicly held corporations or large international corporations with branches in the United States. They may have grown to their present state through mergers and acquisitions, spurred by the breakup of AT&T by the Department of Justice in 1974. Services provided by smaller and midsize businesses fit the definition of wired and wireless market sectors. The large entities participate in wired and wireless provision of services or partner with others like the large satellite television companies to provide a complete package of services to their customers (examples being large telephone or cable companies providing a trio of services of voice, Internet, and television). Large national voice and cell phone companies, national cable television providers, and Internet service providers with voice over Internet protocol (VOIP) capabilities provide telecommunications in various packages

1821

to their customers. Small and midsize businesses compete by providing advantages to their customers with technology or region- specific coverage. Larger companies may create partnerships or have their eyes on smaller companies for future acquisitions. A combination of forces is driving opportunities in the telecommunications industry. Advances are being made in computing and software technology, in semiconductor technology, and in communications protocols and encoding methods. Fiberoptic cable is being installed more broadly and reaching more consumers. Satellite technologies, including the satellites themselves and applications exploiting them, continue to expand. New applications are being developed to leverage mobile technology, such as those enabling consumers to make vending machine purchases through their cell phones, for example. Increased speed and reliability alongside cost reductions are leading to a society that is “always on.”

Wireless technologies include paging, cellular, and other mobile technologies, including wireless wide-area network systems. (©Wayne Ruston/Dreamstime.com)

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There is an exponentially increasing opportunity for small and midsize businesses to start and emerge while larger providers meet the challenges of serving their existing customers. Can large providers move fast enough? Traditional computer equipment companies are becoming sole source providers for delivering telecommunication and information infrastructure to cities of the future under construction now. This is an example of one industry becoming a principal contributor to the old definition of telecommunications service providers. Large providers are learning to grow through mergers and acquisitions as well as by innovation. Companies previously categorized as computer or networking companies are morphing into wired and wireless telecommunications providers through subdivision or acquisition. Companies that never thought of themselves as telecommunications service providers have opportunities, as the cable companies did in 2010, to provide a trio of services. Cable companies are now providing phone and Internet services, in addition to tele-

vision. Satellite television companies will add capabilities that expand into the telecommunications world. Subindustries are springing up to provide wireless hot spots in buildings, towns, and businesses wherever people congregate with their handheld devices to gain access to information. The sector called “other” by the North American Industry Classification System is the fastest-growing in revenues over the other two main categories, wired and wireless. Traditional revenue models for the large traditional players are being threatened by the change in delivery over the telecommunications infrastructure. One example is the decline in the number of land lines as customers go to a wirelessonly method of access. In some regions of the country, a third of voice customers have decided to use their cell phone as their only telephone. The impact on large infrastructure providers of wired land line connections is immense. One of the challenges facing companies will be conflicts over access to the infrastructure. Once a

A telecommunications engineer at work. (©Eimantas Buzas/Dreamstime.com)

Telecommunications Infrastructure Industry

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A remote GPS antenna station on a mountain peak, with a communications tower. (©Dreamstime.com)

provider allows access of one type of business on top of their existing channels, problems of filtering, delaying, or barring of content may arise. This provides a demand for new solutions of both technology and business model acumen to these industries. An example is when owners of “dark” fiber (unused capacity in existing fiber cables) contract with content providers and find that the content is in competition with their own. One solution is to control the speed or quality of their competitor. VOIP transmissions on telecommunications infrastructure owned by traditional companies is an example of where complaints of this type have arisen. Common partnerships early in the twenty-first century are traditional phone companies providing packages that include satellite television and Internet service. Emerging partnerships might include commercial enterprises partnering backwards into the traditional telecommunications sector in order to provide phone contact, images, commercial sales, and process control information

to customers. A simple example is the use of a network to control power usage in peak consumption times of homes and buildings. VOIP companies could well become a part of traditional land line companies in order to preserve the revenue streams and usage of the fiber optic infrastructure installed both in ground and under the ocean in the twentieth century. Media companies (newspapers and magazines) are threatened by the emergence of the application of telecommunications technology; they might well become telecommunications providers of their own content or be merged into existing providers. A look at the state of the industry opens up exciting new possibilities for combinations and permutations of technologies as demands upon the telecommunications infrastructure escalate. Innovations do not necessarily occur just in the domestic U.S. arena. The United States is twenty-fourth out of the top thirty countries in broadband connections. Applications that use the telecommuni-

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cations infrastructure in Scandinavian countries, Japan, and European countries often exceed what is available in the United States. This situation leads to a massive pent-up demand for services in the United States. Once maps and music are on one device such as a cell phone, the pressures are even higher to implement applications across the network. More strain on existing telecommunications infrastructure exists, opening new opportunities for growth for new alliances and new providers. The result is a massive parallelism of growth and opportunity to participate in this industry sector. Required skills and accompanying job titles in business processing, engineering, customer service, sales, marketing, maintenance, and deployment of infrastructure are changing. This is increasing demand for an accelerated rate of growth in this sector. Other factors involving training, certification, and renewal of skills will follow the curve of application of a broader and more complex world of telecommunications providers. Entry into these industries will be available in all sizes of businesses and in captive applications (such as telecommunications infrastructure within a company or law office). Provision of services in a defined area (such as wireless services to a town or airport space) is growing daily. National and international growth occurs as developing countries race to the future and the digital divide is crossed. Developing countries benefit at the same time as the developed countries.

INDUSTRY MARKET SEGMENTS Telecommunications infrastructure companies often specialize in wired or wireless technologies. Wired technologies include cable television, broadband Internet, and traditional telephone lines. Wireless technologies include paging, cellular, and other mobile technologies, including wireless wide-area network (WAN) systems. Other companies provide satellite telecommunications services, which are categorized separately. The telecommunications infrastructure industry ranges from small companies and start-ups to large government entities (especially outside the United States) to quasi-governmental entities

(companies owned by the government but outsourced to public companies) to publicly and privately held companies. Within these divisions, the lines can blur, as wired and wireless services along with Internet service are often provided within one entity. Small Businesses Telecommunications service providers typically serve small, defined regions or territories. They are privately owned and were started as adjuncts to other interests. A cell phone tower put up by a local businessperson along an interstate, a wireless service to cover an area in a region not served by other alternatives, or an Internet service provider all derive revenues either from the customers they serve or from pass-through revenues of larger partners. Small telecommunications infrastructure businesses earn less than $25 million in annual revenues. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary of all telecommunications industry employees was $57,760 in 2009. Computer and information systems managers earned an average of $127,720, general and operations managers earned an average of $127,180, and chief executives earned an average of $189,920. Systems software engineers earned an average of $90,830, network systems and data communications analysts earned an average of $79,030, network administrators earned an average of $72,100, and computer support specialists earned an average of $45,350. Electronics engineers earned an average of $84,950, while electronics engineering technicians earned an average of $57,420. Service sales representatives earned an average of $57,150, while product sales representatives earned an average of $79,660. Customer service representatives earned an average of $36,640, telecommunications equipment installers and repairers earned an average of $55,280, and line installers and repairers earned an average of $52,660. For all these occupations, salaries at small businesses are likely to be lower than these industry averages. Clientele Interaction. Small telecommunications providers rely on direct customers or may themselves be the customers of larger companies for which they provide an extension of coverage. The success of these businesses is primarily based

Telecommunications Infrastructure Industry

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Many residents of this apartment building have satellite dishes. (©Dreamstime.com)

on the quality of service they provide and the cost basis for their business. In some cases, they may have title or exclusive local relationships or property holdings that keep out outside competition. They become candidates for acquisition either because of their exclusive coverage or the loyalty of their customer base. This type of business is in a position to provide local content or identity to their customers, which gives them a marketing advantage in their region. Amenities, Atmosphere, and Physical Grounds. Facilities to provide services are typically on one site. They are required to provide coverage twenty-four hours per day, seven days per week. A facility has to be secure and temperature controlled through all seasons. Customer expectations for cell phone coverage and Internet services are high. Reliability factors determine the basic costs for the facility, which are higher than for usual commercial or retail space. If the company is providing services to a national provider, such as roaming for a cell phone company, it will have to comply with requirements that are specified to get the fran-

chise for their area. In the case of Internet service providers, their customers may have quality requirements for the space into which they put their equipment. Environmental hardening of the facility, and security needs are examples of these cost factors for this industry. The most rigid requirement is for security. These facilities are usually unattended for long periods of time. External hardening to secure the area, locked cages in the case of Internet providers for each occupant of their facility, a backup power supply, and alarm systems are all attributes of an unattended high-quality space for telecommunication Internet service providers. Typical Number of Employees. One of the largest issues facing a telecommunication service provider is expense. The fact that facility costs are high creates a built-in base expense coupled to the high cost of the equipment, cell phone tower, and electronic equipment. These costs make entry into this business expensive. Thus, the number of employees, especially direct hires, is small. The preference is to hire contract workers in technical or fa-

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Telecommunications Infrastructure Industry

cilities specialties to minimize full-time wages and benefits. For an individual employee, lacking benefits and sometimes only paid on a per-job basis, there is the opportunity to spread the work over a combination of technologies. Experience in multiple technologies such as Internet service provision, networking, and cell phone services provides wellrounded experience not available in larger companies where specialization is the norm. Traditional Geographic Locations. Small service providers usually have one facility or location. A cell phone provider could have several towers and an attendant support facility in a county. Since the area of coverage is operating in an underserved area, the location may often be remote or rural. In the case of satellite television services, the locations will be on the customer’s sites, such as hotel properties. A small Internet service provider has one location. Pros of Working for a Small Provider. Because small providers are owner-founded, there is quicker decision making and the opportunity to spread oneself over many technologies is great. The opportunity to gain wide experience, therefore, is unmatched. The opportunity to grow into the operations management area depends on the owner’s involvement in the business, other business interests of that owner, and their age and family involvement in the business. For entrepreneurs, there exists the opportunity to start from scratch, but the initial entry investment is high as a result of the demand for a high-quality facility and expensive equipment. If one works as a contractor, then the opportunity to work with multiple telecommunications providers exists, allowing workers to apply their talents over a wide range of technologies. Cons of Working for a Small Provider. In many ways, the positive aspects of working for a small telecommunications provider are the same as the negative elements. For example, the fact that there is such a stringent requirement for quality of service means an employee or contractor is on call twenty-four hours per day. The owner also would be expected to respond and can be quite demanding of others. The knowledge requirement for the technologies of the whole operation is much higher as there is no one else to ask in case of problems. Some training may come from the equipment suppliers, but much will be self-taught. Seasonality will be a factor, if the facility is subject to

weather-related outages or variation in service. In the case of cell phone and cable television service providers, the outdoor elements can be a factor in work environment in responding to outages. Costs Payroll and Benefits: Small telecommunications providers are caught in a squeeze, needing to pay for technical expertise while usually operating in areas of lower wages. Benefits such as vacation and sick time are therefore offered at the discretion of the owner. Supplies: Providers are subject to high partsreplacement rates when operating cell phone services, Internet service hosting, satellite television downlinks, and wireless networks. External Services: Security services, alarm monitoring, utilities, and backup power supply maintenance contracts are the types of services required. Annual audits and inspections are sometimes outsourced. Utilities: Typical utilities include water, electricity, gas or oil, telephone, and alarm connections. Taxes: Small properties are required to pay local, state, and federal income taxes, as well as applicable property taxes. They must also collect state and local taxes if they have direct customers for their services. Midsize Businesses Midsize telecommunications providers range in size from one thousand to almost fifty thousand employees. A business of this type could have more than one technology service, such as wireless and satellite television, or Internet service provision along with telephone service. They operate over wider territories and regions and have revenues of over $25 million annually. Potential Annual Earnings Scale. According to the BLS, the average annual salary of all telecommunications industry employees was $57,760 in 2009. Computer and information systems managers earned an average of $127,720, general and operations managers earned an average of $127,180, and chief executives earned an average of $189,920. Systems software engineers earned an average of $90,830, network systems and data communications analysts earned an average of $79,030, network administrators earned an average of $72,100, and computer support specialists earned an aver-

Telecommunications Infrastructure Industry age of $45,350. Electronics engineers earned an average of $84,950, while electronics engineering technicians earned an average of $57,420. Service sales representatives earned an average of $57,150, while product sales representatives earned an average of $79,660. Customer service representatives earned an average of $36,640, telecommunications equipment installers and repairers earned an average of $55,280, and line installers and repairers earned an average of $52,660. For all these occupations, salaries at midsize businesses are likely to be in line with these industry averages. Benefits, stock purchase, and pension-matching are provided only on a competitive basis and depend on the city or region where a given firm is located in order to attract and retain employees. Clientele Interaction. Service providers have direct customers or their customers are national companies for which they provide service. In the case of Internet service providers, their customer is the content or media provider for which they provide space and hosting in their facility. Service providers with direct customers must have the patience and customer service skills of a retail environment including having call center access in case of problems with service on a twenty-four-hour basis. Service providers whose customer is a larger corporation will have to manage relationships on a business-to-business basis and create technical linkages into national operation centers for quality of service monitoring and response. Amenities, Atmosphere, and Physical Grounds. Multiple facilities with network linkages are normal for midsize service providers. They may operate in multiple cities or states, such that the operations and facility skills for telecommunications are required in their employee complement. Depending on the company, an employee may get to know and work with people outside of the employee’s main skill set. Over time there will be the opportunity to work on projects which require personal interactions and mixing of skill sets for different lines of the company’s business. Physical grounds are composed of midsize sites involving several hundred employees or sublocations that easily fit leased spaces in larger office parks. These will be located to accommodate the needs and competitiveness of the company and to recruit and retain their employees for business functions in that area.

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Typical Number of Employees. Midsize providers employ from one thousand to fifty thousand people. Traditional Geographic Locations. Locations are multipoint within a city, a county, or a state, or over several states. In the case of cable or satellite television, the locations are dictated by the customers’ properties where services are provided. A midsize Internet service provider might have different hosting locations dictated by profiles of their customer base’s home locations. Pros of Working for a Midsize Provider. Midsize companies have similar attributes to large providers, with a defined management structure, and possibilities for advancement and training. Staying current with technology is important as the field is moving so quickly, so this aspect as part of a working environment is key to progress in the telecommunications field. At the same time, for those on the administrative side, regulations, partnerships, and contracting are also challenges which provide career opportunities. Constant pressure to provide more with less money and fewer people creates an environment of growth and possibility for pursuing skill sets around the enterprise in an environment of rapid change. Cons of Working for a Midsize Provider. Midsize in this industry is a transitory stage. Constant pressures for economies of scale create pressure to grow, add more services, or merge just to stay even in the industry. Technologies move at a pace that puts pressure on capital dollars for midsize companies to maintain their existing base while moving on. Training and skills development are possible where the equipment vendors offer training, while more generic skills and new technology training rest on the shoulders of the employee, sometimes with the company paying for it. For those working there, it is a fast-paced environment but the pressures on revenue and expenses might truncate spending on training. There is attendant stress that comes from working in environments that change while constantly requiring doing more with less. Costs Payroll and Benefits: Midsize telecommunications companies hire staffs on a salary, hourly, or on-call basis. Contractors also are used to respond to projects and variation in loads. Bene-

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fits such as vacation and sick time are provided based on industry practices or requirements of the geographical area in which they operate. Some may also have union contracts operating for their hourly workers. Supplies: The biggest related expense items are plant and high-technology equipment. In addition, costs related to land (either owned or leased) and access for their facilities are large. Site requirements for cleaning, office, and information technology supplies (ink, discs, paper) are sourced locally or based on national purchase agreements. External Services: Security services, alarm monitoring, utilities, and backup power supply maintenance contracts are the types of services required. Annual audits and inspections can be subcontracted to specialists. Utilities: Water and power needs are typical for large companies, but they have the added burden of high reliability requirements. They need to be supplemented by backup generators in case of outages from the supplier or that are due to weather. Taxes: Taxes are corporate in structure to local, state, and federal requirements. In addition, direct customers for voice and data services are taxed according to local, state, and federal requirements and reported and paid accordingly. Large Businesses Large telecommunications providers employ tens of thousands of employees and their scope of operations is usually both in the United States and abroad. The range of business activities is matched by the range of job titles available. Jobs exist beyond typical engineering and business titles in such areas as disaster recovery, right-of-way agents, and government relations. Potential Annual Earnings Scale. According to the BLS, the average annual salary of all telecommunications industry employees was $57,760 in 2009. Computer and information systems managers earned an average of $127,720, general and operations managers earned an average of $127,180, and chief executives earned an average of $189,920. Systems software engineers earned an average of $90,830, network systems and data communications analysts earned an average of $79,030, network administrators earned an average of

$72,100, and computer support specialists earned an average of $45,350. Electronics engineers earned an average of $84,950, while electronics engineering technicians earned an average of $57,420. Service sales representatives earned an average of $57,150, while product sales representatives earned an average of $79,660. Customer service representatives earned an average of $36,640, telecommunications equipment installers and repairers earned an average of $55,280, and line installers and repairers earned an average of $52,660. For all these occupations, salaries at large businesses are likely to be equal to or greater than these industry averages. Large companies often offer health insurance, pension-matching schemes, and other benefits, including stock options or stock purchasing plans. Seminars and outside lectures on broad topics are often available for employee enrichment. Training to keep up on and introduce new technologies is a major benefit. Clientele Interaction. Large service providers have direct customers for which they provide their service and a combination of resellers, partners, alliances, and governments as well. In the case of the Internet service operation, the customer is the content or media provider for which they provide space and hosting in their facility. Interactions occur through customer service centers and network operation centers; these are employed to maintain quality of service of the delivered product as well as personal contact to respond to customer needs. All of this is required on a full twenty-four-hour basis, seven days a week. Interaction occurs also on a large scale involving multiple points of contact with states, government entities, and regulators in order to maintain and grow coverage. Ignoring this area can often result in costs for fines and legal actions for noncompliance or poor customer service. Amenities, Atmosphere, and Physical Grounds. A large company has combined space for a large number of employees, proper laboratory facilities for engineers, and creates an atmosphere in which there is a lot of employee interaction due to the layout of the workspace. More hierarchy is involved in creating departments with specialties to operate in the enterprise. Competition for space and status symbols can be a part of large company environments. The working culture is one where the tone is set by management and

Telecommunications Infrastructure Industry there is a history of how that culture works in both formal and informal organization links. Large companies provide parking, eating facilities, kiosks such as automated teller machines, and break areas inside or out of doors. Because of concern for productivity, often there is on-site contact with the surrounding community businesses and commerce. A large company location can become a small city unto itself. Recreation and fitness facilities are often provided for employees. Typical Number of Employees. A large telecommunications service provider employs tens of thousands of employees. Sites can be large and spread out. AT&T has approximately 126,000 employees, supporting a $51-billion revenue stream. Sites of several hundred employees are common and the character of each site can be different within a large company, according to the main business or engineering functions of that site. Traditional Geographic Locations. Headquarters operations and operating sites are chosen carefully for availability of employees, tax incentives, and quality of life profiles for their employees. Suboperations are specifically chosen for reaching their market and even for engineering reasons. For example, they may need to be located next to major communications and Internetconnect points in the Defense Advanced Research Projects Agency (DARPA) network. Pros of Working for a Large Provider. More so than smaller and midsize telecommunications service providers, large companies depend on interaction of their major functions (business, marketing, service delivery) to deliver quality of service and respond to market changes. Employee career paths are often in a major area of expertise. Careers will ascend along with earnings within an area and will be challenged by the growth in the telecommunications industry. For hourly employees, a benefit is the relative stability of pay, due in large part to collective bargaining for several of the job categories involving maintenance, installation, and operation center personnel. Economic downturns have resulted in major layoffs so there are cycles of ups and downs to which the companies respond. Technologies are essential to responding to the market, so training and exposure to new technologies is a key strategy to maintaining the expertise of their employees in addition to outside hires.

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Cons of Working for a Large Provider. For many companies the sheer complexity of the telecommunications environment, the entry of new technologies, and the need to maintain a large installed technology is proving to be difficult financially and management-wise for large companies. This creates a turbulent environment for the employees as the company responds. Also, it is possible for a career in what was a new technology to become cornered. While seeming to move slowly, employees and managers in large telecommunications companies face myriad changes every week that can seem bewildering; the need to learn one new operational policy after another requires a lot of flexibility on an employee’s part. Costs Payroll and Benefits: The salary structure of large telecommunications providers can be complex, owing to the many positions and job types. Service personnel (such as installers and maintenance) are generally paid on an hourly basis. Many are subject to union contracts. Those in administrative positions (managers, administrative assistants, and salespersons, for example) are paid on a yearly basis with some performance incentives. Benefits such as stock purchase, pension matching, vacation time, and sick time are offered on a competitive basis with others in the industry and through union contracts. Supplies: Large telecommunications providers require a wide range of items for running large sites. Besides cleaning and office supplies, and facilities needs, there can also be requirements for inside cafeteria-like food courts. Information technology is an inside function that requires supplies of paper, discs, ink, and hardware items for the IT environment for employees. Most purchases are generally under annual contracts. External Services: There is a trend to outsource functions in order to avoid the demand for benefits of full-time employees. Examples of outsourced jobs are inside and outside maintenance functions, food service employees, and even computer help desks for office systems used by the employees at large sites. Certain human resource functions, and counselors for employee assistance are contracted with outside providers specializing in areas of legal assistance and personal counseling.

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Utilities: Typical utilities for a large company site include water and sewage, electricity, and backup power provision. As significant users in their community, they work with local sources to negotiate annual rates where possible. Taxes: Large telecommunications infrastructure companies are required to pay local, state, and federal income taxes as well as applicable property taxes. They must also collect federal, state, and local taxes from their individual subscribers for voice and data services through their wired and wireless business units.

ORGANIZATIONAL STRUCTURE AND JOB ROLES

Telecommunications infrastructure companies base their organizational structures on their operational, market, technological, employment, and regulatory needs. From the largest companies, where these functions have their own vice presidents or directorships under the chief executive officer, to the smallest, where the functions are grouped together, all elements are found in the structure of a company. With the multiplicity of business functions and relationships that a large entity covers, areas such as marketing, operations, service delivery, and engineering might be so large as to require specialties in wireless, wired, Internet, networks, and perhaps a global executive as well. These are very often business units in themselves tapping into the expertise in the other functions. Functional titles might include mobile markets, consumer markets, business solutions, and diversified businesses (a catchall where very often emerging businesses and alliances reside). In smaller or midsize companies, where one or two businesses are served, the functions are more directly described with their direct titles, such as wireless services, or Internet services. The human resources function is often nested under an administrative function in small companies. The following umbrella categories apply to the organizational structure of businesses in the telecommunications infrastructure industry:

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Executive Management Development and Planning Marketing and Sales Public Affairs, Policy, and Government Relations Operations Engineering Human Resources Information Technology

Executive Management Executive management handles the overall direction and operations of the company. Responsibilities for profit and loss, goal setting, direction of the company, and regulatory compliance rest in these functions in large telecommunications providers. In large providers, each of these often has a vice president or director title. Since the telecommunications industry is highly technology driven in an environment where quality of service is paramount, the requirement for strong leadership with a background in both business and technology is optimal. These individuals cover a large span of subjects within each heading in large companies and therefore have a large supporting staff and departments within their function. Their purpose is to assure customers, employees, and stockholders of a viable, healthy, and growing presence in their chosen areas of the telecommunications industry. Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

■ ■

Chief Executive Officer (CEO) General Counsel Chief Financial Officer (CFO) Marketing and Sales Director Operations Director Engineering Director Development and Planning Director Public Affairs, Policy, and Government Relations Director Human Resources Director Information Technology Director

Development and Planning Development and planning departments provide corporations with plans to address changes in technology, customer revenue patterns, and the competitive environment. This function works closely with marketing to constantly assess the cur-

Telecommunications Infrastructure Industry rent direction of provision of service, international trends, new entrants, and technical advances; it makes recommendations for existing as well as new directions for the company. The current and future reach of the telecommunications network is constantly being reviewed. Current capacity, weighed against customer demand, is a constant topic for development and planning to put forth recommendations and models for the future. Since there is high pressure on revenue per customer, the cost structure is always in review with a view to increasing productivity or making decisions on economies of scale. This group is always at the center of those discussions, especially when it comes to the budgeting process for the years ahead. Often development and planning will create small teams drawn from engineering, operations, and marketing to address specific challenges put forth by the executive team to address both threats and opportunities. This group can package alternatives into recommendations in short periods of time and assure cross-functional input. Development and planning occupations may include the following:

The primary task of marketing personnel is to create awareness and desire for the company’s services. The primary task of sales personnel is to turn the prospect into a sale. Both marketing and sales personnel work at trade shows and conference events to maintain current clients as well as develop new ones for future business. People serving in these functions must have a high level of knowledge of the services they are promoting. Technical staff are often used as a backup as the discussions with the customer dig deeper into the services. Contracting and proposal staff also support and lead to fulfillment the business relationship that is achieved. Marketing and sales occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

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Network Analyst Financial Analyst Technology Analyst Right-of-Way/Easement Specialist Mergers and Acquisitions Specialist Market Analyst International Analyst Computer Modeling Specialist

Marketing and Sales Marketing and sales personnel solicit and acquire revenue streams for the various types of businesses of the telecommunications provider. Customers range from individual customers, such as Internet service for a small local provider, to large businesses and government departments. The services required by these customers have to be described by marketing for fulfillment by salespeople in the form of direct contact through complex proposal and contracting processes to win the business. Remuneration for marketing is on a salary basis while sales functions are compensated with a base salary upon which commission and bonus schemes are applied for meeting sales targets.

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Corporate Sales Manager Corporate Sales Representative Government Sales Manager Government Sales Representative Consumer Sales Manager Consumer Sales Representative Proposal Writer Contracts Attorney Technical Support Specialist After-Sales Support Specialist

Public Affairs, Policy, and Government Relations Telecommunications are greatly affected by external requirements set by local, state, federal, and international legislatures and regulatory bodies. The environment changes quickly, and there are always recommendations for changes that arise from government and the industry. Telecommunications standards are often in the purview of engineering. However, with such far-reaching implications for the viability of a telecommunications provider, a company often has a specialist in government affairs. Government entities often request industry input, and members of this function supply individuals to task forces or for giving testimony to commissions. Areas of public policy, competition, regulation, and standards are constantly under discussion. The larger the company, the more subject it is to questions about becoming a monopoly. Expertise in this area is relied upon to be the interface to government on behalf of the executive commit-

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tee. Smaller and midsize companies often rely on the chief executive officer or their managers for this function; a midsize company might use one or two persons. Engagement of an outside lobbying firm would be managed out of this function. Large industry associations conduct lobbying on behalf of the industry, but often depend on input from people working in this area. Decisions on corporate monetary support for outside associations, alliances, and lobbyists are led by this function. Public affairs, policy, and government relations occupations may include the following: ■

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■

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Telecommunications Attorney Policy Analyst Regulatory Specialist International Telecommunications Attorney Trade Association Liaison Lobbyist Vice President of Public Affairs Corporate Relations Specialist Communications Director

PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Telecommunications Industry Employment 2009

Projected 2018

Occupation

124,930

132,200

Customer service representatives

25,090

22,300

Electronics engineers, except computer

17,030

16,400

First-line supervisors/managers of office and administrative support workers

130,520

118,100

Telecommunications equipment installers and repairers, except line installers

95,130

86,000

Telecommunications line installers and repairers

13,910

13,300

Telephone operators

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Operations Operations is the customer-interface portion of the telecommunications infrastructure business. It has the largest employee count of a typical company. It can be divided along major customer lines (business, voice subscriber) or base technology lines (wired, wireless, Internet). Closest to the customers are installation, maintenance, and repair jobs. The industry at large has union representation in these occupations. Installers, optical and copper splicers, switching and routers repair personnel, customer premises repair employees, outdoor installers, and outdoor maintenance people are examples of this job category.

Operations employees include first-line supervisors and managers of office and administrative support workers for customer-interfacing tasks such as billing, customer service, call center, and network operations centers. The management of customer engagement through an order, contract, or other form of service requires specialists in tune with the business detail required for each customer covering a range of customer categories (government, business, and consumer). The operations function includes the installation, monitoring, tuning, calibrating, and running of the in-line delivery of the telecommunications infrastructure, whether through wireless or wired/ fiber optic connections. These are typically advanced technician skills, and part of a career path that can follow experience in installation and repair functions. In addition, project management, asset deployment, and tracking are areas that deal with the fa-

Telecommunications Infrastructure Industry ■

cility, plant, layout, and deployment in the area of coverage. Provision and deployment of specialized vehicles are other functions that often come within the purview of operations. Quality of service involves network operations center personnel, disaster recovery planners and specialists, customer service representatives, and performance analysts. Operations occupations may include the following: ■

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Telecommunications Installer/Repairer Asset Management and Tracking Specialist In-Line Equipment Operator

Engineering Engineering is at the heart of telecommunications infrastructure enterprises. Engineers design and issue plans for projects, as well as specifications and expansions for existing routes, design fixes, and improvements for quality of service. They also research and develop new equipment and technologies. Often, this function divides itself into specialties for voice, video, data, compression, and systems integration. Studies are often undertaken to find new applications using existing or new technology. Testing of sophisticated communication systems is a major part of their responsibility to the company.

Network Management and Monitoring Technician Disaster Recovery Specialist Project Manager Plant Support Engineer Service/Quality of Delivery Analyst Administrative Assistant Customer Service Representative

OCCUPATION

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SPECIALTIES

Telecommunications Equipment Installers/Repairers Specialty

Responsibilities

Central office repairers

Test, analyze defects in, and repair telephone circuits and equipment in central telephone company offices.

Central-office installers

Install equipment used to select, connect, and disconnect telephone lines in the telephone company central office.

Central-office repairer supervisors

Supervise and coordinate workers who construct, install, test, maintain, and repair electric power equipment.

Frame wirers

Connect wires from telephone lines and cables to distributing frames in telephone company central offices.

Instrument repairers

Repair, test, and modify telephone and telegraphic equipment.

Office electricians

Adjust submarine cable and terminal circuits and rearrange connections in cables.

PBX installers

Install telephone switchboards, telephoto circuits, mobile radiotelephones, and teletypewriters.

PBX repairers

Analyze and repair defects in telephone switchboards, teletypewriters, and mobile radiophones.

Trouble locators

Locate malfunctions in telephone and telegraph lines and coordinate corrective work of maintenance crews.

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Telecommunications Infrastructure Industry OCCUPATION

PROFILE

Telecommunications Installer and Repairer Considerations

Qualifications

Description

Sets up and maintains telecommunications equipment to transmit communication signals via computer, television, radio, and telephone.

Career cluster

Manufacturing

Interests

Data; people; things

Working conditions

Work inside

Minimum education level

Bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship; military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

RSE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

The range of skills has to match the existing technologies for the business and includes people working in advanced technologies for future needs. Installed base technology for older voice systems requires engineering change orders and improvements along with other current and newer wired or wireless systems. Input from the quality of service analysts needs to be passed through engineering for solutions to improve system quality and performance. Within engineering is the need for computeraided modeling, schematics, computer simulation, design, and layout systems in order to turn the work into reality. Often the manuals and design for installation, commissioning, and maintenance of the systems is written and produced in engineering. Specialists in technical writing are often employed at early stages of a system design. Engineering occupations may include the following:

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Wireless and New Technology Engineer Systems Engineer Telecommunication Standards Specialist Transmission Methods Engineer Compression and Traffic Engineer Systems Design and Layout Technician Systems Installation Technician Technical Writer Regulatory Compliance Specialist

Human Resources Human resources personnel handle employee hiring and dismissal processes, employee relations, and employee payroll and benefit administration (including insurance, retirement programs, and other employee benefit programs). Relocation expertise, training, and leadership development are often functions residing within human resources. In a union environment, it is important to have specific expertise and a talent for working with union counterparts.

Telecommunications Infrastructure Industry In a large company, which can be 100,000 employees or more, this function has the substantial responsibility for responding to changes in personnel needs, adding new locations, closing locations, responding to employment issues, and operating within various state or national laws. Payroll and benefits are subject to operations in various locales, requiring human resources to comply with hiring, payroll, and benefit issues by state or country. Companies often contract with outside providers for legal assistance, counseling services, and health insurance service. Online services, both from kiosks within the company information network and through access by Internet, require expertise in human resources to ensure security and privacy of personal information. Human resources occupations may include the following:

A new area is the usage of social networking applications as a part of the business environment. Policies regarding privacy and safeguarding of company data are new areas requiring IT to respond to the always-on, always-connected world of work. IT occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Software Applications Specialist Hardware Specialist Response Center Specialist Network Specialist Network Services Specialist Disaster Recovery Specialist Office Systems Specialist Design and Modeling Systems Specialist

INDUSTRY ■ ■ ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Coordinator Human Resources Manager Administrative Assistant Benefits Manager Benefits Specialist Union Liaison Employee Information Specialist

Information Technology Telecommunications providers are information technology (IT) providers through their network services. They also have their own needs for computer services; voice, video, and data links; conferencing; hardware; software; computer design and modeling workstations; and networks. The IT group is inward-facing to meet its own company’s needs, while the telecommunications provider is outward-facing, often providing similar services to its external customers. The IT department generates recommendations for privacy, internal usage, Internet usage, standards, new technology adoption, retirement of old technology tools, and software. Projects can involve upgrades, new site requirements, old site closures, and merging of the IT environment of a newly acquired company. Outside providers, national computer supply contracts, network capacity planning and usage, disaster recovery, archival data, and systems backups are some of the many responsibilities of IT.

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OUTLOOK

Overview Even in a period of financial crisis and upheaval, telecommunications is going through an accelerating transformation. During the second decade of the twenty-first century, environments will be driven by applications, which are rapidly being adopted by media, government, and traditional corporations. Social networking, television everywhere, texting, phoning, GPS combined with images, high-speed technologies, commercial transactions processed through handheld devices, and video conferencing or meetings are all factors changing the landscape of the telecommunications infrastructure. Telecommunications service providers are the spine, veins, and arteries of the international information revolution. It is a revolution far beyond the imagination of an individual who peered through a telescope across a land mass at a person signaling back. It is the continuation of an evolution, not a revolution, of technology and human interaction with information. Driven by individuals, commerce, governments, and technology, the evolution will happen at increasing rates of speed. There is a digital divide. A vast distance exists between the developed world that is enjoying this technology, and the developing world which will be able to install and use this information to their advantage without having to work through the stages that occurred from the late sixteenth cen-

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tury to the present. The progress being experienced now will continue unabated and provide the connection between people in the developing world in the areas of basic voice, data, and text, while setting the stage for adoption of advanced services for economic development as the nation progresses. Finance, technology, and deregulation (as in the United States market) and privatization of government monopolies in Europe, have served to restructure the environment of competition. Especially with the momentum provided by wireless technology, telecommunications infrastructure providers have to grow at rates faster than their own forecasts. In 2009, the introduction of the Internet connected phone from Apple brought the network bandwidth of the telecommunications provider to its knees and negatively impacted its net profit. At the same time, the door was opened to other providers to fill the void created by such rapid demand for this technology. According to projections by the BLS, despite increased demand for telecommunications services, industry jobs are expected to decline by 9 percent between 2008 and 2018. Reasons for this include workers due to retire; the shift in technologies from wired to wireless, which reduces the number of people needed in the traditional wired sector; and increased reliability, which reduces the occupational groups required for repairing the infrastructure. In addition, network monitoring and automated forms of service provision reduce the need for manned network operation centers as operations are combined amongst fewer workers. Hardest hit is the sector of wired infrastructure (including the installed base of fiber optic trunks across the land and under the sea). Decline is projected at 11 percent. Growth of the expanding wireless infrastructure will not replace the employment base that the wired sector is losing. The decline in wireless is projected at 1 percent. Technology is also being implemented to allow higher traffic rates over the existing wired and wireless infrastructure. That fact will not increase the number of employees required to implement higher speed, higher density traffic on existing trunks. Within the wireless sector, there will be an increasing need for customer service, automated support of customer service representatives, and personnel to implement, install, and support the

new combinations of technology. Computer design and application skills will grow to support this sector because of the automation that is central to this sector. Changes in the service offerings of cell phone, cable television, and Internet companies will change the skill set for new employees. Voice, video, and meeting services over the Internet will increase usage for cable television providers, Internet service providers (including wireless companies), and, in the future, wireless service provided over larger geographic areas (referred to as WiMax). This change to wider coverage of wireless will either create revenue streams for existing large providers or allow new entrants to provide wireless services. A battle is waging between technologies. Will the cell phone become the ubiquitous communications, music, and computing device, or will the netbook or the Internet phone become a personal digital assistant? Vehicles are starting to have capabilities of roving computers connected to telecommunications infrastructure providers. Services provided in public environments, planes, trains, and automobiles will be in demand from telecommunications infrastructure providers as WiFi hotpots are now. Over the long term, movements by government to deregulate, demonopolize their existing providers, and implement telecommunications-friendly regulations and taxation will create the environment for the emergence or contraction of various forms of delivery of telecommunications services. In addition, the economy on a national and international basis is a determining factor in providing capital for the design and implementation of infrastructure and technology. Existing small and midsize companies will constantly face cost pressures where economies of scale are the norm. They will be targets for merger and acquisition if they provide high quality and serve a niche in their business. Large providers face pressures of cost because as they grow larger they have to bring along their installed base of current services and customers. That can cause a drain on their capital as they go into new technologies, make strategic acquisitions, and make decisions quickly as the market is moving. Thus, employment prospects are bright in most levels and stages of the industry. It is up to the indi-

Telecommunications Infrastructure Industry vidual to be knowledgeable of these trends and factors that affect skill sets in order to navigate one’s career. Because of the speed of change, personal responsibility for upgrading skills is a key factor for enjoying a long career in telecommunications. Employment Advantages The availability of many new applications in Internet phones is keeping intense pressure on the industry to respond and grow. The industry has moved beyond games and music to essential applications for daily lives, especially social networking. It is also an industry that is international in nature as these applications work across borders and connect people in real time to each other. Technical schools, colleges, and universities are adding course work in this field. They draw new students in fields where they know their graduates can find employment. Graphics, video, television, live meetings, voice and image transmission, information compression on wire and wireless networks are all subjects of study enabling students to enter the field of leading applications and technologies. Basic subjects of transmission, magnetic field theory, antennas, information compression, and wired and wireless transmission standards are excellent places to enter and replace retiring traditional employees. Subjects such as transmitting light signals along glass strands, using existing up and down link satellite frequencies, voice and data compression techniques, and wireless technology are strong entry technologies for a career. Current exciting prospects for expansion, such as increased usage of the satellite, wired, and wireless infrastructure for large-area coverage of wireless connections (WiMax), will rapidly be eclipsed with new technology not yet named. The environment is a constantly moving window of change and the challenge will be to renew one’s skills in order to stay at the crest of the wave. Annual Earnings The Telecommunications Industry Association reported global revenues in 2008 of $1.7 trillion and U.S. revenues of $518.3 billion. The compounded growth rate was just over 10 percent. Wireless will be the largest growth area as the market is expected to grow at a rate faster than that of wire line broadband services. The technologies in play are VOIP, WiMax, and Internet television;

1837

higher speeds are becoming available on both wireless and wire line. A lot of this growth will occur as both a shift from wire line services as well as by using some of the overcapacity in wire and fiber routes. However, technologies allowing for greater speed and compression of the information use the same service paths without adding employment. Since telecom providers are constantly addressing profitability issues as the landscape changes beneath their feet, they will be looking to outsource many of the services that now exist within the enterprise. Customer care centers and network operations centers are two examples. As such, there will be opportunities for midsize companies to enter businesses associated with the telecommunications services sector. Small companies, especially wireless services, will be threatened by the introduction of WiMax, which will provide services blanketing the areas they currently serve on a niche basis.

RELATED RESOURCES FOR FURTHER RESEARCH Broadband for America P.O. Box 57244 Washington, DC 20037 Tel: (866) 646-8668 http://www.broadbandforamerica.com CTIA-The Wireless Association 1400 16th St. NW, Suite 600 Washington, DC 20036 Tel: (202) 736-3200 Fax: (202) 785-0721 http://www.ctia.org Institute of Electrical and Electronics Engineers 3 Park Ave., 17th Floor New York, NY 10016-5997 Tel: (212) 419-7900 Fax: (212) 752-4929 http://www.ieee.org International Communication Association 1500 21st St. NW Washington, DC 20036 Tel: (202) 955-1444

1838

Telecommunications Infrastructure Industry

Fax: (202) 955-1448 http://www.icahdq.org

His technical training in career coaching includes both course work and practical experience at the Hudson Institute for coaching.

International Telecommunication Union Place des Nations 1211 Geneva 20 Switzerland Tel: 41-22-730-5111 Fax: 41-22-733-7256 http://www.itu.int JOURNAL OF TELECOMMUNICATIONS AND INFORMATION TECHNOLOGY, National Institute of Telecommunications Szachowa St. 1 04-894 Warsaw Poland Tel: 48-22-5128-183 Fax: 48-22-5128-400 http://www.nit.eu MICROWAVE JOURNAL 685 Canton St. Norwood, MA 02062 Tel: (781) 769-9750 Fax: (781) 769-5037 http://www.mwjournal.com Telecommunications Industry Association 2500 Wilson Blvd., Suite 300 Arlington, VA 22201 Tel: (703) 907-7700 Fax: (703) 907-7727 http://www.tiaonline.org

ABOUT

THE

AUTHOR

Charles L. Bonza has thirty years of experience in general management and CEO positions at Hewlett-Packard, Acterna, Sypris Electronics, and BSW South Africa in electronics equipment, telecommunications instrumentation and software, computers, and telecommunications software development, management, and systems implementation. He worked for fifteen years in international environments and engaged in career counseling and change coaching in working with employees during hiring, development, and layoff situations.

FURTHER

READING

Columbia School of International and Public Affairs. Career Opportunities in Telecommunications. http://sipa.columbia.edu/ resources_services/career_services/current _students/career_resources/opportunities/ CareerOpp_Telecommunications.pdf. Harte, Lawrence. Voice over Data Networks for Managers. Fuquay Varina, N.C.: Althos, 2007. Huurdeman, Anton A. The Worldwide History of Telecommunications. Hoboken, N.J.: John Wiley & Sons, 2003. International Telecommunications Union. ICT Statistics Database. http://www.itu.int/ITU-D/ ICTEYE/Indicators/Indicators.aspx. Lee, Beong Gi. Broadband Wireless Access and Local Networks: Mobile Wimax and Wifi. Fitchburg, Mass.: Artech House, 2008. Plunkett, Jack W. Plunkett’s Telecommunications Industry Almanac Statistics, 2010. Houston, Tex.: Plunkett Research, 2009. http:// www.plunkettresearch.com/Industries/ Telecommunications/Telecommunications Statistics/tabid/96/Default.aspx. Simpson, Wes. Video Over IP: IPTV, Internet Video, H.264, P2P, Web TV, and Streaming. 2d ed. Burlington, Mass.: Focal Press, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. A New Approach to Classifying Industries in the Information Sector. http://www.bls.gov/ opub/ils/pdf/opbils75.pdf. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

SURVEY OF

American Industry and Careers

SURVEY OF

American Industry and Careers Volume 6 Textile and Fabrics Industry—Water Supply Industry Appendixes Indexes

The Editors of Salem Press

Salem Press Pasadena, California

Hackensack, New Jersey

Editorial Director: Christina J. Moose Project Editor: Rowena Wildin Manuscript Editors: Stacy Cole, Andy Perry Acquisitions Manager: Mark Rehn Administrative Assistant: Paul Tifford, Jr.

Research Supervisor: Jeffry Jensen Photo Editor: Cynthia Breslin Beres Design and Layout: James Hutson Additional Layout: William Zimmerman

Cover photo: ©DreamPictures/Shannon Faulk/Blend Images/CORBIS

Copyright ©2012, by Salem Press, A Division of EBSCO Publishing, Inc. All rights in this book are reserved. No part of this work may be used or reproduced in any manner whatsoever or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without written permission from the copyright owner except in the case of brief quotations embodied in critical articles and reviews or in the copying of images deemed to be freely licensed or in the public domain. For information, address the publisher, Salem Press, at [email protected]. ∞ The paper used in these volumes conforms to the American National Standard for Permanence of Paper for Printed Library Materials, X39.48-1992 (R1997). Library of Congress Cataloging-in-Publication Data Survey of American industry and careers / The Editors of Salem Press. v. cm. Includes bibliographical references and indexes. ISBN 978-1-58765-768-9 (set : alk. paper) — ISBN 978-1-58765-769-6 (vol. 1 : alk. paper) — ISBN 978-158765-770-2 (vol. 2 : alk. paper) — ISBN 978-1-58765-771-9 (vol. 3 : alk. paper) — ISBN 978-1-58765-772-6 (vol. 4 : alk. paper) — ISBN 978-1-58765-773-3 (vol. 5 : alk. paper) — ISBN 978-1-58765-774-0 (vol. 6 : alk. paper) 1. Business—Vocational guidance—United States. 2. Industries—United States. 3. Occupations— United States. 4. Vocational guidance—United States. I. Salem Press. HF5382.5.U5S87 2012 331.7020973—dc23 2011019601 First Printing

printed in the united states of america

Contents Complete List of Contents . . . . . . . . . . . . . . . . . . . . cxxxiii List of Tables and Sidebars . . . . . . . . . . . . . . . . . . . cxxxvii Textile and Fabrics Industry . . . . . . . . . . . . . . . . . . . . 1839 Theater and Performing Arts Industry . . . . . . . . . . . . . . 1859 Themed Entertainment Industry . . . . . . . . . . . . . . . . . 1877 Toys and Games Industry . . . . . . . . . . . . . . . . . . . . . 1893 Travel and Tourism Industry . . . . . . . . . . . . . . . . . . . 1910 Veterinary Industry . . . . . . . . . . . . . . . . . . . . . . . . . 1927 Video, Computer, and Virtual Reality Games Industry. . . . . . 1947 Warehousing and Storage Industry . . . . . . . . . . . . . . . . 1964 Waste Management Industry. . . . . . . . . . . . . . . . . . . . 1981 Watches and Jewelry Industry . . . . . . . . . . . . . . . . . . . 1999 Water Supply Industry . . . . . . . . . . . . . . . . . . . . . . . 2017 Employment by Industry, 2008 and Projected 2018 . . . . . . . 2037 Fortune 500 Companies by Industry, 2009 . . . . . . . . . . . . 2044 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2060 Electronic Resources . . . . . . . . . . . . . . . . . . . . . . . . 2129 Industries by Career Cluster . . . . . . . . . . . . . . . . . . . . 2161 Jobs and Careers . . . . . . . . . . . . . . . . . . . . . . . . . . 2164 Subject Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2181

cxxxi

Complete List of Contents VOLUME Contents . . . . . . . . . . . . . . . . . . . . . . v Publisher’s Note . . . . . . . . . . . . . . . . . vii Contributors . . . . . . . . . . . . . . . . . . . xi Complete List of Contents . . . . . . . . . . . xiii List of Tables and Sidebars . . . . . . . . . . xvii Accounting Services . . . . . . . . . . . . . . . 1 Advertising and Marketing Industry . . . . . . 19 Airline Industry . . . . . . . . . . . . . . . . . 36 Alternative Power Industry . . . . . . . . . . . 54 Animal Care Services . . . . . . . . . . . . . . 74 Apparel and Fashion Industry . . . . . . . . . 86 Automobiles and Personal Vehicles Industry . . . . . . . . . . . . . . . . . . . 105

1

Banking Industry . . . . . . . . . Batteries and Fuel Cells Industry Beverage and Tobacco Industry. Biofuels Industry . . . . . . . . . Broadcast Industry . . . . . . . . Building Architecture Industry . Building Construction Industry . Business Services . . . . . . . . .

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125 141 159 177 197 215 233 252

Casino Industry. . . . . . . Chemicals Industry. . . . . Civil Services: Planning . . Civil Services: Public Safety

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271 288 305 325

VOLUME

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Contents . . . . . . . . . . . . . . . . . . . . xxxv Complete List of Contents . . . . . . . . . xxxvii List of Tables and Sidebars . . . . . . . . . . . xli

Day-Care Services. . . . . . . . . . . . . . . . 503 Defense Industry . . . . . . . . . . . . . . . . 523 Dental and Orthodontics Industry . . . . . . 541

Coal Mining Industry . . . . . . . . . Complementary and Alternative Health Care Industry . . . . . . . . Computer Hardware and Peripherals Industry . . . . . . . . . . . . . . . Computer Software Industry . . . . . Computer Systems Industry . . . . . . Construction Equipment Industry . . Corporate Education Services . . . . . Counseling Services . . . . . . . . . . Criminal Justice and Prison Industry .

Electrical and Gas Appliances Industry . . . . 559 Electrical Power Industry . . . . . . . . . . . 578 Environmental Engineering and Consultation Services . . . . . . . . . . . . 593

. . . . 345 . . . . 362 . . . . . . .

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379 397 414 432 452 469 485

Farming Industry . . . . . . . . . . . . Federal Public Administration . . . . Financial Services Industry . . . . . . Fishing and Fisheries Industry. . . . . Food Manufacturing and Wholesaling Industry . . . . . . . . . . . . . . . Food Retail Industry . . . . . . . . . .

VOLUME Contents . . . . . . . . . . . . . . . . . . . . . lix Complete List of Contents . . . . . . . . . . . lxi List of Tables and Sidebars . . . . . . . . . . . lxv

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613 631 648 663

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3

Food Services . . . . . . . . . . . . . . . . . . 721 Freight Transport Industry . . . . . . . . . . 742 Funerary Industry . . . . . . . . . . . . . . . 760

cxxxiii

Survey of American Industry and Careers Furniture and Home Furnishings Industry . . . . . . . . . . . . . . . . . . . 775 Hand Tools and Instruments Industry . . Health and Fitness Industry . . . . . . . . Heavy Machines Industry . . . . . . . . . Higher Education Industry . . . . . . . . Highway, Road, and Bridge Construction Industry . . . . . . . . . . . . . . . . . Home Maintenance Services . . . . . . . Hospital Care and Services . . . . . . . . Hotels and Motels Industry . . . . . . . . Household and Personal Products Industry . . . . . . . . . . . . . . . . .

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793 808 825 844

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863 881 899 918

Industrial Design Industry . . . . . . . . . . . 952 Insurance Industry . . . . . . . . . . . . . . . 971 Internet and Cyber Communications Industry . . . . . . . . . . . . . . . . . . . 989 Landscaping Services . . . . . . Legal Services and Law Firms . Libraries and Archives Industry Light Machinery Industry . . . Livestock and Animal Products Industry. . . . . . . . . . . . Local Public Administration . .

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1005 1026 1043 1060

. . . . . . . 1078 . . . . . . . 1096

. . 937 VOLUME

4

Contents . . . . . . . . . . . . . . . . . . . lxxxiii Complete List of Contents . . . . . . . . . . lxxxv List of Tables and Sidebars . . . . . . . . . lxxxix

Nuclear Power Industry . . . . . . . . . . . 1297

Logging Industry . . . . . . . . . . . . . . . 1113

Paper Manufacturing and Products Industry. . . . . . . . . . . . . . . . Passenger Transportation and Transit Industry. . . . . . . . . . . . . . . . Personal Services . . . . . . . . . . . . Petroleum and Natural Gas Industry . Pharmaceuticals and Medications Industry. . . . . . . . . . . . . . . . Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry . Plastics and Rubber Manufacturing Industry. . . . . . . . . . . . . . . . Political Advocacy Industry. . . . . . . Postal and Package Delivery Services .

Mass Transportation Vehicles Industry . Medicine and Health Care Industry . . . Metals Manufacturing Industry . . . . . Mining Industry . . . . . . . . . . . . . . Motion Picture and Television Industry . Museums and Cultural Institutions Industry. . . . . . . . . . . . . . . . . Music Industry . . . . . . . . . . . . . .

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1131 1151 1169 1187 1204

. . 1225 . . 1241

National and International Security Industry. . . . . . . . . . . . . . . . . . . 1260 Natural Resources Management . . . . . . . 1276

Outdoor Recreation Industry . . . . . . . . 1312

VOLUME Contents . . . . . . . . . . . . . . . . . . . . cvii Complete List of Contents . . . . . . . . . . . cix List of Tables and Sidebars . . . . . . . . . . cxiii Printing Industry . . . . . . . . . . . Private Education Industry . . . . . . Public Elementary and Secondary Education Industry . . . . . . . . Public Health Services . . . . . . . . Publishing and Information Industry

. . . . 1495 . . . . 1515 . . . . 1537 . . . . 1554 . . . . 1572

. . . 1332 . . . 1351 . . . 1369 . . . 1384 . . . 1403 . . . 1423 . . . 1440 . . . 1458 . . . 1476

5

Real Estate Industry. . . . . . . . . Rental and Leasing Services . . . . Residential Medical Care Industry . Restaurant Industry . . . . . . . . . Retail Trade and Service Industry .

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1588 1606 1626 1644 1664

Scientific and Technical Services . . . . . . 1682 Scientific, Medical, and Health Equipment and Supplies Industry . . . . 1703

cxxxiv

Complete List of Contents Shipbuilding, Submarines, and Naval Transport Industry. . . . . . . . . . Space Exploration and Space Science Industry. . . . . . . . . . . . . . . . Spectator Sports Industry. . . . . . . . Sports Equipment Industry. . . . . . .

Telecommunications Equipment Industry. . . . . . . . . . . . . . . . . . . 1799 Telecommunications Infrastructure Industry. . . . . . . . . . . . . . . . . . . 1819

. . . 1722 . . . 1741 . . . 1762 . . . 1783

VOLUME Contents . . . . . . . . . . . . . . . . . . . cxxxi List of Tables and Sidebars . . . . . . . . cxxxvii Textile and Fabrics Industry . . . . . . Theater and Performing Arts Industry Themed Entertainment Industry . . . Toys and Games Industry. . . . . . . . Travel and Tourism Industry. . . . . .

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6

Waste Management Industry . . . . . . . . . 1981 Watches and Jewelry Industry . . . . . . . . 1999 Water Supply Industry . . . . . . . . . . . . 2017

1839 1859 1877 1893 1910

Employment by Industry, 2008 and Projected 2018 . . . . . . . . . . . Fortune 500 Companies by Industry, 2009. . . . . . . . . . . . . . . . . Bibliography. . . . . . . . . . . . . . Electronic Resources . . . . . . . . .

Veterinary Industry . . . . . . . . . . . . . . 1927 Video, Computer, and Virtual Reality Games Industry . . . . . . . . . . . . . . 1947

. . . . 2037 . . . . 2044 . . . . 2060 . . . . 2129

Industries by Career Cluster . . . . . . . . . 2161 Jobs and Careers . . . . . . . . . . . . . . . 2164 Subject Index . . . . . . . . . . . . . . . . . 2181

Warehousing and Storage Industry . . . . . 1964

cxxxv

List of Tables and Sidebars Accommodation Industry’s Contribution to the U.S. Economy, 920 Accountant: Occupation Profile, 12 Accountants and Auditors: Occupation Specialties, 4 Activities Therapist: Occupation Specialties, 1636 Actor: Occupation Specialties, 1871 Actuary: Occupation Profile, 984 Advertising Account Executive: Occupation Profile, 25 Advertising Agent: Occupation Specialties, 27 Aerospace Engineer: Occupation Profile, 1756 Aerospace Engineer: Occupation Specialties, 1755 Agricultural Scientist: Occupation Specialties, 627 Agriculture: Projected Employment for Selected Occupations, 628 Air Transportation: Projected Employment for Selected Occupations, 51 Aircraft Mechanic: Occupation Profile, 48 Airline Industry’s Contribution to the U.S. Economy, 39 Ambulatory Health Care Services’ Contribution to the U.S. Economy, 1153 Amusement Parks: Projected Employment for Selected Occupations, 1889 Animal Caretaker: Occupation Profile, 81 Animal Caretaker: Occupation Specialties, 82 Apparel Industry: Projected Employment for Selected Occupations, 102

Apparel Worker: Occupation Specialties, 92 Architect: Occupation Profile, 225 Architect: Occupation Specialties, 228 Archivist and Curator: Occupation Profile, 1235 Archivist and Curator: Occupation Specialties, 1237 Athletic Trainer: Occupation Profile, 1773 Auditor: Occupation Profile, 14 Automobile Salesperson: Occupation Profile, 112 Automotive Technician: Occupation Specialties, 119 Bank Teller: Occupation Profile, 135 Barber: Occupation Profile, 1374 Bellhop/Bell Captain: Occupation Specialties, 931 Beverage and Tobacco Product Manufacturing: Projected Employment for Selected Occupations, 174 Bindery Worker: Occupation Specialties, 1510 Biomedical Engineer: Occupation Profile, 1714 Biomedical Equipment Technician: Occupation Profile, 1716 Boilermaker: Occupation Profile, 191 Brickmason/Stonemason: Occupation Profile, 247 Broadcast Technician: Occupation Specialties, 210 Broadcasting and Telecommunications Industries, inputs consumed by the, 201 Broadcasting and Telecommunications cxxxvii

Industries’ Contributions to the U.S. Economy, The, 201 Broadcasting: Projected Employment for Selected Occupations, 212 Budget Analyst: Occupation Profile, 262 Bulldozer Operator: Occupation Specialties, 873 Bus Driver: Occupation Profile, 1364 Business Services Industry’s Contribution to the U.S. Economy, 254 Camera Operator: Occupation Profile, 1220 Career/Technology Education Teacher: Occupation Profile, 464 Chemical Engineer: Occupation Specialties, 299 Chemical Equipment Operator: Occupation Specialties, 300 Chemical Manufacturing: Projected Employment for Selected Occupations, 302 Chemical Products Industry’s Contribution to the U.S. Economy, 289 Chemist: Occupation Profile, 190 Chemist: Occupation Specialties, 189 Child-care Worker: Occupation Profile, 518 Chiropractor: Occupation Profile, 370 Cinematographer: Occupation Profile, 1217 Civil Engineer: Occupation Specialties, 311 Clergy: Occupation Profile, 1435 Clothes Designer: Occupation Profile, 98

Survey of American Industry and Careers College Faculty Member: Occupation Profile, 859 Compositor and Typesetter: Occupation Profile, 1509 Computer and Electronic Product Manufacturing: Projected Employment for Selected Occupations, 394 Computer and Electronic Products Industry’s Contribution to the U.S. Economy, 381 Computer-Controlled Machine Tool Operator: Occupation Profile, 443 Computer-Controlled Machine Tool Operator: Occupation Specialties, 440 Computer-Controlled Tool Programmer: Occupation Profile, 442 Computer Engineer: Occupation Profile, 391 Computer Programmer: Occupation Profile, 408 Computer Security Specialist: Occupation Profile, 1000 Computer Systems Analyst: Occupation Profile, 426 Computer Systems Industry’s Contribution to the U.S. Economy, 416 Construction and Building Inspector: Occupation Specialties, 243 Construction Industry: Projected Employment for Selected Occupations, 250 Construction Industry’s Contribution to the U.S. Economy, The, 234 Construction Manager: Occupation Profile, 874 Contribution of Apparel and Leather Manufacturers to the U.S. Economy, 87 Contribution of Food, Beverage, and Tobacco Product Manufacturing to the U.S. Economy, 685

Contribution of Food Services and Drinking Places to the U.S. Economy, The, 1646 Contribution of Funds, Trusts, and Other Financial Vehicles to the U.S. Economy, The, 651 Contribution of Hospital, Nursing, and Residential Care Facilities to the U.S. Economy, 902 Contribution of Personal Services to the U.S. Economy, 1371 Contribution of Securities, Commodity Contracts, and Investments to the U.S. Economy, The, 650 Contribution of Textile and Textile Produce Mills to the U.S. Economy, The, 1841 Contribution to the U.S. Economy of Scientific, Technical, and Miscellaneous Professional Services, 1683 Cook/Chef: Occupation Profile, 1656 Cook/Chef: Occupation Specialties, 1657 Copywriter: Occupation Profile, 30 Corrections Officer: Occupation Profile, 494 Corrections Officer: Occupation Specialties, 493 Cosmetologist: Occupation Specialties, 1375 Cost Estimator: Occupation Specialties, 1507 Counter and Rental Clerk: Occupation Profile, 1619 Couriers and Messengers Industry: Projected Employment for Selected Occupations, 1492 Dancer/Choreographer: Occupation Profile, 1872 Dancer/Choreographer: Occupation Specialties, 1873 Dental Hygienist: Occupation Profile, 554 cxxxviii

Dental Laboratory Technician: Occupation Specialties, 555 Dentist: Occupation Specialties, 553 Dietician and Nutritionist: Occupation Specialties, 819 Dispatcher: Occupation Profile, 1489 Drafter: Occupation Specialties, 313 Education Administrator: Occupation Specialties, 1527 Educational Counselor: Occupation Specialties, 1549 Educational Services: Projected Employment for Selected Occupations, 1551 Electrical and Electronics Engineer: Occupation Profile, 572 Electrical Equipment, Appliance, and Component Manufacturing: Projected Employment for Selected Occupations, 575 Electrical Equipment, Appliances, and Components Industry’s Contribution to the U.S. Economy, 561 Electrical Line Installer and Repairer: Occupation Specialties, 588 Electromechanical Equipment Assembler: Occupation Profile, 573 Electronic Commerce Specialist: Occupation Profile, 997 Elementary School Teacher: Occupation Profile, 1547 Energy Conservation and Use Technician: Occupation Profile, 607 Energy Conservation and Use Technician: Occupation Specialties, 608 Engineering Technician: Occupation Specialties, 1689 Environmental Engineer: Occupation Profile, 606

List of Tables and Sidebars Fabricated Metal Product Manufacturing: Projected Employment for Selected Occupations, 1183 Farmer/Farm Manager: Occupation Specialties, 625 Farming Industry’s Contribution to the U.S. Economy, 614 Federal Government’s Contribution to the U.S. Economy, The, 633 Federal Law Enforcement Agent: Occupation Specialties, 336-337 Finance and Insurance Industry: Projected Employment for Selected Occupations, 139 Firefighter: Occupation Profile, 1565 Fishing Industry: Projected Employment for Selected Occupations, 677 Fitness Trainer and Aerobics Instructor: Occupation Profile, 818 Flight Attendant: Occupation Profile, 46 Food and Beverage Service Worker: Occupation Profile, 736 Food and Beverage Stores: Projected Employment for Selected Occupations, 718 Food Manufacturing: Projected Employment for Selected Occupations, 700 Food Service Manager: Occupation Profile, 733 Food Services and Drinking Places: Projected Employment for Selected Occupations, 739 Forester and Conservation Scientist: Occupation Specialties, 1288 Forestry Worker: Occupation Profile, 1122 Forklift Operator: Occupation Profile, 1977

Funeral Director: Occupation Profile, 771 Furniture and Related Product Manufacturing: Projected Employment for Selected Occupations, 790 Furniture Manufacturing Industry’s Contribution to the U.S. Economy, 776 Gambling Industry: Projected Employment for Selected Occupations, 286 Gardener and Groundskeeper: Occupation Profile, 1020 Gardener and Groundskeeper: Occupation Specialties, 1021 Geologist and Geophysicist: Occupation Profile, 356 Hazardous Waste Manager: Occupation Profile, 1994 Health Care and Social Assistance Industry: Projected Employment for Selected Occupations, 1166 Health Information Technician: Occupation Profile, 910 Heavy and Civil Engineering Construction: Projected Employment for Selected Occupations, 877 Heavy Equipment Service Technician: Occupation Profile, 839 Highway Maintenance Worker: Occupation Profile, 875 Home Appliance Repairer: Occupation Profile, 888 Hospitals Industry: Projected Employment for Selected Occupations, 915 Hotel/Motel Manager: Occupation Specialties, 927 Hotels Industry: Projected Employment for Selected Occupations, 934 Housekeeper: Occupation Specialties, 1376 cxxxix

Industrial Designer: Occupation Profile, 965 Industrial Engineer: Occupation Profile, 966 Industrial Hygienist: Occupation Profile, 1091 Industrial Machinery Mechanic: Occupation Profile, 1071 Inputs Consumed by Ambulatory Health Care Services, 1154 Inputs Consumed by Food Services and Drinking Places, 1646 Inputs Consumed by Funds, Trusts, and Other Financial Vehicles, 651 Inputs Consumed by Hospital, Nursing, and Residential Care Facilities, 902 Inputs Consumed by Manufacturers of Food, Beverages, and Tobacco Products, 685 Inputs Consumed by Personal Services, 1371 Inputs Consumed by Scientific, Technical, and Miscellaneous Professional Services, 1684 Inputs Consumed by Securities, Commodity Contracts, and Investments, 650 Inputs Consumed by State and Local Governments, 1097 Inputs Consumed by Textile Mills and Textile Product Mills, 1842 Inputs Consumed by the Accommodation Industry, 921 Inputs Consumed by the Airline Industry, 39 Inputs Consumed by the Apparel and Leather Manufacturing Industry, 88 Inputs Consumed by the Broadcasting and Telecommunications Industries, 201 Inputs Consumed by the Business Services Industry, 254

Survey of American Industry and Careers Inputs Consumed by the Chemical Products Industry, 289 Inputs Consumed by the Computer and Electronic Products Industry, 381 Inputs Consumed by the Computer Systems Industry, 416 Inputs Consumed by the Construction Industry, 234 Inputs Consumed by the Electrical Equipment, Appliances, and Components Industry, 562 Inputs Consumed by the Farming Industry, 614 Inputs Consumed by the Federal Government, 634 Inputs Consumed by the Furniture Manufacturing Industry, 776 Inputs Consumed by the Insurance Industry, 973 Inputs Consumed by the Legal Services Industry, 1029 Inputs Consumed by the Machinery Manufacturing Industry, 830 Inputs Consumed by the Mining Industry, 1191 Inputs Consumed by the Motion Picture and Sound Recording Industries, 1209 Inputs Consumed by the Motor Vehicle Industry, 107 Inputs Consumed by the Oil and Natural Gas Extraction Industry, 1387 Inputs Consumed by the Paper Products Industry, 1335 Inputs Consumed by the Pipeline Transportation Industry, 1388 Inputs Consumed by the Plastics and Rubber Products Industry, 1443 Inputs Consumed by the Primary Metals Manufacturing Industry, 1172

Inputs Consumed by the Printing Industry, 1499 Inputs Consumed by the Publishing Industry, 1575 Inputs Consumed by the Real Estate Industry, 1590 Inputs Consumed by the Rental and Leasing Industry, 1607 Inputs Consumed by the Retail Trade Industry, 1666 Inputs Consumed by the Transit and Ground Passenger Transportation Industry, 1353 Inputs Consumed by the Truck Transportation Industry, 744 Inputs Consumed by the Utilities Industries, 581 Inputs Consumed by the Warehousing and Storage Industry, 1967 Inputs Consumed by the Waste Management Industry, 1984 Inputs Consumed by the Water Transportation Industry, 1725 Inspector and Compliance Officer: Occupation Profile, 167 Inspector and Tester: Occupation Specialties, 533 Insulation Worker: Occupation Profile, 894 Insurance Carriers and Related Activities: Projected Employment for Selected Occupations, 986 Insurance Claims Adjuster and Examiner: Occupation Profile, 983 Insurance Industry’s Contribution to the U.S. Economy, 973 Interior Designer: Occupation Profile, 229 Jeweler and Watch Repairer: Occupation Profile, 2009 Journalist: Occupation Specialties, 1583 cxl

Landscape Architect: Occupation Profile, 1019 Laundry/Dry Cleaning Machine Operator: Occupation Specialties, 1373 Lawyer: Occupation Specialties, 1037 Legal Services Industry’s Contribution to the U.S. Economy, 1029 Librarian: Occupation Specialties, 1053 Library Technician: Occupation Profile, 1055 Locomotive Engineer: Occupation Profile, 1365 Logging Industry: Projected Employment for Selected Occupations, 1128 Lumber Production Worker: Occupation Specialties, 1124 Machinery Manufacturing Industry’s Contribution to the U.S. Economy, The, 829 Machinery Manufacturing: Projected Employment for Selected Occupations, 841 Machinist: Occupation Profile, 803 Mail Carrier: Occupation Profile, 1490 Mail Clerk and Messenger: Occupation Specialties, 1491 Management Analyst and Consultant: Occupation Specialties, 264 Management of Companies and Enterprises: Projected Employment for Selected Occupations, 267 Manufacturers Representative: Occupation Profile, 694 Marine Biologist: Occupation Profile, 1289 Marine Engineer and Architect: Occupation Profile, 1735 Marine Engineer and Architect: Occupation Specialties, 1734

List of Tables and Sidebars Marriage Counselor: Occupation Profile, 473 Meat Cutter: Occupation Profile, 1088 Mechanical Engineer: Occupation Profile, 1074 Media Specialist: Occupation Specialties, 1056 Medical and Health Services Manager: Occupation Specialties, 911 Medical Records Administrator: Occupation Profile, 1637 Medical Scientist: Occupation Profile, 1566 Medical Social Worker: Occupation Profile, 478 Medical Technologist: Occupation Specialties, 1567 Merchandise Displayer: Occupation Profile, 1671 Metal/Plastic Working Machine Operator: Occupation Profile, 1144 Metallurgical/Materials Engineer: Occupation Specialties, 1180 Millwright: Occupation Profile, 697 Mining and Geological Engineer: Occupation Specialties, 1198 Mining and Quarrying: Projected Employment for Selected Occupations, 1201 Mining Industry’s Contribution to the U.S. Economy, 1190 Motion Picture and Sound Recording Industries’ Contribution to the U.S. Economy, 1209 Motion Picture, Video, and Sound Recording Industries: Projected Employment for Selected Occupations, 1222 Motor Vehicle Manufacturing: Projected Employment for Selected Occupations, 122 Motor Vehicles Industry’s Contribution to the U.S. Economy, The, 107

Museums, Historical Sites, and Similar Institutions: Projected Employment for Selected Occupations, 1238 Music Therapist: Occupation Profile, 480 Musical Instrument Repairer: Occupation Specialties, 1254 Musician and Composer: Occupation Profile, 1252 Musician and Composer: Occupation Specialties, 1251 Nuclear Engineer: Occupation Profile, 1306 Nuclear Engineer: Occupation Specialties, 1307 Nuclear Quality Control Inspector: Occupation Profile, 1308 Nurse Practitioner: Occupation Profile, 1638 Nursing and Residential Care Facilities: Projected Employment for Selected Occupations, 1641 Occupation Profile: Accountant, 12 Occupation Profile: Actuary, 984 Occupation Profile: Advertising Account Executive, 25 Occupation Profile: Aerospace Engineer, 1756 Occupation Profile: Aircraft Mechanic, 48 Occupation Profile: Animal Caretaker, 81 Occupation Profile: Architect, 225 Occupation Profile: Archivist and Curator, 1235 Occupation Profile: Athletic Trainer, 1773 Occupation Profile: Auditor, 14 Occupation Profile: Automobile Salesperson, 112 Occupation Profile: Bank Teller, 135 Occupation Profile: Barber, 1374 cxli

Occupation Profile: Biomedical Engineer, 1714 Occupation Profile: Biomedical Equipment Technician, 1716 Occupation Profile: Boilermaker, 191 Occupation Profile: Brickmason/Stonemason, 247 Occupation Profile: Budget Analyst, 262 Occupation Profile: Bus Driver, 1364 Occupation Profile: Camera Operator, 1220 Occupation Profile: Career/ Technology Education Teacher, 464 Occupation Profile: Chemist, 190 Occupation Profile: Child-care Worker, 518 Occupation Profile: Chiropractor, 370 Occupation Profile: Cinematographer, 1217 Occupation Profile: Clergy, 1435 Occupation Profile: Clothes Designer, 98 Occupation Profile: College Faculty Member, 859 Occupation Profile: Compositor and Typesetter, 1509 Occupation Profile: ComputerControlled Machine Tool Operator, 443 Occupation Profile: ComputerControlled Tool Programmer, 442 Occupation Profile: Computer Engineer, 391 Occupation Profile: Computer Programmer, 408 Occupation Profile: Computer Security Specialist, 1000 Occupation Profile: Computer Systems Analyst, 426 Occupation Profile: Construction Manager, 874 Occupation Profile: Cook/Chef, 1656

Survey of American Industry and Careers Occupation Profile: Copywriter, 30 Occupation Profile: Corrections Officer, 494 Occupation Profile: Counter and Rental Clerk, 1619 Occupation Profile: Dancer/ Choreographer, 1872 Occupation Profile: Dental Hygienist, 554 Occupation Profile: Dispatcher, 1489 Occupation Profile: Electrical and Electronics Engineer, 572 Occupation Profile: Electromechanical Equipment Assembler, 573 Occupation Profile: Electronic Commerce Specialist, 997 Occupation Profile: Elementary School Teacher, 1547 Occupation Profile: Energy Conservation and Use Technician, 607 Occupation Profile: Environmental Engineer, 606 Occupation Profile: Firefighter, 1565 Occupation Profile: Fitness Trainer and Aerobics Instructor, 818 Occupation Profile: Flight Attendant, 46 Occupation Profile: Food and Beverage Service Worker, 736 Occupation Profile: Food Service Manager, 733 Occupation Profile: Forestry Worker, 1122 Occupation Profile: Forklift Operator, 1977 Occupation Profile: Funeral Director, 771 Occupation Profile: Gardener and Groundskeeper, 1020 Occupation Profile: Geologist and Geophysicist, 356

Occupation Profile: Hazardous Waste Manager, 1994 Occupation Profile: Health Information Technician, 910 Occupation Profile: Heavy Equipment Service Technician, 839 Occupation Profile: Highway Maintenance Worker, 875 Occupation Profile: Home Appliance Repairer, 888 Occupation Profile: Industrial Designer, 965 Occupation Profile: Industrial Engineer, 966 Occupation Profile: Industrial Hygienist, 1091 Occupation Profile: Industrial Machinery Mechanic, 1071 Occupation Profile: Inspector and Compliance Officer, 167 Occupation Profile: Insulation Worker, 894 Occupation Profile: Insurance Claims Adjuster and Examiner, 983 Occupation Profile: Interior Designer, 229 Occupation Profile: Jeweler and Watch Repairer, 2009 Occupation Profile: Landscape Architect, 1019 Occupation Profile: Library Technician, 1055 Occupation Profile: Locomotive Engineer, 1365 Occupation Profile: Machinist, 803 Occupation Profile: Mail Carrier, 1490 Occupation Profile: Manufacturers Representative, 694 Occupation Profile: Marine Biologist, 1289 Occupation Profile: Marine Engineer and Architect, 1735 Occupation Profile: Marriage Counselor, 473 cxlii

Occupation Profile: Meat Cutter, 1088 Occupation Profile: Mechanical Engineer, 1074 Occupation Profile: Medical Records Administrator, 1637 Occupation Profile: Medical Scientist, 1566 Occupation Profile: Medical Social Worker, 478 Occupation Profile: Merchandise Displayer, 1671 Occupation Profile: Metal/ Plastic Working Machine Operator, 1144 Occupation Profile: Millwright, 697 Occupation Profile: Music Therapist, 480 Occupation Profile: Musician and Composer, 1252 Occupation Profile: Nuclear Engineer, 1306 Occupation Profile: Nuclear Quality Control Inspector, 1308 Occupation Profile: Nurse Practitioner, 1638 Occupation Profile: Occupational Therapist, 515 Occupation Profile: Office Machine Repairer, 1073 Occupation Profile: Online Merchant, 941 Occupation Profile: Packer/ Packager, 1905 Occupation Profile: Painting/ Coating Machine Operator, 1904 Occupation Profile: Paralegal, 1038 Occupation Profile: Park Ranger, 339 Occupation Profile: Parole and Probation Officer, 495 Occupation Profile: Pharmaceutical Sales Representative, 1416 Occupation Profile: Pharmacist, 1410

List of Tables and Sidebars Occupation Profile: Plumber and Pipefitter, 892 Occupation Profile: Precision Assembler, 535 Occupation Profile: Prepress Technician, 1584 Occupation Profile: Principal, 1546 Occupation Profile: Production Coordinator, 1812 Occupation Profile: Professional Athlete, 1774 Occupation Profile: Public Administrator, 1108 Occupation Profile: Public Relations Specialist, 1470 Occupation Profile: Quality Control Inspector, 1795 Occupation Profile: Range Manager, 1290 Occupation Profile: Real Estate Sales Agent, 1601 Occupation Profile: Recreation Program Director, 1324 Occupation Profile: Recreation Worker, 1325 Occupation Profile: Refuse Collector, 1995 Occupation Profile: Research Assistant, 857 Occupation Profile: Retail Salesperson, 715 Occupation Profile: Retail Store Sales Manager, 1675 Occupation Profile: Riveter, 1145 Occupation Profile: Robotics Technician, 804 Occupation Profile: Science Technician, 154 Occupation Profile: Secondary School Teacher, 1531 Occupation Profile: Ship Loader, 755 Occupation Profile: Software Designer, 409 Occupation Profile: Soil Scientist, 1291 Occupation Profile: Solar Energy System Installer, 69

Occupation Profile: Stationary Engineer, 1811 Occupation Profile: Teacher Assistant, 1532 Occupation Profile: Technical Sales Representative, 1715 Occupation Profile: Telecommunications Installer and Repairer, 1834 Occupation Profile: Telephone Installer and Repairer, 1813 Occupation Profile: Textile Machine Operator, 1852 Occupation Profile: Tool and Die Maker, 2012 Occupation Profile: Upholsterer, 788 Occupation Profile: Urban and Regional Planner, 319 Occupation Profile: Veterinary Assistant/Technician, 1939 Occupation Profile: Water and Wastewater Engineer, 2029 Occupation Profile: Water Treatment Plant Operator, 2030 Occupation Profile: Wholesale Sales Representative, 170 Occupation Profile: Wind Energy Engineer, 71 Occupation Profile: Woodworker, 789 Occupation Specialties: Accountants and Auditors, 4 Occupation Specialties: Activities Therapist, 1636 Occupation Specialties: Actor, 1871 Occupation Specialties: Advertising Agent, 27 Occupation Specialties: Aerospace Engineer, 1755 Occupation Specialties: Agricultural Scientist, 627 Occupation Specialties: Animal Caretaker, 82 Occupation Specialties: Apparel Worker, 92 Occupation Specialties: Architect, 228 cxliii

Occupation Specialties: Archivist and Curator, 1237 Occupation Specialties: Automotive Technician, 119 Occupation Specialties: Bellhop/Bell Captain, 931 Occupation Specialties: Bindery Worker, 1510 Occupation Specialties: Broadcast Technician, 210 Occupation Specialties: Bulldozer Operator, 873 Occupation Specialties: Chemical Engineer, 299 Occupation Specialties: Chemical Equipment Operator, 300 Occupation Specialties: Chemist, 189 Occupation Specialties: Civil Engineer, 311 Occupation Specialties: Computer-Controlled Machine Tool Operator, 440 Occupation Specialties: Construction and Building Inspector, 243 Occupation Specialties: Cook/ Chef, 1657 Occupation Specialties: Corrections Officer, 493 Occupation Specialties: Cosmetologist, 1375 Occupation Specialties: Cost Estimator, 1507 Occupation Specialties: Dancer/ Choreographer, 1873 Occupation Specialties: Dental Laboratory Technician, 555 Occupation Specialties: Dentist, 553 Occupation Specialties: Dietician and Nutritionist, 819 Occupation Specialties: Drafter, 313 Occupation Specialties: Education Administrator, 1527 Occupation Specialties: Educational Counselor, 1549

Survey of American Industry and Careers Occupation Specialties: Electrical Line Installer and Repairer, 588 Occupation Specialties: Energy Conservation and Use Technician, 608 Occupation Specialties: Engineering Technician, 1689 Occupation Specialties: Farmer/ Farm Manager, 625 Occupation Specialties: Federal Law Enforcement Agent, 336337 Occupation Specialties: Forester and Conservation Scientist, 1288 Occupation Specialties: Gardener and Groundskeeper, 1021 Occupation Specialties: Hotel/ Motel Manager, 927 Occupation Specialties: Housekeeper, 1376 Occupation Specialties: Inspector and Tester, 533 Occupation Specialties: Journalist, 1583 Occupation Specialties: Laundry/Dry Cleaning Machine Operator, 1373 Occupation Specialties: Lawyer, 1037 Occupation Specialties: Librarian, 1053 Occupation Specialties: Lumber Production Worker, 1124 Occupation Specialties: Mail Clerk and Messenger, 1491 Occupation Specialties: Management Analyst and Consultant, 264 Occupation Specialties: Marine Engineer and Architect, 1734 Occupation Specialties: Media Specialist, 1056 Occupation Specialties: Medical and Health Services Manager, 911 Occupation Specialties: Medical Technologist, 1567

Occupation Specialties: Metallurgical/Materials Engineer, 1180 Occupation Specialties: Mining and Geological Engineer, 1198 Occupation Specialties: Musical Instrument Repairer, 1254 Occupation Specialties: Musician and Composer, 1251 Occupation Specialties: Nuclear Engineer, 1307 Occupation Specialties: Packer/ Packager, 1906 Occupation Specialties: Pharmacist, 1409 Occupation Specialties: Police Officer, 341 Occupation Specialties: Power Plant Operator, 587 Occupation Specialties: Precision Assembler, 534 Occupation Specialties: Property and Real Estate Manager, 1600 Occupation Specialties: Psychologist, 471 Occupation Specialties: Public Relations Specialist, 1469 Occupation Specialties: Rail Transportation Worker, 752 Occupation Specialties: Recreation Worker, 1326 Occupation Specialties: Renewable Energy Technician, 70 Occupation Specialties: Reservation and Ticket Agent, 1920 Occupation Specialties: Science Technician, 1694 Occupation Specialties: Small Engine Mechanic, 1072 Occupation Specialties: Special Education Teacher, 1548 Occupation Specialties: Sports Instructor/Coach, 1772 Occupation Specialties: Telecommunications Equipment Installer/ Repairer, 1833 cxliv

Occupation Specialties: Textile Machine Operator, 1853 Occupation Specialties: Travel Agent, 1921 Occupation Specialties: Veterinarian, 1938 Occupation Specialties: Welder, 1144 Occupational Therapist: Occupation Profile, 515 Occupations in Pharmaceutical and Medicine Manufacturing: Projected Employment for Selected Occupations, 1420 Office Machine Repairer: Occupation Profile, 1073 Oil and Gas Extraction Industry’s Contribution to the U.S. Economy, 1387 Oil and Gas Extraction: Projected Employment for Selected Occupations, 1400 Online Merchant: Occupation Profile, 941 Packer/Packager: Occupation Profile, 1905 Packer/Packager: Occupation Specialties, 1906 Painting/Coating Machine Operator: Occupation Profile, 1904 Paper Manufacturing: Projected Employment for Selected Occupations, 1347 Paper Products Industry’s Contribution to the U.S. Economy, 1335 Paralegal: Occupation Profile, 1038 Park Ranger: Occupation Profile, 339 Parole and Probation Officer: Occupation Profile, 495 Performing Arts: Projected Employment for Selected Occupations, 1874 Personal and Laundry Services: Projected Employment for Selected Occupations, 1382

List of Tables and Sidebars Petroleum and Coal Products Manufacturing: Projected Employment for Selected Occupations, 1401 Pharmaceutical Sales Representative: Occupation Profile, 1416 Pharmacist: Occupation Profile, 1410 Pharmacist: Occupation Specialties, 1409 Pipeline Transporation Industry’s Contribution to the U.S. Economy, The, 1388 Plastics and Rubber Products Industry’s Contribution to the U.S. Economy, 1443 Plastics and Rubber Products Manufacturing: Projected Employment for Selected Occupations, 1455 Plumber and Pipefitter: Occupation Profile, 892 Police Officer: Occupation Specialties, 341 Postal Service Industry: Projected Employment for Selected Occupations, 1493 Power Plant Operator: Occupation Specialties, 587 Precision Assembler: Occupation Profile, 535 Precision Assembler: Occupation Specialties, 534 Prepress Technician: Occupation Profile, 1584 Primary Metal Manufacturing: Projected Employment for Selected Occupations, 1184 Primary Metals Manufacturing Industry’s Contribution to the U.S. Economy, 1172 Principal: Occupation Profile, 1546 Printing and Related Support Activities: Projected Employment for Selected Occupations, 1512 Printing Industry’s Contribution to the U.S. Economy, 1499

Production Coordinator: Occupation Profile, 1812 Professional Athlete: Occupation Profile, 1774 Professional, Scientific, and Technical Services: Projected Employment for Selected Occupations, 1700 Projected Employment for Selected Occupations: Agriculture, 628 Projected Employment for Selected Occupations: Air Transportation, 51 Projected Employment for Selected Occupations: Amusement Parks, 1889 Projected Employment for Selected Occupations: Apparel Industry, 102 Projected Employment for Selected Occupations: Beverage and Tobacco Product Manufacturing, 174 Projected Employment for Selected Occupations: Broadcasting, 212 Projected Employment for Selected Occupations: Chemical Manufacturing, 302 Projected Employment for Selected Occupations: Computer and Electronic Product Manufacturing, 394 Projected Employment for Selected Occupations: Construction Industry, 250 Projected Employment for Selected Occupations: Couriers and Messengers Industry, 1492 Projected Employment for Selected Occupations: Educational Services, 1551 Projected Employment for Selected Occupations: Electrical Equipment, Appliance, and Component Manufacturing, 575 cxlv

Projected Employment for Selected Occupations: Fabricated Metal Product Manufacturing, 1183 Projected Employment for Selected Occupations: Finance and Insurance Industry, 139 Projected Employment for Selected Occupations: Fishing Industry, 677 Projected Employment for Selected Occupations: Food and Beverage Stores, 718 Projected Employment for Selected Occupations: Food Manufacturing, 700 Projected Employment for Selected Occupations: Food Services and Drinking Places, 739 Projected Employment for Selected Occupations: Furniture and Related Product Manufacturing, 790 Projected Employment for Selected Occupations: Gambling Industry, 286 Projected Employment for Selected Occupations: Health Care and Social Assistance Industry, 1166 Projected Employment for Selected Occupations: Heavy and Civil Engineering Construction, 877 Projected Employment for Selected Occupations: Hospitals Industry, 915 Projected Employment for Selected Occupations: Hotels Industry, 934 Projected Employment for Selected Occupations: Insurance Carriers and Related Activities, 986 Projected Employment for Selected Occupations: Logging Industry, 1128

Survey of American Industry and Careers Projected Employment for Selected Occupations: Machinery Manufacturing, 841 Projected Employment for Selected Occupations: Management of Companies and Enterprises, 267 Projected Employment for Selected Occupations: Mining and Quarrying, 1201 Projected Employment for Selected Occupations: Motion Picture, Video, and Sound Recording Industries, 1222 Projected Employment for Selected Occupations: Motor Vehicle Manufacturing, 122 Projected Employment for Selected Occupations: Museums, Historical Sites, and Similar Institutions, 1238 Projected Employment for Selected Occupations: Nursing and Residential Care Facilities, 1641 Projected Employment for Selected Occupations: Oil and Gas Extraction, 1400 Projected Employment for Selected Occupations: Paper Manufacturing, 1347 Projected Employment for Selected Occupations: Performing Arts, 1874 Projected Employment for Selected Occupations: Personal and Laundry Services, 1382 Projected Employment for Selected Occupations: Petroleum and Coal Products Manufacturing, 1401 Projected Employment for Selected Occupations: Pharmaceutical and Medicine Manufacturing, 1420 Projected Employment for Selected Occupations: Plastics and Rubber Products Manufacturing, 1455

Projected Employment for Selected Occupations: Postal Service Industry, 1493 Projected Employment for Selected Occupations: Primary Metal Manufacturing, 1184 Projected Employment for Selected Occupations: Printing and Related Support Activities, 1512 Projected Employment for Selected Occupations: Professional, Scientific, and Technical Services, 1700 Projected Employment for Selected Occupations: Publishing Industries, 1585 Projected Employment for Selected Occupations: Rail Transportation, 1147 Projected Employment for Selected Occupations: Real Estate Industry, 1603 Projected Employment for Selected Occupations: Real Estate Rental and Leasing, 1604 Projected Employment for Selected Occupations: Religious, Grantmaking, Civic, Professional, and Similar Organizations, 1437 Projected Employment for Selected Occupations: Rental and Leasing Services, 1623 Projected Employment for Selected Occupations: Restaurants, 1660 Projected Employment for Selected Occupations: Retail Trade Industry, 1679 Projected Employment for Selected Occupations: Scenic and Sightseeing Transportation, 1922 Projected Employment for Selected Occupations: Securities, Commodity Contracts, and Related Activities, 661 cxlvi

Projected Employment for Selected Occupations: Social Assistance, 520 Projected Employment for Selected Occupations: Specialty Trade Contractors, 897 Projected Employment for Selected Occupations: Sporting Goods, Hobby, Book, and Music Stores, 1796 Projected Employment for Selected Occupations: Support Activities for Mining, 1399 Projected Employment for Selected Occupations: Support Activities for Transportation, 1367 Projected Employment for Selected Occupations: Telecommunications Industry, 1832 Projected Employment for Selected Occupations: Textile Mills, 1851 Projected Employment for Selected Occupations: Textile Product Mills, 1854 Projected Employment for Selected Occupations: Transit and Ground Passenger Transportation, 1366 Projected Employment for Selected Occupations: Transportation Equipment Manufacturing, 1147 Projected Employment for Selected Occupations: Truck Transportation, 757 Projected Employment for Selected Occupations: Utilities Industry, 590 Projected Employment for Selected Occupations: Warehousing and Storage, 1978 Projected Employment for Selected Occupations: Waste

List of Tables and Sidebars Management and Remediation Services, 1997 Projected Employment for Selected Occupations: Water Transportation, 2031 Projected Employment for Selected Occupations: Wood Product Manufacturing, 230 Property and Real Estate Manager: Occupation Specialties, 1600 Psychologist: Occupation Specialties, 471 Public Administrator: Occupation Profile, 1108 Public Relations Specialist: Occupation Profile, 1470 Public Relations Specialist: Occupation Specialties, 1469 Publishing Industries: Projected Employment for Selected Occupations, 1585 Publishing Industry’s Contribution to the U.S. Economy, 1574 Quality Control Inspector: Occupation Profile, 1795 Rail Transportation: Projected Employment for Selected Occupations, 1147 Rail Transportation Worker: Occupation Specialties, 752 Range Manager: Occupation Profile, 1290 Real Estate Industry: Projected Employment for Selected Occupations, 1603 Real Estate Industry’s Contribution to the U.S. Economy, 1590 Real Estate Rental and Leasing: Projected Employment for Selected Occupations, 1604 Real Estate Sales Agent: Occupation Profile, 1601 Recreation Program Director: Occupation Profile, 1324

Recreation Worker: Occupation Profile, 1325 Recreation Worker: Occupation Specialties, 1326 Refuse Collector: Occupation Profile, 1995 Religious, Grantmaking, Civic, Professional, and Similar Organizations: Projected Employment for Selected Occupations, 1437 Renewable Energy Technician: Occupation Specialties, 70 Rental and Leasing Industry’s Contribution to the U.S. Economy, 1607 Rental and Leasing Services: Projected Employment for Selected Occupations, 1623 Research Assistant: Occupation Profile, 857 Reservation and Ticket Agent: Occupation Specialties, 1920 Restaurants: Projected Employment for Selected Occupations, 1660 Retail Salesperson: Occupation Profile, 715 Retail Store Sales Manager: Occupation Profile, 1675 Retail Trade Industry: Projected Employment for Selected Occupations, 1679 Retail Trade Industry’s Contribution to the U.S. Economy, 1666 Riveter: Occupation Profile, 1145 Robotics Technician: Occupation Profile, 804 Scenic and Sightseeing Transportation: Projected Employment for Selected Occupations, 1922 Science Technician: Occupation Profile, 154 Science Technician: Occupation Specialties, 1694 Secondary School Teacher: Occupation Profile, 1531 cxlvii

Securities, Commodity Contracts, and Related Activities: Projected Employment for Selected Occupations, 661 Ship Loader: Occupation Profile, 755 Small Engine Mechanic: Occupation Specialties, 1072 Social Assistance: Projected Employment for Selected Occupations, 520 Software Designer: Occupation Profile, 409 Soil Scientist: Occupation Profile, 1291 Solar Energy System Installer: Occupation Profile, 69 Special Education Teacher: Occupation Specialties, 1548 Specialty Trade Contractors: Projected Employment for Selected Occupations, 897 Sporting Goods, Hobby, Book, and Music Stores: Projected Employment for Selected Occupations, 1796 Sports Instructor/Coach: Occupation Specialties, 1772 State and Local Governments’ Contribution to the U.S. Economy, 1097 Stationary Engineer: Occupation Profile, 1811 Support Activities for Mining: Projected Employment for Selected Occupations, 1399 Support Activities for Transportation: Projected Employment for Selected Occupations, 1367 Teacher Assistant: Occupation Profile, 1532 Technical Sales Representative: Occupation Profile, 1715

Survey of American Industry and Careers Telecommunications Equipment Installer/Repairer: Occupation Specialties, 1833 Telecommunications Industry: Projected Employment for Selected Occupations, 1832 Telecommunications Installer and Repairer: Occupation Profile, 1834 Telephone Installer and Repairer: Occupation Profile, 1813 Textile Machine Operator: Occupation Profile, 1852 Textile Machine Operator: Occupation Specialties, 1853 Textile Mills: Projected Employment for Selected Occupations, 1851 Textile Product Mills: Projected Employment for Selected Occupations, 1854 Tool and Die Maker: Occupation Profile, 2012 Transit and Ground Passenger Transportation Industry’s Contribution to the U.S. Economy, 1353 Transit and Ground Passenger Transportation: Projected Employment for Selected Occupations, 1366

Transportation Equipment Manufacturing: Projected Employment for Selected Occupations, 1147 Travel Agent: Occupation Specialties, 1921 Truck Transportation Industry’s Contribution to the U.S. Economy, 744 Truck Transportation: Projected Employment for Selected Occupations, 757 Upholsterer: Occupation Profile, 788 Urban and Regional Planner: Occupation Profile, 319 Utilities Industries’ Contribution to the U.S. Economy, 580 Utilities Industry: Projected Employment for Selected Occupations, 590 Veterinarian: Occupation Specialties, 1938 Veterinary Assistant/Technician: Occupation Profile, 1939 Warehousing and Storage Industry’s Contribution to the U.S. Economy, 1966

cxlviii

Warehousing and Storage: Projected Employment for Selected Occupations, 1978 Waste Management and Remediation Services: Projected Employment for Selected Occupations, 1997 Waste Management Industry’s Contribution to the U.S. Economy, 1983 Water and Wastewater Engineer: Occupation Profile, 2029 Water Transportation Industry’s Contribution to the U.S. Economy, 1724 Water Transportation: Projected Employment for Selected Occupations, 2031 Water Treatment Plant Operator: Occupation Profile, 2030 Welder: Occupation Specialties, 1144 Wholesale Sales Representative: Occupation Profile, 170 Wind Energy Engineer: Occupation Profile, 71 Wood Product Manufacturing: Projected Employment for Selected Occupations, 230 Woodworker: Occupation Profile, 789

SURVEY OF

American Industry and Careers

Textile and Fabrics Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Clusters: Agriculture, Food, and Natural Resources; Manufacturing Subcategory Industries: Animal Production; Carpet Mills; Cotton Farming; Fabric Design; Fabric Finishing and Dyeing; Fiber Research and Development; Fiber, Yarn, and Thread Mills; Flax Farming; Hemp Farming; Industrial Chemistry; Jute Farming; Knitting Mills; Lace Mills; Nonwoven Fabric Mills; Rope Cordage and Twine Mills; Sheep Farming; Spinning Mills; Textile Mills; Woven Fabric Mills Related Industries: Apparel and Fashion Industry; Farming Industry; Industrial Design Industry Annual Domestic Revenues: $123.1 billion USD (Datamonitor, 2009) Annual Global Revenues: $1.14 trillion USD (Datamonitor, 2009) NAICS Numbers: 11, 31-33, 42, 313, 314

INDUSTRY

human-made fibers. These products are then used to manufacture apparel and home furnishings, as well as to meet industrial design and engineering needs. From independent craftspeople who produce yarn and fabric in time-honored traditional methods to large-scale factories using cutting-edge technologies, the textile and fabrics industry includes farm production of plant or animal fibers, industrial production of synthetic fibers, design and manufacture of specific types of fabric to meet diverse requirements, and the wholesale marketing and sale of fiber to producers of end-products utilizing textile products.

History of the Industry The use of fibers for cloth and craft began thousands of years ago, predating writing, agriculture, and perhaps even the use of fire. Early humans learned to twist or braid plant fibers together to produce rope and cordage to secure stone spear-points and arrowheads to wooden shafts, to construct fishing nets and animal traps, and for a variety of other pur-

DEFINITION

Summary The textile and fabrics industry produces thread, yarn, rope, cordage, twine, and knitted, woven, and unwoven fabrics made from natural and 1839

1840

Textile and Fabrics Industry

poses. Animal fibers were also used: Early sheep breeds shed their coats annually, and hunter-gatherers probably learned to collect tufts of wool that could be spun into yarn for garments or simply matted together to produce felt. In warm areas of the planet, early cultures learned to grow plants such as cotton and jute for their fibers. In cooler climates, the flax plant was cultivated for its long stem fibers, which could be spun into linen for thread and fabrics of all types from lace to canvas. In much of the world, spinning and weaving traditionally were performed by women. Egyptian tomb-paintings from the third millennium b.c.e. depict women and girls using spindles suspended by the thread being spun. In South America, women of the Inca culture spun fibers from the coat of the indigenous alpaca—a relative of the llama—on similar “drop” spindles. Because yarns made of shorter fibers often were too weak to sup-

Cotton producers include small family farms. (©Natalia Bratslavsky/Dreamstime.com)

port the weight of a drop spindle, supported spindles were developed in areas where the short fibers of the cotton plant were spun. For thousands of years, all yarns and threads were produced on one of these simple top-like hand spindles. Making fabric from these yarns or threads required additional processes. Knitting and the related craft of crocheting evolved from skills learned in the manufacture of fishing nets. Both produced stretchy material that easily could be shaped into fitted garments such as hats and socks. While weaving stiff materials could be managed without a loom, weaving flexible thread was only possible with the development of a frame in which one set of parallel threads, the warp, was held taut so that a thread called the weft could be woven over and under the warp threads. Over time, simple frame tapestry looms gave way to movable warp looms in which certain threads in the warp could be lifted and dropped, making it possible to insert a weft with one pass of a shuttle. Spinning wheels were invented in the middle ages, but until the Industrial Revolution of the eighteenth and nineteenth centuries, textile production was primarily a cottage industry or homebased craft. In the mid-1700’s, design advances in both spinning and weaving allowed for more efficient and uniform production of both thread and woven fabric. The change from artisanal cottage industry to factory manufacture was met with resistance from workers who engaged in protests, sabotage, and sometimes violent riots in an attempt to retain control of the means of production. However, hand methods of textile production were not able to keep up with the demand for goods, and over the subsequent centuries, multihead spinning jennies and foot-powered looms gave way to faster and more profitable textile machines run first by water power, then by coal-powered steam engines, and finally by electricity. Meanwhile, the textile industry was the center of two social developments that would prove to be critical in shaping the future. The first was the extensive use of slave labor in American cotton production during the eighteenth and nineteenth centuries. The impacts of the plantation system were many: It impaired the modernization and industrialization of the American South; it contributed to the success of the brutal slave trade; and it brought the issue of slavery and states’ rights to a

Textile and Fabrics Industry

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head, resulting in the American Civil The Contribution of Textile Mills War. The textile industry also was instrumental in the rise of modern labor and Textile Product Mills to the unions. Textile workers, who were among U.S. Economy the first to work within an industrialized system, also were among the first to esValue Added Amount tablish trade unions, modern guilds, $16.9 billion Gross domestic product and other social bodies capable of orga0.1% nized protest for better working condiGross domestic product tions and higher wages. For example, in 302,000 Persons employed the late nineteenth century, many mem$13.6 billion Total employee compensation bers of the Mule Spinners Guild of New England became early members of the Source: U.S. Bureau of Economic Analysis. Data are for American Federation of Labor (AFL). 2008. To keep up with the demand of the new industrialized factories, fiber producers needed to harvest increasing quantities of cotton, flax, jute, hemp, and sisal. mills from New England to the South was only the Sheep breeds were systematically improved to profirst instance of industry mobility, and it has beduce heavier clips of better-quality wool. New come common for large-scale textile manufacturmethods of silk production eliminated the timeers to relocate their mills to any part of the world consuming process of unwinding the silk cocoons that will yield the company higher profits. by hand, making the manufacture of silk possible on an industrial scale. However, by the end of the The Industry Today nineteenth century, natural fibers alone could not Today, new developments in textile fabrication meet market demands. This led to the develophave broadened the use of fibers and textiles to inment of human-made fibers and fabrics. Rayon, a dustrial applications in computers, fiber optics, cellulose-based fiber invented by Hilaire de construction, and even the aerospace industry in Chardonnet, first was commercially produced by addition to their more traditional uses in the manthe British textile company Courtaulds Fibers in ufacture of apparel and home furnishings. While 1905. Commercial fiberglass first was produced in the United States still plays a strong role in research the 1930’s by researchers at the Owens-Corning and development of new kinds of fibers, new methplant for use as insulation and to reinforce other ods of manufacture, and new applications for fimaterials. In 1935, researchers at the DuPont Exbers, most large-scale industrial production of texperimental Station in Wilmington, Delaware, detiles has been moved to factories owned by veloped nylon, which became vital during World multinational corporations and located in develWar II, replacing scarce supplies of Asian silk in oping nations. Low labor expense and less rigid military parachutes, tents, ropes, and raingear. By health and environmental regulations have made the end of the war in 1945, manufactured fibers countries such as Ethiopia, Vietnam, Pakistan, Inmade up 25 percent of all textiles produced in dia, Mexico, and China more attractive and profitthe United States. While natural fibers—those able as locations for large-scale textile production. produced from plants, animals, and naturally Some design and finishing operations still are comoccuring minerals—continued to be manufacmonly performed in the United States, but huntured after World War II, many other synthetic madreds of thousands of jobs in the U.S. textile industerials were invented, including acetate, acrylic, latry have been lost to foreign workers in recent tex, and spandex. years. Starting in the late 1800’s, worldwide textile proOn a smaller scale, domestic producers have beduction migrated from northern areas to the gun to exploit niche markets, developing and marketing traditionally crafted, artisanal yarns and fabsouth. By the 1930’s, the American South was the rics to cater to the growing domestic market for center of the domestic textile industry. The shift of

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Textile and Fabrics Industry

Inputs Consumed by Textile Mills and Textile Product Mills Input

Value

Energy Materials Purchased services Total

$1.6 billion $33.9 billion $5.4 billion $40.9 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

sustainably produced, organic, or “green” fabrics. Concern about water quality, wildlife habitats, and climate change has prompted a number of people to support textile industries that seem kinder to the environment. In a similar vein, increasing public awareness of the working conditions in the worst of the foreign textile mills has led to the rise of the Clean Clothes Campaign, a consumer activist group dedicated to improving working conditions throughout the world’s textile industries. Consumer awareness also has been stimulated by the Buy Local movement; although originally aimed at encouraging consumers to purchase locally grown foods, the idea has spread, and proponents now advocate the use of locally grown products of all kinds, including textiles made from natural and recycled fibers. Meanwhile, the mainstream textile industry generally is perceived to be controlled by an ogilopolist complex, a small group of producers who together can affect and largely control costs, profits, and trends in the industry as a whole. Using business schema possible only at the most powerful and wealthy levels, including cross-subsidization, business reciprocity, conglomerate mergers, transnational investment, and outsourcing, the largest corporations are able to establish a business environment that is conducive to their continued survival. Large transnational corporations such as DuPont, Celanese, Eastman, and Monsanto that produce synthetic fiber and chemicals, and raw materials for synthetic fiber production, operate profitably within the United States but currently

are experiencing stronger growth in sales of chemicals to overseas manufacturing facilities. International trade tends to rise and fall cyclically, however, and some analysts forecast a drop in foreign textile production as the Chinese yuan becomes more highly valued against other world currencies. This situation would make labor and other expenses more costly in American dollars, leading to decreased demand for Chinese products on the American market. Within the domestic sector, the remnants of the U.S. national textile industry increasingly are threatened by their larger global competitors, who usually can offer greater quantities of product at lower prices. Some domestic firms have responded to these perceived threats by demanding various forms of protectionist regulation, including increased tariffs on goods produced overseas and a reestablishment of higher trade quotas. Debate continues over the efficacy of protected versus free trade as the best stimulus for the fiber and textile industries, as the recent economic downturn has increased anxiety about the future of the industry on all levels.

INDUSTRY MARKET SEGMENTS The fiber and textile industry is a complex field involving agricultural and chemical production of raw fiber, the processing of fiber into yarn or fabric, and the supportive industries of textile machinery design, industrial and artistic design, and chemical and engineering research. Based on the number of employees, most of these separate but interrelated businesses can further be divided into small, midsize, and large enterprises. It is difficult to entirely divide the industry according to scale, as small producers may conduct business with or provide services to large-scale producers and vice versa. However, in general, work in the textile industry may be carried out by businesses of all sizes. The following sections provide an overview of each of these different segments. Small Businesses Many producers of raw materials for the textile industry are small, family-operated farms growing natural fibers such as cotton, wool, and flax. While

Textile and Fabrics Industry one or more family members also may engage in off-farm labor, most members of the family live and work on the farm. The work is seasonal, with the heaviest workloads occurring during planting and harvesting or, in the case of wool production, during lambing season and shearing. Small-scale animal producers often are tied to their farms by the necessity of providing daily care for their stock. Virtually no small-scale production of synthetic or human-made fibers is being conducted. In the processing sector, there are many small producers of textiles. These include individual craftspeople or small shops with a few employees who manufacture yarn and fabric on a relatively small, artisanal scale. There also are individuals and small businesses providing goods and services to the textile trades, including trucking firms, manufacturers and sellers of spinning equipment, looms, and makers of other tools used by the craft fiber industry. One other small-business segment is that of the independent consultant. This work may involve legal and regulatory services to textile concerns engaged in importation, licensing, permitting, and labor negotiations, or it may involve engineering and industrial services in design, factory layout, setup, and installation. Potential Annual Earnings Scale. The average income for a small farmer varies from region to region and depends on the kind and quality of fiber produced. Common cotton, for example, does not command as much per pound as long-stapled specialty cotton; even more value can be added by growing the cotton organically. Producers of exotic luxury fibers such as angora and cashmere have the potential for high earnings from a relatively small output of product. As for producers of craft yarn and fabric, much depends on the skill of the producer and the reputation of the company. Many small-scale producers are independent owner-operators who may work only part time. Others may not only work full time themselves but hire additional employees. Therefore, earnings can vary widely depending on the amount and type of product manufactured. The support industries usually attend to the needs of a large number of textile producers and may generate substantial incomes from trucking services, consulting fees, and the sale of equipment to the trade. Incomes can range from only a few thousand dollars a year for

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the small part-time craftsperson to $250,000 for a family-run farm business. Clientele Interaction. Producers of fiber sometimes have personal contact with their customers if their fiber or fleece is sold to other small fiber businesses. However, if the agricultural output of a family farm is sufficiently large, its products move into the industrial commodity stream with little personal interaction involved. In general, small producers of yarn or fabric depend on the loyalty of their customers, and that loyalty is earned by being consistent and on time, by keeping prices competitive and quality high, and by successfully interacting personally with both suppliers and customers. In many cases, the independent craftsperson must perform a number of roles in his or her business; some of these may involve personal contact and close relationships with clientele. Because of the relatively flexible nature of small-scale textile manufacture, opportunities for custom work often are available, but communication is key to the success of such endeavors. For

A woman cooks silk larva, making fine lines of silk. (©Oystein Sando/Dreamstime.com)

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Textile and Fabrics Industry

those engaged in the support industries as independent businesspeople or as employees of small firms, interpersonal communication is vital to business survival. Amenities, Atmosphere, and Physical Grounds. Small producers of raw fiber generally are based in rural areas where arable land is available or where livestock is permitted. Acreages, outbuildings, and family accommodations vary widely, from substandard homes on depleted farmland to large, well-appointed homes on well-maintained farms. Specialized equipment pertaining to the type of fiber being grown must be housed somewhere on the farm, and if animal fiber is being produced, housing, fencing, feed storage, and other equipment must be provided for sheep, goats, llamas, or other kinds of livestock. Small-scale processors and manufacturers sometimes work within their homes, setting up spinning or weaving studios and a home office. Other producers build or buy separate facilities for their textile shops. Shops that operate using traditional wooden spinning wheels and looms may be quiet and picturesque; those utilizing mechanical spinning and weaving equipment may be noisy, oily, and filled with potentially dangerous moving machinery. Textile factories tend to be cluttered and somewhat dusty environments, even on a small scale, and constant efforts must be made to remove debris and waste products from the floors and general premises. For firms producing textile machinery, some kind of shop or small factory usually is necessary. In the production of wooden spinning and weaving equipment, the premises would house an assortment of saws, lathes, and milling equipment, as well as storage areas for lumber and other materials. For support industries such as equipment sales, trucking, and consultancy services, the business owner provides his or her own vehicle or office, which is not intrinsically different from offices or vehicles engaged in other sectors. Trucking service providers, however, should be prepared to transport material that may be dusty, dirty, or odiferous and to negotiate rural access roads that may be narrow or muddy. Typical Number of Employees. Many farm producers of fiber hire no outside help at all, relying strictly on family members to perform the tasks required to grow and harvest the crop. Other farms

hire one or more full-time employees and as many temporary workers as they need to finish the work on the farm in a timely manner. Full-time employees might perform plowing, tilling, seeding, and other work involving the use of tractors and agricultural equipment. They also might be responsible for the care of the farm operation in the owner’s absence. Temporary workers generally are hired during harvest time to assist with simple, repetitive tasks. Small-scale yarn and fabric producers may work alone or have a small permanent staff ranging from one or two up to half a dozen employees. Some processors adjust their staff seasonally, hiring employees to handle the glut of fiber as it is harvested and then laying them off once the majority of the raw fiber has been spun or woven. Small-scale machine manufacturers generally have fewer than twenty employees, with many operating with only one or two. Traditional Geographic Locations. Farms producing industrial quantities of commodities such as cotton generally are located where the cost of fertile farmland is the lowest, relegating them to areas some distance from urban centers. Producers of niche crops on small acreages can be found in all areas of the country, even within city limits. Another consideration for the location of fiber-producing farms is the climate. Cotton, for example, requires a long, warm growing season, while other crops such as flax do well in cool, wet areas. Wool production is concentrated in northern areas because sheep with heavy wool coats do not thrive in warm climates. Many small producers of yarns and fabric tend to cluster in areas where industrial mills once flourished, primarily because of the regional traditions associated with the woolen industry of New England and the cotton mills of the South, but also in part because the closure of many of these large mills has provided a source of used machinery to smaller producers. Pros of Working for a Small Textile Establishment. Independent fiber producers and small farmers have total control over the business. They are able to determine what products they wish to grow or make and the manner in which business is carried on. Small producers can easily adapt their practices to fill a niche market, providing organic fiber or naturally colored fabric to a small but dedi-

Textile and Fabrics Industry

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Bolts of fabric in a store. (©Crystal Srock/Dreamstime.com)

cated clientele. Hours and other work schedules can be adjusted to meet the needs of the owneroperators of these firms, and they usually are able to provide flexible work arrangement for the few employees they may hire. An advanced degree or specialized training is not required, although selfeducation in sales and marketing, accounting, and technical aspects of the industry can prove beneficial. Cons of Working for a Small Textile Establishment. For most such workers, limited or seasonally determined income means that money can be short during certain times of the year. For owner-operators, investments in equipment and infrastructure can be at risk if the business fails. Small fiber producers rarely can afford to hire additional help, so at times, long hours are required to complete all duties. Finally, the small producer must be competent in a wide array of support ac-

tivities, from accounting to sales and maintenance. Adding to the challenges of the small textile producer can be the isolation involved in working long hours with little or no companionship. While some individuals enjoy the peace and quiet of working alone or with only a few people, others feel trapped and lonely, adding to the financial and physical stresses of working long hours for an uneven income. Costs Payroll and Benefits: If small textile producers hire extra help, they usually do so at hourly wages. Because “micro” businesses like these employ very few, if any, additional staff, benefits often are not mandatory, and health insurance, paid vacations, and sick time may or may not be part of the employment package. Federal regulations expected to come into effect by 2014 may

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Textile and Fabrics Industry

have some impact on the availability of health insurance, however. Supplies: Family farms require a wide range of supplies, including fuel for tractors and other power equipment, seed, fertilizer, pesticides and herbicides for plant crops, feed, fencing materials, medications and supplements for livestock operations, in addition to the more common office supplies, telephones, computers, and cleaning supplies. Processors must expend a substantial outlay of funds on the raw or intermediate materials to be processed. Additional chemicals for cleaning and dyeing are needed even for producers of natural fibers, while those in the synthetic field must purchase large quantities of necessary chemical components to produce the desired man-made fiber. Cleaning supplies, shipping materials, office supplies, and information and communication costs may also be required. External Services: Many small producers perform all the steps of manufacture in-house, although some prefer to pay other processors for steps in coloring, carding, or processing fibers. Cotton farms typically send their fiber to a ginning mill to remove seeds before it is baled and delivered to the cotton mill. Legal or financial assistance may be required from time to time, particularly for the preparation of license applications or tax returns. Trucking and storage are services that also may be required from outside parties. Utilities: Typical utilities for a small textile operation include water and sewer, gas or oil service, electricity, telephone, and Internet. Water for irrigation and livestock needs can be a major factor in arid regions of the country, while water and electricity use can be quite high in processing shops as both are used to clean the fiber and power much of the equipment. Taxes: All textile businesses are required to pay local, state, and federal income taxes as well as applicable property taxes. If they sell any of their products to end users, they also must collect the appropriate sales taxes. If sales are carried out by mail order or via the Internet, taxes must be collected for each state from which products are ordered, and arrangements must be made with these states to remit the collected revenue, usually on an annual basis, although states vary in their sales tax collection calendar.

Midsize Businesses While the Small Business Administration regards a manufacturer with fewer than five hundred employees as a midsize business, most midsize textile operations in Europe and the United States have between ten and thirty employees. Midsize textile concerns typically operate regionally or nationally instead of internationally, and they may vary widely as to the efficiency and modernity of their infrastructure systems. Very few agricultural producers have this many workers, but many research and development laboratories working to develop new fibers fall within this category, as do older family-run woolen and cotton mills in the United States and Canada. Potential Annual Earnings Scale. Wages for employees at midsize textile facilities vary widely by position. The average salary of a textile machine operator for example, is about $24,000 per year, while senior researchers can earn nearly $100,000 per year. Clientele Interaction. Except for sales and marketing personnel and researchers at academic institutions where they may be expected to teach, clientele interaction is rare. Most workers within this size of operation may interact with their fellow workers but not with the general public or the firm’s customer base. Amenities, Atmosphere, and Physical Grounds. Midsize textile processing plants often are housed in traditional factory buildings in the centers of towns and villages and located at the edges of watercourses, which historically provided the power used to run the mills. Now generally powered by electricity, the mills remain where they had been established, from a sense of tradition as well as for practical reasons such as convenience and proximity to the workforce. Another reason for the continued use of vintage mill buildings has to do with government permitting: In order to build new facilities, environmental permits, impact statements and other local and regional permits would have to be obtained before construction could begin. By using an older facility, the factory is said to be “grandfathered in,” and no additional permitting is required unless additions or expansion are planned. These old buildings can be noisy, dusty, and potentially contaminated with heavy metals, asbestos, and other toxic materials. However, their antique charm and waterside situation

Textile and Fabrics Industry make them picturesque additions to any town or village. Research and development facilities, on the other hand, often are located in the science departments of large universities. Usually equipped with the latest scientific apparatus and powerful computing systems, and sharing support staff with the university at large, these laboratories can be pleasant places to work. Typical Number of Employees. Staff levels tend not to exceed thirty people. However, in the case of research and development laboratories in university settings, a number of temporary student employees and graduate research assistants may be engaged to perform some of the work. Traditional Geographic Locations. Midsize textile mills may be found all over the world, but in the United States they are most commonly located in small to midsize towns. Some may occupy the center of a small town, while others may be situated

1847

at the outskirts of communities, close to rail lines and freeway exchanges. Pros of Working for a Midsize Textile Establishment. Midsize textile mills offer full-time employment, usually with at least some benefits. Job stability is greater than in a small shop, while the inconvenience of an occasional job turnover can be absorbed by a slightly larger workforce able to cover for the missing worker until a substitute is recruited and trained. The midsize textile firm is able to fill larger orders than small independent shops, while at the same time retaining the ability to produce short runs of custom-ordered goods for the specialty market. Worker morale often is high, as working in a company of this size allows employees to bond with each other and to feel personal pride in the company’s product. For those working in research labs, the availability of the most up-to-date equipment, the presence of similarly minded, highly educated coworkers, and the inherent at-

This circular knitting machine bears no resemblance to traditional knitting needles. (©Dreamstime.com)

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Textile and Fabrics Industry

traction of the work itself make working in fiber research very satisfying. Cons of Working for a Midsize Textile Establishment. Midsize textile firms often are caught in an economic pinch: Large corporations can outsource labor and undercut prices for similar products, making it very difficult for midsize operations to compete. Some succumb to competitive pressures by borrowing capital in order to expand their operations or to move their facilities overseas. By moving their production offshore, most former employees are no longer needed, and domestic textile jobs are lost. Furthermore, with increased debt burdens, many of these companies fail outright. For researchers in midsize research and development facilities, the tendency is to become fixated on the work at hand. Some researchers spend almost all their waking hours in the laboratory. There also is a tendency for academic researchers to become isolated from the general community and increasingly out of touch with the concerns of the larger, nonacademic culture. Costs Payroll and Benefits: Midsize fiber and textile factories hire most staff at hourly wages. Benefits such as vacation and sick time are offered fairly commonly. For university-based researchers, staff may either be salaried or paid by the hour, depending on rank and job description. Benefits often are liberal. Supplies: Midsize textile operations require a wide range of items, including common office supplies, telephones, computers, and cleaning supplies. Processors must expend a substantial outlay of funds on the raw or intermediate materials to be processed. Additional chemicals for cleaning and dyeing are needed even for producers of natural fibers, while those in the synthetic field must purchase large quantities of necessary chemical components to produce the desired man-made fiber. Cleaning supplies, shipping materials, office supplies, and information and communication costs also may be required. In the laboratory, special substances, chemicals, computer programs, and other expenses may be necessary. External Services: Midsize fiber and textile producers may hire other firms to complete steps in

coloring, carding, or processing fibers. Legal or financial assistance may be performed internally but also may be hired on an as-needed basis. These businesses also may use accounting services, computer maintenance services, vending machine companies, and trucking and warehouse services. Utilities: Typical utilities for a midsize textile operation include water and sewer, gas or oil service, telephone, and Internet. Higher voltage electrical hookups often must be installed, and electric and water bills can be a major expenditure. For university-based laboratories engaged in fiber research and development, many utilities are at least partly covered by the university. Additional funding from government and private grants usually covers any remaining utility cost. Taxes: Midsize commercial fiber mills and processors are required to pay all local, state, and federal income taxes as well as applicable property taxes. Special permits and assessments pertaining to water and air quality also may have to be paid. If the company engages in international import or export of raw material or finished products, customs fees, duties, and tariffs may be levied. Large Businesses Large fiber and textile operations generally are corporate in structure, often part of vast multinational conglomerates with immense resources. Oftentimes, the textile component of a large corporation is only a small portion of the business of the entire organization. Potential Annual Earnings Scale. The earnings of large-scale textile employees vary considerably depending on the position as well as on the geographic location of the workforce. A sizable majority of textile positions throughout the world earn only a fraction of what those in comparable positions in the United States would earn. For example, in 2006, Chinese textile workers earned about 57 cents an hour, or a little more than $100 per month. Meanwhile, positions in international management, import and export, sales and marketing, fiber engineering, and research and development are comparable to similar positions in other industries. Clientele Interaction. Most workers in largescale textile concerns do not interact with workers

Textile and Fabrics Industry

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A fully automated machine weaves denim for jeans. (©Moreno Soppelsa/Dreamstime.com)

in other departments, or on other machines, let alone with the general public. Amenities, Atmosphere, and Physical Grounds. For the upper echelon of corporate executives, work is carried out in spacious, wellappointed offices in high-rise office towers in urban centers such as New York, Hong Kong, and Tokyo, or in corporate headquarters set on sprawling campuses in smaller towns. Midlevel executives often must travel from plant site to plant site, while lower-level managers and supervisors work in a variety of conditions from crowded dilapidated structures filled with obsolete equipment, to streamlined facilities utilizing the most efficient and modern production equipment available. The scale of the workforce at some of the larger mills makes it possible to provide on-site cafeterias, day care centers and, in some cases, dormitories. Depending on the plant design, large textile mills can be multistory structures in which the materials are transported from step to step in the pro-

duction process with the aid of gravity. Raw materials enter the factory on the top floor and move down as they near completion, eventually being packed into shipping containers or trucks at the ground level. Other factories use versions of Henry Ford’s moving assembly line spread out within a large building with only one level. Typical Number of Employees. The number of employees at any given textile factory varies based on the size of the facility, the availability of labor, the volume of trade, and other factors. Many large corporations have textile employees numbering in the thousands, but only forty to seventy at any one plant. On the other hand, the largest single factory in Ethiopia, established recently in the city of Alem Gena by Turkish-based AYKA Incorporated, plans to have a workforce approaching ten thousand. Traditional Geographic Locations. Large textile firms can be found anywhere in the world where there is a large pool of labor, available

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Textile and Fabrics Industry

sources of power to run the machinery, and a transportation system capable of moving raw materials into the facility and finished goods out. Pros of Working at a Large Textile Establishment. For staff in management, design, sales, marketing, engineering, and other white-collar positions, it can be exciting to see one’s ideas carried out on such a vast scale. An individual product idea or technological innovation has a much greater chance of widespread implementation if adopted by companies at this scale. For researchers employed within large textile-based corporations, there is the opportunity to work on cutting-edge technologies in the best laboratories that money can buy. Overall, within these large firms there is ample opportunity for personal career advancement and financial success, although the majority of employees will never reap these rewards. Large fiber manufacturers also encourage worldwide trade, providing steady jobs to classes of people who might otherwise be unemployed. Cons of Working for a Large Textile Establishment. At this scale, business is more than simply discovering a need and producing a product to meet that need. Global corporate businesses must involve themselves with international politics, trade regulations, environmental concerns, labor and human rights issues, worldwide energy depletion, mergers, conglomerates, international currency values, corporate law, and the stock market. Very few, even those in executive positions, understand all aspects of the company they control. While large corporations act as a positive force by providing employment and affordable textile products to the people of the world, they all too easily can cause a great deal of harm, simply because of the scale of operations and the unforeseen consequences that may follow any action. For example, a case may be made that corporate research into genetically modified organisms in order to produce improved quantities and qualities of fiber may have far-reaching negative consequences for the health and diversity of life on the planet. Finally, workers at the lowest levels sometimes are exploited, forced to endure a combination of long working hours, low wages, and substandard working conditions.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and distribution of tasks within the textile industry are typically based on the number of employees and the size of the firm. The owner of a small fiber-producing farm typically will handle most of the major tasks involved in the operation because there may be no other full-time employees. Meanwhile, the general manager of a large textile mill may supervise hundreds of workers on the production staff alone. Nevertheless, the tasks themselves remain similar for each segment of the agricultural and industrial divisions within the field. The following umbrella categories apply to the organizational structure of small, midsize, and large establishments engaged in the manufacture of fiber and textiles. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Management Sales and Marketing Design and Product Development Production Shipping and Storage Research and Development Information Technology Human Resources Accounting and Finance Maintenance Security Technical and Legal Services Administrative Support

Executive Management Executive management handles the general direction of the company. These individuals make major decisions, set goals, and implement longterm plans for the business. Because most mills in the United States are incorporated, the very highest executives are corporate presidents and executive vice presidents, who may be engaged in decision making for a number of corporate branches and divisions. Corporate presidents rarely have any involvement in day-to-day operations of shops, factories, or mills. Superintendents or general managers often run the actual production and are responsible for maintaining adequate productivity and

Textile and Fabrics Industry quality. They also manage individual teams and departments. Many executive managers have advanced degrees, particularly in engineering, business, or accounting, but in some instances experience or family and business connections can make up for the lack of a degree. Presidents and other corporate executives earn yearly salaries determined by the corporation’s board of trustees. Many of these high-level executives are awarded bonuses of several million dollars or more on an annual basis, ostensibly to encourage exceptional performance. At the company level, supervisors and general managers generally earn the highest salaries of anyone actively engaged in the business. Executive management occupations may include the following: ■ ■ ■

■ ■ ■ ■

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PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Textile Mills Employment 2009

Projected 2018

Occupation

6,080

3,600

First-line supervisors/managers of production and operating workers

5,490

3,000

Inspectors, testers, sorters, samplers, and weighers

10,010

6,400

Textile bleaching and dyeing machine operators and tenders

14,050

9,400

Textile knitting and weaving machine setters, operators, and tenders

19,530

13,000

Textile winding, twisting, and drawing out machine setters, operators, and tenders

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

General Manager Sales Director Chief Financial Officer (CFO) Controller Floor Supervisor Chief of Engineering Marketing Director

Sales and Marketing Sales and marketing personnel work to promote and sell the raw fiber, yarn, or textile products manufactured by the company. While some firms are vertically oriented, producing raw fiber and processing it into yarn or fabric for further manufacture or for direct sale to home crafters, many fiber and textile industries sell their products to other manufacturers. This business-to-business trade requires the development of sales plans, meetings with prospective clients, the writing and presentation of sales pitches, and the delivery of sales contracts to the firm. Sales personnel may work closely with design or engineering staff to develop

desirable products and with the accounting or cost analysis team to offer competitive prices to their customers. Sales and marketing personnel often have undergraduate degrees in business management, marketing, or related disciplines. While some in sales work for a small salary augmented by commissions, most textile sales salaries are competitive. Marketing personnel serve as communications representatives for the business, creating positive publicity for its products and goals. They may engage in the creation of print advertising for trade publications, develop campaigns to build brandname recognition or interact with the media, trade associations, and other resources to ensure that the firm’s interests are met. Sales and marketing occupations may include the following: ■ ■

Corporate Sales Manager Sales Director

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Textile and Fabrics Industry

Senior Sales Manager Salesperson Advertising and Graphic Design Staff Administrative Assistant

Design and Product Development Although designers in the fashion and garment industry receive most public attention, design and product development personnel are required at almost every step in the textile industry. Decisions must be made at every step of the process, from deciding what kinds of raw fiber will be included in the product to its ultimate color and finish. Designers and developers work with the sales department to determine the needs of the company’s clientele. They work with marketing personnel to provide prototypes and sample product boards to aid in promoting advance sales of new products, and they also provide advice and input about general trends in fashion and design that may impact the direction of product design for the company. They also work with the general manager and the engineer-

ing department to help acquire and set up the proper equipment to produce the desired material in salable quantities. Salaries for textile designers and product developers range from $45,000 to $69,000, depending on experience and performance. An advanced degree in art, industrial design, or a related field is required. Design and product development occupations may include the following: ■ ■ ■

Product Development Director Industrial Designer Design Engineer

Production The production staff is central to the work of manufacturing. In the agricultural sector, production pertains to the physical activities necessary to grow and harvest natural fibers. For example, in the cotton industry, the land must be prepared for planting by plowing and tilling us-

OCCUPATION

PROFILE

Textile Machine Operator Considerations

Qualifications

Description

Sets up and operates machines producing or processing textiles.

Career cluster

Manufacturing

Interests

Things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Decline expected

Holland interest score

RCE; RIE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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ing heavy equipment. In convenOCCUPATION SPECIALTIES tional agriculture, applications of pesticide, herbicide, and ferTextile Machine Operators tilizer may be applied either before or after planting the cotton Specialty Responsibilities seed, although cotton grown for Bleachers Tend machines that dye or bleach yarn the organic market is raised withwound on beams, tubes, or spring coils. out chemical substances in accordance with guidelines estabDye reel operators Tend machines that bleach or dye cloth lished by the National Organic in rope form and machine-sew pieces Program of the U.S. Department together. of Agriculture. The crop is monExtruder operators Set up and run machines that extrude itored and cared for throughout and color human-made fibers for the growing season to reduce textiles. competition from weeds and predation by insects. Late in the season, the cotton bolls are harvested using large machines and packing systems called modules. The modules are human-made fibers, but most other positions in stored on the farm until shipment to the ginning production rely on in-house training. mill, where cotton seeds are extracted from the fiProduction occupations may include the followber. Jobs producing natural fibers fall into line ing: with general agricultural work, with the addition of ■ Farm Manager the ability to run specialized equipment or to per■ Farmhand form specialized activities—shearing sheep, for ex■ Plant Manager ample. ■ Chemist In the production sector of the human-made fi■ Line Worker ber industry, the work is industrial, technical, and ■ Carder chemical. High-level chemists and engineers di■ Spinner rect the activities of line workers who oversee ■ Weaver various automated processes leading to the pro■ Doffer duction of fibers from cellulose, carbon, or petro■ Dyer chemical constituents. ■ Quality Assurance Tester/Inspector In the strand and fabric sectors, plant managers and supervisors oversee the work of a number of Shipping and Storage operators who attend carding, spinning, weaving, The production of fiber-related products relies and fabrication machinery. Other production opon the transport of raw and intermediate materierations include dyeing and finishing. als to processing facilities, and the transport of the Income for agricultural producers varies with finished product to customers. Fluctuations in mathe size of the farm and the crop produced, but the terial on hand at various stages of production neaverage is about $40,000 per year. Chemists workcessitate storage or warehousing of goods and suping in the field of human-made textile production plies. Shipping managers can earn up to $60,000 earn about $50,000 on average, while unskilled per year, while forklift operators average about United States textile workers earn about $25,000 $30,000 per year. to $30,000 per year. It should be noted, however, Shipping and storage occupations may include that much large-scale textile production has been the following: moved from the United States to other countries where the salaries are much lower, sometimes only ■ Senior Shipping Manager a few thousand dollars per year. Advanced degrees ■ Shipping and Receiving Clerk are typical for chemists working in the field of

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Textile and Fabrics Industry

Trucking Supervisor Truck Driver Forklift Operator Warehouse Manager

Research and Development The research and development department engages in experiments in pure and applied science that may result in profitable new products or innovative production techniques at some point in the future. Research workers design experiments, apply for proprietary patents, and conduct tests of new products. They also may assist the engineering staff during retooling or reconfiguration of the plant. Salaries range from about $37,000 for a laboratory technician to more than $100,000 for a project manager. Research and development occupations may include the following: ■ ■ ■ ■ ■ ■

Project Manager Systems Analyst Laboratory Technician Laboratory Supervisor Researcher Administrative Assistant

PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Textile Product Mills Employment 2009

Projected 2018

6,030

4,100

First-line supervisors/managers of production and operating workers

3,260

2,300

Inspectors, testers, sorters, samplers, and weighers

33,850

22,200

Sewing machine operators

4,530

3,000

Textile cutting machine setters, operators, and tenders

5,790

3,800

Textile knitting and weaving machine setters, operators, and tenders

7,850

5,100

Textile winding, twisting, and drawing out machine setters, operators, and tenders

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

■ ■ ■

Information Technology Information technology (IT) workers are responsible for the purchase, installation, and maintenance of hardware and software for computer networks within the facility. Specialized knowledge of programs pertaining to computer-assisted automated production devices, testing, accounting, and other specific functions may be required. IT staff members also assist in training other employees in the use of newly acquired computers and computer programs. Top IT management positions earn between $60,000 and $110,000. IT occupations may include the following: ■ ■

Information Technology Manager Computer Technician

Occupation

Platform Specialist Electrical Engineer Network Coordinator

Human Resources Employees working in human resources assist in hiring, testing, placing, and dismissing personnel within the firm. They create and file salary histories, job performance reviews, and other employment records, and they assist in mandatory training programs and employee relations. Salaries for human resources generalists range from $35,000 to nearly $60,000, while department directors may receive more than $110,000. Human resources occupations may include the following: ■ ■

Human Resources Director Human Resources Generalist

Textile and Fabrics Industry ■ ■

Training Specialist Administrative Assistant

■ ■ ■

Accounting and Finance Employees in this department are in charge of all financial aspects of the firm from the highestlevel decisions to the disbursement of weekly paychecks to employees. Payments to the company are processed and deposited, and outstanding bills are paid. Some employees may work with spreadsheets and accounting programs to determine profitability, tax liability, and other factors, which are used to generate company reports. Chief financial officers (CFOs) may earn from $78,000 to $200,000, while entry-level accounting clerks earn an average of about $30,000 per year. Accounting and finance occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Chief Financial Officer (CFO) Controller Accounts Receivable Specialist Accountant Bookkeeper Payroll Specialist Auditor Clerk Administrative Assistant

Maintenance Maintenance staff members are responsible for repair and scheduled maintenance of facilities and specialized textile machinery as well as maintaining and repairing building systems such as airconditioning, plumbing, and electrical hardware. The maintenance department also is responsible for general janitorial work and trash collection and removal. They also may play an important role in the planning and implementation of structural or mechanical updates, expansions, and other changes to the physical plant. Most employees in this department have vocational education or technical training, and some may hold advanced degrees in engineering or related fields. Maintenance occupations may include the following:

■

■

■ ■

Maintenance Supervisor Chief Engineer Rigger

Machinist Carpenter Plumber Heating, Ventilation, and AirConditioning (HVAC) Specialist Custodian/Janitor

Security While some textile plants operate around the clock, others close overnight, leaving them vulnerable to burglary and unauthorized entry. Security guards conduct periodic inspections of the facilities, monitor surveillance cameras, and generally provide a human presence at the plant to deter illegal entry or activity. Security personnel are expected to have training in public safety and may be required to obtain certification in cardiopulmonary resuscitation (CPR) and other first-aid techniques. Salaries generally start at $25,000 per year for entry-level officers. Security occupations may include the following: ■ ■

Security Officer Technical Support Specialist

Technical and Legal Services These employees may work as full-time employees or consultants on an as-needed basis. Technical service providers may include material testers, calibrators, or mechanical and electrical engineers who perform specialized tasks involving equipment or materials in the plant. Legal services may be required to defend the firm against litigation, to represent the firm in regulatory or licensing procedures, or to write contracts and other legal documents. Advanced and postgraduate degrees are required for these specialized positions. In-house corporate lawyers can expect to earn $79,000 to $140,000 per year, while industrial engineering consultants may earn up to $119,000. Technical and legal services occupations may include the following: ■ ■ ■ ■

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Industrial Engineer Electrical Engineer Materials Engineer Corporate Attorney Legal Assistant Administrative Assistant

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Textile and Fabrics Industry

Administrative Support Administrative personnel work in offices in departments throughout the firm, assisting in its overall operations. Administrative staff may answer phones, run errands, type letters and other documents, make photocopies, send faxes, and perform many other tasks. With the advent of voice recorders, the ability to transcribe speech in shorthand is seldom necessary, although the ability to remain calm under pressure will always be in demand. The heart of many departments, administrative support personnel organize schedules, keep track of correspondence, forward phone messages, enter data, file records, and perform innumerable other duties as required. Administrative personnel benefit from professional training, although many succeed without it. Many are temporary employees, others are fulltime permanent employees of their departments, and still others act as private administrative assistants to a single executive or manager. Administrative support occupations may include the following: ■ ■ ■

Administrative Assistant Secretary Clerk

INDUSTRY

OUTLOOK

Overview Business analysts predict continued declines in employment within the fiber and textile industries because of advances in automated manufacturing processes and because increasing amounts of textiles are being produced in countries where manufacturing is less costly. Both wages and salaries in the textile and textile product manufacturing industries are expected to decline, possibly by as much as 48 percent through 2018, compared with a projected gain of 11 percent for all other industries combined. Despite these figures, some jobs— especially in the engineering and design sectors— will continue to offer competitive salaries. One significant reason for the projected decline in textile industry jobs over the next decade is the increasing capital investment in technology and a corresponding increase in overall labor productiv-

ity. Wider and faster looms, automated robotics, the development of new nonwoven textiles requiring fewer production processes, and the application of computers in almost every aspect of manufacture all add up to greater productivity with a smaller workforce: fewer workers producing more fabric. Companies are opening new, more efficient plants, and eliminating older ones. As this happens, overall demand for operators of obsolete textile machines and material handlers will continue to decline, but demand for skilled operators able to work with the more efficient modern machines will grow. Another important factor helping to shape the future of the textile industry is the recent relaxation of trade regulations. Because textile manufacturing is so labor-intensive, it is especially sensitive to competition from developing nations in which workers receive lower wages. In 2005, protectionist quotas for textile products were lifted among U.S. trading partners within the World Trade Organization, most significantly China. Almost immediately, Chinese textile imports surged 45 percent, while the European textile industry went into recession. More and more textile products are being imported into the United States from China and other low-wage countries each year. As U.S. firms and multinational corporations continue to outsource their operations, the jobs of machine operators and other low-level production workers within the industry is certain to be negatively impacted. Employment Advantages Despite the bleak outlook for employment within the textile industry, engineers, designers, and skilled production workers still should be in demand. In general, the industry will continue to need creative people with good communication skills, and high levels of technological sophistication. For designers, fiber engineers, and others working within the research sector, future developments seem likely to create demand for skilled scientific and creative personnel. Just on the horizon are scores of innovative new processes and products, including fabrics that can collect solar energy and radiate it as heat or visible light, biosensitive fabrics that can detect the human pulse or toxins in the environment, shimmering fabrics constructed

Textile and Fabrics Industry with thermochromic inks that change color in response to externally generated computer programs, and a prototype for a high-rise office building that could be woven from composite carbon fibers. Collaborative experiments and technical transfer between the fields of electronics, chemistry, engineering, biology, and computers are helping to develop new generations of nonwoven geotextiles to promote plant growth. Other fabrics are being designed incorporating titanium dioxide, which can decompose stains and odors or act as water filtration systems able to strain out bacteria and even viruses. The new field of nanotechnology is being used to redesign fibers at the atomic level, leading to surgical suture fibers that tie themselves into a knot when exposed to a certain temperature, while the “nomads and nanotechnology” research program is trying to develop a self-contained fabric light source capable of providing built-in illumination for refugees and victims of natural disasters who must live in fabric tents. Annual Earnings Continuing changes in the world market will exert cost-cutting pressures affecting business dynamics for firms and workers alike. As consumers become more price conscious, producers are finding it increasingly difficult to pass on costs by raising prices. In order to keep costs low, thereby pleasing consumers, companies are likely to increase both foreign production and investment in new, more efficient, less labor-intensive technologies. In attempts to remain competitive, firms will continue to merge or consolidate, driving down the number of firms and the number of jobs within the industry. Some segments of the U.S. textile products sector, like carpets, industrial fabrics, and specialty yarns, already are competitive on a global scale, so free trade will increase market penetration to new customers overseas. Other sectors, such as fabric for apparel, will be negatively affected as apparel manufacturers relocate to other countries, taking their demand for fabrics with them. Textile mills once again are likely to lose jobs as a result.

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RELATED RESOURCES FOR FURTHER RESEARCH American Association of Textile Chemists and Colorists P.O. Box 12215 Research Triangle Park, NC 27709 Tel: (919) 549-8141 Fax: (919) 549-8933 http://www.aatcc.org Handweavers Guild of America 1255 Buford Hwy., Suite 211 Suwanee, GA 30024 Tel: (678) 730-0010 Fax: (678) 730-0836 http://www.weavespindye.org Industrial Fabrics Association International 1801 County Rd. B West Roseville, MN 55113-4061 Tel: (800) 225-4324 Fax: (651) 631-9334 http://www.ifai.com International Textile Manufacturers Federation Wiedingstrasse 9 CH-8055 Zürich Switzerland Tel: 41-44-283-6380 Fax: 41-44-283-6389 http://www.itmf.org/cms Textile Institute International St. James’s Buildings, 1st Floor 79 Oxford St. Manchester M1 6FQ United Kingdom Tel: 44-161-237-1188 Fax: 44-161-236-1991 http://www.texi.org ABOUT

THE

AUTHOR

Helen M. York has worked as a radio host and producer, a musician and classical music reviewer, and a farmer and craftsperson, producing fine

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Textile and Fabrics Industry

handspun yarns from her own flocks of rare-breed sheep at her farm on the coast of Maine. She holds a master of fine arts from the Ohio State University (1980) and is working toward a Ph.D. in American history with a specialization in science and technology at the University of Maine.

FURTHER

READING

Aggarwal, Vinod K. Liberal Protectionism: The International Politics of Organized Textile Trade. Berkeley: University of California Press, 1985. Blewett, Mary H. Constant Turmoil: The Politics of Industrial Life in Nineteenth Century New England. Amherst: University of Massachusetts Press, 2000. Clairmonte, Frederick, and John Cavanagh. The World in Their Web: The Dynamics of Textile Multinationals. London: Zed Press, 1981. Colchester, Chloe. Textiles Today: A Global Survey of Trends and Traditions. New York: Thames and Hudson, 2007. Copeland, Melvin Thomas. The Cotton Manufacturing Industry of the United States. New York: Augustus M. Kelley, 1917. Delfino, Susanna, and Michele Gillespie, eds. Global Perspectives on Industrial Transformation in the American South. Columbia: University of Missouri Press, 2005. English, Beth. A Common Thread: Labor, Politics and Capital Mobility in the Textile Industry. Athens Ga.: University of Georgia Press, 2006. Goldenburg, David. The U.S. Man-Made Fiber Industry: Its Structure and Organization Since 1948. Westport, Conn.: Praeger, 1992.

McCormack, Richard. “Good Luck Competing Against Chinese Labor Costs—Mfg. Job Growth in China Is Headed Up, Not Down; 109 Million Mfg. Workers in China Dwarfs Number in U.S.” Manufacturing & Technology News 13, no. 9 (May 2, 2006). Available at http://www.manufacturingnews.com/news/ 06/0502/art1.html. Mortimer, John. Cotton Spinning: The Story of the Spindle. Manchester, England: Palmer, Howe, 1895. Munro, John H. Textiles, Towns and Trade. Brookfield, Vt.: Varorium, 1994. Pack, Howard. Productivity, Technology and Industrial Development: A Case Study in Textiles. New York: Oxford University Press, 1987. Rivard, Paul E. A New Order of Things: How the Textile Industry Transformed New England. Hanover, N.H.: University Press of New England, 2002. Ruhm, Herman D. Marketing Textiles. New York: Fairchild, 1970. Toyne, Brian, et al. The Global Textile Industry. London: George Allen and Unwin, 1984. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. Vogel, J. Thomas, and Barbara W. Lowry. The Textile Industry: An Information Sourcebook. Phoenix, Ariz.: Oryx Press, 1989. Yafa, Stephen. Big Cotton: How a Humble Fiber Created Fortunes, Wrecked Civilizations, and Put America on the Map. New York: Viking Penguin, 2005.

Theater and Performing Arts Industry ©Katrina Brown/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Arts and Entertainment Career Cluster: Arts, A/V Technology, and Communication Subcategory Industries: Broadway Musicals; Circuses; Dance Companies; Las Vegas Style Spectacles; Live Performances; Musical Dramas; Opera Related Industries: Motion Picture and Television Industry; Music Industry Annual Domestic Revenues: $12.9 billion USD (U.S. Census, 2008) Annual International Revenues: $39.7 billion USD (U.S. Census /World Bank, 2008) Annual Global Revenues: $52.6 billion USD (U.S. Census/World Bank, 2008) NAICS Numbers: 711

INDUSTRY

the artistic and technical skills necessary for the production of events. The group includes a very wide range of businesses and encompasses nonprofit as well as for-profit entities. The group ranges in size from small businesses, including individual freelance performers, to large organizations such as large opera and theater production companies. Many nonprofit organizations are dependent on significant financial support from government and private-foundation grants. The industry is represented in numerous countries and is most developed in metropolitan cities. In the United States, performing artists are more educated on average than the workforce as a whole.

History of the Industry The practice of presenting live artistic performances dates back to ancient times. Ancient Greek and Roman cultures included dramatic, tragic, and comedic poetry and theater. During the sixteenth century, commedia dell’arte, an improvised comic theater with stock characters, flourished in Western Europe. The roots of current repertoires and performing traditions can be traced to the early

DEFINITION

Summary The theater and performing arts industry includes organizations that produce or organize live presentations involving performances of actors, musicians, dancers, musical groups, and other entertainers. This industry includes the promotion and production of these events as well as providing 1859

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Theater and Performing Arts Industry

seventeenth century, when Williams Shakespeare’s plays were written and the first public opera house was opened in 1637 in Venice, Italy. The modern symphony orchestra developed in Germany during the mid-eighteenth century. Today’s large performance organizations, particularly opera companies, originated from the traditions of European royalty. Many modern performing arts organizations were formed during the eighteenth and nineteenth centuries; Italy’s famous opera house, La Scala, opened in 1778; the first performing circus in the United States opened in 1793, Broadway musicals began in the early 1800’s, the New York Philharmonic was created in 1842, the Boston Symphony Orchestra was created in 1881, and New York’s Metropolitan Opera House opened in 1883. In the United States, wealthy patrons started many of the large perform-

ing organizations. For example, J. P. Morgan, Andrew Carnegie, and Joseph Pulitzer were important contributors to the New York Philharmonic Orchestra. Numerous artistic leaders and performers were brought from Europe to lead many of the major performing arts organization in the United States. Many historians identify modern theater’s beginnings in 1901 with the founding of the Moscow Art Theatre by Konstantin Stanislavsky. He formulated a revolutionary method of acting and is credited with beginning the modern age of the artistic director in theater. The modern tradition of ballet dance performance was developed in France by King Louis XIV in the mid-seventeenth century, and in Russia during the mid-eighteenth century. Modern dance traditions departed from ballet in the late nineteenth century. New American theater dance forms such as tap and jazz were developed in the mid-twentieth century. Major performing arts companies in the United States were aided in the early twentieth century by the creation of taxexempt status for nonprofit organizations. In the United States, a few large organizations were created in major metropolitan cities on the East Coast in the late nineteenth and early twentieth centuries; attendance of performing arts entertainment in the United States grew rapidly in the post-World War II era. The creation of the National Endowment for the Arts in 1965 also increased public support for the performing arts industry. After World War II, an increasingly educated and wealthy population with more disposable income and leisure time increased the demand for artistic performances in many cities. Numerous regional, permanent nonprofit theater companies, symphony orchestras, and opera companies were subsequently created in other North American cities. European higher education institutions employed significant numbers of performing artists during the nineteenth and early twentieth centuries. During the mid-twentieth century, American college and university systems developed Traditional ballet dancers. (©Rumen Baychev/Dreamstime.com)

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Japanese Taiko drummers. (©Zepherwind/Dreamstime.com)

another significant segment of the performing arts industry by forming schools specializing in the performing arts. The Industry Today The performing arts industry today offers several types of entertainment, including symphony orchestras, theatrical plays and musicals, operas, dance performances, circuses, and large multidiscipline spectacle-style shows. Large metropolitan cities continue to provide the majority of employment opportunities for performing artists. For-profit performing arts organizations generally are focused on popular entertainment, such as musical theater production companies and Las Vegasstyle spectacles such as Cirque du Soleil. Nonprofit organizations generally focus on art performances, such as symphony orchestras, opera companies, dance companies (including ballet), and regional theater companies. Performing artists also are often self-employed as freelance performers and teachers in private dance and music studios.

Professional symphony orchestras often provide live weekly concerts in midsize to large cities. Led by a single conductor/music director, they usually feature a large group of local musicians, often paired with a single internationally known virtuoso soloist. While some symphony orchestras offer only classical repertoire, many offer both classical and popular repertoire, usually formatted in separate concert series and marketed to different groups of patrons. To attract new audiences, orchestras are using a growing number of new concert formats, including shorter “rush-hour” concerts and concerts with multimedia presentations. New York’s Broadway is the center of the theater world in America. The highest-profile plays and musicals are produced there; sometimes, Broadway shows spawn touring productions that play in large and midsize cities across the country. Productions of Broadway shows also often have extended runs in large cities; New York, Los Angeles, Las Vegas, Toronto, and Chicago are large enough to support several major shows running simultaneously

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Theater and Performing Arts Industry

High-profile plays and musicals are performed on Broadway in New York. (AP/Wide World Photos)

for months or years. Metropolitan communities also may support regional theater companies. Plays and musicals typically employ numerous performers, including instrumentalists, singers, dancers, conductors, and actors; many stage roles require performers to have high-level performance skills in singing, acting, and dancing. Theaters often employ a technical staff that assists in the production of most performing events. Technical theater positions include lighting designers, carpenters, costume designers, stage managers, and technical directors. Large theater companies that produce works with significant commercial appeal are located in major metropolitan cities such as New York, London, and Chicago. Regional theater companies often produce new plays and challeng-

ing works that do not have the popular appeal necessary for production on Broadway. Dance companies are led by an artistic director/ choreographer and usually specialize in one tradition—ballet, contemporary, folk, modern, or jazz/ tap. Many of the largest dance performance organizations are ballet companies. Dance companies generally have a home theater for most of their performances, although some tour as well. Many ballet companies have an affiliated school that trains young dancers in the distinctive style used by the company. Large hotels and casinos in Las Vegas and some other gambling and entertainment centers produce live performances of popular music and theater. Well-known performers in rock and roll,

Theater and Performing Arts Industry country, and popular music perform concerts for large audiences at these venues. Smaller venues in casinos also host performances by local musicians. Casinos and hotels rely on individual contractors to hire performers. Military organizations in the United States and some other countries are among the largest employers of performing artists. All branches of the United States Armed Forces maintain high-quality music ensembles for ceremonial, entertainment, and educational purposes. Many corporations that operate cruise ships employ numerous performers, including musicians, dancers, and actors, for the entertainment of cruise patrons. Performers often are employed for contract periods of three to six months. Churches and other religious groups regularly employ trained musicians as organists, pianists, and directors of choirs and other music ensembles. Dance bands, pop, rock-and-roll, and country bands often are employed in nightclubs. Employment generally is for single or weekly engagements at the discretion of managers and owners. Public and private primary and secondary schools employ performing artists as teachers. Universities employ numerous performing artists as educators and performers. One of the primary goals of many universities is leadership in the arts for the enrichment of their communities; this requires a significant commitment of resources and creates employment for performing artists in music, dance, and theater. Cooperation between universities and performing arts companies (principally regional theater companies and orchestras) is common in midsize cities. These cooperative agreements to hire performers reduce labor costs and allow the organizations to attract higher-quality performers and artists than they could independently. Performers also may find employment in related industries such as film and the music industry. The performing arts industry has different primary sources of economic support in different regions of the world. In Europe and Asia, support comes largely from government subsidies. In the United States, the industry is supported by a blend of public ticket sales, private donors, private foundation grants, and government grants. Many large performing arts organizations seek to create a reliable funding source by creating an endowment.

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Performing arts audiences are dominated by highly educated individuals with high income levels. The performing arts industry continues to face economic challenges. While the economic efficiency of many industries has increased over time, the performing arts industry has been unable to increase productivity substantially. The performing arts industry remains less efficient economically than other industries because its unique live performances are consumed at the point of production. The solution to the fundamental economic problems facing the performing arts industry continues to be philanthropic support and increasing government subsidies. In the United States, much of the government support comes through the National Endowment for the Arts and each state’s arts council. In the early twenty-first century, countries with growing wealth, such as the United Arab Emirates, increased the import of performing arts from Europe and North America. At the same time, the performing arts industry in North America faced significant challenges stemming from the global economic downturn. Many performing arts organizations have had significant budget difficulties resulting from loss of value in endowments, reduced demand, and decreased philanthropic support. For-profit organizations generally have had better financial success in recent years than nonprofit organizations.

INDUSTRY MARKET SEGMENTS The performing arts industry includes organizations that range in size from very small to large. The industry serves a wide range of audiences as well. The following section provides a detailed analysis of the industry segments. Small Businesses Small music ensembles, theater companies, dance ensembles (primarily modern or jazz dance), and some churches typically have only a few employees serving a very small number of patrons. Ticket prices, budgets, and salaries vary, but generally are much lower than those of midsize and large organizations. Some performers act as

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independent freelance artists or as contractors for other performers, thereby operating as individually owned small businesses. Potential Annual Earnings Scale. The average earnings for performers in small performing arts organizations vary widely by region. Performers generally do not work year-round, and often are paid on a per-service basis. The average wage in the United States for such a position ranges from $14.10 to $31.65 per hour. In many cases, a union or other collective bargaining agreement does not control compensation for performers; instead, management often sets compensation rates, which may change significantly from year to year. Contractors and freelance performers often set a fee schedule that is negotiated with employers individually. Clientele Interaction. Small performing arts companies generally cater to audiences with specific artistic interests. As a result, it is important to the success of the company to encourage repeat patronage. Small performing arts companies also often are supported by philanthropic gifts from individuals and grants from private foundations and government agencies. Continued financial support often relies on maintaining strong relationships among performers, artistic staff, management and the donors and/or granting agency staff members. Small companies often seek annual financial support from state arts councils, civic foundations, and individual donors. Amenities, Atmosphere, and Physical Grounds. Small performing arts companies perform frequently in theaters and other spaces that also are used by others for performances or other purposes. Small dance or theater companies often use a small multipurpose theater in a civic building or school. Many small companies have little or no permanent administrative office space. For small dance and theater companies, the atmosphere of performing spaces usually is designed as a neutral backdrop that does not distract from the artistic presentation. Small music ensembles often perform in a variety of environments and may use a different space for each performance. Some of the spaces may be theaters or auditoriums, but many are spaces designed for other purposes such as casinos, libraries, nightclubs, churches, and bookstores. Generally, small companies seek performance spaces that suit

the particular art, contribute to an intimate environment, are within their budgets, and are more casual than the performance spaces used by larger organizations. Typical Number of Employees. The number of employees often is determined by the requirements of the specific performance medium. Small music ensembles may have as few as three or four employees. Small theater or dance companies typically are only slightly larger, with five or six employees. Small Christian churches often employ a single choir director and/or organist or pianist to lead a volunteer choir. Many small organizations employ a consistent number of part-time workers. Often, a small number of volunteers serve on a board of directors or as trustees who have duties in fund-raising or other management capacities. Traditional Geographic Locations. Small performing arts organizations are found in cities of all sizes and in most geographic regions. In small communities, these organizations often are the only performing arts organizations. In larger cities, small performing arts organizations tend to focus on repertory categories that larger organizations generally do not perform. For example, many large metropolitan areas enjoy the presence of a large symphony orchestra, but may also have a small chamber music society that employs only a few part-time performers. These groups typically play music that attracts only a few patrons who attend concerts in small theaters or homes. Small music ensembles may perform only music from a particular historical period, experimental music, modern repertoire, or music designed for particular events, such as wedding receptions. Similarly, small dance companies and small theater companies often focus on modern or experimental repertoire. Pros of Working for a Small Business. Small companies are able to perform (sometimes exclusively) niche repertoires; they possess greater artistic control for performers, in part because of the absence of large administrative structures and artistic staff direction. Performers often enjoy a closeknit working environment; if there is a small staff, they often are friends or family members of the performers. Cons of Working for a Small Business. Small companies often have relatively low pay and usually do not pay any benefits to performers. For many

Theater and Performing Arts Industry small companies, the only full-time employee is the executive director or artistic director. Employment for performers often is part time and can be unpredictable. Sometimes the performers have to take on the business management tasks of the company and can have long periods without employment. Many small nonprofit companies rely on only a few funding sources; the loss of a single grant source or donor can cause serious budget shortfalls. Costs Payroll and Benefits: Small companies often pay performers on a per-service basis; employees usually do not receive benefits such as health care, retirement, sick leave, or paid vacation. Supplies: Supply requirements are specific to the type of performance medium. Musicians usually own the instruments used, as well as sheet music and sound amplification equipment. Theater and dance companies usually require fewer supplies; the performers usually own and supply dance shoes, costumes, and other inexpensive supplies. External Services: For small organizations, most technical theater requirements are limited to minimal lighting and staging that is supplied by the performance venue or theater. If sound amplification is required and not owned by the performers, the equipment and staff usually are supplied by local companies. Technical theater staff requirements usually are very limited and often supplied by the venue. Utilities: For small organizations, the absence of permanent administrative offices and performance venues often has the benefit of no ongoing utility costs. Taxes: Some small nonprofit companies may pay performers through a nonemployee status to avoid paying and managing payroll taxes. Midsize Businesses Midsize performing arts companies typically include music ensembles, theater companies, and dance ensembles (often regional ballet companies). Smaller military bands and Broadway shows, off-Broadway shows, and touring productions of plays or musicals often fall in this category as well. Midsize organizations usually have three types of employees: performers, artistic staff, and manage-

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ment staff. Ticket prices, budgets, and salaries vary widely but generally are much higher than those of small organizations. Potential Annual Earnings Scale. Average earnings for employees in midsize performing arts companies vary by region. Performers generally work a twenty- to forty-six-week season and often are paid on a salary basis per week of employment. Artistic staff and management staff often are employed year-round on salary with benefits. The typical pay range in the United States is between $20,000 and $65,000 per year; artistic and management executives often are compensated at a higher rate. Compensation for performers often is controlled by a multiyear labor contract or other collective bargaining agreement negotiated between management and a national union. The board of directors usually sets compensation for management. Military bands are compensated based on rank; members of smaller organizations generally have a lower rank than members of large organizations. Clientele Interaction. Midsize performing arts companies generally cater to audiences with specific artistic interests. As a result, repeat patronage of ticket buyers is important for maintaining an audience of sufficient numbers. Midsize companies often market tickets bundled by series, focusing on repertoire interests of clients who purchase tickets for multiple performances at a reduced price. Midsize nonprofit performing arts companies also often are supported by philanthropic gifts from individuals and grants from private foundations and/or government agencies. Continued financial support relies on maintaining relationships among the executive director or development and fundraising staff and the donors or granting agency staff members. Midsize nonprofit companies often seek annual financial support from state arts councils, civic foundations, and individual donors. Amenities, Atmosphere, and Physical Grounds. Midsize performing arts companies may perform in private or civic theaters that are used by other organizations for performances. Midsize companies also are likely to be the dominant tenant for their performance space. Many use the primary local civic auditorium, which is provided to them by the city at a reduced cost. Midsize companies often have permanent administrative office space and rehearsal spaces. Generally, they will

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seek performance spaces that suit the particular art form, the size of the organization, the audience size, and their budgets. The performance spaces are more likely to be civic theaters than the specialized private spaces used by larger organizations. Touring productions of Broadway shows usually perform in civic auditoriums. Military bands usually rehearse and perform in dedicated spaces on military bases. Some military bands tour the country, and utilize different performance spaces in each city on the tour. Typical Number of Employees. The number of employees is determined by the requirements of the specific performance medium. Midsize organizations often have three to ten employees in management; the number of performers varies. For example, a midsize orchestra will employ fifty to seventy performers, while a midsize ballet company will have fifteen to twenty employed performers. For most midsize nonprofit organizations, a volunteer board of directors or trustees assists with duties in fund-raising or other management oversight. Churches often employ two or three full-time employees as artistic management and have numerous part-time performers. Military bands will have one or two artistic directors (officers) who are conductors of the ensemble, several full-time support staff, and twenty to sixty full-time performers. Traditional Geographic Locations. Midsize performing arts organizations are found in midsize to large cities in many geographic regions. In midsize communities, these organizations usually are the primary performing arts groups. In large metropolitan areas, midsize performing arts organizations target a specific geographic area within the community or a niche repertory. For example, many large metropolitan cities enjoy the presence of a large nationally known symphony orchestra but also may have a midsize orchestra that performs in only one suburb. Touring shows often choose their stops by market size: The midsize companies perform in midsize cities referred to as “secondary markets.” Military bands either are in residence at a particular military base or are touring organizations. Pros of Working for a Midsize Business. Midsize performing arts companies often have greater financial stability compared with smaller companies. The presence of full-time administration allows performers to focus on the artistic work

without the other duties they often have in smaller companies. Performers in midsize companies also may be employed part time or full time as teachers in higher education. Cons of Working for a Midsize Business. Midsize companies often have lower pay than large companies. Midsize companies can suffer budget shortfalls that result in loss of compensation. In unionized environments, labor disputes can cause stressful working relationships between management and artistic staff or performers. These contract disputes can last for long periods and may result in the cancellation of performances. The financial support for these midsize organizations often is unpredictable, particularly in cities with shrinking economies or struggling industries. Costs Payroll and Benefits: Midsize companies often pay performers on a weekly salary basis; all employees including performers usually receive benefits such as health care and retirement, but performers often do not receive sick leave or paid vacation. Supplies: Supply requirements are specific to the performance medium. Musicians usually own the instruments used in company performances. The company usually supplies large equipment, staging, and sound amplification equipment. Costuming for actors, dancers, and other stage performers typically are supplied by the employer. External Services: The company, performance venue, or theater supplies most technical theater requirements. If sound amplification is required and not owned by the performers, local companies usually supply the equipment and staff. The company or venue supplies technical theater staff. Utilities: Midsize performing arts companies usually pay utility costs such as electricity, gas, telephone, and Internet service for office spaces. Taxes: Many midsize companies are nonprofit and exempt from paying income taxes; they usually pay employees, including performers, in employee status with payroll taxes. Large Businesses Large music ensembles, Broadway productions, popular music tours, military bands, theater com-

Theater and Performing Arts Industry panies, and dance ensembles (often ballet companies in the largest cities) typically have three types of employees: performers, artistic staff, and management staff. Unlike the small and midsize companies, large companies often have numerous departments within the management staff, including educational programming, fund-raising/development, and production management. Military bands sometimes are considered part of the large business category. Ticket prices, budgets, and salaries vary widely but generally are much higher than those of midsize organizations. Potential Annual Earnings Scale. The average earnings for performers in large performing arts companies vary by region; performers generally work a forty- to fifty-two-week season. The average range in the United States for such a position is $50,000 to $125,000 per year; compensation for executive managers and executive artistic leadership (artistic directors and music directors, for example) generally is much higher than that of other employees. Compensation for performers sometimes is governed by multiyear labor contracts negotiated by national unions. Performers in U.S. military bands usually are compensated based on rank. Performers may receive significant additional compensation for recorded performances; sometimes this compensation is included in their employment contract in the form of an electronic media guarantee. Las Vegas-style spectacles employ performers on a fulltime salary basis with benefits. Clientele Interaction. Large performing arts companies generally cater to a wider range of audiences with more varied artistic interests than small companies. Repeat patronage for ticket buyers is important for maintaining an audience of sufficient numbers, but the very large, and often welleducated populations of large cities provide a large audience base. Large companies often market tickets bundled by series, focusing on repertoire interests of clients; clients may purchase tickets for multiple performances at a reduced price. Large performing arts companies also often are supported by philanthropic gifts from individuals and grants from government agencies. Continued financial support often relies on maintaining relationships among artistic staff, management, and the donors and/or granting agency staff members.

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Amenities, Atmosphere, and Physical Grounds. Large performing arts companies often rehearse and perform in specially designed theaters constructed specifically for their performances. Large companies often have permanent administrative office spaces and rehearsal spaces in the same facility. Large companies also may tour extensively, often internationally, during which time they use available private and civic performance spaces. Military bands usually rehearse and perform in a dedicated space provided on a military base. Broadway shows rehearse and perform in dedicated theater spaces; their touring counterparts use the large civic theaters found in major metropolitan cities. Most large performing arts organizations present their performances in large spaces for large audiences. For many nonprofit organizations, such as ballet companies, opera companies, and symphony orchestras, the atmosphere and presentation are formal. The large performance halls often prevent the close interaction between performers and audience experienced by small performance groups. Popular music performances often occur in multipurpose stadiums or arenas. Most large organizations require private dressing rooms for star performers, conductors, and soloists. Lounges and communal dressing rooms or “green rooms” are supplied for the comfort of supporting performers and ensemble members. Typical Number of Employees. The number of employees often is guided by the requirements of the specific performance medium. Large organizations often have dozens of employees in management, including interns. The number of performers varies; for example, a large orchestra will employ 80 to 100 performers, a large ballet company will have 23 to 45 employed performers, and a large military band will have 150 performers. For nonprofit organizations, a volunteer board of directors assists with duties in fund-raising and other management oversight. The number of employees for a Broadway show varies, but these shows often employ a significant number of cast members, orchestra members, technical theater staff, management staff, and production staff. Touring shows may have employees who travel and other temporary employees who are hired in each city of the tour. Large churches often employ several fulltime musicians as performers, including organists, choir directors, pianists, and singers.

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Traditional Geographic Locations. Large performing arts organizations are found in major metropolitan cities in many geographic regions. In large metropolitan areas, large performing arts organizations serve a specific geographic area and also are viewed as national leaders and innovators in the industry. In the U.S. military, large bands are located at major installations, particularly those in Washington, D.C. Pros of Working for a Large Business. Large organizations have significantly higher compensation, higher artistic standards, and greater financial stability compared with midsize organizations. Performers often may find additional related employment in education and/or other performance companies from the perceived prestige and reputation for artistic excellence resulting from employment in a large company. Cons of Working for a Large Business. Large organizations often create significant pressure for extremely high artistic standards. Performers do not have the desired individual artistic control of their performances. There are a relatively small number of employment opportunities in large organizations and significant competition for employment. Budget shortfalls can cause significant loss of income and uncertain employment.

Taxes: Many large companies are nonprofit and exempt from paying income taxes; they usually pay performers in employee status with payroll taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and distribution of tasks within performing arts companies are based on size and for-profit or nonprofit status. Most organizations have a strong functional division between management of the artistic product and the business management of the organization. A board of directors, artistic director, and executive director are likely to handle most of the major management oversight tasks, while the general manager and/or production manager will delegate tasks to other staff. Nevertheless, the tasks themselves generally remain similar throughout the performing arts industry. The following umbrella categories apply to the organizational structure of small, midsize, and large performing arts companies: ■

Costs Payroll and Benefits: Large companies usually pay all employees, including performers, on a salary basis; employees usually receive benefits such as health care, retirement, sick leave, and paid vacation. Supplies: Supply requirements are specific to the performance medium. Musicians usually own the required musical instruments; the company usually supplies large equipment and sound amplification equipment. Costumes for actors, dancers, and other stage performers often are supplied by the employer. External Services: The company, performance venue, or theater supplies most technical theater requirements. If sound amplification is required and not owned by the performers, local companies usually supply the equipment and staff. The company or venue supplies technical theater staff. Utilities: Large performing arts companies pay utility costs for office and performance spaces.

■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Business Management Administrative Support Development and Fund-Raising Stage Management Personnel Management Artistic Management Musicians Actors Dancers Costumers Composers and Arrangers Las Vegas-Style Spectacle Performers

Business Management The board directs the global mission of the company, sets goals and implements plans, and may assist in specific management oversight. The board issues contracts with and sets compensation for the management staff, executive director, and artistic director. Many board members are wealthy community leaders and/or business executives with vested interests in the success of performing arts in their community.

Theater and Performing Arts Industry Board members of nonprofit performing arts companies generally are volunteers; they often make philanthropic gifts to the organization and solicit gifts from others in the community. The board usually includes specific offices, such as president, that are held for designated terms. The board also may have an executive committee that manages specific and regular oversight of the company. In many cases, the officers and executive committee of the board do the majority of the work. The executive director oversees the operations of the company. These individuals help oversee major operations, goal setting, and the implementation of plans for the organization. They also manage individual teams and departments. Executive managers usually have college degrees; some have advanced degrees and/or significant performance experience, particularly in the company’s specific performing art. Some executive managers also have experience as a general manager. Executive directors generally earn higher salaries than other staff employees. Their job is to manage the overall functions of the company, address large management issues, manage the budget, ensure that all departments are functioning well, and communicate and plan with the artistic leadership and the board of directors. Executive directors often attend many of the performances to maintain quality control and lines of communication. General managers handle the overall operations of the company. These individuals help oversee specific aspects of budget, operations, the details of productions (including purchase or rental of equipment), setting tour dates, booking venues, transportation for touring groups, communication with stage managers, and managing production budgets. They also may manage individual teams or departments and may communicate with artistic staff about the specific requirements of productions. Some general managers have academic degrees and/or significant performance experience, particularly in the company’s specific performing art. General managers usually are salaried employees. The director of education manages the educational programs of the company. These individuals help oversee specific aspects of programs that seek to engage young audiences in education. This includes the details of productions such as purchase

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or rental of equipment, rental of venues, communication with production and general managers, and budget management for educational programs. They may also manage interns, individual teams, or departments and may communicate with artistic staff about the specific requirements of educational programs. Education directors often have academic degrees and/or significant performance experience, particularly in the company’s specific performing art. Directors of education usually are salaried employees. Directors of education also often coordinate programs with area public schools. Organizations often give performances for youths, send performers to visit classrooms, and offer performances in the community as part of their educational programming. For ballet companies, the director of education is responsible for the ballet company’s school, which teaches the style of the company and has classes for various age groups. Occupations in this category include the following: ■

■ ■ ■ ■

Member of the Board of Directors or Trustees Executive Director General Manager Production Manager Director of Education

Administrative Support The administrative support staffs handle operational tasks or office work of the company. These individuals carry out specific aspects of operations, including rental and distribution of sheet music, sales of subscriptions and individual tickets, and managing appointments and communication for the general manager and/or executive director. Librarians often have academic degrees and/or performance experience, particularly in the company’s specific medium. Many employees in administrative support are compensated on a fulltime or part-time hourly basis. Occupations in the area of administrative support include the following: ■ ■ ■ ■

Librarian Office Staff Ticket Manager Box Office Manager

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Development and Fund-Raising Development and fund-raising staff members handle all aspects of fund-raising for the company. These individuals write grant proposals, meet and communicate with donors and potential donors, and report the results to granting agencies. They work with and directly for the board members and the executive director. Some development staff members have academic degrees and/or performance experience, particularly in the company’s specific performing art. Development and fund-raising employees usually are compensated on a salary basis. Stage Management Stage management staff members handle all physical and technical duties in the rehearsal and performance spaces. These individuals construct stage plots, move equipment, and communicate with theater staff to ensure proper lighting, temperature control, and safety in the working environment for performers. They work with and directly for the general manager or production manager. Stagehands work for the stage manager, assist performers, and set up equipment including chairs, stands, sets, lighting, and props. Stage managers usually are compensated on a salary basis while stagehands often are hourly employees. Occupations in the area of stage management include the following: ■ ■

Stage Manager Stagehand

Personnel Management Personnel managers handle hiring, payroll, and communication with all regular performers employed by the company. These individuals distribute information to performers about the locations and times of rehearsals and performances to performers. They also coordinate auditions and hire new performers in cooperation with artistic management. They work with and directly for the general manager and artistic director. Personnel managers for large and midsize organizations usually are compensated on a salary basis. Personnel managers for small organizations often are performers and usually are compensated on an hourly basis.

Artistic Management Artistic managers oversee the artistic goals and direction of the company. These individuals program and direct specific repertoire, set artistic norms and standards, decide on the hiring of company and guest performers, and manage all other matters affecting the artistic product and production. They work for the board of directors and in cooperation with the executive director. For orchestras, the music director often is also the primary conductor. The music director selects repertoire, plans concert series, hires musicians including soloists, rehearses the orchestra and conducts performances. For ballet companies, the ballet master often is the main choreographer for the company, selects repertoire, plans performance series, hires dancers including soloists, and rehearses the company. For theater companies, the director selects repertoire, plans performance series, hires actors and directs the rehearsal process. Artistic managers usually are hired with multiyear contracts and compensated on a salary basis at a much higher rate than other performers. Occupations in the area of artistic management include the following: ■ ■ ■

Music Director Ballet Master/Choreographer Director

Musicians Performers actively prepare and give performances solo or with a band, orchestra, or other group. Orchestral musicians possess highly developed and specific performance skills as musicians. They work for the conductor and/or music director and in cooperation with the personnel manager. Orchestral musicians often are organized into two or three classes with slightly different responsibilities. Principal players play solos and the most prominent parts and lead their sections of the orchestra; associate principal players may also play some prominent parts; section players have no leadership roles and play less prominent parts. Music theater pit musicians collectively accompany the on-stage ensemble. Instrument requirements and skills are slightly different from those for orchestral performers. Jazz musicians may be employed by performing arts organizations, but more often they work as in-

Theater and Performing Arts Industry dependent artists or groups playing in clubs, restaurants, and other venues. These individuals possess highly developed and specific performance skills (particularly improvisation) in a particular repertoire. Instruments commonly found in jazz performances include trumpet, trombone, saxophone, bass, drums, and piano. Performers’ compensation varies widely; as independent performers they usually are hired on a per-service basis, while in larger companies, performers usually are hired with multiyear contracts and compensated on a salary basis. Occupations for musicians include the following:

be capable actors. Performers are organized into voice classes by range and type, such as baritone, tenor, alto, and soprano. Actors work for artistic managers and directors. Compensation varies widely. In small companies, they usually are hired on a per-service basis; in larger companies, performers usually are hired with contracts and compensated on a salary basis. Some music theater performers may also work as actors in other contexts. Occupations for actors include the following: ■ ■ ■

■ ■ ■ ■ ■ ■ ■

Orchestral Musician Opera Orchestra Musician Ballet Orchestra Musician Theater Pit Musician Chamber Musician Military Band Musician Jazz Musician

Actors Actors actively prepare and give performances in stage roles. These individuals have highly developed and specific performance skills as actors; some actors also may be dancers and singers and specialize in musical theater roles. Opera performers primarily are singers, although they also must

OCCUPATION

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Actor Music Theater Stage Performer Opera Singer

Dancers Some performers possess highly developed and specific performance skills as dancers. They work for the artistic manager and choreographer and in cooperation with the personnel manager. Performers in ballet companies in particular often are organized into two groups: principal dancers, who have more responsibilities, and company dancers. Training and skills vary widely among the different styles of dance; for example, ballet dancers have distinctly different skills, development, and repertoire than jazz/tap dancers. Performers’ compensation varies widely; in small companies they usually are hired on a per-

SPECIALTIES

Actors Specialty

Responsibilities

Announcers

Introduce radio, television and stage productions to audiences.

Drama coaches

Evaluate and coach the performance of actors. They coach performers in character interpretation, voice projection and stage technique.

Drama teachers

Instruct individuals and groups in acting and drama techniques. Special emphasis is placed on diction, voice inflection, enunciation, dialects and nonperformance aspects of stage production.

Extras

Perform as nonspeaking members of a cast in dramatic television, movie, or stage productions.

Narrators

Make explanatory comments to accompany action parts of motion pictures.

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service basis, while in larger companies performers usually are hired with multiyear contracts and compensated on a salary basis. Occupations for dancers include the following: ■ ■ ■ ■ ■

Ballet Principal Dancer Ballet Company Dancer Ballet Intern Dancer Tap/Jazz Dancer Modern Dancer

Costumers Costumers design and construct the costumes for performances of the company. They work for the artistic manager and in cooperation with the producer, director, or choreographer. Costumers’ compensation varies widely; in small companies, they usually are hired on an hourly basis, while in larger companies, they usually are compensated on a salary basis. Occupations for costumers include the following:

■ ■

Costume Designer Costumer

Composers and Arrangers Composers or arrangers construct musical works for the performances of the company. They work for the artistic manager and in cooperation with the producer, director, or choreographer. Composers usually are hired on a fee basis. Some organizations, including military bands, hire arrangers on a full-time salary basis. Composers and arrangers also are highly trained professionals skilled in the construction of music for specific performance needs. Occupations in this area include the following:

OCCUPATION

■ ■ ■

Military Band Arranger/Composer Orchestral Arranger/Composer Film and Television Arranger/ Composer

PROFILE

Dancer/Choreographer Considerations

Qualifications

Description

Plans and designs a dance sequence as well as performing the dance.

Career cluster

Arts, A/V Technology, and Communications

Interests

Data; people

Working conditions

Work inside; work both inside and outside

Minimum education level

Junior/technical/community college; apprenticeship; bachelor’s degree

Physical exertion

Heavy work

Physical abilities

Good to excellent fitness; requires strength and flexibility

Opportunities for experience

Apprenticeship; volunteer work; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

AER; AES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Theater and Performing Arts Industry OCCUPATION

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SPECIALTIES

Dancers/Choreographers Specialty

Responsibilities

Acrobatic dancers

Perform a style of dancing characterized by gymnastic feats.

Ballet dancers

Perform a dancing technique based on the turned-out leg, pointed foot, and five fundamental foot and arm positions.

Ballroom dancers

Demonstrate social dancing ranging from the waltz to the latest popular dance.

Dancing instructors

Instruct students in ballet, ballroom, tap, and other forms of dancing.

Tap dancers

Perform a style of dancing that is distinguished by rhythm tapped by the feet in time with the music.

Las Vegas-Style Spectacle Performers Performers possess highly developed and specific performance skills as actors, dancers, jugglers, or musicians. They work for the artistic managers and in cooperation with the personnel manager. Performers usually are hired with contracts and compensated on a salary basis. Occupations for Las Vegas-style spectacle performers include the following: ■ ■ ■ ■ ■ ■ ■ ■

Orchestral Musician Jazz Musician Music Theater Pit Musician Actor Tap/Jazz Dancer Modern Dancer Ballet Dancer Circus Performer

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be in decline. Although the near-term outlook for the industry is unstable, the recent history of the industry has shown growth. Between 1970 and 1990, the number of artists doubled in the United States, growing at twice the rate of the overall labor force. This growth reflects the great expansion of theaters, orchestras, and other venues in the industry

and collegiate community. In recent years, the number of performing artists as a percentage of the U.S. population has stabilized and the rate of growth of the industry has been the same as the rate of the overall labor force. The stability of this measure suggests that the performing arts labor force has reached a balancing point in the overall U.S. economy. Performing artists continue to live and work in the largest metropolitan cities, with 20 percent of performing artists living in Los Angeles, New York, Chicago, Washington, D.C., and Boston. Half of all the professional artists in the United States live in thirty metropolitan cities. The Sun Belt cities have the most performers per capita; the western and southern states have seen the largest growth in performing artists recently. One third of performing artists are employed only part of the year, and it is likely that the profession will continue to trend toward seasonal employment. Performing artists are more likely to have college degrees than other members of the labor force; they receive relatively less compensation for their education level and are more likely to be self-employed. Approximately 400,000 Americans identify the performing arts as their major area of employment, including a growing number of Hispanic people. In the United States from 1990 to 2005, the number of actors grew 16 percent; the number of musicians grew 14 percent; the number of dancers grew 36 percent; the number of producers and di-

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rectors grew 14 percent; and the number of entertainers and performers (comedians, jugglers, puppeteers) grew 283 percent, with most of the increase taking place in Las Vegas. The near-term outlook for the performing arts industry is unstable. The performing arts industry is reliant on the ability and willingness of consumers to spend disposable income, the ability of individuals and families to give philanthropic gifts, and the support of government agencies and private foundations. The global economic crisis of 20072009 created significant loss of performing arts funding from all of these sources. Most performing arts companies have experienced significant loss of revenues and budget difficulties in recent years. However, global economic recovery and further improvement of the U.S. economy may allow for modest growth in the performing arts industry in the long term. The outlook for international opportunities in the performing arts industry varies widely by region. The U.S. Bureau of Labor Statistics projects that wage and salary jobs in arts, entertainment, and recreation in general are projected to grow about

15 percent over the 2008-2018 period, compared with 11 percent for all industries combined. Because of an overall global economic downturn and competition from other forms of entertainment, employment in the performing arts is not expected to grow significantly during the same period, 20082018.

Employment Advantages According to the U.S. Bureau of Labor Statistics, the performing arts industry will not grow significantly in the 2010’s. Employment in many of the performance sectors of the industry is likely to remain challenging in the near future; the advantages of the industry are likely to be found in the management positions within performing arts organizations. Performers in the United States may seek to increase the stability of their income through multiple sources of employment, often including the combination of performance employment with educational employment in institutions of higher or secondary education. Opportunities outside the United States are more likely to grow in the near future; performing artists willing to relocate to the large cities of Europe, Asia, or the Middle East may find adPROJECTED EMPLOYMENT vantages. Large cities with conFOR SELECTED OCCUPATIONS centrations of significant wealth, such as Monaco, Dubai, and SinPerforming Arts gapore for example, are likely to maintain significantly higher Employment levels of funding for the per2008 Projected 2018 Occupation forming arts early in the twentyfirst century. 9,900 11,100 Actors 900

1,100

Artists and related workers

500

600

Fashion designers

200

300

Makeup artists, theatrical and performance

29,100

30,300

5,100

5,700

Musicians, singers, and related workers Producers and directors

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Annual Earnings On average, the performing arts industry in the United States receives half of its annual income from tickets sales, 40 percent from donations and private grants, and 10 percent from government support. In the near future, domestic performing arts organizations will be negatively affected in all these revenue areas. The Recession and the Arts, published in 2009 by the Alliance for Arts, documented the

Theater and Performing Arts Industry effect of the economic recession on arts organizations throughout New York City. This document reveals that in 2008, 80 percent of arts organizations in New York City were reducing their budgets, and more than half were reducing staff. Of the fifteen largest organizations, 53 percent planned to lay off employees, and 80 percent planned to defer new hires. While this report focuses on the effects of the recession on the performing arts in New York City, many large metropolitan cities in North America experienced similar declines in earnings and budgets during 2009 and 2010. Some experts believe that the 2007-2009 economic recession taught performing arts companies and executives difficult lessons about budget management, and that, in the long term, the performing arts will also likely be more resilient as a result.

RELATED RESOURCES FOR FURTHER RESEARCH Actors’ Equity Association 165 W 46th St. New York, NY 10036 Tel: (212) 869-8530 Fax: (212) 719-9815 http://www.actorsequity.org American Federation of Musicians 1501 Broadway, Suite 600 New York, NY 10036 Tel: (212) 869-1330 Fax: (212) 764-6134 http://www.afm.org Americans for the Arts 1 E 53rd St., 2d Floor New York, NY 10022 Tel: (212) 223-2787 Fax: (212) 980-4857 http://www.artsusa.org National Dance Education Association 8609 2d Ave., Suite 203-B Silver Springs, MD 20910 Tel: (301) 585-2880

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Fax: (301) 585-2888 http://www.ndeo.org National Endowment for the Arts 1100 Pennsylvania Ave. NW Washington, DC 20506-0001 Tel: (202) 682-5400 Fax: (202) 682-5496 http://www.nea.gov

ABOUT

THE

AUTHOR

David Steffens is professor of percussion and coordinator of graduate studies at Oklahoma City University’s Bass School of Music, principal percussionist of the Oklahoma City Philharmonic Orchestra, and a regular performer with Lyric Theater of Oklahoma and the Tulsa Symphony. As a performer, he has extensive experience in symphony orchestras, opera orchestra, Broadway shows, and as a chamber musician. He holds degrees from Central Michigan University, Michigan State University, and the Eastman School of Music at the University of Rochester. He has published previous articles focusing on the music of Edgar Varese, the Broadway show Blast!, Art Blakey, Gary Burton, Les Paul, Tupac Shakur, and Chick Webb.

FURTHER

READING

Alliance for the Arts. The Recession and the Arts: The Impact of the Economic Downturn on Nonprofit Cultural Groups in New York City. New York: Author, 2009. Available at http:// www.allianceforarts.org/images/ EcImpactSurvey_2009report.pdf Carson, Nancy. Raising a Star: The Parent’s Guide to Helping Kids Break into Theater, Film, Television, or Music. New York: St. Martin’s Press, 2005. Gaquin, Deirdre. Artists in the Workforce: 19902005. Washington, D.C.: National Endowment for the Arts, 2008. McCarthy, Kevin, et al. The Performing Arts in a New Era. Santa Monica, Calif.: Rand, 2001. O’Neil, Brian. Acting as a Business: Strategies for Success. New York: Vintage Books, 2009.

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Stein, Tobie, and Jessica Bathurst. Performing Arts Management: A Handbook of Professional Practices. New York: Allworth Press, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://

www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. Vogel, Harold L. Entertainment Industry Economics: A Guide for Financial Analysis. New York: Cambridge University Press, 2007. Webb, Duncan. Running Theaters: Best Practices for Leaders and Managers. New York: Allworth Press, 2004.

Themed Entertainment Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Hospitality and Tourism Career Cluster: Hospitality and Tourism Subcategory Industries: Amusement and Theme Parks; Amusement Arcades; Themed Resorts and Casinos Related Industries: Casino Industry; Hotels and Motels Industry; Museums and Cultural Institutions Industry; Restaurant Industry; Travel and Tourism Industry Annual Domestic Revenues: $12 billion USD (PricewaterhouseCoopers, 2008) Annual Global Revenues: $18 billion USD (StarParks, 2009) NAICS Numbers: 72, 713

INDUSTRY

ists for short-term visits and stays. The industry is diverse, complex, and composed of a wide range of venues and attractions.

History of the Industry Many components of the themed entertainment industry have long histories, dating back to antiquity. Rome, during the first century b.c.e. reign of Emperor Pompey, for example, had a number of circuses featuring animals, freak shows, acrobats, death-defying performances, and other attractions. The fall of the Roman Empire in the fifth century c.e. brought a relative disappearance of circuses, although traveling shows of circus performers were still seen around Europe during the Dark Ages that followed Rome’s collapse. More than a millennium later, Philip Astley, a member of the British cavalry, developed an interest in fancy riding and began performing a number of feats while riding a galloping horse. Occasionally, during his performances, clowns would interrupt the show with their own antics. Astley developed and perfected an iconic component of the modern circus: the ring, which he used to help contain the horses he rode. A contemporary and competitor of Astley, John Bill Ricketts, helped bring

DEFINITION

Summary The themed entertainment industry is part of the third-largest industry in the world—tourism. Its hosts travelers, tourists, and others at conceptbased attractions, such as zoos, aquariums, theme parks, museums, and similar venues. The industry also encompasses themed tourism, such as farm tours and ecological preserves. Theme-based entertainment is designed to draw like-minded tour1877

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the act to the United States in the early nineteenth century. At the same time, the tradition of the traveling circus was reborn in America, with exotic animals, clowns, acrobats, stunt riding, and other performances. Over time, the circus retained these sorts of acts and became a profitable industry, traveling all over the country and the world and mounting sizable productions that could be transferred from one large venue to another. The modern amusement park also has its roots in the ancient civilizations of the Mediterranean region. In fact, the ancient Greeks used such entertainment venues to generate political support. The Roman Empire made similar use of fairs, which combined selling and buying goods with entertainment and religious celebrations at permanent marketplaces. In the fifth century c.e., more fairs appeared in permanent locations in modern-day France and Italy. As was the case with their prede-

cessors, these newer fairs combined religious celebrations with commerce and entertainment. The first amusement-park rides were introduced in the seventeenth century at pleasure gardens throughout Europe. However, rides such as the first incarnations of the roller coaster and the Ferris wheel did not appear until the late 1800’s. (The first vertical roller coaster was introduced in Toledo, Ohio, and the Ferris wheel was unveiled at the Chicago World’s Fair in 1893). By the beginning of the twentieth century, driven by the introduction of many new rides, amusement parks exploded into popularity in the United States after the openings of Coney Island and, later, Water Chutes Park in Chicago in the 1870’s. By 1910, there were two thousand amusement parks in operation, although the number decreased after the beginning of the Great Depression. In 1952, children’s filmmaker Walt Disney opened one of the

A child watches animals at the zoo. (©Ingrid Balabanova/Dreamstime.com)

Themed Entertainment Industry most storied theme parks in the world, Disneyland Park in Anaheim, California. Theme-based venues have been built on creating innovative attractions for visitors. Many, such as the former site of Alcatraz Prison in the San Francisco Bay, are designed to educate. Others, such as ethnic restaurants and performing arts venues, pay homage to various cultures and civilizations. Still others, such as film studios in California and Florida or the Guinness brewery in Ireland, focus on industries. In recent years, the industry has given rise to new forms of tourism, such as agritourism and ecotourism, which have helped redevelop the economies of many formerly war-torn and economically depressed countries. The Industry Today The themed entertainment industry has evolved into a vast, diverse, and cosmopolitan industry encompassing a broad range of other industries. Theme-based resorts are located throughout the world, and each country utilizes at least one or two sites as tourist attractions celebrating its culture and heritage. As it has throughout history, the theme-based industry seeks to entertain visitors; in many cases, it also seeks to educate, enlighten, and even inspire them. There are a number of subsectors within the themed entertainment industry. The first of these may be categorized as amusement, gambling, and recreation. This subsector encompasses fairs, amusement parks, arcades, and some gambling facilities. In addition to the venues themselves, the subsector includes the vendors that supply the machinery and equipment in use at those venues. Amusement parks and similar venues vary in size and substance, depending on the target audience and the activity promoted. Some have theatrical themes, featuring characters and live performances, while others are geared toward activities themselves, such as sports and recreational pursuits, or provide rides and concessions to patrons. Another subsector of the themed entertainment industry is museums and historical sites. This segment is included in the broader themed entertainment grouping because of the growing trend of injecting entertainment value into museums and similar attractions. Many such venues do not simply have stationary displays but feature interactive video displays, IMAX (Image MAXimum)

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movie theaters, music and dance performances, historic reenactments, and other attractions that draw larger audiences than do traditional sites. Colonial Williamsburg, a living reconstruction of the colonial capital located in Virginia, is an example of a prominent tourist destination and historical area populated by reenactors and museums. It also features resort amenities such as spas, golfing, and shopping. This themed site reported $18.5 million in ticket revenue in 2008. Hotels and restaurants are increasingly falling into the themed entertainment arena. Many hotels and resorts are self-contained destinations and have entertainment-oriented motifs—most notably, the casino resorts of Las Vegas, Nevada, and Atlantic City, New Jersey. The designs of these resorts are intended to draw like-minded tourists to the properties and keep them on site, where they may attend live shows, dine, and gamble. Many casinos and resorts are quite large, and they may have horticultural displays, canal cruises, or even safaris. Natural attractions also fall under the heading of the themed entertainment industry. Zoos have long been staples of this field, drawing crowds daily to view and often physically interact with exotic animals. Aquariums are also popular venues. Like zoos and aquariums, safaris (which have become major contributors to the economies of previously underdeveloped countries in sub-Saharan Africa) also bring tourists into close encounters with wildlife in wide open areas. Safaris exist not just in Africa but also in the United States and other countries. Lastly, agritourism (or agrientertainment), which consists of vacations or outings to farms or ranches, has long been an established sector of the tourism trade in portions of Western Europe, and it is becoming increasingly popular in the United States. For example, according to a report from Rutgers University, agritourism generated an estimated $5.75 million in revenue for New Jersey in 2007, with one-fifth of Jersey farmers offering some form of entertainment. Additionally, Massachusetts has over 250 farm attractions open to the public throughout the state. In the light of the marketability of themed entertainment, retailers are increasingly developing stores into tourist attractions. Some, such as outdoor retailing magnate L. L. Bean, offer fly-fishing and other outdoor training courses, free outdoor concerts, and other attractions to customers. In

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A water park in Orlando, Florida. (©Dreamstime.com)

Minneapolis, Minnesota, the Mall of America features an enormous selection of retail shops—over four hundred stores as of 2010—and popular restaurants, along with a full amusement park, aquarium, miniature golf course, an “eco park,” and numerous hotels. The themed entertainment industry is driven by numerous forms of tourism. Families and vacationers seek not just one attraction but several activities while visiting a venue. Corporate travelers and sponsored functions tend to contribute considerably more to a given venue in terms of overall revenue, as they are often less concerned with bargain hunting than are frugal family travelers. Themed venues seeking to attract business travelers must incorporate conference and business services into their facilities. The themed entertainment industry employs hundreds of thousands of people. In addition to executives such as corporate managers, the industry employs thousands of servers, cooks, actors, mu-

sicians, tour guides, and associated vendors. It is represented in nearly every country, with venues (both private and government-funded) bringing much-needed revenues to economically underdeveloped areas. In 2009, the U.S. amusement park industry generated approximately $12.9 billion in revenues at four hundred parks and attractions throughout the country. Although the United States remains the largest market for amusement parks and theme parks, a growing number of similar venues have been developing in large numbers in Europe and in East Asia. About 335 million visitors descended on American amusement parks, while in Europe 40 million people visited the continent’s top-ten theme parks. The themed entertainment industry today is a broad-reaching collection of tourist attractions. Like any other industry, it has suffered through economic hardships, but its countless venues around the world continue to thrive and contribute heavily to regional economies with jobs and taxable revenues.

Themed Entertainment Industry INDUSTRY MARKET SEGMENTS In addition to so-called theme parks, many tourist and entertainment industries include components that participate in the themed entertainment industry. For example, some casinos are merely casinos, but many feature themes to differentiate themselves from their competitors, ranging from medieval knights in armor to ancient Egypt to pirates. Hotels, restaurants, and outdoor recreation venues all use themes to increase their brand power or otherwise introduce an element of fun and whimsy into their promotional endeavors. The following sections detail major subsectors of the themed entertainment industry.

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must be able to work well with large volumes of people. Amenities, Atmosphere, and Physical Grounds. Amusement parks and recreational sites are typically crowded, especially during vacation periods and weekends. Often, amusement parks and other themed sites offer a large number of attractions in close proximity to one another, such as food stands, stores, and amusement rides. Both types of venue require large amounts of open space, where amusements such as roller coasters, performance stages, and other relevant attractions may be constructed. Such space is also necessary for parking and transportation purposes. Typical Number of Employees. Some recreational facilities employ only a few attendants full time but increase their workforce during summer months or holiday seasons. Others employ thousands of people, both in the front-lines of consumer interation and behind the scenes. Walt Disney World resort, near Orlando, Florida (considered the most visited resort in the world), employs over sixty-six thousand people, making it the largest single-site employer in the United States. Traditional Geographic Locations. Amusement parks and recreational sites are usually located in areas frequented by tourists, such as coastal or warm-weather locales, or near popular metropolitan areas. For example, Disney’s two main parks—Walt Disney World and Disneyland— are located in the heavily populated and warm-

Amusement Parks and Recreational Sites Amusement parks, often also known as “theme parks,” are the prototypical themed entertainment venues. Together with recreational sites, the largest are destinations, driving tourism to their locales and sometimes anchoring their local economies. Even small amusement parks contribute to the culture and atmosphere of their communities, and a single large carousel or Ferris wheel may be enough to turn a local pier into a popular destination for weekend and evening entertainment. Potential Annual Earnings Scale. With the exception of management, employees at amusement parks are generally paid hourly, often at minimum wage. In 2008, amusement park attendants and recreational protective service personnel (such as lifeguards) earned between $8 and $9 per hour, while food service personnel earned an hourly wage between $9 and $10. Clientele Interaction. Amusement parks and recreational sites are designed for use by large, diverse crowds. Employees at such venues are therefore in constant contact with the public, ensuring their safety while acting as entertainers and service personnel. People who work at amusement parks, carnivals, and recreational areas The Ferris wheel is a common ride at amusement parks. (©Dreamstime.com) such as nature and theme parks

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weather areas of Florida and California, respectively. Such locations encourage tourists staying elsewhere to take day trips to the venues. Still others are located near highways, so that passing travelers may stop along their routes. Pros of Working for an Amusement Park or Recreational Site. The atmosphere of amusement parks and recreational sites is typically festive, enjoyable, and, for the most part, full of friendly guests. In addition, a majority of these sites are outdoors and in open areas, giving workers regular access to fresh air and sunlight. Discounts on park merchandise and complimentary park passes are also typical benefits of amusement park employment. Cons of Working for an Amusement Park or Recreational Site. With the exception of senior management, amusement park or recreational site workers generally earn low salaries (wages hover around the minimum wage level). Additionally, while the atmosphere is designed to entertain visitors, there are many occasions when guests are unruly or confrontational with one another and the staff. Furthermore, many parks and sites close for part of the year or inclement weather, making employment seasonal and sometimes unpredictable. Costs Payroll and Benefits: Senior management and executives in amusement park companies are paid salaries, but many other employees are hourly workers. Benefits vary, but the largest venues typically provide standard benefits to full-time workers at all levels. Supplies: Amusement parks and recreational sites require a great deal of supplies of a wide variety. Depending on the size and nature of the attraction, such venues will need food and beverage services; heavy equipment and rides; prizes and merchandise; first-aid supplies; office supplies; feed for animals; electrical equipment; computer software and hardware; audiovisual systems and construction materials (for stages, booths, and other staging areas); and maintenance equipment. External Services: Many rides and attractions at theme parks are built, maintained, and operated by external companies. Security may also be managed by private organizations, and any number of attractions may be operated by sepa-

rate staff. Although food and beverages are sometimes prepared on-site, they may be brought into parks by external grocers and food and beverage personnel. Finally, many amusement parks contract road-repair crews and construction personnel to keep their facilities in operation. Utilities: Amusement parks and recreational sites use a great deal of electricity in order to power rides and attractions and for nighttime operations. They also require a great deal of water, not just for restrooms and food and beverage services but for many water rides as well. Additionally, they require a number of separate telephone services and Internet connections for the purposes of both internal operations and guest services (such as emergency phones in parking lots and at help desks). Taxes: By virtue of their size, amusement parks and similar recreational sites pay a considerable portion of their expenses to cover property taxes. They must also pay regional taxes, which may cover a number of areas, including public safety, health care coverage, and excessive utility usage. In some countries, entertainment taxes are levied on venues that host performers from other areas. Museums and Historical Sites Many museums are explicitly marketed as themed entertainment venues. These include small specialty and novelty museums, such as barbed-wire museums or dinosaur exhibits, as well as major cultural establishments. While large museums attempt to draw tourists to travel in order to visit them, smaller novelty sites cater primarily to those already “passing through” the area, and they are often situated at designated highway rest areas alongside restaurants and other services. Potential Annual Earnings Scale. Curators are typically the highest-paid museum employees. In 2008, the average curator’s salary was $48,000 per year. Archivists earned an average of $45,000 per year. At the lower end of the spectrum, tour guides and escorts earned about $22,000 per year. Clientele Interaction. Museums are generally designed for large crowds. Most employees at these venues are expected to interact regularly with guests during the course of their workdays. The exceptions are maintenance personnel, surveillance

Themed Entertainment Industry

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The Alamo in San Antonio, Texas, is an important historical site and museum. (©Sally Scott/Dreamstime.com)

security officers, and after-hours security and custodial staff. Recently, interactive displays have become a more frequent aspect of museum design, lessening employee interaction with visitors. Amenities, Atmosphere, and Physical Grounds. The atmosphere of a museum or historical site is generally crowded but reserved in terms of guest behavior. Museums vary in size, from very small to multistory properties. Because displays can be very delicate, facilities tend to be very clean and organized, with strict rules for staff and visitors. Typical Number of Employees. Some museums employ only a handful of full-time personnel, while others require dozens, if not hundreds, of employees to function. For example, the world’s largest museum, the Smithsonian Institution in Washington, D.C., employs six thousand people working throughout nineteen museum facilities, nine research centers, and the National Zoo. Traditional Geographic Locations. Museums and historical sites are found all over the world, although they tend to be located along or near road-

ways and other areas that attract visitors and passers-by. Most are located in heavily populated areas, such as metropolitan and suburban centers, in order to attract the maximum number of visitors. Pros of Working for a Museum or Historical Site. Employees of museums and historical sites have access to their venues’ exhibits and resources. Many of those who work at museums are themselves students of art, history, or the field explored by the museum. Cons of Working for a Museum or Historical Site. Salaries for museum and historical site employees may be on the lower end of the spectrum. Museums are typically beholden to private donations, grants, and government budget earmarks, and when those monies are not contributed, the museum’s personnel are at risk. Costs Payroll and Benefits: Large museums’ staff are typically salaried, while smaller tourist venues and roadside displays are more likely to pay by

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the hour. Similarly, while major cultural institutions generally offer full benefits, smaller attractions may offer no benefits at all. Supplies: Museums and historical sites require some hardware supplies, such as frame hangers, display materials, and other equipment. They also need cleaning supplies and office supplies and equipment, such as stationery and computers, as well as telecommunications equipment, research equipment, and preservation technology. External Services: Museums and historic sites may use external vendors for cleaning and janitorial services, grounds maintenance (such as lawn care and snow plowing), and security. They may also use external services for Web site maintenance, marketing, advertising, and accounting. Utilities: Museums and historical sites require basic utilities, such as electricity, water, and sew-

age. They also need multiple phone lines for Web-based interactive displays, public telephones, and internal office systems. Taxes: A large percentage of museums and most historical sites are government-operated, -owned, or -subsidized. They are largely exempt from most federal, state, and local property and commercial income taxes. Private museums and sites may and typically do apply for nonprofit, tax-exempt status from the federal government as well. Hotels and Restaurants Many hotels and restaurants cultivate a clientele that is at least as interested in an establishment’s theme as in its amenities. Such themes involve uniforms or costumes for employees, interior design, and thematically appropriate names for dishes, rooms, and so on. These types of establishments, while sometimes of high quality, often expend

A fife and drum corps at Colonial Williamsburg. (AP/Wide World Photos)

Themed Entertainment Industry more effort on creating an atmosphere of fun than they do on luxury per se. Potential Annual Earnings Scale. Hotels’ and restaurants’ general managers are typically their highest-paid employees, with senior managers just below general managers on the salary scale. According to the U.S. Bureau of Labor Statistics (BLS), the median annual salary for a general or operations manager in 2009 was $110,550. At the lowest end of the salary scale is the service staff, including dishwashers and housekeepers, who typically earn the minimum wage. Clientele Interaction. The purpose of hotels and restaurants, particularly those within the themed entertainment industry, is to provide a direct service to customers. Client interaction for workers in this subsector is thus constant. Workers in the industry must demonstrate excellent interpersonal skills and the ability to show patience and courtesy to large numbers of diverse guests and customers. Amenities, Atmosphere, and Physical Grounds. Themed hotels and restaurants are professional, service-oriented facilities designed to manage large groups of people. Their atmosphere is therefore usually high-paced and diverse, as employees must work as a team to handle groups with varying aims, whether it be dining, gambling, or lodging. Employees in this segment tend to work long, demanding hours in their respective positions. Typical Number of Employees. Some casino hotels employ hundreds if not thousands of employees, while some independent themed restaurants employ fewer than one hundred people. Traditional Geographic Locations. Themed entertainment hotels and restaurants are found all over the world, in major cities as well as rural areas where real estate is more easily obtained. Typically, however, such properties are located near transportation networks, such as a major highway, an airport, or any area with access to public transportation; such convenience ensures that guests may easily travel to and from the property. Pros of Working for a Hotel or Restaurant. Themed hotels and restaurants are dynamic working environments, often with exciting, high-profile guests and celebrities on-site. For servers, gametable attendants, and other employees who rely on tips to supplement their regular hourly wages, the potential for higher tips from these clients and

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guests is greater than may be found at other properties. Cons of Working for a Hotel or Restaurant. The dynamic in a themed hotel or restaurant is often intense and high-pressure, as guest demands are often greater than in other properties. Also, although the potential for tips at such locations is higher, many employees still do not earn large paychecks unless they work long hours. Costs Payroll and Benefits: Hotels and restaurants pay hourly wages or annual salaries, depending on the position. The hourly wage for tipped employees may be at or even below the minimum wage, as they may be expected to earn the bulk of their income from tips. Benefit packages range from generous to nonexistent. Supplies: The supply needs of a themed hotel or restaurant are numerous and significant. They may include daily food and beverage deliveries, as well as daily linen deliveries. These businesses also require audiovisual and stage equipment for live shows, as well as gaming supplies (such as dice, slot machines, and playing cards) for any gambling facilities. Additionally, they need internal office supplies and hardware in order to handle credit-card payments, conduct sales and marketing activities, and perform other related endeavors. External Services: Themed hotels and restaurants use a number of external services and vendors. They may contract with linen and laundry services, casino-equipment vendors, and marketing and public relations firms as part of their routine and external operations. Those properties that feature live entertainment generally employ visiting entertainers, although some have permanent “lounge acts.” Additionally, hotels and restaurants may outsource any number of their internal operations, including housekeeping, security, maintenance, game attendants, and financial management services. Utilities: Hotels and restaurants use a great deal of electricity to power not just internal lighting but also casino and other attraction-related machinery and air-circulation systems. They also have water and sewage requirements and use oil or natural gas to heat the building and water. In many cases, hotels and restaurants purchase

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“green energy” credits to help power their systems, using solar, wind, or hydroelectricity instead of conventional energy. Taxes: Themed hotels and restaurants are required to pay commercial income and property taxes. Many casinos are required to pay an additional percentage of their profits to state governments. Hotels and restaurants must also pay unemployment insurance taxes and other state and local taxes. Natural Attractions Natural attractions include venues for experiencing nature, such as parks and reserves, as well as artificial venues that feature wild animals, such as zoos and, aquariums. As themed entertainment, they range from the sublime to the ridiculous, and, like museums, they vary from major tourist attractions to roadside curiosities that cater only to coincidental passers-by. Potential Annual Earnings Scale. According to the BLS, the median 2009 annual salary for a zoologist was $60,670, while PayScale.com estimates the average park ranger salary at between $35,197 and $46,549. Clientele Interaction. The level of client interaction for employees of natural attractions such as zoos and aquariums depends on the position itself. Many veterinary and animal-care professionals working at such venues tend to work with the animals behind closed doors, although some give demonstrations of animal care to the general public. Tour guides and animal handlers (at live animal displays) have a higher degree of public interaction. Amenities, Atmosphere, and Physical Grounds. Natural attractions, such as zoos, aquariums, and parks, are generally outdoor, open areas (or, in the case of aquariums, large, enclosed structures) designed to handle large flows of visitors. They are designed to provide the appearance of close interaction between people and the animals or vistas found at such sites, while at the same time maintaining public safety and the integrity of the attraction. Employees must be able to handle large crowds of tourists, including many families with young children. Typical Number of Employees. The number of employees at a natural attraction depends on the size of the attraction and the need for profes-

sional care and oversight. For example, some state parks employ only a handful of individuals, who collect entrance fees and sell bottled water and gifts. Larger zoos and aquariums, by contrast, may have hundreds of employees working on every operational system from animal care and feeding to engineering and waste removal. Traditional Geographic Locations. Natural attractions are typically found in open areas or in large structures in or near major cities and population centers. Some, such as safaris, are located in remote locations to minimize disruptions to resident animals. Open spaces are also conducive to providing enough space and for the property to expand if necessary. Pros of Working for a Natural Attraction. Natural attractions such as zoos, aquariums, and national and state parks are often operated by students of the natural sciences or animal lovers, who gain hands-on experience in animal care and environmental protection. The open-air environments of zoos and parks are also beneficial to those who enjoy the outdoors. Marine biologists have an opportunity to work with exotic species from all over the world within a confined environment, yet they may be called upon to travel locally to retrieve or treat a distressed animal in nearby waters. Cons of Working for a Natural Attraction. Salaries paid by zoos, aquariums, and parks are often lower than those paid in other industry sectors, in part because of the limited financial contributions they may receive from government and private donors. In some cases, the working environment is unpleasant, as employees may be called upon to clean animal waste or tend to unruly visitors. Costs Payroll and Benefits: Government employees, such as those at national and state parks, usually earn annual salaries, although part-time employees, such as park docents, may be paid hourly. Government benefits are often more generous than those in the private sector, in part in order to compensate for the fact that salaries are often lower. Employees of private attractions earn annual or hourly wages, depending on the position. Supplies: The supply needs of a natural attraction are many. Among these supplies are animal and

Themed Entertainment Industry plant feed, medical supplies (for humans and animals alike), and maintenance equipment. Interactive venues such as zoos and aquariums also require computer technology for displays, as well as for internal operations. Most sites also need motor vehicles and other forms of transportation, and sites with wild and caged animals need to prepare and protect against any animal escape. External Services: Natural attractions may use a number of external vendors, including accountants, Web site consultants, and marketing consultants. Some use independent security teams, food and beverage companies, custodial workers, and uniform vendors. They may also use private companies to handle garbage and animalwaste disposal, as well as visitor shuttle and transportation services. Utilities: Natural attractions such as zoos, aquariums, and nonenclosed parks utilize a number of utilities. Lighting and heating the enclosures of an aquarium or zoo exhibit, for example, require significant expenditure on electricity, oil, natural gas, or other fuel sources. Additionally, such facilities may require multiple phone lines for both visitors and employees. Taxes: Most open spaces used for recreation, such as national and state parks, are operated by the federal or state government and are exempt from income and property taxes. Private zoos, aquariums, and similar venues may also be exempt from these taxes, although they must register with the government as nonprofit, 501(c)(3) organizations in order to achieve taxexempt status.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of the themed entertainment industry is often specific to each industry subsector. However, there is a wide range of general positions that span the industry, each of which plays an important role in ensuring that visitors receive the highest quality of services and have enjoyable visits. The following umbrella categories apply to the

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organizational structure of businesses in the themed entertainment industry: ■ ■ ■ ■ ■ ■

Management Public Safety Guest Services Sales and Marketing Entertainment Maintenance

Management Managers establish and implement policies, set goals and strategies, assign tasks to subordinate personnel, draft and implement budgets, and review all data and information that is to be issued to the public. In most situations, they also serve as the public face of their venues, making public statements on behalf of the property or attraction to the media, the government, and the public at large. They also raise money to support their venues, particularly in the case of museums, zoos, aquariums, and historical sites, as these venues are often nonprofit and rely on private donations and government appropriations. Managers oversee large groups of diverse employees, ensuring that each function is operating smoothly. The sizes of their workforces vary, from a small handful to hundreds or thousands of employees performing a wide array of tasks. The management of a themed entertainment attraction generally earns the highest salaries of any individuals directly employed by the attraction. Managers are generally well educated in the operation of their facilities, often having built their careers by working from within the company (in some cases, from the bottom rungs of the workforce). Many are college-educated, and some have advanced degrees such as a master of business administration (M.B.A.) in fields such as accounting, human resources, or hospitality management. Management occupations may include the following: ■ ■ ■ ■ ■ ■

General Manager Chief Operating Officer (COO) President/Chief Executive Officer (CEO) Chief Financial Officer (CFO) Curator Director

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Public Safety Public safety at themed entertainment complexes and attractions is managed by a collective team of security specialists and professionals. Public safety personnel oversee the security of the entire venue, eject guests for unruly or unlawful behavior, enforce company rules for guest and staff decorum, and safeguard against trespassers during and after business hours. They also manage evacuations and other emergency responses as they arise. Public safety officers generally have strong backgrounds in law enforcement and security. Many have experience in the military or are former police officers, so they have formal training in security procedures and protocols. They must coordinate with law enforcement agencies when they encounter multijurisdictional situations, such as bomb threats, tracking dangerous individuals, and other security threats. They must also be experienced in dealing with large crowds, able both to redirect crowds during emergencies and to pay careful attention to individuals’ behavior amid such crowds. Public safety salaries are dependent on the size of the property and the nature of the work. For example, a night watchperson at a small museum may earn less than a security guard at a large casino resort as a result of the comparatively lower threat level at the former facility. However, every public security officer and employee is expected to ensure the safety of customers and guests, as well as of the property itself. Public safety occupations may include the following: ■ ■ ■ ■ ■

Security Director Security Guard Night Watchperson Security Specialist Park Ranger

Guest Services Guest services personnel address the needs of customers and visitors. They are part of a diverse series of occupational groups, such as check-in, reservations, special services (including concierge and room service), tour guidance, and customer complaints. As their duties are varied, so too are their backgrounds. Some have college educations in such disciplines as hospitality management, history, and environmental protection and man-

agement. Their primary concern is directly interfacing with guests and customers, handling large numbers of visitors, including demanding and unruly guests. Thus, they must have strong diplomatic and interpersonal skills. Most guest services staff are paid on an hourly basis, although some earn yearly salaries. Many also receive tips from customers. Guest services occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Concierge Server/Bartender Front-Desk Manager Reservations Manager Maitre d’ Tour Guide Administrative Assistant

Sales and Marketing Sales and marketing personnel develop strategies for attracting large groups and sponsors to their venues. They create public relations campaigns, assemble attractive visitor packages, and seek to draw large groups in addition to individual visitors. Salespeople try to book large, corporate groups in particular, as such groups tend to pay more to stay in rooms, dine, and participate in other activities. Sales and marketing professionals are generally well educated and experienced in their respective industries. Most have undergraduate degrees in business, marketing, or similar fields and have spent significant time working within their fields. They must be familiar with all of the most up-todate technologies relevant to their fields in order to ensure that any sales and marketing campaign reaches the maximum number of potential clients and guests. Many sales and marketing personnel are given base salaries with sales quotas and performance incentives (such as bonuses), while others are offered simple salaries on an hourly or yearly basis. Sales and marketing occupations may include the following: ■ ■ ■

Sales Director Sales Manager Marketing and Communications Manager

Themed Entertainment Industry ■ ■ ■

Marketing Coordinator Administrative Assistant Intern

■ ■ ■ ■

Entertainment Themed entertainment venues and attractions often feature performers and artists who are either contracted within the company or visit the establishment for limited-run shows. These individuals, as well as their stage production crews, assemble and perform a wide range of shows for children and adults. They come from a wide range of backgrounds: Many are formally trained in music, theater, or the arts, while others have no formal training. They are supported by choreographers, sound and lighting technicians, stage construction crews, and artistic designers, among many others. Entertainment occupations may include the following:

■ ■ ■ ■ ■ ■ ■ ■ ■

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Dancer Musician Singer Performance Artist Comedian Stage Manager Stagehand Choreographer Director Lighting Technician Sound Technician Set Designer Costumer

Maintenance Maintenance personnel ensure that the many technological systems of a themed entertainment venue are operational. They replace and repair malfunctioning equipment and ensure that heating and air-conditioning systems are functioning properly. In some cases, they may work with law enPROJECTED EMPLOYMENT forcement and fire departments FOR SELECTED OCCUPATIONS to locate and isolate public safety threats, such as fires and electriAmusement Parks cal short circuits, and they help monitor and provide for evacuaEmployment tion routes. 2008 Projected 2018 Occupation Maintenance personnel come from a wide range of back3,200 3,300 Actors, producers, and directors grounds applicable to the venue 30,700 32,200 Amusement and recreation at which they are working. Some attendants have vocational training in such fields as carpentry, plumb900 900 Art and design occupations ing, electrical repair, or HVAC 8,100 7,800 Building and grounds cleaning and (heating, ventilating, and airmaintenance occupations conditioning) operation. Others have formal educations in 23,100 24,700 Food and beverage serving workers engineering and handle large800 900 Musicians and singers scale repairs and renovations. They may specialize in upgrad15,100 15,800 Retail sales workers ing on-site systems while causing 200 300 Tailors, dressmakers, and sewers minimal disruption to guests. The nature of the work per200 200 Tour and travel guides formed by maintenance personnel is a major determinant of Source: U.S. Bureau of Labor Statistics, Industries at a Glance, their salaries. Some are hired on Occupational Employment Statistics and Employment Projections a contract term, while others are Program. paid full time on an hourly or annual basis.

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Maintenance occupations may include the following: ■ ■ ■ ■ ■ ■

Engineer Environmental Services Specialist Carpenter Electrician Plumber Apprentice

INDUSTRY

OUTLOOK

Overview The themed entertainment industry is one of the more diverse groups of businesses in the twenty-first century global economy. Although its primary focus is tourism, the industry spans a wide range of attraction types within several other industries, including lodging, amusements, parks and recreation, dining, and historical preservation, among others. This diversity gives the themed entertainment industry staying power in the light of the large volumes of visitors who frequent each establishment during the course of a given year. However, like other segments of the tourism industry, themed entertainment properties and venues are vulnerable to economic downturns. Tourists may be less inclined to stay at themed resorts, opting instead to vacation locally or to drive shorter distances for recreational diversions. As is the case with many other industries (such as retail), themed entertainment venues may offer special packages or reduced rates and entrance fees in order to attract customers. These special incentives and rates have helped generate business, although industry profits did not spike because of reduced revenues. Between 2004 and 2007, for example, the amusement park industry saw 13 million more visitors, but the revenues generated by that increase were modest: The industry realized an increase of about $1 billion during that four-year period. Despite the global downturn of 2008-2009, Asian markets are set to expand. Universal Studios, anticipating this potential has expanded to Singapore, while the first Legoland in Asia is set to open in 2012 and Disney is preparing to construct a theme park in Shanghai, China. In addition, while

attendance at the top twenty-five theme parks in the world has declined in recent years, according to the Themed Entertainment Association, the ten most visited park destinations in the Asia-Pacific region have seen an increase in attendance. Overall, the outlook for the themed entertainment industry is strong, especially in the light of the general stability created by the industry’s diverse composition. According to the International Association of Amusement Parks and Attractions, the top twenty parks in Europe experienced a growth rate of 1.1 percent in 2008; visits to the top twenty parks in North America remained level from 2007 through 2008 (after growing nearly 4 percent from 2005 to 2007); the top fifteen water parks in the United States showed an attendance increase of 1.8 percent in 2008; and, overall, the total attendance for the top twenty-five global theme parks was 189.6 million in 2008, down only 0.3 percent from the previous year. The industry is projected to add more jobs, up to about 31 percent more, by 2016, with all position types (from management to attendants and servers) seeing double-digit increases in availability. Wages and salaries, on the other hand, are expected to continue to be on the low end of the payroll spectrum. The volume of the workforce helps keep pay at a low rate, and, despite the influx of revenues from guests, the growing number of employees at such venues will result in increased revenues being distributed among a larger complement of employees. Still, the themed entertainment industry continues to grow and diversify, offering potential employees a wide range of venues and interest areas that meet their personal and professional tastes. Although the industry is subject to economic flux, it is forecast to continue its growth and attractiveness to tourists in every part of the world. Employment Advantages The themed entertainment industry is a vast network of venues that stand apart from standard hotels, restaurants, and parks. The industry offers consumers exciting and unique experiences. As a result, those who work in this field are likely to work in an area that is both exciting and stimulating. Additionally, there is a great deal of opportunity within the industry for employees to experience

Themed Entertainment Industry upward professional mobility. Many of the industry’s senior leaders, such as general managers, executive directors, curators, and even venue owners, began their careers as doorpersons, tour guides, or servers. Those at the lower end of the organizational hierarchy may, drawing from their experiences at this level, climb the ladder consistently over the course of their careers. Adding to the benefits of employment within this industry is the fact that themed entertainment, while already vast and diverse, will likely continue to expand and succeed in the years to come. As parks, resorts, and attractions continue to draw visitors, more job opportunities in more venues will likely become available. Annual Earnings Amusement parks in the United States generate about $12 billion annually, while American zoos and similar attractions generate about $9 billion (although many are nonprofit organizations and do not report profits and revenues generated against expenses). Many highly concentrated and competitive niche industries also participate in the industry. The ski resort industry, for example, realized an annual revenue of $200 billion in 2007 from approximately 350 companies at over four hundred locations. Like other segments of the global economy, the themed entertainment industry is susceptible to recessions and other forms of economic stagnation. Revenue for the Walt Disney Company’s Parks and Resorts division in fiscal 2008, for example, decreased an estimated 7 percent, to $10.7 billion, despite attendance trending up (a factor largely attributed to discounted prices). Additionally, in January, 2009, Disney was reported to have offered over six hundred buyouts to theme park and resort managers, and it cut an estimated nineteen hundred jobs the following April, the majority in Orlando. Other parks have declared bankruptcy in response to low attendance and increased debt. These include Six Flags, which owns twenty amusement parks, most in the United States. Nonetheless, the diversity of the themed entertainment industry, as well as its sheer size, gives it an ability to weather periodic declines in revenues. It is predicted that the industry will continue to grow over the next decade in terms of venue volume, employment, and revenues generated.

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RELATED RESOURCES FOR FURTHER RESEARCH American Association of Museums 1575 Eye St. NW, Suite 400 Washington, DC 20005 Tel: (202) 289-1818 Fax: (202) 289-6578 http://www.aam-us.org American Gaming Association 1299 Pennsylvania Ave. NW Washington, DC 20004 Tel: (202) 552-2675 http://www.americangaming.org International Association of Amusement Parks and Attractions 1448 Duke St. Alexandria, VA 22314 Tel: (703) 836-4800 Fax: (703) 836-6742 http://www.iaapa.org International Hotel and Restaurant Association 41 Ave. General Guisan (Lausanne) 1009 Pully Switzerland Tel: 41-21-711-4283 http://www.ih-ra.com Smithsonian Institution P.O. Box 37012 SI Building, Room 153, MRC 010 Washington, DC 20013-7012 Tel: (202) 633-1000 http://www.si.edu Themed Entertainment Association 175 E Olive Ave., Suite 100 Burbank, CA 91502-0126 Tel: (818) 843-8497 Fax: (818) 843-8477 http://[email protected] World Association of Zoos and Aquariums Lindenrain 3 3012 Bern Switzerland

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Tel: 41-31-300-2030 Fax: 41-31-300-2031 http://www.waza.org

ABOUT

THE

AUTHOR

Michael P. Auerbach has over sixteen years of professional experience in public policy and administration, economic development, and the hospitality industry. He is a 1993 graduate of Wittenberg University and a 1999 graduate of the Boston College Graduate School of Arts and Sciences. He is a veteran of state and federal government, having worked for seven years in the Massachusetts legislature and four years as a federal government contractor.

FURTHER

READING

Adams, Judith A. The American Amusement Park Industry: A History of Technology and Thrills. Boston: Twayne, 1991. Clavé, Salvador Anton. The Global Theme Park Industry. Cambridge, Mass.: CABI, 2007. Davis, Susan G. Spectacular Nature: Corporate Culture and the Sea World Experience. Berkeley: University of California Press, 1997. Dickey, Robert. Dynasty of Dimes: Eccentric Entrepreneur Engineers Empire. St. Augustine, Fla.: St. Margaret, 2009.

Harris, Richard. Early Amusement Parks of Orange County. Charleston, S.C.: Arcadia, 2008. Indeed.com. “Zookeeper Salaries.” http:// www.indeed.com/salary/Zoo-Keeper.html. Kurtti, Jeff. Walt Disney’s Imagineering Legends: And the Genesis of the Disney Theme Park. New York: Disney Editions, 2008. Marketdata Enterprises. The U.S. Amusement and Theme Parks Industry: A Marketing, Operational and Competitive Analysis. Tampa, Fla.: Author, 1999. Merryman, John Henry, and Albert Edward Elsen. Law, Ethics, and the Visual Arts. 4th ed. New York: Kluwer Law International, 2002. Telotte, J. P. The Mouse Machine: Disney and Technology. Urbana: University of Illinois Press, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Toys and Games Industry ©Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Action Figures Manufacturing; Children’s and Adult Games (Except Coin-Operated) Manufacturing; Children’s Vehicles (Except Bicycles and Metal Tricycles) Manufacturing; Craft and Hobby Kits and Sets Manufacturing; Doll and Stuffed Toy Manufacturing; Doll Clothing Manufacturing; Electronic Toys and Games Manufacturing; Kites Manufacturing; Rubber Balls and Marbles Manufacturing; Structural Toy Sets and Science Kits Manufacturing; Toy and Hobby Models Manufacturing; Toy Furniture and Householdtype Equipment Manufacturing; Toy Rifles Manufacturing; Toys Manufacturing Related Industries: Casino Industry; Computer Software Industry; Video, Computer, and Virtual Reality Games Industry Annual Domestic Revenues: $21.47 billion USD (NPD Group, 2009) Annual International Revenues: $38.4 billion USD (Data Monitor, 2008) Annual Global Revenues: $60.8 billion USD (Marketline; Data Monitor, 2008) NAICS Number: 33993

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DEFINITION

Summary The toys and games industry manufactures games, toys, and children’s vehicles (except bicycles and metal tricycles), including toys and games for adults. Key functions for industry manufacturers include purchasing raw materials, designing prototypes, ramping up production of marketready products, and marketing those finished products to wholesalers and retailers. The industry has an international presence, with the United States accounting for about one-third of the global market share. History of the Industry Archaeologists have found evidence of ancient toys and games in the form of dolls, balls, and activities from five thousand years ago. Early toys were not manufactured on a large scale. Generally, toys and games were created by individuals for specific children or to be sold at fairs or by travelling peddlers. The early beginnings of the modern toys and games industry emerged in sixteenth century Central Europe as clusters of German villages became specialists in the creation of particular toys. For example, in the

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mid-1700’s, the town of Nuremberg became known for a mass-produced, uniformly designed kitchen playset that was affordable to middle-class families. By the end of the nineteenth century, the Industrial Revolution expanded into the toy industry as toy production moved from handmade creations in homes and small shops to machine-made toys in factories. This movement was assisted by the introduction of new, inexpensive materials such as papier-mâché, rubber, and sheet metal that could be utilized by the new machines. The United States industrialized the toy business after the Civil War; however, many toys were produced only as sidelines to other products. One early manufacturer, J. & E. Stevens, originally focused on the manufacture of cast-iron hardware and hammers and then added cast-iron mechanical banks in 1870 as a third product line. Toys were marketed to parents, not children, and meant to be

educational and durable. Most toys in this era were sold through local general stores or catalogs, such as that of Sears, Roebuck, and Company. In 1900, Germany led the global toys and games industry, exporting 75 percent of the toys and games it made. One-quarter of Germany’s toy exports at this time were to the United States. However, American toy and game manufacturing was in the process of transformation. In the 1880’s, Morton Converse made his rocking-horse, woodenplayset, and puzzle factory into the “Nuremberg of America,” using modern machinery, a formal planning department, and a trained, specialized workforce. Innovations such as increased mechanization, new materials, and new production methods also allowed U.S. toy and game manufacturers to get toys and games to consumers quickly. Toys began to move from a sideline into a main product line.

Stuffed toys remain popular with children. (©Elena Elisseeva/Dreamstime.com)

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As toy and game manufacturing grew, stores focusing on toys and games exclusively also became a presence in the retail market. By 1908, F. A. O. Schwarz, one of the first retail toy stores, expanded into a large toy and game business. In 1875, Macy’s created the first department-store toy section. Woolworth’s began selling toys purchased directly from Germany at a cheaper price than department stores did. After 1910, toy companies began advertising specific toys in family, women’s, children’s, and do-it-yourself periodicals. The wholesale value of U.S. toys and games rose from Board games are played by children and adults. (©Dreamstime.com) $8.29 million in 1899 to $70.17 million in 1919. During this era, U.S. toy manufacturers founded about significant expansion in the toys and games the Toy Manufacturers of the United States and beindustry. This expansion stemmed from the pergan a trade journal called Playthings. fect storm conditions of a dramatic rise in personal World War I ushered in an environment of padisposable income, increased leisure time, the sotriotism and isolationism that was instrumental in called baby boom, and the introduction of televithe next major change in American toy manufacsion. More disposable income and increased time turing. During World War I, European imports of to fill left room for toy and game manufacturers to toys were halted. In 1939, restrictions were lifted on suggest purchasing their entertaining toys and European imports; however, stiff tariffs were levied games to make that time fun and productive for on foreign toys. Between tariff-increased prices of children and adults. Television brought about a European toys and games and U.S. toy and game major revolution in the toys and games industry makers’ appeals to purchase American-made in the 1960’s, as it allowed toy and game manufacgoods, buying American toys became a patriotic turers such as Mattel and Hasbro to market directly act. By the time of World War II, 95 percent of toys to their major consumers: children. Marketers purchased in the United States were Americanquickly learned effective strategies in promotion, made. Although non-U.S. toymakers would recappackaging, and product-line expansion to increase ture some of the market over time, toy and game children’s desire for their products. However, telemanufacturing in the United States had become a vision advertising required more capital than other mature industry. forms of advertising, making it more difficult for World War II found toys labeled nonessential small manufacturers to get the word out about manufactured products. Restrictions were placed their products. Large toy and game manufacturers on the use of metal and rubber. Accordingly, sevwith their larger budgets and effective marketing eral toy and game businesses directed their factoteams pushed many of the small toy and game comries to produce military equipment and other panies out of the market. items needed for the war effort. Although some In the late 1980’s and early 1990’s, many Americompanies replaced metal and rubber compocan toy manufacturing operations were moved to nents with wood, the toys and games industry stagChina and other overseas locations that offered nated in the United States. reduced labor costs and decreased government After weathering the restrictions on manufacturing during World War II, the 1950’s brought regulation. However, after a series of Chinese-

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Toys and Games Industry ing and tracking standards and felt that the law decreased their ability to remain in business. At the same time, many small and midsize toy companies that continued operations saw an upsurge in revenue, as customers focused on purchasing American-made toys and games, often at a premium cost, to avoid the recalls and perceived safety issues of foreign products.

Toy cars are often made to closely resemble real cars. (©Alain Lacroix/Dreamstime.com)

manufactured-toy recalls in 2007 related to leadbased paints on toys, concerns were raised about the safety standards maintained by overseas manufacturing plants. To address safety concerns, the Consumer Product Safety Improvement Act of 2008 (CPSIA) was signed into law. The law increased the budget of the Consumer Product Safety Commission (CPSC), imposed new testing and documentation requirements for manufacturers of toys, clothes, jewelry, shoes, electronics, and other children’s products; increased penalties for violating the consumer product safety law; and set new acceptable levels of several substances such as lead. The CPSIA has affected all sizes of toy and game companies, in that it requires all manufacturers to implement new, and often expensive, testing, tracking, and quality assurance measures. Many small U.S. manufacturers complained of what they saw as unfair inclusion in the stringent CPSIA test-

The Industry Today Today, the international toys and games industry is an integral part of the global economy with revenues of $60.8 billion in 2008. The U.S. industry accounted for about 36.8 percent, or approximately $22.4 billon, of that revenue. The growth of the industry is tied to the size of disposable personal income and the effectiveness of promotional programs at capturing that income. The size of toy and game manufacturers ranges from independent inventors with one product to smaller companies specializing in a certain toy or game to large international corporations such as Mattel and Hasbro, which produce a wide variety of products. The industry’s top fifty companies generate about 75 percent of overall toy and game revenue in the United States. Toys are sold in retailers such as specialist toy stores, department stores (traditional and discount), and supermarkets. The toys and games manufactured continue to fall into categories such as arts and crafts, building and other learning and hobby products, dolls, jigsaw puzzles, board and card games, action figures, die cast models, soft toys, and outdoor and sportsrelated toys and games. However, the kinds of toys in these categories are constantly changing in response to an influx of new creative ideas, as well as the need to meet customer demand. The most common distribution method for toys and games begins with the manufacturers, who sell their products to wholesalers or retailers. The wholesalers sell to retailers. Then, retailers sell directly to consumers. Although large retail stores such as Walmart, Target, and Toys“R”Us control a large portion of the toys and games market, specialty toy stores compete by emphasizing convenience, top-notch service, and quality products. The revenue of companies in the toys and games industry is highly seasonal. Despite attempts to increase year-round toy and game purchases, the year-end holiday time during November and

Toys and Games Industry December continues to be the most important for businesses to generate revenue. Many industry analysts focus on the sales during this timeframe to predict future earning and industry stability. Accordingly, many new toy designs and product lines follow a production and marketing schedule that tries to create excitement prior to the holiday season so that the items will be in high demand by the end of the year. Nearer to the actual holiday season, toy and game manufacturers will adjust prices and market their most popular products extensively. Toys and games continue to be used in the entertainment and education of adults and children. The toys and games market has developed several niches to address commercial trends. For example, infant and preschool toy sales now generate 15.8 percent of the U.S. toys and games market’s total revenues. This toy category grew from parental demands for early stimulation and learning toys to assist infants and toddlers. In order to meet consumer demand for effective toys, developmental

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and behavioral study results have become standard in the toy development and design process. Following environmentally friendly trends and more parental agitating, the manufacturing market has developed green lines of toys that focus on the use of recycled woods and plastics as the raw material to create standard toys such as trucks and puzzles. The green toy lines have even entered largemarket retailers such as Toys“R”Us. In a move to address concerns about purchase of toys during a turbulent economy, other manufacturers have focused on the production of toy and game lines that produce economical toys, costing $10 to $20, in addition to more expensive luxury toy items. Beyond stand-alone toy lines, toy and game manufacturers have also created character-focused toys and games that take advantage of the popularity of particular images from books, television shows, and films. For example, the Sesame Street character Elmo can be found on products that range from stuffed animals to play sets, puzzles,

Toys that feature Hispanic characters such as Dora the Explorer are increasingly popular as manufacturers vie for the shopping dollars of the fastest growing population in the U.S. (AP/Wide World Photos)

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and board games. Likewise, a toy and game company may work with a television production team to create a cartoon or show based on a new toy. Through use of a known character, manufacturers can capture the interest of consumers already familiar with the character. After creation of a successful image or character, toys and games can increase their revenue by licensing that image to other toy and game companies, as well as clothing and shoe companies or party goods stores. A very important component of the toys and games industry over the past two decades has been adjustment to the changes in technology and consumer demand. The increased use of the Internet and decreased price of electronics has stimulated toy and game manufacturers to think creatively about ways to join traditional toys and games with modern technology. Innovative thinking was particularly important as the growth of the computer games market decreased the sales of traditional toys.

INDUSTRY MARKET SEGMENTS The toy and game businesses range from small start-up companies specializing in a certain toy or game to giant, multinational corporations such as Mattel and Hasbro, which produce a wide variety of products. The positions of these companies in the industry are dynamic, with small companies being acquired by large companies or midsize sized businesses expanding over time. The following sections provide a comprehensive breakdown of each of these different segments. Small Businesses Small toy and game companies earn average annual revenues of $1.0 million to $3.6 million and have fewer than one hundred employees. This industry segment is an important source of new product ideas. Independent inventors who sell their ideas to toy and game companies are also included in this category. The small toys and games community was given a large boost by the Internet, which provided an increased opportunity for small toy and game companies to sell their items in virtual stores and boutiques on the World Wide Web.

Potential Annual Earnings Scale. The average earnings for employees of small toy and game companies vary widely depending upon the region and position in the company. For example, an independent inventor will often earn 5 to 10 percent standard patent royalty rates for toy inventions. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary of all employees in the miscellaneous manufacturing category, of which toy and game manufacturers are a component, was $39,590 in 2009. Commercial and industrial designers in this category earned an average of $53,490. The annual salary of a small toy and game company owner is directly dependent upon the business’s sales. Clientele Interaction. Independent inventors and employees of small toy and game companies often have the unique opportunity to interact directly with customers. As there are fewer layers of employees in many small companies, even business owners may work directly with product purchasing adults, parents, and children during transactions. However, in somewhat larger small businesses, employees are increasingly specialized, and direct clientele interaction can be confined to a designated customer service individual or department. Additionally, if a small company’s business model is focused on wholesale business with retail chains or larger companies, interaction with the end user is decreased. Amenities, Atmosphere, and Physical Grounds. Working in a small toy and game business can be dynamic, interesting, and fun. Toy and game companies often have more of a casual work environment than a traditional business. Employers encourage comfort to increase employee creativity. Employees and owners in a smaller company often have a greater range of job responsibilities than the more specialized employees of a larger company. Sole proprietors and/or inventors have an increased amount of flexibility in hours and schedules. However, sole proprietors, small-business owners, and inventors also have increased personal responsibility for the financial performance of the business. Typical Number of Employees. Although the United States government considers a toy and game company with fewer than five hundred employees to be a small business, the typical number of employees in a small toy and game business is

Toys and Games Industry fewer than one hundred. Independent inventors often work on their own, while in other small businesses the number of employees grows based on product demand and company income. Many small companies seasonally increase their number of employees to meet demand of toys and games for the winter holiday season. Traditional Geographic Locations. Small toy and game companies are found across the United States. Many smaller companies and independent inventors have home-based businesses. Depending on the small company’s product, manufacturing may be conducted in overseas factories, primarily in China. Pros of Working for a Small Business. Small toy and game companies offer opportunities for employees to interact very closely with both company owners and customers. Often each employee may serve many roles and have broader responsibilities than in a larger business. In addition, as there are few employees, an individual employee stands a greater chance of being noticed if he or she is a strong performer. Owners and independent inventors also have increased freedom to make their own decisions, take their own risks, and reap the rewards of their efforts. Cons of Working for a Small Business. Employees in small businesses can face problems based on the companies’ size. For example, a smallbusiness staff and its owners may be required to work more hours during busy times of the year. Small businesses are at increased risk of failure in times of economic downturn. Small companies lack scale advantages and have difficulty achieving widespread distribution because of concentration in the retail market. In addition, small businesses may not be able to offer benefits such as health or life insurance. Costs Payroll and Benefits: Small businesses generally hire their staff at hourly wages rather than salaries. Based on their small size, the government does not mandate benefits such as health insurance, vacation time, and sick time for small businesses. Supplies: The supplies required by a toy and game business vary depending upon the product being sold and whether it is being manufactured on site. For example, a wood toy company would

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require raw materials such as wood, paint, and screws, as well as the tools to create the items. An independent inventor would require enough raw materials to make a prototype for use in focus groups and to show to buyers. Typical supplies needed by most businesses would include office supplies and information technology (telephones and computers). External Services: The external services for a small business depend on the product being sold and size of the company. Some small toy and game companies use off-site manufacturing plants. Other small companies require external agents or marketers to sell their products. Still others may use Web hosts for their Web sites to sell their products. Utilities: Typical utilities for a small business include water and sewage, electricity, gas or oil, telephone, and Internet access. Taxes: The taxes paid by a small toy and game company depend on the type of business and its location. Some locations require payment of local and state taxes. All locations require payment of federal income taxes. Federal income taxes are based on net income, with sole proprietorships having the lower tax rate, while corporations have the highest. Most companies must collect sales taxes from purchasers. Small businesses with employees must pay an employment tax. Some small toy and game companies that manufacture their own products may also have to pay an excise tax. Midsize Businesses Midsize toy and game businesses are usually small businesses that have succeeded in raising a profit and have a larger number of specialized employees. These companies are traditionally more financially stable than small businesses and have annual sales revenue between $100 million and $1 billion. Potential Annual Earnings Scale. Although potential earnings at a midsize company are usually higher than those of a small or start-up business, the average earnings for individuals involved in midsize toy and game companies vary widely depending upon the region and position in the company. According to the BLS, the average annual salary of all employees in the miscellaneous manufacturing category, of which toy and game

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manufacturers are a component, was $39,590 in 2009. Commercial and industrial designers in this category earned an average of $53,490. Marketing managers, the occupation that most closely relates to product or brand managers at toy and game companies, earned an average of $106,410. Clientele Interaction. Midsize toy and game company employees may have the opportunity to directly interact with clientele on a routine basis as they purchase the company’s product. However, the larger number of specialized employees at a midsize company means that clientele interaction is often confined to a designated “customer service” individual or department. If the company’s business model is focused on wholesale business with retail chains or larger companies, interaction with the end user is decreased. Amenities, Atmosphere, and Physical Grounds. Working in a midsize toy and game business is often described as dynamic, interesting, and fun. Toy and game companies often have more of a casual work environment than a traditional business atmosphere. Employers encourage comfort to increase employee creativity. Typical Number of Employees. Midsize toy and game companies typically have one hundred to five hundred employees. Traditional Geographic Locations. Toy and game companies are found across the United States. Many midsize companies have their products manufactured in overseas factories, primarily in China. Pros of Working for a Midsize Business. Midsize toy and game companies may allow increased opportunity for employees to specialize in one position or role as compared to a small company. However, midsize companies still offer an increased likelihood for skill-building opportunities related to cross coverage of positions. The company bureaucracy is usually on a small scale so that employees may have the chance to be involved directly in changes in company procedures and products. In addition, midsize businesses are often more financially stable than small businesses and may offer increased job security and benefits. Cons of Working for a Midsize Business. Midsize businesses still are often unable to offer the long-term financial stability of larger companies. In addition, midsize businesses may not offer

benefits such as health insurance, sick time, or vacation leave. Costs Payroll and Benefits: Midsize businesses generally have a mix of staff at hourly wages and salaries. Depending on their exact size, the government may not mandate benefits such as health insurance, vacation time, and sick time. Supplies: The supplies required by a toy and game business vary depending upon raw materials needed to create the product being sold and whether it is being manufactured on site. Typical supplies needed by most businesses would include office supplies and information technology (telephones and computers). External Services: The external services for a midsize business depend on the product being sold and size of the company. Many midsize toy and game companies utilize off-site manufacturing plants. Other midsize companies require external agents or marketers to sell their products. Utilities: Typical utilities for a midsize business include water and sewage, electricity, gas or oil, telephone, and Internet access. Taxes: The taxes paid by a midsize toy and game company depend on the type of business and its location. Some locations require payment of local and state taxes. All locations require payment of federal income taxes. Federal income taxes are based on net income with sole proprietorships having the lower tax rate, while corporations have the highest. Most companies must collect sales taxes from purchasers. All businesses with employees must pay an employment tax. Some toy and game companies that manufacture their products may also have to pay an excise tax. Large Businesses Large competitive corporations dominate the toys and games industry. The revenues of U.S. toy and game companies range from $765 million to $5.9 billion annually. The top fifty toy and game companies, which include Mattel and Hasbro, generate about 75 percent of total industry revenues. Many of these large businesses are publically owned companies that produce a wide variety of products and outsource their production to other countries, such as China.

Toys and Games Industry Potential Annual Earnings Scale. The average earnings for an individual involved in large toy and game companies vary widely depending upon the region and position in the company. According to the BLS, the average annual salary of all employees in the miscellaneous manufacturing category, of which toy and game manufacturers are a component, was $39,590 in 2009. Commercial and industrial designers in this category earned an average of $53,490. Marketing managers, the occupation that most closely relates to product or brand managers at toy and game companies, earned an average of $106,410. However, most salaries at large companies are higher than at small or midsize businesses. For example, toy and game designers at large toy and game companies can earn salaries of $150,000 to $200,000. Clientele Interaction. Most large toy and game company employees generally have little opportunity to interact directly with clientele. The large size of the companies isolates employees from product-purchasing adults, parents, and children, unless those employees work in a development, marketing, or customer service department. Amenities, Atmosphere, and Physical Grounds. Working in any toy and game business is often described as dynamic, interesting, and fun. However, larger toy and game companies often have a more stable and traditional corporate atmosphere than their smaller counterparts. Typical Number of Employees. The typical number of employees in a large company often numbers two thousand or more. Traditional Geographic Locations. Although large toy and game companies are located across the United States, approximately half of them are in California, New York, Pennsylvania, Ohio, Illinois, Florida, Colorado, Michigan, Missouri, and Maryland. Many large corporations also have numerous satellite offices across the United States in addition to their main offices. Almost all manufacturing of the large toy and game companies’ products is conducted in overseas factories, primarily in China. Pros of Working for a Large Business. There are several benefits to working in a large toy and game company. A large company can often offer more job security and higher starting salaries than a smaller business. In addition, larger companies offer health care packages to their employees and

1901

their families in addition to other benefits such as paid vacations, paid holidays, retirement benefits, and health insurance. Large companies also tend to operate in a structured manner that links raises and bonuses to the performance of the company. As an employee of a larger corporation, employees have access to more resources and training programs. Many large toy and game companies operate in multiple locations and as such there is also often the option to relocate to another locale and remain employed by the same company. Cons of Working for a Large Business. The downsides in working for a large toy and game business tend to relate to their size. Large businesses have increased layers of corporate structure that may tend to decrease a particular employee’s chance at promotion or being noticed for a job well done. In a large business, each job is much more specialized and there is less opportunity to serve multiple roles or interact with end users or top company executives. Costs Payroll and Benefits: The payroll and salary structure of a large toy and game business is complex given its large number of employees and job positions. Personnel directly involved in building the toys will often be paid hourly while others are paid a salary. Benefits such as vacation time and sick time are usually offered to all employees. Supplies: The supplies required by a toy and game business vary depending upon raw materials needed to create the product being sold and whether it is being manufactured on site. Typical supplies needed by most businesses include office supplies and information technology (telephones and computers). External Services: The external services for a large business depend on the product being sold and size of the company. The majority of large toy and game companies utilize off-site manufacturing plants. Utilities: Typical utilities for a large business might include water and sewage, electricity, gas or oil, telephone, and Internet access. Taxes: The taxes paid by a large toy and game company depend on the type of business and its location. Most locations require payment of local and state taxes. All locations require payment of federal income taxes. Federal income taxes are

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Toys and Games Industry

based on net income with sole proprietorships having the lower tax rate, while corporations have the highest. Most companies must collect sales taxes from purchasers. All businesses with employees must pay an employment tax. Some toy and game companies that manufacture their own products may also have to pay an excise tax.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and distribution of tasks within a toy and game company depends on the specific business. Traditional toys and games industry jobs range from creative positions such as toy designers and marketers to more traditional roles in accounting, administration, and engineering. The number and type of positions in each company is determined by the size and scope of the business. For example, a very small toy and game business would be that of an independent inventor. A toy and game inventor often begins a company with an idea for a toy or game. The inventor serves as designer, marketer, and financial services employee, all in one individual. Large corporate toy and game businesses have hundreds of employees each of whom specializes in different arenas such as design, production, marketing, and administration. Each of these areas requires employee administrative support personnel and executive supervisors. Often, the actual manufacture of the products in a large corporation is performed at off-site plants with their own organizational structure. The following umbrella categories apply to the organizational structure of businesses in the toys and games industry: ■ ■ ■ ■ ■

■ ■ ■ ■

Business Management Customer Service Advertising, Sales, and Marketing Facilities and Security Technology, Research, Design, and Development Production and Operations Distribution Human Resources Information Technology

■ ■ ■ ■

Administrative Support Legal and Licensing Engineering Buying and Merchandising

Business Management Business executives direct the policies and operations of the organizations to meet specific goals and objectives. The executives also supervise and manage the various sectors, departments, and teams to optimize performance and oversee operations. Many executives have advanced degrees in business, accounting, or similar fields; however, experience may substitute for lack of a degree. Business management positions usually command the highest salaries at the company. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) General Manager President Vice President Marketing Director Sales Director Corporate Controller

Customer Service Customer service personnel directly interact with a company’s customers to provide answers to customer questions and resolve customer problems. Interaction with customers can occur in person or via telephone, e-mail, fax, or standard mail. Depending on the position and company, entrylevel customer service personnel positions may require a high school diploma or an undergraduate degree. Customer service occupations may include the following: ■ ■ ■ ■

Customer Service Manager Customer Service Representative Account Manager Client Services Representative

Advertising, Sales, and Marketing Advertising, marketing, public relations, and sales personnel play a crucial role in promoting

Toys and Games Industry their companies’ products and name recognition through a variety of internal and external activities. Their responsibilities may include sales, advertising, promotion, pricing, product development, coordinating market research of target audiences, developing marketing strategy for particular toys or lines, and public relations activities. Their positional goal is to incite interest in the company and induce customers to purchase the company’s products. Individuals in these positions may attend toy trade shows and other events, and visit retail stores to promote the company and its product lines. Most sales, advertising, and marketing employees have undergraduate degrees in business management, marketing, sales, communications, or related subjects. Many sales employee compensation packages include a component based on performance tied to product sales and new accounts. Advertising, sales, and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Advertising Manager Account Executive Account Associate Creative Director Media Director Marketing Manager Product Development Manager Market Research Manager Market Research Analyst Promotions Manager Public Relations Manager Public Relations Specialist Sales Manager Sales Representative Sales Director Corporate Sales Manager Senior Sales Manager Administrative Assistant

category is the occupational health and safety inspectors who design safe work spaces, inspect machines, and test air quality. Salaries and education requirements vary greatly based on the position. Facilities and security occupations may include the following: ■

■ ■ ■ ■ ■ ■

Occupational Health and Safety Inspector Security Officer Security Guard Night Watchperson Administrative Support Manager Computer Systems Manager Computer Network Security Specialist

Technology, Research, Design, and Development Positions in the technology, research, design, and development category are focused on development of future products, expansion of product lines, and modification of current items. The individuals and teams in this job category significantly affect the future earnings of the toy and game company as they create new products to capture their customers’ attention. Many design and development positions are filled by creative individuals who develop their own products and ideas or build upon specific toy and game requirements provided by the company. Engineers in the research and develop teams also research raw materials, production costs, toy safety and durability, and create electronic and mechanical components. Salaries and education requirements vary greatly based on the position, but usually require a specialized college or graduate degree. Technology, research, design, and development occupations may include the following: ■

Facilities and Security The responsibilities of employees in the facilities and security sector of toy and game businesses center on protecting the safety of employees, maintaining the physical manufacturing facilities and equipment, and guarding proprietary company information. Positions range from entry-level security guards who protect physical property to skilled computer systems managers who ensure network security. Another frequently seen position in this

1903

■ ■ ■ ■ ■

Toy/Game Designer Inventor Research and Development Specialist Mechanical Engineer Materials Engineer Electronics Engineer

Production and Operations Employees in production and operations have positions focused on the manufacturing of toys and games. Many positions in production and op-

1904

Toys and Games Industry

erations in large toy companies have moved to sites overseas following the move of manufacturing plants. Individuals in production focus on the manufacture of products while the operations team attempts to develop and optimize the production process. Supervisory positions in production and operation such as industrial production managers often require a college degree and production operations experience. Manufacturing jobs are focused on the transformation of raw materials into finished toys and games. Many manufacturing positions in large toy companies moved away from the United States in the late 1980’s and early 1990’s leading to decreased job availability in this sector. These positions range from entry-level assembler and fabricator positions to manufacturing supervisors. Assembler and fabricator positions usually are hourly and generally require only a high school diploma. More supervi-

OCCUPATION

sory positions may require college degrees and/or manufacturing experience. Production and operations occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Industrial Production Manager Operations Team Leader Operations Director Operations Manager Industrial Production Engineer Health and Safety Engineer Assembler and Fabricator Maintenance and Repair Worker Production Machinery Operator Production Shift Supervisor

Distribution When toys and games are manufactured or imported, they often go to large distribution centers

PROFILE

Painting/Coating Machine Operator Considerations

Qualifications

Description

Uses painting and coating machinery and equipment to apply finishes to machines and to other manufactured products, from toy and games to cars to candy.

Career cluster

Manufacturing

Interests

Things

Working conditions

Work inside

Minimum education level

No high school diploma; on-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Part-time work

Licensure and certification

Recommended

Employment outlook

Slower-than-average growth expected

Holland interest score

CRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Toys and Games Industry OCCUPATION

1905

PROFILE

Packer/Packager Considerations

Qualifications

Description

Sets up and runs machines that package products; sometimes manually packs products.

Career clusters

Manufacturing; Marketing, Sales, and Service; Transportation, Distribution, and Logistics

Interests

Things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

RCS; RES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

or warehouses. Workers in these facilities handle incoming and outgoing shipments, coordinate transportation, and track customer orders. They also might work with federal agencies, including U.S. Customs, to ensure that proper importation procedures are followed. Distribution positions range from entry-level loading/unloading positions to higher-level distribution supervisors. Many distributor positions are hourly and do not require a specific educational degree. Some supervisory positions may require college degrees or distribution experience. Distribution occupations may include the following: ■ ■ ■ ■ ■

Warehouse Manager Warehouse Supervisor Warehouse Worker Freight Agent Distribution Supervisor

■ ■ ■ ■ ■ ■

Distribution Manager Distribution Worker Loader/Unloader Material Logistics Specialist Shipping and Receiving Clerk Heavy Truck Driver

Human Resources Human resource positions in toy and game companies focus on the administrative management activities of a business’s employees. Responsibilities in this area involve coordinating a range of worker-related processes, including employee recruitment, hiring, training, performance/conduct/behavior management, and compensation. They also may include development of company policies, standards, organizational structure, and processes. The majority of human resources positions are salaried and require undergraduate degrees. The variety and number of human resource

1906

Toys and Games Industry OCCUPATION

SPECIALTIES

Packers/Packagers Specialty

Responsibilities

Hand packagers

Package materials and products manually by cleaning packaging containers, lining and padding crates, obtaining and sorting products, and wrapping protective material around the product.

Machine packagers

Tend the machines that perform one or more packaging functions, such as filling, marking, labeling, banding, tying, packing, or wrapping containers. They feed the product into the packaging machine and unload the packaged product.

Wrappers

Wrap materials and products before packaging them in order to protect them after they have been weighed and counted.

positions in a company depend on the business’s size. Human resources occupations may include the following:

■ ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Human Resources Assistant Recruiting Manager Compensation and Benefits Analyst Compensation and Benefits Manager Human Resources Administrator Human Resources Representative Benefits Manager Talent Manager

Information Technology Positions in information technology (IT) relate to the study, design, development, implementation, support, and management of computerbased information systems. Individuals in IT use computers to manage information in a secure manner. Specialist positions may focus on networking, Web site development, storage, user support, or many other career paths. IT positions are usually salaried and require at least an undergraduate degree at the entry level. IT occupations may include the following: ■ ■

Chief Information Officer (CIO) Network Administrator

■

Network Engineer Project Manager Web Designer Systems Administrator Help Desk Staff Information Technology Support Specialist

Administrative Support Toy and game companies require a variety of administrative support personnel in each department to operate effectively. Administrative personnel perform day-to-day tasks related to everything from answering telephone calls to detailed financial accounting. Some administrative positions focus on inventory control and shipping of the toys and games to and from producers, distributors, and consumers. Other administrative personnel focus on taking and fulfilling order requests from customers. Still other positions focus on billing, bookkeeping, and accounting. Administrative positions range from entry-level receptionist positions to specialized accountants. Although some positions are hourly and do not require a specific educational degree, other specialized positions may require college or graduate degrees. The variety and number of administrative positions in a company vary greatly depending on the business’s size. Administrative support occupations may include the following:

Toys and Games Industry ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

■

Shipping and Receiving Clerk Order Clerk Financial Clerk Bill/Account Collector Bookkeeper/Auditor Information Clerk Receptionist Shipping and Receiving Clerk Desktop Publisher Office Clerk Secretary Administrative Assistant Billing Clerk Machine Operator Communications Equipment Operator Computer Operator Credit Authorizer/Checker Data Entry Clerk Dispatcher File Clerk Office Manager Administrative Support Manager Order Clerk Payroll and Timekeeping Clerk Procurement Clerk Production, Planning, and Expediting Clerk Stock Clerk/Order Filler

Legal and Licensing Lawyers and licensing specialists play an important role in the toys and games industry. Lawyers and other legal specialists draft and interpret contracts, advise companies about laws and regulations, and secure copyrights, trademarks, and patents for new products. Licensing specialists have become increasingly important in the industry as the rights to develop products using a familiar image or brand are transferred from one company to another. Most legal and licensing positions are salary based and require a graduate degree. Legal and licensing occupations may include the following:

Engineering Engineering positions play an important role in the toys and games industry. Engineers can help to improve the design or function of toys, increase toy safety, reduce production costs, and determine the best production methods. They may work closely with research and development teams or they may independently assess toy designs. Engineers also work at the factories that produce toys, including factories abroad. Engineering occupations generally require at least a bachelor’s degree in engineering, although those with some other related college degrees may qualify as well. Some more specialized or advanced positions, however, may require a master’s or doctorate degree or a certain amount of relevant work experience. Engineering occupations may include the following: ■ ■ ■ ■ ■

■ ■ ■

General Counsel Attorney/Counsel Paralegal Licensing Specialist

Engineering Manager Industrial Engineer Industrial Engineering Technician Materials Engineer Materials Engineering Technician

Buying and Merchandising Toy and game positions in buying and merchandising are important to the industry. Buyers make purchasing decisions for toy, hobby, and game stores and for merchant wholesalers. Buyers may attend trade shows, visit production facilities, negotiate with vendors, and track sales. Merchandisers, many of whom are employed part time or seasonally, set up displays of products within stores and give in-store demonstrations. Most entry-level buying and merchandising positions are hourly and do not require an undergraduate degree. Higher-level positions are often salaried and require a college degree as well as experience. Buying and merchandising occupations may include the following: ■

■

1907

■ ■

Buyer Merchandiser Merchandising Manager

1908

Toys and Games Industry INDUSTRY

OUTLOOK

Overview The U.S. toys and games industry is a large and diverse industry that leads the world in the production of toys and games. The industry’s success is a result of high value-added domestic operations, such as product design, engineering and strategic marketing, with substantial overseas production in countries such as China. The toys and games industry depends heavily on the disposable income of its customers and a receding economy often damages the industry’s outlook. However, the toys and games industry has weathered the global economic downturn of 2007-2009 well, with U.S. toy sales holding stable in 2009, generating $21.47 billon in retail sales (down only 0.8 percent in 2009 from 2008). These data have resulted in optimism for the future sales in 2010 and beyond. As Anita Frazier of the NPD Group noted in 2009, “While many industries are feeling the effects of the economy, [the revenue from toys and games] shows that toys remain a vital part of total spending on kids.” Growth areas with sales increases over 2009 included building sets, crafts, and action figures. According to Data Monitor research data published in September of 2009, the United States toy and game market is forecast to have a value of $23.4 billion by 2013, an increase of 4.3 percent since 2008, which accounts for 36.8 percent of the global toy and game market’s value. The toys and games industry is a dynamic business environment which has usually found increasing market success through innovation. However, at the same time, familiar characters can also provide a stable revenue stream. In 2009, profitable industry attention and increased revenue have been in focused on: lower wholesale toy prices; increased licensing of known television, film, and book characters to increase the success of new toys; large companies purchasing smaller companies in order to diversify holdings; green products; and extending known brands. Areas of opportunity important to the growth of the toys and games industry include reducing development and production times in order to respond to toy fads; a focus on toys and games directed at ’tweens (children aged nine to twelve); targeting grandparents; exploring the market for premium higher-price toys; producing educa-

tional toys for all age groups; focusing on nonviolent toys; and developing more toys that result in active play to reduce childhood obesity. Employment Advantages Industry research suggests that in 2013, the U.S. toys and games market will have a value of $23.4 billion, an increase of 4.3 percent since 2008. Continued industry growth suggests that overall average toys and games industry wages and salaries are expected to continue to be at or above the national average, but this projection varies by position. As examples, overall employment for computer systems designers is expected to grow very quickly, by 45 percent between 2008 to 2018, while overall engineering employment is expected to have a more average growth rate of 11 percent during that period, and overall employment of production workers is expected to decrease as advances in manufacturing technology allow fewer workers to produce greater output. The competitive, fast-paced nature of the toys and games industry can be a significant benefit to individuals seeking entry into this challenging field. Careers can have an element of excitement focused on the constant flow of new ideas and new products needed in an industry sensitive to trends and fashion. Annual Earnings The toys and games industry has weathered the global economic downturn of 2007-2009 well, with United States toy sales holding stable in 2009 (down only 0.8 percent in 2009 from 2008). The industry’s domestic revenue for 2009 was approximately $21.47 billion. In 2008, the international toy and game market generated total revenues of $38.4 billion.

RELATED RESOURCES FOR FURTHER RESEARCH American Specialty Toy Retailing Association 432 N. Clark Ave., Suite 401 Chicago, IL 60654 Tel: (312) 222-0984 Fax: (312) 222-0986 http://www.astratoy.org

Toys and Games Industry International Council of Toy Industries 80 Camberwell Rd. London SE5 0EG United Kingdom Tel: 44-207-701-7271 Fax: 44-207-708-2437 http://www.toy-icti.org PLAYTHINGS Magazine 360 Park Ave. South New York, NY 10010 Tel: (646) 746-7419 http://www.playthings.com Toy Industry Association 1115 Broadway, Suite 400 New York, NY 10010 Tel: (212) 675-1141 Fax: (818) 883-3809 http://www.toyassociation.org

ABOUT

THE

AUTHOR

Dawn A. Laney is an author, genetic counselor, and research coordinator in the Atlanta, Georgia, area. She received a bachelor’s degree from Trinity College in Hartford, Connecticut, in 1996 and a master’s degree in human genetics from Sarah Lawrence College in Bronxville, New York, in 1999. In addition to her main career path in clinical care of lysosomal storage disease patients, she is the developer of a line of baby toys and gifts focused around her children’s story A Late Night Lullaby (2009).

FURTHER

READING

British Library Business and IP Centre. “Toys and Games Industry Guide.” June 3, 2009. http:// www.bl.uk/reshelp/pdfs/Toy_and_Games _Industry_Guide.pdf

1909

Cross, Gary. Kids’ Stuff: Toys and the Changing World of American Childhood. Cambridge, Mass.: Harvard University Press, 1997. Datamonitor. Global Toys and Games: Industry Profile. New York: Author, 2009. _______. Toys and Games in the United States: Industry Profile. New York: Author, 2009. Giacobello, John. Choosing a Career in the Toy Industry. New York: Rosen, 2001. Miller, Richard K. The 2009 Retail Business Market Research Handbook. 11th ed. Loganville, Ga.: Richard K. Miller and Associates, 2009. Parker, Philip M. The 2006-2011 World Outlook for Accessories, Clothes, Parts, and Playsets for Dolls, Toy Animals, and Action Figures. San Diego, Calif.: ICON Group, 2005. Phillips, Sam. “Toys to Fight Their Corner.” License, January/February, 2010, p. 12. Scott, Sharon. Toys and American Culture. Santa Barbara, Calif.: ABC-CLIO, 2010. Torpey, Elka Maria. “Toy Jobs: Work in the Business of Play.” Occupational Outlook Quarterly, Winter, 2008-2009. Available at http://www.bls.gov/opub/ooq/2008/winter/ art01.pdf. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. The Wall Street Journal. “U.S. Tramples Small Toy Makers,” September 19, 2009, p. A14.

©Mikael Damkier/Dreamstime.com

Travel and Tourism Industry

INDUSTRY

SNAPSHOT

General Industry: Hospitality and Tourism Career Cluster: Hospitality and Tourism Subcategory Industries: Convention and Visitor Bureaus; Cruise Lines (to and from Domestic Ports); Cruise Lines (to or from Foreign Ports); Other Travel Arrangement and Reservation Services; Tour Operators; Tourism Bureaus; Travel Agencies Related Industries: Airline Industry; Hotels and Motels Industry; Passenger Transportation and Transit Industry Annual Domestic Revenues: $221 billion USD (U.S. Department of Labor, 2007) Annual International Revenues: $534 billion USD (U.S. Department of Labor, 2007) Annual Global Revenues: $792 billion USD (Research and Markets, 2009) NAICS Numbers: 5615, 483112, 483114

INDUSTRY

ism enterprises, cruise operators, group tour packagers, and packaged vacation providers such as Club Med and Sandals. The travel and tourism industry also meets the special interests of business travelers, ecotravelers, adventure travelers, and senior travelers, to name a few target markets. Travel industry professionals must help their clients select the best products from an ever-expanding menu of available options.

History of the Industry The first known professional tour operator was Thomas Cook, a Baptist missionary, who in 1841 made all the travel arrangements for a British group traveling from Leicester to Loughborough and back to attend a temperance meeting. By the end of the nineteenth century, Thomas Cook and Son was a successful company escorting travelers around the world. Carlson Wagonlit Travel began in 1872 as Wagon-Lits (from the French term for a sleeping car, wagon lits) because the founder, Georges Nagelmackers, added sleeping accommodations to his rail cars. The Ask Mr. Foster company came on the scene in 1888. Other

DEFINITION

Summary Travel and tourism is one of the world’s largest industries and one that continues to grow. It serves the needs of those who choose to be, or must be, temporarily away from their homes. The industry includes travel agencies, public and private tour1910

Travel and Tourism Industry

1911

companies followed, but the industry grew slowly. traveling first class had “POSH” stamped on their During the early decades of the twentieth centickets. POSH stood for “Port Over, Starboard tury, the so-called golden age of travel lured the Home,” meaning that in addition to receiving upprivileged few to travel on the Orient Express and graded quarters and amenities, they would travel other storied trains. Some chose safaris in colonial on the sunny side of the ship both ways; the term Africa, and the European Grand Tour was still confound its way into the lexicon as a synonym for luxsidered an essential part of the education of the urious. In 1912, four days into its maiden voyage, wealthy. Travel service providers emerged to serve the Titanic hit an iceberg and sank off the coast of these travelers. Most travelers were still of the armNewfoundland. The death toll was 1,517, includchair variety, enjoying their adventures vicariously ing many poor emigrants who had booked passage through the works of Marco Polo or Mark Twain. to North American in the less well-appointed secFor most Americans, however, such journeys tions of the ship. Among the survivors was Denver were impossible. Not only were they prohibitively socialite Molly Brown, whose Titanic adventure was expensive, but also, in the days before air travel, chronicled in the musical, The Unsinkable Molly most people lacked the time to leave their daily Brown. lives and jobs to board an ocean liner and spend weeks reaching and traveling in Europe. Playgrounds outside North America remained off limits to the average vacationer. While visits to far-flung relatives or a week at Yellowstone were considered travel, such jaunts required no travel agents or other industry professionals. The family gassed up the car, or boarded a train. As recently as 1950, fewer than 10 percent of Americans had passports. The United States’ growing prosperity and the emergence of air travel opened the world to more people, and the travel industry simplified reaching it. Travel agents wrote tickets and made hotel reservations. They bought packaged tours for their clientele. Vacationers going abroad had once satisfied their wanderlust in Western Europe, but Asia, Africa, and Australia now beckoned. Corporate travel expanded to the extent that large companies often had in-house departments to take care of travel arrangements for their increasingly mobile executives and managers. The cruise segment of the travel industry began as a necessary means of transporting people from one side of the ocean to the other, usually from New York to London. Accommodations varied greatly aboard grand old ships Cruises feature onboard attractions as well as interesting port cities. such as the Queen Mary. Most passengers (©Don Mace/Dreamstime.com) sailed second or third class, while those

1912

Travel and Tourism Industry

The Industry Today New interests and greater opportunities have changed the industry. Since the end of the Cold War, new destinations have opened up to tourists. Russia and other countries of the former Soviet Union are now popular European destinations. People are visiting Asian nations such as Thailand, Korea, Vietnam, and Cambodia, countries brought to their attention by U.S. involvement in events happening there. While travel and tourism soften during economic downturns such as the global recession of 2007-2009, they experience growth with the growth of new middle-class travelers in newly developed nations. In the United States, as in many other countries, tourism is the primary generator of revenue in many communities, where it drives the profits not only of the travel and tourism industry itself but also of the hotels and motels industry, the restaurant industry, the outdoor recreation industry, and many local retail industries. Taken together, these various industries represent one of the largest sectors of the economy in the United States and in many other countries. Despite the cutbacks in recent years driven by recession, reduced corporate travel, and fear of terrorism, the travel and tourism industry is viable and will remain so. Some demographics, retirees for example, are less affected by downturns in the economy, and they are still traveling in large numbers. In the twenty-first century, the industry has undergone major changes that are due in large part to Internet companies that allow people to act as their own travel agents. The proliferation of self-help travel sites on the World Wide Web continues. Travelocity, Orbitz, and Hotels.com are but a few of the companies that rendered the old-style travel agent obsolete. They triggered the end of travel agencies with mall or storefront offices that depended on walk-in trade. Travel agents and agencies reinvented themselves to fit the times, offering specialized services to niche markets. Some large companies remain, however, allowing home-based agents to affiliate with larger entities and gain the right to issue The Durango-Silverton train in Colorado is a journey into the past. airline tickets. Even the online companies engaged in travel arrangements need employ(©Richard Semik/Dreamstime.com) As air travel increased, travel by ship decreased as a means of point-to-point travel until the emergence of the cruise industry—which featured attractions aboard ships, as well as those at ports of call. Fueled in part by the long-running television series The Love Boat, cruising surged in popularity until, by the late 1990’s, millions of vacationers were choosing that form of travel. Cruisers were likely to be repeat customers. Once clients experienced the entertainment, food, spas, casinos, and other amenities of modern cruise ships, they wanted to do so again. Dollar for dollar, cruises represented good value, and the passenger had to unpack only once. More and bigger ships appeared each year, and they began traveling to places such as Alaska, not just the tropics. Operators of river barges began taking people down the Danube and other European rivers, offering yet another type of cruise competing for tourist dollars.

Travel and Tourism Industry

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A sightseeing bus is one way to see New York City. (AP/Wide World Photos)

ees. Today’s savvy travel agent knows everything there is to know about a small and identifiable segment of the travel market, such as honeymoon destinations, river rafting, ecotravel, adventure travel, inn-to-inn walking vacations, archaeological explorations, or deep-sea fishing. Cruising still draws heavily from the senior population, a market segment that is expected to reach 60 million people by 2015. Many of these people like the idea of unpacking only once, having their shore excursions preplanned, and enjoying a plethora of activities while at sea. Segments of the cruise industry have adapted to meet the more sophisticated demands of special-interest cruisers. Themed cruises are available for singles, the physically challenged, opera buffs, art and history lovers, and murder mystery enthusiasts, to name just a few. Luxury cruises on small vessels where the staff-topassenger ratio is about one to three appeal to the affluent. “Barefoot cruises” on small vessels, where

passengers participate in sailing the ship and preparing the food, attract a younger, more adventurous clientele. Those with unlimited time can indulge in around-the-world freighter cruises. Another major industry segment is packaged tours, a broad category that includes everything from industry giants such as Globus and Trauck, which offer escorted coach tours in all the tourism hot spots, to individuals who put together themed walking tours of their hometowns—Al Capone’s Chicago, for example. Globus reports that its clientele has become discerning over the years and demands authentic experiences, unique to a given region. For example, a group visiting Moscow may be more interested in dinner with a true Russian ambience, with caviar and vodka, than in the familiar fare offered by the local Hard Rock Cafe. Visitors want to browse in Russian amber shops and look for nesting dolls or Fabergé-style eggs. Here, too, specialization is gaining in popular-

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Travel and Tourism Industry

ity. Tourists enjoy being with a coachload of people who have purchased a travel package based on shared interests, rather than having to work at finding common ground with their fellow-travelers. Singles trips are popular, not to meet possible mates but to avoid expensive “single supplements,” surcharges levied by many tours to make up for lost revenues when there is no double occupancy. The more exotic a locale, the more its tourists seek the perceived safety of organized tours. It is one thing for a Westerner to sightsee independently in London but quite another for the same person to do so in Ho Chi Minh City, Vietnam. Twenty-first century travelers are informed, know what they want, and will continue to patronize those providers able meet those special needs. They are equally loyal to successful providers in related industries, such as airlines, restaurants, hotels, motels, and themed entertainment venues. One example of a fast-growing travel market is ecotravel. Many of today’s travelers are choosing to leave smaller carbon footprints. They want accommodations with green practitioners who share their concerns. Hunting safaris are losing favor, while photo safaris are gaining in appeal. Some travelers seek total immersion in a different culture and choose home stays over traditional hotels. Industry professionals must keep abreast of the times and adapt to their clients’ wishes. Medical tourism has also risen to prominence, as Americans without adequate health insurance seek lower-cost treatment in India, Thailand, Mexico, South Africa, and the Caribbean, among other destinations. This market segment is expected to see rapid growth in the years to come. The travel professionals best able to evaluate those offshore clinics and advise traveler-patients seeking medical attention may reap huge rewards. Financial considerations have also changed the way people vacation. Fluctuating gas prices have caused some recreational vehicle enthusiasts to stick closer to home and explore their own states or geographic regions. This means local tourism promoters now court their neighbors, as well as potential clients across the country. The travel and tourism industry is poised for growth and is continuously evolving as it develops new travel products and new twists on the old. Its success will depend on offering something different, seamless service, and good value for money spent.

INDUSTRY MARKET SEGMENTS The various segments of the travel and tourism industry comprise small, midsize, and large operations, ranging from independent, self-employed travel agents and one-person local tour companies to the largest cruise companies, which employ thousands of workers. Following is a breakdown by size and by type of company. Small Businesses Small businesses within the industry include independent travel agents and other home-based industry professionals, such as entrepreneurs who conduct local tours. The more successful of these carve out niches for themselves, specializing in specific types of travel for a specifically targeted clientele. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the combined average annual salary of all employees in the travel arrangement industry was $38,390 in 2009. Tour guides earned an average of $28,230, while travel agents earned an average of $32,170. Clientele Interaction. The business owner is the person with whom clients interact, so an independent travel agent or tour provider needs both excellent communication skills and excellent people skills. For the agent, that means determining the client’s needs, meeting them, and running interference when problems arise. The local walking tour provider makes arrangements to meet the tour group, provide an informative and entertaining tour, take care of any problems that arise during the tour, and make sure the group members have a good time and feel they have received good value for money spent. In addition, he or she is responsible for the group’s safety while on the tour. Amenities, Atmosphere, and Physical Grounds. Most operators of small businesses in this industry work out of home offices and have no walk-in traffic. Their only requirements are a comfortable place to work, ample space, and sufficient technology. Typical Number of Employees. Small businesses may have as few as one employee, perhaps with temporary help during peak times. Employees

Travel and Tourism Industry seldom number more than two or three and— other than owners—are usually part time and paid hourly wages. Traditional Geographic Locations. Local walking tours and similar businesses must be located in places of sufficient interest to attract tourists. It is also helpful if more than one tour can be developed. For example, an architectural tour, a tour of historically significant landmarks, a Christmas tour, and a haunted building tour would make a nice mix. Travel agents working from home may be located anywhere. Pros of Working for a Small Travel Business. Starting and running a small business can be immensely rewarding, and persons with the right combination of skills and personality traits can be happier and achieve more success than they would working for someone else. An owner-operator has total control over the direction the company and consequently of his or her earnings. An enterprise can be started without advanced education, but an outgoing personality is necessary, along with the ability and the willingness to pay attention to the smallest detail. Since the owner does everything, each day is different, with little time or opportunity for boredom. An employee can earn a little extra money while learning the business. Also, the startup costs are minimal and primarily consist of obtaining technology, stationery, brochures, business cards, and any required licenses. Advertising is necessary but can be as simple initially as calling on everyone in town who is a potential customer. Cons of Working for a Small Travel Business. When one is in business for oneself, all time spent not working shows up in the bottom line. Forces over which one has no control can wreak financial havoc. These include catastrophic weather, downturns in the economy, or unexpected illnesses. The business owner is responsible for all phases of the operation and has to perform marketing, accounting, customer service, and all other functions to keep the business running smoothly. Everyone is better at performing some tasks than at others, so the owner has to either gain expertise where lacking or pay someone else to provide those services. An employee in such a business is limited in earnings, as there is no corporate ladder to climb. What could be seen as either a pro or a con, depending on the point of view, is that many tourism business are seasonal, requiring that profits be

1915

made in the peak season. While this creates tremendous pressure to be productive within a limited window, it also gives the owner and the employees the opportunity to pursue other interests during the off-season. Costs Payroll and Benefits: Most employees are part time and paid hourly wages. Owners pay themselves out of the business’s profits. If there are no profits, they will not be paid. Benefits are usually not offered to part-time staff. Supplies: Small-business owners require standard home-office supplies and equipment, including computers, telephones, copiers, fax machines, toner and ink cartridges, and paper of various stocks and quality levels for business cards, brochures, flyers, and other marketing hand-outs. External Services: Gone are the days when every mall had a travel agency. Today’s agents are likely to be home-based, doing their work by telephone, fax, and e-mail. One problem this poses for the agent is that airlines sanction only those agencies housed in commercial space to write tickets, and in today’s market, renting office space is financially prohibitive for most independent agents. The way around that is for the home-based agent to affiliate him- or herself with one of the large agencies for the privilege of issuing tickets. This is a win-win situation, as the independent agent gets tickets printed by the host agency, and the host agency receives an average of 30 percent of the agent fees. A person conducting local tours has to make arrangements for admissions to both private and public stops on the tour. Costs vary, but the group rates are usually considerably lower than an individual admission ticket. The arrangements and payments should be made before the tour to simplify the tour itself and give the impression of being totally in control. Otherwise, small-business owners may contract occasional accounting or advertising services. Utilities: Utility costs are usually minimal, as they are a prorated portion of the owner’s residential expenses. An exception would be high-speed Internet service or a dedicated telephone line for business use only. Taxes: Employers must pay payroll taxes on their employees’ earnings and file quarterly reports.

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Property taxes, like utilities, can be prorated and the portion deemed business can be deducted as a cost of doing business. Owners must also pay any applicable state and local business taxes and charge taxes on sales when required. Income is generally reported on owners’ personal tax returns, in which case, they must also pay self-employment taxes. Midsize Businesses Midsize businesses in the travel and tourism industry include travel agencies larger than homebased independent agents and smaller than the larger chains. Local tour operators may become midsize when they go beyond special-interest walking tours and include coach or water tours. Government tourism boards also fit in this category. These are local, state, and federal entities that promote tourism in assigned regions. Chambers of commence and convention and visitor’s bureaus likewise promote the merits of their communities to potential visitors. Potential Annual Earnings Scale. According to the BLS, the combined average annual salary of all employees in the travel arrangement industry was $38,390 in 2009. Tour guides earned an average of $28,230, while travel agents earned an average of $32,170. Sales representatives selling services within the industry earned an average of $50,190, sales supervisors earned an average of $59,590, and sales managers earned an average of $91,470. Captains of deep sea, coastal, and Great Lakes vessels, such as cruise ships, earned an average of $87,750, while those guiding small scenic and sightseeing watercraft earned an average of $44,160. Clientele Interaction. Clientele interaction is high, as there are few behind-the-scenes jobs in midsize businesses. From the person who sells the package to the person who entertains the tour participants, all must have good people skills and be proactive in solving potential problems. Even those in the lower echelons—for example, the waiters who serve clients on a sightseeing dinner cruise—deal directly with the client, and the impression made reflects favorably or unfavorably on the company. Amenities, Atmosphere, and Physical Grounds. Clients do not usually visit company offices, but there are other physical grounds to con-

sider. For example, tour coaches must be kept clean, comfortable, and attractive, as must boats from which tourists enjoy shoreline sightseeing, brunch cruises, or sunset dinner cruises. Points of embarkation must have ample, safe parking, and, in the absence of that, the operator should provide valet parking for tourists with rental cars, as well as for locals who are often entertaining business associates or out-of-town visitors. Typical Number of Employees. These companies usually have fewer than fifty employees, often no more than fifteen or twenty, but this varies from location to location. Employers may also employ part-time or temporary workers in response to seasonal fluctuations. Traditional Geographic Locations. Travel agencies can be located anywhere and often choose suburban office space over more expensive city offices. Government tourism boards maintain offices in government-owned buildings, usually in areas of their jurisdictions frequented by tourists. Some have branch offices at their borders to greet motorists entering the territory. Chambers of commerce opt for the visibility of offices in the heart of the areas they serve. Coach tours typically embark from midcity, and cruises from the most convenient spots on lakes or rivers. Sometimes, the geographic location is the most appealing part of a cruise, as in the sightseeing boats that ply the river along the Riverwalk in San Antonio, Texas. Pros of Working for a Midsize Travel Business. Midsize companies offer employees more opportunities and higher financial compensation than do smaller companies. They also provide a good entry into the industry for someone seeking experience for a future career with a large company or learning the ropes before striking out alone. Without the cumbersome layers of management typical of larger firms, employees have greater access to decision makers and thus more opportunity both to offer input and to have that input acted on. Because employees play a vital role in the overall success of a midsize company, the employee gains more visibility and more hands-on experience. There is also some room to rise in the company; the administrative assistant in the chamber of commerce can conceivably become the director. One of the biggest benefits of working for a midsize travel company is the opportunity for

Travel and Tourism Industry

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deeply discounted travel, sometimes even free travel. Familiarization, or “fam,” trips are given by resorts and other glamorous destinations to those who can steer clients to their properties. These are awarded to those agents with proven track records or to travel writers who can give them favorable media exposure. Cons of Working for a Midsize Travel Business. The biggest con, from the employee’s point of view, in working for a midsize travel company is the limited room for advancement and thus access to higher earnings. Although there are greater opportunities than in small companies, midsize companies are still no match for the industry giants. Because there are fewer employees, some workers may need to perform tasks not in their job descriptions. The tour coach driver may be required to wash the bus and clean its An NBC page gives a guided tour of the NBC Studios in Burbank, Califorinterior. The agent may have to nia. (AP/Wide World Photos) spend time at the reception desk or do routine paperwork. Because of Utilities: Utilities include telephone, Internet serthe blurring of responsibilities and the lack of a forvice, electricity, water, gas, and heat. mal complaint department, any employee may be Taxes: Midsize businesses must pay payroll taxes called upon to smooth things over in the event of on employees and submit quarterly statements, misunderstandings and other difficulties. as well as paying local, state, federal, and possibly international corporate and property taxes. A subtle form of taxation is any licenses or perCosts mits required for the privilege of doing busiPayroll and Benefits: Midsize travel companies ness. generally have mostly salaried employees as well as a few who generate sales and are paid on comLarge Businesses mission. Full-time employees are given sick Large businesses form the bulk of the travel and leave, vacation, and other benefits, while the tourism industry, and they employ most of its workowner typically decides whether to give benefits ers. The industry giants fit, for the most part, into to seasonal or part-time workers. three categories: cruise ship operators, packaged Supplies: Midsize businesses require standard oftour operators, and the companies such as Apple fice equipment and supplies. Some need tour Vacations or Club Med that offer packages at single vehicles such as coaches or boats, as well as the destinations. The less adventurous of travelers pretools and supplies to maintain, repair, and clean fer these vacations because they involve less risk; them. are available at low, all-inclusive group rates; and alExternal Services: Midsize companies may conlow all details to be taken care of by the provider. tract accounting or legal services. They also require insurance coverage and may choose to Potential Annual Earnings Scale. According rent rather than purchase tour buses or boats. to the BLS, the combined average annual salary of

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all employees in the travel arrangement industry was $38,390 in 2009. Tour guides earned an average of $28,230, while travel agents earned an average of $32,170. Sales representatives selling services within the industry earned an average of $50,190, sales supervisors earned an average of $59,590, and sales managers earned an average of $91,470. Captains of deep sea, coastal, and Great Lakes vessels, such as cruise ships, earned an average of $87,750, while those guiding small scenic and sightseeing watercraft earned an average of $44,160. Clientele Interaction. As in all facets of the industry, client interaction is high, though the large companies have more opportunities for behindthe-scenes support employees. Amenities, Atmosphere, and Physical Grounds. Clients of travel companies seek attractive, well-maintained facilities, whether they are on a cruise ship, at a Club Med resort, or on a guided coach tour where more than one property is visited. The physical property must be meticulously maintained, provide sufficient amenities to occupy the guests, and ensure that everything contributes to an atmosphere that is welcoming and conducive to making new friends while enjoying new experiences. Typical Number of Employees. The largest cruise ships can employ a thousand or more people, and the large companies that run them employ many thousands each. On the other end of the spectrum, an escorted tour through several countries might have a dozen employees at most, including the drivers. This also includes local guides who join the tour for a half day to extoll the virtues of their home cities. These professionals are supported by corporate workforces of marketers, accountants, administrative assistants, and others. Traditional Geographic Locations. Locations vary, but tour sites usually include large cities with cultural, architectural, and entertainment opportunities. Cruises sail to the tropics, to Alaska, and along many other routes as well. Planned vacation destinations are usually in resort areas, and, while beaches are the most popular, spa, skiing, and golf resorts also compete for vacationers’ dollars. Pros of Working for a Large Travel Business. Large companies offer greater opportunities for professional advancement. The larger companies also employ hundreds, if not thousands, of people,

so there is ample opportunity for advancement or geographic change. Motivated employees can start at the bottom of a department and work their way up, or move from department to department to learn the entire business before striking out on their own. These companies also have the potential for higher earnings and better benefits. Only the most motivated of small or midsize company employees reach the higher levels. Cruise ship employees report to work from their onboard cabins and are constantly traveling to exciting ports of call. While they may have to remain on board performing their duties, they also have ample opportunities to visit favorite locales on their off time. For those afflicted with wanderlust, the greatest plus of working for the larger industry companies remains the opportunity for personal travel. Between “fam” trips and deep professional courtesy discounts, the possibilities are endless. An intangible but important consideration is the personal satisfaction that comes when a client’s trip is all he or she hoped it would be. For some people, travel is a way of life, and they make arrangements through a variety of small-to-large companies depending on the situation. For others, a trip abroad or to Hawaii can represent a lifelong dream, and they are likely to turn to a large company for the perceived lack of risk involved in dealing with major organizations. To have had a part in making someone’s dream a reality is heartwarming. Cons of Working for a Large Travel Business. Employees have little or no say in how large businesses are run. As in any large corporation, they can feel invisible, where in smaller companies everyone’s contribution is both needed and highly visible. While traveling for a living is at first glamorous, it also means being away from home for long periods of time, and that can cause difficulties in maintaining family and personal relationships. Another problem for those working aboard a ship, or who live at the vacation resort where they are employed, is the lack of a clear division between work and play. It is harder to change gears at the end of a shift without physically leaving the job site. Burnout occurs. Costs Payroll and Benefits: Salary structures vary to accommodate the wide range of positions. At the

Travel and Tourism Industry lower end of the hierarchy, employees are often paid an hourly wage. Higher up the ladder, salaries are annual and sometimes include commissions, bonuses, and tips. With union jobs, compensations and benefits are collectively bargained. One industry-specific benefit is travel. Even those who do not travel as part of their jobs, are usually given opportunities for discounted travel. Other benefits include sick leave, vacation time, and paid insurance. Supplies: Cruise ships and company-owned hotels require the same supplies as any resort hotel and entertainment complex, including massive amounts of fuel. External Services: Large companies may contract accounting or legal services. While they typically employ advertising or public relations staffs, they may also contract external firms to plan or help plan major advertising campaigns. They also require significant amounts of insurance coverage, and many subcontract for such service providers as local tour guides or entertainers. Utilities: Utilities include telephone, Internet service, electricity, water, gas, and heat. Taxes: Large businesses must pay payroll taxes on employees and submit quarterly statements, as well as paying local, state, federal, and international corporate and property taxes. A subtle form of taxation is any licenses or permits required for the privilege of doing business.

ORGANIZATIONAL STRUCTURE AND JOB ROLES While travel and tourism include jobs unique to the industry, certain functions, such as accounting, have to be performed in any business to ensure smooth overall operation. The number of people assigned to complete these tasks varies widely. A one-person travel agency requires the owner to wear many hats, with perhaps an assistant, parttime help as needed, or periodic input from professionals that may include auditors or tax preparers. Local, state, or federal tourism bureaus typically operate with staffs of less than twelve. The cruise industry giants and vacation packagers are major corporate entities with all the attendant levels of hierarchy.

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The following umbrella job categories apply to the organizational structure of businesses in the travel and tourism industry: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Business Management Sales and Marketing Security Human Resources Information Technology/Multimedia Tour Guides and Support Primary Shipboard Personnel Housekeeping and Maintenance Food and Beverage Casino and Entertainment Recreation and Fitness

Business Management This category is responsible for the overall direction of the company and can be as simple as a lone proprietor sitting down and devising short-term, midterm, and long-range plans. A midsize operation typically has one person, usually the owner, calling the shots with input from employees with various responsibilities. Large companies are run by boards of directors, a chief executive officer, and other layers of management. Those with decision-making authority plan the company’s activities and oversee the execution of their plans. With the exception of those employees who sell travel products and earn commissions, the top managers are the highest paid. Generally speaking, the larger the company, the more educational credentials and experience are required for positions in this employment category. Degrees helpful here include business management, accounting and finance, sales and marketing, hospitality, and advanced degrees in any of those specialties, such as a master of business administration. Smaller company owners or managers may overlook the lack of formal degrees and choose an applicant with a solid industry track record coupled with enthusiasm and proven ability to achieve goals. The smallest, especially if they have limited budgets, are more likely to train an applicant with no experience, as this person can be had for a lower salary. Business management occupations may include the following: ■ ■

Director Chief Executive Officer (CEO)

1920 ■ ■ ■ ■ ■ ■ ■

Travel and Tourism Industry chures are in information racks anywhere a tourist is likely to be. In small agencies or tour companies, the operator handles all aspects, from making itself known to the chosen niche market to closing the sale and handling all the details involved. Midsize companies have greater divisions of duties, and administrative support staffs take care of details such as maintaining client mailing and email lists and routine customer service. The sales staff is responsible for finding new customers through cold calling, referrals, and often inviting prospects in for presentations on cruises and other travel packages. Large companies operate similarly to midsize companies, but with more layers and a more distinct hierarchy. The travel agent, whether home-based and independent or a corporate employee, must understand the client’s wishes. For example, someone traveling to the charming towns of southeast Alaska can choose between a large cruise ship and the lesser-known Alaska state ferry system, which transports passengers to the ports southeast and south-central Alaska. A major selling point is that ferry passengers can stay at a port for as long as they wish, while traveling the same waters and seeing the same eagles and whales as cruise passengers at considerably lower cost. The travel adviser must determine the client’s agenda. If the bells and whistles of the cruise itself are the main source of

President Vice President of Marketing Vice President of Public Relations Sales and Marketing Manager Chief Financial Officer (CFO) Controller Human Resources Manager

Sales and Marketing This department is the lifeblood of a company and of the whole industry. The travel and tourism industry exists to match clients to their travel needs. Nothing happens until a cruise reservation is made, an escorted tour is booked, or a vacation package is bought. Large companies have marketing departments to analyze the most effective ways to reach their target clients and sales departments to sell products to individual travelers. Sometimes, the client is a corporation that hires an agency to handle all its travel arrangements. In that case, several employees may be responsible for servicing the client. More often, the product is sold to individuals or small groups of family or friends who want to travel together. The smallest of enterprises, the local walking-tour company, for example, is the simplest. Owners place advertisements in local papers, especially those that will be found in hotels and inns, and they also make sure their advertising bro-

OCCUPATION

SPECIALTIES

Reservation and Ticket Agents Specialty

Responsibilities

Automobile club travel counselors

Plan trips, map suitable routes, reserve hotel or motel accommodations, calculate mileage, and make bus, train, and plane reservations for members of automobile clubs.

Gate agents

Assist passengers and check flight tickets at the entrance gate or station when passengers are boarding or disembarking. They assist passengers to the correct boarding area, check flight tickets, make boarding announcements, and assist elderly, disabled, or young passengers when they board or depart.

Ticket agents

Sell tickets for transportation agencies such as airlines, bus companies, railroads, and steamship lines.

Travel and Tourism Industry OCCUPATION

1921

SPECIALTIES

Travel Agents Specialty

Responsibilities

Automotive club travel counselors

Plan trips for members, providing maps and brochures.

Government travel clerks

Plan itineraries and schedule travel accommodations for government personnel and relatives.

Hotel travel clerks

Provide travel information and arrange accommodations for tourists.

Reservation clerks

Make travel and hotel accommodations for guests and employees of businesses.

appeal, the adviser should book a cruise. If experiencing Alaska itself is the objective, the ferry is a better choice. Government tourism departments do not sell products per se, but they aggressively market the locale’s attractions in magazines, in newspapers, and sometimes on television, and they attempt to reach those outside the area who arrange conventions, business meetings, and other events. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Marketing Director Sales Manager Sales Representative Administrative Assistant Travel Agent Advertising Director Director of Tourism

security has increased substantially. Acts of terrorism and piracy are very real threats. Security officers must be highly trained and computer savvy. Those at the top are college educated, and many have additional training or experience with military or law enforcement organizations. Security officers often train other staff members to notice and report suspicious behavior. Motor coach operators have a responsibility to select safe stops and to make sure their vehicles are secured during passengers’ absences. Even local walking-tour guides have to be sure they do not take tourists into high-risk areas. Clients may become separated from tours, despite all precautions, and their safety remains the responsibility of the tour operators. Security occupations may include the following: ■ ■

Security Cruise lines and tour operators need to provide security for their clients. They must guard against thieves, con artists, vandals, pirates, and terrorists, among others. This department also intervenes in the event of altercations between passengers and makes sure no illegal activities are carried out onboard ship or within tours. Security responsibilities sometimes include fire prevention and periodic fire drills. The stakes involved in this industry segment have risen, and the need for highly sophisticated

■ ■

Chief Security Officer Investigator Network/Computer Security Specialist Plainclothes Operative

Human Resources Human resources personnel make sure the right people are hired for all positions, manage insurance programs and other benefits, and offer ongoing training and continuing-education opportunities. They ensure that employees are up-to-date on the latest trends and are thus able to anticipate their clients’ needs. They also participate in contract negotiations with employees represented by

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collective bargaining units and respond to employee grievances. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Human Resources Representative Employee Training Manager Employee Trainer Labor Relations Manager

Tour Guides and Support Large guided tour companies constitute a substantial segment of the travel industry. Travelers who want an overview of a region rely on the expertise of those conducting the tour. For some, the tour is an end in itself, while others use it as an introduction before traveling to the destination independently. Tour guides must have extensive knowledge of the area visited, including speaking both the country’s language and the language of the people being guided. Also needed is knowledge of the history of the area, and ability to weave colorful or humorous anecdotes into the presentation. Strong organizational skills, attention to detail, and strong people skills keep the tour on track and ensure that all participants come away satisfied. The large companies have support staff, usually at the company’s headquarters, who handle the arrangements for hotels, included meals, and included sightseeing venues. These people need intimate knowledge of the cities where overnight stops are scheduled so that chosen hotels are located in areas where guests can walk in safety to dining, shopping, or other entertainment, as well as explore independently.

Information Technology/Multimedia The small-business owner does everything via technology and needs both information technology equipment and the expertise to use it. Midsize companies need the same type of equipment but more of it. Both need to be aware of new products as they are introduced, so they can stay competitive in an increasingly technological world. Cruise ships run on technology. The captain and crew use navigational technology. Nightclubs onboard need amplifiers, special-effect lighting, and computerized synthesizers. A public address system aids communication. Wide-screen televisions keep passengers entertained and informed. Music adds to the serenity of the spa PROJECTED EMPLOYMENT experience. Word-processing FOR SELECTED OCCUPATIONS programs and printers produce daily agendas and menus, along Scenic and Sightseeing Transportation with instructional materials detailing fire-drill procedures and Employment the location of lifeboats, for ex2009 Projected 2018 Occupation ample. Because technology is only 3,460 3,500 Bus drivers, transit and intercity as good as the person using 3,300 16,400 Captains, mates, and pilots of water it, the larger companies have vessels to not only be aware of constant advances but also make 780 1,100 Reservation and transportation ticket sure their employees are fully agents and travel clerks trained. 1,420 1,900 Sailors and marine oilers Information technology and multimedia occupations may 2,520 3,300 Tour guides and escorts include the following: ■

■ ■

Information Technology Director Multimedia Technician Computer Technician

Source: U.S. Bureau of Labor Statistics, Industries at a Glance, Occupational Employment Statistics and Employment Projections Program.

Travel and Tourism Industry Smaller companies offer tours to local destinations. For example, travelers on a tour that includes France, may on one of their free days in Paris, opt for a local company’s tour to Claude Monet’s gardens at Giverney. Included in this category are those local city, museum, and other guides who board coaches at predetermined itinerary stops. Tour guide and support occupations may include the following: ■ ■ ■ ■ ■

Company Tour Guide Local Tour Guide Personal Escort Motor Coach Driver Support Worker

scenes, they expect clean food preparation areas as well. Of particular importance is making sure all kitchen surfaces are sanitized to avoid crosscontamination. It takes a sizeable cleaning and janitorial staff to keep the ship immaculate. Pools must be kept clean and chlorinated. Personal care salons and spas have to be cleaned between services. Dining areas, bars, theaters, and casinos all require frequent attention. Whether the vessel is the Queen Elizabeth II or a ferry, the decks have to be swabbed, the bed linens fresh, and the bar glasses free of water spots. Housekeeping and maintenance occupations may include the following: ■

Primary Shipboard Personnel Arguably the most important cruise ship employees are the captain and crew. The captain joins passengers for dinner, but most of the crew has little or no client contact. Even with today’s hightechnology navigational tools, some hands-on effort is required, and these highly trained professionals assist the captain in making sure the passengers enjoy a smooth, safe voyage. They are prepared to deal with unforeseen mechanical difficulties, sudden bad weather, or any other difficulties that could occur. It is also their responsibility to perform the day-to-day maintenance requirements of the ship and handle breakdowns that, though unlikely, can occur. Primary shipboard occupations may include the following: ■ ■ ■ ■ ■

Captain Engineer Deckhand Mate Marine Oiler

Housekeeping and Maintenance These cruise-line positions clean and maintain accommodations and equipment aboard ship. It is estimated that nearly two-thirds of cruise ship passengers are repeaters. Every effort is thus made to ensure they are comfortable and that the vessel sparkles from stem to stern. Cruisers demand cleanliness in their cabins and in the common areas, and although they do not see behind the

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■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

■

Facility Manager Housekeeping Director Cleaner Custodian/Janitor Laundry Worker Pool Maintenance Worker Dishwasher Maintenance Manager Electrician Painter Plumber Carpenter Heating, Ventilation, and AirConditioning (HVAC) Specialist General Maintenance and Repair Worker

Food and Beverage Cruise passengers expect gourmet cuisine, prepared perfectly, and presented creatively. In addition to the formal dinners, and endless buffets, food is available in bars and snack and coffee shops. This requires a large and well-trained staff. In addition to cruise ships, these jobs are a factor in company-owned planned-vacation resorts such as Club Med. Food and beverage occupations may include the following: ■ ■ ■ ■ ■ ■

Chef Sous Chef Pastry Chef Prep Cook Food Server Bartender

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Travel and Tourism Industry

Casino and Entertainment Casinos continue to be popular with passengers. The staff keeps the casino running smoothly and handles the occasional situation where a patron might become unruly. Most of the casino visitors are recreational, not hard-core gamblers, and are there to have a good time and add to the overall cruise experience. High-quality entertainment is expected, and the cruise line obliges with nightclub acts, formal shows, and cinema. Entertainers are professionals in their field. Cruise lines also hire lecturers to give talks about areas to be visited or, in the case of a themed cruise, on the subject theme. Sometimes classes are offered, such as on cooking the foods of the region visited. Casino and entertainment occupations may include the following: ■ ■ ■ ■ ■ ■

Manager Card Dealer Film Projectionist Musician Night Club Entertainer Instructor

Recreation and Fitness This category includes those onboard people who make sure passengers are aware of their many options and who encourage them to take part in those activities. They have to be good with people and have the ability to draw shy passengers out of their shells. They lead the aerobics classes, act as trainers in the weight room, and provide instruction on the climbing wall. Some cruise lines offer free or reduced sailings to single men in return for their dancing with unescorted ladies. Employees make sure these gentlemen spread themselves around and avoid spending too much time with one individual. Recreation and fitness occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Social Director Activity Leader/Instructor Personal Trainer Spa Manager Massage Therapist Skin Care Specialist Hair Stylist

■ ■

Manicurist Pedicurist

INDUSTRY

OUTLOOK

Overview The outlook for the travel and tourism industry shows it to be stable in some areas and in decline in others. The industry has been affected by the global recession of 2007-2009, but it is expected to resume growing in the near term. Corporate travel has lessened, as companies have tightened their belts, but not all business travel can be eliminated. A large portion of it is conducted in the pursuit of sales, so the need exists to continue or even increase such travel. In addition, couples are choosing parenthood later and taking more vacations before becoming encumbered with families. That said, family travel represents a sizable chunk of the industry, and families will continue traveling, though they may make budgetary adjustments such as exploring their home states’ riches and postponing the trip to Disney World. The BLS projects that the number of jobs for travel agents in the United States will decline by 1 percent between 2008 and 2018. The job market for travel guides is also expected to remain flat. This compares to an average growth rate across all occupations of 11 percent for this same period, and tour guide jobs, by contrast, are expected to grow at this average 11 percent rate. The cruise ship segment of the industry has snowballed. In the seven years between 2002 and 2009, approximately forty-seven thousand cruise ship jobs were created. With new and bigger ships coming, it would seem that anyone could find a job in this industry sector. However, most of these jobs are at the low end of the scale, involving cleaning, food preparation, and so on. Turnover is high on cruise lines, as most who work on these ships do not intend to make doing so a permanent career. As a result, there are always openings, as workers go back to school, start a family, or decide to put down roots on land. It is predicted that growth will continue in other areas of travel and tourism, particularly exotic and luxury travel, as that market is less affected by the economy. Medical tourism will grow as well. Travel for volunteerism and humanitarian purposes has

Travel and Tourism Industry mushroomed in the wake of Hurricane Katrina and the devastating earthquakes in Haiti and South America. People with time and disposable income feel a responsibility to help. While that category of traveler does not spend lavishly, they can help keep the industry afloat until the economic situation turns around. Another industry threat is the ever-present danger of terrorist attacks. Increased security will help ease fears, but there are some who will not fly unless absolutely necessary. This may be a boon to the cruise industry, as departure ports can be reached by car. People will continue traveling, but they may look for creative solutions to safety and economic issues. The industry, too, must find creative ways to make travel appealing. Some trips cannot wait for better days. Travel professionals can reach out to those who want to treat children and grandchildren to an extensive multigenerational trip. There is a small window of opportunity when the kids are old enough to appreciate the wonders they will see and still young enough to want to take such a trip. Such trips are often planned around a milestone birthday or wedding anniversary, and that, not the state of the economy, dictates when the trip will be taken. Employment Advantages Tourism is one of the largest drivers of revenue in the United States. Thus, opportunities will always exist for those seeking employment in tourism-boosting professions, which remain crucial to the health of regional economies. Published salary ranges can be misleading, as lodging and meals can be part of one’s compensation package while traveling. Some industry professionals, tour guides and escorts for example, also receive tips. Not all advantages are monetary. Entrepreneurs enjoy independence. Some choose to work only part of the year and specialize in locations with peak seasons. There is room for laidback individuals to work extremely hard for shorter periods of time, just as there is room for careerists who wish to work long hours to reap great rewards. Those afflicted with wanderlust—who are the most likely to seek jobs in this industry—can see the world while showing it to their coach or cruise ship passengers. Whether self-employed or an employee of a large agency, an employee in this industry will likely have great opportunities to travel. “Fam” trips are a

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mainstay as resorts, hotels, attractions, and even governments invite agents to their destination in the hope those agents will steer clients to the destination. Annual Earnings According to the U.S. Department of Labor, the domestic travel and tourism industry earned revenues of $221 billion in 2007. The department predicts modest to average growth in some facets of the industry and substantial growth in others. As many agents and other travel professionals are self-employed, it is difficult to gauge their earnings. Jobs often pay commissions, not salaries, and some work only part time. Commissioned sales representatives or travel agents earn less during lean years but can make up for it when business is good. This requires strategic planning and preparing in advance for slow periods.

RELATED RESOURCES FOR FURTHER RESEARCH American Society of Travel Agents 1101 King St., Suite 200 Alexandria, VA 22314 Tel: (800) 275-2782 Fax: (703) 739-0453 http://www.asta.net.org National Association of Cruise Oriented Agencies 7600 Red Rd., Suite 128 Miami, FL 33143 Tel: (305) 663-5626 Fax: (866) 816-7143 http://www.nacoa.com National Business Travel Association 110 N Royal St., 4th Floor Alexandria, VA 22314 Tel: (703) 684-0836 http://www.ustoa.com

ABOUT

THE

AUTHOR

Norma Lewis is the author of four nonfiction books, one an account of the Yukon gold rush for

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Travel and Tourism Industry

young adults and the other three pictorial histories of the southwestern Michigan area she calls home. She is a prolific writer for magazines and, during the twenty years she has been writing travel articles, has covered destinations, escorted group travel, solo travel, and recreational vehicle camping. She holds a bachelor of science degree in business administration from Aquinas College.

FURTHER

READING

Beaverstock, Jonathan V., et al. International Business Travel in the Global Economy. Burlington, Vt.: Ashgate, 2010. Chin, Christine B. N. Cruising in the Global Economy: Profits, Pleasure, and Work at Sea. Burlington, Vt.: Ashgate, 2008. Goeldner, Charles R., and J. R. Brent Ritchie. Tourism: Principles, Practices, Philosophies. Hoboken, N.J.: John Wiley & Sons, 2008. Mancini, Marc. Cruising: A Guide to the Cruise Line Industry. 2d ed. Florence, Ky.: Cengage Learning, 2003.

Medlik, S. Dictionary of Travel, Tourism, and Hospitality. 3d ed. Oxford ButterworthHeinemann, 2003. Mintzer, Rich. Start Your Own Travel Business. New York: Entrepreneur Media, 2007. Smith, Melanie K., and László Puczkó. Health and Wellness Tourism. Boston: Elsevier/ButterworthHeinemann, 2009. United Nations World Tourism Organization. http://www.unwto.org/facts. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Vogel, Harold L. Travel Industry Economics: A Guide for Financial Analysis. Cambridge, England: Cambridge University Press, 2001.

Veterinary Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Health Science Career Cluster: Health Science Subcategory Industries: Animal Hospitals; Livestock Inspection and Testing; Livestock Veterinary Services; Pet Veterinary Services; Veterinary Offices; Veterinary Research and Development; Veterinary Testing Laboratories Related Industries: Animal Care Services; Livestock and Animal Products Industry; Museums and Cultural Institutions Industry; Public Health Services Annual Domestic Revenues: $20 billion USD (Hoover’s, 2009) NAICS Numbers: 541712, 541940

INDUSTRY

cal research industry and the study of animal behavior in general. Many veterinarians contribute to the study of animal biology, behavior, and physiology, as well as other facets of the life sciences.

History of the Industry Since its inception, veterinary medicine has been closely related to human medicine, and both industries emerged before the advent of written history. Between 3000 and 2500 b.c.e., humans began domesticating animals for food and other animal products. In the process, they began to learn about the ailments that affect livestock and other working animals, and they began to develop treatments to keep their animals healthy. The first animals studied from a veterinary perspective were horses and other livestock, as well as dogs and cats, the most common companion animals. The early study of animal health served a utilitarian purpose, as humans depended on animals for food and labor. Horses were used for transportation and to aid in farm labor, while dogs and cats hunted pests and protected property.

DEFINITION

Summary The veterinary industry is dedicated to protecting the health of nonhuman animals, from wildlife to livestock and companion animals. In addition to veterinarians, the industry includes a variety of semiskilled and skilled support positions, such as veterinary research technicians, animal grooming and maintenance workers, and veterinary assistants. The industry is closely tied to both the medi1927

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Veterinary Industry

A cat gets a checkup at a small animal hospital. (©Tyler Olson/Dreamstime.com)

Ancient texts indicate that veterinary medicine emerged as a specialty largely in ancient Egypt, where early veterinarians cared for cats and dogs, which were considered sacred animals, as well as a variety of livestock. In ancient India, veterinary medicine was described in manuals written as early as 1800 b.c.e., and it was considered one of the most prestigious fields of study. Records indicate that the first animal hospitals were established in the Indian subcontinent as early as 230 b.c.e. Ancient writings from Greece and Rome also indicate that veterinary studies gained a foothold in those Western societies, from which they spread through Europe. Modern veterinary science emerged during the European Renaissance, along with major developments in human medicine and the life sciences in general. Researchers and biology enthusiasts in Europe and around the world dissected animals in order to further their studies in human medicine; likewise, medical developments instituted for the benefit of humans filtered into the veterinary field.

Rapid advancements in scientific knowledge and a widespread increase in experimentation on animals led to the systematic development of the veterinary field. One of the first veterinary schools on record was established in Lyons, France, in 1761. The French government sponsored the establishment of a professional veterinary program out of economic concerns, mostly in an effort to protect and aid the agricultural industry. The development of institutionalized veterinary medicine continued to follow the evolution of the agriculture industry. Veterinary institutions were soon established in many European colonies, including the United States and Canada. In 1855, the U.S. Department of Agriculture supported the foundation of the Veterinary College of Philadelphia, the first college of veterinary medicine in the United States. In 1879, Iowa State College opened the first public veterinary college, and in 1883, the University of Pennsylvania became the first institution to operate an accredited veteri-

Veterinary Industry nary program. The American Veterinary Medical Association (AVMA) was established in 1863, and it became the national authority on veterinary practices and education. The AVMA helped popularize veterinary medicine by publishing peer-reviewed journals, by funding its development, and by organizing meetings among professionals in the field. In the late nineteenth century, funds for veterinary medicine were concentrated on treating maladies that affected work animals and livestock. Veterinarians, however, were also capable of treating companion animals. One of the first major milestones for veterinary medicine in the United States was the discovery of ticks’ role in transmitting disease after a major outbreak of Texas fever. Groundbreaking work on ticks and disease transmission helped enhance the relevance of modern veterinary study and led to increased funding for veterinary colleges. Early animal researchers and veterinarians also played an important role in human medicine by studying and investigating a variety of diseases that affect both humans and nonhuman

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animals. For example, pioneering work on tuberculosis and a variety of other diseases depended on the work of veterinary specialists. Following World War I, the U.S. population became increasingly urbanized and the demand for agricultural veterinarians rapidly declined. Many veterinarians began specializing in the treatment of dogs and cats instead. The market for such specialists expanded as cities grew, and the companion animal veterinary industry eventually eclipsed livestock medicine as the largest facet of the veterinary industry. During this same period, the specialty of wildlife veterinary medicine grew, as concern over the health of wild animal populations spread among the populace. The demand for wildlife veterinarians was bolstered during the 1960’s by a movement to improve the condition and practices of zoos and other wild animal parks. The development of the urban veterinary industry resulted in increased specialization. Building on human medical research, veterinarians developed a wide variety of subdisciplines to treat spe-

A dog rests after surgery on his leg. (©Dreamstime.com)

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Veterinary Industry

cific types of animals or disorders. By the close of the twentieth century, veterinary medicine constituted a multifaceted and rapidly growing industry serving both commercial and personal interests. While livestock and commercial medicine remained important facets of the field, treatment of companion animals became one of the primary pillars of the industry. The Industry Today The veterinary industry remains a robust and rapidly growing field in the early twenty-first century. The growth of the industry is closely linked to the growth of the human population, increasing urbanization worldwide, and the continued popularity and ownership of cats, dogs, and other companion animals. In addition, as disposable income increases in Western countries such as the United States—and as specialty products and industries catering to pet owners, such as pet insurance, develop—the demand for veterinary specialists will continue to increase. In 2008, according to Hoover’s, the U.S. veterinary industry earned more than $20 billion, making it one of the largest segments of the $34 billion domestic pet-care industry. There are no reliable estimates for earnings in the global veterinary industry, but estimates indicate that the global pet industry is also in a state of rapid growth. The Japanese pet industry, for example, accounts for more than $2.2 billion annually, while other countries, such as Australia and the United Kingdom, spend more than $10 billion each on pets and pet health each year. In the United States, the rapid growth of cat and dog populations has helped fuel the growth of the veterinary industry, even as the demand for agricultural veterinarians has decreased. Veterinary medicine for companion animals has splintered into a number of subfields dedicated to treating specific ailments. In addition to general practitioners, there are veterinarians specializing in dentistry, ophthalmology, cardiology, orthopedics, and a number of other areas. Veterinary surgery has become one of the major specialties in the field; surgical procedures range from spaying and neutering pets to a variety of specialized procedures. Veterinary oncology is another growing field, driven by the number of pets susceptible to various types of cancer. Veterinary

surgeons and oncologists are often employed within animal hospitals or clinics, though some may opt for private practice. Another specialty that is growing rapidly is veterinary orthopedics, largely in the treatment of canines. The large number of dog breeds that suffer from congenital orthopedic disorders has helped veterinary orthopedics become a thriving specialty. A number of related fields have emerged to supplement traditional veterinary medicine in the twenty-first century. Among these are holistic veterinary medicine, which is a branch of the industry concerned with treating animals using herbs and alternative medical treatments, such as massage, energy therapy, acupuncture, and other types of therapy. Veterinary psychology involves evaluating and treating animals with psychological problems. It is closely related to the study of animal behavior and involves similar methods of evaluation and treatment. The veterinary industry has also changed in response to the evolving ecological consciousness of the population. Concern over species depletion and extinction has led to greater interest in wildlife veterinary medicine and in helping stop the spread of disease in wild populations. Wildlife veterinarians also play an important role in the medical industry by helping study and evaluate the transmission of disease and the effects of population dynamics on health. While veterinary practices were once closely tied to utilitarian needs, modern veterinarians serve many clients who desire luxury care for their pets. Some modern vets offer a variety of “comfort services” in addition to basic care, including aromatherapy, alternative medicine, and luxury examination rooms for extra comfort. In addition, the number of veterinarians working in some countries has allowed increased specialization within the profession, where some veterinarians specialize in certain types of animals, such as birds, dogs, cats, horses, or reptiles. The veterinary industry includes not only veterinarians, technicians, and other workers in animal hospitals and clinics but also pet medication manufacturers and specialists who research and develop new treatments and techniques. Indeed, veterinary research and development has grown into a multibillion-dollar industry, largely buoyed by veterinary pharmaceuticals. The veterinary industry

Veterinary Industry remains tightly tied to the medical industry. Research and development in human medicine and medical technology filters into the veterinary industry and similarly, veterinary research provides essential information used to further the advance of human medicine.

INDUSTRY MARKET SEGMENTS One method that can be used to analyze the veterinary industry is to examine the division between small, midsize, and large veterinary businesses. According to Hoover’s market analysts, the division of wealth within the industry is distributed among a wide variety of companies, from small operations with only a single veterinarian, to veterinary hospitals with dozens of practicing veterinary doctors, to veterinary pharmaceutical companies that may have hundreds of employees.

1931

Small Businesses Most veterinary practices are small businesses, having twenty or fewer employees and close ties to their immediate communities. The “neighborhood vet” and smaller urban and rural veterinary clinics fall into this category, as do small laboratory, animal testing, and veterinary equipment manufacturing businesses. The average small veterinary business has revenues of less than $1 million per year, although revenues may vary widely, from less than $90,000 to several million dollars. Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary for a veterinarian in 2009 was $90,110. Clientele Interaction. Most small veterinarian businesses have strong ties to their local communities. In many communities, customers may visit the same veterinarian for the life of their pets and may develop close relationships with their veterinarians. Cultivating relationships with these repeat cus-

Veterinary surgical procedures range from spaying and neutering pets to setting bones and removing tumors. (©Scott Griessel/Dreamstime.com)

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Veterinary Industry

tomers and patients is likely essential to the practice of local veterinarians, as the success or failure of a small practice often depends on the staff’s success in building relationships with clients who then become repeat customers. Small businesses that specialize in the manufacture of veterinary equipment or in animal testing and laboratory work generally survive by filling a specific niche within the industry. A small laboratory might compete by offering types of testing or research not offered by the larger laboratories and testing facilities. These companies depend less on client-patient interaction, but because they typically do not have the marketing or advertising resources of larger companies, they must be able to cultivate a list of repeat clients. Amenities, Atmosphere, and Physical Grounds. Some veterinary businesses operate within spaces no larger than a midsize one-bedroom apartment, while others occupy one or more large buildings. The layout of a business depends largely on the atmosphere. Urban businesses, for instance, often have to work within smaller spaces than those available in rural and suburban areas. Space requirements vary widely according to the specifics of the business. For example, a veterinary office specializing in horses and livestock requires a stable or some other accommodating area to separate and examine large animals, while a veterinary office specializing in pet dogs and cats requires a smaller amount of space. Many veterinary offices must also set aside space for quarantining animals and performing surgeries or other procedures. Veterinarian businesses also require different amounts of space depending on the number of clients served in a typical business day. While the smallest veterinary offices may serve no more than ten customers per day, some may see more than fifty clients on a busy day. Though designs may vary, most veterinary offices must have one or more examination rooms, a waiting room and check-in area for customers, an administrative area for paperwork, and a storage area for supplies. Customers typically see only the waiting area and examination rooms. Waiting areas in most veterinary offices contain seats for customers and may have amenities such as magazines and other reading materials, television, and some amenities for dogs and cats, which represent the most commonly treated clients.

A typical veterinary office has an atmosphere similar to that of a doctor’s office, with the addition of animal- and pet-themed decorations. Many veterinary offices hang pictures of animals and clients’ pets on their walls, as well as informative posters and signs displaying information about pet health risks such as fleas, ticks, and intestinal parasites. The magazines and other reading materials kept in the waiting room are also typically animalthemed. Typical Number of Employees. Most small veterinary businesses have twenty or fewer employees. Some businesses, including private veterinary practices, may have as few as five employees, including a veterinarian, one or more technicians and assistants, and one or more office assistants. Veterinary businesses that handle larger numbers of clients or offer many different types of medical procedures require larger staffs. Veterinary supply, animal-testing, and laboratory companies also typically have fewer than twenty employees, though some small laboratories require a large number of support staff, including administrative and laboratory technicians. Traditional Geographic Locations. Small veterinary businesses can function in virtually any environment with a sufficient population of people with pets or working animals. Smaller veterinary businesses are especially common in larger cities, where space limits the size of the typical business and large populations of pet owners support multiple, neighborhood-style veterinary offices. Small veterinary offices also thrive in smaller rural communities, where they often serve as the only veterinarian for the entire community. Pros of Working for a Small Veterinary Business. Veterinarians, technicians, and support personnel who work in smaller businesses have the opportunity to build strong, personal relationships with their clients. With a smaller number of clients and a large number of repeat customers, employees of small veterinary offices can get to know their clients and their patients with an intimacy that may be impractical in a larger business. In addition, a small vet’s office or animal hospital draws its clients primarily from the immediate area, allowing the veterinarians and other staff to become or feel part of the larger community. Smaller veterinary businesses require less overhead than do larger businesses, in terms of staffing,

Veterinary Industry supplies, equipment, and real estate costs. Because smaller businesses draw many of their clients from the immediate area, they are not as dependent on advertising and not as closely tied to economic fluctuations. In periods of recession, for instance, when businesses must cut back on advertising and marketing, smaller businesses may weather economic downturns by relying on their repeat and local customer base. Cons of Working for a Small Veterinary Business. Working in a small veterinary office presents a number of challenges. Because smaller businesses earn less in a typical working day, income potential for the business owner and managers is less than can be earned by working for a larger business. In addition, although there are economic advantages to having a relatively stable customer base of local and repeat clients, small businesses may be vulnerable during prolonged periods of reduced business because they lack the financial resources to maintain their supplies and staff until business rebounds. Because they often must complete jobs from a number of different categories, employees of small businesses may also find that they have a more demanding workload than those working in similar positions at larger companies. A neighborhood veterinarian, for example, might be asked to treat gerbils, rats, mice, fish, birds, snakes, lizards, dogs, cats, and a variety of other animals, while veterinarians at larger animal hospitals and clinics can specialize in only one type of animal. Costs Payroll and Benefits: While most veterinarians work on salary, other staff members are typically paid an hourly wage. Many small veterinary businesses are unable to offer traditional benefits to their employees but may offer alternative benefits, including free treatment for employees’ pets or discounts on pet medication and supplies. Supplies: All veterinary offices require a wide variety of supplies, including medications, equipment, cleaning and sanitation supplies, office supplies, and other items. While larger businesses and chains can reduce supply costs by purchasing in bulk quantities, maintaining sufficient supplies is a significant challenge for many small businesses.

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External Services: Most veterinary offices require few external services other than the delivery of supplies. Some hire external vendors to dispose of expired medication and other biohazardous materials or to launder uniforms and medical gowns. Some veterinary businesses also hire outside vendors to handle laboratory tests, including blood, urine, and feces screening. Utilities: Most veterinary businesses pay for basic utilities, including gas/oil, water, sewage, electricity, telephone, and Internet services. Taxes: Small businesses are required to pay state, local, and federal taxes, as well as licensing fees applicable to their region. Most veterinary offices also must carry significant insurance to protect staff and customers from both injury and litigation.

Midsize Businesses Midsize veterinary businesses include animal hospitals and clinics, joint private practices with several staff veterinarians, and many animal-testing and laboratory facilities. These businesses are more generalized than are small businesses, and they must draw clients from outside their immediate community to earn sufficient revenues. Midsize businesses are often part of larger chains that operate branches in various locations. Potential Annual Earnings Scale. Wages in midsize veterinary businesses tend to be at the higher end of the salary range. Most midsize businesses earn between $1 million and $3 million annually, and the average veterinarian’s salary according to the BLS was $90,110 in 2009. Veterinarians in the seventy-fifth income percentile earned $105,190. Most technicians, assistants, and supporting staff members are paid hourly wages. Clientele Interaction. While the atmosphere of many small veterinary businesses may seem hectic, with each employee struggling to complete tasks in a variety of categories, midsize businesses usually have sufficient staff to institute a more functional division of labor. In some midsize businesses, veterinarians and other staff members are able to dedicate a greater proportion of their time to clientele interaction, despite having to handle large customer volume. Many midsize veterinary businesses are animal hospitals, which may employ specialists in a variety

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Veterinary Industry

An X ray of a cat’s paws. Other diagnostic imaging used for pets includes magnetic resonance imaging, ultrasound, and computed tomography. (©Dwight Smith/Dreamstime.com)

of veterinary fields. Staff specialization can lead to greater customer satisfaction, as clients feel that their animals are receiving the most appropriate treatment. In addition, midsize businesses can often afford support personnel who specialize in client interactions, helping customers feel welcome and comfortable. While midsize businesses have some distinct advantages in providing service, the atmosphere of midsize veterinary offices is often more formal than that of small-business offices. Because midsize businesses depend on drawing customers from outside the immediate community, they do not cultivate the same community-oriented atmosphere that many smaller veterinary offices do. In addition, higher volumes often prevent the relationships between staff and clients from becoming as intimate as they do in smaller businesses. Amenities, Atmosphere, and Physical Grounds. Midsize businesses require more space than do their smaller counterparts. Whereas smaller veterinary businesses more often need to organize themselves to fit within an existing space, midsize businesses often have the luxury of designing their space to fit their needs. Veterinary busi-

nesses catering to livestock and commercial animals need significantly larger areas than do those catering to domestic cats, dogs, and other pets. Whatever the type of business, most midsize veterinary establishments have one or more waiting areas for clients, several examination and quarantine rooms, and rooms for storage and supplies. Since many midsize veterinary businesses are animal hospitals, they may have examination rooms set aside for certain types of treatments, including X-ray rooms and surgical rooms. The waiting rooms and client areas of a veterinary office are usually decorated with animalthemed pictures, posters, and other items. Outside of the animal themes, the offices resemble medical waiting rooms, with magazines and other reading materials and, often, televisions for clients who are waiting while their pets are treated. While a midsize business is often more formal and organized than a small business, most veterinary offices strive to create a friendly and inviting atmosphere in those areas set aside for clients. As midsize businesses often have significant funds for designing their interior spaces, they are more able to offer amenities to their clients, including multiple restrooms, cable or satellite television, wireless Internet access, and comfortable furniture. Typical Number of Employees. Midsize veterinary practices generally employ between twenty and thirty employees, including veterinarians, technicians, customer service attendants, supply and equipment specialists, cleaning staff, and temporary workers. While a midsize laboratory or testing facility may require between ten and twenty employees, many animal hospitals provide late-night hours and may therefore require a much larger staff, divided among two or more shifts. Traditional Geographic Locations. Midsize veterinary businesses are often located in areas with significant traffic, such as outside a major metropolitan area or at the intersection of a major highway system. While small veterinary practices specialize in providing community care, midsize veterinary businesses must draw clients from across the surrounding area. Midsize businesses are best situated where they can draw some business from their immediate area while being easily accessible to those traveling from other nearby areas. Locations at the edge of cities or in suburbs are ideal, as businesses can attract clients from all surrounding

Veterinary Industry communities that have few or no small veterinary offices serving them. Pros of Working for a Midsize Veterinary Business. One of the primary benefits of working at a midsize veterinary business is job security. Midsize businesses are often financially stable relative to their smaller counterparts. Because many midsize veterinary businesses offer veterinary specialists, they receive business from clients who cannot receive specialized care at their local veterinary offices. Midsize businesses are also able to compete by offering longer hours and less wait time. Employees of midsize veterinary businesses are also more likely to enjoy employment benefits than are those working at smaller businesses. This is especially true for employees of veterinary chain businesses, as these businesses often offer group medical and dental plans and other benefits. Even independent midsize veterinary businesses often have a large enough staff and high enough annual revenues to offer health insurance, retirement plans, and other benefits to their employees. Employees of midsize businesses also benefit from an increased division of labor, which often translates into less hectic workloads and more assistance being available for all employees. While receptionists at small veterinary offices might have to handle tasks ranging from customer service and scheduling to cleaning patient and customer areas, receptionists at midsize businesses might enjoy the assistance of other customer-service specialists, cleaning staff, and other personnel, helping lighten their workload. Cons of Working for a Midsize Veterinary Business. Some individuals may prefer the atmosphere of small businesses, which provide more personal client interactions and greater diversity of activities, over that of midsize businesses. In addition, some prefer small businesses because of their community-oriented nature, which is often lacking at a larger veterinary firms. Midsize businesses have higher costs than do small businesses, for both staff and supplies. For this reason, midsize businesses must maintain higher customer volume. Some employees may find that the need to maintain high numbers of customers results in uncomfortable levels of activity during a given shift. Employees at midsize businesses might also find that they work longer hours than do those at smaller businesses, particularly

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since midsize businesses often offer late shifts and some offer twenty-four-hour emergency services. Veterinarians at midsize hospitals may need to answer calls overnight or visit the hospital at all hours to handle emergencies that require special attention. Costs Payroll and Benefits: Midsize veterinary businesses typically pay veterinarians and managers annual salaries, while most other employees earn hourly wages. Supplies: Midsize veterinary businesses require numerous supplies, from medical equipment and medication to cleaning, sanitary, and paper supplies. External Services: Many midsize veterinary businesses have in-house laboratory equipment, but others use outside vendors to process some materials and conduct advanced testing. Some may also contract external laundry and disposal services to clean uniforms and dispose of biohazardous materials and expired medication. Utilities: Midsize businesses are responsible for paying for gas/oil heating, electricity, water, sewerage, telephone, and Internet services. Taxes: Midsize businesses are responsible for paying all applicable state, federal, and local taxes. Most veterinary businesses also incur significant expenses for insurance, to cover both injury and malpractice. In some states, veterinary offices must pay special licensing fees for animal care and housing. Large Businesses There are relatively few large veterinary businesses. Such businesses have more than fifty employees and revenues generally ranging above $5 million annually. Banfield Pet Hospitals, a multinational corporation owned by the Mars Corporation, earns in excess of $180 million annually. According to Hoover’s, the fifty largest companies in the United States hold only 10 percent of the nationwide veterinary market. Most of the largest veterinary businesses are part of national or international chains, such as those in the Banfield and VGA Antech companies, which are part of the PetSmart chain of pet and pet-supply retailers. Potential Annual Earnings Scale. Most employees in the largest veterinary businesses earn sal-

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Veterinary Industry

aries commensurate with those in midsize businesses. The average veterinarian’s salary according to the BLS was $90,110 in 2009. Veterinarians in the ninetieth income percentile earned $142,910. Because their income level is determined by the overall earnings of the chain rather than an individual branch, general and district managers for chain businesses may earn significantly higher incomes on average. The average salary of a general or operations manager in 2009 was $110,550. Most technicians and veterinary support staff, as well as cleaning staff and other personnel at larger veterinary businesses, are paid hourly wages. Clientele Interaction. Managers and veterinarians at large businesses tend to interact with clients in a more formal manner than do their counterparts at smaller businesses. Greater overall customer volume translates into the need for a more rigid system of customer service and does not always allow time for personal interaction. Despite these constraints, large veterinary businesses are capable of employing personnel dedicated to customer satisfaction and customer relations. Many of the larger veterinary businesses operate in conjunction with veterinary universities or veterinary technician programs. As a result, customers of large veterinary businesses often interact with students who are learning the veterinary practice. The presence of student assistants sometimes allows veterinarians and other staff members to dedicate more time to customer interaction. Amenities, Atmosphere, and Physical Grounds. Large veterinary businesses differ widely in appearance and atmosphere. A veterinary university, for instance, may be a complex operation with numerous examination, laboratory, and medical rooms and several waiting areas capable of handling a large volume of customers. A veterinarian business located within a pet store may occupy only a small section of the larger retail environment, with a significantly different overall atmosphere. Because they handle large volumes of customers, most large veterinary businesses provide a number of basic amenities, from restrooms and vending machines to television and Internet service for customers. The waiting and lobby areas of large veterinary businesses, like those of midsize and small businesses, tend to resemble those of doctors’ offices. Decorations often include posters

and postings with information about animal illnesses and office policies. Magazines and reading materials usually include a number of animalthemed publications and materials. Typical Number of Employees. A single office within a chain of veterinary offices may have only ten or twenty employees, while the company as a whole may employ thousands of people. For example, Banfield Pet Hospitals employs more than five thousand veterinarians, technicians, and support personnel through its offices in the United States, the United Kingdom, and Mexico. In addition, companies such as Banfield provide employment for hundreds of temporary and student workers. Traditional Geographic Locations. Many of the largest veterinary businesses are part of national or multinational chains, with locations spread across a vast geographic area. Large singlelocation veterinary businesses include major veterinary colleges and other learning centers. These are generally located in or near major metropolitan areas. Large veterinary businesses must maintain significant customer volume to afford their considerable costs, but most are able to expend a significant amount on advertising and marketing. Veterinarian offices located within pet stores often offer veterinary services to customers purchasing pets, thereby maintaining a consistent level of customers. Pros of Working for a Large Veterinary Business. Large companies are generally able to offer employment benefits, including insurance and medical care for employees, because they are able to secure group rates for coverage. In addition, large companies have the financial backing to purchase better equipment and supplies for their employees and to hire more support personnel to enhance their operations. For employees of veterinary learning institutions, working in a student environment can entail access to experimental and emerging veterinary techniques, medications, and equipment. In addition, medical learning institutions can sometimes provide employees with amenities not available through smaller companies, such as parking permits, gym or fitness-center access, and access to a larger university or college campus with its associated resources. Cons of Working for a Large Veterinary Business. Large veterinary businesses are usually

Veterinary Industry the least community oriented, and many employees may not want to work in a more corporate and less personal environment. Larger businesses are also more complicated in terms of operation, supplies, and staffing, which can be an important factor to some potential employees. Another con to working in a large veterinary business is that the success of the business is more closely tied to the state of the local economy, as large businesses are dependent on maintaining significant customer flow. Unlike small veterinary businesses, a large veterinary chain must rely on attracting new customers on a regular basis and must therefore invest heavily in advertising and marketing. If the local economy deteriorates, large businesses are the first to suffer, as new customers become less frequent, while small businesses can weather some financial fluctuations by relying on their repeat clientele. Costs Payroll and Benefits: Salaries and benefits vary in large veterinary establishments. In veterinary hospital chains, many employees are offered benefits along with full-time employment. Most veterinarians, managers, and executives are paid salaries, while assistants and technicians are often paid hourly wages. Supplies: Large veterinary businesses require a wide variety of supplies, from medical equipment and medication to cleaning and administrative supplies. Medical learning institutions must also provide a variety of additional supplies, including learning materials, student computer systems, and other equipment. Larger businesses have some advantages in terms of supply costs, as they are generally able to purchase supplies in bulk. External Services: Large businesses may hire outside companies to deliver supplies, in addition to hiring laundry services to clean staff uniforms. Most veterinary colleges and universities hire external companies to dispose of hazardous materials and medications. Veterinary colleges may also hire external companies to provide food and beverages to their students and staff. Utilities: Large businesses pay for water, sewage, gas/oil, and electricity, in addition to telephone and Internet access.

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Taxes: Large properties must pay all applicable state, federal, and local taxes, in addition to maintaining specialized insurance against both injury and malpractice. Many businesses must also pay annual licensing fees specific to companies that handle animals.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure of a veterinary business depends on both the size of the business and the type of services offered. Some job roles are specific to certain kinds of businesses. For example, some businesses that treat dangerous or large animals must employ handlers specializing in managing these animals, while a veterinarian who primarily handles domestic pets has no need for these specialized employees. While some businesses require an organized hierarchy of executives and managers, smaller businesses may function with a single manager. Likewise, larger businesses often require a more complex organizational structure to accommodate larger numbers of customers. The following umbrella categories apply to businesses in the veterinary industry: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Medical Staff Executive Management Medical Support Staff Animal Care Nutrition and Food Services Maintenance and Sanitation Administrative Support Laboratory Services Advertising and Marketing Human Resources Alternative Care

Medical Staff Veterinarians and veterinary specialists are trained in animal medicine. Like human medical staff, veterinarians attend veterinary school for between three and five years. Though a veterinarian may begin practicing immediately after graduating from veterinary school, most graduates choose to complete a year-long residency program to obtain practical experience.

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Veterinary Industry OCCUPATION

SPECIALTIES

Veterinarians Specialty

Responsibilities

Poultry veterinarians

Advise poultry raisers on problems, gather information from owners, and inspect flocks, pens, and housing.

Public health veterinarians

Control and prevent diseases that are transmitted from animals to humans. They inspect livestock and food- and drug-processing plants and provide information to the public.

Veterinary livestock inspectors

Test animals for the presence of disease by performing standard clinical tests and submitting specimens of tissues and other parts for laboratory analysis.

Veterinary meat inspectors

Inspect establishments engaged in slaughtering livestock and processing meat to detect evidence of disease or other conditions.

Veterinary virus-serum inspectors

Inspect establishments that manufacture serums, toxins, and similar products used in the treatment of animals to enforce state or federal standards.

After completing veterinary training at an accredited program, veterinarians may choose to become board certified, meaning that they receive endorsement from the American Veterinary Medical Association (AVMA), an organization that is empowered by the U.S. Department of Education to represent veterinarians and measure quality in the industry. Those veterinarians who seek endorsement from the AVMA must complete an additional three- to four-year residency in one of twenty AVMA-recognized specializations. Like medical doctors, veterinarians can specialize in various disciplines, including internal medicine, surgery, oncology, dermatology, radiology, anesthesiology, neurology, and cardiology. Specialized veterinarians have more diverse employment options, including working in veterinary learning institutions and animal hospitals. Veterinarians who do not obtain board certification generally work in private practice or for private veterinary clinics. In addition to specializing in a branch of medicine, veterinarians may also specialize in a certain type of animal or a certain type of veterinary environment. For instance, some veterinari-

ans specialize in treating animals in zoological parks, and others specialize in treating commercial animal populations, such as livestock and other working animals. In a private practice or small veterinary clinic, the veterinarian generally also serves as the executive manager. Other veterinary businesses have separate employees serving as managers and executives. Veterinarians are generally paid a salary, ranging from under $50,000 to well over $150,000 per year in the United States. Medical occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Executive Veterinarian Veterinary Associate Veterinary Neurologist Veterinary Surgeon Veterinary Anesthesiologist Veterinary Oncologist Veterinary Dentist Veterinary Nutritionist Veterinary Dermatologist Veterinary Cardiologist

Veterinary Industry Executive Management Executive managers oversee the daily operations of veterinary businesses, from hiring and human resources management to ensuring financial stability. While some veterinary businesses, such as private practices, may not have management roles, others, such as the large Banfield Pet Hospitals operated in conjunction with nationwide pet-supply stores, have dedicated executive managers in addition to veterinarians. In some veterinary businesses, individuals in management are trained or former veterinarians. In other businesses, managers and executive officers are hired for their expertise in management and may not need to have any veterinary experience. In veterinary learning institutions, for instance, executives and managers are generally separate from the medical department and do not handle veterinary duties in addition to their executive functions.

OCCUPATION

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Executive management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) General Manager Personnel Manager Administrative Support Manager Assistant Manager Human Resources Manager

Medical Support Staff Veterinary technicians and technologists are trained to assist veterinarians in their practice. There are two levels of training recognized by the AVMA: technicians, who undergo a two-year training program, and technologists, who receive four years of professional training. In 2006, there

PROFILE

Veterinary Assistant/Technician Considerations

Qualifications

Description

Assists veterinarians in procedures performed on animals and monitors animals in veterinarians’ offices.

Career clusters

Agriculture, Food, and Natural Resources; Health Science

Interests

People; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; junior/technical/community college

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; volunteer work; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

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Veterinary Industry

were 131 accredited training programs in the United States, located in forty-four states. Veterinary technicians and technologists are the equivalent of nurses. Technicians assist veterinarians in performing medical procedures and can perform some basic examinations and other procedures on their own. Technicians and technologists also assist in handling animals and are often responsible for speaking with customers and discussing care and handling with owners. Like veterinarians, veterinary technicians and technologists may specialize in certain types of animals. There are technicians and technologists who specialize in livestock and the commercial animal industry, while others are trained to handle wildlife and exotic animals. The vast majority of technicians and technologists work with domestic animals. Most technicians and technologists are paid hourly wages and may be paid between $10 and $20 per hour. Some technologists and technicians work on salary and may earn between $25,000 and $50,000 per year. As they are trained professionals, many technicians and technologists receive basic benefits, including health and dental insurance, from their employers. Medical support occupations may include the following: ■ ■ ■

Veterinary Technician Veterinary Technologist Managing Technician/Technologist

Animal Care Animal care assistants fill a wide variety of roles in the veterinary industry, generally occupying a subordinate role to both veterinarians and veterinary technicians and technologists. Animal care assistants are generally required to have high school degrees or the equivalent, and they must receive on-the-job training in the industry. Animal care experts may specialize in several different areas, including animal training, grooming, handling, and basic care. Many animal care assistants help veterinarians and other veterinary workers by physically handling animals and assisting with grooming and other procedures that require hands-on care. Animal care workers are generally paid hourly wages of between $6 and $15 per hour, depending

on the type of institution employing them. They generally earn more when employed at an animal hospital or a veterinary clinic than if employed at a private practice. Larger corporations, animal hospitals, and learning institutions are more likely to offer animal care workers some benefits, including medical and dental insurance. Animal care occupations may include the following: ■ ■ ■

Animal Care Attendant Groomer Animal Trainer

Nutrition and Food Services Some veterinary businesses provide nutrition and diet services for clients. While veterinarians are generally trained in nutrition and diet, there are also assistant positions for those who handle animal nutrition. In the livestock industry, for example, food preparation and the feeding of animals is often handled by trained technicians who study nutritional requirements. Nutritionists and food service providers are generally paid hourly and may earn wages ranging from $7 to over $10 per hour. Many veterinary businesses assign food service duties to technicians, technologists, or other animal care workers, rather than hiring staff members specifically for food preparation and maintenance. In larger corporations and veterinary colleges and universities, nutritionists may be offered some benefits along with full-time employment. Nutrition and food service occupations may include the following: ■ ■ ■

Nutritionist Nutrition Assistant General Assistant

Maintenance and Sanitation Larger veterinary businesses often hire employees to clean and sanitize their facilities. These workers remove trash and recyclable materials, clean floors and surfaces, and may also dispose of hazardous materials, including expired medications. Some maintenance workers are also called on for other activities, including transportation of supplies and equipment, or repair and upkeep of equipment. Maintenance workers who fix equip-

Veterinary Industry ment may require special training, which is offered through many colleges, universities, and technical training organizations. Maintenance workers are generally paid hourly wages, which may depend on the type of business. In some larger corporations and in veterinary learning institutions, maintenance workers may be offered some basic worker benefits, such as health insurance, dental coverage, and retirement plans, or life insurance. Maintenance and sanitation occupations may include the following: ■ ■ ■ ■

Custodian/Janitor Housekeeper Sanitation Assistant Maintenance and Repair Worker

Administrative Support Many veterinary businesses hire staff to handle administrative functions. Administrative assistants handle clerical and bookkeeping functions and may also be responsible for ordering and maintaining office supplies. Administrative assistants may also be responsible for scheduling appointments and organizing schedules for veterinarians and other professionals. The specific roles and duties assigned to administrative personnel differ widely depending on the type of business. In a veterinary learning institution, for instance, an administrative assistant might have duties related to student enrollment and degree attainment, while an assistant in a small practice might handle some roles that would be assigned to animal care experts or technicians in larger veterinary businesses. Training courses for administrative assistants are offered through colleges, universities, community colleges, and technical training institutions. Not all administrative assistants complete specialized training, and some companies offer on-thejob training for those interested in administrative positions. Most administrative assistants are paid hourly wages, ranging between $6 and $10 per hour. Some companies offer benefits, such as health and dental insurance, to administrative personnel. Administrative support occupations may include the following:

■ ■ ■

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Administrative Assistant Bookkeeper Clerk

Laboratory Services Laboratory work is an essential part of veterinary medicine. Laboratory technicians test animal blood and waste and help screen animals for various types of diseases and parasites. In addition, dedicated laboratories perform experiments that help create new medications and treatments. University, college, and technical training programs are available for those seeking to become laboratory workers and technicians. Many independent laboratories hire chemists and other specialists as assistants. Some veterinary offices have internal personnel dedicated to performing laboratory procedures and managing laboratory operations. There are also dedicated laboratory businesses that serve more than one veterinary office, providing testing and other services for veterinarians. Independent laboratories often have an administrative structure that may include laboratory managers, researchers, specialists in certain procedures, and animal care providers. Most laboratory assistants are paid hourly wages, typically between $7 and $10 per hour, while some laboratory managers and executives may earn salaries. In some companies, laboratory assistants may be offered benefits, including health insurance. Laboratory occupations may include the following: ■ ■ ■ ■

Laboratory Manager Laboratory Technician Laboratory Assistant Laboratory Maintenance Assistant

Advertising and Marketing Advertising and marketing staff create and organize advertising and marketing campaigns for their businesses. While small veterinary clinics might not typically engage in any advertising other than placing print advertisements in local publications, large animal-hospitals and major corporations must create advertising, branding, and marketing strategies to compete in the larger market. Some companies hire outside vendors to handle their marketing and advertising needs, while other

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companies hire one or more full-time employees to help organize marketing and advertising strategies. In companies large enough to have marketing and advertising departments, advertising executives and assistants often earn salaries similar to those of lower-level managers. Some advertising and marketing specialists have college degrees in marketing, advertising, or business administration. As they are generally part of the executive staff, many advertising and marketing workers receive benefits, including medical and dental insurance. Advertising and marketing occupations may include the following: ■ ■ ■ ■ ■

Advertising and Marketing Director Events Director Advertising Executive Advertising Assistant Marketing Assistant

nary industry. Veterinary psychology, holistic animal health, veterinary chiropractic medicine, and veterinary wellness are all growing disciplines that have gained increasing respect in the early twentyfirst century. Most alternative veterinary health professionals receive their training from specialized institutions that may offer certificate programs or other measures of attainment. Some accredited veterinary learning institutions have begun to offer training in certain alternative health practices. As many alternative health professionals are employed in private practice, salaries for these professionals can be similar to those for veterinary professionals, ranging from $50,000 to over $100,000 annually. Alternative care occupations may include the following: ■ ■ ■

Human Resources Human resources staff hire, fire, manage, and train personnel, as well as responding to employee conflicts and grievances and administering benefits and payrolls. Some larger veterinary companies and veterinary learning institutions have dedicated human resources staff, whereas others assign human resources duties to general managers and administrators. Human resources personnel may receive training in various disciplines, including psychology, business administration, or specialized human resources programs. They may be either salaried or hourly depending on the type of business. Hourly wage earners may receive between $7 and $20 per hour, depending on the organization. In some businesses, human resources personnel are offered benefits such as medical and dental insurance. Human resources occupations may include the following: ■ ■

Human Resources Manager Human Resources Assistant

Alternative Care The alternative health industry includes a number of disciplines that are generally outside the realm of a standard veterinary education but that have come to represent a major facet of the veteri-

■

Veterinary Chiropractor Veterinary Psychologist Holistic Veterinary Specialist Holistic Dietician

INDUSTRY

OUTLOOK

Overview While many U.S. industries suffered as a result of the 2007-2009 global financial crisis, the veterinary industry, like other medical services, remained strong. Veterinary services are generally considered essential, rather than elective. In addition, the overall increase in the affluence of the American population and a constantly increasing population of domestic animals have contributed to the continuing growth of the veterinary industry. In 1995, the Pet Food Institute estimated that there were approximately 144 million pet dogs and cats in the United States. The Pet Food Institute also estimated that the pet population was growing at an annual rate of 1.2 percent for dogs and 1.9 percent for cats. Another estimate, conducted by the American Pet Products Association in 2006, indicated that there were 164 million pets in the United States, slightly fewer than the number projected by the the Pet Food Institute’s statistics. According to the AVMA, more than 70 percent of working veterinarians concentrate on domestic animals, and approximately 75 percent work in private practice. According to the BLS, there were ap-

Veterinary Industry proximately sixty-eight thousand veterinarians in the United States in 2006, serving a population of more than 140 million pets (growing at a rate of between 1 and 2 percent each year). Taken together, these statistics indicate that there is ample room for growth within the veterinary industry. The BLS estimates that the number of jobs for qualified veterinarians will grow by 35 percent between 2006 and 2016, which is much faster than the average rate of 11 percent for all industries combined. Because the domestic cat population is growing at a faster rate than is the domestic dog population, the demand for cat services is expected to be the fastest growing segment of the veterinary industry. For each veterinarian entering the industry, moreover, there is a demand for one or more veterinary technicians. The BLS estimates that the technician and technologist industry will grow by more than 41 percent between 2006 and 2016. As of 2008, there were only twenty-eight accredited veterinary schools in the United States, leading to considerable competition among prospective students. The situation is similar for those seeking to become veterinary technicians and technologists, as there are too few programs available to serve all the nation’s prospective students. In addition, most veterinary technicians and technologists leave their jobs after eight years or fewer, creating more employment opportunities for those wishing to enter the industry. Another factor affecting the amount of work available for veterinary workers is the number of pet owners who regularly use veterinary services. About six of every ten pet owners use veterinary services, a number that is expected to grow as the general population increases in affluence. Job prospects are expected to increase, both for those seeking to provide high-end veterinary services and for those interested in offering cheaper veterinary options to low-income pet owners. Job prospects remain good in both urban and suburban areas, and there are numerous additional opportunities for those seeking to work in underserved rural areas. The veterinary industry is always evolving with the advent of new therapies, techniques, and technology. In the first decade of the twentyfirst century, alternative therapies and specialized veterinary medicine were the two major trends dominating the field.

1943

The modern veterinary field has kept pace with human medicine in terms of procedures, equipment, and research. Many procedures that were once available only to humans—such as advanced cancer treatments, joint-replacement surgery, kidney transplants, and other advanced surgical techniques—are now regularly performed on animals. In addition, veterinary specialists, once relatively rare, are becoming more common. Specialist veterinarians generally work at veterinary hospitals or learning institutions and tend to cater to the more affluent customers who can afford the considerable costs of special procedures. The veterinary oncology and orthopedic surgery subsectors, in particular, have grown considerably. This increase is partly related to inbreeding to create purebred dog strains, which has exacerbated degenerative ailments among dogs. Veterinary specialists have allowed many animals to survive that might have been euthanized in the past. Another area of growth in the specialized veterinary industry is veterinary dentistry, a field that has grown rapidly in the 1990’s and early twenty-first century. Many pet owners purchase preventive dental care for their dogs and cats, preventing tooth decay and tooth loss in elderly animals. The emergence of veterinary dentistry has also led to growth in the technician and technologist fields, as veterinary dentistry often requires specially trained assistants. In a trend similar to those affecting human medicine, the specialization of veterinary professionals has led to a situation in which trained technologists now routinely handle basic veterinary care, while veterinarians handle more advanced diagnoses and procedures. This situation is analogous to that in human medicine, in which nurse practitioners have begun to take a larger role in primary care, while physicians concentrate on advanced care. The other major growth area in the veterinary industry is alternative care, which includes veterinary psychology, holistic veterinary care, and other alternative treatments. While alternative care is still a relatively small subsector—and is typically available only in urban environments—the number of practitioners offering alternative care has grown in the twenty-first century, as have the number of alternative treatment options for human patients. Holistic veterinary care has a number of subfields, including herbal medicine, acupuncture,

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Veterinary Industry

massage, and relaxation therapy. While basic veterinary care is often considered an essential expenditure, holistic care generally appeals only to affluent pet owners with considerable disposable income. Alternative treatments appeal to those who have found that traditional treatments have been ineffective and also to those who have a strong personal belief in the efficacy of alternative treatment options. Like holistic care, veterinary psychology is generally considered optional rather than essential, and it appeals only to those who have sufficient disposable income. The field has grown, however, because many animal trainers and animal care experts have begun to offer veterinary psychology as part of their behavioral analyses. Veterinary psychology has therefore thrived because of its association with the more popular and practical animal training industry. Another area of growth within the veterinary industry is wildlife medicine. Increasing global concern over extinction of species and the threats affecting wild populations of animals has increased the demand for specialists in the fields of veterinary medicine and wildlife health. Veterinarians specializing in exotic animals and wildlife may find work in zoological parks and wildlife parks, as well as through conservation organizations. As populations of wild animals shrink to vulnerable levels, disease can rapidly spread through a population and bring a species to the brink of extinction. Wildlife veterinarians specializing in infectious diseases have therefore found a strong niche in the industry, and the demand for wildlife specialists is expected to grow as the environmental crisis increases in intensity. Veterinarians may also be employed by state and federal agencies, and they often play an important role in monitoring and preventing the spread of disease between animal and human populations. As concern over diseases such as avian flu and H1N1 (swine flu) have increased in the early twenty-first century, the demand for veterinarians working in infectious diseases and related specialties continues to grow. Employment Advantages The BLS and the AVMA both predict that the veterinary industry will continue its current trend of robust growth and increasing availability of jobs.

Because animal care will remain an essential service, the animal care industry will enjoy greater stability than some consumer and recreation industries. Job losses are less likely among veterinarians, technologists, and technicians, and most veterinary clinics are able to maintain sufficient volume to maintain a full staff, even in times of economic turmoil. The veterinary industry offers a diverse array of career paths, from executive management and education positions to organic chemistry and advanced medical research. The increasing diversity of veterinary medicine, with a growing list of specializations and subspecializations, allows veterinary graduates to choose from a larger list of potential career options. As veterinary medicine diversifies, new career paths are created within the technician and technologist professions as well. In addition, the veterinary industry offers unique opportunities to have a direct impact on the environment and ecological health, as well as opportunities to positively affect human culture. Veterinarians, technologists, and technicians are essential to efforts to control loss of species, to promote environmental health, and to slow the processes of ecological decay. Veterinary workers are also essential in the effort to provide sufficient food for the global population and to study, prevent, and cure many different kinds of diseases. While veterinary medicine and skilled assistant positions require investment in education, the veterinary industry provides a number of positions for semiskilled and unskilled workers. These workers serve as janitorial assistants, animal handlers, and maintenance technicians, among other roles. In addition, veterinary hospitals, clinics, and learning institutions employ a large number of students and young workers for temporary jobs and aid in the training of a large number of individuals hoping to enter the animal care industry as professionals. As animal care is available in a variety of areas, from urban environments to rural communities, the industry also spreads job availability around the globe. Most veterinary workers are drawn to the industry by a basic love for animals and a desire to aid in their care and well-being. Along with zoological parks, wildlife sanctuaries, and the animal sciences, the veterinary industry allows persons with a love for animals to earn a living engaging with ani-

Veterinary Industry mals on a daily basis. Many who work in veterinary positions are drawn more by their own passion for animals than by the wages and job security afforded by the industry. Annual Earnings Hoover’s estimated the 2009 total revenues of the veterinary industry at $20 billion. The BLS estimated the median annual income of U.S. veterinarians in 2009 at $80,510, with a range from under $47,670 to more than $142,910. Veterinarians employed by federal agencies earned an average of $84,200 in 2009. Veterinary technicians and technologists earned a median income of $12.88 per hour in 2006, within a range of between $10.00 and $18.00 per hour. While technicians and technologists earn far less on average than veterinarians, the lower cost of training and greater job availability continue to make veterinary medical support an attractive option. According to the BLS, animal caretakers, trainers, and handlers earned an hourly wage in the range between $7 and $12 in 2006. Though this category earned wages significantly lower than the more specialized facets of the industry, animal care workers require less training: On-the-job training often suffices. Because of the low pay compared to other employment opportunities requiring similar levels of educational attainment and experience, animal-care positions tend to attract a large number of students and young workers.

RELATED RESOURCES FOR FURTHER RESEARCH American Animal Hospital Association 12575 W Bayaud Ave. Lakewood, CO 80228 Tel: (303) 986-2800 Fax: (303) 986-1700 http://www.aahanet.org American Association for Laboratory Animal Science 9190 Crestwyn Hills Dr. Memphis, TN 38125-8538 Tel: (901) 754-8620 http://www.aalas.org

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American Society for the Prevention of Cruelty to Animals 424 E 92d St. New York, NY 10128-6804 Tel: (212) 876-7700 http://www.aspca.org American Veterinary Medical Association 1931 N Meacham Rd., Suite 100 Schaumburg, IL 60173-4360 Tel: (800) 248-2862 Fax: (847) 925-1329 http://www.avma.org Animal Behavior Society 402 N Park Ave. Bloomington, IN 47408 http://www.abs.org Association of American Veterinary Medical Colleges 1101 Vermont Ave. NW, Suite 301 Washington, DC 20005 Tel: (202) 371-9195 Fax: (202) 842-0773 http://www.aavmc.org Humane Society of the United States 2100 L St. NW Washington, DC 20037 Tel: (202) 452-1100 http://www.hsus.org International Veterinary Information Service P.O. Box 4371 Ithaca, NY 14852 http://www.ivis.org National Association of Veterinary Technicians in America 50 S Pickett St., Suite 110 Alexandria, VA 22304 Tel: (703) 740-8737 Fax: (202) 449-8560 http://www.navta.net United States Animal Health Association P.O. Box 8805 St. Joseph, MO 64508

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Veterinary Industry

Tel: (816) 671-1144 Fax: (816) 671-1201 http://www.usaha.org

ABOUT

THE

AUTHOR

Micah L. Issitt is a freelance writer specializing in animal behavior and ethnology. He has been working with veterinarians and animal care experts since his childhood and has had the opportunity to work closely with wildlife and zoological veterinarians, as well as those in private practices. Issitt has published works in journals and textbooks on industry and the development of the American marketplace.

FURTHER

READING

American Veterinary Medical Association. “Market Research Statistics.” http:// www.avma.org/reference/marketstats/ 1yremploy.asp. Aspinall, Victoria. The Complete Textbook of Veterinary Nursing. St. Louis, Mo.: Elsevier Health Sciences, 2006. Dobbs, Katherine. 101 Veterinary Technician Questions Answered. Lakewood, Colo.: American Animal Hospital Association, 2009. Fox, Michael W. Laboratory Animal Husbandry: Ethology, Welfare, and Experimental Variables. New York: SUNY Press, 1986. Heinke, Marsha. Practice Made Perfect: A Guide to Veterinary Practice Management. Lakewood, Colo.: American Animal Hospital Association, 2009. Hoover’s. “Veterinary Services.” http://www .hoovers.com/veterinary-services/ID__110—/ free-ind-fr-profile-basic.xhtml. Hunter, Pamela. Veterinary Medicine: A Guide to Historical Sources. Surrey, England: Ashgate, 2004. Koshgarian, Lindsay, et al. Veterinary Medicine in New England: State-by-State Industry Characteristics and Economic Impacts. Boston:

UMass Donahue Institute, Economics and Public Policy Research Unit, 2008. Miller, Louise. Careers for Animal Lovers and Other Zoological Types. 3d ed. New York: McGraw-Hill, 2007. Pratt, Paul W. Medical, Surgical, and Anesthetic Nursing for Veterinary Technicians. Goleta, Calif.: American Veterinary Publications, 1994. Rose, Rebecca. Career Choices for Veterinary Technicians: Opportunities for Animal Lovers. Lakewood, Colo.: American Animal Hospital Association, 2009. Shenk, Ellen. Careers with Animals: Exploring Occupations Involving Dogs, Horses, Cats, Birds, Wildlife, and Exotics. Mechanicsburg, Pa.: Stackpole Books, 2005. Shilcock, Maggie, and Georgina Stutchfield. Veterinary Practice Management: A Practical Guide. St. Louis, Mo.: Elsevier Health Sciences, 2003. Swope, Robert E., and Julie Rigby. Opportunities in Veterinary Medicine Careers. New York: McGrawHill Professional, 2001. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Labor. The Big Book of Jobs. 2009-2010 ed. New York: McGraw-Hill, 2010. U.S. National Commission on Veterinary Economic Issues. Study of the Current and Future Market for Veterinarians and Veterinary Medical Services in the United States. Schaumburg, Ill.: Author, 2000. Warren, Dean Marvin. Small Animal Care and Management. Florence, Ky.: Cengage Learning, 2002.

Video, Computer, and Virtual Reality Games Industry ©Dreamstime.com

INDUSTRY

INDUSTRY

SNAPSHOT

DEFINITION

Summary Dedicated to interactive entertainment, the video, computer, and virtual reality games industry is one of the fastest-growing segments of the entertainment industry. Comprising software, hardware, and peripherals, the electronic game industry provides entertainment experiences ranging from immersive games requiring hundreds of hours of play to casual games popularized by social media and mobile devices. The industry relies on innovative technologies to create entertainment for a global audience ranging in age from toddlers to senior citizens.

General Industry: Arts and Entertainment Career Cluster: Arts, A/V Technology, and Communication Subcategory Industries: Coin-Operated Games Manufacturing; Computer and Peripheral Equipment Manufacturing; Computer Software Games Publishing; Computer Storage Device Manufacturing; Electronic Computer Manufacturing; Electronic Toys and Games Manufacturing; Input/Output Equipment Manufacturing; Software Publishers; Video Game Machines (Except Coin-Operated) Manufacturing Related Industries: Computer Hardware and Peripherals Industry; Computer Software Industry; Toys and Games Industry Annual Domestic Revenues: $10.5 billion USD (Entertainment Software Association, 2009) Annual International Revenues: $42 billion USD (Entertainment Software Association, 2009, and PricewaterhouseCoopers, 2009) Annual Global Revenues: $52.5 billion USD (PricewaterhouseCoopers, 2009) NAICS Numbers: 3341, 339932, 339999, 511210

History of the Industry Considerable controversy exists as to what constitutes the first video game. In 1952, Alexander Douglas, a doctoral student at the University of Cambridge, programmed his university’s computer to run tic-tac-toe simulations. Some historians attribute the first video game to William Higinbotham, a scientist at Brookhaven National Laboratory. In 1958, Higinbotham prepared for a public open house by programming a table-tennis game to run on a laboratory oscilloscope. His game, Tennis for Two, was enthusiastically greeted by the public and was the hit of the open house. 1947

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Video game players, once mostly teenage boys and young men, have come to include women and older people. (©Stefano Lunardi/Dreamstime.com)

In 1962, the first game available outside a single institute, Spacewar!, was created in a Massachusetts Institute of Technology (MIT) computer laboratory after hours by members of MIT’s Tech Model Railroad Club. The object of the game was to shoot down one’s opponent’s spaceship without falling into the Sun. Other programmers who were familiar with academic computers could potentially modify the gameplay of Spacewar!, and many did. The 1970’s saw the birth of consumer video games. Instead of being relegated to military bases or universities, video games became coin-operated and were installed in pinball and arcade parlors, pizzerias, and other recreational areas. Clones of Spacewar!, based on the original programming at MIT, began appearing in arcades. In the late 1970’s and early 1980’s, home videogame consoles began to appear. Manufacturers

such as Atari and Magnavox offered simplified versions of coin-operated arcade games playable in consumers’ homes, and game consoles sold well. During 1972, the Magnavox Odyssey sold over 100,000 units. These consoles worked with cartridges containing individual games, enabling users to play many different games by purchasing many different cartridges for the same console. As the decade progressed, consumers became disenchanted with the quality of cartridge-based games, which were noticeably more primitive than the full-sized coin-operated machines found in arcades. Seeking to earn profits quickly, some companies preyed on consumers eager for the latest games by repackaging old games and selling them as new titles. Other companies’ game quality dropped precipitously as coin-operated games continued to advance, and consumers became reluctant to purchase titles from an industry that sought only profit. During this same time period, personal computers (PCs) began to drop in price and become more affordable for families. Personal computers were popular not only for business applications and word processing but also as hubs of game playing. Infocom’s Zork series and other text-based games formed a genre known as “interactive fiction” that was popular with young adults. As PCs’ processing power increased, games with simple graphics became available. In 1985, the Nintendo Company released the Nintendo Entertainment System (NES), which was sophisticated enough to rekindle interest in game consoles. The Nintendo games were graphically sophisticated for the time, and they introduced a pair of plumbers (the Mario Brothers) and other iconic characters to the gaming public. These characters would become increasingly important as video gaming evolved, because industry sales would come to be driven in part by franchise characters such as the Mario Brothers who would be featured in many different games. Sega, too, became involved in the console technology race and introduced Sonic the Hedgehog as a franchise character for its Sega Genesis console. While Sega’s games were graphically superior to those of Nintendo, the NES had a more agressive marketing and public relations campaign behind it, and it sold significantly better. In 1999, Sega released the Dreamcast, the first game console with

Video, Computer, and Virtual Reality Games Industry Internet access, but even that could not save the company. At the start of the 2010’s, Sony’s Playstation 3, Microsoft’s Xbox 360, and Nintendo’s Wii systems are battling for dominance of the console market, and PCs remain strong contenders for video game dominance. The video gaming industry has grown into a multibillion-dollar industry, one that consistently earns greater revenues than the motion picture industry and that appeals to a wide range of demographics. The Industry Today As the video game industry has grown, it has realized the need to open new markets. A significant portion of the industry still caters to “hardcore” gamers, or those seeking the most advanced possible hardware and software features and who play games that require hundreds of hours to solve. However, the overall industry seeks to provide a wide range of games to appeal to all ages, genders, and tastes. As the industry seeks to reach all possible markets, casual gamers have become important

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alongside hardcore gamers. Casual games do not require the powerful hardware needed to run hardcore games, and they generally require very little time commitment. Throughout the world, then, gaming is becoming more popular, more accessible, and more profitable. The video, computer, and virtual reality games industry—like most industries reliant on technology—is evolving quickly. Although consoles and PCs are currently the dominant platforms, casual gaming (often played in conjunction with social media) is gaining popularity. Thus, the video game industry consists of more than just first-person shooters and sports simulations. It includes solitaire and other simple one-person games, socialmedia-based games such as Farmville that are played on social networking Web sites, and games featuring immersive worlds such as the Grand Theft Auto series, as well as educational games designed for young players. Casual games do not require the same time commitment that hardcore games do. Players can drop in and drop out of casual games without having to

A fitness club in Los Angeles featuring Nintendo’s Wii Fit Plus. (AP/Wide World Photos)

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remember complex plots, tactical plans, or anything else. Dropping in to play a casual game has no impact on the player’s enjoyment because there is no plot to remember. Hardcore games encourage players to spend dozens, if not hundreds, of hours exploring and mastering them. Generally played on consoles or PCs, these games can cost millions of dollars to make, market, and distribute. Hardcore games run the gamut from sports simulations to realist military simulations to fantasy roleplaying games (FRPGs). Another typical type of hardcore game is the massively multiplayer online role playing game (MMORPG). Players of MMORPGs usually pay a monthly subscription fee to access a shared virtual space simultaneously with other gamers from around the world. These are known as “persistent worlds,” because events continue to occur in them even when the player is logged out of the game. Other persistent virtual worlds are free to play but have in-game advertising or charge fees for specific, premium features. Historically, these online games have been played mostly on PCs, but console manufacturers are increasingly aware that their players desire virtual gathering spaces and are building virtual worlds based around their consoles. The social aspect of gaming is growing quickly. Some players not only want to interact with other players (for example, through MMORPGs and virtual worlds), but also encourage their friends on social networks to play with them. Social games (often played while logged into social networking sites, such as Facebook and MySpace) encourage players to get other members of their social networks involved in them. Farmville, online Scrabble, and other social games provide casual gaming experiences on social networks. More serious games have grown into a serious business. Also known as educational or vocational games, these interactive games are increasingly used by businesses and other organizations. Employers have recognized the value of using games to train their employees in a virtual world before letting them loose in the real world, with real profits and losses. The U.S. Army, recognizing the power of gaming, has experimented with using military simulation games as recruiting tools. With the increasing popularity of video games, especially social and casual games, the way consum-

ers access their games is shifting. In the past, consoles and personal computers (PCs) were the dominant gaming platforms, with handheld consoles such as Nintendo’s GameBoy and Sony’s Playstation Portable as the third most popular platform. This system of game delivery is changing, however, with the evolution of mobile phones. As mobile phones become more sophisticated and better able to support processor- and graphicsintensive games, they are poised to take over as the most popular gaming platform. As with other parts of the entertainment industry, video games borrow from and mix with many aspects of popular culture. Film, television, toys, and video games seed one another with concepts and licensed properties: popular video games have made the leap to feature films, and television shows have spawned their own video games. Indeed, many projects that begin as films, television programs, video games, or comic books seek to develop complementary projects in the other media to maximize profitability, particularly so-called genre projects. It has become extremely common for a science-fiction film, for example, to have a novelization, a comic book adaptation, Web-based and mobile-phone-based casual gaming tie-ins, and a hardcore console and PC game adaptation or spin-off. Cooperating companies strive to release all such adaptations around the same time, so that each will increase the audience for the others. This entwining of various media is moving toward a convergence of seemingly all entertainment. Hardware manufacturers for PCs, consoles, handhelds, and mobile phones are readying themselves for their products to allow consumers to communicate, play games, play video, and surf the Internet. Within the video games industry, there are several subindustries. In larger companies, each subindustry may be a subdivision of the same corporation. Game design studios come up with game concepts and details of play (known as game mechanics). The design team creates the conflict, writes the plot, and designs the monsters. Designers create the story that the game publisher will flesh out. Some design teams are subsidiaries of larger game-publishing houses, while others are third-party developers who contract with publishers on a game-by-game basis. Publishers provide the money and the technical

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Tom Taylor, a professional video gamer also known as Tsquared, was signed to a $250,000 contract by Major League Gaming. (AP/Wide World Photos)

expertise to make a game. They employ programmers to write the code necessary to turn designs into software. Artists take these lines of code and create models, textures, and animation, as well as audio tracks, to turn the raw code into a full audiovisual experience. After analyzing the game for bad code and other quality problems, the publisher gives the go-ahead to mass-produce and distribute the game, either on physical media or as a downloadable file online.

INDUSTRY MARKET SEGMENTS The video game industry ranges in size from hobbyists programming in their spare time to large companies spending millions of dollars on a single game release. The following sections provide a comprehensive breakdown of each of these different segments.

Small Businesses Small video game businesses typically range from one to ten employees. Many owner-founders began creating video games in their spare time. To break into the video game industry, some small companies act as design studios. They pitch their ideas to video game publishers with a working demo in order to get their game into the hands of consumers. Other small companies provide their games directly to the public on the Web through social networks or as shareware (games freely available for download that require or request fees from players who keep and continue to play them). Potential Annual Earnings Scale. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary for a computer hardware engineer in 2009 was $107,410, while the average annual salary for an applications software engineer working for a software publisher was $91,910 and the average annual salary for a computer programmer working for a software publisher was $85,510.

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Small businesses vary significantly in earnings, and they may well begin as hobbies for their owners. In social and casual games, businesses may receive micro-payments of $0.10 to $1.00 per customer per month or may receive advertising income rather than player fees. Many such games are unable to earn enough revenues to support their publishers, but others become highly popular and earn for their programmers either direct revenue or a reputation that allows them to gain employment as full-time game developers. At the 2010 Canadian Game Developers Conference, Jason Bailey (chief executive officer, or CEO, of a company brokering virtual currency) claimed that one of his clients grew from zero to one million users in a matter of months. Not coincidentally, he also suggested that all game developers wanting to succeed should move to working on casual or social games. Some game platforms encourage such snowballing popularity. For example, Apple’s iTunes Store, which sells games for the iPod, iPhone, and iPad, ranks games by their popularity, so a game that begins to be popular may become increasingly popular as its rank increases. Clientele Interaction. Client interaction in small video game companies varies. If the company makes its game available directly to the public, any employee with public contact information available should be prepared for direct, regular, and frank feedback. Tech-savvy consumers are often very blunt about desired changes. Willingness to accept feedback can help improve games and assure consumers that companies value user opinions. If the company is acting as a design studio, generally only the owner makes pitches to outside companies. The owner may pitch the game to publishers, venture capitalists, or loan officers to gain the resources necessary to continue working on the game. There are also communities of independent game designers (such as Indie Fund) who want to foster gaming and help develop new independent gaming companies. Amenities, Atmosphere, and Physical Grounds. Small businesses are typically run from home offices or small, leased business spaces. There are not many amenities, as much of the business’s income will be used to gain further business, to improve marketing or game-play, or to begin production on a new game.

Small video game businesses typically have an atmosphere focused on teamwork and fun. Although there may not be much (if any) pay involved, the participants crave involvement in creating video games. Unfortunately, this attitude may also prove detrimental, as the participants may have other priorities in their lives, and the game may be considered more of a hobby than a business. Typical Number of Employees. Typically, there are fewer than ten employees of a small gaming business, with each employee taking on multiple roles. Often, the founder also designs and programs the games. Many times, the founder will begin the business as an after-work hobby. Without guaranteed income, the owner will have difficulty hiring employees and may have to rely on friends and family for assistance without any promise of a paycheck. Traditional Geographic Locations. Small video game businesses must have access to technology and to the Internet. Most small businesses are begun in places where Internet access is available, cheap, and speedy. Pros of Working for a Small Business. Small businesses have the advantage of being nimble. Instead of spending years on one massive title, a small company can survey the marketplace and focus its efforts precisely. It has the luxury of discovering niches and unusual opportunities that bigger businesses are too unwieldy to explore. Teamwork is also a benefit, as willingness to learn and work multiple roles is expected of all employees. Cons of Working for a Small Business. Video games are a quickly growing industry, but small businesses are volatile, with many not surviving their first few years. There are also significant startup costs associated with small businesses specializing in video game development because many require cutting-edge technology. (Because of the life cycle of both games and computer hardware, a game created on an older computer may be obsolete by the time it is released.) Without a steady cash flow or dedicated employees, a small video game company may never fully graduate from a hobby to a business. If owners rely too much on friends and family for assistance, they may also find that their personal relationships suffer if their businesses fail.

Video, Computer, and Virtual Reality Games Industry Costs Payroll and Benefits: Top-notch programmers and artists require top-notch salaries, so many owners of small video game businesses work as their own programmers, artists, or both to save on employee salaries. Unless the company has a regular cash flow, the owners will not typically offer benefits. Supplies: Programming graphically sophisticated games requires top-of-the-line computer equipment that must be upgraded frequently to remain viable. Some small companies also buy or lease software engines from larger companies to provide a shortcut for some programming tasks, which adds to company expenses. Small companies may also need to invest in office payroll or accounting software, as well as printers, toner, and other typical office supplies. External Services: Small video game companies may contract printing, legal counsel, accounting, Web hosting, and other professional services. Some, particularly shareware companies, may contract art or graphic design services rather than hiring full-time artists. Utilities: Telephone, electricity, and Internet service are imperative for any company in the games industry. Higher-speed Internet access is desirable but also increases the cost of a small business’s utilities. At minimum, a small company should be prepared to pay for a DSL or cable modem and upgrade to a higher-bandwidth line when possible. Water and sewage, gas, and other utilities may be included in the rental of office space, or the company may be responsible for payment. Taxes: All video game companies are responsible for paying local, state, and federal business taxes, including payroll taxes if there are any employees. Self-employed company owners may report their income on their personal returns, in which case they must also pay self-employment taxes. Midsize Businesses In the video game industry, it is difficult to remain a midsize business. Entrepreneurs begin small businesses every day, and large companies grow relatively quickly. Midsize businesses are often on their way to either downsizing to a small business or growing into a large business. Few

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midsize businesses in the video game industry are planned to remain midsize. Potential Annual Earnings Scale. According to the BLS, the average annual salary for a computer hardware engineer in 2009 was $107,410, while the average annual salary for an applications software engineer working for a software publisher was $91,910 and the average annual salary for a computer programmer working for a software publisher was $85,510. Salaries for employees in a midsize video game business generally range from $20,000 to $25,000 for administrative and support staff and from $50,000 to $75,000 for programmers, artists, and management. Clientele Interaction. Although some midsize companies release games directly to the public via social networks, online gaming, or through mobile applications, many others work as third-party contracted developers for larger game publishers. Like smaller companies that release games directly to the public, midsize companies must be prepared to receive frank, often blunt feedback about their games and their playability. Any employee in the company with public contact information must expect to be contacted by players with suggestions, complaints, and other concerns. Those employees who do interact with the public must remain calm and civil. Hardcore gamers who are heavily involved in one’s game can either be the game’s best advocates or its worst critics. Polite, quick responses to criticism will often sway gamers to a more positive outlook. For companies working on a contractual basis with other businesses, owners or CEOs must be prepared to meet with and pitch to loan officers, game publishers, venture capitalists, and other partners who may be putting up money. Amenities, Atmosphere, and Physical Grounds. Midsize game companies function mostly the same way as other midsize, office-based businesses. Work is typically in an office building, with cubicles as well as other open spaces in which the team can regularly gather to discuss game problems, milestones, and progress. Midsize video game companies often share office space with other companies in downtown areas of larger cities. Amenities for midsize businesses are generally not extensive and may only include pizza and soda paid for by management when working late. In

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larger, shared office buildings, there are usually coffee shops, small restaurants, and other cafés within walking distance. Typical Number of Employees. Midsize businesses generally employ ten to seventy-five people, with many remaining in the range of twenty to thirty employees until the company has a strong cash flow and can sustain a larger workforce on a long-term basis. Traditional Geographic Locations. Midsize video game companies are often found in the same areas that larger companies are found. These businesses thrive in larger, technologically forward cities with strong creative cultures. The Pacific Northwest; Austin, Texas; and other coastal metropolises are inviting environments for growing video game companies. Pros of Working for a Midsize Business. Midsize businesses are generally grown from successful small businesses. With a modest history of success, companies learn what does and does not work. This lends midsize businesses more stability than most small businesses, as well as a more significant cash flow. Midsize companies may also be successful enough to pick and choose their projects, only working on games that interest them. Midsize video game companies are often still small enough that employees are not forced to work only in specific roles but instead may work on a variety of tasks that stretch their skills and build their resumes. Many midsize companies also have the good fortune to be small enough that every employee works toward a common goal. While larger companies may have too many employees to be personal and small companies’ employees may work too hard to constitute a strong team, midsize companies are often just big enough that employees are not overwhelmed by their projects but small enough that everyone is working on the same game, toward the same goal. Cons of Working for a Midsize Business. As midsize businesses are often contractual partners with larger companies, they may not have as much flexibility as either smaller or larger companies in developing their own game titles. If a large game publisher asks a midsize game design company to assist on a project, the smaller company may have to compromise its creativity and vision in order to fulfill the contract. Midsize companies do not have the same monetary resources that large companies

have, so their equipment may be older than that of larger companies. They are also not as nimble as smaller companies and may take too long to change course, if that is what the market dictates. Costs Payroll and Benefits: Midsize video game companies dedicate most of their money to employee payroll and benefits. While not required to by law, most midsize companies provide vacation, sick days, and health benefits to their employees. Supplies: Midsize video game companies rely on technology to provide their income and should purchase the most powerful computers available. If working with large companies, midsize businesses may have to invest in proprietary engines and other expensive gaming software just to stay at the minimally acceptable levels of graphics rendering and playability. Additionally, midsize businesses require typical office supplies, such as printers, paper, telephones, and other office goods. External Services: Midsize companies may contract payroll, accounting, and other office services in order to keep their administrative overhead expenses low. Additionally, midsize companies should have relationships with good entertainment or intellectual property lawyers to ensure their interests are represented in contracts with game publishers and other companies. Utilities: Telephones, electricity, and Internet are necessary for any video game company, including midsize companies. If a company leases space in an office building, there may be shared costs for water, sewage, heating, and other building services provided by the building owner. Taxes: All video game companies are responsible for paying local, state, and federal business taxes. Large Businesses Large video game companies are often multinational corporations and are sometimes subsidiaries of parent entertainment companies. Large companies may be design studios or game publishers. Many large publishers establish contracts with third-party designers for game titles, while other corporations keep in-house design staff. In-house

Video, Computer, and Virtual Reality Games Industry designers typically have more money available and greater creative flexibility with their games than do third-party developers. Potential Annual Earnings Scale. According to the BLS, the average annual salary for a computer hardware engineer in 2009 was $107,410, while the average annual salary for an applications software engineer working for a software publisher was $91,910 and the average annual salary for a computer programmer working for a software publisher was $85,510. Employees directly involved in game design (including art and audio) earn starting salaries around $40,000 to $50,000 per year, and programmers start higher. Many companies offer bonuses based on a game title’s success. Upper management generally earns over $100,000 per year and will also receive additional compensation based on the company’s performance. Support staff often earn less than game team members. Employees responsible for grounds maintenance, amenities, and other support functions generally earn from $20,000 to $35,000 per year. Clientele Interaction. Typically, there is no direct clientele interaction for most large corporate jobs. Customer service representatives (CSRs) and marketers are the exception. CSRs may interact with gamers online, in-game, or via telephone to assist them with problems or concerns. Marketers may attend industry conferences, gaming conventions, or other entertainment expos in order to promote the company and its games, as well as giving interviews and crafting press releases. Sales and distribution managers meet and negotiate with wholesalers and retailers but generally do not speak directly to consumers. Amenities, Atmosphere, and Physical Grounds. Large video game companies are sprawling campuses with plenty of amenities for their employees. Free snacks, gym facilities, and playrooms are common amenities to keep programmers, designers, and artists happy. Some companies also provide child care on-site. During crunch times, the company may provide meals, errand running, and sleeping accommodations. Typical Number of Employees. Large game companies employ anywhere from seventy-five to thousands of employees. Most are organized into smaller teams focused around specific aspects of individual game titles, such as programming, au-

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dio, or specific game areas. Large companies may be working on multiple game titles and deadlines at the same time, with team members working on the same title sharing cubicle space. Traditional Geographic Locations. Large businesses need to have a fresh supply of talent, so most are located in tech-savvy metropolitan areas. Many large businesses have a presence in California’s Silicon Valley. Other hotbeds of video game activity for large companies include Austin, the Pacific Northwest, the Washington, D.C., area and Southern California. Internationally, Canada, Japan, and Korea have maturing game industries. With the low cost of doing business, India, China, and Vietnam are also desirable areas for video game companies. As more game companies tailor games to different geographical locations, teams specializing in localizing games to different countries will become more widespread, as will game teams themselves. Pros of Working for a Large Business. Although the video games industry remains volatile, many large video game companies have diversified sufficiently to avoid the danger of overnight financial ruin. Many large companies also have multiple locations, some abroad. Possibilities for transfer exist, and employees may find themselves on localization teams for countries they wish to visit. Large businesses offer more amenities and benefits than smaller corporations, as well as stock options and significant monetary bonuses for completed games. Large companies also offer the opportunity to work on different types of games within the same corporation. An industry leader such as Electronic Arts publishes titles in several different genres annually, with more always in development. When one game ends, a successful employee may be transferred to a different game to learn new skills or promoted to new responsibilities. Large companies also tend to promote from within, so the more time one spends with a large company, the more likely an employee is to rise through the ranks. Cons of Working for a Large Business. In large game companies, employees fill specialized roles. This can lead to frustrating layers of bureaucracy and middle-management, as well as rigid sets of job tasks. Additionally, crunch times can last for months on poorly planned and executed projects, greatly increasing employee stress. Large busi-

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nesses are sometimes also part of larger entertainment companies, which can dismiss otherwise good ideas if they do not fit within the corporate brand. Large companies also rely more on contract labor—employees contracted to work for the company for a specific game title. Independent contractors are often not entitled to the same benefits and protections that regular employees are, and they may not have a job after their titles ship. Costs Payroll and Benefits: Payroll and benefits are the biggest expenses for large companies. Top programmers, designers, and artists are always in demand, and to retain top talent companies must pay competitive salaries and benefits. If a company is profitable, its design and publishing teams are generally granted bonuses, as well as company stock (if the company is publicly traded). Supplies: For their design, programming, and artistic teams, large video game companies must have cutting-edge computers and other technology to create multimillion-dollar games. In addition to appropriate technology, computer programs requiring strong processor technology are necessary. If these programs are not proprietary (in-house) programs, companies use top-of-the-line creative software, often spending tens of thousands of dollars per team member in software licensing costs alone. Large video game companies also have the same supply needs as smaller companies. Typical office supplies, such a printing supplies, copiers, and other office machinery, are necessary. Additionally, if the groundskeepers and cleaning crews are not contracted, cleaning supplies, gardening tools, and other supplies are necessary. External Services: If they are not included on the executive management team, a cadre of topnotch lawyers should be on retainer for large companies. In addition to any labor disputes that may arise, video game companies have the signature problem of protecting their intellectual property. A lawyer specializing in intellectual property and entertainment law should be available, especially to consider and review any licensing or other agreements with entertainment or other companies. In addition, large

companies may contract programmers, artists, designers, voice actors, musicians, and other content creators for specific projects, rather than hiring them as permanent full-time employees. Utilities: Large companies must pay for water, sewage, electricity, gas, telephone, and high-speed Internet service. Some companies also purchase carbon offsets to help mitigate the amount of greenhouse gases they release by doing business. Taxes: All video game companies are responsible for paying local, state, and federal business taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Video game industry employees are responsible for the entire gaming experience, from the initial concept through marketing and publishing to retail sales. The main three branches of the industry are game design, game production, and retail. The design team is responsible for the initial concepts, story, and visuals. Publishing breathes life into the creations, making the game real, playable, and fun. Marketing and public relations staff, the quality assurance (QA) testers, and sales associates all support and facilitate the success of video game companies. In smaller companies, an individual may fill many roles, while larger companies assign each task to a different employee. The following umbrella categories apply to the organizational structure of businesses in the video, computer, and virtual reality games industry. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Management Administration and Human Resources Marketing and Public Relations Retail Stores Customer Service Amenities and Facilities Security Game Design Production Animation/Art Audio Programming

Video, Computer, and Virtual Reality Games Industry ■ ■ ■

Quality Assurance Sales and Distribution Professional Gamers

Management Upper management roles are typically filled by veterans who have at least five years of experience in the video games industry. In smaller companies, upper management roles are filled by just a few people taking on multiple tasks. These executives acquire funding, work with other companies, and broker licensing deals. Many executive managers have worked their way up from the bottom of the gaming industry, acquiring a detailed understanding of what the industry entails. Increasingly, the industry is filling upper management roles with employees who have specialized business training. Management in the video games industry is well compensated, with average salaries ranging from $70,000 to $130,000, plus cash bonuses. Management occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Business Development Director Chief Financial Officer (CFO) Chief Information Officer (CIO) Chief Operating Officer (COO) Chief Technology Officer (CTO) Creative Director Product Development Director Technical Director

Administration and Human Resources Administrative positions handle much of the day-to-business operations of a company. Secretaries, payroll clerks, receptionists, and other office occupations are necessary to keep the business end of the operation running smoothly. Within the administrative roles, executive secretaries and assistants are usually paid the most. Most training is short term and on the job. Expertise with office software applications and business correspondence is crucial. Salaries range from $25,000 to $50,000 (or more, in the case of executive assistants). Human resources (HR) positions are more specialized and focus on staff retention, training, and benefits. Many human resources jobs require at least a bachelor’s degree, with some specific training regarding labor laws. Accordingly, human

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resources personnel earn more than other administrative personnel, from $35,000 to $60,000 per year. Administration and HR occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Secretary Administrative Assistant Executive Assistant Receptionist Payroll Clerk Benefits Specialist Recruitment Specialist Human Resources Assistant

Marketing and Public Relations Marketing is one of the video game industry’s most difficult tasks. While marketing and good public relations can get a game noticed, an industry research group has found that many casual gamers prefer to learn about games by word of mouth from their social circle. Marketing for hardcore gamers also requires a deft touch, as many passionate gamers resist any sort of organized spin. Viral marketing for both casual and hardcore games has proven to be successful. As the public face of a company, a successful marketer requires a very specific set of skills. A strong candidate for a marketing or public relations team must have exceptional communication skills (both oral and in writing) and an ability to connect with mainstream news outlets and everyday gamers alike. Many marketing managers have at least a bachelor’s degree, and many also have advanced degrees. Salaries for marketing personnel can range from $50,000 for a public relations specialist to $110,000 for a marketing manager. Marketing and public relations occupations may include the following: ■ ■ ■ ■ ■

Marketing Director Public Relations Manager Brand Manager Communications Specialist Public Relations Specialist

Retail Stores Sales jobs in the video games industry are often of the retail store variety. With experience, one can advance to managerial positions. According to

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Video Games Careers, these jobs are unlikely to prepare one for work in the larger video games industry. Retail stores provide short-term, on-the-job training. Retail clerks often earn minimum wage at the beginning of their employment and work their way up to earning approximately $25,000 per year. Retail managers earn more, often up to $40,000 annually. Many retail establishments are decreasing their physical locations and increasing their online operations. Retail occupations may include the following: ■ ■ ■

Electronic Game Store Sales Clerk Electronic Game Store Manager Retailer

ees happy. Groundskeepers work to keep campuses green and well groomed, and janitors ensure that buildings remain clean and well stocked with supplies. In larger companies, game rooms, gyms, and cafeterias are available for staff members during their workdays. Cooks, cashiers, and personal trainers all may be involved in ensuring that employees are fed and feeling their best. Salaries range from minimum wage for janitorial staff and groundskeepers to about $40,000 for supervisors of these positions. Amenities and facilities occupations may include the following: ■ ■ ■

Customer Service For online games, especially for MMORPGs, excellent customer service is imperative. Paying players expect customer service representatives to be available twenty-four hours a day to provide them with quick answers and to remain cheerful while doing so. As representatives of their companies, customer service representatives must remain fair, civil, and watchful for players abusing the game or other players. Many companies have all in-house staff, but others use offshore customer service representatives, and still others use volunteers to help police their games. Customer service representatives usually earn between $12 and $15 per hour; supervisors earn between $22 and $30 per hour. There is considerable time investment in learning the ins and outs of a given MMORPG, and companies must ensure that customer service representatives are not there just to abuse their administrative privileges. Customer service occupations may include the following: ■ ■ ■

Customer Service Manager Customer Service Representative Volunteer

Amenities and Facilities Large companies generally have large campuses, filled with amenities for hard-working programmers and artists. Cafeterias, gyms, and arcades or game rooms are all benefits that larger companies provide in order to keep their employ-

■

Custodian/Janitor Groundskeeper Chef Personal Trainer

Security With the expensive technology, intellectual property, and trade secrets on the grounds of many video game companies, security is of paramount importance. Trained security guards protect a company’s physical grounds, its surrounding site, and the intellectual property contained on its servers. They ensure no unauthorized persons approach sensitive materials. This is a growing field but is not lucrative. After a short duration of onthe-job training, most security guards earn $20,000 to $30,000 annually. Security occupations may include the following: ■ ■ ■

Security Guard Security Officer Network Security Specialist

Game Design Game design is one of the most important parts of the game industry. Designers provide the initial concepts for games, and their vision brings those games to fruition. Designers provide story structures, concepts for the look of characters and items that players will encounter, dialogue, and paths through each level. They are generally paid to use their imaginations. Ultimately, designers receive the kudos (or the blame) for the enjoyability of their games. Competition for design positions is tough. Many employees on design teams began their careers in

Video, Computer, and Virtual Reality Games Industry the QA department. Design employees usually have at least a bachelor’s degree, and the majority have spent at least three years in the industry. The starting salary for a new designer is around $45,000, but with industry experience designers can earn over $85,000 per year. Game design occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Design Director Lead Designer Level Designer Interface Designer Associate Designer Game Writer Quest Developer World Designer

and browns or against a hyper-saturated rainbow of colors for a dancing game, the art department must convey the feel of a game visually. Artists must have a strong facility with technology to create electronic reproductions of concept art. Modelers and animators must be familiar with anatomy and physiology in order to ensure an item’s movement is appropriate and realistic. Many artists have bachelor’s degrees in fine or applied arts. The average salary for an entry-level artist is $45,000, and artists with at least five years of experience in the industry can earn nearly $100,000 per year. Animation and art occupations may include the following: ■ ■ ■

Production Producers have the delicate task of communicating between design teams and game publishers. They report on progress toward game milestones, report whether or not games are on budget and on schedule, and assess whether projects are worth continuing when obstacles crop up. As liaisons, producers must not only continually promote their games to publishing companies but also advocate for publishers’ requests to design teams and maintain as much harmony as possible among all parties. Producers are most often industry veterans. Nearly 50 percent have worked in the industry for over six years. Salaries range from around $42,000 for an unseasoned producer (or assistant producer) to over $95,000 for an executive producer. The great majority of producers have at least some college, and most of them have earned bachelor’s degrees. Production occupations may include the following: ■ ■ ■ ■

Executive Producer Producer Associate Producer Assistant Producer

■ ■ ■ ■ ■

Two-Dimensional Artist Three-Dimensional Artist Animator Concept Artist Environment Artist Modeler Technical Artist Texture Artist

Audio Video game companies’ audio departments are responsible for immersing players into their games’ virtual worlds. The success of sound effects, musical scores, and character voices all depends on excellent audio teams. Some actors specialize in video game voiceover work and are listed as cast members for dozens of game titles. Many positions in the audio category are independent contractor positions, and some workers may work on several projects at once. Audio workers usually have bachelor’s degrees and some technical experience when entering the video games industry. The entry-level salary is between $40,000 and $50,000 per year, and veterans of the industry can earn more than $85,000 annually. Audio occupations may include the following: ■ ■ ■

Animation/Art The art department is tasked with creating the look of a game. Whether the game takes place within a postapocalyptic wasteland of muted tans

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■ ■ ■ ■

Audio Director Audio Technician Composer Sound Designer Sound Producer Sound Mixer/Editor Voiceover Artist

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Video, Computer, and Virtual Reality Games Industry

Programming Programmers write the code that constitutes the core of a video game. Without code, there would be no game. Programmers create the designers’ world, allowing artists and audio employees to bring it to life. As code writers, programmers have the most detailed control of the game. Their commands dictate how the world will work and how decisions will play out. Programmers, in accordance with their status, generally have the highest salaries in the video game industry (outside of upper management). A new programmer, with less than three years’ experience in the industry, can earn around $55,000 per year; veterans can nearly double that at $109,000 annually. While a college degree is not strictly necessary for a programming job, familiarity with programming languages is. Programming occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Artificial Intelligence Programmer Audio Programmer Engine Programmer Graphics Programmer Interface Programmer Lead Programmer Networking Programmer Physics Programmer Quality Assurance Programmer Tools Programmer

Quality Assurance Although quality assurance jobs are seen as the lowest rung of the ladder for this industry, many successful video game veterans began their careers as quality assurance testers. Testers search for problems in programming by repeatedly trying to break games. A quality assurance lead tester takes the list of bugs compiled by testers and communicates those problems to the programmers, allowing them to fix bugs before the game is released to the public. Quality assurance is an often thankless but necessary part of the industry. Turnover rates are high for quality assurance testers, as many move to other positions in the games industry and others find they do not like working in games. Quality assurance departments pay some of the lowest wages in the industry, averaging $24,000 to start. With experience, a quality

assurance lead tester can earn over $65,000 per year, but many find they want to move to another department when possible. QA occupations may include the following: ■ ■ ■ ■ ■ ■

Compatibility Tester Quality Assurance Leader Lead Tester Playability Tester Quality Assurance Technician Tester

Sales and Distribution Once a game is complete and ready to be shipped, sales and distribution staff ensure that it will be allocated shelf space at retail outlets. Many game publishers must pay for such shelf space, as well as for advertising space in retailers’ advertising flyers. For the sales and distribution team, it is crucial to develop and maintain good relationships with retailers in order to ensure their games receive the best placement possible. Most sales personnel have at least a bachelor’s degree, and many managers have masters in business administration. The average sales clerk’s starting salary is around $25,000 per year, and managers can earn up to $110,000. These salaries vary wildly, as many sales positions are based on commission. Sales and distribution occupations may include the following: ■ ■ ■ ■

Sales and Distribution Manager Sales and Distribution Representative Sales Clerk Distribution Director

Professional Gamers Professional gamers earn their livings by playing in video game tournaments. Most professional players do not earn the bulk of their living through tournaments themselves; instead, the lion’s share of their income comes through paid endorsements. Landing one of these lucrative positions requires many hours of unpaid practice per day. Entering tournaments and networking with fellow gamers and companies who sponsor gaming teams may provide a foot in the door for those seeking professional game-playing jobs.

Video, Computer, and Virtual Reality Games Industry INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise. While buying and playing video games has continued to be popular, the rate of growth in both industry jobs and revenue slowed during the recession of 2007-2009. Nevertheless, the jobs forecast for the video games industry is cautiously optimistic, with steady growth predicted. The BLS projects that, between 2008 and 2018, the information industry will grow by approximately 4 percent, adding 118,000 jobs. Software publishers make up the lion’s share of this growth. In particular, the software publishing job market is forecast to grow by 30 percent, adding nearly 80,000 jobs. Not surprisingly, many of the fastest-growing segments of the software publishing industry are software programmers and system administrators. Although both revenue and employment are predicted to increase through the next decade, recent studies have shown the current video game industry to be less robust than was originally thought. The Electronic Software Association’s 2010 annual report on the state of the industry confirmed a decline in domestic computer and video game sales from a high of $11.7 billion in 2008 to $10.5 billion in 2009. In light of the global recession, this decline was not unexpected, and analysts believe revenue will increase as consumers regain financial confidence. In the United States, domestic jobs for the information industry also declined from 2008 to 2009. The video game market is undergoing an evolution from focusing on so-called AAA or event PC and console games (the equivalent of film blockbusters or best-selling novels) to producing a greater quantity of smaller, casual games that offer greater returns on investment. Larger games are still made, but in the unstable consumer market fewer companies and venture capitalists are willing to risk millions of dollars on investments that might not pay off. Additionally, many companies are attempting to save money by changing their distribution channels. Instead of selling games on optical discs in cases on store shelves, producers are considering offering digital downloads and other nonphysical distribution channels as a way to cut costs. Game industry experts also recognize that the flourishing

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used-game market means that game companies are only in the supply chain for the first step of the market, the initial sale. Wanting to protect their profits, many video game companies are exploring the future of games with an online or streaming model. Video game companies could bypass consoles and the need for high-performing, top-of-the-line PCs for gaming by offering games primarily as Web applications playable in most browsers. While this type of shift could be good news for video game companies themselves, retail sales of consoles, PCs, and used games could crash. The outlook is sunnier for the global market. Globally, developing countries are focusing on science, technology, engineering, and math vocations. Cities in China’s Guangdong and Shandong provinces are working with the U.S. vocational training company Kaplan to develop video game career programs for their cities. As a country, China is also becoming a stronger consumer of video games, leading to a larger local video game industry. Mobile gaming is also growing at an exponential rate. Gartner Research predicts that global consumers will spend over $11.4 billion in mobile gaming applications by 2014. Although demand for video games has increased, some salaries may decrease as some video game jobs can easily be outsourced to countries with lower pay rates. Employment Advantages The video game industry is a strong field for anyone who loves video games or programming. The growing industry means that there will be additional jobs at middle and larger companies, while do-it-yourself types may want to consider opening their own casual gaming enterprises. The video game industry allows an individual to be part of bringing a creative effort to the marketplace. Although it is highly unlikely that one can be paid exclusively to play games, it is likely that a part of one’s job will be play-testing games. Detail-oriented individuals with a penchant for detective work may also find fulfilling work in the game industry. Replicating and hunting down programming errors can be a full-time job, and the more experience one has in the industry, the more likely one is to move up the ladder. Working in the video game industry also allows one to work with high-end technology. The massive computing

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Video, Computer, and Virtual Reality Games Industry

power needed for gaming allows industry personnel to work with the latest technology. Annual Earnings In concert with other entertainment and media trends, global revenue for the video game industry is predicted to grow at a compound annual rate of 10.6 percent in the period from 2009 to 2014, reaching $86.8 billion, according to PricewaterhouseCoopers. Although the United States witnessed a decline in video game sales from 2008 to 2009, consumer spending is expected to increase as the recession abates. The domestic job market for video game companies in the United States is a mixed bag. While game companies continue to hire, some industry veterans have expressed dismay that the companies hire for specific projects and then let their senior staffs go before the next game, allowing for decreased salaries. Some programmers have found more success in relocating to other parts of the country, or even internationally. Domestic job opportunities are likely to decrease, because of increased competition from developing countries such as India, China, and Vietnam. These developing countries are providing more technology training to their citizens, allowing large companies to outsource programming positions to countries with cheaper labor.

RELATED RESOURCES FOR FURTHER RESEARCH Entertainment and Leisure Software Association 111/113 High St. Evesham, Worcestershire WR11 4XP United Kingdom Tel: 44-20-7534-0580 http://www.elspa.com Entertainment Software Association 575 7th St. NW, Suite 300 Washington, DC 20004 Tel: (202) 223-2400 Fax: (202) 223-2401 http://www.theesa.com

International Game Developers Association 19 Mantua Rd. Mt. Royal, NJ 08061 Tel: (856) 423-2990 Fax: (856) 423-3420 http://www.igda.org Major League Gaming 420 Lexington Ave., #2820 New York, NY 10170 Tel: (213) 370-1444 http://www.mlgpro.com Software and Information Industry Association 1090 Vermont Ave. NW, 6th Floor Washington, DC 20005-4095 Tel: (202) 289-7442 Fax: (202) 289-7097 http://www.siia.net

ABOUT

THE

AUTHOR

Chaunacey Dunklee is senior reference librarian at Fullerton Public Library in Fullerton, California. She received a master’s degree in library and information science from San Jose State University and a bachelor’s degree in English from the University of California, Davis. She is currently a member of the American Library Association’s Outstanding Reference Sources Committee. Dunklee began an outreach program at Fullerton Public Library, using video games to encourage teens to visit their local libraries. Additionally, Chaunacey is an avid gamer and enjoys reading about the future of gaming and libraries.

FURTHER

READING

Boyd, S. Gregory, and Brian Green. Business and Legal Primer for Game Development. Boston: Charles River Media, 2007. Chaplin, Heather, and Aaron Ruby. Smartbomb: The Quest for Art, Entertainment, and Big Bucks in the Videogame Revolution. Chapel Hill, N.C.: Algonquin Books of Chapel Hill, 2005.

Video, Computer, and Virtual Reality Games Industry “Computer and Video Game Designers.” Encyclopedia of Careers and Vocational Guidance. 13th ed. Vol. 2. New York: Ferguson, 2005. Edery, David, and Ethan Mollick. Changing the Game: How Video Games Are Transforming the Future of Business. Upper Saddle River, N.J.: FT Press, 2009. Ewing, Richard Daniel. “China’s Online Video Game Wars.” China Business Review, July, 2007, 45-49. Glenn, Lawrence M., and F. Martin Nikirk. “How Career and Technical Education Can Jumpstart a New Industry.” Techniques, October, 2009, 26-29. Hodgson, David S. J., Bryan Stratton, and Alice Rush. Video Game Careers. Rev. ed. Roseville, Calif.: Prima Games, 2008. McAllister, Ken. Game Work: Language, Power, and Computer Game Culture. Tuscaloosa: University of Alabama Press, 2004. Novak, Jeannie. Game Development Essentials: An Introduction. Clifton Park, N.Y.: Thomson/ Learning, 2005.

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Rutter, Jason, and Jo Bryce. Understanding Digital Games. Thousand Oaks, Calif.: SAGE, 2006. Sheffield, Brandon, and Jeffrey Fleming. “Ninth Annual Game Developer Salary Survey.” Game Developer, April, 2010, 7-13. Taylor, T. Allan, and James Robert Parrish. Careers in the Internet, Video Games, and Multimedia. New York: Ferguson, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Computer Software Engineers and Computer Programmers.” In Occupational Outlook Handbook, 2010-2011 ed. http:// www.bls.gov/oco/ocos303.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

©Mikael Damkier/Dreamstime.com

Warehousing and Storage Industry

INDUSTRY

SNAPSHOT

General Industry: Transportation, Distribution, and Logistics Career Cluster: Transportation, Distribution, and Logistics Subcategory Industries: Farm Product Storage; General Merchandise Warehousing and Storage; Hazardous Materials Warehousing; Mini Warehouses and Self-Store Storage Facilities; Moving and Storage; Refrigerated Warehousing and Storage Related Industries: Rental and Leasing Services; Retail Trade and Service Industry Annual Domestic Revenues: $985 million (U.S. Census Bureau, Statistical Abstract) Annual International Revenues: $21 billion USD (Fedstats, 2007) Annual Global Revenues: $21.985 billion USD (U.S. Census Bureau, Statistical Abstract and Fedstats, 2007) NAICS Numbers: 49, 4931, 531130

INDUSTRY

as retail stores. One segment of the industry is connected to the moving industry and typically provides short-term (thirty- to ninety-day) storage for household and other goods as required by families or companies in the process of relocating. The company must provide fireproof and waterproof storage space and ensure that the site is protected from theft and vandalism. Warehousing companies may provide their corporate clients with ancillary services such as packaging, pricing, light assembly, and sometimes delivery. Known as third-party logistics providers, they act as the middleman between the manufacturer and the end user.

History of the Industry The possessions of nomadic hunter-gatherers were limited to whatever goods they could readily transport, but as many of the world’s peoples adopted settled lifestyles, they began to accumulate numerous items, beyond their immediate needs. As the volume of accumulated goods increased and people began to trade or sell excess

DEFINITION

Summary The warehousing and storage industry provides storage for goods such as food, general merchandise, furs, automobiles, archival materials, documents, petroleum, books, and many other products awaiting distribution to consumer outlets such 1964

Warehousing and Storage Industry items, they began to develop specialized storage facilities. With the advent of mass production, the need for such facilities increased. As businesses grew in size and the number of consumer products increased, the warehousing and storage industry developed to meet the storage needs of businesses and individuals. Granaries were among the first storage facilities to appear in Europe. They provided a means of preserving grains for later use. As the Europeans became major world suppliers of a diverse number of products and commodities, storage systems became more sophisticated to better serve the increasing demand. By 1891, the American Warehouseman’s Association had been organized in an attempt to lessen the railroads’ total control over freight depots. The Hepburn Act of 1906 gave teeth to the Interstate Commerce Commission and significantly helped the budding industry. In 1898, entrepreneur Max Epstein founded the GATX Corporation, which became an industry leader, in response to the Pittsburgh, Pennsylvania-

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based Duquesne Brewery’s pressing need for the cold storage of beer. Commercial cold storage was developed primarily to preserve food, but in later decades, pharmaceutical and chemical companies found a climate-controlled environment beneficial for the storage of their products and gradually emerged as the largest users. Early cold storage was accomplished by carefully packing goods on ice, but later warehouses used refrigeration. Occasionally, naturally cool structures, such as repurposed mines, are used for cold storage. The Michigan Natural Storage Company, in Wyoming, Michigan, was originally a gypsum mine. Since 1957, it has provided naturally cooled underground storage for everything from business records to burgers for fast-food providers. The post-World War II economic boom created a growing need for third-party logistics storage professionals. Ever-increasing demands for consumer goods resulted in specialization in the industry. Companies began providing storage for a single product line—appliances, for example—and served multiple manufacturers such as Maytag,

Wine is stored by specialty storage companies. (©Dreamstime.com)

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Warehousing and Storage Industry

Frigidaire, and Westinghouse, allowing them to ship their products to a warehousing company that in turn would ship appliances as needed to retailers within the region served. The industry became more complicated and more regulated as it grew. Government regulatory agencies such as the Occupational Safety and Health Administration (OSHA) and the Food and Drug Administration (FDA) developed guidelines to ensure the safety of both industry employees and the end users of stored products. Regulations were created to govern the warehousing and storage of potentially dangerous products such as petroleum, radioactive materials, and flammable materials. Food storage required numerous safety standards, primarily to guard against spoilage. Food imports meant additional regulations, some of which were designed to guard against foodborne diseases, such as bovine spongiform encephalopathy (mad cow disease), which affected the European beef industry in 2001. All these regulations helped the warehousing and storage industry, as the added complications meant more and more manufacturers and importers decided to hire commercial warehousing companies to handle these matters. At the simplest level, this industry is easy to enter. Anyone with a barn or even vacant land can offer recreational or other vehicle storage as long as they meet local zoning and land-use requirements. For the farmer or landowner, storage is an additional source of income. Some businesses offer storage as a part of their services. For example, furriers offer climate-controlled summer storage for

customers’ coats. In the mid-twentieth century, dry cleaners often stored their clients’ winter garments, keeping their woolens safe from moths. The 1970’s saw the proliferation of self-storage facilities, which have become the fastest growing segment of the warehousing and storage industry. Self-storage units allow renters to store and retrieve items as they please. They are used by small-business owners, people who are in the process of moving, and people who have too many possessions to store in their own living space. One of the largest of the self-storage companies, the Public Storage Company, opened its first facility in 1972 and has experienced phenomenal growth, with more than two thousand facilities in the United States and Europe.

The Industry Today In the United States, about seven thousand companies are active in the industry, although nearly half of the earnings are generated by only the top fifty companies. This indicates that the industry as a whole is not labor-intensive and that the smaller companies, which are the vast majority, usually operate with five or fewer employees. The industry has been hit hard by the 2007-2009 recession. One of the hardest hit segments consists of the storage businesses affiliated with moving companies. Corporate moves provide a substantial portion of the profits for companies such as Allied Van Lines, United Van Lines, and Mayflower Transit. When corporate America tightened its belt, the industry suffered. Other companies, such as thirdparty logistics providers of warehousing, also felt the impact. Large companies in this area include the industry giants Exel, The Warehousing and Storage GATX, Tibbett and Britten, and Kenco. Other affected companies, such as the Industry’s Contribution to the U.S. New England regional heavyweight Dean Economy Warehousing, provide warehousing and storage for manufacturers and importers, Value Added Amount among other clients, then deliver those Gross domestic product $40.7 billion goods to end buyers. After the start of the Gross domestic product 0.3% recession, the need for warehousing lessPersons employed 1.208 million ened, and companies have had to come Total employee compensation $32.0 billion up with creative ways to deal with increased unused capacity. Source: U.S. Bureau of Economic Analysis. Data are for Although the moving industry is slowly 2008. rebounding, the need for storage has lessened. Companies relocating employees

Warehousing and Storage Industry are not as likely to hire a moving company for the packing, moving, and short-term storage of household goods. Instead, they often offer a moving allowance, and the transferring employee can either hire a mover or rent a moving truck. Companies whose business included the storage of household goods are now providing space to commercial clients who need short-term solutions, for example, retail customers who are building a new facility. As the economy becomes increasingly global, some aspects of the market are expanding. Flash freezing of fish, for example, means halibut caught in Alaska or salmon caught in Norway can be immediately frozen, then stored before being shipped to consumers all over the world. Goods manufactured in emerging world markets such as China and India arrive at warehouses daily to await distribution to retail outlets. GATX operates in Europe and the United States, and continues to provide both warehousing and transportation for a mix of international clients. Warehousing companies have tended to operate out of mammoth centralized facilities, but in the 2000’s, many companies began to favor decentralization, operating smaller regional facilities. Factors affecting this trend include extreme weather (Hurricane Katrina, for example), labor issues in some areas, and the threat of terrorism. Regional facilities reduce vulnerability as goods are placed in multiple facilities. Document storage is another example of a growing market segment, as companies, particularly those dealing with sensitive data, seek safe repositories for their archives. The special warehouse and storage industry is a group of companies serving firms that wish to store products that require extra attention or care, such as petroleum products, data, wine, and liquor. Storage of these products often entails complying with various regulations and the facilities used can be subject to inspection by regulatory agencies. An emerging subcategory of the warehousing and storage industry is matchmaking companies that pair corporations with short-term needs and storage professionals with underutilized capacity. Among customers availing themselves of the service are retail operations that are building new facilities. Another subcategory is miniature warehouses, similar to self-storage units, that are single rooms, compartments, lockers, containers, or outdoor

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Inputs Consumed by the Warehousing and Storage Industry Input

Value

Energy Materials Purchased services Total

$2.1 billion $2.0 billion $13.8 billion $17.9 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

spaces. An example is a meat locker, where customers store their butchered farm animals or animals slain while hunting. Although miniature warehouses are popular, self-storage units still dominate the small-user market. They are cost-effective and allow users to move items in and out of the unit at will. Commercial storage remains a better option when access to goods is not an issue. As people age, sell their homes, and downsize their living quarters, they often find that they would like to keep certain items but that they do not have space for them. Alternatively, they may wish to make more living space by storing seasonal items such as outdoor fitness gear, patio furnishings, and holiday decor, and other items such as memorabilia that are not needed in everyday life. For these items, they often turn to storage companies. The self-storage end of the market can sometimes gain in a slow economy. Young people are often the newest hires and the first to be fired in economic downturns. In the 2007-2009 recession, many adult children were forced to give up their apartments or sell their homes and move in with their parents temporarily. When this happens, they need a place to store their furnishings. People can choose either rental units at the company’s warehouse or pod units. Warehouse self-storage units require that customers move their belongings in and out of the unit, but pods are delivered to the customer’s home. Pods are convenient for the storage of household goods during a renovation project, for example, or as collection units for those staging flea markets or other one-time sales events.

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Warehousing and Storage Industry cility. They can also add revenue by offering recreational vehicle, boat, and automotive storage both outside and in climate-controlled indoor spaces.

INDUSTRY MARKET SEGMENTS

A worker compares the order number to that on the package. (©Endostock/Dreamstime.com)

The industry is poised for moderate growth, although as in all industries, some areas of the business will experience more growth than others. There is always a need for those people who can successfully deal with the increasing regulatory issues and provide a safe, clean storage environment for their clientele. Fewer jobs are predicted in the labor end of the business, especially in the larger storage facilities, partly because of advances in automation that reduce the need for manpower. That said, there will always be job openings, as these jobs experience high turnover. Workers enhance their skills and move on to other jobs, often in other industries. Some workers take these jobs while completing their education or while searching for other employment following job layoffs. Self-storage facility owners with a strong entrepreneurial spirit can earn a better than average living by branching out and buying more than one fa-

Small Businesses The small warehousing and storage industry business can be a local independent business owner, a franchisee, or a small branch office of a larger company. The storage portion of a moving and storage company franchise fits in this category, as does any independent provider. U-Store-It, Public Storage, and other large self-storage companies where owners or managers run a single company location make up a large portion of the small business segment. The small-business owner or manager draws customers through local advertising, including newspapers and yellow pages, and increasingly through Web sites. The self-storage provider faces tough competition, so impeccable service is mandatory. Potential Annual Earnings Scale. This industry does not produce wealth for many, although owners or franchisees can earn a comfortable living. Self-storage facilities may provide on-site living quarters for the owner or manager. Employees of smaller companies can include office personnel, delivery truck drivers, and order pickers, although in the smallest of companies, the owner or manager does all or most of the work. The owner can earn $50,000 or more annually, a manager somewhat less. Support personnel can earn an hourly wage of $12 to $15 per hour or be salaried at about $18,000 to $25,000 annually, depending on responsibilities and experience. The lowest-level jobs could be at minimum wage but are usually paid $12 to $13 on average. Clientele Interaction. In any small company, clientele interaction is high. All employees have customer contact and must be prepared to be proactive and service the customer’s needs effectively. Amenities, Atmosphere, and Physical Grounds. A small warehousing and storage company will typically be located on main roads, often in light industrial areas. A self-storage company will

Warehousing and Storage Industry be on commercially zoned properties close to residential areas, to provide easy access for their major customer base. Wherever the location, a storage company will be clean, with storage areas that are fireproof, waterproof, climate-controlled (if necessary), and protected from rodents and other pests. Security is also a major part of operations, and a small business will provide electronic security systems, whereas a larger company may also hire security personnel. Electronic security fences are often found on the grounds. The office, though not plush, will be clean and comfortable and equipped with all the requisite technology. Warehouse areas have to be arranged in an orderly manner to quickly access products for delivery. Typical Number of Employees. The staff is usually made up of from two to five people. This includes the owner, franchisee, or manager, an office manager, and warehouse personnel. Some employees may be part time. In a self-storage operation, a husband-wife team may cover all the chores and live in an on-site apartment. Traditional Geographic Locations. Because there is a universal need for these businesses, they are found everywhere, from the largest cities to the smallest towns. Anywhere that people live, there is some need for warehousing and storage services. They tend to locate in light industrial complexes, commercial areas, and along the highways leading into town. Visibility is not an issue, as they do not depend on walk-in customers. Pros of Working for a Small Warehousing and Storage Business. Organized, motivated selfstarters do well in this and other small businesses. The owner or franchisee has control over the business and has complete responsibility for its success or failure. Whether that is a curse or a blessing depends entirely on the personality of the individual, as the job can be the cause of great stress. Some thrive in the small-business owner arena, while others are overwhelmed by it. A major cause of stress is the fact that the business can be adversely affected by a weak economy or other issues over which the owner has no control. Employees can use the job to learn the business and gain experience. Employee positions are, for the most part, routine jobs not career positions, so personal factors are often the motivation for filling such a position. Many employees take these jobs knowing they will work a year or two and then move

1969

on to something else. They may be students, looking to work around their class schedules. Cons of Working for a Small Warehousing and Storage Business. The owner or manager works long hours and is required to be there during all open hours. He or she has to handle all problems that arise, and there is no one to go to for help. Employees in this business have little or no chance for advancement and receive relatively low compensation. This can be viewed as a trade-off for working in a low-stress, noncompetitive working atmosphere. Costs Payroll and Benefits: Employees may be paid salaries or an hourly wage. Benefits may include a profit-sharing or a savings plan, health insurance, paid vacation, and sick leave. At the

A worker drives a pallet truck in a large warehouse. (©Dreamstime.com)

1970

Warehousing and Storage Industry

owner’s discretion, part-time employees may receive prorated benefits. Supplies: Supplies are one of the smaller budgetary items, limited to routine office supplies, computer, printer, and copier toners and inks, restroom supplies, cleaning supplies, and breakroom supplies. There are no supply items unique to the industry. External Services: Especially in a small business, it is usually cost-effective to contract out some of the needed services. Security is a key issue, and often the owner subscribes to a security service, which can include restricted entry, security cameras, and motion sensors. Other contracted services can include accounting and bookkeeping, legal, insurance, landscaping and lawn care, janitorial, snow removal, and the handling of routine or emergency maintenance issues. These businesses will also contract a pest-control service in all storage areas. Utilities: Small businesses in this industry use the basic utilities of any similarly sized enterprise: electricity, gas, water, heat and air-conditioning, along with telephone and electronic hookups. Taxes: The owner pays social security taxes on employees as well as the usual federal, state, and local income taxes. These are paid quarterly and based on projected earnings. There may also be local business or property taxes, and the owner pays his or her personal income and property taxes as required by the locality. Midsize Businesses The midsize business can be a single business, a franchise, or a local branch of a larger business. The owner or president, the franchisee, or the local branch manager runs the business on a day-today basis. Some large companies use managing a branch operation as a training ground before promoting an employee to greater responsibilities in its corporate headquarters, but in most cases, the job is a permanent assignment and not a stepping stone to future promotions. Potential Annual Earnings Scale. A midsize warehousing and storage business offers the opportunity for somewhat higher earnings than the smaller company for both the owner/manager and the employee. Employees may earn between $25,000 to $35,000, depending on experience and responsibilities. Part-time clerical help is generally

paid $15 to $20 per hour, and some of the lowerechelon jobs may pay minimum wage. A few of the jobs, such as drivers, may be unionized and paid accordingly. Clientele Interaction. Jobs in these companies require medium to high clientele interaction. Although many of the jobs require direct public contact, there will always be some behind-the-scenes opportunities. Because this is a service rather than a tangible-product industry, good customer service skills are an added plus for those who want to succeed in the business. The ability to proactively handle small problems before they become major issues can greatly increase an employee’s value to the company. Good communication skills are always an asset. Amenities, Atmosphere, and Physical Grounds. The building and grounds in all warehousing and storage companies must always project cleanliness and attention to detail. Security is a major customer concern, so there will be visible reminders, such as evidence of sprinkling systems and security monitoring devices, to assure customers that they can safely store their goods. Employees work in clean, comfortable surroundings and have all the necessary technological equipment, often including surveillance cameras. Companies providing storage for hazardous materials are required to meet all regulatory requirements, and the facility will be regularly inspected to ensure compliance. Typical Number of Employees. These companies usually employ from five to twenty-five employees for each location, although some employees may be part time. Jobs include management, bookkeeping, and administrative support. Other jobs specific to the industry are delivery-truck drivers, order pickers, inventory clerks, pricers, labelers, packagers, assemblers, and forklift operators. The larger companies in this category may employ security guards, although often security is a contracted service. Traditional Geographic Locations. Like their smaller counterparts, midsize companies are found everywhere, from the largest cities to the smallest towns. Anywhere that people live, there is some need for warehousing and storage services. Midsize companies tend to locate in light industrial complexes, commercial areas, and along the highways leading into town. As they do not depend

Warehousing and Storage Industry on walk-in customers, visibility is not an issue. Customers do not seek this service until the need arises, and then factors such as convenience of location can influence their decisions. Pros of Working for a Midsize Warehousing and Storage Business. Employees have a greater opportunity to advance within a midsize company than a small one. For example, a clerical worker can be promoted to office manager, or an order picker can become a warehouse supervisor. As in all industries, the midsize business is a good arena in which to gain experience before joining a larger enterprise or going into business for oneself. There are more types of jobs available as midsize enterprises employ larger staffs, but as this is not a labor-intensive work environment, there are fewer jobs in this industry per business than in many others. Cons of Working for a Midsize Warehousing and Storage Business. Owners or managers tend to work long hours, often fifty to sixty per week. Although warehousing and storage is slightly less sensitive to downward turns in the economy, business can stagnate, causing stress to the person charged with the responsibility for profit. Jobs are more structured than in a smaller business, making it more difficult to gain knowledge of the business as a whole, but midsize companies still offer greater flexibility than their larger counterparts. Salaries tend to be lower than in larger companies but slightly higher than in the smallest ones. Costs Payroll and Benefits: Payroll and employee benefits can be one of the largest budgetary items in a midsize business. Most of the workforce is on salary or receives an hourly wage. Benefits can include health insurance, paid vacation, and sick leave, and sometimes employer-matched savings or investment plans for all full-time employees. Part-time employees may receive prorated benefits, at the discretion of the owner. Union members’ wages and benefits periodically undergo bargaining, and the midsize or smaller owner has little, if any, input in the bargaining process. Supplies: Supplies represent only a small portion of the overall costs of doing business. Storage and warehousing businesses need the usual office supplies, including ink and toner for electronic equipment. They also need to stock rou-

1971

tine cleaning and maintenance supplies (even when those services are provided by external sources), as well as restroom and breakroom supplies. There are no supplies peculiar to the industry. External Services: Purchased services can include legal, advertising, janitorial, insurance, snow removal, trash pickup, security, and pest control, with security being the most important and the most expensive. Customers demand that their goods be protected from weather, fire, theft, and spoilage. Though the owner carries insurance to cover such losses, damages to stored items can do irreparable harm to a company’s reputation and result in lost business. Utilities: Costs for utilities are the same as for any midsize operation: telephone, Internet, and electronic hookups, electricity, water, gas, and heat. Companies specializing in warehousing items that must be stored in a climate-controlled environment will incur significantly higher electricity or gas costs. Taxes: Owners must pay social security and payroll taxes on employees and submit quarterly statements. In addition to their personal federal, state, and local income taxes, they must file and pay business income taxes. Some localities will also require business licenses or permits. Large Businesses The industry giants include moving companies that offer storage, such as the Atlas Van Lines, United Van Lines, and Mayflower Transit, and the industry leaders in third-party logistics warehousing and storage, such as GATX, Dean Warehouse, and DHL. The other segment is made up of the major self-storage companies: Public Storage and UStore-It. These companies have name recognition and a large national, regional, or even international presence in the business. Potential Annual Earnings Scale. Annual earnings vary widely, depending on the type of position within the industry. Compensation for management at the corporate level is competitive with that for management in other industries. Annual salaries for management at national or regional headquarters can reach $75,000, with additional pay in the form of performance bonuses. Jobs at local facilities pay slightly more than the same jobs in small or midsize companies. An experienced fork-

1972

Warehousing and Storage Industry

Inventory specialists ensure smooth flow from the receipt of stock to its placement on the loading dock. (©Endostock/ Dreamstime.com)

lift driver can expect to earn between $25,000 and $31,000 per year. However, many jobs in this industry are considered unskilled, and compensation is in the range of $9 to $16 per hour. Some positions are part time, with reduced, if any, benefits. Clientele Interaction. Clientele interaction ranges from high to none, with those in sales, customer service, and other sales support positions having the highest customer contact. Other employees, such as warehouse personnel or accounting, may have limited or no interaction with customers. As in all industries, those who regularly interact with customers need good people skills, along with an above-average ability to communicate, both orally and in writing. Large companies are able to provide ample opportunities for those who prefer working behind the scenes. Amenities, Atmosphere, and Physical Grounds. Corporate headquarters provide comfortable working conditions and cutting-edge technology. Any building that includes storage or warehouse space will have visible security to reassure

potential customers. That security means protection from weather, fire, pests, theft, and vandalism. Loss of a client’s property can irreparably damage a company’s reputation. Facilities offering refrigerated storage will be equipped with all the necessary electronic devices to monitor temperatures and alert personnel at the first sign of a malfunction. Those storing hazardous materials have strict standards to maintain and are overseen by OSHA and other agencies. Typical Number of Employees. This industry does not require large numbers of employees. The corporate offices need the same marketing, accounting, administrative, and other departments needed for any smooth-running operation, but the actual warehouses, storage lockers, and other facilities typically require only a small workforce, irrespective of the size of the company as a whole. Traditional Geographic Locations. Large companies are typically headquartered in metropolitan areas, but most also have facilities in smaller towns. Larger warehousing companies that

Warehousing and Storage Industry service certain industries tend to locate close to their customer base for ease of delivery. The services provided by this industry are needed virtually everywhere, so these companies are located near their customers, near the end users, or both. Wherever there are products to be stored, there will be warehouses to store them. Pros of Working for a Large Warehousing and Storage Company. As in any industry, large companies attract those who want the opportunity for upward mobility and those who value the name recognition a large company provides. An ambitious employee can work his or her way up through the ranks. The larger companies are more likely to provide company-paid continuing education opportunities that enable employees to climb the corporate ladder. However, this applies more to the headquarters—national or regional—than the field locations, where advancement opportunities are few. There is also prestige in working for an industry leader, where salaries are higher and benefits tend to be more generous. The franchisee benefits from the name recognition of a larger company, along with corporate training, advertising, and marketing. Any franchisee is, however, assessed fees for those benefits. With large companies, employees who want or need to make a geographic move for personal reasons may be able to transfer to a branch in the chosen location. Cons of Working for a Large Warehousing and Storage Company. Employees seeking to advance may find it hard to distinguish themselves from other workers, especially if they work far from headquarters and the attention of top management. In addition, this industry offers fewer employment opportunities, and the competition can be stiff. Outside the main offices, the positions are mostly warehouse workers, truckers, order pickers, forklift operators, and a small office staff. The hours are long, and much of the work is physically demanding. In companies of all sizes in this industry, injuries are common. They include falls, strained muscles, back injuries, and forklift and other equipment accidents. Costs Payroll and Benefits: Larger companies can offer not only the typical benefits but also employerpaid educational benefits and profit sharing or other retirement savings plans. By offering

1973

better benefits and higher salaries, they can attract more job applicants, but this means the competition is greater for the jobs available. As in any large company, payroll and benefits are typically the largest budgetary items. Supplies: These companies use the same supplies as smaller ones but in larger numbers. Included are office supplies, printer and copier ink and toner cartridges, routine maintenance supplies, restroom products, and breakroom supplies. There are no supply items used only by this industry. External Services: Services commonly provided by an outside source include legal services, auditing, janitorial work, landscaping, snow removal, trash removal, security, pest control, and cafeteria management. However, many of the larger companies have personnel or departments to provide some of these services. Insurance is a major expense for the large company, as the customers’ goods and the facilities themselves must be protected. Utilities: Large companies use electricity, gas, water, telephone, Internet, and electronic hookup services. In the largest companies, corporate headquarters is sometimes responsible for contracting these services for all satellite facilities as well as the home office. Taxes: These companies pay social security, unemployment, and any other federal, state, or local taxes levied on their employees, along with quarterly federal, state, and local income taxes. They also pay taxes to every state and municipality in which they do business, along with fees for any relevant licenses or permits. The largest companies often have a whole department charged with the responsibility of handling this chore for the entire company.

ORGANIZATIONAL STRUCTURE AND JOB ROLES Every company, irrespective of the industry, has certain tasks that must be performed to ensure that the business runs smoothly, holds its own against the competition, and complies with all government and industry regulations. Those tasks remain the same whether the company is a single propri-

1974

Warehousing and Storage Industry

etorship, a partnership of two individuals, or a corporation employing thousands. Objectives must be established, employees managed, goods or services marketed, accounting records maintained, payrolls calculated, and taxes paid. In a small warehouse and storage operation, the manager or franchisee will handle all or most of the responsibilities, acting as chief executive officer, sales manager, accountant, janitor, and coffee brewer. Midsize companies have employees charged with various, often overlapping duties. In these companies, some flexibility exists because job descriptions are not as rigid as in larger corporate entities. Large companies have whole departments devoted to a single function, such as sales support, billing, accounts payable, or maintenance. In these companies, job descriptions tend to be precise and detailed, which is sometimes frustrating for the employee who enjoys a variety of tasks and new challenges. No company can operate without people with the skills to perform their assigned duties, but obviously, the larger the company, the more diverse job opportunities it can provide. That said, this particular industry does not require the large staffs that are often the norm, as the warehouses run on minimum manpower, and the jobs in these warehouses are often unskilled and low paying, and may even be part time. The following umbrella categories apply to the organizational structure of businesses in the warehousing and storage industry:

vice presidents, who oversee the department managers in their area of specialization. A vice president of finance would be responsible for the accounting and payroll departments, for example. Those aspiring to top management positions should have a graduate degree in their chosen area of specialization, such as an M.B.A. or master of finance degree, to gain entry to the industry giants. However, in this industry, more than two-thirds of all businesses have fewer than ten employees, so the need for multiple levels of management is considerably less than in other industries. The owner of a small business will do well with a general business education based on his or her individual needs. The small-business owner needs basic economics, accounting, business planning, communications, and management course work targeted for small businesses. For additional help, the owner or manager of a small business can turn to volunteer organizations such as the Service Corps of Retired Executives (SCORE), whose members have been mentoring and advising entrepreneurs since 1964. Help is also available through programs sponsored by trade organizations and local chambers of commerce. Occupations in business management include the following: ■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■

Business Management Customer Services Sales and Marketing Facilities and Security Technology Administrative and Clerical Support Industry-Specific Jobs

Business Management Management determines the direction a company will take, identifies its mission, and makes the necessary decisions to support that mission. The larger the company, the more layers of management. The structure of management in warehousing and storage companies can be as simple as a single owner or as complicated as a board of directors to which a chief executive office or president must answer. The chief executive officer oversees the

■ ■ ■ ■ ■

Director Chief Executive Officer (CEO) President Vice President Sales and Marketing Manager Chief Financial Officer (CFO) Controller Human Resources Manager Office Manager

Customer Services Customer services are the lifeblood of any company and can determine its success or failure. These are the jobs that support the sales and marketing departments or, in small businesses in this industry, serve the customer in respect to accepting payments, handling complaints, arranging for deliveries to end users, and performing related duties. Workers in this field need strong people skills and should be able to effectively handle all problems that arise and be proactive in preventing them. Excellent communications skills, both oral

Warehousing and Storage Industry and written, are required, and workers must be detail-oriented and able to multitask. Jobs in customer service require better than average people skills. At least an associate’s degree and preferably a bachelor’s degree is advisable but not always required. It is sometimes possible to gain an entrylevel position, then work one’s way up through on-the-job training or company-sponsored continuing educational benefits. A customer service manager in this industry is typically paid $38,000 to $48,000 per year, and customer service representatives begin at between $19,000 and $26,000. In smaller companies, customer service is just one more responsibility of the owner, but it is one of the most important if the business is to flourish. Occupations within the customer services department include the following: ■ ■ ■

Customer Service Manager Customer Service Representative Expediter

Sales and Marketing Sales and marketing are essential to any industry and involve multiple layers of employees, from the corporate marketing director to branch sales managers to sales representatives. No company can survive without bringing its product or service to the attention of those who can purchase it. Advertising is part of sales and marketing, although the warehousing and storage industry, for the most part, does not need the sophisticated advertising campaigns that manufacturers of consumer goods do. Large self-storage companies, such as Public Storage, have national advertising campaigns, but for the most part, advertising in this industry is business-to-business rather than directed at consumers. Keep in mind that many companies hire an advertising agency in lieu of an inhouse advertising department. In the smallest of companies, particularly those in the self-storage segment, the owner may rely primarily on telephone directories, classified advertisements in newspapers, and a Web site to sell his or her service. Potential clients for storage units typically do not seek providers until the need arises. Therefore, something as simple as location can be the deciding factor. Billboards can sometimes be used effectively, providing subliminal brand recognition before the need occurs. Buying

1975

low-cost advertisements in high school yearbooks, community theater programs, and similar local publications is yet another way to place the name of the business in front of the public without damage to the budget. People often prefer to do business with companies or individuals who are perceived as being tied to the community. Another cost-effective way to advertise a self-storage facility is through inclusion in local coupon mailers. Franchisees benefit from the advertising done by the national or international headquarters but must pay periodic assessments for that advantage. Entry-level positions require a bachelor’s degree, and those aspiring to management should also consider obtaining an M.B.A. or another postgraduate degree. Smaller company owners and managers are less in need of formal education, as the most effective way to spread their message is to be attuned to what’s happening in the community and what works for other small-business owners. Occupations within the sales and marketing department include the following: ■ ■ ■ ■

Marketing Director Sales Manager Advertising Manager Advertising Creative Personnel

Facilities and Security In the warehousing and storage industry, facilities and security are extremely important. As in any industry, the buildings that house the company have to be maintained, but in this industry, maintenance is crucial because the facility itself is the product being sold. Warehouses must always be kept up in a manner that makes clients feel that their property will be kept safe from fire, weather, pestilence, theft, and vandalism. In corporate headquarters, a facility manager oversees the various departments, including maintenance, janitorial, security, landscaping, and even the employee cafeteria, if it exists. The mail room also falls under the facilities umbrella. If maintenance services are purchased externally, the facilities manager is still required to oversee the provider’s activities. The corporate department may also dictate the security measures to be taken at satellite buildings. Those measures can include security guards, alarms, surveillance cameras, and motion sensors at points of entry. In smaller com-

1976

Warehousing and Storage Industry

panies, some facility and security services may be provided by outside firms, but someone in the company must purchase those services and make sure they are performed satisfactorily. A dual major, engineering and management, is useful for a management position, and workers such as electricians need to be licensed in their respective trades. Facilities managers earn, on average, $60,000 to $80,000 per year, while department heads under them earn less. Maintenance employees such as carpenters and electricians earn the prevailing rate in their geographic location or the union wage if they are union members. When work is performed by an external provider, that company determines the pay scale. Specialty warehouses have separate concerns that fall under the responsibility of the facility manager. These can include anything from temperature control for refrigerated storage to regulatory compliance for hazardous materials handling and storage. Occupations within the facilities and security department include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Facility Manager Housekeeping Staff Custodian/Janitor Maintenance Manager Skilled Tradesman Chief Security Officer Regulatory Compliance Specialist Mail Room Supervisor Mail Clerk

Technology This industry does not provide many technology positions. Computers must be maintained and periodically updated. Databases are used to track inventory and monitor receipts and shipments of customer goods. Most companies also have electronically controlled security systems. Positions in warehousing and storage technology require at least a bachelor’s degree and a commitment to ongoing education to keep up with technological advances. Occupations within the technology departments include the following: ■ ■

Computer Systems Manager Information Services Manager

■ ■

Computer Technician Computer Operator

Administrative and Clerical Support The administrative and clerical positions in this industry are similar to those at many other industries. Employees in this area support the day-to-day functions of a smooth-running enterprise so that management is free to concentrate on the bigger picture. Employees include the administrative assistant who works for a single executive and serves as that person’s trusted aide, as well as the payroll clerk who may be part of a larger department. In small companies, the manager and the support staff are often one and the same. A high school education is enough for most entry-level positions but at least an associate’s degree is a plus. Those seeking upward mobility should have a bachelor’s degree. Most jobs also require computer literacy and familiarity with the most popular word processing and other software programs relevant to the job. In companies with continuing education benefits and a policy of promoting from within, jobs in this area can be stepping stones to greater responsibilities. Occupations within the administrative and clerical departments include the following: ■ ■ ■ ■

Administrative Assistant Accounting Clerk Data Entry Clerk Warehouse Clerk

Industry-Specific Jobs This industry is not labor-intensive and provides fewer jobs than many other industries beyond those provided by any large company’s staffing needs. There are, however, jobs specific to the industry, and these, for the most part, are in the materials handling and management areas. Most are also jobs as opposed to careers. Warehouse designers strive for ease of stocking and retrieval and for maximal space usage. A warehouse designer might develop a new building concept but most likely will be called upon to create a floor plan that will best utilize an existing structure. When goods appear on the receiving dock, they are packed in cartons, barrels, drums, or other containers. The receiving paperwork is completed, and the goods are placed on pallets or racks, often with the help of a forklift or other materials-

Warehousing and Storage Industry moving machinery. The location of all items is stored in a database for easy retrieval. When end users order deliveries, the items must be taken from storage and loaded for shipment. This requires forklift drivers, order pickers, dispatchers, and expediters, although the smaller the operation, the more job functions will overlap. After being prepared for shipment, the order is placed on the loading dock to await transport. Larger operations rely on inventory specialists and others to ensure smooth flow from the receipt of stock to its placement on the loading dock. Many companies offer ancillary services that include pricing, packaging, breaking down bulk items, order entry, order fulfillment, and even light assembly of goods. These services require additional personnel. Every additional service increases revenue, and the companies that can effectively meet the most client needs have a substantial competitive edge.

1977

For the most part, these jobs are unskilled and thus low paying. They are expected to decline in number because of automation. Although the total number of jobs may be reduced, opportunities will always exist as the turnover rate in this area is high. The reasons for the turnover are varied. People move on to higher-paying jobs both inside and outside the industry, and the work can become too physically demanding. Most jobs require no education beyond high school and are quickly learned through on-the-job training. Good physical condition and the ability to lift heavy packages are primary requirements. Occupations specific to the warehousing and storage industry include the following:

OCCUPATION

■ ■ ■ ■

Warehouse Manager Order Picker Dispatcher Expediter

PROFILE

Forklift Operator Considerations

Qualifications

Description

Drives a forklift and uses it to lift and move objects; may also do some maintenance.

Career cluster

Manufacturing

Interests

Things

Working conditions

Work inside; work both inside and outside

Minimum education level

No high school diploma; on-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Light work; medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Usually not required

Employment outlook

Decline expected

Holland interest score

RCE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

1978 ■

Warehousing and Storage Industry

in the United States alone in 2010. These facilities are owned by more than 30,000 companies and are ■ likely to continue to multiply as they perform a use■ ful service for many people. It is estimated that 10 ■ percent of American households have items in a self-storage unit, the average size of which is comparable to a one-car garage. However, the self-storage end of the industry provides the fewest jobs. INDUSTRY OUTLOOK Eventually, the market for self-storage units could become saturated, but until that time, it will experiOverview ence continued growth. The rebound in the movThe outlook for this industry shows it to be on ing industry is likely to increase the need for the the rise, although growth is slightly slower than for short-term storage of household goods, although the average industry. The U.S. Department of Lathat market has been eroded by the proliferation bor estimates that some segments will remain staof self-storage facilities. ble, while others will grow as much as 12 percent Larger commercial warehousing and storage between 2011 and 2018. companies will see gains based on the growing In 2008, the Bureau of Labor Statistics reported dependence on goods produced offshore. These third-party logistics providers provide a convethat there were 15,200 facilities storing general nience to manufacturers as well as to retailers. They merchandise and refrigerated goods. This does will continue to gain customers as companies innot count the self-storage segment of the industry, which is expected to see the largest growth. The creasingly decide not to warehouse their own products. Stricter and more numerous safety regulations self-service sector had more than 50,000 facilities have made shipping of certain products complex enough that some suppliers prefer to use proPROJECTED EMPLOYMENT fessional shippers to avoid probFOR SELECTED OCCUPATIONS lems and legal repercussions. Petroleum products, chemicals, Warehousing and Storage pharmaceuticals, and food products all are highly regulated, and Employment those storing such products need 2009 Projected 2018 Occupation to be knowledgeable in their safe handling. Foods that once 83,480 97,700 Industrial truck and tractor were available only during seaoperators son or in their areas of origin 148,100 160,600 Laborers and freight, stock, and can be flash frozen or otherwise material movers, hand preserved to be enjoyed all year long and all over the world. 33,490 39,000 Shipping, receiving, and traffic These foods require special atclerks tention throughout the storage 53,550 66,200 Stock clerks and order fillers process to protect the end consumer. 6,690 6,500 Transportation, storage, and The trend toward decentraldistribution managers ization has made the industry more efficient. The average reSource: U.S. Bureau of Labor Statistics, Industries at a Glance, gional facility operates with six Occupational Employment Statistics and Employment Projections distribution centers, all of which Program. can be tailored to meet the needs of loca.l customers, and most of ■

Forklift Operator Inventory Specialist Pricer Packager Clerk

Warehousing and Storage Industry those centers can move products within twentyfour hours of receiving the order. Just in time is another strategy developed to increase efficiency and reduce long-term storage of unneeded product. Continued corporate downsizing and outsourcing make third-party logistics providers a cost-effective way to handle warehousing and storage needs, thus allowing the corporation to concentrate on its core area of business. Vacancy rates are expected to decline in the period from 2011 to 2018, leading to greater profitability. Also, new structures are being built anywhere from 25 percent to 40 percent larger than in the 2000’s, a sign of industry confidence. Special warehousing (that not counted elsewhere) is another category expected to see rapid growth. These facilities usually provide bulk storage for petroleum, oil, and gasoline. In the United States, they tend to be found near the oil refineries in Oklahoma and Texas. Another area of special warehousing is the storage of records and data, including microfilm, X rays, computer disks and drives, videotapes, and blueprints. These items must be stored in a climate-controlled environment and protected from damage, theft, and corporate espionage. Employment Advantages The industry is poised for growth, and although there are fewer opportunities than in many other industries, the career side of the business will continue to provide opportunities to earn a good living. There is always an advantage to working in an industry that provides a service that will be in demand in the future. The industry will always provide the type of positions that are required in every industry, such as managers, accountants, and administrative assistants. In addition, unskilled workers will always be needed as this area sees higher than average turnover. Workers who take these jobs can earn a modest living and expect to be able to choose from among many companies needing their services. Self-storage and mini warehousing remains a good opportunity for entrepreneurs willing to work hard for what could be a distant payoff. However, the danger exists that the market will become saturated, and not all companies will survive.

1979

Annual Earnings The warehousing and storage industry is predicted to rise in overall revenues about 5.9 percent from 2011 through 2018, resulting in domestic growth of approximately $755 million. As with most industries, some categories will experience significantly higher (or lower) growth rates. Wages earned by the majority of employees will remain stable at an average hourly rate of $12 to $13 per hour. Owners, management, and other salaried skilled workers will receive the benefit of the lion’s share of the industry’s growth, although many workers performing unskilled labor may see increases in hourly wages to reflect increases in the cost of living. The industry itself is confident about growth. Following a stagnant 2009, Modern Materials Handling magazine reported a 12 percent increase in equipment orders in 2010, a trend that is expected to continue into 2011. This means the industry is preparing for growth. An Armstrong Consulting report in the magazine also predicted that thirdparty logistics warehousing would top $50 billion in 2010 and 2011.

RELATED RESOURCES FOR FURTHER RESEARCH Dangerous Goods Advisory Council 1100 H St. NW, Suite 740 Washington, DC 20005 Tel: (202) 289-4550 Fax: (202) 289-4074 http://www.dgac.org International Association of Refrigerated Warehouses 1500 King St., Suite 201 Alexandria, VA 22314-2730 Tel: (703) 373-4300 Fax: (703) 373-4301 http://www.iarw.org Material Handling Industry of America 8720 Red Oak Blvd., Suite 201 Charlotte, NC 28217-3992 Tel: (704) 676-1190 Fax: (704) 676-1199 http://www.mhia.org

1980

Warehousing and Storage Industry

MODERN MATERIALS HANDLING Peerless Media P.O. Box 1496 Framingham, MA 01701 Tel: (800) 315-1578 Fax: (508) 663-1599 http://www.mmh.com

FURTHER

SUPPLY CHAIN MANAGEMENT REVIEW Peerless Media P.O. Box 1496 Framingham, MA 01701 Tel: (800) 315-1578 Fax: (508) 663-1599 http://www.scmr.com Warehousing Education and Research Council 1100 Jorie Blvd., Suite 170 Oak Brook, IL 60523-4413 Tel: (630) 990-0001 Fax: (630) 990-0256 http://www.werc.org

ABOUT

THE

AUTHOR

Norma Lewis is the author of four nonfiction books, one an account of the Yukon gold rush for young adults and the other three pictorial histories of the southwestern Michigan area. She is a prolific writer for magazines, and during the twenty years she has been writing travel articles, she has covered destinations, group and solo travel, and recreational vehicle camping. She holds a bachelor of science degree in business administration from Aquinas College.

READING

Bourlakis, Paul W., and W. H. Weigtman, eds. Food Supply Chain Management. Hoboken, N.J.: John D. Wiley and Sons, 2004. Center for Chemical Process Safety. Guidelines for Safe Warehousing of Chemicals. Hoboken, N.J.: John D. Wiley and Sons, 2008. Martin, James William. Lean Six Sigma for Supply Chain Management: The Ten-Step Solution Process. New York: McGraw-Hill, 2006. Morris, Peter, and Jeffrey K. Pinto, eds. The Wiley Guide to Project Technology Management, Supply Chain, and Procurement. Hoboken, N.J.: John D. Wiley and Sons, 2007. Ryan, Mary Meghan, ed. Handbook of U.S. Labor Statistics: Employment, Earnings, Prices, Productivity, and Other Labor Data. 13th ed. Lanham, Md.: Bernam Press, 2010. Toigo, Jon William. The Holy Grail of Data Storage Management. New York: Prentice Hall, 1999. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 20102011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Waste Management Industry ©Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Transportation, Distribution, and Logistics Career Clusters: Government and Public Administration Occupations; Transportation, Distribution, and Logistics Subcategory Industries: Hazardous Waste Collection; Recycling; Septic Tank and Related Services; Sewer Cleaning; Solid Waste Collection; Waste Treatment and Disposal Related Industries: Business Services; Civil Services: Public Safety; Local Public Administration; Public Health Services Annual Domestic Revenues: $75 billion USD (Hoover’s, 2009) Annual Global Revenues: $375 billion USD (300 billion euros; Veolia Environmental Services, 2009) NAICS Numbers: 56299, 5621-5622

INDUSTRY

waste. Waste management has become increasingly complex as the human population has increased and its industries and technologies have evolved. The primary goal of waste management is to protect the public and the environment from the potentially harmful effects of waste.

History of the Industry Historically, there have been three basic methods of managing waste: recycling, dumping, and burning. Recycling and reuse were the earliest recognized forms of waste management: They have always existed in some form, mostly involving gathering damaged or previously used materials. There is evidence that a recycling system for bronze scrap metal was in operation in Europe nearly four thousand years ago and that composting was carried out in China around the same time. The first recorded landfill site, or dumping site, dates back to 3000 b.c.e. at Knossos, on Crete, during the Minoan civilization. There, waste was placed in large pits and covered with earth at various levels. More than twenty-five hundred years ago, government officials in Athens, Greece, opened a municipal landfill site and established a

DEFINITION

Summary Waste management is the collection, hauling, treatment, and disposal or recycling of the waste produced by human activity. There are different kinds of waste, including solid waste and hazardous 1981

1982

Waste Management Industry

decree that waste was to be transported at least 1 mile beyond the city gates. Even though landfills were used throughout history, archaeological digs have revealed only small amounts of ash, broken tools, and pottery. Archaeologists have therefore theorized that everything that could be salvaged by ancient civilizations was repaired and used again. For many ancient civilizations, waste was manageable largely because populations were not heavily concentrated or remained nomadic in nature. As the human population increased and became more sedentary, shifting into urban areas, waste disposal became more difficult and complicated, and the consequences of failure became more severe. For centuries, unregulated waste was a primary source of disease; water supplies, in particular, became infected with untreated waste. In the early 1800’s, cholera, which is transmitted to humans through contaminated drinking water, caused millions of deaths after it spread from the contaminated water and filthy living conditions of Calcutta, India. This cholera pandemic spread from India to Southeast and Central Asia, the Middle East, and finally Russia. Great Britain’s first

cholera epidemic began shortly thereafter, in 1831. Seventeen years later, in 1848, the Public Health Act was enacted in Britain as a first effort to manage waste. However, major cities such as London were not included in the legislation, and problems with waste continued. The management of animal waste also became an issue, as many diseases were the result of untreated waste from livestock. Pigs, for example, were often given raw garbage as feed—an early method of municipal waste disposal. However, pigs were found to be the source of diseases such as trichinosis, a parasitic disease passed along to humans who consume undercooked pork. To prevent the transmission of such diseases, Britain developed a waste management system in the early twentieth century that consisted of burning waste. The ash was then disposed of in the ground, where it helped improve the soil. In the 1930’s, commercial plastic, which is manufactured from petroleum, was introduced and used as packaging. While plastics helped reduce food waste, they were nonbiodegradable, but initially the environmental impact of their use was

This labeled bin encourages people to recycle. (©Dreamstime.com)

Waste Management Industry

1983

largely overlooked. During the years folThe Waste Management lowing World War II, waste was largely buried as opposed to being burned. The Industry’s Contribution to the U.S. burial of waste was the most conveEconomy nient and cost-effective method to manage waste, and landfills were created Value Added Amount throughout the United States. However, Gross domestic product $40.8 billion little thought was given to the environmental impact or consequences of landGross domestic product 0.3% fills, including the effect of buried garPersons employed 360,000 bage upon groundwater. Eventually, it Total employee compensation $21.5 billion was determined that garbage in landfills could contribute to water pollution and Source: U.S. Bureau of Economic Analysis. Data are for the release of methane gas. (Landfills re2008. lease “landfill gas,” which is roughly 50 percent methane and 50 percent carbon dioxide.) As a result of these dangers, Some cities are enacting waste prevention stratstrict regulations were initiated during the 1970’s egies that are geared to reducing the amount of to codify and enforce the proper management of waste created. Such cities include Edinburgh, Scotchemical and hazardous waste. land, which received £83 million (nearly $136 million in January, 2010, dollars) from the Strategic The Industry Today Waste Fund to develop a waste prevention strategy. The contemporary waste management industry Edinburgh’s Waste Prevention Strategy is designed seeks to reduce waste, not just to dispose of it. to reflect the principles of the waste hierarchy, aimWaste generation has slowed considerably as a reing to reduce waste at every level of the productionsult of increased recycling and reduced consumpconsumption chain. The strategy aims to create a tion of disposable materials, such as paper. Local culture change among residents, ultimately demunicipalities are focusing on increasing recycling creasing the amount of waste sent to landfills. and reducing the amount of waste that is dumped Organic waste, which generally makes up 30 in landfills. In fact, a term now being used is “zero percent of a typical household’s waste stream, has waste,” a design principle that involves abolishing become a key focus of waste management. Organic landfills and dramatically reducing the need to inwaste—any waste from something that was once livcinerate waste; in short, waste itself is to be elimiing—includes food scraps, leaves, grass, and agrinated. cultural residues, as well as materials that would Zero waste also involves a reduction in connaturally decay or decompose, such as wood waste, sumption and an increase in recycling—everymanure, or biosolids. Biosolids are treated sewage thing a consumer buys can be recycled or reused sludge generated at wastewater treatment facilities; and can be made from products that have themthey consist of the solid and semisolid materials selves been recycled or reused. In New Zealand, for from household sewage. example, an estimated 45 percent of local governThe waste management industry in the United ments, as early as 2002, had introduced zero waste States is fragmented and highly concentrated. programs or policies, with the overall goal of There are approximately twenty thousand compaachieving zero waste by 2015 (or coming as close to nies in the U.S. waste management industry, but zero waste as possible). Such policy changes are the eight leading companies are responsible for dramatically increasing the amount of waste that is one-half of the industry’s total annual revenue. recycled. For instance, just six years after enacting Household waste from both single-family and mulpolicy changes to increase recycling and reduce tifamily residences makes up the largest percentwaste, Canberra, Australia, was recycling an estiage of solid waste, while 35 to 45 percent comes mated 59 percent of its waste, while Edmonton, from commercial businesses, schools, and instituCanada, was recycling 70 percent of its waste.

1984

Waste Management Industry

Inputs Consumed by the Waste Management Industry Input

Value

Energy Materials Purchased services Total

$1.0 billion $8.7 billion $28.2 billion $37.9 billion

Source: U.S. Bureau of Economic Analysis. Data are for 2008.

tions. Improvements in the U.S. waste management industry—and the global industry as a whole—are largely dependent upon the enhanced use of technology. More advanced processes are being used to map out routes, as well as to treat and dispose of waste. In addition, large companies are forming joint ventures and buying subsidiaries to produce waste-to-energy production facilities. The waste management industry has several major subsectors and components. The waste combustors subsector comprises two types of operations: waste-to-energy facilities and incinerators that do not recover energy. Waste-to-energy facilities not only burn garbage but also recover heat energy from the incineration process and sell it to producers of electricity or steam. Typical waste-toenergy facilities generate about 2,750 megawatts of electricity, enough to meet the power needs of nearly 2.3 million homes. Traditional incinerators simply burn garbage and allow the heat to escape to the atmosphere. In many cases, incineration facilities also separate recyclable materials, which are either processed through another division of the company or sold. Through the incineration process, the volume of municipal solid waste is reduced by about 90 percent, while its weight is reduced by about 75 percent. As of 2007, there were 87 waste-to-energy plants operating in the United States, down from 102 in 2000. Of these plants, 40 were located in the Northeast, 23 in the South, 16 in the Midwest, and 8 in the West. Both local governments and private companies are engaged in the waste combustor in-

dustry. The market is split about fifty-fifty between private companies and local governments that own and operate their own waste combustors. The recycling industry processes household and industrial waste for reuse. Materials that can be recycled include paper, glass, and certain metals and plastics. Recycling slows the depletion of nonrenewable resources and helps prevent pollution. Businesses may specialize in recycling one or more types of material. While the recycling industry includes both public and private entities, private recycling is by far the larger sector. It supports about ten times the number of employees that are supported by the public sector. The U.S. recycling industry is growing as a result of increasing regulations, and all U.S. states encourage or require local recycling programs. The recycling industry also provides environmental benefits. For example, recycling aluminum scrap saves 95 percent of the energy that would have been needed to make the same amount of new aluminum. Recycling paper saves about 64 percent of the energy that would have been needed to make an equivalent amount from raw materials. However, the 2007-2009 recession forced many local communities to cut back on their recycling programs. The industry was also affected by a drop in the price of commodities following the 2007-2009 global financial crisis. Glass containers are 100 percent recyclable, making them an extremely environmentally friendly product. Glass recycling is conducted in approximately twenty-five states and employs more than thirty thousand people at approximately sixtyfive glass recycling plants. A typical glass processing facility can handle 20 tons of color-sorted glass per hour, and glass bottles and jars can go from a recycling bin back to the retail shelf in as few as thirty days. Glass recycling can serve specialized markets, such as cathode-ray tubes for televisions and computer monitors or window plate and container glass. Some businesses specialize in one or more such markets. Aluminum is also highly recyclable, and the recovery and recycling of aluminum has become its own industry. While aluminum recycling has been a common practice for more than one hundred years, it remained a low-profile activity until 1968, when recycling of aluminum beverage cans became common practice. (As of 2010, 100 percent

Waste Management Industry of all beverage cans were made from aluminum.) While beverage cans are the most well known example of recycled aluminum, they typically amount to less than 30 percent of the tonnage of aluminum consumer products that are recycled. Other sources of recycled aluminum include appliances, automobiles, windows, and doors, As of 2009, there were more than ten thousand aluminum recycling centers in the United States. The continued growth of the aluminum recycling industry is due primarily to the fact that it has become cheaper, faster, and more energy efficient to recycle aluminum. As the demand for aluminum increases, aluminum recyclers are expanding their businesses or advancing them by becoming more specialized to meet customers’ unique product specifications and market needs. For example, recycled aluminum can be made into cans, pie pans, house siding, lawn furniture, and small appliances. The greatest consumer of aluminum is the automobile industry, which uses almost 6 billion pounds.

1985

Mine waste consists of the by-products of extracting and processing mineral resources. Mine waste from extractive operations is one of the largest and most important waste streams in the European Union, and managing it is vital to preventing or minimizing water or ground pollution. Some mine wastes are inert and are therefore not likely to represent significant pollution threats. Others, however, may contain large amounts of dangerous substances, particularly those generated by metal mining, such as heavy metals. The extraction and subsequent mineral processing of metals and metal compounds tend to make them chemically more available, which can result in the generation of acid or alkaline drainage. Mine waste management also entails the management of tailings, or the materials left after separating the valuable part from the worthless part of a metal. This separation is a hazardous process that often involves residual processing chemicals and increased levels of metals. In many instances, tailings are stored in large ponds that are retained by

Trash bags stacked at the curb, awaiting removal. (©Dreamstime.com)

1986

Waste Management Industry

dams. If such a dam were to collapse, the resulting release of its tailings could have a serious impact on human health and safety, as well as on the environment. Other possible negative effects of mine waste include the physical footprints of waste disposal facilities, resulting in the loss of land productivity, effects on ecosystems, and dust and erosion. Hazardous waste poses a serious threat to public health and the environment and cannot be disposed of without treatment or some type of processing. Hazardous wastes may be flammable, toxic, explosive, carcinogenic, or corrosive, and they can be found in several different forms, such as liquids, solids, or gases. Hazardous household wastes include used paint, oils, fuels, automotive products, and fluorescent lightbulbs. Industrial hazardous wastes can be treated or processed through a number of means, including recycling, neutralization, conversion to cement, incineration, and waste-to-energy production. Hazardous waste management is a fairly new

field that began in the second half of the twentieth century. As the field evolved, many companies realized the need for rigorous scientific investigation to solve their environmental problems. Governmental agencies began to issue and enforce stricter waste management regulations that, in turn, required the hazardous waste management industry to seek chemists who could provide the scientific knowledge necessary to comply with the stricter laws. The market for chemists in the hazardous waste management field has been growing ever since, and it will likely continue to grow as environmental protection and concerns continue to rise. Nuclear waste management involves the cleanup of nuclear and radioactive waste. Nuclear waste refers to the radioactive by-products of nuclear energy and weapons production. The cleanup or management of nuclear waste often takes decades. The U.S. Department of Energy (DOE) spends billions of dollars annually cleaning up nuclear waste from projects that date back as far as the 1940’s.

Household waste from both single-family and multifamily residences makes up the largest percentage of solid waste. (©Dreamstime.com)

Waste Management Industry

1987

Birds scavenge at a landfill. (©Dreamstime.com)

Some of these DOE projects take forty years or longer to complete. Nuclear power is the only energy industry that takes full responsibility for all its wastes, as is reflected in the costs of the industry’s end product. Organic waste is typically biodegradable; it is generated from plants or animals and is broken down by other living organisms, such as worms, fungi, and bacteria. Organic waste is generated by households, businesses, municipalities, and industries. Household waste largely consists of food waste such as potato peelings, spoiled fruits and vegetables, and grass and garden trimmings. Restaurants generate waste similar to that of households, only in larger quantities. Industrial waste includes waste generated from food-processing factories and agricultural farms. Composting involves the managed decay of organic waste into humus, a form that can provide nutrients to soil. Nonfunctional, outdated, or unwanted electronics equipment must be managed separately from other waste. From cameras to computers to

broken televisions, the electronics waste management industry continues to grow in correlation to the growth in the technology industry. The industry is also affected by toxic materials and the appropriate handling and disposal issues at the electronics equipment end-of-life. The scrap metals recycling industry in the United States is largely driven by demand from the auto, steel, and construction industries. Most companies in the scrap metal recycling industry are small and specialize in one type of material. Large companies have a competitive advantage because of economies of scale derived from the ability to purchase equipment and transportation vehicles in bulk. The industry is capital-intensive, meaning it requires large investments in the purchase and maintenance of equipment, as well as in labor. Landfills can be started with raw land, or they can be purchased as ready-to-go landfills with all the proper permitting in place. Permitting can be a lengthy process, taking several years. Landfill and disposal operations generate billions of dollars in

1988

Waste Management Industry

A container for used syringes. Biomedical waste requires special handling. (©Susanne Neal/Dreamstime.com)

revenue annually. The latest technology is used in the design and management of landfills to address restrictions and regulations, as well as the increased need for efficiency in managing landfill space that is due to the declining number of landfills. In 1989, there were roughly 7,500 landfills in the United States; in 2000, that number had dropped by more than 50 percent, to 3,091. The competitiveness and consolidation of the waste management industry have caused some landfill operators to purchase waste collection companies to guarantee steady waste streams. The landfill industry is ever changing—many communities are evaluating and implementing privatization, while others are switching back to public ownership. Cost-effectiveness for private landfills varies from state to state. Certain areas of the United States lean toward public ownership, while other areas prefer private ownership. For ex-

ample, many of the landfills in Florida are publicly owned, because many of the state’s municipalities have grown rapidly. The landfill industry in Florida is highly competitive. Private landfill companies often have the flexibility to offer lower prices in competitive markets, particularly where there are several landfills within a reasonable transportation distance of the same market. They also rely on contracts with municipalities to collect residential waste. Ohio, for example, is a highly competitive environment, where private ownership of landfills has proved to be cost-beneficial for landfill owners. More than 1 million tons of medical or clinical waste is generated each year by hospitals, veterinary clinics, and medical centers in the United States. While the majority of medical waste is harmless, about 15 percent of medical waste poses a potential hazard. Federal and state laws govern the disposal of medical waste, mandating specific methods for packaging or sterilizing the waste so it does not negatively affect people, animals, or the environment. (The Medical Waste Tracking Act of 1988 was enacted following a few highly publicized incidents of medical waste washing up on beaches along the East Coast.) While the Environmental Protection Agency (EPA) provides basic regulations, most requirements for the treatment and disposal of medical waste are dictated by the states.

INDUSTRY MARKET SEGMENTS Each of the many subsectors of the waste management industry is divided into small, midsize, and large businesses. Some such businesses specialize in only one component of waste management. Others are more comprehensive in their approach to waste, offering multiple services and processing multiple types of waste to maximize their effectiveness and profits. Small Businesses Generally speaking, small waste management businesses earn between $1 million and $7 million annually. They typically specialize in one area of waste management, providing one specific service. For example, environmental waste disposal is a growing industry that is particularly suited to small

Waste Management Industry businesses. Governmental standards for waste disposal, specifically environmental waste disposal, continue to become stricter. On a federal level, the process begins with the EPA. In addition, numerous permits are required by various environmental organizations and agencies and other types of waste management oversight organizations at the state and local level. As a result of these various regulatory bodies and processes, the environmental waste disposal industry is difficult to enter and highly competitive. Small businesses might also employ an environmental waste engineer to help develop economically advantageous disposal solutions. Small businesses may also specialize in waste and environmental consulting. Consultants in solid waste management may have varied specialties and skills and may include engineers, geologists, scientists, and chemists. Solid waste consultants and firms help engineer landfills and manage greenhouse gases. They assess and remediate soil and groundwater from service stations that may have contaminated the ground. They also perform due diligence work, determining the assets and liabilities of a company. Solid waste and environmental consultants are also needed in legal proceedings to provide expert witness and litigation support services. Recycling consultants and firms analyze the amount of trash and recyclables a company, resident, or city generates and provide workable solutions to reduce the waste stream. They identify the types of materials that are in the waste stream and assess their recyclability. Often, a municipality may hire a recycling consultant to help increase its recycling content by determining ways to increase the amount of trash that is recycled. Medical waste management is a highly regulated industry. Some regulations vary from state to state, while other regulations are federally mandated. In addition, the U.S. Department of Transportation (DOT) requires that all employees transporting hazardous waste, including medical waste, must undergo regular training. Meanwhile, the composting industry is, for the most part, in its infancy in the United States. As an industry, it is largely focused on decreasing the amount of waste that is sent to landfills. Composting allows for dual revenue streams: Businesses are paid to remove organic waste, and they are paid

1989

again by consumers and retailers purchasing compost. For example, the food scraps of residents and businesses in San Francisco are brought to a composting facility that is paid to take the organic refuse. Once that matter has become compost, it is sold to vineyards. The composting business must deal with odors of decomposing foods and organic matter. This often requires a closed facility or a facility that is removed from residential communities. Some composting facilities are public-private partnerships. It is estimated that up to 30 percent of residential and commercial waste is compostable. A rapidly growing waste management sector with opportunities for small businesses is animal manure management research. This burgeoning industry develops new or improved technologies for managing animal manures based on economically and environmentally sound approaches. It researches such techniques as combining manure with other materials, including litter, water, and bedding. Animal manure management research is intended to find ways to reduce the negative impact of animal manure on the environment, particularly the impact of factory farming. It also serves to improve the economics of animal production by creating value-added products derived from animal manure and maximizing manure management technologies. Funding is available exclusively to small animal manure management research businesses through the U.S. Department of Agriculture’s Small Business Innovation Research (SBIR) program. Potential Annual Earnings Scale. According to the BLS, the mean annual salary of all workers in the waste management field in 2009 was $46,170. Managers earned an average of $101,690, while liquid waste treatment plant operators earned $50,290 and trash and recycling collectors earned $37,290, on average. Clientele Interaction. Small waste management businesses, depending on the nature of their specialized services, must deal with clients on the municipal and federal level. They may serve corporations, hospitals, and medical facilities. Amenities, Atmosphere, and Physical Grounds. Waste management facilities operate within a highly regulated environment. Requirements often include odor and dust management and control. Amenities and atmosphere vary be-

1990

Waste Management Industry

tween the executive level and the rest of the workforce, such as those engaged in the actual collection and handling of waste. Typical Number of Employees. Small waste management businesses may employ anywhere from one person to five hundred people. Traditional Geographic Locations. Waste management facilities are located throughout the United States, typically a good distance from residential communities. Pros of Working for a Small Waste Management Business. Small waste management businesses often have more creative control and flexibility. Competitive pricing and access to newly emerging markets are other benefits of small businesses. In addition, because they generally offer specialized services, small businesses serve local markets, establishing ties to their communities. Cons of Working for a Small Waste Management Business. Small waste management businesses must be aware of and adhere to the various permitting procedures and strict environmental regulations that exist on both the national and local levels. They are more vulnerable to fluctuations in the market than are larger businesses, which usually have greater cash reserves, especially since start-up costs in the industry can be high. Because companies often offer specialized services, competition can also be intense among businesses with the same specialty. Costs Payroll and Benefits: Small waste management businesses generally hire a large portion of their staff at hourly wages. Health benefits, including vision and dental, are usually offered. Supplies: Waste management businesses require large hauling equipment, sorting equipment, and other specialized equipment, as well as standard office equipment and supplies. Those with significant research divisions require all manner of scientific equipment as well. External Services: Some businesses that focus on on-site disposal or recycling of waste may contract debris hauling and other transportation services. They may also hire external vendors to manage and control dust and odor at their facilities, as well as to provide security, maintenance, accounting, or marketing services. Utilities: Waste management businesses must pay

for standard utilities, such as electricity, gas, water, sewage, telephone service, and Internet access. Taxes: Small businesses are required to pay local, state, and federal income taxes, as well as applicable property taxes. Other incurred costs include special permits and licenses. Midsize Businesses Generally speaking, midsize waste management businesses earn between $7 million and $15 million per year. They typically perform more than one process in a service area. For example, a hazardous waste company may collect hazardous waste, incinerate it, and sell the resulting energy on the open market. Specific services may include waste-to-energy conversion and remediation. Waste-to-energy conversion has become an important and growing market, as more garbage is being shipped to developing countries from developed nations with insufficient landfill space. (Often, these developing countries lack the technologies to process waste efficiently.) For example, researchers are investigating ways to convert wastewater into ethanol and use it as an automobile fuel. They are also developing technologies to extract hydrogen from waste materials, such as vegetable oil or the glycerol by-product of biodiesel production. In the future, hydrogen-based fuel could be used for large-scale power production, and hydrogen cells could power laptop computers and other electronics. The remediation services industry is primarily involved in the cleanup and removal of dangerous contamination. It remediates contaminated mine sites, buildings, soil, and groundwater. The industry also treats wastewater and removes hazardous materials such as asbestos and lead paint. When soil has been damaged, remediation services help revegetate the land by rebuilding the soil and then replanting. The growing need for remediation services is also allowing small companies to enter the field with sophisticated technology. Potential Annual Earnings Scale. According to the BLS, the mean annual salary of all workers in the waste management field in 2009 was $46,170. Managers earned an average of $101,690, while liquid waste treatment plant operators earned $50,290 and trash and recycling collectors earned $37,290, on average.

Waste Management Industry Clientele Interaction. Midsize waste management businesses, depending on the nature of their specialized services, must deal with clients on the municipal and federal level. They may serve corporations, hospitals, and medical facilities. Amenities, Atmosphere, and Physical Grounds. Waste management facilities operate within a highly regulated environment. Requirements often include odor and dust management and control. Amenities and atmosphere vary between the executive level and the rest of the workforce, such as those engaged in the actual collection and handling of waste. Typical Number of Employees. Midsize waste management businesses generally employ between five hundred and one thousand people. Traditional Geographic Locations. Waste management facilities are located throughout the United States, typically a good distance from residential communities. Pros of Working for a Midsize Waste Management Business. Midsize waste management businesses are usually more financially stable, with greater cash reserves, than are small businesses. They are able to achieve greater economies of scale and more competitive pricing than are small businesses, while still being large enough to diversify somewhat, covering more than one specialty or segment of the waste management process. At the same time, they may be more nimble and flexible than large businesses. Cons of Working for a Midsize Waste Management Business. Midsize waste management businesses must be aware of and adhere to the various permit and strict environmental regulations, both on the national and local level. They are more likely than small businesses to operate in multiple jurisdictions, requiring multiple sets of permits and overseen by multiple regulatory structures. However, they may lack the resources to dedicate as many legal and oversight personnel to ensuring compliance as can large businesses. Similarly, while they may have significant financial resources, they will still be less likely to weather economic downturns than are larger firms. Costs Payroll and Benefits: Midsize waste management businesses generally hire a portion of their staff at hourly wages, but they have more salaried ad-

1991

ministrative and management employees than do small businesses. Health benefits, including vision and dental, are usually offered. Supplies: Waste management businesses require large hauling equipment, sorting equipment, and other specialized equipment, as well as standard office equipment and supplies. Those with significant research divisions require all manner of scientific equipment as well. External Services: Businesses that focus on onsite disposal or recycling of waste may contract debris hauling and other transportation services. They may also hire external vendors to manage and control dust and odor at their facilities, as well as to provide security, maintenance, accounting, or marketing services. Utilities: Waste management businesses must pay for standard utilities, such as electricity, gas, water, sewage, telephone service, and Internet access. Taxes: Midsize businesses are required to pay local, state, and federal income taxes, as well as applicable property taxes. Other incurred costs include special permits and licenses. Large Businesses Generally speaking large waste management businesses earn $10 million or more annually. They typically collect, dispose of, and treat many types of waste in various locations. They do not specialize in only one waste management service; rather, they vertically integrate operations into the five primary services: recycling, remediation, waste collection, treatment, and disposal. Large waste management companies usually operate in more than one state, serving millions of customers through hundreds if not thousands of service contracts. The waste management industry is highly concentrated, and the eight largest firms accounted for approximately 50 percent of the industry’s total revenue in 2009. In order to serve the market, large companies privately operate transfer stations, recycling facilities, landfills, hauling facilities, and waste-to-energy facilities nationwide. According to Hoover’s, recycling accounts for about 10 percent of the waste management industry’s revenue, while waste collection accounts for about 55 percent. Treatment and disposal account for about 20 percent, and remediation and cleaning of ground contamination, lead paint, and as-

1992

Waste Management Industry

bestos account for about 15 percent. Efficient operations and labor are the primary profitability drivers of large waste management companies. In the early twenty-first century, the industry’s operations have been complicated by growing environmental awareness and concerns. Stricter regulations have been implemented, requiring the use of clay liners in landfills, monitoring devices to detect leakage of garbage, and containment technologies to capture dangerous methane gas. In particular, the need to use green technology and to lower carbon dioxide emissions are two major concerns for large waste management businesses. The industry can help reduce greenhouse gases and reduce emissions in its fleet of vehicles by 50 percent if it converts its hauling vehicles from diesel fuel to clean-burning natural gas. Additionally, joint ventures have become a growing market for large waste management companies, which partner with communities, governments, industries, and environmental groups to redevelop closed landfills and convert them into recreational facilities, such as campgrounds, athletic fields, and golf courses. Potential Annual Earnings Scale. According to the BLS, the mean annual salary of all workers in the waste management field in 2009 was $46,170. Managers earned an average of $101,690, while liquid waste treatment plant operators earned $50,290 and trash and recycling collectors earned $37,290, on average. Clientele Interaction. Large waste management businesses, depending on the nature of their specialized services, must deal with clients on the municipal and federal level. They may serve corporations, hospitals, and medical facilities. Amenities, Atmosphere, and Physical Grounds. Waste management facilities operate within a highly regulated environment. Requirements often include odor and dust management and control. Amenities and atmosphere vary between the executive level and the rest of the workforce, such as those engaged in the actual collection and handling of waste. Typical Number of Employees. Large waste management businesses generally employ more than one thousand people. Traditional Geographic Locations. Waste management facilities are located throughout the United States. Their plants are typically a good distance from residential communities. In addition to

such plants, large corporations coordinate their operations from headquarters located in major cities and other business centers. Pros of Working for a Large Waste Management Corporation. Large waste management businesses have sufficient resources in multiple locations to realize economies of scale, price their services competitively, and vertically integrate those services. They are able to devote substantial resources to compliance—a significant and everchanging aspect of the industry—as well as to the crucial area of research and development. In addition to their cash reserves, the fact that these corporations operate nationally or internationally increases their financial stability, as their success is not tied to any one state or regional economy. Cons of Working for a Large Waste Management Corporation. Large waste management businesses face a dizzying array of local, state, national, and international regulations, permitting procedures, and oversight agencies. Like any large corporations, they can be extremely impersonal places to work, and their internal bureaucracies may rival those of the various government entities and agencies with which they must deal. Costs Payroll and Benefits: Large waste management businesses generally hire a portion of their staff at hourly wages, but they also have many salaried positions. Because they are national companies, they generally offer competitive health benefits, including vision and dental. Their employees may be members of collective bargaining units that renegotiate their contracts on a regular basis. Supplies: Large organizations have significant capital expenditures related to equipment for hauling, sorting, and storage. They also have significant costs related to real estate, facilities, and, most especially, fuel. Because they handle a broad cross section of services, specialized equipment may be necessary. Like any business, office equipment and supplies are also required. External Services: Large, vertically integrated corporations are likely to handle all services directly related to waste management internally. They may contract subsidiary services such as groundskeeping, security, or cafeteria service.

Waste Management Industry While they often have dedicated public relations and marketing staffs, large corporations nonetheless often contract external public relations firms to create or advise on major advertising campaigns. Utilities: Waste management businesses must pay for standard utilities, such as electricity, gas, water, sewage, telephone service, and Internet access. For large corporations, these costs may be substantial. Taxes: All businesses are required to pay local, state, and federal income taxes, as well as applicable property taxes. Other incurred costs include special permits and licenses.

ORGANIZATIONAL STRUCTURE AND JOB ROLES

■ ■

■ ■ ■ ■

Executive Management Administrative Support Sales and Marketing Technology, Research, and Development

Operations Human Resources

Executive Management Business or executive management staff establish and achieve the goals of an organization. They create the vision or direction of the business, manage employees who can implement that vision, and oversee finances. In addition to strategy and finances, managers often serve in a business development capacity, coordinating and establishing relationships with suppliers, partners, and clients. Many executive managers have advanced degrees in business management, accounting, or similar fields. They are usually the highest-paid employees of their agency or business. Executive management occupations may include the following: ■

The waste management industry comprises both governmental agencies and private businesses. In either type of organization, waste pickup and disposal activities need to be both conducted and managed. Government entities, such as cities, often maintain departments that handle waste management in addition to other services, whereas private businesses may be dedicated solely to waste management. The difference between jobs in governmental agencies versus jobs in the private sector is primarily in the business management area. In a governmental agency, jobs such as accounting, human resources, marketing, and public relations are performed by other portions of the agency or government, rather than within the waste management department. Other differences include the job role of the director or primary manager of a government’s waste management department versus a private waste management company. Additionally, governmental agencies have public works directors rather than chief executive officers (CEOs). The following umbrella categories apply to the organizational structure of businesses in the waste management industry:

1993

■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO) Legal Counsel Regional Manager Business Manager Office Manager Route Manager Accountant Procurement Manager Public Works Director Waste Management Director Recycling Manager Landfill Manager

Administrative Support Administrative support staff facilitate all aspects of a company’s day-to-day operations. They are usually in-house employees, but their duties can also be outsourced to other companies. They prepare and update internal reports, collecting and verifying all relevant data; schedule appointments and meetings; arrange domestic and international travel; and serve as liaisons or contacts within or outside their organizations regarding issues related to purchasing, personnel, facilities, and operations. Administrative occupations may include the following: ■ ■

Secretary Executive Assistant

1994

Waste Management Industry OCCUPATION

PROFILE

Hazardous Waste Manager Considerations

Qualifications

Description

Conducts studies on hazardous waste problems and provides solutions for the treatment and containment of waste.

Career clusters

Agriculture, Food, and Natural Resources; Government and Public Administration; Manufacturing; Transportation, Distribution, and Logistics

Interests

Data; things

Working conditions

Work inside

Minimum education level

Junior/technical/community college; bachelor’s degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Military service; part-time work

Licensure and certification

Recommended

Employment outlook

Average growth expected

Holland interest score

IRE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

■ ■ ■ ■

■

Administrative Assistant Recycling Coordinator Accounts Payable Clerk Accounts Receivable Clerk Waste Reduction and Recycling Coordinator

Sales and marketing occupations may include the following: ■ ■ ■ ■ ■

Sales and Marketing Sales and marketing staff generate revenue growth by securing new accounts and retaining existing accounts. They develop and implement strategies for customer retention and utilize negotiation skills to preserve existing business. They also secure contract agreements from previously noncontracted customers. Sales and marketing employees seek to establish and maintain a high level of customer satisfaction for all account holders, and they work with retention managers to resolve customer issues as quickly as possible.

■ ■ ■

Strategic Accounts Manager Account Manager Sales Manager Sales Coordinator Inside Sales Account Manager Senior Associate Inside Commercial Representative Business Development Director

Technology, Research, and Development Waste management jobs in technology, research, and development often require a high level of technical expertise in designing, developing, coding, testing, and debugging computer software, as well as installing significant enhancements to existing software. Technology, research, and development staff also engage in quality-control tests

Waste Management Industry and analyses to evaluate the ability of software packages to fulfill end-user requirements and comply with established standards. They may use established procedures to administer or assist in the implementation of environmental protection programs. Monitoring and investigating compliance also falls within this staff’s purview. Technology, research, and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■ ■

Development Analyst Waste Management Specialist Facility Engineer Instructional Designer Trainer Senior Engineer Solutions Architect Environmental Engineer Environmental Compliance Specialist

1995

Their duties may include heavy lifting and handling disposal containers such as garbage cans and recycling bins, as well as operating hydraulic lift trucks to pick up and empty dumpsters. Most operations jobs require little training or experience; wages are hourly and at the lower end of the scale. The work environment for this type of job tends to be repetitive and physically demanding. Some jobs may expose workers to hazardous materials, fumes, chemicals, or dangerous equipment. Workers who handle toxic chemicals or substances receive specialized training. Many of the training requirements, particularly for jobs that are potentially dangerous, are standardized through the U.S. Occupational Safety and Health Administration (OSHA). Training is typically provided by the employer. Operations occupations may include the following:

Operations Operations staff gather and dispose of waste and recycling materials from homes and businesses.

OCCUPATION

■ ■ ■

Refuse and Recyclable Material Collector Hazardous Materials Removal Worker Equipment Operator

PROFILE

Refuse Collector Considerations

Qualifications

Description

Picks up and collects refuse on an assigned route.

Career clusters

Agriculture, Food, and Natural Resources; Human Services

Interests

Things

Working conditions

Work outside

Minimum education level

No high school diploma

Physical exertion

Heavy work

Physical abilities

Unexceptional/basic fitness; may be required to lift heavy objects

Opportunities for experience

Part-time work

Licensure and certification

Usually not required

Employment outlook

Slower-than-average growth expected

Holland interest score

RES

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

1996 ■ ■ ■ ■ ■ ■ ■

Waste Management Industry

Mechanic Commercial Driver Residential Driver Equipment Operator Sorter Technician Welder

Human Resources A human resources department recruits, hires, fires, and serves the employees of an organization. It administers benefits and payroll and conducts salary analysis, as well as ensuring that all labor laws are complied with. Human resources staff typically post job announcements, interview potential candidates, and ensure that all necessary hiring forms and documentation are completed. Additionally, if workers are injured on the job, the human resources staff completes their worker’s compensation claims. Typically, corporate policies and procedures are established through the human resources department. If a company or public entity works with union employees, the human resources department is charged with ensuring that the organization complies with negotiated contracts. Additionally, when contract negotiations are under way, the human resources department plays a significant role in informing decision makers of the financial and management implications of proposed contract elements. Human resources occupations may include the following: ■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Senior Recruiter Human Resources Coordinator Human Resources Generalist

INDUSTRY

OUTLOOK

Overview The waste management industry appears to be on the rise in the early twenty-first century, as stricter regulations require improved disposal techniques, increased recycling, and more awareness of waste prevention procedures. Many states in the United States continue to set and enact

stricter recycling goals and restrictions; municipalities are establishing recycling and reuse goals in combination with laws that restrict or ban certain types of products. For example, San Francisco has banned retail plastic bags. While recycling, reuse programs, and waste-to-energy processes are on the rise, more work needs to be done to reduce landfills and the pollution caused by waste. While municipalities have traditionally been responsible for waste collection and disposal, privatization has become a growing trend in the waste management industry. Many municipalities contract their work out to private companies, and eight of the largest waste management companies in the United States produce more than 50 percent of the industry’s revenue. There are a number of employment areas and opportunities in the waste management industry. For example, the BLS has projected environmental science jobs within the industry to increase by 25 percent between 2006 and 2016, a rate that is much faster than the average of 11 percent for all occupations in all industries. Similarly, sales managers are expected to increase at an average rate of 12 percent during the same period, with intense domestic and global competition spurring job growth for sales personnel. Employment in material-moving occupations is projected to have little or no change, possibly declining by 1 percent between 2006 and 2016. The anticipated slight decrease is due to automated equipment and processes that minimize the need for manual sorting and moving of waste. Job growth will be strongest in the private sector, which is advantageous to the waste management industry since the majority of waste management revenue is produced by private firms. Recycling is the fastest-growing market segment in the hazardous waste remediation market. Its rate of growth was 19 percent in 2006, and that rate is projected by BCC Research to increase to 27 percent by 2011. Hazardous waste remediation technologies were worth about $10.7 billion in 2005, and they are anticipated to grow to $16.6 billion by 2011. Employment Advantages The waste management industry is discovering new ways to prevent, reduce, and manage waste, as stricter regulations are being set by municipalities and governments. Students who are conservation-

Waste Management Industry minded and environmentally concerned may enjoy careers in the waste management industry. Furthermore, students who are creative and enjoy researching and implementing new techniques and technologies might excel in the waste management industry’s innovative branches, particularly as new processes are being developed and enhanced. For example, waste-to-energy processes are increasingly important in both the public and private sectors as the need to reduce waste and the need to increase energy efficiency converge. In addition, recycling technology continues to be enhanced to reduce the amount of waste that is dumped in landfills.

1997

PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

Waste Management and Remediation Services Employment 2009

Projected 2018

Occupation

32,520

38,600

Hazardous materials removal workers

19,740

20,400

Laborers and freight, stock, and material movers, hand

70,950

92,500

Refuse and recyclable material collectors

12,640

15,700

Septic tank servicers and sewer pipe cleaners

44,800

57,600

Truck drivers, heavy and tractortrailer

Source: U.S. Bureau of Labor Statistics, Industries at a Glance,

Annual Earnings Occupational Employment Statistics and Employment Projections The waste management inProgram. dustry is heavily influenced by the overall levels of consumer spending and economic activity. Growth is anticipated in the recycling and Fax: (412) 232-3450 waste-to-energy market, as increased legislative http://www.awma.org policies are enacted to address public and environmental concerns. In 2007, the United States generAmerican Council on Renewable Energy 1600 K St. NW, Suite 700 ated approximately 254 million tons of garbage; of Washington, DC 20006 this amount, 63.3 million tons were recovered for Tel: (202) 393-0001 recycling according to Waste Age. Hoover’s estiFax: (202) 393-0606 mates the total annual revenue of the U.S. waste http://www.acore.org management industry at about $75 billion. By way of comparison, according to Waste News, the EuroAssociation of Compost Producers pean Union’s industry has annual revenues of 7860 Alida St. about 100 billion euros, or $125 billion. La Mesa, CA 91942 Tel: (619) 303-3694 RELATED RESOURCES FOR Fax: (619) 589-9905 FURTHER RESEARCH http://www.healthysoil.org Air and Waste Management Association 1 Gateway Center, 3d Floor 420 Fort Duquesne Blvd. Pittsburgh, PA 15222-1435 Tel: (800) 270-3444

Energy Recovery Council 1730 Rhode Island Ave. NW, Suite 700 Washington, DC 20036 Tel: (202) 467-6240 http://www.energyrecoverycouncil.org

1998

Waste Management Industry

International Solid Waste Association Auerspergstrasse 15, Top 41 1080 Vienna Austria Tel: 43-1-253-6001 http://www.iswa.org National Recycling Coalition 805 15th St. NW, Suite 425 Washington, DC 20005 Tel: (202) 789-1430 Fax: (202) 789-1431 http://www.nrc-recycle.org National Solid Waste Management Association 4301 Connecticut Ave. NW, Suite 300 Washington, DC 20008 Tel: (202) 244-4700 Fax: (202) 966-4824 http://www.environmentalistseveryday.org Solid Waste Association of North America 1100 Wayne Ave., Suite 700 Silver Spring, MD 20910 Tel: (800) 467-9262 Fax: (301) 589-7068 http://www.swana.org

ABOUT

THE

AUTHOR

Suzanne Mulvehill is an elected official overseeing and guiding the waste management services provided by the city of Lake Worth, Florida. She is working to establish a waste prevention program, a downtown business recycling program, and a backyard composting program in her city. Mulvehill is also the author of two books, Employee to Entrepreneur: A Mind, Body, and Spirit Transition (2007), and Empowerment for Entrepreneurs: A Ninety-Day Guide (2008) and the founder of Emotional Endurance Training Programs. She has taught at universities and business organizations throughout the United States and Europe. Mulvehill has a master’s degree in business administration and a bachelor’s degree in social work from Florida Atlantic University.

FURTHER

READING

BCC Research. “Global Markets for Hazardous Waste Remediation Technologies.” MarketResearch.com, April 1, 2006. http:// www.marketresearch.com/product/ display.asp?productid=1300222&SID=3190436 8-463897374-440422766&partnerid =811788012&kw=global%09waste %09revenues. Dijkgraaf, E., and R. H. J. M. Gradus. The Waste Market: Institutional Developments in Europe. Dordrecht: Springer, 2008. Hoover’s. “Industry Overview: Waste Management.” http://www.hoovers.com/ waste-management/—ID__99—/free-ind-fr -profile-basic.xhtml. Institute for Career Research. Careers in the Waste Management Industry. Chicago: Author, 2007. Key Note Publications. Recycling and Waste Management. Hampton, Middlesex, England: Author, 2009. Miller, Debra A. Garbage and Recycling. Detroit: Lucent Books, 2010. Renner, Michael, et al. Green Jobs: Working for People and the Environment. Washington, D.C.: Worldwatch Institute, 2008. Stuart, Tristram. Waste: Uncovering the Global Food Scandal. New York: W. W. Norton, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Government Accountability Office. “Nuclear Waste: DOE’s Environmental Management Initiatives Report Is Incomplete.” June 2, 2009. http://www.gao.gov/new.items/ d09697r.pdf.

Watches and Jewelry Industry ©Mark Hryciw/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Manufacturing Career Cluster: Manufacturing Subcategory Industries: Jewelers Material and Lapidary Work Manufacturing; Jewelry (Except Costume) Manufacturing; Watch, Clock, and Part Manufacturing; Watch Jewels Manufacturing; Watch Repair Shops; Watches and Parts (Except Crystals) Manufacturing Related Industries: Apparel and Fashion Industry; Metals Manufacturing Industry; Mining Industry Annual Domestic Revenues: $60 billion USD (Idexonline.com, 2008) Annual International Revenues: $75 to $80 billion USD (Idexonline.com, 2008) Annual Global Revenues: $135 to $140 billion USD (Idexonline.com, 2008) NAICS Numbers: 334518, 339911, 339913, 811490

INDUSTRY

Previously owned vintage and estate jewelry, particularly high-value items, is also sold in some stores. Repair services are often provided. The current American jewelry industry comprises several segments: bridal/engagement jewelry (mainly diamonds), fine (classic) jewelry, costume (fashion) jewelry, watches, unmounted precious stones, and precious metals, including silver flatware. Of these, the first category accounts for the largest share of sales, between 30 and 35 percent. Classic or fine jewelry is defined as that made of precious metals and precious or semiprecious gemstones. Costume or fashion jewelry is less expensively made from such materials as baser metals (including copper, brass, aluminum, iron, and zinc), glass, plastic, wood, leather, bone, shells, and nonprecious or synthetic stones.

History of the Industry Clock making in America goes back to seventeenth century New England. Eventually, the socalled American system was developed and led to the mass production of floor-standing and shelf clocks in the very early nineteenth century. Until World War I, nearly all American watches were

DEFINITION

Summary The watches and jewelry industry designs, manufactures, distributes, markets, and sells goods, including precious and semiprecious gems with or without settings, watches, and plated silverware. 1999

2000

Watches and Jewelry Industry

siderable time wearing such watches was considered effeminate. During the Great Depression of the 1930’s, manufacturing of watches by American companies declined, partially as a result of overexpansion and the purchase of expensive equipment. The great majority of watch manufacturing reverted to Europe, which maintained primacy until the rise of later industrial powerhouses such as Japan and China. The American watch industry has continued to decline since the 1980’s. The manufacture of parts has largely moved abroad, escalated by the popularity, since 1969, of quartz watches that are produced mainly in Asia. Battery-powered electric and elecBridal and engagement jewelry accounts for 30 to 35 percent of jewelry tronic watches were introduced in sales. (©Dreamstime.com) the 1950’s, and the first digital watch, the Pulsar, was introduced in the 1970’s. The Tourneau chain, founded about 1900, pocket watches of the type that first began producclaims to be the largest contemporary retail purtion in the early nineteenth century. By the midveyor of fine watches. 1800’s, they were being manufactured in volume The fascination with gemstones dates back to using a system of interchangeable parts. ancient times. Some were thought to possess magic Among the manufacturing pioneers was the powers and the ability to endow those who wore Waltham Watch Company, formed in 1850, which them with special attributes. For example, a ruby was to dominate the industry for at least twenty supposedly meant nobility and a blue sapphire years. Along with the taste for pocket watches came symbolized wisdom. They were used as talismans the desire for expensive accessories such as fobs and amulets and were even thought to predict the and chains to be placed in vests’ watch pockets. future. Several religions, including Christianity, JuOwning and displaying such watches was the ninedaism, and Hinduism, used them as part of some of teenth century equivalent of flashing a Rolex, their religious practices. It is believed that the anPatek-Philippe, Omega, or other modern upmarket cient Egyptians first combined gemstones and metbrand. als to produce jewelry. Such great Renaissance artBy the 1890’s, the once-luxury item was being ists as Benvenuto Cellini fashioned timelessly mass-produced, and the so-called dollar watch had beautiful vessels from precious stones and precious been introduced. Jeweled parts were replaced by metals, and enameling was perfected about that inexpensive standardized metal parts produced by time. punch presses. At the opposite end of the spectrum In the United States, the progenitors of the first were watches used by railroad employees that had jewelers were colonial watchmakers, silversmiths, to be extremely accurate. Manufacturing techand coppersmiths. They probably fashioned rings niques became more sophisticated. Americanor other pieces of metal jewelry as an occasional made wristwatches became very popular during sideline. The first business that might be regarded World War I, when they were distributed to the as a jewelry store is believed to have opened about American fighting forces. the beginning of the nineteenth century. New York Previously, Swiss firms had been almost the exCity has been the center of the American jewelry inclusive manufacturers of wristwatches, at first mardustry since the 1890’s. By the early twentieth cenketing them primarily to women. In fact, for a con-

Watches and Jewelry Industry tury, machines had been invented that enabled the mass production of costume jewelry. This allowed a much greater number of people to own jewelry in addition to their wedding rings. In the late nineteenth century, the De Beers syndicate based in South Africa gained control of most of the world’s diamond production, and as of 2010, it controls about 80 percent of the supply. However, its sales declined more than 50 percent during the recession of 2007-2009, and there may even be a glut of diamonds on the market. De Beers also has attempted to gain a large part of the synthetic gemstones market. Through its numerous interlocking companies and the diamond exchanges located throughout the world (Antwerp, Belgium, being the largest), the diamonds eventually make their way to retail sources. Other exchanges are found in New York, Israel, Amsterdam, and other major European cities. Historically, Orthodox Jews have played a large role in the wholesale and retail diamond markets.

2001

The Industry Today The retail watches and jewelry industry remains highly competitive and fragmented, with less than one-quarter of the revenue being generated by the top ten retailers and one-half the revenue generated by the top fifty chain stores. At the end of 2007, independent stores accounted for 21 percent of sales, discount chains 8 percent, Internet auction sites 11 percent, Internet sales sites 6 percent, shopping networks 11 percent, national chains 15 percent, department stores 13 percent, and other venues 15 percent. About 75 percent of all jewelry businesses had their own Web sites. Most small jewelry businesses gross less than $2.5 million annually. In fine jewelry, there continues to be strong demand for semiprecious stones, but diamond jewelry accounts for 55 percent of sales, especially in wedding-related items. The sale of fine jewelry to men now composes about 10 percent of the market. Classic jewelry has been considered almost recession-proof, but the sale of cos-

There are more than 130 varieties of gemstones, of which about 50 are customarily sold by retail jewelers. (©Stuart Corlett/ Dreamstime.com)

2002

Watches and Jewelry Industry

The sale of costume jewelry increased more than 50 percent annually between 2003 and 2008. This trend may continue with the growing popularity of “bling,” or hip-hop jewelry, a term for the flashy jewelry worn on every part of the body (not excluding teeth and toes) associated with hiphop culture. This trend has brought jewelry to the attention of a relatively new demographic, the very young. To capitalize on the youth market, less expensive watches are now sold in fashion clothing stores. The United States has always been the prime market for the Bench jewelers use a variety of tools to fabricate and manufacture jewelry, set importation of costume jewstones, and repair individual pieces. (©Sean Nel/Dreamstime.com) elry and since 1985 has accounted for more than 50 percent of all such imports. Asian countries are the tume or fashion jewelry has been affected by major exporters. economic conditions. The holiday period around About 54 percent of all jewelers and precious Christmas continues to be the prime sales time, folstone and metal workers are self-employed. Some lowed by Valentine’s Day and Mother’s Day. workers hold credentials as bench jewelers from At least 90 percent of the fine jewelry sold conJewelers of America, which requires them to pass tained some kind of gemstone. There are said to be written and practical examinations. More than more than 130 varieties of gemstones, of which forty-two thousand jobs were held, until recently, about 50 are customarily sold by retail jewelers. by jewelers in specialty shops, department stores, Synthetic gemstones, manufactured by such comand discount stores. Most were in large urban cenpanies as De Beers, Gemesis, and Apollo, are claimters, a substantial number being in California, ing an increasing share of the market and are ofTexas, New York, Pennsylvania, Illinois, and New fered for sale by some retailers. A majority of Jersey. The major centers of jewelry manufacture jewelry purchasers indicate a willingness to purin the United States are in Rhode Island, New York, chase synthetic stones, which usually are much less and California. expensive than naturally grown ones. Up to the time of the 2007-2009 economic reOnline sales by the industry have risen from apcession, there were estimated to be more than proximately 4.7 percent of the market in 2004, with thirteen thousand wholesale watch and jewelry es$1.7 billion in sales, to 6.6 percent of the market in tablishments. The majority of them were small, em2009, with $2.7 billion in sales. It had taken six ploying five or fewer persons. The companies, years, from 1996 to 2002, for online sales to reach found mainly in Texas, California, and New York, $1 billion. However, the quality of the merchanwere generating $14 billion in annual sales. The dise sold online does not always match its advertisnumber of positions in all aspects of the industry ing, and buyers must be cautious when purchasing may be declining, particularly since a majority of jewelry unseen or based on photographs published the industry’s product is imported into the United on the Web. This is one of the reasons buyers still States, a trend that further limits American emwant to purchase from stores they know and trust, ployment opportunities. The reduction or elimieven though their prices may be higher than those nation of tariffs on nearly all categories of gemfound online.

Watches and Jewelry Industry stones, with only a small tariff on finished jewelry, has continued to ease the way for imports. Tariffs on imported costume jewelry have traditionally been higher but have also been reduced. For some countries, North American Free Trade Agreement (NAFTA) member Mexico being one, they have been completely eliminated. By the end of the twentieth century, imports accounted for 50 percent of fine jewelry. Prior to the recession of 2007-2009, the largest retailers of jewelry and watches were Walmart, Finlay Fine Jewelry, Fred Meyer Jewelers, Ben Bridge, Blue Nile, the Zale Corporation, Tiffany’s, and Sterling Jewelers, the American arm of Britain’s Signet Jewelers. Before the economic downturn, sales in all but discount stores had been increasing, with 50 percent of sales going to specialty jewelry stores. Zales (and its associated stores under other names) has been the largest specialty jeweler, with some two thousand outlets in the United States. The next highest, with some fourteen hundred stores, is Sterling. The top four jewelry retailers accounted for only about 11 percent of sales in 2008. This is a much lower percentage than in some other industries, where the top four may command 50 percent of all sales. The reason large retailers have not driven small retailers out of the market is that price seems to be of lesser importance to fine-jewelry buyers. This attitude lessens the advantage that large companies, with their greater sales volumes, have over small companies. Among discounters, Walmart has come to the fore because profit margins on each sale can be as high as 50 percent, thus enabling the chain to reduce prices and still make a good profit. The fluctuating prices of platinum, silver, and gold are always one determinant of such profit margins. In 2009, the price of gold exceeded $1,000 per ounce, marking an increase of more than 250 percent since 2001. Trends in watch purchases include both men and women buying larger and more unusually shaped watches. Colored watches and those with gemstones are also becoming trendy. Men are increasingly purchasing diamond watches. Industry leaders in the watch business are Timex, Seiko, Movado, and Bulova. About 80 percent of the watch repairers in the United States are self-employed, and most are members of the American Watchmakers-Clockmakers Institute, the national trade

2003

organization. They may have their own stores or be affiliated with local jewelry businesses.

INDUSTRY MARKET SEGMENTS The watch and jewelry industry comprises oneperson businesses specializing in watch repair or custom jewelry design, as well as massive corporations that hold large percentages of the precious gem markets. Small Businesses Small jewelry and watch stores generally have no more than three employees, one of whom is the owner, who may or may not be a bench jeweler. Repairs are usually done on the premises, as are appraisals; in other words, these businesses are often

Costume jewelry is popular among young people. (©Axel Drosta/Dreamstime.com)

2004

Watches and Jewelry Industry

all-in-one operations. Small stores may be located in most neighborhoods of urban areas and the suburbs, as well as in malls. Potential Annual Earnings Scale. The location, number of people employed, and the profitability of the business all factor into earnings. According to the U.S. Bureau of Labor Statistics (BLS), the average annual salary of jewelers and precious stone and metal workers in 2009 was $34,890. The average annual salary of watch repairers was $40,810. Clientele Interaction. Since small businesses have very few employees, much of a store’s clientele may know the sales staff personally and have built up trust with them over the years. In familyowned stores, customers may believe they will receive personalized service that compensates for the somewhat higher prices. Stores may strive to occupy a certain niche by carrying items made by a particular jewelry designer whose work other stores do not carry. They may also carry a selection of gemstones that are not ordinarily featured in many stores. Return business is likely to be high. Word of mouth from satisfied customers is very important since extensive advertising may not be economically feasible. Approaches to customers are likely be individualized rather than rote. Since turnover of stock is very important in a small jewelry business, it is most important that store owners know their clientele. Knowledge of the customer base is vital for maintaining profits. The presence of appraisal and repair services on the premises may also be a selling point, preventing items from having to be sent to a central location as chain stores may do. Amenities, Atmosphere, and Physical Grounds. Small businesses, especially repair shops, might be housed in storefronts, sometimes little more than “holes in the wall.” Freestanding jewelry stores are usually entered via barred doors controlled by buzzers, and thus the stores may give the impression of being fortresslike. To overcome that impression, jewelry stores strive to be well lit and welcoming to passersby despite the need for tight security. Lighting design is itself an art because “cold” light is better for showcasing diamonds, whereas “warm” light is superior in highlighting gold pieces. Attractive, uncluttered window displays are important in fostering drop-in trade, even

when window space is limited and the windows are barred. Although interior space may be limited, sufficient room for the free flow of potential customers must be provided. Small stores tend to display more of the merchandise they have on hand. If the store is narrow and long, most of the merchandise will be placed toward the front because some browsers may not make it all the way to the rear of the store. Repair facilities are often placed at the rear, so customers coming in for that reason will also see the items placed at that location, often watches, less expensive jewelry, and silverware. Typical Number of Employees. The average owner-run small jewelry store will have one to three employees, sometimes family members, and an additional person or two may be hired during holiday and traditional gift-giving seasons. Traditional Geographic Locations. Most small jewelry businesses are located in larger cities and towns, but smaller towns may have one or more stores. Sometimes, they may be located in less prosperous socioeconomic areas because rents are less onerous or because they have built a longtime, loyal customer base. They are often located in malls and in areas with heavy tourism. Pros of Working for a Small Business. A loyal customer base may be able to sustain a small specialized business through bad economic times. There is satisfaction in working with longtime customers who know employees and come to respect their advice and judgment. Jewelry is something most people know little about, so they depend upon the advice of a jeweler. Since the business will probably be owned by an on-premises person, the policies and procedures will remain relatively stable. Cons of Working for a Small Business. In a small jewelry business, one or two people may have to accomplish the entire range of services offered. Because good hand-eye coordination and manual dexterity are required, a continuous heavy workload may affect job performance. The physical demands of working on tiny mechanisms, such as the works of a watch, in an uncomfortable position may cause fatigue. Safety can become an issue, especially when sharp tools, jewelers’ torches, and certain chemicals are in use. The financial investment needed to open a jewelry store is considerable, so small retailers are in a

Watches and Jewelry Industry difficult place economically when the prices of precious metals and gemstones rise. If they raise their prices too much, they are in danger of losing clients to discount chains; if they do not raise prices, their profit margins may be too small to sustain them in business. The owner and employees may have to work weekends and evenings. During the busy holiday seasons they may be required to work at times that are not personally convenient for them. They may not be able to take lengthy vacations unless the store is closed or temporary help is hired. Costs Payroll and Benefits: Employees of small businesses may not have many benefits, and they may not earn commissions based on sales. Because of the necessities of staffing, vacations are likely to be no more than two weeks per year. Such other benefits as sick leave, maternity/paternity leave, and so on will be at the owner’s discretion and are relatively rare in small businesses. External Services: Small stores handle all aspects of the business in-house, including payroll, displays, and advertising. Utilities: Since a well-lit and temperature-controlled store is vital to business, it is important that airconditioning be installed. There is little leeway in controlling lighting expenses because of security and sales concerns. Taxes: Small businesses must pay local, state, and federal corporate and property taxes, as well as collecting and paying applicable sales taxes. Owners of small businesses may report their income on their personal returns, in which case they must also pay self-employment taxes. Midsize Businesses Midsize jewelry and watch businesses are increasingly located in malls and as freestanding stores in more economically advantaged neighborhoods. They tend to carry more midprice items than small businesses and may have a larger range of products in each store. If they are part of a chain, they may or may not have such positions in each location as bench jewelers, appraisers, and so on. Potential Annual Earnings Scale. According to the BLS, the average annual salary of jewelers and precious stone and metal workers in 2009 was

2005

$34,890. The average annual salary of watch repairers was $40,810. In a midsize business, there may be a range of salaries depending on the skill requirements of the positions. Many midsize businesses employ only managers and salespeople in their stores and centralize specialized work in other locations. Some people may work on commission that is dependent on sales volume. Most sales employees will probably not exceed the average wage unless they can earn commissions. Clientele Interaction. A rate of about 35 percent return business is customary for midsize stores. Among the inducements for return business are that they may be able to offer easier credit terms than small stores and that their location in malls may be more convenient for shoppers. Stores may be open longer periods because of the mall’s extended hours, especially at prime sales times. Sales staff are typically well dressed and well groomed and are knowledgeable about the stock. This is very important because staff turnover may be higher in such stores. Approaches to potential buyers should be customized to each person, even if the person is unknown to the salespeople. Amenities, Atmosphere, and Physical Grounds. Most midsize businesses are pleasant places in which to work and shop and are usually located in more upscale areas, including malls. They are well lit and have displays that are easy to navigate. It is often difficult to control the lighting in a mall-located store or at a department-store counter because the light of the surrounding areas will be dominant. The necessary presence of security should not decrease the pleasurable experience of browsing and shopping. Stores that mainly do repair work generally have minimal facilities because displays of merchandise are not their primary function. Typical Number of Employees. Three to six employees are standard in a midsize business, and there may be added seasonal help hired in busy sales seasons such as the Christmas holidays. Traditional Geographic Locations. Midsize businesses are generally found in freestanding locations in larger cities and town and in malls. They tend not to be located in poorer socioeconomic areas. Pros of Working for a Midsize Business. There are economic positives and negatives in a midsize business. During short-term downward cy-

2006

Watches and Jewelry Industry

cles, midsize businesses may be able to weather economic doldrums better than small retailers because they can raise their prices on some items without jeopardizing their business viability. They are usually owned by people with experience in the jewelry industry and hence are less likely than large outlets to base decisions solely on the bottom line. Various tasks can be distributed among several employees, although sales will likely still be their major function. The ability to take time off may be easier than it is in small businesses. Cons of Working for a Midsize Business. In the sustained recession that began in December, 2007, it is the midsize chains that are downsizing. If they do not have considerable customer loyalty, such firms can sometimes not achieve enough economy of scale to compensate for the higher costs of store operations and materials. Employees need to be on their feet for periods of time and they may work in uncomfortable positions when performing repairs. Sales goals may be set by management that place stress on some employees. Costs Payroll and Benefits: Staff members are usually compensated by the hour, and unless they hold specialized jobs, the average wage will probably not exceed the industry norm. Payroll might be done at corporate headquarters rather than by each store manager. Benefits may exceed those that a small business can offer but the exigencies of staffing may preclude long vacations and other benefits, such as maternity/paternity leave. External Services: Midsize businesses that are part of a chain may centralize such processes as advertising, displays, and payroll rather than performing them in each individual store. Utilities: Lighting and temperature may be under the control of mall management, and contractual arrangements will determine how much the individual store must pay for them. In freestanding stores, an acceptable level of lighting and temperature control must be maintained for sales and security reasons. Taxes: Midsize businesses must pay local, state, and federal corporate and property taxes, as well as collecting and paying applicable sales taxes.

Large Businesses Large jewelry and watch businesses tend to belong to chains and are generally located in more gentrified urban areas as freestanding stores or in malls. They may only have salespeople and managers in individual stores; other activities such as appraisals and gemology are done in centralized locations. Potential Annual Earnings Scale. According to the BLS, the average annual salary of jewelers and precious stone and metal workers in 2009 was $34,890. The average annual salary of watch repairers was $40,810. Higher salaries may be earned in large-scale businesses, but this is not always the case. Salaries depend on the skill level of the employee and will be hourly for salespeople and per annum for management. Businesses may motivate employees by paying them commissions on each piece sold and there may even be selling “contests” in which the winning employee will get a bonus. However, statistics show that because of competition mall-based stores earn less profits per store than freestanding ones, so wages in such stores may be lower than in freestanding chain stores. Clientele Interaction. To overcome the presence of tight security, including armed guards at some locations, a store’s personnel should be well groomed, relaxed, and welcoming. This is especially important because they may not personally know their potential customers. They should have good knowledge of their stock and be able to converse knowledgeably about it. This is important to overcome the possible high staff turnover in such businesses. Large businesses can generally take advantage of more sophisticated marketing research tools like trend reports, market demand forecasts, and comparative analyses to draw in customers. Their advertising is probably more ubiquitous and professionally produced as well. They may periodically offer specials or discounts that smaller stores cannot match. Amenities, Atmosphere, and Physical Grounds. Window displays are usually lavish, well lit, and contain a few tastefully arrayed items. Unless a store is freestanding, its lighting will be determined by the surrounding areas in a mall or department store. Large businesses have some advantage over small ones by being able to offer greater selection. The displays are oftentimes professionally designed. Generally, larger stores display less of the

Watches and Jewelry Industry merchandise they have on hand, but those pieces displayed are usually the higher-priced items. Because of their economic clout, chain stores negotiate the more desirable locations in a mall, and sometimes a mall will even provide incentives for prestigious stores to locate there. If a business deals primarily in repairs, its facilities will be more modest. Typical Number of Employees. Five to nine employees are the norm for large stores, and temporary help is usually added during busier holiday seasons. Traditional Geographic Locations. Large businesses are usually located in malls in the larger cities, but some are in freestanding locations or department stores. The jewelry counters in department stores are generally leased by large chains such as Finlay Fine Jewelry, which has operated outlets in stores such as Bloomingdale’s, Macy’s, Bon Ton, and Lord & Taylor. The kiosks and carts that are found in malls are also usually operated by large jewelry chains. Major jewelry chains are almost never found in poorer socioeconomic areas unless they are also general merchandisers such as Walmart. Pros of Working for a Large Business. A large business allows some possibility of advancement to a supervisory capacity such as manager or head or master jeweler. Skilled employees may sometimes gain higher pay even if advancement opportunities are limited. They also get the benefits that obtain within their company. Because some operations like payroll, advertising, and displays are centralized within corporate or regional headquarters, the manager can devote more time to supervision of employees and ways to increase sales. Credit terms may be more generous, potentially increasing sales. Cons of Working for a Large Business. Many of the large jewelry chains are run by executives who have little or no experience in the industry but instead are professional retailers or even money managers. For instance, the large retailer Zales is partly owned by several hedge funds. When new chief executives assume charge of a company, there may be substantial policy changes that affect each store and create employee instability. Since the bottom line may be the driving force behind the operations of such retailers, the closing of stores and cutbacks in staffing will likely occur during economic downturns.

2007

Higher per hour pay is not always guaranteed in a large business, particularly in malls where profit margins per store may be less. Sales goals may be set that create stress in employees, and retention of employees may be less certain than in smaller businesses. If employment is in a factory environment where jobs like polishing, electroplating, and lacquer spraying occur, workers may be exposed to fumes from chemicals and solvents. Despite safety measures there may be unpleasant odors. Workers who perform bench work may be sitting in uncomfortable positions, and others may be standing for long periods of time in assembly lines. The work, especially at lower skill levels, may be repetitious. Costs Payroll and Benefits: Pay scales may vary greatly in a large business depending on the range of specializations found in each location. If skilled employees such as appraisers, display designers, repairers, and gemologists are located in the store, salaries for those workers will be higher. If such tasks are centralized at some other location and there are mainly salespeople in a store, the average wage of $13 to $14 per hour will probably apply. Managers will be paid at accordingly higher rates. Turnover may be higher at such locations; thus, fewer people may advance to higher wages over time. External Services: Many activities within a large store are likely to be centralized at an offpremises location. These may include payroll, display design, and advertising. Within the store software packages will probably be used for inventory control, employee scheduling, and even for evaluating customer satisfaction. Utilities: Within malls control of temperature and lighting will be largely under the control of mall management, and costs of such utilities will likely be part of a lease arrangement. In freestanding locations acceptable levels of lighting and temperature control must be maintained for sales and security purposes. Taxes: Large companies must pay all applicable local, state, federal, and international taxes, including tariffs and import/export fees as appropriate. They must also pay property taxes and collect and pay sales taxes in relevant jurisdictions.

2008

Watches and Jewelry Industry ORGANIZATIONAL STRUCTURE AND JOB ROLES

Although there are several very large jewelry store chains, approximately 40 percent of all those in the retail trade are self-employed, mostly in small, neighborhood businesses or operating a store or kiosk within a shopping mall. There is also a large but declining wholesale component to the industry. Among the different specialized jobs within the jewelry and watch industry are manufacturing, designing, repairing, sales, appraising, gem cutting, polishing, setting and engraving, and gemology. In small businesses, one person may accomplish several of these tasks, while large firms may have the wherewithal to employ different people to perform each of them. The following umbrella categories apply to the organizational structure of businesses in the watches and jewelry industry: ■ ■ ■ ■ ■

■ ■

Business Management Customer Service Sales and Marketing Security Technology, Research, Design, and Development Production and Operations Distribution, Imports, and Exports

Business Management Jewelry business owners and managers recruit, hire, train, and supervise employees. They may order the store’s merchandise and do appraisals and repairing of merchandise and participate in advertising and marketing their wares. They need to know how best to utilize the increasingly available management computer software packages that are available from numerous companies. Among the features of most software packages are the automation of point-of-sales, inventory control, purchasing, repair, accounting, and reporting. Managers supervise inventory and are responsible for loss prevention, the optimum presentation of merchandise in displays, and coaching employees in setting the tone for excellent customer service. In many chain stores, some processes such as advertising, marketing, ordering, payroll, and dis-

plays are centrally handled by corporate headquarters. Some large chains employ people specifically to design store displays, which are then generally uniform in each location. Business management occupations may include the following: ■ ■ ■ ■ ■ ■ ■

Chief Executive Officer (CEO) Chief Financial Officer (CFO) Vice President of Franchising Vice President of Business Development Business Owner Store Manager Bench Jeweler

Customer Service Besides selling watches, jewelry, and accessories such as watch bands, retail stores and kiosks usually do repair work. This may involve increasing or reducing the size of settings, resetting stones, fixing broken settings, and replacing watch batteries. Retail jewelers may sometimes do appraisals, but large concerns may employ specialized appraisers located off-premises who determine and document the value of jewelry. The sales staff should themselves wear tasteful jewelry and watches. Experienced salespeople will intuitively judge how to deal with each potential customer, rather than treat them all the same. For instance, one large chain instructs its salespeople never to ask “May I help you?” because the answer is usually “I am just looking.” Instead, they are encouraged to engage browsers in individualized, customer-centered conversation. Customer service occupations may include the following: ■ ■ ■ ■

Repairer Appraiser Salesperson Engraver

Sales and Marketing Among the venues used to sell jewelry and watches are trade and craft shows and art fairs. Often, these events feature both local and international vendors, who display their wares to other vendors and the public. They sometimes enable purchasers to buy at a discounted price. Advertising is done both in traditional media, such as televi-

Watches and Jewelry Industry OCCUPATION

2009

PROFILE

Jeweler and Watch Repairer Considerations

Qualifications

Description

Repairs jewelry and watches.

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; part-time work

Licensure and certification

Recommended

Employment outlook

Slower-than-average growth expected

Holland interest score

REC; REI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

sion and newspapers, and using sophisticated online technologies. Sales and marketing occupations may include the following: ■ ■ ■ ■ ■ ■

Vice President of Sales and Marketing Marketing Director Sales Manager Sales Representative Market Research Analyst Public Relations Manager

Security Smaller businesses usually have a locked front door that employees can open remotely. The employees basically operate on their instinct to determine whether each person seeking admission can be trusted. Windows are often barred. In most malls, jewelry stores generally are physically open to anyone walking by to encourage customers, possibly on the theory that escaping with stolen goods

would be more difficult in such a venue. Larger businesses may well have one or more security guards, sometimes armed, on their staffs. All businesses have security systems of varying complexity, at the very least a burglar alarm. Sophisticated security systems are often not visible. The industry’s Jewelers’ Security Alliance (JSA) raises awareness among its members and law enforcement authorities about security problems and how to deal with them forcefully. The first ten years of the twenty-first century have seen a sharp decrease in thefts and violent crimes against jewelry businesses in-store, off-premises, and at airports, formerly a frequent venue for theft. Among the reasons for the decline are that fewer salespeople go out on the road and that the number of jewelry outlets has declined. Nevertheless, in 2009, the industry still suffered an estimated $100 million in losses to criminal activity. Occupations within this category include the following:

2010 ■ ■ ■

Watches and Jewelry Industry

Security Manager Security Guard Security Alarm/Systems Specialist

Technology, Research, Design, and Development For many years, computer-aided design (CAD) and computer-aided manufacturing (CAM) have been used to assist in jewelry design and in the manufacturing of molds and models. With the use of CAD, designs can be produced in virtual reality and modified as often as needed until the finished design is decided upon. CAM then produces the mold in wax or another medium. Lasers have been employed in various phases of the industry, including silversmithing, stone cutting, engraving of settings (glyptography), and metal welding for jewelry settings. Artificial or imitation gemstones have been developed, including those made from glass. Cubic zirconias (also called djevalite) are considered to be among the best diamond simulations to date. They have even been known to fool unwary buyers and are not to be confused with zircons, which are natural stones. Another imitation gemstone is moissanite, a silicon carbide named after Henri Moissan, the French scientist who created it in the laboratory. There are also brand names such as Fabulite (also known as Wellington Diamond), GGG (Galliant), and YAG (Yttrium Aluminum Garnet). These types of stones differ from real gemstones both physically and chemically. The presence of such stones on the market, where naïve buyers might be fooled, is one reason electronic diamond testers have proved useful. Synthetic gemstones, first synthesized about 1970, are not the same as artificial or imitation stones because they are actual gemstones, but they are produced in laboratories rather than having been formed naturally in the earth. They have been utilized for industrial, scientific, and technological purposes, as well as for fashion. The two major methods used to form these stones are the flux fusion method and the hydrothermal method. Within those broad categories are growth from melt, growth from solution, high temperature or pressure processes, ceramic processes, and skull melting processes. Synthetic gemstones can be made with fewer imperfections and more vivid color than natural

stones, but, because of the methods used in manufacturing them, they may be more brittle and thus breakable. Another category of nonnatural stones is the composite gem, which is midway between the other two. Composite stones are formed by combining different materials together, usually in double or triple layers, to create the appearance of a natural stone. Many buyers of precious gemstones still desire to own stones that were formed deep in the earth millions of years ago by nature. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■

Designer Mold and Model Maker Geologist/Gemologist Materials Engineer

Production and Operations Jewelers and watchmakers use a variety of highly specialized tools in the various phases of manufacture. During each step, an extremely high degree of skill is required, and any mistakes, especially while working with precious and semiprecious stones, may result in totally destroying their value. The production of jewelry requires several steps, including manufacturing the setting into which a gem will be inserted. This requires shaping the setting according to a previously completed design and soldering together individual parts if required. The latter operation is performed by assemblers. Although machines mass-produce certain types of jewelry, the necessary models and tools usually are made by a skilled jeweler. The more expensive a piece of jewelry is, the more likely it was not mass produced. The cutting of the gem into its final form, which is the most delicate, difficult, and exacting step in jewelry manufacture, will usually be done at the wholesale level by people who have received long years of training. After securing the stones in their settings, the final steps usually involve polishing and, if desired, engraving the setting. Precious stones can be enhanced by such processes as oiling, which reduces the appearance of flaws, heating, lasers, and radiation. Among the more skilled, specialized careers in the watch and jewelry industry are bench jewelers, appraisers, horologists, gemologists, repairers, cutters, silversmiths, and jewelry designers. Precision,

Watches and Jewelry Industry skill, thorough training, and attention to even the tiniest details are required in all these jobs. Bench jewelers might be called the backbone of the industry. They utilize a variety of tools such as jewelers’ lathes, saws, drills, files, and soldering irons to fabricate and manufacture jewelry, set stones, and repair individual pieces. Some have received bench certification, which may have taken a year or two to earn at a technical school from Jewelers of America, a trade organization. There are four levels of certification: bench jeweler technician, bench jeweler, senior bench jeweler, and master bench jeweler. The jewelers most often encountered in smaller retail stores are probably bench jewelers, but not every retail outlet has one. If they also manage the business they should possess organizational, business, and sales skills. Appraisers may also be bench jewelers in smaller venues, but they may do appraisals only. They determine the value of a piece by various means, including consulting reference books, the Internet, and previous auction results. They then write a report certifying their findings. They may be employed by large jewelry chains, insurance companies, appraisal companies, or auction houses, or they may be self-employed. Their greatest resource is their own knowledge and experience gained over the years. In a large chain they most probably will work in a corporate facility rather than a retail store. Horologists, so-called because horology is the study of timepieces, act as clock and watchmakers and repairers. Because inexpensive watches are sometimes just discarded rather than repaired, horologists tend to work on more expensive items. Some timepieces have few moving parts and only a battery replacement is required. Expensive ones have mechanical movements, often with jewels, and still need manual winding. If replacement parts are unavailable horologists may make the parts themselves. The assembly/disassembly, repair, and cleaning of minuscule gears and springs is exacting work requiring mechanical skill, good hand-eye coordination, and patience. Certification by the American Watchmakers-Clockmakers Institute and other bodies is offered by some technical schools and sometimes takes up to two years to obtain. Gemologists are among the most highly trained personnel in the industry. They study the quality and characteristics of precious and semiprecious stones, grade them according to industry stan-

2011

dards, and make reports of their findings. They may work for large retail or wholesale jewelry companies, mining companies, insurance companies, laboratories (including the Gemological Institute of America and the American Gemological Laboratories) or even work as self-employed appraisers. People consulting gemologists for private appraisals may expect to pay up to $200 an hour for their services. Certification for gemologists is available through the Gemological Institute of America, and degrees are offered by colleges and fashion institutes. Repairers work on both watches and jewelry. With jewelry, they may perform such tasks as altering ring, bracelet, and necklace sizes, resetting stones, restringing beads or jewelry, repairing clasps and hinges, mending breaks in metal pieces, and even refashioning jewelry into new pieces. Watch repairers may do simple tasks like replacing dead batteries or complex ones like mending or replacing the works of watches. Because repairers often work with very expensive articles, this can be a very exacting job. Good hand-eye coordination is vital. In large chains, repairers may work in a central corporate facility rather than a retail shop. Cutters may specialize in one type of gem, such as diamonds, or perform cutting on various types of gems. Different skills are required for cutting heavy stones like agate than are needed for diamonds. Other gemstones require yet other cutting skills. The cutter must study the “inner life” of a rough gem under a jeweler’s loupe (a magnifying device), sometimes for weeks or even months, before attempting a final cut. Many cutting centers are now located in developing countries, such as Thailand, Brazil, China, and India. At one time, cleaving was the preferred method of producing a finished stone, but any miscalculation with a metal-bladed wedge and mallet could result in a fabulous stone being utterly ruined. In modern times, a diamond saw is generally used. As buyers’ tastes evolve in such matters as gem shape, cutters need to keep abreast of the latest trends. Cutters have much to do with the so-called Four Cs of gemstones: carat weight, clarity, cut, and color. Silversmiths practice an art that goes back to colonial days in America and perhaps earlier in Europe. Silversmiths design, manufacture, decorate, and repair silver and gold articles and sometimes work with other metals such as copper and brass.

2012

Watches and Jewelry Industry

They may also perform appraisals on such articles. Excellent mechanical skills are required for using such tools as hammers, anvils, saws, shears, blocks, and torches. They cut the metals into the desired shapes and assemble pieces by means such as soldering and riveting. Laser-beam welding is a newer technology that has been widely adopted. Jewelry designers sometimes have bachelor’s or master’s degrees with a specialization in design. They should be creative, have fashion sense and artistic ability, and possess basic math skills. Designers first draw their designs on paper or on wax, and with the aid of computer programs (CAD/CAM) the designs are then transferred to models in metal or stone. Computers may run the machines that produce the finished model. The designers may conceive lines of jewelry for one company’s exclusive use or do individual pieces. In more recent years a group of designers has emerged who refer to themselves as jewelry artists. They usually design

pieces on speculation and sell them to boutiques, galleries, and in craft and trade shows. Some have opened their own specialty shops. Under American law such designs can be patented or even copyrighted. Other specialties, which run the gamut from highly skilled to relatively unskilled, include buyers, polishers, engravers, mold casters and modelers, solderers, lacquer sprayers, gemstone setters, restorers of pearls and other jewelry, press operators, electroplaters, assembly line workers, and toolmakers. Production and operations occupations may include the following:

OCCUPATION

■ ■ ■ ■ ■

Appraiser Assembler Bench Jeweler Cutter Engraver

PROFILE

Tool and Die Maker Considerations

Qualifications

Description

Analyzes specifications and places materials in order to make and repair dies, cutting tools, jigs, fixtures, and machinists’ hand tools.

Career cluster

Manufacturing

Interests

Data; things

Working conditions

Work inside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship; apprenticeship

Licensure and certification

Usually not required

Employment outlook

Decline expected

Holland interest score

RIE

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Watches and Jewelry Industry ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Gemologist Grader Horologist Jewelry Designer Metalworker Mold and Model Maker Polisher Repairer Silversmith Stone Setter

Distribution, Imports, and Exports The watches and jewelry industry has had a large wholesale component. Wholesalers sometimes buy from the mining companies themselves, from local sources near the mines, or from importers. The leading exporters of precious metal jewelry to the United States have been Italy, India, Hong Kong, Thailand, and Israel. The leading exporters of costume jewelry to the United States have been China, South Korea, Taiwan, Hong Kong, and Thailand. Wholesalers may sell directly to retail jewelers, or specialized buyers may purchase gems, jewelry, and watches from wholesalers and resell them to retailers. In recent years, as more retailers buy directly from designers and manufacturers, the size of the wholesale segment has diminished considerably. Important markets for American-made precious metal jewelry have been Canada, Mexico, Switzerland, and Japan. Major costume jewelry markets include Japan, Canada, South Korea, the United Kingdom, and Switzerland. The import value of watches into the United States was about $4 billion by the middle of the first decade of the twenty-first century. Almost 55 percent of this amount went to Switzerland. China, with its low labor costs, is also becoming an increasingly major player in the watch export market. Various trade agreements, including NAFTA and the General Agreement on Tariffs and Trade (GATT), have reduced or eliminated the tariffs on these goods. Distribution, imports, and exports occupations may include the following: ■ ■ ■ ■ ■

Warehouse Manager Shipping and Receiving Clerk Truck Driver Importer/Exporter International Buyer

INDUSTRY

2013

OUTLOOK

Overview The outlook for the watches and jewelry industry shows it to be on the decline. The industry is particularly prone to national and worldwide economic cycles. When economic growth is on an upswing, increased sales are the norm. The rise of two-income families, the generally better economic status of working women, the growing interest by teenagers in costume jewelry, and the increasing fashion interest of men have contributed to the growth of industry sales. However, because higher-end jewelry and expensive watches are considered discretionary items, future economic downturns may continue to take their toll on the industry. The U.S. Department of Labor predicts that employment in the industry will decline through 2014. The number of jewelry firms declined from more than 27,000 in 1998 to about 22,600 in 2008. Another factor affecting profitability is that jewelry stores have to carry large amounts of inventory, more than almost any other type of retail industry. Some experts expect continuing consolidation of retail outlets in the second decade of the twentyfirst century. The exponential increase in the use of cell phones and other electronic devices that tell the time has led to a decline in the purchase of inexpensive watches among younger consumers, although luxury brands such as Rolex may remain as status symbols with older and more affluent consumers. In keeping with this trend, the importation of plastic watches, such as the-once popular Swatch, has declined. In general, younger buyers are not as interested in wearing watches as status symbols, so marketing them as fun accessories may be a new sales approach. By the same token, repair work on existing items may increase, because new watches are not being purchased. Even before the worldwide economic crisis began, a decline in the number of industry positions was predicted because of increasing automation, particularly in lower-skilled jobs such as assembly and polishing. The closing of retail stores was hastened by the rise of alternate venues for the sale of jewelry and watches. These include television channels such as QVC, Shop NBC, the Home

2014

Watches and Jewelry Industry

Shopping Network (HSN), and Jewelry Television (JTV), which is devoted exclusively to jewelry sales. Another method of purchasing is the online private sale, operated by companies such as Gilt Groupe and Portero. Discount stores, Internet e-commerce sites (including Amazon.com, Walmart.com, and Shopzilla.com), and mail order or catalog houses will continue to affect brick-and-mortar retail stores, particularly in smaller cities and towns. These nontraditional outlets require fewer employees. Consolidation of retail chains is expected to continue, and increased closure of smaller retail stores is likely in the coming years. Wholesalers are gradually becoming less important, as businesses buy directly from manufacturers or designers. In spite of this somewhat dire outlook, the forecast by the U.S. Department of Labor is that employment in the industry will grow, but at a slower rate than the average for all occupations. All occupations combined are projected to increase by 11 percent between 2008 and 2018, but the jewelry and watch industry may add positions at a rate of 5 percent during the same period. Projected employment by 2018 is predicted to be approximately fifty-five thousand jobs. Among Asian countries, China, Japan, and India will continue to increase their demand for jewelry, and China will increase its jewelry production capacity. In Europe, Italy and the United Kingdom should continue to be the leading consumers, and Italy should continue to be one of the largest jewelry manufacturers in the world. Platinum jewelry is expected to increase its market share vis-a-vis gold jewelry. Employment Advantages Individuals with artistic talent or an interest in fashion, or those who enjoy working with customers and advising them on purchases, should consider a career in this industry. For those with ability in one or more of the industry’s interesting specializations, the opportunities for fulfilling careers and advancement are present, including management positions or even eventual ownership of a business. The present-day decline is likely to be a temporary one because the industry has always rebounded from downturns once better economic times have returned. One advantage of employment in the watches

and jewelry industry is that a higher education degree is not essential for many positions. Some jobs within the trade, such as gemology and jewelry design, require training at a vocational or technical school, but on-the-job-training is frequently sufficient for many others. In the past, certain skills were passed down from father to son, but this form of apprenticeship can work just as well between master jeweler and novice. Although in difficult economic times positions may be harder to obtain, there is a general dearth of well-trained people, particularly to replace skilled retirees, so employment prospects for such workers are usually good in better economic climates. Employees may earn commissions in addition to their salaries if they prove to be effective salespeople. Working in a jewelry store carries a certain amount of prestige and even glamor, and the ambience is generally very congenial. Annual Earnings In 2007, the industry’s domestic sales amounted to some $64.8 billion, and about one-half of U.S. consumers had purchased jewelry or watches. By the end of 2008, a year into the recession, sales had declined from the previous year to about $60 billion. Some large chains such as Zales, which sells midprice merchandise, seemed to be in poor financial straits, and some of Zales’s stores were closed or consolidated. Before the 2009 holiday season, its sales had declined by almost 19 percent. This experience was probably replicated to some degree by other major chains as well. Two large chains that had been in the top five, Friedman and Whitehall, were completely liquidated. The U.S. Department of Labor estimates a continuing slow decline in jewelry and watch sales for the next few years. An estimated eight hundred retail jewelry businesses closed permanently in 2008. Some 80 percent of such businesses reported that their earnings were either flat or down, and 65 percent of those with a decline reported a downturn of at least 10 percent. Sales in the prime November-toDecember holiday period, the time of year when specialty shops may do up to 90 percent of their business, were said to be the worst since the 1950’s. Adding to the uncertainty was the high price of gold and other precious metals, as well as tighter lending policies by financial institutions.

Watches and Jewelry Industry However, by the end of 2009, sales for fine jewelry and watches had begun rising again, fueled primarily by affluent purchasers with annual incomes exceeding $100,000. More than 55 percent of retail outlets reported that their incomes were up over the previous year. Most of this gain was in smaller retail stores and local chains, which outperformed large national chains. Some industry analysts believe that small jewelry chain stores and local businesses would profit from continuing problems among the large chains and that only the behemoth chain Kay Jewelers might survive the consolidations as a large national retailer.

RELATED RESOURCES FOR FURTHER RESEARCH

American Watchmakers-Clockmakers Institute 701 Enterprise Dr. Harrison, OH 45030 Tel: (866) 367-2924 http://www.awci.com Gemological Institute of America 5345 Armada Dr. Carlsbad, CA 92008 Tel: (800) 421-7250 http://www.gia.edu Jewelers of America 52 Vanderbilt Ave., 19th Floor New York, NY 10017 Tel: (800) 223-0673 http://www.jewelers.org

Accredited Gemologists Association 3315 Juanita St. San Diego, CA 92105 Tel: (619) 501-5444 http://www.accreditedgemologists.org

Jewelers’ Security Alliance 6 E 45th St. New York, NY 10017 Tel: (800) 537-0067 http://www.jewelerssecurity.org

Accrediting Commission of Career Schools and Colleges 2101 Wilson Blvd., Suite 302 Arlington, VA 22201 Tel: (703) 247-4212 http://www.accsc.org

Jewelers Vigilance Committee 25 W 45th St., Suite 1406 New York, NY 10036 Tel: (212) 997-2002 http://www.jvclegal.org

American Gem Society 8881 W Sahara Ave. Las Vegas, NV 89117 Tel: (702) 225-6500 http://www.americangemsociety.org American Jewelry Design Council 760 Market St., Suite 900 San Francisco, CA 94102 http://www.ajdc.org American Watch Association 1201 Pennsylvania Ave. NW Washington, DC 20044 Tel: (703) 759-3377 Fax: (703) 759-1639 http://www.americanwatchassociation.com

2015

Jewelry Career Fair http://www.careerfair.gia.org Manufacturing Jewelers and Suppliers of America 45 Royal Little Dr. Providence, RI 02904 Tel: (800) 444-6572 http://www.mjsa.polygon.net

ABOUT

THE

AUTHOR

Roy Liebman is an emeritus librarian (professor) of the California State University, Los Angeles, where he held several management positions during a thirty-five-year career. He is a 1958 graduate of Brooklyn College, a 1961 graduate of Pratt Insti-

2016

Watches and Jewelry Industry

tute (M.L.S.), and a 1978 graduate of the California State University, Los Angeles (M.A.). He is the author of five reference books, as well as numerous periodical articles, reference book essays, and more than two hundred book reviews covering a wide range of subjects. He also wrote the script for a produced television documentary and has appeared as an interview subject in two other documentaries. Formerly also holding positions at the California Institute of Technology and the Brooklyn and New York Public Libraries, among others, he is currently serving part time as a reference librarian at the Los Angeles Public Library.

FURTHER

READING

Barnes Reports. U.S. Jewelry and Silverware Manufacturing Industry Report. Woolwich, Maine: Author, 2010. Blakemore, Kenneth. Management for the Retail Jeweler: A Companion Volume to the Retail Jeweler’s Guide. London: Iliffe Books, 1973. Cipriani, Curzio, and Alessandro Borelli. Simon and Schuster’s Guide to Gems and Precious Stones. New York: Simon and Schuster, 1986. Glasmeier, Amy. Manufacturing Time: Global Competition in the Watch Industry, 1795-2000. New York: Guilford Press, 2000. Griffiths, Jane. Jewelry, Watches, and Fashion Accessories: 2000 Market Report. Hampton, England: Key Note, 2000. Harrold, Michael C. American Watchmaking: A Technical History of the American Watch Industry, 1850-1930. np: Author, 1981. IBISWorld. U.S. Industry Report: Jewelry Stores, 2010. http://www.ibisworld.com/industry/ default.aspx?indid=1075. Institute for Career Research. Careers in the Jewelry Industry: Design, Manufacturing, Retailing. Chicago: Institute for Career Research, 2003. Jewelers of America. Careers in the Jewelry Industry: Your Guide to a Bright and Shining Future. New York: Jewelers of America, n.d.

Morton Research Corporation. The Jewelry Industry: An Economic, Marketing, and Business Manual of the U.S. Precious Metal Jewelry Industry. Boca Raton, Fla.: Morton Research Company, 1997. O’Donoghue, Michael. Synthetic, Imitation, and Treated Gemstones. London: Robert Hale, 2008. Parker, Philip M. The 2007-2012 Outlook for Jewelry Stores in the United States. San Diego, Calif.: ICON Group, 2006. Unity Marketing Group. Jewelry and Watch Report, 2007. http://www.unitymarketingonline.com/ cms_jewelry/jewelry/jewelry_2007.php. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Jewelers and Precious Stone and Metal Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos222.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. _______. 2002 Economic Census: Manufacturing Industry Series. Watch, Clock and Parts Manufacturing. U.S. Department of Commerce, Economics and Statistics Administration, 2004. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. _______. The U.S. Jewelry Industry: Federal Interagency Report on U.S. Jewelry Competitiveness Issues. Washington, D.C.: Author, 1997. U.S. International Trade Commission. A Competitive Assessment of the U.S. Jewelry Industry, Phase I: Costume Jewelry: Report to the Commission. Washington, D.C.: Author, 1986. U.S. Small Business Administration. Starting and Managing a Small Retail Jewelry Store. Washington, D.C.: Author, 1971.

Water Supply Industry ©Michael Irwin/Dreamstime.com

INDUSTRY

SNAPSHOT

General Industry: Natural Resources Career Cluster: Agriculture, Food, and Natural Resources Subcategory Industries: Canal Irrigation; Irrigation System Operation; Water Distribution (Except Irrigation); Water Distribution for Irrigation; Water Filtration Plant Operation; Water Supply Systems; Water Treatment Plants Related Industries: Beverage and Tobacco Industry; Civil Services: Planning; Electrical Power Industry; Environmental Engineering and Consultation Services; Farming Industry; Local Public Administration; Natural Resources Management; Waste Management Industry Annual Domestic Revenues: $55.065 billion USD in 2009 (IBISWorld Industry Report, 2010; includes both water supply and irrigation systems) NAICS Number: 22131

INDUSTRY

tory standards for a water supply that is safe to drink. In turn, this means that plant and system operators need to have the training, skills, and tools to run all of the various forms of equipment in the plant, safely control all of the numerous processes that are required under state and federal regulations, and monitor all aspects of the treatment process.

History of the Industry The earliest known water supply system was a development by the Minoan civilization on the Greek island of Crete in the Mediterranean Sea some five thousand years ago. Aqueducts were used to bring water from nearby streams into the palace and city of Knossus until a huge earthquake, about 1450 b.c.e., destroyed the region. The next major development in water supply technology occurred about 1000 b.c.e., when underground tunnels (called qanats) were used in the Middle East, particularly in what is now Iran, and in North Africa. One of the renowned engineering triumphs of the Roman Empire, albeit one accomplished with slave labor, was the construction of elevated stone

DEFINITION

Summary The water supply industry secures, treats, and distributes fresh water for human consumption and use, as well as for crop irrigation. The overriding function of a water treatment plant is to make sure that all incoming raw water is processed so that the finished product meets all of the regula2017

2018

Water Supply Industry

The Owens River, one of the sources of water in Southern California. (©Eugene Everett/Dreamstime.com)

aqueducts beginning about 312 b.c.e. By 300 b.c.e., fourteen major aqueducts were in service, transporting about 151 million liters (40 million gallons) per day to Rome. Similar systems were also constructed at that time in other parts of Europe that were occupied by the Romans, such as the rest of Italy, France, the Netherlands, England, and Spain. One such aqueduct in Segovia, Spain, that was built in the first century by the Romans is still in use today. The Romans also built a system of pipelines in London to convey water from the Thames River and adjacent springs to the people in the city. The Middle Ages in Europe were noted for filth, disease, and minimal attempts to have personal and public sanitation. Some people bathed only once or twice a year. As cities developed in Europe, North America, and other areas of the world, the easiest way to obtain water was to pipe it in from nearby surface sources or local wells. For example, Paris at the beginning of the sixteenth century had an estimated population of about 300,000 to 400,000 people, who were dependent

on water from the Seine River and private wells. The continued growth in urbanization and the vast array of waste materials that were dumped into the same river systems that were being used for drinking water invariably resulted in the easy spread of waterborne diseases. For example, the cholera epidemic of 1848-1849 caused the deaths of over fifty-three thousand people in London alone. Fortunately, the enterprising physician John Snow of London traced the impure water to one community water pump at Broad Street in Soho in 1854 that was getting its water from a highly polluted portion of the lower Thames River. His solution was simple: He removed the pump’s handle, forcing residents of the area to get their water from other sources. Bethlehem, Pennsylvania, in 1754 built a municipal water plant, reputedly the first such plant in history. Philadelphia followed in 1801, constructing a pumping plant on the Schuylkill River above the point where it flows into the Delaware River. A treatment plant was built in 1804 in Paisley, Scot-

Water Supply Industry land, to serve filtered water to the city. Paris in 1806 built a plant on the Seine River that was designed to treat the water by allowing it to trickle slowly through sand filters. Richmond, Virginia, in 1834 became the first U.S. city to adopt the slow-sand filter system. Poughkeepsie, New York, was far enough upstream on the Hudson River to use fresh water to build its first treatment plant in 1870. Chlorination was first used in 1908 in Jersey City, New Jersey, as a viable means of disinfecting the raw water obtained from surface streams. The immediate result was a sharp reduction in the city’s typhoid rate, and the technique soon spread to other water purveyors.

2019

cure stable access to Owens Valley water, but the city continued to grow, requiring even greater water supplies. Accordingly, the Colorado River Aqueduct Project was started in 1928 and included thirteen Southern California cities, which together established a metropolitan water district. The present-day Metropolitan Water District of Southern California consists of twenty-six water districts and cities that supply drinking water to 18 million people, with an average delivery of 7 million cubic meters (1.8 billion gallons) per day. The bulk of treated water is used to flush toilets (47 percent) and take a shower or bath (37 percent); only about 5 percent is used for drinking. Nevertheless, since all such water is supplied through the same pipes, it must all meet the standards for drinking, cooking, and washing. New standards for low-flush toilets were introduced in the early 1990’s and should help reduce overall water consumption. Although there are variations in treatment technologies, most plants start with tried and tested pretreatment processes. The first step in pretreatment usually consists of screens that block large items that are floating in the raw intake water, such as debris, dead animals, and fish. This is followed by the diversion of raw water to large tanks, or holding basins, where suspended sediments, such as silt

The Industry Today The supply sources for many contemporary large water treatment systems have remained the same. For example, Philadelphia; New Orleans; Washington, D.C.; and Chicago still get their water from the Delaware and Schuylkill Rivers, the Mississippi River, the Potomac River, and Lake Michigan, respectively. For those coastal metropolitan areas that border the salty waters of the ocean, large reservoirs in inland watersheds have had to be constructed. A prime example is New York City, which has seven reservoirs in the Croton, Catskill, and Delaware watersheds that collectively serve 9 million people with an average daily consumption of 4.54 million cubic meters (1.2 billion gallons). Another example is central Massachusetts’s Quabbin Reservoir system, which supplies the Boston metropolitan area. With an average annual precipitation rate of only 381 millimeters (15 inches), Los Angeles during the early twentieth century was quickly exhausting its limited local water supplies. A project was begun in 1907 to import water from the Owens Valley in east-central California, some 375 kilometers (200 miles) distant. The scheme was met with steep resistance from the valley’s residents, who destroyed the aqueduct with dynamite. NonetheThe aqueduct passes through the Mojave Desert on its way to Southern Califorless, Los Angeles was able to senia. (©Darren Bradley/Dreamstime.com)

2020

Water Supply Industry

and clay particles, can settle out. This step is particularly important if the water source contains large quantities of suspended materials. The next step, called flocculation and coagulation, occurs when chemicals such as alum and soda ash are added to the water to encourage the suspension of fine particles. This coagulation process results in the formation of floc, which with time becomes heavy enough to sink to the bottom of the large tanks as sludge. The flocculation and coagulation procedure can remove 90 to 99 percent of the viruses in the water. It does not kill the viruses, but they become part of the floc that settles out and is removed later in the process. Filtration is next employed by allowing the water to pass through sand and gravel layers that provide more opportunity for the water to be cleansed of finer particles. These filters over time can become clogged with sediments that have to be removed by backwashing or flushing, a process that results in a waste product that must be diverted to a sewer system for further treatment. The final stages in the drinking-water treatment process generally include fluoridation and disinfection. Sodium fluoride is one of the commonly added compounds and is recommended for the maintenance of healthy teeth. About half of the U.S. population uses water that is fluoridated at an optimum level of concentration. Chlorine gas is

also mixed with the water to kill any remaining bacteria and some viruses. Some people contend that chlorinated water has an unpleasant odor and taste, although the use of activated carbon in the treatment process can increase the palatability of the finished water. Residual amounts of chlorine remain in the treated water as it flows through a maze of pipes to reach individual users, so some level of disinfection travels with the flow and further protects consumers. Given the complaints of some people about chlorine odor and taste in their water, some utilities use ozone gas and ultraviolet radiation systems as disinfectants. Ozone is both a very effective disinfectant and a strong oxidant of odor and taste compounds. However, ozone not only has a higher price than chlorine but also is unable to travel with treated water and continue to disinfect it in a water system’s pipes as chlorine can. Ultraviolet light is particularly effective in killing practically all microbiological organisms that may be in treated water, as the light energy is absorbed in the deoxyribonucleic acid (DNA) of these microbes, thereby eliminating reproduction at the cellular level. Ultraviolet treatment is both costly and slow, however, but it can be very useful in selected situations. The U.S. water treatment industry has become increasingly privatized in the late twentieth and early twenty-first centuries. Some of the private companies acquiring water treatment systems are domestic and have been around for many years, but many of the larger companies are foreign. In both cases, the companies are well financed and eager to acquire existing firms and facilities. Given the increasing complexity and cost of running a water treatment plant with a variety of state and federal guidelines and regulations that have to be followed, this trend toward privatization is an interesting development in the industry. Although the private share of the total water treatment market is only about 9 percent, economic circumstances The bulk of treated water is used to flush toilets (47 percent) and take a shower and the growth of the trend toor bath (37 percent); only about 5 percent is used for drinking. (©Crystal ward privatization suggest that this Craig/Dreamstime.com) number will increase.

Water Supply Industry

2021

Pipes and valves inside a water treatment plant. (©Dreamstime.com)

A major division of the national U.S. water supply infrastructure is the community water system (CWS), which is defined by the U.S. Environmental Protection Agency (EPA) as a facility that delivers water to at least fifteen service connections that are used by year-round residents or twenty-five residents that are year-round users. CWSs vary from privately owned places, such as a very small mobile home park, to very large publicly owned systems, such as New York City. There are approximately 167,000 public water systems in the United States, serving about 278 million people. The more than 53,000 CWSs serve about 260 million people. Many nontransient water systems (about 20,000) and transient noncommunity water systems (about 93,000) serve a combined population of about 18 million people. CWSs serve about 94 percent of the total amount of water systems. Even with the development of more technical and complicated equipment, water treatment operators will always be faced with the increasingly stringent state and federal regulations that the product must meet. To put it another way, there

are always new chemicals that get into the rivers and groundwater that could cause harm to the unwary consumer. Thus, both the technology and the regulations driving the delivery of water to consumers and crops are likely to continue increasing over time. Studies by the American Water Works Association (AWWA) indicate that substantial changes are coming to the industry based on new technologies, such as information systems, advances in treatment processes, desalination, and telemetry. The water supply industry must respond to each such change.

INDUSTRY MARKET SEGMENTS Data about the water treatment industry are variable in scope. Some information is reasonably available, while many other aspects of the business, particularly detailed data on expenses and the types of personnel needed in the industry, are generally not available. The EPA has been conducting

2022

Water Supply Industry

detailed CWS surveys since 1976. The survey made in 2000 was released in 2002 and listed five sizebased categories of CWS. This number of categories represented a reduction from earlier surveys undertaken between 1976 and 1985, which listed eight such categories. The American Water Works Association, the premier professional organization of the U.S. drinking water industry, conducted salary surveys between 2007 and 2009 for selected technical and administrative positions. Wage information is available only for the entire industry, however, and not for individual market segments. In addition, all annual income estimates include both water and liquid waste plant treatment plant and system operators. This mixing of the water and wastewater treatment plant data probably reflects the relatively small number of workers employed by these industries. Very Small Systems Very small water supply systems serve up to five hundred customers. Potential Annual Earnings Scale. The median annual income of industry employees in May, 2008, was $38,430. The middle 50 percent of workers earned between $30,040 and $48,640. The bottom 10 percent earned less than $23,710, and the top 10 percent earned more than $59,860. Clientele Interaction. Since very few people work in these very small treatment plants, there is very little interaction between personnel working for this level of the industry and clients, who range from other workers to the public. Amenities, Atmosphere, and Physical Grounds. Plant operators have to work both indoors and outdoors, and they can be exposed to noise from a variety of machines and pumps. Workers have to be aware of safety issues that include gases that may be dangerous, walkways that may be slippery, and equipment that may not function properly. These potential safety issues can result in above-average injury rates on the job. Very small plants tend to have only limited amenities. Many water treatment plants are off-limits to visitors for reasons of security, especially after the terrorist attacks of September 11, 2001. Typical Number of Employees. According to the EPA’s CWS Survey, in 2000 there were 57,608 workers in 29,119 very small plants, for an average of 2 workers per plant.

Traditional Geographic Locations. Water treatment plants are generally located in close proximity to rivers, lakes or reservoirs, or well fields. The smallest ones are generally in extremely rural areas. Pros of Working for a Very Small Treatment Plant. Workers may have the advantage of handling a greater number of different jobs than would be the case in a larger plant, adding to their breadth of experience. Very small plants have little or no chain of command and considerably less bureaucracy to deal with than larger plants. (There is still some bureaucracy, because the plants are answerable to governmental regulatory entities.) Cons of Working for a Very Small Treatment Plant. Employees at very small plants may be on their own for extended periods of time. Those who seek guidance and clear direction may prefer positions with greater supervision and less breadth of responsibility. Costs Payroll and Benefits: Employees of even very small facilities are salaried and generally receive health benefits, vacations, and sick time. Supplies: Water supply facilities require tools to maintain their equipment; chemicals and other substances used to treat water; and standard office equipment and supplies. External Services: Water supply facilities may contract private consulting firms to provide technical assistance in matters beyond the expertise of facility employees or outside contractors to assist in maintenance and repairs. Utilities: Typical utilities such as water, sewer, electricity, and telephone are needed at the plant. Taxes: Private, for-profit water treatment plants must pay local, state, and federal income and property taxes. Nonprofit and government entities may be exempt from some or all of these taxes. All plants must pay payroll taxes. Small Systems Small water supply systems serve between 501 and 3,300 customers. Potential Annual Earnings Scale. The median annual income of industry employees in May, 2008, was $38,430. The middle 50 percent of workers earned between $30,040 and $48,640. The bottom 10 percent earned less than $23,710, and the top 10 percent earned more than $59,860.

Water Supply Industry Clientele Interaction. Since there are very few people working in these small treatment plants, there is very little interaction between personnel working for this level of the industry and clients, who range from other workers to the public. Amenities, Atmosphere, and Physical Grounds. Plant operators have to work both indoors and outdoors, and they can be exposed to noise from a variety of machines and pumps. Workers have to be aware of safety issues that include gases that may be dangerous, walkways that may be slippery, and equipment that may not function properly. These potential safety issues can result in above-average injury rates on the job. Small plants tend to have only limited amenities. Many water treatment plants are off-limits to visitors for reasons of security, especially after the terrorist attacks of September 11, 2001. Typical Number of Employees. According to the EPA’s CWS Survey, in 2000 there were 40,649 workers in 14,017 small water treatment plants, for an average of about 3 workers per plant. Traditional Geographic Locations. Water treatment plants generally are located in close proximity to rivers, lakes or reservoirs, or well fields. They are usually located in rural areas. Pros of Working for a Small Treatment Plant. Workers may have the advantage of handling a greater number of different jobs than would be the case in a larger plant, adding to their breadth of experience. Small plants have little or no chain of command and considerably less bureaucracy to deal with than larger plants. (There is still some bureaucracy, because the plants are answerable to governmental regulatory entities.) Cons of Working for a Small Treatment Plant. Employees at small plants may be on their own for extended periods of time. Those who seek guidance and clear direction may prefer positions with greater supervision and less breadth of responsibility. Costs Payroll and Benefits: Employees of even small facilities are salaried and generally receive health benefits, vacations, and sick time. Supplies: Water supply facilities require tools to maintain their equipment; chemicals and other substances used to treat water; and standard office equipment and supplies.

2023

External Services: Water supply facilities may contract private consulting firms to provide technical assistance in matters beyond the expertise of facility employees or outside contractors to assist in maintenance and repairs. Utilities: Typical utilities such as water, sewer, electricity, and telephone are needed at the plant. Taxes: Private, for-profit water treatment plants must pay local, state, and federal income and property taxes. Nonprofit and government entities may be exempt from some or all of these taxes. All plants must pay payroll taxes. Midsize Systems Midsize water supply systems serve between 3,301 and 10,000 customers. Potential Annual Earnings Scale. The median annual income of industry employees in May, 2008, was $38,430. The middle 50 percent of workers earned between $30,040 and $48,640. The bottom 10 percent earned less than $23,710, and the top 10 percent earned more than $59,860. Between 2007 and 2008, the average salaries of plant operators and utility executives in plants serving fewer than ten thousand customers were $38,168 and $67,993, respectively. Clientele Interaction. At midsize facilities, a modest level of interaction occurs between plant workers and clients, who range from other workers to the public. Amenities, Atmosphere, and Physical Grounds. Plant operators have to work both indoors and outdoors, and they can be exposed to noise from a variety of machines and pumps. Workers have to be aware of safety issues that include gases that may be dangerous, walkways that may be slippery, and equipment that may not function properly. These potential safety issues can result in above-average injury rates on the job. Midsize plants tend to have only limited amenities. Many water treatment plants are off-limits to visitors for reasons of security, especially after the terrorist attacks of September 11, 2001. Typical Number of Employees. According to the EPA’s CWS Survey, in 2000 there were 32,333 workers in 5,052 midsize water treatment plants, for an average of 6.4 workers per plant. Traditional Geographic Locations. Water treatment plants are generally located in close proximity to rivers, lakes or reservoirs, or well

2024

Water Supply Industry

fields. Midsize plants serve rural and suburban populations. Pros of Working for a Midsize Treatment Plant. Midsize plants not only have larger staffs at work at any given time, allowing greater distribution of responsibilities, but also have larger total workforces, allowing different employees to work different shifts. While each employee’s breadth of required expertise is likely to be less at a midsize plant than at a small plant, each employee’s depth of required expertise may be greater, as midsize plants are more likely to require more complex machinery and control systems. Cons of Working for a Midsize Treatment Plant. Even at midsize plants, employees may be on their own for extended periods of time. Demand peaks for water and the necessity of repairing damage resulting from accidents, storms, and cold weather may necessitate overtime work in the evenings and on the weekends. In addition, the water industry hires very few part-time workers. Costs Payroll and Benefits: Full-time personnel generally receive salaries, health benefits, vacations, and sick time. Supplies: Water supply facilities require tools to maintain their equipment; chemicals and other substances used to treat water; and standard office equipment and supplies. External Services: Water supply facilities may contract private consulting firms to provide technical assistance in matters beyond the expertise of facility employees or outside contractors to assist in maintenance and repairs. Utilities: Typical utilities such as water, sewer, electricity, and telephone are needed at the plant. Taxes: Private, for-profit water treatment plants must pay local, state, and federal income and property taxes. Nonprofit and government entities may be exempt from some or all of these taxes. All plants must pay payroll taxes. Large Systems Large water supply systems serve between 10,001 and 100,000 customers. Potential Annual Earnings Scale. The median annual income of industry employees in May, 2008, was $38,430. The middle 50 percent of workers earned between $30,040 and $48,640. The bot-

tom 10 percent earned less than $23,710, and the top 10 percent earned more than $59,860. Between 2007 and 2008, the average salaries of plant operators, utility engineers, and utility executives in plants serving between 10,000 and 100,000 customers were $42,174, $64,349, and $98,529, respectively. Clientele Interaction. Employees of large water treatment plants enjoy greater interaction with their clients than those of smaller plants. Amenities, Atmosphere, and Physical Grounds. Plant operators have to work both indoors and outdoors, and they can be exposed to noise from a variety of machines and pumps. Workers have to be aware of safety issues that include gases that may be dangerous, walkways that may be slippery, and equipment that may not function properly. These potential safety issues can result in above-average injury rates on the job. The size difference between a large plant and a midsize plant is much greater than the size difference between a midsize plant and a small plant. As a result, large plants are likely to have significantly greater amenities than smaller plants. They are also more likely to be formally secure facilities, requiring keycard access and badges to be worn by all employees at all times. Typical Number of Employees. According to the EPA’s CWS Survey, in 2000 there were 81,247 workers in 3,484 large water treatment plants, for an average of more than 23 workers per plant. Traditional Geographic Locations. Water treatment plants generally are located in close proximity to a river, lake or reservoir, or well field. However, large and very large treatment facilities may be located some distance away from their water sources. For example, the water for the major metropolitan areas of Phoenix and Tucson, Arizona, has to be pumped uphill from the Colorado River at Lake Havasu on the Arizona-California border, traveling a distance of 540 kilometers (336 miles) and experiencing an elevation increase of 875 meters (2,870 feet). Pros of Working for a Large Treatment Plant. Large facilities require not only greater numbers of workers but also workers with more specialized skills than are required at smaller facilities. Workers are likely to work on rotating days and shifts, although the number needed varies from place to place. Work skills tend to be more varied as

Water Supply Industry

2025

Aerial view of a water treatment plant. (©Dreamstime.com)

treatment processes, machinery, chemical additions, and more observations of a variety of dials and controls are required. Larger treatment plants are more likely to offer formal training programs than smaller plants. They also encourage further professional development among their employees through such means as the online continuing education classes offered by the AWWA. Cons of Working for a Large Treatment Plant. Workers at large plants need to be available twenty-four hours a day, every day. Although water demand generally decreases during the evening hours, raw intake water must still be treated during those hours. Large plants serve populations that are not only vast but also complexly distributed, and they are affected by variations in weather and other factors beyond employees’ control. For example, rainstorms can increase the turbidity of rivers and necessitate extra alum inputs to raw water prior to other treatment steps. Plant employees must constantly be ready to make quick decisions in response to changing circumstances.

Costs Payroll and Benefits: Workers at large plants work full shifts. Salaries generally vary based on the variety of speciality skills needed for the different operations. As with the other plants, all personnel are entitled to health benefits, vacations, and sick time. Supplies: Water supply facilities require tools to maintain their equipment; chemicals and other substances used to treat water; and standard office equipment and supplies. External Services: Water supply facilities may contract private consulting firms to provide technical assistance in matters beyond the expertise of facility employees or outside contractors to assist in maintenance and repairs. Such external vendors are less likely to be needed at larger plants with greater staffs and resources. Utilities: Typical utilities such as water, sewer, electricity, and telephone are required. Taxes: Private, for-profit water treatment plants must pay local, state, and federal income and

2026

Water Supply Industry

property taxes. Nonprofit and government entities may be exempt from some or all of these taxes. All plants must pay payroll taxes. Very Large Systems Very large water supply systems serve more than 100,000 customers. Potential Annual Earnings Scale. The median annual income of industry employees in May, 2008, was $38,430. The middle 50 percent of workers earned between $30,040 and $48,640. The bottom 10 percent earned less than $23,710, and the top 10 percent earned more than $59,860. Between 2007 and 2008, at plants serving a population greater than 100,000, water treatment plant operators, water utility engineers, and top utility executives averaged $47,638, $69,505, and $139,611, respectively. A 2009 AWWA survey indicated that the median annual salaries for customer service managers and top executives at water treatment plants serving from 100,000 to 250,000 people were $76,563 and $140,110, respectively; for plants serving from 250,001 to 500,000 people, they were $89,826 and $145,489, respectively; for plants servings from 500,001 to 1,000,000 people, they were $83,059 and $160,655, respectively; and for more than 1 million people, they were $97,009 and $246,580, respectively. Clientele Interaction. Plants serving more than 100,000 customers have a much greater number of clients than small plants, so employees are more likely to interact with them. Generally speaking, however, only dedicated customer-service employees interact with members of the public. Amenities, Atmosphere, and Physical Grounds. Plant operators have to work both indoors and outdoors, and they can be exposed to noise from a variety of machines and pumps. Workers have to be aware of safety issues that include gases that may be dangerous, walkways that may be slippery, and equipment that may not function properly. These potential safety issues can result in above-average injury rates on the job. The largest plants generally have the greatest amenities, such as dedicated break rooms for employees. They also tend to employ the greatest level of security, requiring keycard access and badges to be worn by all employees at all times. Typical Number of Employees. According to the EPA’s CWS Survey, in 2000 there were 87,269

workers in 514 water treatment plants, for an average of 170 workers per plant. Traditional Geographic Locations. Water treatment plants generally are located in close proximity to rivers, lakes or reservoirs, or well fields. In some cases, metropolitan facilities may receive their water from hundreds of miles away. Pros of Working for a Very Large Treatment Plant. Very large facilities need not only more workers than smaller facilities but also workers that have more specialized skills. Employees at large plants often must be available on rotating days and shifts, although the number required varies from place to place. Work skills are also more varied, as treatment processes, machinery, chemical additions, and more observation of a variety of dials and controls are required. Larger treatment plants are more likely to offer formal training programs than smaller plants. They also encourage further professional development among their employees through such means as the online continuing education classes offered by the AWWA. Cons of Working for a Very Large Treatment Plant. Workers at very large plants need to be available twenty-four hours a day, every day. Although water demand generally decreases during the evening hours, raw intake water must still be treated during those hours. Large plants serve populations that are not only vast but also complexly distributed, and they are affected by variations in weather and other factors beyond employees’ control. For example, rainstorms can increase the turbidity of rivers and necessitate extra alum inputs to raw water prior to other treatment steps. Plant employees must constantly be ready to make quick decisions in response to changing circumstances, including the release of pollutants into the water supply. Costs Payroll and Benefits: Workers at very large plants work full shifts. Salaries generally vary based on the variety of speciality skills needed for the different operations. As with the other plants, all personnel are entitled to health benefits, vacations, and sick time. Supplies: Water supply facilities require tools to maintain their equipment; chemicals and other substances used to treat water; and standard office equipment and supplies.

Water Supply Industry External Services: Water supply facilities may contract private consulting firms to provide technical assistance in matters beyond the expertise of facility employees or outside contractors to assist in maintenance and repairs. Such external vendors are less likely to be needed at larger plants with greater staffs and resources. Utilities: Typical utilities such as water, sewer, electricity, and telephone are needed. Taxes: Private, for-profit water treatment plants must pay local, state, and federal income and property taxes. Nonprofit and government entities may be exempt from some or all of these taxes. All plants must pay payroll taxes.

ORGANIZATIONAL STRUCTURE AND JOB ROLES The organizational structure and distribution of jobs within a water treatment plant are usually based on the size of the facility and the population served. All water plants must conform to EPA standards and regulations. Although about 91 percent of plants are public, many of the larger systems are private and sometimes operate in a different organizational framework. Interestingly, the standards for bottled water are governed by the Food and Drug Administration (FDA). Although these standards are broadly similar to EPA standards, there are some differences. For example, the number of samples per time period that must be tested are more stringent for tap water monitored by the EPA than for bottled water monitored by the FDA. All treatment plant and system operators have to be certified within their respective states. The particular requirements and standards vary considerably from state to state, but many specify four levels of certification. Some states may honor licenses from other states, but they are not required to do so and operators may have to pass new sets of exams if they move among states. The number of levels of certification is generally based on the types of treatment processes used in a particular plant, as well as the plant’s size. For example, operators at plants that serve small populations may need only level-one certification. A worker who has a level-one certification is permitted to operate such a plant without any other su-

2027

pervision. Workers in small plants in some states can go up the certification ladder by taking additional tests on their technical knowledge, while other states stipulate that experience in a larger plant is required for advancement. Thus, those workers who want to advance their careers may have to move to larger plants to do so. As treatment plants get larger and include many more complicated types of equipment, machines, and computers, their employees need to acquire additional skills. Workers in the largest plants who have attained higher levels of certification can become shift supervisors. They may then be in charge of large teams of other workers. In addition, some of the more experienced workers who have higher degrees of certification have the option of getting jobs as technicians in drinking-water-control state agencies. Such technicians monitor and offer technical assistance to plant personnel in their states. Workers for most positions in water treatment plants are required to have a high school diploma or some form of equivalent degree. Those workers that have an associate’s degree or have taken a oneyear certificate program in water quality technology receive very useful training for future employment. Workers who are interested in becoming plant operators should have some mechanical aptitude in conjunction with basic courses in math, chemistry, and biology. Computer skills are very desirable, as computers are increasingly used to monitor plant equipment, test performance, and analyze workflow. The following umbrella categories apply to the organizational structure of businesses in the water supply industry: ■ ■ ■ ■

■

Business Management Customer Service Facilities and Security Technology, Research, Design, and Development Human Resources

Business Management There are substantial variations in water treatment plant management formats. For example, private facilities are often organized differently than public facilities. At public facilities, management personnel may not even have offices in treatment plants but rather work in municipal build-

2028

Water Supply Industry

ings located elsewhere. Private facilities, likewise, may take their direction from executives operating from corporate headquarters far distant from the facilities themselves. Indeed, the senior executive managers of some large, privately owned systems may be located in foreign countries. On-site treatment plant personnel must include technically qualified engineers, chemists, and skilled operators, particularly if the plant is large. Business management occupations may include the following: ■ ■ ■ ■

Administrator Plant Director/Manager President/Chief Executive Officer (CEO) Vice President of Water Supply Operations

Customer Service Customer problems with such items as billing, requests for new water meters, and general questions are usually directed to personnel in a separate location or building in the municipal or corporate office. Questions or concerns that involve the operations of a treatment plant directly, such as water taste, chemical additives, or high turbidity levels in raw water usually come from personnel in the state or federal government and are addressed directly to the appropriate on-site specialist. Customer service occupations may include the following: ■ ■ ■ ■ ■ ■

Bookkeeper Customer Service Manager Customer Service Representative Meter Reader Administrative Assistant Clerk

Facilities and Security Public visits to treatment plants since the terrorist attacks on the World Trade Center and the Pentagon on September 11, 2001, have been substantially diminished. One needs permission to get into most plants, and the general rule is not to encourage outsiders to visit. Plant personnel must enforce these rules, ensuring that only authorized personnel have access to their facilities. Large plants must also worry about cybernetic access, in addition to physical security, as the computers that con-

trol their operations may be vulnerable to attack. Facilities and security occupations may include the following: ■ ■ ■ ■ ■ ■

Building Inspector Maintenance Supervisor Maintenance and Repair Worker Security Supervisor Security Guard Computer Security Specialist

Technology, Research, Design, and Development Government and private entities research new and better ways to deliver high-quality water to consumers and crops efficiently and effectively. States and the EPA generally introduce new techniques as the science of water treatment advances. The fields of engineering, chemistry, and laboratory methodology invariably change as new research is approved and then mandated by regulatory authorities. For example, one problem receiving a great deal of attention in the early twenty-first century is the level of prescription pharmaceuticals in the water supply. Such pharmaceuticals enter wastewater, both after passing through the human digestive system and after being disposed of in toilets directly. Water treatment plants thus far have not developed comprehensive techniques for removing such drugs from the water supply, so trace amounts remain. In addition to drugs, raw water coming into a treatment plant may contain bacteria, viruses, lead, mercury, and industrial acids. Techniques exist to handle or at least abate these contaminants. It is more difficult, however, to remove or neutralize synthetic organic compounds, such as watersoluble materials (cleaning compounds and insecticides) and insoluble materials (petroleum residues and plastics). These substances, if not properly addressed in the treatment process, can result in a mix of ailments that include kidney disorders and birth defects. Endocrine-disrupting compounds and pharmaceutical and personal care products, known collectively as PPCPs, are also present in wastewater, as they are easily excreted by humans and livestock (such as those animals that have been given food additives). PPCPs that have already been detected in drinking water sources include sex steroids, beta-blockers, painkillers, and

Water Supply Industry OCCUPATION

2029

PROFILE

Water and Wastewater Engineer Considerations

Qualifications

Description

Specializes in all areas of the water cycle, from designing systems that provide fresh water to determining how to dispose of wastewater and sewage to preventing damage related to floods.

Career clusters

Agriculture, Food, and Natural Resources; Architecture and Construction; Manufacturing; Science, Technology, Engineering, and Math

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

Bachelor’s degree; master’s degree; doctoral degree

Physical exertion

Light work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Internship

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

antibiotics. Most of these PPCPs eventually get into wastewater treatment plants, where they can be only partially removed by existing technology. The remaining PPCPs eventually wind up in surface streams or travel directly from septic systems into the groundwater. In the future, drinking water regulations may include PPCPs, and new treatment procedures will become required. Technology, research, design, and development occupations may include the following: ■ ■ ■ ■ ■ ■ ■ ■

Chemist Food Scientist Food Technologist Microbiologist Biologist Science Technician Industrial Engineer Chemical Engineer

■ ■ ■ ■ ■

Mechanical Engineer Electrical Engineer Engineering Technician Software Engineer Computer Hardware Engineer

Human Resources Water treatment plants require skilled personnel to operate the equipment, be in control of all processes, and keep tabs on all the equipment that is necessary to make the finished water safe enough to drink. The number of people and the specific mix of specific skills involved in water treatment are related to the size and type of the plant. For example, one operator in a small plant can be assigned all of the responsibility for proper maintenance for all of the systems. This person would most probably work during the day and be available by phone during the nights and weekends. For

2030

Water Supply Industry

midsize and large plants, where monitoring of all of the equipment is required constantly, personnel generally work in three eight-hour shifts. Very large plants need more specialized personnel to handle issues that may develop, and weekend and holiday time may be required. Overtime work is also a possibility, especially during an emergency related to plant malfunctions, such as chemical leaks, problems with automated equipment and computers, or storm-induced floods that may block access to or damage the plant. Human resources occupations may include the following: ■ ■ ■ ■ ■ ■

Human Resources Director Human Resources Manager Human Resources Generalist Benefits Specialist Payroll Clerk Administrative Assistant

OCCUPATION

INDUSTRY

OUTLOOK

Overview The outlook for this industry shows it to be on the rise. According to the U.S. Bureau of Labor Statistics, the number of jobs for water treatment plant personnel and system operators is projected to grow by 20 percent between 2008 and 2018, significantly faster than the 11 percent growth rate for all occupations combined. In addition, the AWWA has indicated that the water industry will go through a substantial loss of workers resulting from voluntary retirements during the same period. Accordingly, thousands of existing positions will need to be filled, in addition to the new positions that will be created, in the fields of plant management, engineering, and science-related positions. Consequently, qualified individuals should be able to find opportunities based on their mix of skills and experience. The projected growth in jobs is based

PROFILE

Water Treatment Plant Operator Considerations

Qualifications

Description

Controls water treatment equipment that cleans water so there will be a continuous supply that is safe for humans and corporations to use.

Career cluster

Agriculture, Food, and Natural Resources

Interests

Data; things

Working conditions

Work both inside and outside

Minimum education level

On-the-job training; high school diploma or GED; high school diploma/technical training; apprenticeship

Physical exertion

Medium work

Physical abilities

Unexceptional/basic fitness

Opportunities for experience

Apprenticeship; military service; part-time work

Licensure and certification

Required

Employment outlook

Faster-than-average growth expected

Holland interest score

RCE; REI

Note: See volume 1, “Publisher’s Note,” for an explanation of the Holland interest score.

Water Supply Industry

2031

hours per day. As the plants get larger and handle customer bases of more than fifty thousand, this percentage increases to 80 perWater Transportation cent. Fully 95 percent of systems that serve more than 500,000 Employment persons have operators on site at 2009 Projected 2018 Occupation all times. All surface water plants that handle 100 million gallons 12,180 13,000 Captains, mates, and pilots of water per day or more have personnel vessels on duty every day, around the 1,310 1,200 General and operations managers clock. Groundwater plants are generally much less likely to have 1,010 1,100 Laborers and freight, stock, and ersonnel available both day and material movers, hand night, as they generally are 14,510 15,900 Sailors and marine oilers smaller systems and do not run at all hours of the night. These 6,130 6,600 Ship engineers smaller systems generally pump their water into above-ground Source: U.S. Bureau of Labor Statistics, Industries at a Glance, storage containers (water towOccupational Employment Statistics and Employment ers) at high elevations in their Projections Program. service areas so that the morning surge in water use can be handled properly. Many plants that do not have twenty-four-hour in part on the continued need for potable water, as coverage rely on supervisory control and data acwell as the growth rate of the U.S. population and quisition (SCADA) to handle either process monithe urbanization of that population. All these factoring or control. This technique allows a plant to tors drive demand for new and expanded water monitor or control its systems when an operator is treatment facilities and for the labor necessary to not present. Treatment plants that use groundwaoperate them. ter and do not have personnel on site at all times The largest employers of treatment plant and rely on SCADA for process monitoring (19 persystem operators are local governments. However, cent) and process control (14 percent). These perjobs are expected to be more plentiful in privately centages approximately double for surface-water owned plants than in publicly owned plants. An infacilities. crease in federal certification requirements will enMergers and acquisitions of water purveyors courage the private sector increasingly to specialthat developed during the 1990’s have continued ize in the more complex aspects governing water and are expected to continue in the future. The treatment plant operation and management. drivers of this trend have been the economies of Another factor for job growth is the ongoing nascale that can be achieved in larger systems, the exture of regulatory changes in the water industry, panded use and associated development of technibased on continually revised and upgraded water cal procedures that would not be feasible in quality standards. Changes in standards are exsmaller plants, and the increasing need to meet pected to result in the need to have additional new and more stringent environmental regulaworkers at each facility, as the complexity of procetions. These are some of the very strong pressures dures required in the treatment process will inthat encourage the growth of larger plants and crease. On-the-job training may increase in order make the operations of smaller plants that much to ensure that personnel acquire the skills necesless viable. sary to operate new equipment properly. The trend of private investor firms acquiring About 22 percent of plants that handle only sursmaller public water systems is expected to conface water have an operator on site twenty-four PROJECTED EMPLOYMENT FOR SELECTED OCCUPATIONS

2032

Water Supply Industry

tinue. Larger systems are more capable of obtaining capital than smaller systems, and this capital can be used to make the necessary changes to the infrastructure of smaller plants once they are acquired. Larger utilities, either public or private, have the benefit of spreading their overhead expenses over a much larger customer base, allowing them to reduce the per-customer costs of providing service. Employment Advantages Water is necessary to life, so employees in the water supply industry need not worry about changes in consumer preferences. They may also gain fulfillment from helping provide consumers with such a fundamental requirement. Jobs in the industry are expected to be relatively plentiful for those with the specific training required to obtain them. Those with interests in chemistry, microbiology, and other experimental sciences who wish their research to have obvious practical effects in the world may find the water supply industry particularly fulfilling. Management positions at large plants may also be good fits for those with a skill for contingency planning and responding quickly to sudden crises. Annual Earnings In 2000, publicly owned U.S. water systems earned revenues of $34.5 billion, and privately owned systems earned revenues of $4.3 billion, for a combined total of $39.8 billion. By 2009, this combined total had reached $55.01 billion.

RELATED RESOURCES FOR FURTHER RESEARCH American Water Resources Association 4 W. Federal St. Middleburg, VA 20118 Tel: (540) 687-8390 Fax: (540) 687-8395 http://www.awra.org American Water Works Association 6666 W. Quincy Ave. Denver, CO 80235 Tel: (303) 794-7711

Fax: (303) 347-0804 http://www.awwa.org National Association of Water Companies 2001 L St. NW, Suite 850 Washington, DC 20036 Tel: (202) 833-8383 Fax: (202) 331-7442 http://www.nawc.org Water Environment Federation 601 Wythe St. Alexandria, VA 22314-1994 Tel: (800) 666-0206 Fax: (703) 684-2492 http://www.wef.org Water Quality Association 4151 Naperville Rd. Lisle, IL 60532 Tel: (630) 505-0160 Fax: (630) 505-9637 http://www.wqa.org

ABOUT

THE

AUTHOR

Robert M. Hordon has taught for several decades at Rutgers University in New Jersey. His fields of speciality include hydrology, water resources, and physical geography. He has a B.A. from Brooklyn College and an M.A. and Ph.D. from Columbia University. Professor Hordon has served for several terms of office on the Executive Committee of the American Institute of Hydrology (AIH), a nonprofit scientific and educational organization that offers certification to professionals in all of the varied fields of hydrology (groundwater, surface water, and water quality). In 2009, he was appointed chair of the Examination Committee of the AIH for professional certification.

FURTHER

READING

Brooks, Kenneth N., et al. Hydrology and the Management of Watersheds. 3d ed. Ames: Iowa State Press, 2003.

Water Supply Industry Career Information Center. Agribusiness, Environment, and Natural Resources. 9th ed. Vol. 1. Detroit: Thomas/Gale, 2007. Cech, Thomas V. Principles of Water Resources: History, Development, Management, and Policy. 3d ed. Hoboken, N.J.: John Wiley, 2010. Chin, David A. Water-Resources Engineering. 2d ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2006. Dzurik, Andrew A. Water Resources Planning. 3d ed. Lanham, Md.: Rowman and Littlefield, 2003. Fair, Gordon M., John C. Geyer, and Daniel A. Okun. Water Supply and Wastewater Removal. Vol. 1 in Water and Wastewater Engineering. New York: John Wiley, 1966. Gleick, Peter H., et al. The World’s Water, 20082009: The Biennial Report on Freshwater Resources. Washington, D.C.: Island Press, 2009. Gray, N. F. Drinking Water Quality: Problems and Solutions. 2d ed. New York: Cambridge University Press, 2008. Grigg, Neil S. “Water and Wastewater Workforce Stats: The Case for Improving Job Data.” Journal of the American Water Works Association 101, no. 8 (August, 2009): 67-78. Hammer, Mark J., and Mark J. Hammer, Jr. Water and Wastewater Technology. 5th ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2004. IBISWorld. Water Supply and Irrigation Systems in the U.S.: Industry Report 22131. May 4, 2010. http://www.ibisworld.com/industry/ outlook.aspx?indid=161. Linsley, Ray K., and Joseph B. Franzini. WaterResources Engineering. New York: McGraw-Hill, 1972. Patrick, Roger, and Edward G. Means III. “Meeting Customer Expectations in a Fluid

2033

Utility Environment.” Journal of the American Water Works Association 97, no. 9 (September, 2005): 56-61. Pojasek, Robert B., ed. Drinking Water Quality Enhancement Through Source Protection. Ann Arbor, Mich.: Ann Arbor Science, 1977. Speidel, David H., Lon C. Ruedisili, and Allen F. Agnew, eds. Perspectives on Water: Uses and Abuses. New York: Oxford University Press, 1988. Spellman, Frank R. The Science of Water: Concepts and Applications. 2d ed. Boca Raton, Fla.: CRC Press, 2008. Symons, James M. Plain Talk: Questions and Answers About the Water You Drink. 4th ed. Denver: American Water Works Association, 2001. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Water and Liquid Waste Treatment Plant and System Operators.” In Occupational Outlook Handbook, 2010-2011 ed. http:// www.bls.gov/oco/ocos229.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Environmental Protection Agency. Office of Water. Community Water System Survey, 2000. Washington, D.C.: Author, 2002. Wurbs, Ralph A., and James P. Wesley. Water Resources Engineering. Upper Saddle River, N.J.: Prentice Hall, 2002.

Appendixes

Employment by Industry, 2008 and Projected 2018 Employment (thousands of jobs) 2007 NAICS Number

Industry Total 1, 2 Nonagriculture wage and salary Mining Oil and gas extraction Mining, except oil and gas Coal mining Metal ore mining Nonmetallic mineral mining and quarrying Support activities for mining Utilities Electric power generation, transmission, and distribution Natural gas distribution Water, sewage, and other systems Construction Manufacturing Food manufacturing Animal food manufacturing Grain and oilseed milling Sugar and confectionery product manufacturing Fruit and vegetable preserving and specialty food manufacturing Dairy product manufacturing Animal slaughtering and processing Seafood product preparation and packaging Bakeries and tortilla manufacturing Other food manufacturing Beverage and tobacco product Beverage manufacturing Tobacco manufacturing Textile mills Fiber, yarn, and thread mills Fabric mills Textile and fabric finishing and fabric coating mills Textile product mills Textile furnishings mills Other textile product mills Apparel manufacturing Apparel knitting mills Cut and sew apparel manufacturing 2037

2008

Projected 2018

NA 21 211 212 2121 2122 2123 213 22 2211 2212 2213 23 31-33 311 3111 3112 3113

150,931.7 137,814.8 717.0 161.6 227.7 80.6 39.9 107.2 327.7 559.5 404.7 106.8 48.0 7,214.9 13,431.2 1,484.8 50.9 62.6 70.8

166,205.6 152,443.5 613.2 135.8 225.7 83.9 35.9 105.9 251.7 500.5 345.7 100.8 54.0 8,552.0 12,225.2 1,483.2 49.0 61.4 63.7

3114 3115 3116 3117 3118 3119 312 3121 3122 313 3131 3132 3133 314 3141 3149 315 3151 3152

173.7 129.1 512.1 40.6 280.9 164.1 199.0 177.0 22.0 151.1 37.4 65.4 48.3 147.6 75.4 72.2 198.4 26.2 155.2

154.8 126.3 538.7 44.7 275.4 169.2 180.9 164.1 16.8 79.2 20.7 35.0 23.5 91.3 41.9 49.4 88.4 12.5 66.7

2038

Employment by Industry, 2008 and Projected 2018 Employment (thousands of jobs)

Industry Apparel accessories and other apparel manufacturing Leather and allied products Leather and hide tanning and finishing, and other leather and allied product manufacturing Footwear manufacturing Wood product manufacturing Sawmills and wood preservation Veneer, plywood, and engineered wood product manufacturing Other wood product manufacturing Paper manufacturing Pulp, paper, and paperboard mills Converted paper product manufacturing Printing and related support activities Petroleum and coal products manufacturing Chemical manufacturing Basic chemical manufacturing Resin, synthetic rubber, and artificial synthetic fibers and filaments manufacturing Pesticide, fertilizer, and other agricultural chemical manufacturing Pharmaceutical and medicine manufacturing Paint, coating, and adhesive manufacturing Soap, cleaning compound, and toilet preparation manufacturing Other chemical product and preparation manufacturing Plastics and rubber products manufacturing Plastics product manufacturing Rubber product manufacturing Nonmetallic mineral product manufacturing Clay product and refractory manufacturing Glass and glass product manufacturing Cement and concrete product manufacturing Lime, gypsum, and other nonmetallic mineral product manufacturing Primary metal manufacturing Iron and steel mills and ferroalloy manufacturing Steel product manufacturing from purchased steel Alumina and aluminum production and processing Nonferrous metal (except aluminum) production and processing Foundries Fabricated metal product manufacturing Forging and stamping Cutlery and handtool manufacturing

2007 NAICS Number

2008

Projected 2018

3159 316

17.0 33.6

9.2 23.0

3161, 3169 3162 321 3211

17.8 15.8 459.6 103.6

13.0 10.0 424.4 84.9

3212 3219 322 3221 3222 323 324 325 3251

90.8 265.2 445.8 126.1 319.7 594.1 117.1 849.8 152.1

99.8 239.7 337.5 81.9 255.6 499.3 90.8 793.2 99.9

3252

105.4

95.2

3253 3254 3255

36.1 289.8 62.8

35.0 307.4 65.4

3256 3259 326 3261 3262 327 3271 3272 3273

108.2 95.4 734.3 589.0 145.3 468.1 52.4 96.5 223.3

101.1 89.2 678.0 555.2 122.8 480.1 53.9 83.8 247.5

3274, 3279 331 3311 3312 3313

95.9 443.2 98.9 60.1 67.9

94.9 399.5 79.9 58.9 64.9

67.4 148.9 1,528.3 107.9 49.1

62.9 132.9 1,399.1 84.9 35.9

3314 3315 332 3321 3322

Employment by Industry, 2008 and Projected 2018

2039

Employment (thousands of jobs) Industry Architectural and structural metals manufacturing Boiler, tank, and shipping container manufacturing Hardware manufacturing Spring and wire product manufacturing Machine shops; turned product; and screw, nut, and bolt manufacturing Coating, engraving, heat treating, and allied activities Other fabricated metal product manufacturing Machinery manufacturing Agriculture, construction, and mining machinery manufacturing Industrial machinery manufacturing Commercial and service industry machinery manufacturing Ventilation, heating, air-conditioning, and commercial refrigeration equipment manufacturing Metalworking machinery manufacturing Engine, turbine, and power transmission equipment manufacturing Other general purpose machinery manufacturing Computer and electronic product manufacturing Computer and peripheral equipment manufacturing Communications equipment manufacturing Audio and video equipment manufacturing Semiconductor and other electronic component manufacturing Navigational, measuring, electromedical, and control instruments manufacturing Manufacturing and reproducing magnetic and optical media Electrical equipment, appliance, and component manufacturing Electric lighting equipment manufacturing Household appliance manufacturing Electrical equipment manufacturing Other electrical equipment and component manufacturing Transportation equipment manufacturing Motor vehicle manufacturing Motor vehicle body and trailer manufacturing Motor vehicle parts manufacturing Aerospace product and parts manufacturing Railroad rolling stock manufacturing Ship and boat building Other transportation equipment manufacturing

2007 NAICS Number

2008

Projected 2018

3323 3324 3325 3326

409.4 95.8 29.3 51.5

429.4 89.1 24.0 41.9

3327 3328 3329 333

360.1 143.7 281.5 1,185.5

319.5 124.8 249.6 1,095.2

3331 3332

242.1 120.8

249.6 92.9

3333

105.3

104.8

3334 3335

149.5 191.7

112.8 189.7

3336 3339 334 3341 3342 3343

103.5 272.6 1,247.7 182.8 129.0 27.0

96.8 248.6 1,006.5 124.7 120.1 14.6

3344

432.4

286.8

3345

441.6

434.3

3346

34.9

26.0

335 3351 3352 3353

424.9 57.1 72.0 158.5

367.8 45.9 54.9 129.2

3359 336 3361 3362 3363 3364 3365 3366 3369

137.3 1,606.6 190.7 141.9 544.4 503.9 28.4 156.7 40.6

137.8 1,437.4 159.7 130.8 443.3 502.4 17.5 139.8 43.9

2040

Employment by Industry, 2008 and Projected 2018 Employment (thousands of jobs)

Industry Furniture and related product manufacturing Household and institutional furniture and kitchen cabinet manufacturing Office furniture (including fixtures) manufacturing Other furniture-related product manufacturing Miscellaneous manufacturing Medical equipment and supplies manufacturing Other miscellaneous manufacturing Wholesale trade Retail trade Transportation and warehousing Air transportation Rail transportation Water transportation Truck transportation Transit and ground passenger transportation Pipeline transportation Scenic and sightseeing transportation and support activities for transportation Postal Service Couriers and messengers Warehousing and storage Information Publishing industries Newspaper, periodical, book, and directory publishers Software publishers Motion picture, video, and sound recording industries Broadcasting (except Internet) Telecommunications Data processing, hosting, related services, and other information services Finance and insurance Monetary authorities, credit intermediation, and related activities Securities, commodity contracts, and other financial investments and related activities Insurance carriers and related activities Insurance carriers Agencies, brokerages, and other insurance-related activities Funds, trusts, and other financial vehicles Real estate, rental, and leasing Real estate Rental and leasing services and lessors of intangible assets Automotive equipment rental and leasing Consumer goods rental and general rental centers

2007 NAICS Number

2008

Projected 2018

481.0

511.5

306.0 131.2 43.8 630.7 309.7 321.0 5,963.9 15,356.4 4,504.9 492.6 229.5 65.2 1,391.0 418.0 42.0

339.4 129.8 42.3 758.9 359.5 399.4 6,219.8 16,010.4 4,950.4 529.4 240.4 66.9 1,534.2 471.4 38.2

487, 488 491 492 493 51 511 5111 5112 512 515 517

617.9 747.5 575.9 672.8 2,996.9 882.6 618.9 263.7 381.6 316.0 1,021.5

726.1 650.0 588.1 755.7 3,115.0 842.0 499.2 342.8 427.5 339.5 931.9

518, 519 52

395.2 6,015.3

574.1 6,336.9

521, 522

2,758.1

2,895.5

523 524 5241 5242 525 53 531 532, 533 5321 5322, 5323

858.1 2,308.8 1,401.8 907.0 90.3 2,130.2 1,481.1 649.1 194.6 298.1

959.1 2,376.4 1,338.2 1,038.2 105.9 2,365.8 1,677.2 688.6 214.6 308.3

337 3371 3372 3379 339 3391 3399 42 44, 45 48, 492, 493 481 482 483 484 485 486

Employment by Industry, 2008 and Projected 2018

2041

Employment (thousands of jobs) Industry Commercial and industrial machinery and equipment rental and leasing Lessors of nonfinancial intangible assets (except copyrighted works) Professional, scientific, and technical services Legal services Accounting, tax preparation, bookkeeping, and payroll services Architectural, engineering, and related services Specialized design services Computer systems design and related services Management, scientific, and technical consulting services Scientific research and development services Advertising and related services Other professional, scientific, and technical services Management of companies and enterprises Administrative and support and waste management and remediation services Administrative and support services Office administrative services Facilities support services Employment services Business support services Travel arrangement and reservation services Investigation and security services Services to buildings and dwellings Other support services Waste management and remediation services Education services Elementary and secondary schools Junior colleges, colleges, universities, and professional schools Other educational services Health care and social assistance Ambulatory health care services Offices of health practitioners Outpatient, laboratory, and other ambulatory care services Home health care services Hospitals, private Nursing and residential care facilities Social assistance Individual and family services Community, and vocational rehabilitation services Child day care services

2007 NAICS Number

2008

Projected 2018

5324

128.2

127.8

533 54 5411

28.2 7,829.6 1,163.7

37.9 10,486.1 1,416.8

5412 5413 5414 5415 5416 5417 5418 5419 55

950.1 1,444.7 143.1 1,450.3 1,008.9 621.7 462.3 584.8 1,894.6

1,149.2 1,769.5 208.7 2,106.7 1,844.1 778.9 499.3 712.9 1,997.0

56 561 5611 5612 5613 5614 5615 5616 5617 5619 562 61 6111

8,053.8 7,693.6 403.3 132.7 3,144.4 823.2 227.7 806.8 1,847.1 308.4 360.2 3,036.5 854.9

9,484.8 9,033.8 483.3 173.6 3,744.1 948.3 224.7 960.0 2,182.6 317.2 451.0 3,842.0 1,089.7

6112, 6113 1,602.7 6114-7 578.9 62 15,818.7 621 5,660.8 6211, 6212, 6213 3,713.3

1,857.4 894.9 19,815.6 7,675.9 4,978.6

6214, 6215, 6219 6216 622 623 624 6241 6242, 6243 6244

989.5 958.0 4,641.2 3,008.0 2,508.7 1,108.6 540.9 859.2

1,297.9 1,399.4 5,191.9 3,644.8 3,303.0 1,638.8 672.0 992.2

2042

Employment by Industry, 2008 and Projected 2018 Employment (thousands of jobs)

Industry Arts, entertainment, and recreation Performing arts, spectator sports, and related industries Performing arts companies Spectator sports Promoters of events, and agents and managers Independent artists, writers, and performers Museums, historical sites, and similar institutions Amusement, gambling, and recreation industries Accommodation and food services Accommodation Food services and drinking places Other services Repair and maintenance Automotive repair and maintenance Electronic and precision equipment repair and maintenance Commercial and industrial machinery and equipment (except automotive and electronic) repair and maintenance Personal and household goods repair and maintenance Personal and laundry services Personal care services Death care services Drycleaning and laundry services Other personal services Religious, grantmaking, civic, professional, and similar organizatons Religious organizations Grantmaking and giving services and social advocacy organizations Civic, social, professional, and similar organizations Private households Federal government Postal Service Federal electric utilities Federal enterprises except the Postal Service and electric utilities Federal defense government Federal non-defense government except enterprises Federal government except enterprises State and local government Local government passenger transit Local government enterprises except passenger transit Local government hospitals—compensation Local government educational services—compensation

2007 NAICS Number

2008

Projected 2018

1,969.5 406.4 117.8 128.8 109.4 50.4 131.8 1,431.3 11,489.2 1,857.3 9,631.9 6,333.2 1,228.2 858.3

2,273.7 468.1 126.7 145.9 130.7 64.8 160.7 1,644.9 12,327.4 1,956.7 10,370.7 7,141.9 1,290.7 911.9

8112

104.4

110.7

8113 8114 812 8121 8122 8123 8129

191.5 74.0 1,326.7 621.6 136.2 334.8 234.1

199.7 68.4 1,588.7 819.1 145.3 347.9 276.4

NA 8131

2,973.3 1,684.2

3,352.5 1,881.8

8132, 8133 8134, 8139 814 NA 491 NA

351.1 938.0 805.0 2764.3 747.5 24.0

387.4 1,083.3 910.0 2859.1 650.0 19.0

63.5 496.3 1433.0 1,929.3 19,735.2 268.6 1,326.4 662.6 8,075.6

44.9 547.1 1598.1 2,145.2 21,326.7 342.6 1,499.1 669.0 8,728.3

71 711 7111 7112 7113, 7114 7115 712 713 72 721 722 81 811 8111

NA NA NA NA NA NA NA NA NA

Employment by Industry, 2008 and Projected 2018

2043

Employment (thousands of jobs) Industry Local government excluding enterprises, educational services, and hospitals—compensation State government enterprises State government hospitals—compensation State government educational services—compensation State government, other compensation State and local government capital services General state and local government except compensation and capital services Owner-occupied dwellings Agriculture, forestry, fishing, and hunting 3 Crop production Animal production Forestry Logging Fishing, hunting, and trapping Support activities for agriculture and forestry Nonagriculture self-employed and unpaid family worker 4 Secondary wage and salary jobs in agriculture and private household industries 5 Secondary jobs as a self-employed or unpaid family worker 6

2007 NAICS Number NA NA NA NA NA NA NA NA 11 111 112 1131, 1132 1133 114 115

2008

Projected 2018

4,224.1 533.8 363.4 2,359.0 1,921.7 —

4,464.0 578.3 377.3 2,584.0 2,084.1 —

— — 2,098.3 950.6 860.6 16.8 82.0 47.0 141.3 9,312.6

— — 2,020.1 880.7 823.9 18.0 100.2 47.1 150.1 9,943.1

181.7 1,524.3

191.6 1,607.3

Source: Employment Projections Program, U.S. Department of Labor, U.S. Bureau of Labor Statistics. Accessed February, 2011. Available at http://www.bls.gov/emp/ep_table_207.htm. — Dash indicates data not available. NA = not applicable n.e.c. = not elsewhere classified. 1. Employment data for wage and salary workers are from the U.S. Bureau of Labor Statistics’ Current Employment Statistics survey, which counts jobs, whereas self-employed, unpaid family workers, and agriculture, forestry, fishing, and hunting are from the Current Population Survey (household survey), which counts workers. 2. Output subcategories do not necessarily add to higher categories as a by-product of chain-weighting. 3. Includes agriculture, forestry, fishing, and hunting wage and salary, self-employed, and unpaid family workers. Data from the Current Population Survey, except logging, which is from Current Employment Statistics survey. Government wage and salary workers are excluded. 4. Comparable estimate of output growth is not available. 5. Workers who hold a secondary wage and salary job in agricultural production, forestry, fishing, and private household industries. 6. Wage and salary workers who hold a secondary job as a self-employed or unpaid family worker.

Fortune 500 Companies by Industry, 2009 The following data are aggregated from CNN.Money.com, Fortune 500, http://money.cnn.com/magazines/fortune/fortune500/2010/industries/140/index.html. Revenues are rendered in millions of dollars. Employees are in real numbers, for the year 2009. Advertising, Marketing Rank 1 2

Company Omnicom Group Interpublic Group

F500 Rank

Revenues

Employees

198 358

11,720.7 6,027.6

63,000 40,000

F500 Rank

Revenues

Employees

28 37 44 61 69 74 95 148 214 220 325 334 454 462

68,281.0 52,920.0 45,189.0 35,291.0 31,981.0 30,908.0 24,881.0 15,615.0 10,904.5 10,548.0 6,913.8 6,685.6 4,583.2 4,470.0

157,100 206,700 140,000 120,700 91,700 122,000 75,000 67,000 40,200 32,000 20,600 24,000 19,000 19,300

F500 Rank

Revenues

Employees

84 120 140 183 222 229

28,063.0 19,917.0 16,335.0 12,586.0 10,458.0 10,350.0

81,106 78,900 47,000 39,640 31,300 34,726

F500 Rank

Revenues

Employees

124 310 417

19,176.1 7,220.3 5,018.9

34,300 45,700 17,000

Aerospace and Defense Rank

Company

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Boeing United Technologies Lockheed Martin Northrop Grumman General Dynamics Honeywell International Raytheon L-3 Communications ITT Textron Precision Castparts Goodrich Alliant Techsystems Rockwell Collins

Airlines Rank 1 2 3 4 5 6

Company Delta Air Lines AMR UAL Continental Airlines US Airways Group Southwest Airlines

Apparel Rank 1 2 3

Company Nike VF Polo Ralph Lauren

2044

Fortune 500 Companies by Industry, 2009

2045

Automotive Retailing, Services Rank 1 2 3 4 5 6 7

Company AutoNation Penske Automotive Group Hertz Global Holdings CarMax Sonic Automotive Avis Budget Group Group 1 Automotive

F500 Rank

Revenues

Employees

212 245 318 323 345 409 457

11,015.6 9,558.1 7,101.5 7,028.3 6,349.7 5,131.0 4,525.7

18,000 13,950 23,050 13,035 9,200 18,700 6,990

F500 Rank

Revenues

Employees

72 113 174 378 464

30,990.0 21,645.0 13,219.0 5,531.0 4,421.3

92,800 70,000 64,900 19,000 18,700

F500 Rank

Revenues

Employees

46 86 190 197 231 262 273 280 293 319 362 365 414 415 453

44,945.0 27,328.0 12,239.0 11,740.0 10,298.0 8,956.0 8,381.4 8,106.0 7,763.0 7,094.2 5,952.7 5,900.6 5,082.0 5,047.0 4,586.3

52,195 58,000 38,500 24,950 7,500 26,164 18,650 14,700 11,000 29,220 31,300 25,930 7,400 10,000 6,700

F500 Rank

Revenues

Employees

5 9 12 19 39 70 88 121

150,450.0 115,632.0 108,785.0 98,636.0 51,673.0 31,515.0 26,730.0 19,490.0

283,717 222,316 267,150 267,300 36,200 61,388 58,300 58,229

Beverages Rank 1 2 3 4 5

Company Coca-Cola Coca-Cola Enterprises Pepsi Bottling Dr Pepper Snapple Group PepsiAmericas

Chemicals Rank

Company

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Dow Chemical DuPont PPG Industries Monsanto Mosaic Praxair Air Products & Chemicals Ashland Huntsman Sherwin-Williams Avery Dennison Ecolab Celanese Eastman Chemical Lubrizol

Commercial Banks Rank 1 2 3 4 5 6 7 8

Company Bank of America Corp. JPMorgan Chase & Co. Citigroup Wells Fargo Goldman Sachs Group Morgan Stanley American Express U.S. Bancorp

2046

Fortune 500 Companies by Industry, 2009

Rank

Company

9 10 11 12 13 14 15 16 17 18 19 20

GMAC PNC Financial Services Group Capital One Financial BB&T Corp. SunTrust Banks Fifth Third Bancorp State Street Corp. Regions Financial Bank of New York Mellon Corp. Discover Financial Services KeyCorp Northern Trust Corp.

F500 Rank

Revenues

Employees

122 123 144 217 224 248 249 254 274 286 356 497

19,403.0 19,231.0 15,980.1 10,818.0 10,420.0 9,450.0 9,362.0 9,087.1 8,345.0 7,985.7 6,068.0 4,193.1

18,800 52,791 28,000 32,394 28,001 20,998 27,310 28,509 42,200 10,500 16,698 12,400

F500 Rank

Revenues

Employees

166 304

14,025.9 7,453.0

43,200 45,991

F500 Rank

Revenues

Employees

36 105 353 482 494

58,437.0 23,252.0 6,149.9 4,271.0 4,212.0

93,000 86,000 17,400 13,200 9,100

F500 Rank

Revenues

Employees

10 38 56 152 204 375 451

114,552.0 52,902.0 36,537.0 15,179.0 11,449.0 5,569.2 4,612.0

304,000 95,150 36,800 53,600 29,000 33,004 21,500

F500 Rank

Revenues

Employees

66 107 218 337 402

32,396.0 23,112.4 10,800.0 6,630.4 5,205.0

93,813 51,262 34,900 14,500 15,900

Computer Peripherals Rank 1 2

Company EMC Western Digital

Computer Software Rank 1 2 3 4 5

Company Microsoft Oracle Symantec CA Electronic Arts

Computers, Office Equipment Rank 1 2 3 4 5 6 7

Company Hewlett-Packard Dell Apple Xerox Sun Microsystems Pitney Bowes NCR

Construction and Farm Machinery Rank 1 2 3 4 5

Company Caterpillar Deere Cummins AGCO Terex

Fortune 500 Companies by Industry, 2009

2047

Diversified Financials Rank 1 2 3 4 5 6 7 8 9

Company General Electric International Assets Holding Freddie Mac Fannie Mae Marsh & McLennan Ameriprise Financial Aon SLM H&R Block

F500 Rank

Revenues

Employees

4 49 54 81 221 288 298 354 493

156,779.0 43,604.4 37,614.0 29,065.0 10,493.0 7,946.0 7,595.0 6,144.7 4,213.4

304,000 625 5,366 6,000 52,000 9,793 36,200 8,000 71,000

F500 Rank

Revenues

Employees

189 265

12,297.9 8,867.1

210,000 45,000

F500 Rank

Revenues

Employees

117 136 469 476

20,915.0 17,099.0 4,385.2 4,332.5

129,000 66,884 11,300 19,000

F500 Rank

Revenues

Employees

149 156 172 246 263 276 302 338 368 369

15,598.8 14,690.0 13,489.0 9,546.0 8,952.0 8,255.0 7,499.8 6,564.0 5,818.4 5,737.8

7,200 27,000 21,673 9,030 4,607 4,801 5,025 2,046 250 9,700

F500 Rank

Revenues

Employees

111 193 203 238 252 309

21,990.3 12,105.0 11,467.4 9,985.0 9,249.1 7,279.7

36,152 51,000 46,050 25,900 41,700 28,000

Diversified Outsourcing Services Rank 1 2

Company Aramark Automatic Data Processing

Electronics, Electrical Equipment Rank 1 2 3 4

Company Emerson Electric Whirlpool General Cable Rockwell Automation

Energy Rank

Company

1 2 3 4 5 6 7 8 9 10

Constellation Energy AES American Electric Power Energy Future Holdings NRG Energy Williams Integrys Energy Group Calpine Global Partners UGI

Engineering, Construction Rank 1 2 3 4 5 6

Company Fluor KBR Jacobs Engineering Group Peter Kiewit Sons’ URS Shaw Group

2048

Fortune 500 Companies by Industry, 2009

Rank

Company

7 8 9 10

AECOM Technology Emcor Group CH2M Hill Tutor Perini

F500 Rank

Revenues

Employees

352 377 381 407

6,192.4 5,547.9 5,499.3 5,152.0

43,200 25,000 23,500 4,072

F500 Rank

Revenues

Employees

57 76 82 170 177 376 490

36,149.0 30,423.0 28,842.0 13,619.0 13,014.6 5,551.9 4,232.0

144,000 55,000 31,000 11,200 25,580 19,295 4,300

F500 Rank

Revenues

Employees

250 326 380 411 413 491

9,313.8 6,911.0 5,508.0 5,098.7 5,083.6 4,224.0

24,402 5,700 20,700 5,100 6,800 20,000

F500 Rank

Revenues

Employees

18 23 32 47 52 89 99 247 284 306

98,729.0 76,733.2 63,335.0 44,564.0 40,850.7 26,289.5 24,515.0 9,516.2 8,031.6 7,367.0

169,000 334,000 202,000 178,000 186,000 80,340 105,500 31,680 47,750 36,500

F500 Rank

Revenues

Employees

50 53 155 178 180

43,232.0 40,386.0 14,691.3 12,980.8 12,881.0

203,000 97,000 30,000 25,600 41,000

Entertainment Rank 1 2 3 4 5 6 7

Company Walt Disney News Corp. Time Warner Viacom CBS CC Media Holdings Live Nation Entertainment

Financial Data Services Rank 1 2 3 4 5 6

Company First Data Visa SunGard Data Systems MasterCard Western Union Fiserv

Food and Drug Stores Rank

Company

1 2 3 4 5 6 7 8 9 10

CVS Caremark Kroger Walgreen Supervalu Safeway Rite Aid Publix Super Markets Great Atlantic & Pacific Tea Whole Foods Market Winn-Dixie Stores

Food Consumer Products Rank 1 2 3 4 5

Company PepsiCo Kraft Foods General Mills ConAgra Foods Sara Lee

Fortune 500 Companies by Industry, 2009 Rank

Company

6 7 8 9 10 11 12 13

Kellogg Dean Foods Land O’Lakes H. J. Heinz Campbell Soup Dole Food Hormel Foods Hershey

2049

F500 Rank

Revenues

Employees

184 208 226 233 299 331 340 395

12,575.0 11,158.4 10,408.5 10,148.1 7,586.0 6,782.7 6,533.7 5,298.7

30,949 27,157 9,000 32,400 18,700 57,350 18,600 12,900

F500 Rank

Revenues

Employees

27 87 163 317

69,207.0 27,165.0 14,190.5 7,113.8

28,200 117,000 52,400 41,240

F500 Rank

Revenues

Employees

108 216 241 311

22,744.7 10,836.0 9,774.6 7,217.5

385,000 199,500 142,000 179,000

F500 Rank

Revenues

Employees

104 379 383 472

23,366.0 5,528.0 5,465.0 4,366.0

56,100 14,900 10,000 12,100

F500 Rank

Revenues

Employees

1 30 48 103 133 135 195 270 305 348

408,214.0 65,357.0 44,043.0 23,489.0 17,556.0 17,178.0 11,796.4 8,627.0 7,400.6 6,226.6

2,100,000 351,000 322,000 161,300 154,000 81,000 79,800 48,000 37,000 35,312

Food Production Rank 1 2 3 4

Company Archer Daniels Midland Tyson Foods Smithfield Foods Pilgrim’s Pride

Food Services Rank 1 2 3 4

Company McDonald’s Yum Brands Starbucks Darden Restaurants

Forest and Paper Products Rank 1 2 3 4

Company International Paper Weyerhaeuser Domtar AbitibiBowater

General Merchandisers Rank

Company

1 2 3 4 5 6 7 8 9 10

Wal-Mart Stores Target Sears Holdings Macy’s JCPenney Kohl’s Dollar General Nordstrom Family Dollar Stores Dillard’s

2050

Fortune 500 Companies by Industry, 2009

Health Care: Insurance and Managed Care Rank

Company

1 2 3 4 5 6 7 8 9 10 11

UnitedHealth Group WellPoint Aetna Humana Cigna Health Net Coventry Health Care WellCare Health Plans Amerigroup Universal American Centene

F500 Rank

Revenues

Employees

21 31 63 73 129 146 168 328 404 425 486

87,138.0 65,028.1 34,764.1 30,960.4 18,414.0 15,713.2 13,993.3 6,878.2 5,188.1 4,963.5 4,248.0

80,000 40,500 35,000 28,100 29,300 8,821 14,400 3,419 4,000 2,200 3,900

F500 Rank

Revenues

Employees

191 253 355 403 443 477

12,149.7 9,215.0 6,108.8 5,202.4 4,687.3 4,326.3

68,885 50,411 34,000 34,000 30,100 46,800

F500 Rank

Revenues

Employees

35 77 96 303 347 442

59,804.2 30,052.0 24,748.9 7,455.2 6,242.7 4,694.7

22,375 165,500 14,270 43,000 14,450 28,000

F500 Rank

Revenues

Employees

291 351 373 406 435

7,858.0 6,205.4 5,577.6 5,152.6 4,775.1

35,400 24,248 19,500 20,000 19,900

F500 Rank

Revenues

Employees

213 264 360

10,908.0 8,907.4 5,978.6

137,000 69,000 54,000

Health Care: Medical Facilities Rank 1 2 3 4 5 6

Company Community Health Systems Tenet Healthcare DaVita Universal Health Services Health Management Associates Kindred Healthcare

Health Care: Pharmacy and Other Services Rank 1 2 3 4 5 6

Company Medco Health Solutions HCA Express Scripts Quest Diagnostics Omnicare Laboratory Corp. of America

Home Equipment, Furnishings Rank 1 2 3 4 5

Company Masco Fortune Brands Newell Rubbermaid Jarden Black & Decker

Hotels, Casinos, Resorts Rank 1 2 3

Company Marriott International Harrah’s Entertainment MGM Mirage

Fortune 500 Companies by Industry, 2009 Rank 4 5 6

Company Starwood Hotels & Resorts Las Vegas Sands Host Hotels & Resorts

2051

F500 Rank

Revenues

Employees

438 456 492

4,712.0 4,563.1 4,216.0

145,000 27,000 186

F500 Rank

Revenues

Employees

22 126 151 228 308 384

79,697.0 19,115.0 15,327.0 10,382.8 7,323.8 5,450.0

135,000 56,000 38,100 41,000 31,300 8,300

F500 Rank

Revenues

Employees

169 194 230 367 427 473

13,903.6 11,873.0 10,309.0 5,831.0 4,935.9 4,365.3

59,000 70,000 51,639 29,300 15,000 15,000

F500 Rank

Revenues

Employees

20 138 215 341 452

95,758.0 16,739.9 10,847.0 6,523.2 4,597.7

399,409 92,000 46,200 74,000 25,600

F500 Rank

Revenues

Employees

64 90 93 115 237 342 408 420

34,014.3 26,278.0 25,423.6 21,602.6 10,040.9 6,514.8 5,149.6 5,014.4

16,835 6,890 11,000 4,783 4,870 3,010 5,067 2,275

Household and Personal Products Rank 1 2 3 4 5 6

Company Procter & Gamble Kimberly-Clark Colgate-Palmolive Avon Products Estée Lauder Clorox

Industrial Machinery Rank 1 2 3 4 5 6

Company Illinois Tool Works Eaton Parker Hannifin Dover SPX Flowserve

Information Technology Services Rank 1 2 3 4 5

Company International Business Machines Computer Sciences SAIC Affiliated Computer Services Unisys

Insurance: Life, Health (mutual) Rank 1 2 3 4 5 6 7 8

Company New York Life Insurance TIAA-CREF Massachusetts Mutual Life Insurance Northwestern Mutual Guardian Life Ins. Co. of America Thrivent Financial for Lutherans Mutual of Omaha Insurance Western & Southern Financial Group

2052

Fortune 500 Companies by Industry, 2009

Insurance: Life, Health (stock) Rank

Company

1 2 3 4 5 6 7 8 9 10

MetLife Prudential Financial AFLAC Unum Group Lincoln National Genworth Financial Principal Financial Reinsurance Group of America Pacific Life Conseco

F500 Rank

Revenues

Employees

51 65 130 235 256 257 266 321 401 475

41,098.0 32,688.0 18,254.4 10,091.0 9,071.8 9,069.0 8,849.1 7,066.8 5,211.0 4,341.4

54,000 41,943 8,057 9,700 9,539 6,000 14,487 1,367 2,715 3,500

F500 Rank

Revenues

Employees

34 418

61,479.6 5,017.1

67,500 3,627

F500 Rank

Revenues

Employees

11 16 68 71 97 98 118 132 161 165 176 268 344 361 366 463 478 484

112,493.0 103,189.0 32,013.0 31,094.0 24,701.0 24,680.0 20,751.0 17,557.6 14,563.6 14,123.0 13,016.0 8,700.5 6,453.4 5,972.8 5,857.7 4,431.2 4,320.6 4,255.4

222,000 96,000 36,400 45,000 28,000 32,000 32,881 21,695 24,661 18,500 10,200 14,709 7,745 30,922 17,200 6,072 7,100 4,200

F500 Rank

Revenues

Employees

100 102 227 267 343

24,509.0 23,650.6 10,398.0 8,727.4 6,460.3

24,300 19,835 23,073 16,400 13,900

Insurance: Property and Casualty (mutual) Rank 1 2

Company State Farm Insurance Cos. Auto-Owners Insurance

Insurance: Property and Casualty (stock) Rank

Company

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Berkshire Hathaway American International Group Allstate Liberty Mutual Insurance Group Hartford Financial Services Travelers Cos. Nationwide United Services Automobile Association Progressive Loews Chubb Assurant American Family Insurance Group First American Corp. Fidelity National Financial W.R. Berkley American Financial Group Erie Insurance Group

Internet Services and Retailing Rank 1 2 3 4 5

Company Amazon.com Google Liberty Media eBay Yahoo!

Fortune 500 Companies by Industry, 2009

2053

Mail, Package, and Freight Delivery Rank 1 2

Company United Parcel Service FedEx

F500 Rank

Revenues

Employees

43 60

45,297.0 35,497.0

408,000 247,908

F500 Rank

Revenues

Employees

160 185 279 312 333 445

14,599.0 12,562.0 8,188.0 7,216.7 6,723.1 4,681.3

41,000 49,700 26,000 29,116 18,582 14,000

F500 Rank

Revenues

Employees

127 206 211 327

18,745.0 11,190.3 11,048.0 6,883.4

59,000 20,400 43,000 13,586

F500 Rank

Revenues

Employees

150 154 258 260 261 271 295 296 346 434 449 498

15,531.0 15,040.0 9,064.0 9,000.0 8,960.0 8,614.8 7,737.0 7,701.9 6,313.9 4,787.0 4,621.9 4,176.5

10,100 28,400 3,335 4,300 5,500 3,452 14,500 8,300 7,300 2,100 8,012 8,081

F500 Rank

Revenues

Employees

8 15 83 141 201 202 242

118,308.0 104,589.0 28,497.0 16,301.0 11,614.0 11,569.0 9,739.6

198,000 217,000 130,000 69,000 60,550 15,100 74,870

Medical Products and Equipment Rank 1 2 3 4 5 6

Company Medtronic Baxter International Boston Scientific Becton Dickinson Stryker St. Jude Medical

Metals Rank 1 2 3 4

Company Alcoa Nucor United States Steel Commercial Metals

Mining, Crude-Oil Production Rank

Company

1 2 3 4 5 6 7 8 9 10 11 12

Occidental Petroleum Freeport-McMoRan Copper & Gold XTO Energy Anadarko Petroleum Devon Energy Apache Newmont Mining Chesapeake Energy Peabody Energy EOG Resources Consol Energy MDU Resources Group

Motor Vehicles and Parts Rank 1 2 3 4 5 6 7

Company Ford Motor General Motors Johnson Controls Goodyear Tire & Rubber TRW Automotive Holdings Navistar International Lear

2054

Fortune 500 Companies by Industry, 2009

Rank

Company

8 9 10 11 12 13 14 15

Paccar Icahn Enterprises Visteon Oshkosh Dana Holding Autoliv Tenneco ArvinMeritor

F500 Rank

Revenues

Employees

282 290 335 386 398 410 446 450

8,086.5 7,865.0 6,685.0 5,433.3 5,228.0 5,120.7 4,649.0 4,617.0

15,200 42,368 29,500 12,300 24,000 34,053 21,000 13,200

F500 Rank

Revenues

Employees

58 110 225 371 391

36,117.0 22,063.0 10,416.0 5,599.6 5,395.0

65,550 53,000 16,100 15,400 23,500

F500 Rank

Revenues

Employees

158 182 243 277 399 467

14,675.0 12,712.0 9,664.0 8,218.6 5,223.2 4,405.4

51,000 34,613 34,400 21,931 18,100 10,400

F500 Rank

Revenues

Employees

289 307 322 357 374 487

7,938.0 7,345.3 7,066.5 6,049.0 5,574.0 4,242.8

20,510 14,500 22,000 20,000 19,000 16,200

F500 Rank

Revenues

Employees

2 3 6 26 41 78 79

284,650.0 163,527.0 139,515.0 70,035.0 49,403.0 29,630.0 29,569.0

102,700 64,132 30,000 20,920 28,855 11,200 13,300

Network and Other Communications Equipment Rank 1 2 3 4 5

Company Cisco Systems Motorola Qualcomm Harris Corning

Oil and Gas Equipment, Services Rank 1 2 3 4 5 6

Company Halliburton National Oilwell Varco Baker Hughes Smith International Cameron International FMC Technologies

Packaging, Containers Rank 1 2 3 4 5 6

Company Crown Holdings Ball Owens-Illinois MeadWestvaco Smurfit-Stone Container Sealed Air

Petroleum Refining Rank 1 2 3 4 5 6 7

Company Exxon Mobil Chevron ConocoPhillips Valero Energy Marathon Oil Sunoco Hess

Fortune 500 Companies by Industry, 2009 Rank

Company

8 9 10 11 12

Murphy Oil Tesoro Western Refining Holly Frontier Oil

2055

F500 Rank

Revenues

Employees

125 139 330 431 488

19,138.0 16,589.0 6,807.4 4,834.3 4,237.2

5,815 5,500 3,300 1,632 843

F500 Rank

Revenues

Employees

33 40 75 85 112 114 159 324 412 458 459 471

61,897.0 50,009.0 30,764.7 27,428.3 21,836.0 21,634.0 14,642.0 7,011.4 5,092.8 4,515.5 4,503.6 4,377.3

115,500 116,500 72,868 100,000 40,360 28,000 17,100 3,874 14,000 12,000 8,300 4,750

F500 Rank

Revenues

Employees

92 128 209 315 364 388 437 447

25,510.9 18,520.0 11,111.7 7,185.2 5,905.4 5,417.3 4,725.0 4,631.0

4,800 3,400 4,758 7,931 2,000 5,581 5,400 4,991

F500 Rank

Revenues

Employees

240 363 370

9,857.4 5,951.8 5,613.0

56,800 21,077 35,000

F500 Rank

Revenues

Employees

164 167 259 287

14,143.0 14,016.0 9,041.0 7,969.0

43,531 37,363 30,088 28,593

Pharmaceuticals Rank

Company

1 2 3 4 5 6 7 8 9 10 11 12

Johnson & Johnson Pfizer Abbott Laboratories Merck Eli Lilly Bristol-Myers Squibb Amgen Gilead Sciences Mylan Genzyme Allergan Biogen Idec

Pipelines Rank 1 2 3 4 5 6 7 8

Company Enterprise GP Holdings Plains All American Pipeline Oneok Kinder Morgan Enbridge Energy Partners Energy Transfer Equity Spectra Energy El Paso

Publishing, Printing Rank 1 2 3

Company R. R. Donnelley & Sons McGraw-Hill Gannett

Railroads Rank 1 2 3 4

Company Union Pacific Burlington Northern Santa Fe CSX Norfolk Southern

2056

Fortune 500 Companies by Industry, 2009

Scientific, Photographic, and Control Equipment Rank 1 2 3 4

Company Danaher Thermo Fisher Scientific Eastman Kodak Agilent Technologies

F500 Rank

Revenues

Employees

207 234 297 461

11,184.9 10,109.7 7,606.0 4,481.0

46,600 35,400 20,250 16,800

F500 Rank

Revenues

Employees

441 444 465 495

4,699.3 4,687.0 4,414.0 4,194.1

8,629 3,367 12,400 7,700

F500 Rank

Revenues

Employees

62 199 223 390 405 421 432 460

35,127.0 11,684.5 10,427.0 5,403.0 5,177.5 5,013.6 4,803.0 4,490.3

79,800 61,000 26,584 13,395 35,150 12,826 18,200 7,407

F500 Rank

Revenues

Employees

25 29 42 45 101 119 162 171 192 232 255 269 313 314 316 329 372 382 389

71,422.0 66,176.0 47,220.0 45,015.0 24,275.5 20,288.4 14,197.0 13,568.0 12,144.5 10,187.0 9,078.0 8,632.5 7,212.1 7,208.3 7,184.2 6,816.8 5,596.3 5,472.0 5,412.6

110,500 255,185 202,500 155,000 72,622 154,000 135,000 67,425 41,000 23,500 32,081 54,600 25,500 37,000 29,450 47,100 37,000 11,052 39,000

Securities Rank 1 2 3 4

Company BlackRock NYSE Euronext Charles Schwab Franklin Resources

Semiconductors and Other Electronic Components Rank 1 2 3 4 5 6 7 8

Company Intel Jabil Circuit Texas Instruments Advanced Micro Devices Sanmina-SCI Applied Materials Micron Technology Broadcom

Specialty Retailers Rank

Company

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Costco Wholesale Home Depot Lowe’s Best Buy Staples TJX Gap Toys “R” Us Office Depot BJ’s Wholesale Club GameStop Limited Brands OfficeMax Bed Bath & Beyond Ross Stores AutoZone Barnes & Noble Pantry Advance Auto Parts

Fortune 500 Companies by Industry, 2009 Rank

Company

20 21 22 23 24 25 26 27 28 29

PetSmart Dollar Tree Foot Locker O’Reilly Automotive Big Lots TravelCenters of America Dick’s Sporting Goods RadioShack Casey’s General Stores Blockbuster

2057

F500 Rank

Revenues

Employees

393 397 428 429 436 440 466 481 485 500

5,336.4 5,231.2 4,854.0 4,847.1 4,726.8 4,699.8 4,412.8 4,276.0 4,251.5 4,161.8

33,500 33,480 26,018 37,601 24,350 14,680 17,700 35,750 13,260 36,500

F500 Rank

Revenues

Employees

7 13 59 67 116 131 188 200 210 292 332 359 416 423 468

123,018.0 107,808.0 35,756.0 32,260.0 21,565.0 17,868.0 12,311.0 11,664.2 11,110.4 7,773.3 6,755.0 6,013.6 5,020.7 4,974.2 4,397.6

282,720 222,927 107,000 40,000 22,550 46,300 30,138 24,500 23,000 22,368 16,700 12,201 12,400 20,200 13,673

F500 Rank

Revenues

Employees

143 479

16,038.7 4,314.8

28,000 7,900

F500 Rank

Revenues

Employees

94 137 272

25,035.0 16,824.0 8,419.0

77,300 10,000 6,475

F500 Rank

Revenues

Employees

301 483

7,577.2 4,269.2

7,347 27,454

Telecommunications Rank

Company

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

AT&T Verizon Communications Comcast Sprint Nextel DirecTV Group Time Warner Cable Qwest Communications DISH Network Liberty Global Cablevision Systems Charter Communications Virgin Media Telephone & Data Systems CenturyTel NII Holdings

Temporary Help Rank 1 2

Company Manpower Kelly Services

Tobacco Rank 1 2 3

Company Philip Morris International Altria Group Reynolds American

Transportation and Logistics Rank 1 2

Company C. H. Robinson Worldwide Con-way

2058

Fortune 500 Companies by Industry, 2009

Trucking, Truck Leasing Rank 1 2

Company YRC Worldwide Ryder System

F500 Rank

Revenues

Employees

396 426

5,282.8 4,957.6

36,000 22,900

F500 Rank

Revenues

Employees

134 145 147 153 173 175 179 181 186 187 219 239 244 251 275 280 285 300 320 336 350 385 424 489 496

17,318.0 15,743.0 15,643.0 15,131.0 13,399.0 13,031.6 12,967.0 12,731.0 12,406.0 12,361.0 10,745.7 9,885.0 9,644.3 9,259.0 8,281.0 8,106.0 8,014.0 7,585.0 7,090.0 6,652.9 6,212.0 5,439.4 4,969.1 4,237.0 4,193.2

19,329 26,112 15,400 17,900 19,425 15,534 13,379 18,680 10,352 19,244 15,181 11,000 11,351 5,110 8,810 13,839 10,244 10,489 9,780 7,616 8,039 6,078 4,691 5,828 4,692

F500 Rank

Revenues

Employees

196 278

11,791.0 8,199.1

43,400 31,000

F500 Rank

Revenues

Employees

205 236 349 394 422 448

11,295.2 10,057.5 6,222.0 5,318.1 4,982.4 4,624.0

1,249 29,000 17,250 8,870 7,811 6,100

Utilities: Gas and Electric Rank

Company

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Exelon Southern FPL Group Dominion Resources PG&E Corp. Consolidated Edison FirstEnergy Duke Energy Public Service Enterprise Group Edison International Entergy Progress Energy Xcel Energy Pepco Holdings CenterPoint Energy Sempra Energy DTE Energy PPL Ameren NiSource CMS Energy Northeast Utilities Atmos Energy Scana Wisconsin Energy

Waste Management Rank 1 2

Company Waste Management Republic Services

Wholesalers: Diversified Rank 1 2 3 4 5 6

Company World Fuel Services Genuine Parts W. W. Grainger Reliance Steel & Aluminum Anixter International Wesco International

Fortune 500 Companies by Industry, 2009 Rank 7 8

Company Graybar Electric Airgas

2059

F500 Rank

Revenues

Employees

470 474

4,377.9 4,349.5

6,900 14,000

F500 Rank

Revenues

Employees

80 109 142 157 294 439

29,515.4 22,099.9 16,229.9 14,684.1 7,756.3 4,710.3

13,750 7,628 12,900 11,300 7,320 5,700

F500 Rank

Revenues

Employees

55 91 400 419

36,853.3 25,729.9 5,212.7 5,015.6

47,000 8,211 6,297 4,267

F500 Rank

Revenues

Employees

14 17 24 283 339

106,632.0 99,612.9 71,789.0 8,037.6 6,546.3

32,500 46,500 9,700 4,800 12,500

F500 Rank

Revenues

Employees

106 387 392 430 432 455 480 499

23,123.0 5,430.8 5,344.0 4,838.6 4,803.0 4,569.7 4,293.3 4,165.8

74,835 27,000 27,400 7,900 16,000 21,500 142 29,000

Wholesalers: Electronics and Office Equipment Rank 1 2 3 4 5 6

Company Ingram Micro Tech Data Avnet Arrow Electronics Synnex United Stationers

Wholesalers: Food and Grocery Rank 1 2 3 4

Company Sysco CHS Nash-Finch Core-Mark Holding

Wholesalers: Health Care Rank 1 2 3 4 5

Company McKesson Cardinal Health AmerisourceBergen Owens & Minor Henry Schein

Miscellaneous Rank 1 2 3 4 5 6 7 8

Company 3M Mattel Mohawk Industries Harley-Davidson Owens Corning Washington Post Spectrum Group International CB Richard Ellis Group

Bibliography The following electronic resources—both general and targeted by industry—will assist students and other career seekers in assessing the industry as a focal point of a career or job hunt. GENERAL

REFERENCE

Van Horn, Carl E., and Herbert A. Schaffner, eds. Work in America: An Encyclopedia of History, Policy, and Society. 2 vols. Santa Barbara, Calif.: ABC-CLIO, 2003. Wilson, Richard L., ed. Historical Encyclopedia of American Business. 3 vols. Pasadena, Calif.: Salem Press, 2009. Zielinski, Jennifer, ed. Dun & Bradstreet/Gale Group Industry Handbook. 5 vols. Detroit: Gale Group, 2000.

Brock, James, ed. The Structure of American Industry. 12th ed. Upper Saddle River, N.J.: Pearson/Prentice Hall, 2009. Career Information Center. 9th ed. New York: Macmillan Reference USA, 2006. Duetsch, Larry L., ed. Industry Studies. 3d ed. Armonk, N.Y.: M. E. Sharpe, 2002. Encyclopedia of American Industries. 5th ed. 2 vols. Millerton, N.Y.: Grey House, 2008. Encyclopedia of Careers and Vocational Guidance. 15th ed. 5 vols. New York: Ferguson, 2010. Encyclopedia of Emerging Industries. Armenia, N.Y.: Grey House, 2007. Executive Office of the President. Office of Management and Budget. North American Industry Classification System: United States, 2007. Springfield, Va.: National Technical Information Service, U.S. Department of Commerce. 2007. _______. Standard Occupational Classification Manual. 2010 ed. Alexandria, Va.: National Technical Information Service, U.S. Department of Commerce, 2010. Farr, Michael. One Hundred Fastest-Growing Careers: Your Complete Guidebook to Major Jobs with the Most Growth and Openings. 11th ed. St. Paul, Minn.: JIST, 2010. O*NET Dictionary of Occupational Titles. 4th ed. St. Paul, Minn.: JIST, 2007. Salary Facts Handbook: The Definitive Source of Pay Information on Eight Hundred Jobs. St. Paul, Minn.: JIST, 2008. 2011 U.S. Industry and Market Outlook . Woolwich, Maine: Barnes Reports, 2010. U.S. Department of Labor. Bureau of Labor Statistics. The Big Book of Jobs. 2009-2010 ed. New York: McGraw-Hill, 2010. _______. Occupational Outlook Handbook, 2010-2011: With Bonus Content. St. Paul, Minn.: JIST, 2010.

ACCOUNTING

SERVICES

Albrecht, W. Steve, and Chad O. Albrecht. Fraud Examination. Cincinnati: Thomson SouthWestern, 2003. Flesher, Dale L. The IIA: Fifty Years of Progress Through Sharing. Altamonte Springs, Calif.: Institute of Internal Auditors, 1991. _______. One Hundred Years of NASBA: Serving the Public Interest. Nashville, Tenn.: National Association of State Boards of Accountancy, 2007. Flesher, Dale L., and Tonya K. Flesher. Accounting for the Middle Manager. Albany, N.Y.: Van Nostrand Reinhold, 1979. Gleim, Irvin N. CPA Review. 4 vols. Gainesville, Fla.: Gleim, 2010. Gleim, Irvin N., and Dale L. Flesher. CMA Review Part 1: Financial Planning, Performance, and Control. 15th ed. Gainesville, Fla.: Gleim, 2010. King, Thomas A. More than a Numbers Game: A Brief History of Accounting. New York: John Wiley & Sons, 2006. Melancon, Barry. “Trends for CPAs in 2010.” New Accountant 736 (March/April, 2010): 5ff. Miranti, Paul J., Jr. Accountancy Comes of Age: The Development of an American Profession, 1886-1940. Chapel Hill: University of North Carolina Press, 1990.

2060

Bibliography Olson, Wallace E. The Accounting Profession: Years of Trial, 1969-1980. New York: American Institute of Certified Public Accountants, 1982. Previts, Gary John, and Barbara Dubis Merino. A History of Accountancy in the United States: The Cultural Significance of Accounting. Columbus: Ohio State University Press, 1998. Roehl-Anderson, Janice M., and Steven M. Bragg. The Controller’s Function: The Work of the Managerial Accountant. 2d ed. New York: John Wiley & Sons, 2000. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

ADVERTISING AND MARKETING INDUSTRY Berners-Lee, Tim, James Hendler, and Ora Lassila. “The Semantic Web.” Scientific American, May, 2001. Cappo, Joe. The Future of Advertising: New Media, New Clients, New Consumers in the Post-television Age. New York: Crain Communications, 2003. Holme, Bryan. Advertising: Reflections of a Century. New York: Viking Press, 1982. Lears, Jackson. Fables of Abundance: A Cultural History of Advertising in America. New York: Basic Books, 1994. Luft, Oliver. “Advertising Boss: Print Will Struggle to Recover After Recession.” The Guardian, May 5, 2009. http://www.guardian .co.uk/media/2009/may/05/maurice-levy -publicis-groupe. Mackay, Adrian, ed. The Practice of Advertising. 5th ed. Oxford, England: Elsevier ButterworthHeinemann, 2005.

2061

Norris, James D. Advertising and the Transformation of American Society, 1865-1920. Westport, Conn.: Greenwood Press, 1990. Pattis, S. William. Careers in Advertising. 3d ed. Chicago: VGM Career Books, 2004. Scott, David Meerman. The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases, Online Video, and Viral Marketing to Reach Buyers Directly. 2d ed. Hoboken, N.J.: John Wiley & Sons, 2010. Strickland, Martha. “What the Semantic Web—or Web 3.0—Can Do for Marketers.” Advertising Age, November 24, 2008. http://adage.com/ digitalnext/post?article_id=132815. Twitchell, James B. Adcult USA: The Triumph of Advertising in American Culture. New York: Columbia University Press, 1996. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Wilkerson, David B. “U.S. Advertising Seen Plunging 13 Percent in 2009.” Marketwatch, March 12, 2009. http://www.marketwatch .com/story/us-advertising-revenue-plunge-13 -2009. Wilmshurst, John, and Adrian Mackay. The Fundamentals of Advertising. 2d ed. Oxford, England: Elsevier Butterworth-Heinemann, 1999.

AIRLINE

INDUSTRY

AVJobs.com. “Aviation Career Salary, Wages and Pay.” http://www.avjobs.com/salaries-wages -pay/index.asp. Belobaba, Peter, Amedeo Odoni, and Cynthia Barnhart, eds. The Global Airline Industry. Chichester, West Sussex, England: John Wiley & Sons, 2009.

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Bibliography

Dillon, Tamara. “Sky-High Careers: Jobs Related to Airlines.” Occupational Outlook Quarterly, Summer, 2007. http://stats.bls.gov/opub/ ooq/2007/summer/art01.pdf. Doganis, Rigas. The Airline Business. 2d ed. New York: Routledge, 2006. Finnegan, Joy. “Special Report: Aviation Maintenance 2007 Salary Survey.” Aviation Maintenance, September 1, 2007. http://www.aviationtoday.com/am/categories/ commercial/15370.html. Massachusetts Institute of Technology, Global Airline Industry Program. “Airline Industry Overview.” 2010. http://web.mit.edu/ airlines/analysis/analysis_airline_industry.html. Morrison, Steven A., and Clifford Winston. The Evolution of the Airline Industry. Washington, D.C.: Brookings Institution, 1995. Orenic, Liesl Miller. On the Ground: Labor Struggle in the American Airline Industry. Urbana: University of Illinois Press, 2009. Shaw, Stephen. Airline Marketing and Management. 6th ed. Burlington, Vt.: Ashgate, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Vasigh, Bijan, Ken Fleming, and Tom Tacker. Introduction to Air Transport Economics: From Theory to Applications. Burlington, Vt.: Ashgate, 2008. Wensveen, John G. Air Transportation: A Management Perspective. Burlington, Vt.: Ashgate, 2007.

ALTERNATIVE POWER INDUSTRY Brooks, H., et al. Energy in Transition, 1985-2010: Final Report of the Committee on Nuclear and

Alternative Energy Systems. Washington, D.C.: National Academies Press, 1980. Brown, Amy Kathryn. Powering the Future: The Problems and Possibilities of Green Energy. New York: International Debate Education Association, 2010. Carazo, Dan. Green Electrical Sells: Profit from the Booming Markets for Green Building and Energy Efficiency. Syosset, N.Y.: Carazo Communications, 2010. Doyle, Kevin Lee, et al. The Complete Guide to Environmental Careers in the Twenty-first Century. Washington, D.C.: Island Press, 1999. Fasulo, Michael, and Paul Walker. Careers in the Environment. 3d ed. New York: McGraw-Hill, 2007. Heintzman, Andrew. The New Entrepreneurs: Building a Green Economy for the Future. Toronto: House of Anansi Press, 2010. McNamee, Gregory. Careers in Renewable Energy: Get a Green Job. Masonville, Colo.: PixyJack Press, 2008. Schlager, N., and J. Weisblatt, eds. Alternative Energy. 3 vols. Detroit: UXL, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Energy. Geothermal Technologies Market Report. Washington, D.C.: Author, 2009. _______. Solar Technologies Market Report. Washington, D.C.: Author, 2010. _______. Wind Technologies Market Report. Washington, D.C.: Author, 2009.

ANIMAL

CARE

SERVICES

Bennett, Laura. “Pet Industry Trends for 2009.” Small Business Trends, January 15, 2009.

Bibliography http://smallbiztrends.com/2009/01/pet -industry-trends-2009.html. CareerBuilder.com. Salary Calculator and Wage Finder. http://www.cbsalary.com/salary -calculator. Hollow, Michele C., and William P. Rives. The Everything Guide to Working with Animals: From Dog Groomer to Wildlife Rescuer—Tons of Great Jobs for Animal Lovers. Avon, Mass.: Adams Media, 2009. Lee, Mary Price, and Richard S. Lee. Opportunities in Animal and Pet Care Careers. 2d ed. New York: McGraw-Hill, 2009. Miller, Louise. Careers for Animal Lovers and Other Zoological Types. 3d ed. New York: McGraw-Hill, 2007. Sandlin, Eileen Figure. Pet Businesses. Irvine, Calif.: Entrepreneur Media, 2006. Shenk, Ellen. Careers with Animals: Exploring Occupations Involving Dogs, Horses, Cats, Birds, Wildlife, and Exotics. Mechanicsburg, Pa.: Stackpole Books, 2005. Simpkins, Jason. “Despite the Recession, the U.S. Pet Care Industry Is Staying Out of the Dog House.” Money Morning, May 29, 2009. http://moneymorning.com/2009/05/29/pet -care-industry. U.S. Bureau of Labor Statistics. “Animal Care and Service Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos168.htm. _______. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/ industry/otea/OTII/OTII-index.html.

APPAREL AND FASHION INDUSTRY Baudot, Francois. Fashion: The Twentieth Century. New York: Universe, 1999.

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Blasczyk, Regina Lee. Producing Fashion: Commerce, Culture, and Consumers. Philadelphia: University of Pennsylvania Press, 2008. Brown, Carol. Fashion and Textiles: The Essential Careers Guide. London: Laurence King, 2010. DePaola, Helena de, and Carol Stewart Mueller. Marketing Today’s Fashions. Englewood Cliffs, N.J.: Prentice-Hall, 1980. Easey, Mike, ed. Fashion Marketing. 2d ed. Oxford, England: Blackwell Science, 2002. Gross, Michael. Model: The Ugly Business of Beautiful Women. New York: Perennial, 2003. Karr, Rick. “Fashion Industry Copes with Designer Knockoffs: With Copyright Protection Elusive, Copies Are Common.” http://www.npr.org/templates/story/stotu.ph p?storyId=1434815. September 18, 2003. Manlow, Veronica. Designing Clothes: The Culture and Organization of the Fashion Industry. New Brunswick, N.J.: Transaction, 2007. Martin, Richard, ed. Contemporary Fashion. New York: St. James Press, 1995. Rath, Jan. Unraveling the Rag Trade: Immigrant Entrepreneurship in Seven World Cities. New York: Berg, 2000. Roscho, Bernard. The Rag Trade: How New York and Paris Run the Breakneck Business of Dressing American Women. New York: Funk & Wagnalls, 1963. Sherrill, Marcia, and Carey Adina Karmel. Style Makers: Inside Fashion. New York: Monacelli Press, 2002. Sluiter, Liesbeth. Clean Clothes: A Global Movement to End Sweatshops. New York: Palgrave Macmillan, 2009. Snyder, Rachel Louise. Fugitive Denim: A Moving Story of People and Pants in the Borderless World of Global Trade. New York: W. W. Norton, 2008. Timmerman, Kelsey. Where Am I Wearing? A Global Tour to the Countries, Factories, and People That Make Our Clothes. Hoboken, N.J.: Wiley, 2009. UNITE HERE! “UNITE HERE! Textiles, Manufacturing, and Retail.” http://www .unitehere.org/about/apparel.php. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Textile, Apparel, and Furnishings Occupations.” In Occupational Outlook

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Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos233.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Defense. “Berry Amendment FAQ.” http://www.acq.usd.mil/dpap/cpic/ berry_amendment_faq.html. U.S. Department of Labor. Bureau of International Labor Affairs. The Apparel Industry and Codes of Conduct: A Solution to the International Child Labor Problem. Washington, D.C: Author, 1996. White, Nicola, and Ian Griffiths, eds. The Fashion Business: Theory, Practice, Image. New York: Berg, 2000.

AUTOMOBILES AND PERSONAL VEHICLES INDUSTRY Carson, Iain, and Vijay V. Vaitheeswaran. Zoom: The Global Race to Fuel the Car of the Future. New York: Twelve, 2008. Fuhs, Allen. Hybrid Vehicles and the Future of Personal Transportation. Boca Raton, Fla.: CRC Press, 2009. Goodman, J. David. “An Electric Boost for Bicyclists.” The New York Times, February 1, 2010. Hachman, Mark. “Segway Quietly Sold; Dealers Remain Optimistic.” PC, January 18, 2010. http://www.pcmag.com/article2/0,2817,2358 173,00.asp. Herlihy, David. Bicycle: The History. New Haven, Conn.: Yale University Press, 2004. Ingrassia, Paul. Crash Course: The American Automobile Industry’s Road from Glory to Disaster. New York: Random House, 2010. Kraft, Thomas. “From High-Wheelers to High-Tech: Bicycle Manufacturing Past and Present.” Techdirections, November, 2006. Levy, Efraim. Industry Survey: Autos and Auto Parts. New York: Standard & Poor’s, 2009.

Nieuwenhuis, Paul, and P. E. Wells. Car Futures: Rethinking the Automotive Industry Beyond the American Model. Cardiff, Wales: Trend Tracker, 2009. Rossi, Renzo. A History of Water Travel. Detroit: Blackbirch Press, 2005. Russ, Jonathan S. Global Motivations: Honda, Toyota, and the Drive Toward American Manufacturing. Lanham, Md.: University Press of America, 2009. Smedman, Lisa. From Boneshakers to Choppers: The Rip-Roaring History of Motorcycles. Buffalo, N.Y.: Annick Press, 2007. U.S. Bureau of Economic Analysis. “Gross Domestic Product by Industry Accounts.” March 30, 2010. http://www.bea.gov/ industry/gpotables/gpo_action.cfm?anon=501 149&table_id=24759&format_type=0. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. _______. Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. _______. Office of Transportation and Machinery. “The Road Ahead: An Assessment of the U.S. Motor Vehicle Industry.” April, 2009. http://trade.gov/wcm/groups/public/ @trade/@mas/@man/@aai/documents/web _content/auto_report_roadahead09.pdf. U.S. Library of Congress. “Who Invented the Automobile?” February 12, 2009. http://www .loc.gov/rr/scitech/mysteries/auto.html. Woodsen, Mary. “Going for Green.” Popular Science 276, no. 1 (2010): 50.

BANKING

INDUSTRY

Careers-in-Finance.com. “Commercial Banking.” http://careers-in-finance.com/cbsal.htm.

Bibliography Dietz, Miklos, Robert Reibestein, and Cornelius Walter. “What’s in Store for Global Banking.” The McKinsey Quarterly, January, 2008. Dilley, Deborah. Essentials of Banking. New York: Wiley, 2008. Foster, John Bellamy, and Fred Magdoff. The Great Financial Crisis: Causes and Consequences. New York: Monthly Review Press, 2009. Hanc, George. “The Future of Banking in America: Summary and Conclusions.” FDIC Banking Review 16, no. 2 (2004): 1-28. Heffernan, Shelagh. Modern Banking. New York: Wiley, 2005. King, Brett. Bank 2.0: How Customer Behavior and Technology Will Change the Future of Financial Services. New York: Marshall Cavendish Reference, 2010. Paradis, Adrian. Opportunities in Banking Careers. Rev. ed. New York: Contemporary, 2000. Ring, Trudy. Careers in Finance. New York: McGraw-Hill, 2004. Sumichrast, Michael, and Martin Sumichrast. Opportunities in Financial Careers. New York: McGraw-Hill, 2004. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007.

BATTERIES AND FUEL INDUSTRY

CELLS

Appleby, A. J., and F. R. Foulkes. Fuel Cell Handbook. New York: Van Nostrand Reinhold, 1989. Avadikyan, Arman, Patrick Cohender, and Jean-Alain Héraud, eds. The Economic Dynamics of Fuel Cell Technologies. New York: Springer Verlag, 2003. Basu, Suddhasatwa, ed. Recent Trends in Fuel Cell Science and Technology. New York: Springer, 2007. Bode, Hans. Lead-Acid Batteries. New York: John Wiley & Sons, 1977.

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Bossel, Ulf. The Birth of the Fuel Cell, 1835-1845. Oberrohrdorf, Switzerland: European Fuel Cell Forum, 2000. Brandon, Nigel P., and Dave Thompsett. Fuel Cells Compendium. San Diego, Calif.: Elsevier, 2005. Crompton, T. R. Battery Reference Book. 3d ed. Woburn, Mass.: Newnes, 2000. Kordesch, Karl, and Günter Simader. Fuel Cells and Their Applications. New York: VCH, 1996. Linden, David. Handbook of Batteries and Fuel Cells. New York: McGraw-Hill, 1983. Long, Kenneth, and Joseph Iorillo. World Batteries. Cleveland, Ohio: Freedonia Group, 2004. Norbeck, Joseph. Hydrogen Fuel for Surface Transportation. Warrendale, Pa.: Society of Automotive Engineers, 1996. Parker, Philip M. The 2009-2014 World Outlook for Lithium-Ion Batteries for Plug-In Hybrid and Pure Electric Vehicles. San Diego, Calif.: Icon Group, 2008. Spiegel, Colleen S. Designing and Building Fuel Cells. New York: McGraw-Hill, 2007. Srinivasan, Supramanian. Fuel Cells: From Fundamentals to Applications. New York: Springer, 2006. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Vincent, Colin A., et al. Modern Batteries: An Introduction to Electrochemical Power Sources. Baltimore: Edward Arnold, 1984. Viswanathan, B., and M. Aulice Scigioh. Fuel Cells: Principles and Applications. Boca Raton, Fla.: CRC Press, 2007. Yoshio, Masaki, Ralph J. Brodd, and Akiya Kozawa, eds. Lithium-Ion Batteries: Science and Technologies. New York: Springer, 2009.

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BEVERAGE AND TOBACCO INDUSTRY Allen, Gary, and Ken Albala. The Business of Food: Encyclopedia of the Food and Drink Industries. Westport, Conn.: Greenwood Press, 2007. ClearWay Minnesota. Unfiltered: A Revealing Look at Today’s Tobacco Industry. Minneapolis: Author, 2010. Jones, Raymond. Strategic Management in a Hostile Environment: Lessons from the Tobacco Industry. Westport, Conn.: Quorum Books, 1997. Mahon, John F., and Richard A. McGowan. “The Cigarette Industry.” Chapter 4 in Industry as a Player in the Political and Social Arena: Defining the Competitive Environment. Westport, Conn.: Quorum Books, 1996. Parker, Philip M. The World Market for Beverages and Tobacco: A 2005 Global Trade Perspective. San Diego, Calif.: ICON Group, 2004. Plunkett, Jack W. Plunkett’s Food Industry Almanac, 2009. Houston, Tex.: Plunkett Research, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Van Liemt, Gijsbert. The World Tobacco Industry: Trends and Prospects. Geneva, Switzerland: International Labour Office, 2002.

BIOFUELS

INDUSTRY

Bart, Jan C. J., and Natale Palmeri. Biodiesel Science and Technology: From Soil to Oil. Cambridge, England: Woodhead, 2010. Bourne, Joel K. “Green Dreams.” National Geographic, October, 2007, 38-59. Briggs, Michael, and Palligarnai T. Vasudevan. “Biodiesel Production: Current State of the Art and Challenges.” Journal of Industrial

Microbiology and Biotechnology 35 (2008): 421-430. Bryan, Tom. “2006 U.S. Ethanol Industry Salary Survey Report.” Ethanol Producer Magazine, December, 2006. http://ethanolproducer .com/article.jsp?article_id=2539. Clean Edge. Clean Energy Trends, 2010. Alameda, Calif.: Author, 2010. Available at http://www .cleanedge.com/reports/reports-trends2010 .php. Curtis, Brian. U.S. Ethanol Industry: The Next Inflection Point. Washington, D.C.: U.S. Department of Energy, 2008. Available at http://bcurtisenergies.com/pdf/Biomass2008 .pdf. Emerging Markets Online. Algae, 2020: Advanced Biofuels Markets and Commercialization Outlook. Houston, Tex.: Author, 2009. Erbaum, Jason B. Bioethanol: Production, Benefits, and Economics. New York: Nova Science, 2009. Hall, David O., and Joanna I. House. “Biomass: A Modern and Environmentally Acceptable Fuel.” Solar Energy Materials and Solar Cells 38 (1995): 521-542. Hokhman, Gal, et al. The Effect of Biofuel on the International Oil Market. Berkeley: University of California, Berkeley, Department of Agricultural and Resource Economics, 2010. Korosec, Kristen. “Big Ethanol’s Lobbying Investment of 2010: Tax Credits and Tariffs.” BNET.com, February 17, 2010. http://industry .bnet.com/energy/10003067/big-ethanols-lob bying-investment-of-2010-tax-credits-and-tariffs. Langeveld, Hans, Marieke Meeusen, and Johan Sanders. The Biobased Economy: Biofuels, Materials, and Chemicals in the Post-oil Era. Washington, D.C.: Earthscan, 2010. Markov, S. A. “Potential of Using Microalgae for Biofuel Production and CO2 Removal from Atmosphere.” International Scientific Journal of Alternative Energy and Ecology 70 (2009): 83-91. Mikityuk, Andrey. “Mr. Ethanol Fights Back.” Forbes, November 24, 2008, 52-57. National Renewable Energy Laboratory. Department of Energy’s Aquatic Species Program: Biodiesel from Algae. Golden, Colo.: Author, 1998. http://www.nrel.gov/docs/legosti/ fy98/24190.pdf.

Bibliography Pahl, Greg. Biodiesel: Growing a New Energy Economy. White River Junction, Vt.: Chelsea Green, 2008. Renewable Fuels Association. Ethanol Industry Outlook, 2010: Climate of Opportunity. Washington, D.C.: Author, 2010. United Nations Environment Programme. Towards Sustainable Production and Use of Resources: Assessing Biofuels. Paris: Author, 2009. http://www.unep.fr/scp/rpanel/pdf/Assessing _Biofuels_Full_Report.pdf. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Department of Energy. Breaking the Biological Barriers to Cellulosic Ethanol: A Joint Research Agenda. Report from the December 2005 Workshop, DOE/SC-0095. Washington, D.C.: U.S. Department of Energy Office of Science, 2006. Westhoff, Patrick C. The Economics of Food: How Feeding and Fueling the Planet Affects Food Prices. Upper Saddle River, N.J.: FT Press, 2010. Zarrilli, Simonetta. The Emerging Biofuels Market: Regulatory, Trade, and Development Implications. New York: United Nations, 2006.

BROADCAST

INDUSTRY

Albarran, Alan B., and Gregory G. Pitts. The Radio Broadcasting Industry. Boston: Allyn & Bacon, 2001. Anderson, Christopher. “National Broadcasting Company.” In The Encyclopedia of Television. 2d ed. Chicago: The Museum of Broadcast Communications, 2004. Available at http://www.museum.tv/archives/etv/N/html N/nationalbroa/nationalbroa.htm. Bensman, Marvin R. “The History of Broadcasting, 1920-1960.” Bensman Radio

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Program Archive, University of Memphis. https://umdrive.memphis.edu/mbensman/ public/history1.html. Curtin, Michael, and Jane Shattuc. The American Television Industry. New York: Palgrave Macmillan, 2009. Duffy, Brooke Erin, and Joseph Turow, eds. Key Readings in Media Today: Mass Communication in Contexts. New York: Routledge, 2009. Global Industry Analysts. “Global Radio Industry to Reach $62.08 Billion by 2015.” June 29, 2009. http://www.cascademedia.net/a633203 -global-radio-industry-to-reach-.cfm. Hanlon, Mike. “Internet Video Revenues to Exceed US$7 Billion in 2010.” Gizmag, November 7, 2006. http://www.gizmag.com/ go/6577. Hein, Gary, and Rota Jakuska. Podcast Industry. Dearborn: University of Michigan, School of Management, 2007. http://www.umdilabs.com/ casestudies/documents/Podcast%20Industry %20White%20Paper.pdf. Kackman, Michael, ed. Flow TV: Television in the Age of Media Convergence. New York: Routledge, 2010. M.C.: Marketing Charts. “SNL Kagan U.S. Cable TV Summary Data, 2006.” http://www.marketing charts.com/television/snl-kagan-cable -subscription-data-contradicts-fcc-chairman -kevin-martin-2634/snl-kagan-cable-summary -data-2006 jpg/. Mogel, Leonard. This Business of Broadcasting: A Practical Guide to Jobs and Job Opportunities in the Broadcasting Industry. New York: Billboard Books, 2004. National Cable and Telecommunications Association. “History of Cable Television.” 2009. http://www.ncta.com/About/ About/HistoryofCableTelevision.aspx. PayScale.com. “Salary Survey for Country: United States.” 2009. http://www.payscale.com/ research/US/Country=United_States/Salary. Radio Business Report. “Radio Pros Look to the Near Future.” September 23, 2009. http:// www.rbr.com/features/ideas-working-now/ 17234.html. Rodman, George. Mass Media in a Changing World: History, Industry, Controversy. Boston: McGraw-Hill, 2010.

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Schneider, Chris. Starting Your Career in Broadcasting: Working On and Off the Air in Radio and Television. New York: Allworth Press, 2007. Soundararajan, Mani. “Penetration of Digital Technology Sustains Growth in the Broadcasting Industry.” TMCnet.com. September 9, 2008. http://www.tmcnet.com/ voip/ip-communications/articles/39170 -report-penetration-digital-technology-sustains -growth-the-broadcasting.htm. Teitelbaum, Michael. Radio and Television. Milwaukee: World Almanac Library, 2005. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

BUILDING ARCHITECTURE INDUSTRY American Institute of Architects. AIA Compensation Report: A Survey of U.S. Architecture Firms. New York: Author, 2008. _______. Architect’s Essentials of Starting, Assessing, and Transitioning a Design Firm. Hoboken, N.J.: John Wiley & Sons, 2008. _______. The Business of Architecture: An AIA Report on Firm Characteristics. New York: Author, 2009. Clear, Nic. Architectures of the Near Future. Hoboken, N.J.: Wiley, 2009. Franck, Karen A., and Teresa von Sommaruga Howard. Design Through Dialogue: A Guide for Clients and Architects. Chichester, West Sussex, England: Wiley, 2010. Guthrie, Pat. The Architect’s Portable Handbook. 4th ed. New York: McGraw-Hill, 2010. Klingmann, Anna. Brandscapes: Architecture in the Experience Economy. Cambridge, Mass.: MIT Press, 2007.

Roaf, Susan. Transforming Markets in the Built Environment: Adapting to Climate Change. London: Earthscan, 2010. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. _______. “Construction Trades and Related Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ oco1009.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

BUILDING CONSTRUCTION INDUSTRY Allen, Edward, and Joseph Iano. Fundamentals of Building Construction Materials and Methods. 5th ed. Hoboken, N.J.: Wiley, 2009. Associated General Contractors of America. Project Delivery Systems for Construction. Arlington, Va.: Author, 2004. Careers in Focus: Construction. 5th ed. New York: Ferguson, 2010. Chudley, R., and Roger Greeno. Building Construction Handbook. 8th ed. Burlington, Mass.: Butterworth-Heinemann, 2010. Fisk, Edward. Construction Project Administration. 6th ed. Upper Saddle River, N.J.: Prentice Hall, 2000. Kubal, Michael T. Building Profits in the Construction Industry. New York: McGraw-Hill, 2000. Ryan, Mary Meghan, ed. Handbook of U.S. Labor Statistics: Employment, Earnings, Prices, Productivity, and Other Labor Data. 13th ed. Lanham, Md.: Bernam Press, 2010. Schaufelberger, John. Construction Business Management. Upper Saddle River, N.J.: Prentice Hall, 2009. Simmons, H. Leslie. Construction: Principles, Materials, and Methods. 7th ed. New York: John Wiley & Sons, 2001. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg.

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BUSINESS

SERVICES

Alexander, James A., and Mark W. Hordes. S-Business: Reinventing the Services Organization. New York: SelectBooks, 2003. Burkholder, Nicholas C. Outsourcing: The Definitive View, Applications, and Implications. Hoboken, N.J.: John Wiley & Sons, 2006. Business History. “Industries: Business History of Business Services.” December, 2008. http:// businesshistory.com/ind._bus._services.php. Cohen, Linda, and Allie Young. Multisourcing: Moving Beyond Outsourcing to Achieve Growth and Agility. Boston: Harvard Business School Press, 2006. Goolsby, Kathleen. “New Impacts on Outsourcing in 2009.” Outsourcing Journal, November, 2008. http://www.outsourcing -journal.com/nov2008-outsourcing.html. Hoover’s. “Business Services Industry Overview.” http://industries.hoovers.com/business -services. International Association of Outsourcing Professionals. “Top Five Outsourcing Trends for 2009 Predicted by International Association of Outsourcing Professionals.” Press release, December 29, 2008. http://www .outsourcingprofessional.org/content/23/ 196/1782. Kaka, Noshir. “Strengthening India’s Offshoring Industry.” McKinsey Quarterly, August, 2009. PayScale.com. “Salary Survey for Country: United States.” 2009. http://www.payscale.com/ research/US/Country=United_States/Salary. Reuvid, Jonathan, ed. Managing Business Support Services: Collaborating to Compete. Sterling, Va.: Kogan Page, 2005. Small Business Notes. “Professional and Business Services Industry.” http://www.smallbusiness notes.com/businesses/professional.html.

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CASINO

INDUSTRY

Cornell Hospitality Quarterly. “Focusing on Gaming.” May, 2008. Durham, Steve, and Kathryn Hashimoto. The History of Gambling in America. Upper Saddle River, N.J.: Prentice Hall, 2007. Eade, Vincent H., and Raymond H. Eade. Introduction to the Casino Entertainment Industry. Upper Saddle River, N.J.: Prentice Hall, 1997. Institute for Career Research. Careers in the Gaming Industry: Casino Resort Employment— Dealers to Managers, State Regulators. Chicago: Author, 2007. Roberts, Chris, and Kathryn Hashimoto. Casinos: Organization and Culture. Boston: Prentice Hall, 2010. Rudd, Denis P., and Lincoln H. Marshall. Introduction to Casino and Gaming Operations. 2d ed. Upper Saddle River, N.J.: Prentice Hall, 2000. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. University of Nevada, Las Vegas, International Gaming Institute. The Gaming Industry:

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CHEMICALS

INDUSTRY

Aftalion, Fred. History of the International Chemical Industry. Philadelphia: University of Pennsylvania Press, 1991. Arora, Ashish, Ralph Landau, and Nathan Rosenberg. Chemicals and Long-Term Economic Growth: Insights from the Chemical Industry. New York: John Wiley & Sons, 1998. Blair, Margaret M. Corporate Restructuring in the Chemical Industry in the Deal Decade: What Takeovers and Leveraged Buyouts Mean for Corporate Governance. Washington, D.C.: Brookings Institution, 1993. Boswell, Clay. “SMEs Continue to Hold a Sizeable Portion of the Market Place, Showing That It Still Pays to Be Nimble and Focused.” ICIS Chemical Business, July 25, 2008. http://www.icis .com/Articles/2008/07/28/9142582/global -chemical-small-and-medium-sized-enterprises -profiled.html. Chapman, K. The International Petrochemical Industry. Oxford, England: Basil Blackwell, 1991. “Facts and Figures of the Chemical Industry.” Chemical and Engineering News, July 10, 2006. http://pubs.acs.org/cen/coverstory/84/8428 factsandfigures.html. Landau, Ralph. “The Chemical Industry: From the 1850’s Until Today.” Business Economics, March 22, 2010. http://findarticles.com/p/ articles/mi_m1094/is_4_34/ai_56973853/. Landau, Ralph, and Ashish Arora. The Dynamics of Long-Term Growth: Gaining and Losing Advantage in the Chemical Industry in U.S. Industry in 2000: Studies in Competitive Performance. Washington, D.C.: National Research Council, 1999. Milmo, Sean. “Employee Numbers in the Chemical Industry Are in Decline: And an Aging Population Will Pose Challenges.” ICIS Chemical Business, February 28, 2008. http:// www.icis.com/Articles/2008/03/03/9104613/

chemical-industry-employment-levels -continue-to-decline-in-the-us-and-europe.html. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

CIVIL

SERVICES:

PLANNING

Bruegmann, Robert. Sprawl: A Compact History. Chicago: University of Chicago Press, 2005. Federal Highway Administration. Planning for Transportation in Rural Areas. http://www.fhwa .dot.gov/planning/rural/planningfortrans/ 3resprurpln.html. Houghton, Gillian. Careers in Urban Planning. New York: Rosen, 2003. Howell-Moroney, Michael, and Donna Milam Handley. Restoring the Intergovernmental Partnership: What Needs to Change. Washington, D.C.: International City/County Management Association, 2009. Kaliski, John. “Democracy Takes Command: The New Community Planning and Challenge to Urban Design.” In Urban Planning Today: A Harvard Design Magazine Reader. Minneapolis: University of Minnesota Press, 2006. PayScale.com “Salary Survey for Job: Urban Planner (United States).” http://www.payscale .com/research/US/Job=Urban_Planner/ Salary/by_Employer_Type. Staley, Samuel R., and Adrian T. Moore. Mobility First: A New Vision for Transportation in a Globally Competitive Twenty-first Century. Lanham, Md.: Rowman and Littlefield, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://wwwbls.gov/ oco/cg. _______. “Urban and Regional Planners.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos057.htm.

Bibliography U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Whitehouse.gov. “Urban Policy.” http://www .whitehouse.gov/issues/urban- policy.

CIVIL SERVICES: PUBLIC SAFETY Cole, George F., and Christopher E. Smith. The American System of Criminal Justice. 11th ed. Belmont, Calif.: Thomson Wadsworth, 2007. Cordner, Gary, and Kathryn Scarborough. Police Administration. 7th ed. New Providence, N.J.: LexisNexis/Anderson, 2010. Dempsey, John S., and Linda S. Forst. An Introduction to Policing. 5th ed. Belmont, Calif.: Cengage Learning, 2010. Hess, Karen. Introduction to Law Enforcement and Criminal Justice. 9th ed. Belmont, Calif.: Cengage Learning, 2009. O*NET OnLine. Summary Report for: 3303021.05—Immigration and Customs Inspectors. http://online.onetcenter.org/ link/summary/33-3021.05. Reaves, Brian A. Census of State and Local Law Enforcement Agencies, 2004. Washington, D.C.: U.S. Department of Justice, Bureau of Justice Statistics, 2007. http://bjs.ojp.usdoj.gov/index .cfm?ty=pbdetail&iid=539. _______. Federal Law Enforcement Officers, 2004. Washington, D.C.: U.S. Department of Justice, Bureau of Justice Statistics, 2006. http://bjs .ojp.usdoj.gov/index.cfm?ty=pbdetail&iid=867. Schmalleger, Frank. Criminal Justice Today. 9th ed. Upper Saddle River, N.J.: Prentice Hall, 2007. Stojkovic, Stan, David Kalinich, and John Klofas. Criminal Justice Organizations: Administration and Management. 4th ed. Belmont, Calif.: Thomson Higher Education, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg.

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U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Walker, Samuel, and Charles M. Katz. Police in America. 6th ed. Boston: McGraw-Hill, 2008.

COAL

MINING

INDUSTRY

Brister, Brian S., and L. Greer Price. New Mexico’s Energy, Present and Future. Socorro: New Mexico Bureau of Geology and Mineral Resources, 2002. Burke, D. Barlow, and Robert E. Beck. The Law and Regulation of Mining: Minerals to Energy. Durham, N.C.: Carolina Academic Press, 2010. Craig, James R, David J. Vaughn, and Brian J. Skinner. Resources of the Earth: Origin, Use, and Environmental Impact. Upper Saddle River, N.J.: Prentice Hall, 2001. Godell, Jeff. Big Coal: The Dirty Secret Behind America’s Energy Future. New York: Houghton Mifflin, 2006. Gore, Tony, et al. Coalfields and Neighbouring Cities: Economic Regeneration, Labour Markets, and Governance. York, North Yorkshire, England: Joseph Rowntree Foundation, 2007. Kolker, Allan, et al. Emissions from Coal Fires and Their Impact on the Environment. Reston, Va.: U.S. Geological Survey, 2009. Parker, Philip M. The 2009-2014 World Outlook for Coal Mining. San Diego, Calif.: ICON Group, 2008. Rouse, Michael J., and Usher Fleising. “Miners and Managers: Workplace Cultures in a British Columbia Coal Mine.” Human Organization 54 (1995): 238-248. Schmidt, Richard A. Coal in America: An Encyclopedia of Reserves, Production, and Use. New York: McGraw-Hill, 1979. Simpson, David. Productivity in Natural Resource Industries: Improvement Through Innovation. Washington, D.C.: Resources for the Future, 1999.

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Thomas, Larry. Coal Geology. Hoboken, N.J.: John Wiley & Sons, 2002. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

COMPLEMENTARY AND ALTERNATIVE HEALTH CARE INDUSTRY American Association of Professional Hypnotists. “How Profitable a Career Is Hypnotherapy?” http://www.aaph.org/node/166. Anath, Sita. “CAM: An Increasing Presence in U.S. Hospitals.” Hospitals and Health Networks, January 20, 2009. http://www.hhnmag.com/ hhnmag_app/jsp/articledisplay.jsp?dcrpath= HHNMAG/Article/data/01JAN2009/090120 HHN_Online_Ananth&domain=HHNMAG. _______. “A Steady Growth in CAM Services.” Hospitals and Health Networks, March 31, 2009. http://www.hhnmag.com/hhnmag_app/jsp/ articledisplay.jsp?dcrpath=HHNMAG/Article/ data/03MAR2009/090331HHN_Online_Anan th&domain=HHNMAG. Brody, Jane E., et al. The New York Times Guide to Alternative Health. New York: Henry Holt and Company, 2001. Cohen, Michael H. Complementary and Alternative Medicine: Legal Boundaries and Regulatory Perspectives. Baltimore: The Johns Hopkins University Press, 1998. Ernst, Edzard, ed. Healing, Hype, or Harm? A Critical Analysis of Complementary or Alternative Medicine. Charlottesville, Va.: Societas Imprint Academic, 2008. FeldHusen, Adrian E. “The History of Midwifery and Childbirth in America: A Time Line.” http://www.midwiferytoday.com/articles/ timeline.asp.

French, Nancy. Complementary and Alternative Medicine. Colleyville, Tex.: CAM, 2002. Hartford Hospital. Building Bridges Between Conventional and Complementary Medicine: A Manual. Hartford, Conn.: Hartford Hospital, 2003. Nahin, Richard L., et al. National Health Statistics Report: Cost of Complementary and Alternative Medicine (CAM) and Frequency of Visits to CAM Practitioners—U.S., 2007. Washington, D.C.: U.S. Department of Health and Human Services, 2009. Santa, Colleen F. “The Adoption of Complementary and Alternative Medicine by Hospitals: A Framework for Decision Making.” The Journal of Health Care Management 46 (July, 2001): 250-260. http://www.allbusiness.com/ management/3604702-1.html. Tierney, Gillian. Opportunities in Holistic Medical Careers. Rev. ed. New York: McGraw Hill, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Chiropractors.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos071.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Weil, Andrew. Health and Healing. Rev. ed. New York: Houghton Mifflin, 2004. White House Commission on Complementary and Alternative Medicine Policy. Final Report. Washington, D.C.: Government Printing Office, 2002. http://www.whccamp .hhs .gov/final report.html. World Health Organization. National Policy on Traditional Medicine and Complementary/ Alternative Medicine. Geneva, Switzerland: Author, 2005. _______. National Policy on Traditional Medicine and Regulation of Herbal Medicines: Report of a WHO Global Survey. Geneva, Switzerland: Author, 2005.

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COMPUTER HARDWARE AND PERIPHERALS INDUSTRY

COMPUTER SOFTWARE INDUSTRY

Allan, Roy A. A History of the Personal Computer: The People and the Technology. 2d ed. London, Ont.: Allan Publishing, 2001. Burns, Julie Kling. Opportunities in Computer Careers. Chicago: VGM Career Books, 2002. Campbell-Kelly, Martin, and William Aspray. Computer: A History of the Information Machine. 2d ed. Boulder, Colo.: Westview Press, 2004. Computer History Museum. “Timeline.” http:// www.computerhistory.org/semiconductor/ timeline.html. Cortada, James W. The Digital Hand: How Computers Changed the Work of American Manufacturing, Transportation, and Retail Industries. New York: Oxford University Press, 2004. Eberts, Marjorie, and Margaret Gisler. Careers for Computer Buffs and Other Technological Types. 3d ed. New York: McGraw-Hill, 2006. Morley, Deborah. Understanding Computers in a Changing Society. Boston: Cengage Learning, 2009. Swade, Doron. “The Babbage Engine.” Computer History Museum, 2008. http://www.computer history.org/babbage. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Computer and Information Systems Managers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos258.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Yost, Jeffrey R. The Computer Industry. Westport, Conn.: Greenwood Press, 2005.

Arora, Ashish, and Alfonso Gambardella, eds. From Underdogs to Tigers: The Rise and Growth of the Software Industry in Brazil, China, India, Ireland, and Israel. New York: Oxford University Press, 2005. Convergence Plus Journal. “InfoSecurity: F-Secure, VSNL Offer Internet Security Solutions for SMEs.” January 22, 2007. http://www .convergenceplus.com/jan07%20infosec%2002 .html. Dale, Nell, and John Lewis. Computer Science Illuminated. 3d ed. Sudbury, Mass.: Jones and Bartlett, 2007. D’Costa, Anthony P., and E. Sridharan, eds. India in the Global Software Industry: Innovation, Firm Strategies, and Development. New York: Palgrave Macmillan, 2004. Hall, Pat, and Juan Fernández-Ramil. Managing the Software Enterprise: Software Engineering and Information Systems in Context. London: Thomson Learning, 2007. Hoch, Detlev J., et al. Secrets of Software Success: Management Insights from One Hundred Software Firms Around the World. Boston: Harvard Business School Press, 2000. Johnston, Jessica. Technological Turf Wars: A Case Study of the Antivirus Industry. Philadelphia: Temple University Press, 2009. Lightstone, Sam. Making It Big in Software: Get the Job—Work the Org—Become Great. Upper Saddle River, N.J.: Prentice Hall, 2010. Lopp, Michael. Being Geek: The Software Developer’s Career Handbook. Sebastopol, Calif.: O’Reilly Media, 2010. Mozilla.org. “About Mozilla.” http://www.mozilla .org/about. Qing, Liau Yun. “APAC to See Fastest Software Revenue Growth.” ZDNet Asia, November 9, 2009. http://www.zdnetasia.com/news/ business/0,39044229,62059188,00.htm. Robat, Cornelis, ed. The History of Computing Project. http://www.thocp.net/index.html. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg.

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_______. “Computer and Information Systems Managers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos258.htm. _______. “Computer Support Specialists and Systems Administrators.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos268.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/ industry/otea/OTII/OTII-index.html. Yu, Eileen. “Global Security Software Revenue to Hit US$10.5 billion.” ZDNet Asia, April 24, 2008. http://www.zdnetasia.com/news/ security/0,39044215,62040592,00.htm.

COMPUTER SYSTEMS INDUSTRY Bayles, D. L. E-Commerce Logistics and Fulfillment. Upper Saddle River, N.J.: Prentice Hall, 2001. Chesbrough, H. W. Open Business Models. Boston: Harvard Business School Press, 2006. Conference Board of Canada. Canada’s Computer Systems Design Industry: Industrial Outlook, Spring, 2010. Ottawa, Ont.: Author, 2010. Cowhey, Peter F., Jonathan David Aronson, and Donald Abelson. Transforming Global Information and Communication Markets: The Political Economy of Innovation. Cambridge, Mass.: MIT Press, 2009. Fisher, Eran. Media and New Capitalism in the Digital Age: The Spirit of Networks. New York: Palgrave Macmillan, 2010. Forrester Business Data Services. Enterprise Network and Telecommunications Survey. Boston: Author, 2007. Gronstedt, A. Training in Virtual Worlds. New York: ASTD Press, 2008. Hunter, R. World Without Secrets: Business, Crime, and Privacy in the Age of Ubiquitous Computing. New York: Wiley, 2002.

Kalakota, R., and M. Robinson. E-Business 2.2 Roadmap for Success. Boston: Addison Wesley, 2001. Khosrow-Pour, M., ed. Encyclopedia of E-Commerce, E-Government, and Mobile Commerce. Hershey, Pa.: Idea Group Reference, 2006. Prahalad, C. K., and M. S. Krishnan. The New Age of Innovation. New York: McGraw-Hill, 2008. Sadeh, N. M-Commerce. New York: Wiley, 2002. SalaryList.com. “Manager of Information Technology Jobs Salary, Ranked by Salary.” http://xxx.salarylist.com/all-manager-ofinformation-technology-real-jobs-salary.htm. Turban, E., et al. Decision Support Systems and Intelligent Systems. 8th ed. Upper Saddle River, N.J.: Prentice Hall, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

CONSTRUCTION EQUIPMENT INDUSTRY Harris, Frank. Modern Construction and Ground Engineering Equipment and Methods. 2d ed. New York: Longman, 1994. Huzij, Robert, Angelo Spano, and Sean Bennett. Modern Diesel Technology: Heavy Equipment Systems. Detroit: Delmar Cengage Learning, 2008. Levy, Sidney M. Construction Databook: Construction Materials and Equipment. 2d ed. New York: McGraw-Hill, 2010. Stearns, Peter. The Industrial Revolution in World History. 3d ed. Boulder, Colo.: Westview Press, 2007. Stonehouse, Tom, and Eldon Brumbaugh. J. I. Case: Agricultural and Construction Equipment, 1956-1994. St. Joseph, Mich.: American Society of Agricultural Engineers, 1996.

Bibliography U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Construction Trades and Related Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ oco1009.htm. Vorster, Michael C. Construction Equipment Economics. Christiansburg, Va.: Pen, 2009.

CORPORATE EDUCATION SERVICES Analoui, Farhad. The Changing Patterns of Human Resource Management. Burlington, Vt.: Ashgate, 2002. Brakeley, Harry H., and Jeanne C. Meister. “Greater Expectations: How Corporate Education Can Boost Company Performance.” Outlook, February, 2005. http://www.accenture .com/Global/Research_and_Insights/Outlook/ By_Issue/Y2005/ToAdvantage.htm. Craig, Robert L., ed. The ASTD Training and Development Handbook: A Guide to Human Resource Development. 4th ed. New York: McGraw-Hill, 1996. Greeno, Nathan J. Corporate Learning Strategies. Alexandria, Va.: American Society for Training and Development, 2006. Haskell, Robert E. Reengineering Corporate Training: Intellectual Capital and Transfer of Learning. Westport, Conn.: Quorum Books, 1998. Noe, Raymond A. Employee Training and Development. 4th ed. New York: McGraw-Hill/ Irwin, 2008. Paradise, Andrew. “Learning Remains Steady During the Downturn.” American Society for Training and Development, State of the Industry Report, November, 2009. http://www .astd.org/TD/Archives/2009/Nov/Free/0911 _SOIR.htm. Rothwell, William J., John E. Lindholm, and William G. Wallick. What CEOs Expect from Corporate Training: Building Workplace Learning and Performance Initiatives That Advance Organizational Goals. New York: AMACOM, 2003.

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Tyler, Kathryn. “Carve Out Training? Outsourcing the Entire Training Function Is a Huge Change That—When Handled Properly—Can Yield Improved Services and Decreased Costs.” HR Magazine, February, 2004. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Human Resources, Training, and Labor Relations Managers and Specialists.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos021.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

COUNSELING

SERVICES

Broskowski, Anthony, and Shelagh Smith. Estimating the Cost of Preventive Services in Mental Health and Substance Abuse Under Managed Care. Rockville, Md.: U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Center for Mental Health Services, Office of Managed Care, 2001. Cummings, Nicholas A., William T. O’Donohue, and Michael A. Cucciare. Universal Healthcare: Readings for Mental Health Professionals. Reno, Nev.: Context Press, 2005. Levin, Bruce Lubotsky, Kevin D. Hennessy, and John Petrila. Mental Health Services: A Public Health Perspective. New York: Oxford University Press, 2010. Mark, Tami, et al. National Expenditures for Mental Health Services and Substance Abuse Treatment, 1993-2003. Rockville, Md.: U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, 2007. Munley, Patrick H., et al. “Counseling Psychology in the United States of America.” Wes

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Counselling Psychology Quarterly 17, no. 3 (2004): 247-271. Pedrini, Laura, et al. “Burnout in Nonhospital Psychiatric Residential Facilities.” Psychiatric Services 60 (November, 2009): 1547-1551. Pistole, M. Carole. “Mental Health Counseling: Identity and Distinctiveness.” ERIC Digest. http://www.ericdigests.org/2002-4/mental -health.html. Reinhardt, Uwe E., et al. “U.S. Health Care Spending in an International Context.” Health Affairs: The Policy Journal of the Health Sphere 23, no. 3 (2004): 10-25. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Walfish, Steven, and Jeffrey E. Barnett. Financial Success in Mental Health Practice: Essential Tools and Strategies for Practitioners. Washington, D.C.: American Psychological Association, 2009. Williams, Ruth F. G., and D. P. Doessel. The Economics of Mental Health Care: Industry, Government, and Community Issues. Burlington, Vt.: Ashgate, 2001.

CRIMINAL JUSTICE AND PRISON INDUSTRY ASIS International. Career Opportunities in Security. Alexandria, Va.: Author, 2005. Available at http://www.asisonline.org/careercenter/ careers2005.pdf. Barlow, Hugh D., and Scott H. Decker. Criminology and Public Policy: Putting Theory to Work. Philadelphia: Temple University Press, 2010. Culp, Richard F. “The Rise and Stall of Prison Privatization: An Integration of Policy Analysis Perspectives.” Criminal Justice Policy Review 16, no. 4 (December, 2005): 412-442.

Federal Bureau of Prisons. Employment Information Handbook. Washington, D.C.: Author, 2010. Kerle, Ken E. Exploring Jail Operations. Hagerstown, Md.: American Jail Association, 2003. Lamont, Christopher K. International Criminal Justice and the Politics of Compliance. Burlington, Vt.: Ashgate, 2010. Maguire, Mary, and Dan Okada. Critical Issues in Crime and Justice: Thought, Policy, and Practice. Los Angeles: Sage, 2011. Pelaez, Vicky. The Prison Industry in the United States: Big Business or a New Form of Slavery. New York: El Diario-La Prensa, 2005. Pew Charitable Trusts. Public Safety, Public Spending: Forecasting America’s Prison Population, 2007-2011. Philadelphia: Author, 2007. Shoham, S. Giora, Paul Knepper, and Martin Kett. International Handbook of Criminology. Boca Raton, Fla.: CRC Press, 2010. Spivak, Andrew L., and Susan F. Sharp. “Inmate Recidivism as a Measure of Private Prison Performance.” Crime and Delinquency 54, no. 3 (July, 2008): 482-508. Sumpter, Melvina. “Faith-Based Prison Programs.” Criminology and Public Policy 5, no. 3 (August, 2006): 523-528. Tewksbury, Richard, and Elizabeth Ehrhardt Mustaine. “Insiders’ View of Prison Amenities: Beliefs and Perceptions of Correctional Staff Members.” Criminal Justice Review 30, no. 2 (September, 2005): 174-188. U.S. Bureau of Justice Statistics. Jail Inmates at Midyear. Washington, D.C.: Author, 2009. _______. Prison Inmates at Midyear. Washington, D.C.: Author, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

Bibliography Walmsley, Roy. World Prison Population List. London: International Center for Prison Studies, 2009.

DAY-CARE

SERVICES

Gestwicki, Carol, and Jane Bertrand. Essentials of Early Childhood Education. Toronto: Thomson Nelson, 2008. Goldsmith, Seth M. Long-Term Care Administration Handbook. New York: Aspen, 1994. Hearron, Patricia F., and Verna Hildebrand. Management of Child Development Centers. 7th ed. Boston: Pearson, 2011. Institute for Career Research. A Career as a Teacher: Early Childhood Education, Nursery Schools—Daycare. Chicago: Author, 2004. Leach, P. Day Care Today: Getting It Right for Everyone. New York: Random House, 2010. Lynn, Jacquelyn, and Charlene Davis. Start Your Own Senior Services Business. 2d ed. Irvine, Calif.: Entrepreneur Press, 2010. Moore, Keith Diaz, Lyn Dally Geboy, and Gerald D. Weisman. Designing a Better Day: Guidelines for Adult and Dementia Day Services Centers. Baltimore: The Johns Hopkins University Press, 2006. Pruissen, Catherine A. Start and Run a Home Daycare. 3d ed. North Vancouver, B.C.: Self Counsel Press, 2002. Schmitt, E. M., et al. “Adult Day Health Center Participation and Health-Related Quality of Life.” Gerontologist, February 10, 2010. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www .bls.gov/oco/cg. _______. “Child Care Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www .bls.gov/oco/ocos170.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

DEFENSE

2077

INDUSTRY

Anderson, Guy, and Keri Wagstaff-Smith. “Analysis: Can the Defence Industry Re-ignite the Economy?” Jane’s Information Group, November 26, 2008. http://www.janes.com/ news/defence/business/jdi/jdi081126_1_n .shtml. Ben-Ari, Guy, and Pierre A. Chao. Organizing for a Complex World: Developing Tomorrow’s Defense and Net-Centric Systems. Washington, D.C.: Center for Strategic and International Studies, 2009. Bialos, Jeffrey P., et al. Fortresses and Icebergs: The Evolution of the Transatlantic Defense Market and the Implications for U.S. National Security Policy. Washington, D.C.: Center for Transatlantic Relations, 2009. Bitzinger, Richard. The Modern Defense Industry: Political, Economic, and Technological Issues. Santa Barbara, Calif.: Praeger Security International/ABC-CLIO, 2009. “Boeing Wins $84 Million Contract from U.S. Air Force for B-1 Bomber’s Avionics Software Upgradation.” Defense World, October 30, 2009. http://www.defenseworld.net/go/defensenews .jsp?gcatid=2&id=3767&h=Boeing%20wins % 20$84%20million%20contract%20from % 20US%20Force%20B-1%20Bomber % 20avionics%20’software%20upgradation. Finnegan, Philip. “U.S. Defense and Aerospace Industry Weakens During Worldwide Recession.” Teal Group Corporation, October 14, 2009. http://www.tealgroup.com/index .php?option=com_content&view=article&id= 59:us-aerospace-and-defense-industry-weakens -in-face-of-worldwide-recession-&catid= 8:blogmain&Itemid=100004. Lasou, Damien. “Five Key Trends Impacting the Aerospace and Defense Industry Amid Challenging Economic Times.” Aviation Spectator, June 9, 2009. http://www.aviation spectator.com/blogs/admin/guest-post-five -key-trends-impacting-the-aerospace-and -defense-industry-amid-challenging. Markowski, Stefan, Peter Hall, and Robert Wylie. Defence Procurement and Industry Policy: A Small Country Perspective. London: Routledge, 2010.

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FINANCIAL SERVICES INDUSTRY FEDERAL PUBLIC ADMINISTRATION Frederickson, H. George, and Kevin B. Smith. The Public Administration Theory Primer. Boulder, Colo.: Westview Press, 2003. Goldsmith, Stephen, and William D. Eggers. Governing by Network: The New Shape of the Public Sector. Washington, D.C.: Brookings Institution Press, 2004. Lane, Jan-Erik. Public Administration and Public Management: The Principal-Agent Perspective. New York: Routledge, 2005. Morgan, Douglas F., et al. Foundations of Public Service. Armonk, N.Y.: M. E. Sharpe, 2008. Office of Policy and Management. “Key Events: Ninety-six Premerit Years, 1789-1883.” http://www.opm.gov/BiographyofAnIdeal/ PUevents1789p01.htm. O’Leary, Rosemary, and Lisa Bingham, eds. The Collaborative Public Manager: New Ideas for the Twenty-first Century. Washington, D.C.: Georgetown University Press, 2009.

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FURNITURE AND HOME FURNISHINGS INDUSTRY Bennington, Richard R. Furniture Marketing: From Product Development to Distribution. New York: Fairchild Books, 2003. Dugan, Michael K. The Furniture Wars: How America Lost a Fifty Billion Dollar Industry. Conover, N.C.: Goosepen Studio & Press, 2009. International Trade Centre UNCTAD/WTO and International Tropical Timber Organization. International Wooden Furniture Markets: A Review. Geneva, Switzerland: Author, 2005. Purdy, Warren G. The Guide to Retail Business Planning. Boston: Inc. Magazine Business Resources, 1997. Schroeder, Carol L. Specialty Shop Retailing. Hoboken, N.J.: John D. Wiley and Sons, 2007. Segel, Dick. Retail Business Kit for Dummies. Indianapolis: Wiley, 2008. Taylor, Don, and Jeanne Smalling Archer. Up Against the Wal-Marts. 2d ed. New York: American Management Association, 2005. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and

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HAND TOOLS AND INSTRUMENTS INDUSTRY Chuang, Steve. “Digital Tools to Drive Growth of Taiwan’s Hand Tool Industry.” China Economic News Service, November, 2009. http://cens.net/cens/html/en/news/news _ inner_30792.html. Chylinski, Manya. Career Launcher: Manufacturing. New York: Ferguson, 2010. Korn, Peter. The Woodworker’s Guide to Hand Tools. Newtown, Conn.: Taunton Press, 1997. Leseure, Michel J. “Manufacturing Strategies in the Hand Tool Industry.” International Journal of Operations and Production Management 20, no. 12 (2000): 1475-1487. Mintel International Group. DIY Review. London: Author, 2008. Trotman Real Life Guides. Manufacturing and Product Design. Richmond, England: Author, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Vereen, Bob. Surviving in Spite of Everything: A Postwar History of the Hardware Industry. Indianapolis: Dog Ear, 2010. Watson, Aldren A. Hand Tools: Their Ways and Workings. New York: W. W. Norton, 1982.

Bibliography HEALTH AND FITNESS INDUSTRY American College of Sports Medicine. ACSM’s Health/Fitness Facility Standards and Guidelines. 3d ed. Champaign, Ill.: Human Kinetics, 2007. Bates, Mike, ed. Health Fitness Management. 2d ed. Champaign, Ill.: Human Kinetics, 2008. Maguire, Jennifer Smith. Fit for Consumption: Sociology and the Business of Fitness. New York: Routledge, 2008. Oakley, Ben, and Martin Rhys, eds. The Sport and Fitness Sector: An Introduction. New York: Routledge, 2008. Tharrett, Stephen J., and James A. Peterson. Fitness Management. 2d ed. Monterey, Calif.: Healthy Learning, 2008. Thatcher, Ron, and Andy Li. Fitness Memberships and Money. Victoria, B.C.: Trafford, 2004. Thompson, Walter R. “Worldwide Survey Reveals Fitness Trends for 2010.” ACSM’s Health and Fitness Journal 13, no. 6 (November/ December, 2009): 9-16. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/ industry/otea/OTII/OTII-index.html.

HEAVY

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Dennis, Neil. “Economic Outlook: Measure of Manufacturing.” The Financial Times, September 26, 2010. Mitchel, Doug. Anatomy of the John Deere. Iola, Wis.: Krause, 2007. Orlemann, Eric C. Caterpillar Chronicle: The History of the World’s Greatest Earthmovers. St. Paul, Minn.: Motorbooks International, 2009.

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HIGHER EDUCATION INDUSTRY Belson, Ken. “Universities Cutting Teams as They Trim Their Budgets.” The New York Times, May 3, 2009. Bridges, David, et al., eds. Higher Education and National Development: Universities and Societies in Transition. New York: Routledge, 2007. Buller, Jeffrey. The Essential College Professor: A Practical Guide to an Academic Career. New York: John Wiley & Sons, 2010. Chen, Sheying, ed. Academic Administration: A Quest for Better Management and Leadership in Higher Education. Hauppauge, N.Y.: Nova Science, 2009 Cohen, Arthur M., and Carrie B. Kisker. The Shaping of American Higher Education: Emergence and Growth of the Contemporary System. 2d ed. New York: John Wiley & Sons, 2010. Duderstadt, James J. A University for the Twenty-first Century. Ann Arbor: University of Michigan Press, 2000.

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HIGHWAY, ROAD, AND BRIDGE CONSTRUCTION INDUSTRY Associated General Contractors of America. “Construction Industry Adds Jobs (but with a Caveat).” Industry Today, May 17, 2010. http://

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Barnes Reports. U.S. Home and Garden Equipment Repair and Maintenance Industry Report. Woolwich, Maine: Author, 2009. Bewsey, Susan. Start and Run a Profitable Home Cleaning Business. North Vancouver, B.C.: International Self-Counsel Press, 1999. Commercial and Residential Cleaning Services to 2013. Cleveland, Ohio: Freedonia Group, 2010. Meany, Terry. How to Start a Home-Based Handyman Business. Guilford, Conn.: Globe Pequot Press, 2009. Morrow, Beth. How to Open and Operate a Financially Successful Cleaning Service. Ocala, Fla.: Atlantic, 2008. Price, Laurence. How to Start Your Own Horticulture Business: Landscape Maintenance, Lawn Renovation, Landscaping Services, Home Nursery. Bremerton, Wash.: Botany Books, 1983. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www .bls .gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007.

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Cutler, David M., ed. The Changing Hospital Industry: Comparing Not-for-Profit and For-Profit Institutions. Chicago: University of Chicago Press, 2000. Geisler, Eliezer, Koos Krabbendam, and Roel Schuring, eds. Technology, Health Care, and Management in the Hospital of the Future. Westport, Conn.: Praeger, 2003. Gordon, Suzanne, John Buchanan, and Tanya Bretherton. Safety in Numbers: Nurse-to-Patient Ratios and the Future of Health Care. Ithaca, N.Y.: ILR Press/Cornell University Press, 2008. Institute for Career Research. Careers in Hospital and Health Services Administration: Healthcare Executives. Chicago: Author, 2004. Ohsfeldt, Robert L., and John E. Schneider. The Business of Health: The Role of Competition, Markets, and Regulation. Washington, D.C.: AEI Press, 2006. Snook, I. Donald. Opportunities in Hospital Administration Careers. New York: McGraw-Hill, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/ industry/otea/OTII/OTII-index.html.

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PKF Hospitality Research. “PKF Revises 2009 U.S. Forecast.” Hotels, October 28, 2008. http:// www.hotelsmag.com/article/CA6609097.html. Rogers, Tony. Conferences and Conventions: A Global Industry. 2d ed. London: ButterworthHeinemann, 2008. Rutherford, Denney G., and Michael J. O’Fallon. Hotel Management and Operations. 4th ed. New York: John Wiley and Sons, 2007. SalaryList.com. “Manager of Information Technology Jobs Salary, Ranked by Salary.” http://www.salarylist.com/all-manager-of-info rmation-technology-real-jobs-salary.htm. Smith Travel Research. “Hotel Industry Posts Record Revenue in 2008, Other Metrics Slide.” Hotel News Resource, June 23, 2009. http:// www.hotelnewsresource.com/HNR-detail-sid -39541.html. Stoessel, Eric. “Marriott Posts Steep Declines.” Lodging Hospitality, July 16, 2009. http:// lhonline.com/news/marriott_second_quarter _0716. United Nations World Tourism Organization. “Testing Times for International Tourism.” UNWTO World Tourism Barometer 7, no. 2 (June 2009). http://www.unwto.org/facts/eng/pdf/ barometer/UNWTO_Barom09_2_en_excerpt .pdf. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Hotel, Motel, and Resort Desk Clerks.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos132.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/ industry/otea/OTII/OTII-index.html. Venison, Peter. One Hundred Tips for Hoteliers: What Every Successful Hotel Professional Needs to Know and Do. New York: iUniverse, 2005. Walker, John R., and Jack E. Miller. Supervision in the Hospitality Industry: Leading Human Resources. 6th ed. Hoboken, N.J.: Wiley, 2010.

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SERVICES AND FIRMS

LAW

Anderson, Wayne, and Marilyn Headrick. The Legal Profession: Is It for You? Cincinnati: Thomson Executive Press, 1996. Echaore-McDavid, Susan. Career Opportunities in Law and the Legal Industry. New York: Facts On File, 2002. Feuer, Alan. “A Study in How Major Law Firms Are Shrinking.” The New York Times, June 5, 2009. Friedman, Lawrence M. American Law in the Twentieth Century. New Haven, Conn.: Yale University Press, 2002. Furi-Perry, Ursula. Fifty Unique Legal Paths: How to Find the Right Job. Chicago: American Bar Association, 2008. Harvard Law School Program on the Legal Profession. “Analysis of the Legal Profession and Law Firms.” http://www.law.harvard.edu/ programs/plp/pages/statistics.php. Hazard, Geoffrey C., and Angelo Dondi. Legal Ethics: A Comparative Study. Stanford, Calif.: Stanford University Press, 2004. Munneke, Gary. Careers in Law. 3d ed. New York: McGraw-Hill, 2003. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Lawyers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos053.htm. _______. “Paralegals and Legal Assistants.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos114.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Williams, Sean, and David Nersessian. Overview of the Professional Services Industry and the Legal Profession. Cambridge, Mass.: Harvard Law School Program on the Legal Profession,

2007. http://www.law.harvard.edu/programs/ plp/pdf/Industry_Report_2007.pdf.

LIBRARIES AND ARCHIVES INDUSTRY Battles, Matthew. Library: An Unquiet History. New York: W. W. Norton, 2003. Bogart, Dave, ed. Library and Book Trade Almanac, 2009. 54th ed. Medford, N.J.: Information Today, 2009. Camenson, Blythe. Opportunities in Museum Careers. New York: McGraw-Hill, 2007. Cox, Richard J. Archives and Archivists in the Information Age. New York: Neal-Schuman, 2005. Eberhart, George M. The Whole Library Handbook 4. Chicago: American Library Association, 2006. Grady, Jenifer, and Denise M. Davis. ALA-APA Salary Survey—Librarian-Public and Academic: A Survey of Library Positions Requiring an ALAAccredited Master’s Degree. Chicago: American Library Association, 2009. Information Today. American Library Directory. 62d ed. Medford, N.J.: Author, 2009. International Federation of Library Associations and Institutions. “Global Library Statistics, 1990-2000.” The Hague, Netherlands, 2003. http://archive.ifla.org/III/wsis/wsis-stats4pub _v.pdf. Lynch, Mary Jo. “Reaching Sixty-five: Lots of Librarians Will Be There Soon.” American Libraries 33, no. 2 (March, 2002). Simkin, Joyce P. American Salary and Wages Survey. 10th ed. Farmington Hills, Mich.: Gale Cengage, 2009. Society of American Archivists. “So You Want to Be an Archivist: An Overview of the Archival Profession.” http://www2.archivists.org/ profession. Spear, Martha J. “The Top Ten Reasons to Be a Librarian.” American Libraries 33, no. 9 (October, 2002). U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg.

Bibliography _______. “Librarians.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/ocos068.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. _______. Statistical Abstract of the United States: 2010. 129th ed. Washington, D.C.: Author, 2009. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/ industry/otea/OTII/OTII-index.html.

LIGHT

MACHINERY

INDUSTRY

Abraham, Edward. Competitive Assessment of the United States Power Tool Industry. Washington, D.C.: Industrial Trade Administration, 1992. Institute for Career Research. Careers in the Machine Trades: Precision Machinist, Tool and Die Maker. Author, 2009. Paz, Emilio Bautista, et al. A Brief Illustrated History of Machines and Mechanisms. New York: Sprinter, 2010. Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010. Stearns, Peter N. The Industrial Revolution in World History. 3d ed. Boulder, Colo.: Westview Press, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. _______. Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

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LIVESTOCK AND ANIMAL PRODUCTS INDUSTRY Dunn, Barry. “Characteristics of Successful Ranch Management.” National Cattlemen: Producer Education 22, no. 5 (Fall, 2007): 6. Available at http://www.beefusa.org/uDocs/NC_ProED _Fall_07.pdf. Food and Agriculture Organization of the United Nations. The State of Food and Agriculture. Rome: Author, 2009. Available at http://www .fao.org/docrep/012/i0680e/i0680e00.htm. Gegner, Lance. Hog Production Alternatives. Fayetteville, Ark.: ATTRA-National Sustainable Agriculture Information Service, 2004. Available at http://attra.ncat.org/attra -pub/PDF/hog.pdf. Henkel, Keri, ed. Occupational Guidance for Agriculture. Minneapolis: Finney, 2002. Key, Nigel, and William McBride. The Changing Economics of U.S. Hog Production. Economic Research Report Number 52. Washington, D.C.: U.S. Department of Agriculture, Economic Research Service, 2007. Available at http://www.ers.usda.gov/publications/err52/ err52.pdf. McBride, William D., and Catherine Greene. “Organic Dairy Sector Evolves to Meet Changing Demand.” Amber Waves 8, no. 1 (March, 2010): 28-33. Available at http:// www.ers.usda.gov/AmberWaves/march10/ PDF/OrganicDairySector.pdf. McBride, William D., and Nigel Key. Economic and Structural Relationships in U.S. Hog Production. Agricultural Economic Report AER818. Washington, D.C.: U.S. Department of Agriculture, Economic Research Service, 2003. Available at http://www.ers.usda.gov/ publications/aer818. MacDonald, James M., and William D. McBride. The Transformation of U.S. Livestock Agriculture: Scale, Efficiency, and Risks. Economic Information Bulletin EIB-43. Washington, D.C.: U.S. Department of Agriculture, Economic Research Service, 2009. Available at http://www.ers.usda.gov/Publications/EIB43. National Academy of Sciences. Changes in the Sheep Industry in the United States. Washington, D.C.: Author, 2008.

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Organization for Economic Cooperation and Development and Food and Agriculture Organization of the United Nations. OECD-FAO Agricultural Outlook, 2009-2018. Paris: Author, 2009. Perry, Janet, David Banker, and Robert Green. Broiler Farms’ Organization, Management, and Performance. Agriculture Information Bulletin AIB748. Washington, D.C.: U.S. Department of Agriculture, Economic Research Service, 1999. Available at http://www.ers.usda.gov/ Publications/AIB748/. U.S. Bureau of Labor Statistics. “Agriculture, Forestry, and Fishing.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/ oco/cg/cgs001.htm. _______. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Agriculture. Economic Research Service. USDA Agricultural Projections to 2019. Report OCE-2010-1. Washington, D.C.: Author, 2010. http:www.ers.usda.gov/ publications/oce101. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. University of California Cooperative Extension. Structure of the Cattle Business. Livestock and Natural Resources Publication 31-609. Berkeley: Author, 1996.

Frederickson, H. George, and Kevin B. Smith. The Public Administration Theory Primer. Boulder, Colo.: Westview Press, 2003. Goldsmith, Stephen, and William D. Eggers. Governing by Network: The New Shape of the Public Sector. Washington, D.C.: Brookings Institution Press, 2004. Lane, Jan-Erik. Public Administration and Public Management: The Principal-Agent Perspective. New York: Routledge, 2005. Morgan, Douglas F., et al. Foundations of Public Service. Armonk, N.Y.: M. E. Sharpe, 2008. Morphet, Janice. Modern Local Government. Thousand Oaks, Calif.: Sage, 2008. Office of Citizen Services and Communications. “Statistics at the State and Local Levels.” February 25, 2010. http://www.usa.gov/ Government/State_Local/Statistics.shtml. PublicServiceCareers.org. “Building a Professional Career in Public Service.” http:// www.publicservicecareers.org/index.asp ?pageid=515. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

LOGGING LOCAL PUBLIC ADMINISTRATION American Federation of Teachers. Compensation Survey: A Survey of Professional, Scientific, and Related Jobs in State Government Prepared by AFT Public Employees. Washington, D.C.: Author, 2009. Available at http://archive.aft.org/ salary/2009/PubEmpsCompSurvey09.pdf. Baxter, Neale, and Mark Rowh. Opportunities in Government Careers. Rev. ed. Chicago: VGM Career Books, 2001.

INDUSTRY

Adams, Darius M., and Richard W. Haynes, eds. Resource and Market Projections for Forest Policy Development: Twenty-five Years of Experience with the U.S. RPA Timber Assessment. New York: Springer, 2007. American Forest and Paper Association. “Our Industry—Forestry.” http://www.afandpa .org/forestry.aspx. Baldwin, Richard F. Maximizing Forest Product Resources for the Twenty-first Century: New Processes, Products, and Strategies for a Changing

Bibliography World. San Francisco: Miller Freeman Books, 2000. Careers.org. Occupation Profiles: Descriptions, Earnings, Outlook. http://occupations .careers.org. Huber, Tim. “Timber Trouble: Hard Times Are Hitting the Timber Industry.” Desert News (Salt Lake City), April 9, 2008. Iannone, Don. “Industry Profile: Timber Operations.” Economic Development Futures Journal, January 23, 2006. http://www.liberty parkusafd.org/lp/Jefferson/timber %20companies%5CProfile%20Timber %20Operations .htm. Kallen, Stuart A., ed. Managing America’s Forests. Detroit: Greenhaven Press, 2005. PayScale.com. “Logging Workers, All Other Job Description.” http://www.payscale .com/ Job _Description/Logging_Workers,_All_Other. Rae, Stephen. “North American Forestry Outlook.” In ForestBook, 2006. http://www .forestindustry.com/static/ForestBook/ 09outlook.html. Ruhong, Li, et al. “Long-Term Effects of Eliminating Illegal Logging on the World Forest Industries, Trade, and Inventory.” Forest Policy and Economics 10 (October, 2008): 480-490. Solomon, Barry D., and Valerie A. Luzadis, eds. Renewable Energy from Forest Resources in the United States. New York: Routledge, 2009. Talwar, Himanshu. “Wood Industry.” 2009. http://www.economywatch.com/world-indust ries/wood-industry-timber-industry.html. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Forest, Conservation, and Logging Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos178.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Agriculture. An Economic Overview of the United States Solid Wood Industry. Washington, D.C.: Author, 2007. http://www .fas.usda.gov/ffpd/Economic-Overview/An

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_Economic_Overview_of_the_U.S_Solid _Wood_Industry.pdf. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

MASS TRANSPORTATION VEHICLES INDUSTRY American Public Transportation Association. 2009 Public Transportation Fact Book. Washington, D.C.: Author, 2009. Brown, Betty J. Transportation. Vol. 2 in Encyclopedia of Business and Finance, edited by Burton S. Kaliski. 2d ed. Detroit: Macmillan Reference, 2006. Cheape, Charles W. Moving the Masses: Urban Public Transit in New York, Boston, and Philadelphia, 1880-1912. Harvard Studies in Business History 31. Cambridge, Mass.: Harvard University Press, 1980. Cudahy, Brian J. Cash, Tokens, and Transfers: A History of Urban Mass Transit in North America. New York: Fordham University Press, 1990. Karr, Ronald Dale. Railroads. Vol. 2 in Encyclopedia of American Urban History. New York: Sage Reference, 2007. Levinson, Herbert S. “Bus Transit in the Twenty-first Century: Some Perspectives and Prospects.” Transportation Research Record: Journal of the Transportation Research Board 1760, no. 1 (2001): 42-46. http://trb.metapress .com/content/q073w13683w14255. McHoes, Ann McIver. Computer Sciences: Railroad Applications, edited by Roger R. Flynn. Vol. 3. New York: Macmillan Reference, 2002. Meier, Albert E. Over the Road: A History of Intercity Bus Transportation in the United States. Upper Montclair, N.J.: Motor Bus Society, 1975. Middleton, William D. Metropolitan Railways: Rapid Transit in America. Bloomington: Indiana University Press, 2003. Miller, John A. Fares, Please! A Popular History of Trolleys, Horse-Cars, Street-Cars, Buses, Elevateds, and Subways. New York: Dover, 1960. Parker, Jeffrey A. “Private Financing of Mass Transit.” In Private Innovations in Public Transit,

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edited by John C. Weicher. Lanham, Md: University Press of America, 1988. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Bureau of Transportation Statistics. National Transportation Statistics, 2009-2010 ed. http:// www.bts.gov/publications/national_ transportation_statistics. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Wallace, Jonathan. Railroads. Vol. 3 in Encyclopedia of Science, Technology, and Ethics, edited by Carl Mitcham. Detroit: Macmillan Reference, 2005. Walsh, Margaret. Making Connections: The Long-Distance Bus Industry in the United States. Burlington, Vt.: Ashgate, 2000. Wang, J., and S. McOwan. “Fast Passenger Ferries and Their Future.” Maritime Policy and Management: The Flagship Journal of International Shipping and Port Research 27, no. 3 (2000): 231.

MEDICINE

AND HEALTH INDUSTRY

CARE

Dill, Monda. “A Brief History of Health Care in America.” Associated Content, August 13, 2007. http://www.associatedcontent.com/article/33 9640/a_brief_history_of_health_care_in _america.html. Dillon, Tamara. “Health Care Jobs You Might Not Know About.” Occupational Outlook Quarterly, Summer, 2008. Available at http:// www.bls.gov/opub/ooq/2008/summer/ art03.pdf. Fried, Bruce, and James A. Johnson, eds. Human Resources in Health Care: Managing for Success. Washington, D.C.: AUPHA Press/Health Administration Press, 2002. Jonas, Steven, Anthony R. Kovner, and James Knickman. Jonas and Kovner’s Health Care

Delivery in the United States. New York: Springer, 2008. Koss, W., and T. Sodeman. “The Workload Recording Method: A Laboratory Management Tool.” Clinical Lab Management Review 12, no. 2 (June, 1992): 337-350. Kotlikoff, Laurence J. The Health Care Fix: Universal Insurance for All Americans. Cambridge: Massachusetts Institute of Technology, 2007. Merrit-Hawkins. Physician Salary, Compensation, and Practice Surveys. http://www.merritt hawkins.com/compensation-surveys.aspx. Plunkett, Jack W. Plunkett Health Care Industry Update. Houston, Tex.: Plunkett Research, 2010. Stevens, Rosemary, Charles E. Rosenberg, and Lawton R. Burns. History and Health Policy in the United States: Putting the Past Back In. New Brunswick, N.J.: Rutgers University Press, 2006. Swanson, Barbara M. Careers in Health Care. 5th ed. New York: McGraw-Hill, 2005. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007. U.S. Department of Health and Human Services. Office of Disease Prevention and Health Promotion. Healthy People. http://www.healthy people.gov/. World Health Organization. “Health Financing Policy.” http://www.who.int/health _financing/functions/functions/en.

METALS

MANUFACTURING INDUSTRY

Beddoes, J., and M. J. Bibby. Principles of Metal Manufacturing Processes. New York: John Wiley & Sons, 1999. Creese, Robert C., et al. Estimating and Costing for the Metal Manufacturing Industry. Boca Raton, Fla.: CRC Press, 1992.

Bibliography _______. Introduction to Manufacturing Processes and Materials. Speen, Newbury, Berkshire, England: Marcel Dekker, 1999. Hoerr, John P. And the Wolf Finally Came: The Decline of the American Steel Industry. Pittsburgh: University of Pittsburgh Press, 1988. Khare, Mukesh, et al. Aluminium Smelting: Health, Environment and Engineering Perspectives. Miami: Ian Randle, 2008. Lankford, William T., Jr., et al. The Making, Shaping, and Treating of Steel. 11th ed. Pittsburgh: AISE Steel Foundation, 1998. McDavid, Richard A., and Susan EchaoreMcDavid. Career Opportunities in Engineering. New York: Ferguson, 2007. Madar, Daniel. Big Steel: Technology, Trade, and Survival in a Global Market. Vancouver: University of British Columbia Press, 2009. Peck, Merton J. The World Aluminum Industry in a Changing Energy Era. Baltimore: The Johns Hopkins University Press, 1988. Preston, Richard. American Steel: Hot Metal Men and the Resurrection of the Rust Belt. New York: Prentice Hall, 1991. Reutter, Mark. Sparrows Point: Making Steel—The Rise and Ruin of American Industrial Might. New York: Summit Books, 1988. Rogers, Robert P. An Economic History of the American Steel Industry. New York: Routledge, 2009. Tiffany, Paul A. The Decline of American Steel: How Management, Labor, and Government Went Wrong. New York: Oxford University Press, 1988. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. World Steel Association. Steel Statistical Yearbook, 2009. Brussels, Belgium: Committee on Economic Studies, 2010.

MINING

2099

INDUSTRY

Ali, Saleem H. Treasures of the Earth: Need, Greed, and a Sustainable Future. New Haven, Conn.: Yale University Press, 2009. Bateman, Alan M. Economic Mineral Deposits. 2d ed. New York: John Wiley & Sons, 1950. Bishop, A. C., A. R. Woolley, and W. R. Hamilton. Guide to Minerals, Rocks, and Fossils. Buffalo, N.Y.: Firefly Books, 2005. Bouquet, Tim, and Byron Ousey. Cold Steel: The Multi-Billion-Dollar Battle for a Global Empire. Toronto: Key Porter Books, 2008. Burke, D. Barlow, and Robert E. Beck. The Law and Regulation of Mining: Minerals to Energy. Durham, N.C.: Carolina Academic Press, 2010. Dietrich, R. V., and B. F. Skinner. Gems, Granites, and Gravels: Knowing and Using Rocks and Minerals. New York: Cambridge University Press, 1990. Erlichman, Howard J. Conquest, Tribute, and Trade: The Quest for Precious Metals and the Birth of Globalization. Amherst, N.Y.: Prometheus Books, 2010. Hill, Mary. Gold: The California Story. Berkeley: University of California Press, 1999. Horberry, Tim, Robin Burgess-Limerick, and Lisa J. Steiner. Human Factors for the Design, Operation, and Maintenance of Mining Equipment. Boca Raton, Fla.: CRC Press, 2011. Perlez, Jane, Raymond Bonner, and Evelyn Rusli. “Below a Mountain of Wealth, a River of Waste.” New York Times late ed. (East Coast), December 27, 2005. Thompson, Tamara. Uranium Mining. Detroit: Greenhaven Press, 2010. Tilton, John E., ed. World Metal Demand: Trends and Prospects. Washington, D.C.: Resources for the Future, 1990. United Nations Statistical Division. Statistical Yearbook. 51st ed. New York: United Nations, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007.

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U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Geological Survey. Mineral Commodity Summaries, 2006. Washington, D.C.: U.S. Government Printing Office, 2006. Available at http://minerals.usgs.gov/minerals/ pubs/mcs/2006/msc2006.pdf. _______. Minerals Yearbook, 2007. Washington, D.C.: U.S. Government Printing Office, 2007. http://minerals.usgs.gov/minerals/pubs/myb .html.

MOTION PICTURE AND TELEVISION INDUSTRY Appleton, Dina, and Daniel Yankelevits. Hollywood Dealmaking: Negotiating Talent Agreements for Film, TV, and New Media. New York: Allworth Press, 2010. Balio, Tino. The American Film Industry. Madison: University of Wisconsin Press, 1976. _______. Grand Design: Hollywood as a Modern Business Enterprise, 1930-1939. New York: Maxwell Macmillan International, 1993. Bielby, Denise D., and C. Lee Harrington. Global TV: Exporting Television and Culture in the World Market. New York: New York University Press, 2008. Finney, Angus. The International Film Business: A Market Guide Beyond Hollywood. New York: Routledge, 2010. Hoovers. “British Broadcasting Corporation.” http://www.hoovers.com/company/British _Broadcasting_Corporation/hrfyri-1.html. International Television Expert Group. “TV Market Data/Global TV Funding, 2008-2013.” http://www.international-television.org/tv _market_data/pay-tv-and-tv-funding-worldwide _2008-2013.html. Koszarski, Richard. Hollywood on the Hudson: Film and Television in New York from Griffith to Sarnoff. New Brunswick, N.J.: Rutgers University Press, 2008. Langford, Barry. Post-classical Hollywood: Film Industry, Style, and Ideology Since 1945. Edinburgh: Edinburgh University Press, 2010.

Mehta, Rini Bhattacharya, and Rajeshwari Pandharipande. Bollywood and Globalization: Indian Popular Cinema, Nation, and Diaspora. New York: Anthem Press, 2010. Motion Picture Association of America. The Economic Impact of the Motion Picture and Television Industry on the United States. Washington, D.C.: Author, 2009. Musser, Charles. The Emergence of Cinema: The American Screen to 1907. New York: Maxwell Macmillan International, 1990. Udelson, Joseph H. The Great Television Race: A History of the American Television Industry, 1925-1941. University: University of Alabama Press, 1982. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Library of Congress. “History of Edison Motion Pictures.” http://memory.loc.gov/ ammem/edhtml/edmvhist.html.

MUSEUMS AND CULTURAL INSTITUTIONS INDUSTRY Alexander, Edward P. Museums in Motion: An Introduction to the History and Functions of Museums. Walnut Creek, Calif.: AltaMira Press, 1996. Burdick, Jan E. Creative Careers in Museums. New York: Allworth Press, 2008. Center for the Future of Museums. Museums and Society, 2034: Trends and Potential Futures. Washington, D.C.: American Association of Museums, 2008. Available at http://aam-us .org/upload/museumssociety2034.pdf. Chew, Ron. “In Praise of the Small Museum.” Museum News, March/April, 2002. http://www .aam-us.org/pubs/mn/MN_MA02_Small Museums.cfm.

Bibliography Institute for Career Research. Careers in Museums: Director, Curator, Conservator, Exhibit Designer, Archivist. Chicago: Author, 2007. Rentzhog, Sten. Open Air Museums: The History and Future of a Visionary Idea. Stockholm: Carlsson, 2007. Schlatter, N. Elizabeth. Museum Careers: A Practical Guide for Novices and Students. Walnut Creek, Calif.: Left Coast Press, 2008. Society of American Archivists. “So You Want to Be an Archivist: An Overview of the Archival Profession.” http://www2.archivists.org/ profession. U.S. Bureau of Labor Statistics. “Archivists, Curators, and Museum Technicians.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos065.htm. _______. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

MUSIC

INDUSTRY

Allen, Katie. “Downloads Fail to Stem Fall in Global Music Sales.” The Guardian, July 3, 2007. Borg, Bobby. The Musician’s Handbook: A Practical Guide to Understanding the Music Business. New York: Billboard Books, 2008. Cosper, Alex. “History of Record Labels and the Music Industry.” Playlist Research, 2009. http://www.playlistresearch.com/ recordindustry.htm. Deloitte. “2009 Industry Outlook: Media and Entertainment.” January 28, 2009. http://www .deloitte.com/view/en_US/us/Industries/ Media-Entertainment/article/a5391ec6f60012 10VgnVCM100000ba42f00aRCRD.htm. The Economist. “Digital Music Sales.” May 28, 2009. Espejo, Roman, ed. What Is the Future of the Music Industry? Detroit: Greenhaven Press, 2009.

2101

Gordon, Steve. The Future of the Music Business. 2d ed. Milwaukee: Hal Leonard Books, 2008. Hefflinger, Mark. “Sony BMG Revenue Down 27.8%; Digital Up 40%.” Digital Media Wire, March 20, 2008. http://www.dmwmedia.com/ news/2008/03/20/sony-bmg-revenue-down -27.8%25%3B-digital-40%25. Krasilovsky, M. William, and Sydney Shemel. This Business of Music: The Definitive Guide to the Music Industry. 10th ed. New York: Billboard Books, 2007. Miller, Warren. “Live Nation, Ticketmaster Announce Plan to Merge.” Morningstar, February 12, 2009. http://quicktake .morningstar.com/Stocknet/san.aspx?id= 279588. Negus, Keith. Music Genres and Corporate Cultures. New York: Routledge, 1999. Rapaport, Diane. A Music Business Primer. Upper Saddle River, N.J.: Prentice Hall, 2003. Thall, Peter W. What They’ll Never Tell You About the Music Business: The Myths, the Secrets, the Lies (and a Few Truths). New York: Billboard Books, 2006. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Musicians, Singers, and Related Workers.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos095.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

NATIONAL AND INTERNATIONAL SECURITY INDUSTRY Bullock, Jane A., et al. Introduction to Homeland Security: Principles of All-Hazards Response. 3d ed. Boston: Butterworth Heinemann, 2009.

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NATURAL RESOURCES MANAGEMENT Cassio, Jim, and Alice Rush. Green Careers: Choosing Work for a Sustainable Future. Gabriola Island, B.C.: New Society, 2009. DeGalan, Julie. Great Jobs for Envrionmental Studies Majors. New York: McGraw-Hill, 2008. Education-Portal.com. Natural Resource Manager Career Summary. http:// education-portal.com/articles/Natural _Resource_Manager_Career_Summary.html. Fasulo, Michael, and Paul Walker. Careers in the Environment. 3d ed. New York: McGraw-Hill, 2007. Fraidenburg, Michael E. Intelligent Courage: Natural Resource Careers That Make a Difference. Malabar, Fla.: Krieger, 2007. Greenland, Paul R., and Annamarie L. Sheldon. Career Opportunities in Conservation and the Environment. New York: Checkmark Books, 2007. Hoovers. “Environmental Consulting.” http:// www.hoovers.com/environmental-consulting/ —ID__385—/free-ind-fr-profile-basic.xhtml. Hunter, M. J., D. B. Lindenmayer, and A. J. K. Calhoun. Saving the Earth as a Career: Advice on Becoming a Conservation Professional. Oxford, England: Blackwell, 2007. Kroger, Richard. Choosing a Conservation Vocation or a Bureaucratic Career: Your Personal Choices and the Environmental Consequences. Victoria, B.C.: Trafford, 2006.

Bibliography Llewellyn, A. B. Green Jobs: A Guide to Eco-Friendly Employment. Cincinnati: Adams Media, 2008. Sharp, Bill. The New Complete Guide to Environmental Careers. Washington, D.C.: Island Press, 2001. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Conservation Scientists and Foresters.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ocos048.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

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POWER

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INDUSTRY

CareerBuilder.com. Salary Calculator and Wage Finder. http://www.cbsalary.com/salary -calculator. Careers.org. Occupation Profiles: Descriptions, Earnings, Outlook. http://occupations .careers.org. Elliott, David. Nuclear or Not? Does Nuclear Power Have a Place in a Sustainable Energy Future? New York: Palgrave Macmillan, 2007. Franceschetti, Donald R., David Rulloch, and Lee A. Paradise. “Can Radiation Waste from Fission Reactors Be Safely Stored?” In Science in Dispute, edited by Neil Schlager. Farmington Hills, Mich.: Gale, 2002. Heppenheimer, T. A. “Nuclear Power: What Went Wrong?” American Heritage of Invention and Technology 18, no. 2 (2002): 46-56. Herbst, Alan M., and George W. Hopley. Nuclear Energy Now: Why the Time Has Come for the World’s Most Misunderstood Energy Source. Hoboken, N.J.: John Wiley & Sons, 2007. Lejzerovi5, Aleksander. Wet-Steam Turbines for Nuclear Power Plants. Tulsa, Okla.: PennWell, 2005.

OUTDOOR RECREATION INDUSTRY Beech, John G., and Simon Chadwick. The Business of Tourism Management. Upper Saddle River, N.J.: Prentice Hall, 2006. Bell, Simon. Design for Outdoor Recreation. New York: Taylor and Francis, 1997. Broadhurst, Rich. Managing Environments for Leisure and Recreation. New York: Routledge, 2001. Fennell, David A. Ecotourism: An Introduction. New York: Routledge, 2003. Forbes, M. S., F. S. Liljegren, J. T. Liljegren, and V. E. Lovejoy. Outdoor Recreation Business Plan Guidebook. Denver: U.S. Department of the Interior, Bureau of Reclamation, Policy and Program Services, Denver Federal Center, 2008. Available at http://www.usbr.gov/ recreation/publications/BusPlanGuide.pdf. Gartner, W. C., and D. W. Lime. Trends in Outdoor Recreation, Leisure, and Tourism. Oxfordshire, England: CABI Press, 2000. Jenkins, John. Outdoor Recreation Management. New York: Routledge, 1999.

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PAPER MANUFACTURING AND PRODUCTS INDUSTRY Bjorkman, A., D. Paun, and C. Jacobs-Young. “Financial Performance, Capital Expenditures, and International Activities of the North American Pulp and Paper Industry at Mid-Decade.” TAPPI Journal 80, no. 10 (October, 1997): 71-84. Carson, Thomas, and Mary Bonk. Gale Encyclopedia of U.S. Economic History. Detroit: Gale Group, 1999. Converter. “New Technology Active in Sector.” 46, no. 6 (October 28, 2008). Retrieved from Business Source Complete database. Datamonitor. Global Paper Products: Industry Profile. March 8, 2010. Retrieved from MarketLine database.

_______. Paper and Paperboard in the United States. March 15, 2010. Retrieved from MarketLine database. Encyclopedia of American Industries. Millerton, N.Y.: Grey House, 2008. Holik, Herbert. Handbook of Paper and Board. Weinheim, Germany: Wiley-VCH, 2006. Hunter, Dard. Papermaking: The History and Technique of an Ancient Craft. New York: Knopf, 1947. IBISWorld. Cardboard Box and Container Manufacturing in the U.S.: Industry Report 32221. February, 2010. Retrieved from IBISWorld Industry Market Research database. _______. Cardboard Mills in the U.S.: Industry Report 32213. June, 2009. Retrieved from IBISWorld Industry Market Research database. _______. Coated and Laminated Paper Manufacturing in the U.S.: Industry Report 32222. February, 2010. Retrieved from IBISWorld Industry Market Research database. _______. Labels, Egg Cartons, and Other Paper Product Manufacturing the U.S.: Industry Report 32229b. January, 2010. Retrieved from IBISWorld Industry Market Research database. _______. Office Stationery Manufacturing the U.S.: Industry Report 32223. May, 2010. Retrieved from IBISWorld Industry Market Research database. _______. Paper Mills in the U.S.: Industry Report 32212. February, 2009. Retrieved from IBISWorld Industry Market Research database. _______. Sanitary Paper Product Manufacturing in the U.S.: Industry Report 32229a. February, 2010. Retrieved from IBISWorld Industry Market Research database. _______. Wood Pulp Mills in the U.S.: Industry Report 32211. November, 2009. Retrieved from IBISWorld Industry Market Research database. Nurmi, Ville. “Future Trends of HRD in the Finnish Pulp and Paper Industry.” Human Resource Development International 10, no. 1 (2007): 107-113. O’Hara, Frederick M., Jr., and F. M. O’Hara III. Handbook of United States Economic and Financial Indicators. Westport, Conn.: Greenwood Press, 2000. Organization for Economic Cooperation and Development. OECD Environmental Outlook to 2030. Paris: Author, 2008.

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PASSENGER TRANSPORTATION AND TRANSIT INDUSTRY Cudahy, Brian. Cash, Tokens, and Transfers: A History of Urban Mass Transit in North America. New York: Fordham University Press, 1990. Guess, George. Public Policy and Transit System Management. New York: Greenwood Press, 1990. Landefeld, Steven, Brent R. Moulton, and Cindy M. Vojtech. “Chained-Dollar Indexes: Issues, Tips on Their Use, and Upcoming Changes.” Survey of Current Business (November, 2003): 8-16. McDavid, Richard, and Susan Echaore-McDavid. Career Opportunities in Transportation. New York: Ferguson, 2009. Transit Cooperative Research Program. 2008 Annual Report. Washington, D.C.: Transportation Research Board, 2008. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

PERSONAL

SERVICES

Brown, Bobbi, and Sally Wadyka. Bobbi Brown Beauty Evolution: A Guide to a Lifetime of Beauty. New York: HarperCollins, 2002. Careers in Focus: Personal Services. 2d ed. New York: Ferguson, 2007. Clarke-Stewart, A., and V. D. Allhusen. What We Know About Childcare. Cambridge, Mass.: Harvard University Press, 2005. Ferri, E., and M. E. Siegel. Finger Tips: A Professional Manicurist’s Techniques for Beautiful Hands and Feet. New York: C. N. Potter, 1988. Mendelson, C. Home Comforts: The Art and Science of Keeping House. New York: Scribner, 1999.

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PETROLEUM AND NATURAL GAS INDUSTRY Anderson, Robert O. Fundamentals of the Petroleum Industry. Norman: University of Oklahoma Press, 1984. Bader, Jeffrey, et al. The Global Politics of Energy. Washington, D.C.: Aspen Institute, 2008. Boudreaux, Terry. Ethanol and Biodiesel: What You Need to Know. McLean, Va.: Hart Energy, 2007. Deffeyes, Kenneth S. Hubbert’s Peak: The Impending World Oil Shortage. Princeton, N.J.: Princeton University Press, 2001. Drapes, Michaela. Vault Guide to the Top Energy and Oil and Gas Employers, 2009. New York: Vault Reports, 2008. Engler, Robert. The Brotherhood of Oil: Energy Policy and the Public Interest. Chicago: University of Chicago Press, 1977. Falola, Toyin, and Ann Genova. The Politics of the Global Oil Industry: An Introduction. Westport, Conn.: Praeger, 2005. Grace, Robert. Oil: An Overview of the Petroleum Industry. Houston, Tex.: Gulf, 2007. Johnson, Arthur M. Pipelines: A Study in Private Enterprise and Public Policy. Ithaca, N.Y.: Cornell University Press, 1956. Reprint. Westport, Conn.: Greenwood Press, 1982.

Miesner, Thomas O., and William L. Leffier. Oil and Gas Pipelines in Nontechnical Language. Tulsa, Okla.: Pennwell, 2006. Odell, Peter R. Global Issues. Vol. 1 in Oil and Gas: Crises and Controversies, 1961-2000. Brentwood, Essex, England: Multi-Science, 2004. Raymond, Martin S., and William L. Leffier. Oil and Gas Production in Nontechnical Language. Tulsa, Okla.: Pennwell, 2005. Roberts, Paul. The End of Oil: On the Edge of a Perilous New World. New York: Mariner Books, 2005. Sampson, Anthony. The Seven Sisters: The Great Oil Companies and the World They Shaped. New York: Viking Press, 1980. Simmons, Matthew R. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. New York: Wiley, 2006. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

PHARMACEUTICALS AND MEDICATIONS INDUSTRY Alliance for Retired Americans Educational Fund. Outrageous Fortune: How the Drug Industry Profits from Pills. Washington, D.C.: Author, 2007. Angell, Marcia. The Truth About Drug Companies: How They Deceive Us and What to Do About It. New York: Random House, 2004. Bastianelli, Enrico, Jurg Eckhardt, and Olivier Teirlynck. “Pharma: Can the Middle Hold?” The McKinsey Quarterly, May 29, 2001, 118. Campbell, John J. Understanding Pharma: The Professional’s Guide to How Pharmaceutical and Biotech Companies Really Work. 2d ed. Raleigh, N.C.: Pharmaceutical Institute, 2008.

Bibliography Cockburn, Iain M. “The Changing Structure of the Pharmaceutical Industry.” Health Affairs 23, no. 1 (January/February, 2004): 10-22. Davidson, Larry, and Gennadiy Greblov. “The Pharmaceutical Industry in the Global Economy.” Bloomington: Indiana University Kelley School of Business, 2005. Jacobsen, Thomas M., and Albert I. Wertheimer. Modern Pharmaceutical Industry: A Primer. Sudbury, Mass.: Jones and Bartlett, 2010. McCarthy, Robert L., and Kenneth W. Schafermeyer. Introduction to Health Care Delivery: A Primer for Pharmacists. 2d ed. Gaithersburg, Md.: Aspen, 2001. Niebyl, Jennifer R. “The Pharmaceutical Industry: Friend or Foe?” American Journal of Obstetrics and Gynecology, April, 2008, 435. Organization for Economic Cooperation and Development. Pharmaceutical Pricing Policies in a Global Market. Paris: Author, 2008. Paul, Steven M., et al. “How to Improve R&D Productivity: The Pharmaceutical Industry’s Grand Challenge.” Nature Reviews: Drug Discovery 9, no. 3 (March, 2010): 203-214. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Congressional Budget Office. Research and Development in the Pharmaceutical Industry: A CBO Study. Washington, D.C.: Author, 2006. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Internal Revenue Service. “Pharmaceutical Industry Overview.” http://www.irs.gov/ businesses/article/0,,id=169579,00.html. World Trade Organization. “TRIPS and Pharmaceutical Patents: Fact Sheet.” Geneva, Switzerland: Author, 2006. http://www.wto .org/english/tratop_e/trips_e/factsheet _pharm00_e.htm.

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PHILANTHROPIC, CHARITABLE, RELIGIOUS, CIVIC, AND GRANT-MAKING INDUSTRY Boris, Elizabeth T., et al. What Drives Foundation Expenses and Compensation: Results of a Three-Year Study. New York: Urban Institute, Foundation Center, and Philanthropic Research, 2008. Available at http:// foundationcenter.org/gainknowledge/ research/pdf/fec_report.pdf. Charities Aid Foundation. International Comparison of Charitable Giving, November, 2006. Kings Hill, West Malling, Kent, England: Author, 2006. Available at http://www .cafonline.org/pdf/International Giving highlights.pdf. Elazar, Daniel J. Community and Polity: The Organizational Dynamics of American Jewry. Philadelphia: Jewish Publication Society of America, 1976. Gassler, Robert Scott. The Economics of Nonprofit Enterprise: A Study in Applied Economic Theory. Lanham, Md.: University Presses of America, 1986. Grobman, Gary M., and Gary B. Grant. The Non-Profit Internet Handbook. Harrisburg, Pa.: White Hat Communications, 1997. Independent Sector. “The Sector’s Economic Impact.” http://www.independentsector .org/economic_role. Keating, Barry P., and Maryann O. Keating. Not-for-Profit. Glen Ridge, N.J.: Thomas Horton and Daughters, 1980. Knauft, E. B., Renee A. Berger, and Sandra T. Gray. Profiles of Excellence: Achieving Success in the Nonprofit Sector. San Francisco: Jossey-Bass, 1991. Lowell, Stephanie. Careers in the Nonprofit Sector. Cambridge, Mass.: Harvard Business School, 2000. Olasky, Marvin. The Tragedy of American Compassion. Preface by Charles Murray. Washington, D.C.: Regnery, 1992. Organization for Economic Cooperation and Development. The Non-profit Sector in a Changing Economy. Paris: Author, 2003.

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Pallotta, Dan. Uncharitable: How Restraints on Nonprofits Undermine Their Potential. Hanover, N.H.: University Press of New England, 2008. Raymond, Susan U. The Future of Philanthropy: Economics, Ethics, and Management. Hoboken, N.J.: John Wiley & Sons, 2004. Shaw, Sondra C., and Martha A. Taylor. Reinventing Fundraising: Realizing the Potential of Women’s Philanthropy. San Francisco: Jossey-Bass, 1995. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. Von Drehle, David. “The Other Financial Crisis.” Time, June 28, 2010, 22-28. White, Michelle J., ed. Nonprofit Firms in a Three-Sector Economy. Washington, D.C.: Urban Institute, 1991. Wing, Kennard T., Katie L. Roediger, and Thomas H. Pollak. The Nonprofit Sector in Brief: Public Charities, Giving, and Volunteering, 2009. Washington, D.C.: Urban Institute, 2010. http://www.urban.org/uploadedpdf/412085 -nonprofit-sector-brief.pdf. Wolch, Jennifer L. The Shadow State: Government and Voluntary Sector in Transition. New York: Foundation Center, 1990.

PLASTICS AND RUBBER MANUFACTURING INDUSTRY Aftalion, Fred. A History of the International Chemical Industry. Philadelphia: University of Pennsylvania Press, 1991. Chamis, Alice Yanosoko. “The Literature of Synthetic Rubber.” In Literature of Chemical Technology, edited by Julian F. Smith.

Washington, D.C.: American Chemical Society, 1968. Chandler, Alfred D. Shaping the Industrial Century: The Remarkable Story of the Evolution of the Modern Chemical and Pharmaceutical Industries. Cambridge, Mass.: Harvard University Press, 2005. Ciesielski, Andrew. An Introduction to Rubber Technology. Shawsbury, Shrewsbury, Shropshire, England: RAPRA Technology, 1999. International Institute of Synthetic Rubber Producers. Synthetic Rubber: The Story of an Industry. New York: Author, 1973. Kaufman, M. The First Century of Plastics: Celluoid and Its Sequel. London: Plastics Institute, 1963. Mossman, Susan, ed. Early Plastics: Perspectives, 1850-1950. London: Leicester University Press, 1997. Schidrowitz, P., and T. R. Dawson. History of the Rubber Industry. London: Institution of the Rubber Industry, 1952. Stevens, Eugene S. Green Plastics: An Introduction to the New Science of Biodegradable Plastics. Princeton, N.J.: Princeton University Press, 2001. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http://www.census.gov/cgi-bin/sssd/naics/na icsrch?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Environmental Protection Agency. Office of Compliance. Profile of the Rubber and Plastics Industry. 2d ed. Washington, D.C.: Author, 2005.

POLITICAL ADVOCACY INDUSTRY Bimbaum, Jeffrey H. “In a Harsh Climate for Lobbyists, the Forecast Calls for . . . More

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CB Richard Ellis Group. “CB Richard Ellis’s 2009 Review and 2010 Outlook for Commercial Real Estate in Europe.” December, 2009/ January, 2010. http://www.cbre.com/ EN/AboutUs/MediaCentre/2010/Pages/ 011110.aspx. Harkins, Phil. Everybody Wins: The Story and Lessons Behind RE/MAX. Hoboken, N.J.: John Wiley & Sons, 2004. Keller, Gary, with Dave Jenks and Jay Papasan. The Millionaire Real Estate Agent: It’s Not About the Money . . . It’s About Being the Best You Can Be! New York: McGraw-Hill, 2004. Lindahl, David. Emerging Real Estate Markets: How to Find and Profit from Up-and-Coming Areas. Hoboken, N.J.: John Wiley & Sons, 2008. Malpass, Peter, and Robert Rowlands. Housing, Markets, and Policy. New York: Routledge, 2010. National Association of REALTORS. Field Guide to the History of the National Association of REALTORS. July, 2008. http://www.realtor .org/library/library/fg002. Plunkett, Jack W. Plunkett’s Real Estate and Construction Industry Almanac, 2010. Houston, Tex.: Plunkett Research, 2010. Riley, Rowan. Real Estate: An All-in-One Guide to Navigating Toward a New Career. New York: Ferguson, 2010. Urban Land Institute and Pricewaterhouse Coopers. Emerging Trends in Real Estate, 2009-2010. Washington, D.C.: Author, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data

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RENTAL AND LEASING SERVICES Auto Rental News. “U.S. Car Rental Revenues Rise in 2010.” December 1, 2010. http://www .autorentalnews.com/News/Story/2010/12/ Revenues-Rise-in-2010.aspx. Barton, Robert. “American Car Rental Association Chief: I’m ‘Adamantly Opposed’ to á la Carte Pricing.” Interview by Christopher Elliott. Elliott Blog, April 24, 2009. http:// www.elliot.org/first-person/6333. The Economist. “Wheels When You Need Them: Car-Sharing.” 396, no. 8698 (September 4, 2010): 70. Jahn, Tim. “Creating the Textbook Rental Industry—With Aayush Phumbhra, Founder of Chegg.com.” Beyond the Pedway, November 9, 2010. http://www.beyond thepedway.com/ chegg-interview-aayush-phumbhra. Jakl, Thomas, and Petra Schwager, eds. Chemical Leasing Goes Global: Selling Services Instead of Barrels: A Win-Win Business Model for Environment and Industry. New York: SpringerWien, 2008. Kazanjian, Kirk. Exceeding Customer Expectations: What Enterprise, America’s Number-One Car Rental Company, Can Teach You About Creating Lifetime Customers. Foreword by Andrew C. Taylor. New York: Currency Doubleday/Random House, 2007. Keegan, Paul. “Zipcar: The Best New Idea in Business.” Fortune 160, no. 5 (September 14, 2009): 42-52. Lacko, James M., Signe-Mary McKernan, and Manoj Hastak. Survey of Rent-to-Own Customers. Washington, D.C.: Federal Trade Commission, Bureau of Economics, 2000. Menkin, Christopher. “The $650 Billion Leasing Industry Has Dramatically Changed.” Seeking Alpha: Financial Stocks, March 27, 2009. http:// seekingalpha.com/article/128189-the-650 -billion-leasing-industry-has-dramatically -changed. Monitor Daily. “Equipment Finance Industry Confidence Shows More Improvement.”

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RESTAURANT

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Beriss, David, and David Evan Sutton. The Restaurants Book: Ethnographies of Where We Eat. Oxford, England: Berg, 2007. “Economics and Origin of the Restaurant.” Cornell Hotel and Restaurant Administration Quarterly, August, 2002. http://www.arts .cornell.edu/econ/kiefer/Restaurant.PDF. Fine, Gary Alan. Kitchens: The Culture of Restaurant Work. Berkeley: University of California Press, 2008.

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Fisher, Marshall L., and Ananth Raman. The New Science of Retailing: How Analytics Are Transforming the Supply Chain and Improving Performance. Boston: Harvard Business Press, 2010. JobBank USA. “Training, Certifications, Skills and Advancement: Purchasing Managers, Buyers, and Purchasing Agents.” http://www .jobbankusa.com/career_employment/ purchasing_managers_buyers_purchasing _agents/training_certifications_skills _advancement.html. Krafft, Manfred, and Murali K. Mantrala. Retailing in the Twenty-first Century: Current and Future Trends. New York: Springer, 2010. Lichtenstein, Nelson. The Retail Revolution: How Wal-Mart Created a Brave New World of Business. New York: Metropolitan Books, 2009. Miller, Michael. Selling Online 2.0: Migrating from eBay to Amazon, Craigslist, and Your Own E-commerce Website. Indianapolis, Ind.: Que, 2009. Moody’s Investor Services. “Annual Outlook: U.S. Retail Industry.” Alacra Store. http://www .alacrastore.com/research/moodys-global -credit-research-Annual_Outlook_U_S_Retail _Industry_Sluggish_Economy_Will_Limit _Earnings_Growth_in_2011-PBC_128312. PayScale.com. “Salary for Industry: Retail.” January 11, 2011. http://www.payscale.com/ research/US/ Industry=Retail/Salary. _______. “Salary Snapshot for Web Administrator Jobs.” January 7, 2011. http://www.payscale .com/research/US/Job=Web_Administrator/ Salary. Salary.com. “Salary Wizard: Storekeeper.” http://www1.salary.com/Storekeeper-salary .html. Simply Hired. “Average Building Maintenance Salaries.” http://www.simplyhired .com/ a/salary/search/q-building+maintenance. _______. “Average Online Retail Sales Salaries.” http://www.simplyhired.com/a/salary/search/ q-online+retail+sales/l-logan,+ut. StateUniversity.com. “Stock Clerk Job Description, Career as a Stock Clerk, Salary,

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SCIENTIFIC AND TECHNICAL SERVICES Adeola, Bayo. Engineering Is Development: Towards a New Role for Consultancy in Nation Building. Lagos, Nigeria: Comprehensive Project Management Services, 2009. Camenson, Blythe. Opportunities in Forensic Science Careers. New York: McGraw-Hill, 2009. Careers in Focus: Engineering. 2d ed. New York: Ferguson, 2007. Erickson, Aaron. The Nomadic Developer: Surviving and Thriving in the World of Technology Consulting. Upper Saddle River, N.J.: Addison-Wesley, 2009. Gartner, John. Confessions of a Consultant: Survival Business Skills for Scientists and Engineers. Belleville, Ont.: Epic Press, 2008. Kenney, Martin. Biotechnology: The University-Industrial Complex. New Haven, Conn.: Yale University Press, 1986. Simon, Françoise, and Philip Kotler. Building Global Biobrands: Taking Biotechnology to Market. New York: Free Press, 2003. Skrzeszewski, Stan. The Knowledge Entrepreneur. Lanham, Md.: Scarecrow Press, 2006. U.S. Bureau of Labor Statistics. “Biological Scientists.” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos047.htm.

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SHIPBUILDING, SUBMARINES, AND NAVAL TRANSPORT INDUSTRY Benamara, Hassiba. Shipping and Global Trade: A Review of Major Developments. New York: United Nations Conference on Trade and Development, 2010. Crowell, John Franklin. “Present Status and Future Prospects of American Shipbuilding.” Annals of the American Academy of Political and Social Science 19 (January, 1902): 46-60. De la Pedraja Tomán, René. A Historical Dictionary of the U.S. Merchant Marine and Shipping Industry: Since the Introduction of Steam. Westport, Conn.: Greenwood Press, 1994. Dear, I. C. B., and Peter Kemp, eds. The Oxford Companion to Ships and the Sea. 2d ed. New York: Oxford University Press, 2005. Finamore, Daniel. America and the Sea: Treasures from the Collections of Mystic Seaport. New Haven, Conn.: Yale University Press, 2005. Fox, Nancy Ruth, and Lawrence J. White. “U.S. Shipping Policy: Going Against the Tide.”

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SPACE SPACE

EXPLORATION AND SCIENCE INDUSTRY

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THEMED

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VETERINARY

INDUSTRY

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Novak, Jeannie. Game Development Essentials: An Introduction. Clifton Park, N.Y.: Thomson/ Delmar Learning, 2005. Rutter, Jason, and Jo Bryce. Understanding Digital Games. Thousand Oaks, Calif.: SAGE, 2006. Sheffield, Brandon, and Jeffrey Fleming. “Ninth Annual Game Developer Salary Survey.” Game Developer, April, 2010, 7-13. Taylor, T. Allan, and James Robert Parrish. Careers in the Internet, Video Games, and Multimedia. New York: Ferguson, 2007. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls .gov/oco/cg. _______. “Computer Software Engineers and Computer Programmers.” In Occupational Outlook Handbook, 2010-2011 ed. http:// www.bls.gov/oco/ocos303.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html.

WAREHOUSING AND INDUSTRY

STORAGE

Bourlakis, Paul W., and W. H. Weigtman, eds. Food Supply Chain Management. Hoboken, N.J.: John D. Wiley and Sons, 2004. Center for Chemical Process Safety. Guidelines for Safe Warehousing of Chemicals. Hoboken, N.J.: John D. Wiley and Sons, 2008. Martin, James William. Lean Six Sigma for Supply Chain Management: The Ten-Step Solution Process. New York: McGraw-Hill, 2006. Morris, Peter, and Jeffrey K. Pinto, eds. The Wiley Guide to Project Technology Management, Supply Chain, and Procurement. Hoboken, N.J.: John D. Wiley and Sons, 2007. Ryan, Mary Meghan, ed. Handbook of U.S. Labor Statistics: Employment, Earnings, Prices, Productivity, and Other Labor Data. 13th ed. Lanham, Md.: Bernam Press, 2010.

Toigo, Jon William. The Holy Grail of Data Storage Management. New York: Prentice Hall, 1999. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/ industry/otea/OTII/OTII-index.html.

WASTE MANAGEMENT INDUSTRY BCC Research. “Global Markets for Hazardous Waste Remediation Technologies.” MarketResearch.com, April 1, 2006. http:// www.marketresearch.com/product/display .asp?productid=1300222&SID=31904368 -463897374-440422766&partnerid=811788012 &kw =global%09waste%09revenues. Dijkgraaf, E., and R. H. J. M. Gradus. The Waste Market: Institutional Developments in Europe. Dordrecht: Springer, 2008. Hoover’s. “Industry Overview: Waste Management.” http://www.hoovers.com/ waste-management/—ID__99—/free-ind-fr -profile-basic.xhtml. Institute for Career Research. Careers in the Waste Management Industry. Chicago: Author, 2007. Key Note Publications. Recycling and Waste Management. Hampton, Middlesex, England: Author, 2009. Miller, Debra A. Garbage and Recycling. Detroit: Lucent Books, 2010. Renner, Michael, et al. Green Jobs: Working for People and the Environment. Washington, D.C.: Worldwatch Institute, 2008. Stuart, Tristram. Waste: Uncovering the Global Food Scandal. New York: W. W. Norton, 2009. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg.

Bibliography U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Government Accountability Office. “Nuclear Waste: DOE’s Environmental Management Initiatives Report Is Incomplete.” June 2, 2009. http://www.gao.gov/new.items/d09697r.pdf.

WATCHES AND JEWELRY INDUSTRY Barnes Reports. U.S. Jewelry and Silverware Manufacturing Industry Report. Woolwich, Maine: Author, 2010. Blakemore, Kenneth. Management for the Retail Jeweler: A Companion Volume to the Retail Jeweler’s Guide. London: Iliffe Books, 1973. Cipriani, Curzio, and Alessandro Borelli. Simon and Schuster’s Guide to Gems and Precious Stones. New York: Simon and Schuster, 1986. Glasmeier, Amy. Manufacturing Time: Global Competition in the Watch Industry, 1795-2000. New York: Guilford Press, 2000. Griffiths, Jane. Jewelry, Watches, and Fashion Accessories: 2000 Market Report. Hampton, England: Key Note, 2000. Harrold, Michael C. American Watchmaking: A Technical History of the American Watch Industry, 1850-1930. n.p.: Author, 1981. IBISWorld. U.S. Industry Report: Jewelry Stores, 2010. http://www.ibisworld.com/ industry/default.aspx?indid=1075. Institute for Career Research. Careers in the Jewelry Industry: Design, Manufacturing, Retailing. Chicago: Institute for Career Research, 2003. Jewelers of America. Careers in the Jewelry Industry: Your Guide to a Bright and Shining Future. New York: Jewelers of America, 200[?]. Morton Research Corporation. The Jewelry Industry: An Economic, Marketing, and Business Manual of the U.S. Precious Metal Jewelry Industry. Boca Raton, Fla.: Morton Research Company, 1997.

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O’Donoghue, Michael. Synthetic, Imitation, and Treated Gemstones. London: Robert Hale, 2008. Parker, Philip M. The 2007-2012 Outlook for Jewelry Stores in the United States. San Diego, Calif.: ICON Group, 2006. Unity Marketing Group. Jewelry and Watch Report, 2007. http://www.unitymarketingonline .com/cms_jewelry/jewelry/jewelry_2007.php. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Jewelers and Precious Stone and Metal Workers” In Occupational Outlook Handbook, 2010-2011 ed. http://www.bls.gov/oco/ ocos222.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. _______. 2002 Economic Census: Manufacturing Industry Series. Watch, Clock and Parts Manufacturing. U.S. Department of Commerce, Economics and Statistics Administration, 2004. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. _______. The U.S. Jewelry Industry: Federal Interagency Report on U.S. Jewelry Competitiveness Issues. Washington, D.C.: Author, 1997. U.S. International Trade Commission. A Competitive Assessment of the U.S. Jewelry Industry, Phase I: Costume Jewelry: Report to the Commission. Washington, D.C.: Author, 1986. U.S. Small Business Administration. Starting and Managing a Small Retail Jewelry Store. Washington, D.C.: Author, 1971.

WATER

SUPPLY

INDUSTRY

Brooks, Kenneth N., et al. Hydrology and the Management of Watersheds. 3d ed. Ames: Iowa State Press, 2003. Career Information Center. Agribusiness, Environment, and Natural Resources. 9th ed. Vol. 1. Detroit: Thomas/Gale, 2007.

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Bibliography

Cech, Thomas V. Principles of Water Resources: History, Development, Management, and Policy. 3d ed. Hoboken, N.J.: John Wiley, 2010. Chin, David A. Water-Resources Engineering. 2d ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2006. Dzurik, Andrew A. Water Resources Planning. 3d ed. Lanham, Md.: Rowman and Littlefield, 2003. Fair, Gordon M., John C. Geyer, and Daniel A. Okun. Water Supply and Wastewater Removal. Vol. 1 in Water and Wastewater Engineering. New York: John Wiley, 1966. Gleick, Peter H., et al. The World’s Water, 2008-2009: The Biennial Report on Freshwater Resources. Washington, D.C.: Island Press, 2009. Gray, N.F. Drinking Water Quality: Problems and Solutions. 2d ed. New York: Cambridge University Press, 2008. Grigg, Neil S. “Water and Wastewater Workforce Stats: The Case for Improving Job Data.” Journal of the American Water Works Association 101, no. 8 (August, 2009): 67-78. Hammer, Mark J., and Mark J. Hammer, Jr. Water and Wastewater Technology. 5th ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2004. IBISWorld. Water Supply and Irrigation Systems in the U.S.: Industry Report 22131. May 4, 2010. http://www.ibisworld.com/industry/outlook .aspx?indid=161. Linsley, Ray K., and Joseph B. Franzini. Water-Resources Engineering. New York: McGraw-Hill, 1972. Patrick, Roger, and Edward G. Means III. “Meeting Customer Expectations in a Fluid Utility Environment.” Journal of the American

Water Works Association 97, no. 9 (September, 2005): 56-61. Pojasek, Robert B., ed. Drinking Water Quality Enhancement Through Source Protection. Ann Arbor, Mich.: Ann Arbor Science, 1977. Speidel, David H., Lon C. Ruedisili, and Allen F. Agnew, eds. Perspectives on Water: Uses and Abuses. New York: Oxford University Press, 1988. Spellman, Frank R. The Science of Water: Concepts and Applications. 2d ed. Boca Raton, Fla.: CRC Press, 2008. Symons, James M. Plain Talk: Questions and Answers About the Water You Drink. 4th ed. Denver: American Water Works Association, 2001. U.S. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/ oco/cg. _______. “Water and Liquid Waste Treatment Plant and System Operators.” In Occupational Outlook Handbook, 2010-2011 ed. http://www .bls.gov/oco/ocos229.htm. U.S. Census Bureau. North American Industry Classification System (NAICS), 2007. http:// www.census.gov/cgi-bin/sssd/naics/naicsrch ?chart=2007. U.S. Department of Commerce. International Trade Administration. Office of Trade and Industry Information. Industry Trade Data and Analysis. http://ita.doc.gov/td/industry/ otea/OTII/OTII-index.html. U.S. Environmental Protection Agency. Office of Water. Community Water System Survey, 2000. Washington, D.C.: Author, 2002. Wurbs, Ralph A., and James P. Wesley. Water Resources Engineering. Upper Saddle River, N.J.: Prentice Hall, 2002.

Electronic Resources The following electronic resources—both general and targeted by industry—will assist both students and career seekers in learning about various industries and their potential for jobs and careers. GENERAL

RESOURCES

Hoover’s, Inc. Hoovers.com. hoovers.com Hoover’s, Inc., a veteran business publisher, provides some information about industries on its free Web site, although it offers more extensive data on its subscription database, First Research. The free site allows users to obtain brief overviews of many industries, with descriptions of these industries and data about top companies.

Web Sites Career Overview. Careers and Occupations Guide: Complete List of Career Choices. http://www.careeroverview.com/careers.html Career Overview is designed to help students, job seekers, and career changers obtain information about employment. The site’s Careers and Occupations Guide lists eighteen types of industry, such as education, engineering, law enforcement, sales, and transportation. After selecting a category, users can retrieve a list of specific occupations, and they can then access job descriptions and information about training, qualifications, employment opportunities, and salaries for these jobs.

JobBank USA. Career Profile, Career Profiles, Career Statistics. http://www.jobbankusa.com/career-profiles JobBank USA, an online recruiting site, contains data about several industries, including business, education, social services, engineering, and health care, on its career profiles and statistics page. Users can retrieve general information about these industries, as well as statistics about specific occupations within them. For example, the business career page contains a list of job titles with statistics about the number of workers, expected growth, median salaries, and number of employees with college degrees for each job. Users can then click on the job titles to obtain additional information about specific jobs.

Deloitte Development LLC. Industries. http://www.deloitte.com/view/en_US/us/ Industries/index.htm Deloitte, an international accountancy and business consulting firm, provides information about selected industries on its Web site. The site’s Industries page contains a list of about twenty industries, including aerospace and defense, automotive, oil and gas, state and federal government, and retail. The individual pages for each of these industries provides access to articles and analyses of current issues in these fields.

U.S. Census Bureau. 2007 Economic Census. www.census.gov/econ/census07 The Economic Census is conducted every five years and provides a detailed portrait of the American economy. The 2007 census contains data about selected industries, including mining, utilities, construction, manufacturing, finance and insurance, and health care.

Global Edge. Industry Profiles. http://globaledge.msu.edu/industries The Global Edge site was created by the International Business Center at Michigan State University to provide information about global business activities. The Industries page enables users to access information about twenty industries, including discussions of an industry’s composition, history, leading companies, trends, and future outlook. There are also trade and sales statistics and links to additional Web-based resources for each industry.

U.S. Census Bureau. North American Industry Classification System, 2007. http://www.census.gov/cgi-bin/sssd/naics/ naicsrch?chart=2007 The North American Industry Classification System (NAICS) is, according to its Web site, “the stan2129

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Electronic Resources

dard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.” The official NAICS Manual for 2007, which is also available in print and on CD-ROM, provides definitions for each industry, background information about industries, and tables outlining changes in each industry between 2002 and 2007. U.S. Department of Commerce. International Trade Administration. Manufacturing and Services. http://trade.gov/mas/index.asp The Manufacturing and Services unit of the International Trade Administration aims to increase the global competitiveness of American industry. Its Web site provides statistical data about specific manufacturing and service industries, including aerospace, health, financial services, and travel and tourism. U.S. Department of Commerce. International Trade Administration. Office of Industry Analysis. http://www.trade.gov/mas/ian/index.asp This section of the Department of Commerce Web site offers analysis and information about issues affecting U.S. industry, including the national employment outlook, an overview of U.S. trade, trade statistics, and analyses of the effects of international trade on the economies of each of the fifty states. U.S. Department of Labor. Bureau of Labor Statistics. Career Guide to Industries, 2010-2011 ed. http://www.bls.gov/oco/cg The 2010-2011 edition of Career Guide to Industries (CGI) provides a wealth of information about American industries, including specific occupations within an industry, training and advancement, salaries, expected job prospects, and working conditions. This information can be accessed in several ways: Users can enter a term in a search box located on every page; they can browse through a list of industries featured on the home page; or they can use CGI’s index, accessible from the home page, to retrieve an alphabetical listing of industries.

U.S. Department of Labor. Bureau of Labor Statistics. Occupational Outlook Handbook. 2010-2011 ed. http://www.bls.gov/oco Occupational Outlook Handbook offers information about hundreds of jobs, describing the required training and education, earnings, expected job prospects, what workers do on the job, and working conditions. Users can retrieve information in three ways: They can enter a term in a search box located on every page; they can browse through a list of occupations featured on the home page; or they can use the handbook’s index, accessible from the home page, to retrieve an alphabetical listing of job titles. This Web site also provides information in Spanish about one hundred occupations. U.S. Department of Labor. Bureau of Labor Statistics. Occupational Outlook Quarterly Online (OOQ Online). http://www.bls.gov/opub/ooq OOQ Online is an online version of the print periodical Occupational Outlook Quarterly and, according to the site, provides “practical information on jobs and careers,” including “career- and workrelated topics such as unusual occupations, tips for job seekers, salary trends, and results of new studies from the Bureau of Labor Statistics.” The online version enables users to read a “nutshell” description or “snippet” from each article, as well as obtain a full-text version available in portable document format (PDF), which can be printed for easier reading. The Web site also features indexes of articles from previous issues. U.S. Department of Labor. Employment and Training Administration. CareerOneStop. http://www.careeronestop.org CareerOneStop is designed for job seekers, career professionals, students, and other people who wish to learn more about occupations and industries. The “Explore Careers” page provides access to “Industries,” where users can retrieve profiles about significant industries in specific metropolitan areas and counties of the fifty states. The “Industries” section also contains data about the fastest-growing and highest-paying industries and industries with both increasing and declining employment; users can also learn about employment trends in the metropolitan areas and counties of the fifty states.

Electronic Resources U.S. Department of Labor. Employment and Training Administration. O*Net Online. http://www.onetonline.org The home page of O*Net Online explains that the site is a “tool for career exploration and job analysis” providing “detailed descriptions of the world of work.” The site is divided into three sections: “Find Occupations” enables users to browse groups of similar occupations to obtain information about careers. “Advanced Search” retrieves information about occupations that require specified skills or the use of specific tools, machinery, and software. “Crosswalks” allows users to enter job titles or classification codes to obtain information. Subscription Databases The following Web-based databases are available only to paying subscribers. Public, college, and university libraries subscribe to these sources. Readers can consult library Web sites or ask reference librarians about availability. EBSCO Publishing. Business Source Complete. http://www.ebscohost.com/academic/businesssource-complete Business Source Complete features articles from more than thirteen hundred business-related journals, as well as financial data, major reference works, conference proceedings, case studies, investment research reports, industry reports, market research reports, country reports, and company profiles. EBSCO Publishing. Career Guidance System. http://www.ebscohost.com/government/careerguidance-system Career Guidance System is designed to provide students with information about colleges and careers. Users can access information about twenty-five hundred occupations, apprenticeships, and military jobs, including job descriptions, salary data, employment prospects, and related college majors. Students also can assess their skills and interests to identify occupations in which they might be interested. Gale Cengage Learning. Business and Company Resource Center. http://www.gale.cengage.com/BusinessRC The Business and Company Resource Center contains information about companies and industries,

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with separate search engines for each of these categories. Users can enter the name of an industry or a classification code to obtain market research reports about broad industry categories or specific industry sectors. The site also enables users to retrieve magazine and journal articles about business and industry. Gale/Info Trac. Vocations and Careers Collection. http://www.gale.cengage.com/pdf/facts/GML3 6309_VocCareCollection.pdf This database contains content from almost four hundred journals, which include general career guides as well as specialized industry journals. Hoover’s, Inc. First Research http://www.firstresearch.com First Research is a division of Hoover’s, Inc., a longstanding publisher of business-related information. The database offers profiles of more than nine hundred industry segments that contain analysis, statistics and forecasts and are updated every quarter. Infogroup, Inc. Reference USA. http://www.referenceusa.com Reference USA contains a database of fourteen million U.S. businesses. Information can be accessed via the business’s name; the first or last name of an executive; and the city, state, or telephone number of a business. There is specific information about each business’s location; profiles of the business itself and the industry in which it operates; and demographic data about sales volume, number of employees, and credit rating. Additional information includes a management directory, company news reports, stock data for publicly traded firms, and lists of competing companies. Standard and Poor’s. NetAdvantage. http:www.netadvantage.standardandpoors.com Created by Standard and Poor’s investors’ service, NetAdvantage enables subscribers to access the company’s industry surveys, as well as its research, data, and commentary on stocks, bonds, and mutual funds.

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Electronic Resources ACCOUNTING

SERVICES

Academy of Accounting Historians, Weatherhead School of Management https://www.netforumondemand.com/eweb/ StartPage.aspx?Site=AAH American Accounting Association http://www.aaahq.org American Institute of Certified Public Accountants http://www.aicpa.org Association of Certified Fraud Examiners http://www.acfe.com Association of Government Accountants http://www.agacgfm.org Gleim Publications http://www.gleim.com Institute of Internal Auditors http://www.theiia.org Institute of Management Accountants http://www.imanet.org National Library of the Accounting Profession, University of Mississippi http://www.olemiss.edu/depts/general_library/ aicpa

ADVERTISING AND MARKETING INDUSTRY American Advertising Federation http://www.aaf.org American Association of Advertising Agencies http://www2.aaaa.org Asian American Advertising Federation http://www.3af.org Association of Hispanic Advertising Agencies http://www.ahaa.org

International Advertising Association http://www.iaaglobal.org World Advertising Research Center http://www.warc.com

AIRLINE

INDUSTRY

Air Transport Association of America http://www.airlines.org Association of European Airlines http://www.aea.be European Regions Airline Association http://www.eraa.org International Air Transport Association http://www.iata.org Regional Airline Association http://www.raa.org

ALTERNATIVE POWER INDUSTRY American Solar Energy Society http://www.ases.org American Wind Energy Association http://awea.org Energy Information Administration http://www.eia.doe.gov National Biodiesel Board http://www.biodiesel.org National Renewable Energy Laboratory http://www.nrel.gov

ANIMAL

CARE

American Kennel Club http://www.akc.org

SERVICES

Electronic Resources American Pet Products Association http://www.americanpetproducts.org

Center for Automobile Research http://www.cargroup.org

American Society for the Prevention of Cruelty to Animals http://www.aspca.org

National Automobile Dealers Association http://www.nada.org

Association of Pet Dog Trainers http://www.apdt.com Cat Fanciers’ Association http://www.cfainc.org Certification Council for Professional Dog Trainers http://www.ccpdt.org

National Bicycle Dealers Association http://nbda.com National Marine Manufacturers Association http://www.nmma.org National Motorcycle Dealers Association http://www.nationalmda.com

BANKING National Dog Groomers Association of America http://www.nationaldoggroomers.com

APPAREL AND FASHION INDUSTRY

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INDUSTRY

American Bankers Association http://www.aba.com Credit Union National Association http://www.cuna.org

American Apparel and Footwear Association http://www.apparelandfootwear.org

Independent Community Bankers of America http://www.icba.org

American Apparel Producers’ Network http://www.aapnetwork.net

Mortgage Bankers Association http://www.mortgagebankers.org

Fashion Group International http://www.fgi.org

National Bankers Association http://nationalbankers.org

International Association of Clothing Designers and Executives http://www.iacde.com Professional Fashion Photography Organization http://pfpo.net

AUTOMOBILES AND PERSONAL VEHICLES INDUSTRY Alliance of Automobile Manufacturers http://www.autoalliance.org Automotive Service Association http://www.asashop.org

BATTERIES AND FUEL INDUSTRY

CELLS

American Chemical Society http://www.acs.org American Institute of Chemical Engineers http://www.aice.org Battery Council International http://www.batterycouncil.org Electrochemical Society http://www.electrochem.org

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Electronic Resources

National Hydrogen Association http://www.hydrogenassociation.org U.S. Fuel Cell Council http://www.usfcc.com

U.S. Department of Energy http://www.energy.gov

BROADCAST

BEVERAGE AND TOBACCO INDUSTRY Alcohol and Tobacco Tax and Trade Bureau http://www.ttb.gov

INDUSTRY

Association of International Broadcasting http://www.aib.org.uk British Broadcasting Company http://www.bbc.co.uk

American Beverage Association http://www.ameribev.org

International Association of Broadcasting Manufacturers http://www.thiabm.org

International Council of Beverages Associations http://www.icba-net.org

National Association of Broadcasters http://www.nab.org

International Tobacco Growers Association http://www.tobaccoleaf.org

North American Broadcasters Association http://www.nabanet.com

National Alcohol Beverage Control Association http://www.nabca.org Tobacco Merchants Association http://www.tma.org

BIOFUELS

INDUSTRY

American Coalition for Ethanol http://www.ethanol.org Biomass Power Association http://usabiomass.org Biotechnology Industry Organization http://www.bio.org International Energy Agency http://www.iea.org National Biodiesel Board http://www.biodiesel.org Renewable Fuels Association http://www.ethanolrfa.org

BUILDING ARCHITECTURE INDUSTRY American Institute of Architects http://www.aia.org American Institute of Architecture Students http://www.aias.org National Architectural Accrediting Board http://www.naab.org National Council of Architectural Registration Boards http://www.ncarb.org

BUILDING CONSTRUCTION INDUSTRY American Institute of Constructors and the Constructor Certification Commission http://www.aicnet.org Associated Builders and Contractors http://www.abc.org

Electronic Resources Associated General Contractors of America http://www.agc.org

American Institute of Chemical Engineers http://www.aiche.org

Building and Construction Trades Department, AFL-CIO http//www.buildingtrades.org

Chemical and Engineering News http://pubs.acs.org/cen

CIVIL BUSINESS

PLANNING

SERVICES

Association of Executive and Administrative Professionals http://www.theaeap.com Association of Executive Search Consultants http://www.aesc.org Association of Management Consulting Firms http://www.amcf.org International Association of Outsourcing Professionals http://www.outsourcingprofessional.org Travel Industry Association http://www.tia.org

CASINO

SERVICES:

INDUSTRY

American Gaming Association http://www.americangaming.org Casino Careers http://www.casinocareers.com National Indian Gaming Association http://www.indiangaming.org Navegante Group http://www.navegantegroup.com

CHEMICALS

INDUSTRY

American Chemical Society http://www.acs.org American Chemistry Council http://www.americanchemistry.com

American Planning Association http://www.planning.org Community Development Society http://wwwcomm-dev.org National Association of Development Organizations http://www.nado.org National Association of Local Government Environmental Professionals http://nalgep.org Urban Land Institute http://www.uli.org

CIVIL SERVICES: PUBLIC SAFETY Administrative Office of the United States Courts http://www.uscourts.gov Government Accountability Office http://www.gao.gov Office of Personnel Management http://www.opm.gov U.S. Department of Homeland Security http://www.dhs.gov U.S. Department of Justice http://www.justice.gov

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2136

Electronic Resources

COAL

MINING

INDUSTRY

Energy Information Administration http://www.eia.doe.gov Mine Safety and Health Association http://www.nsga.gov National Mining Association http://www.nma.org Society for Mining, Metallurgy, and Exploration http://www.smenet.org United Mine Workers of America http://www.umwa.org World Coal Association http://www.worldcoal.org

COMPLEMENTARY AND ALTERNATIVE HEALTH CARE INDUSTRY American Holistic Medicine Association http://www.holisticmedicine.org

Computer Society http://www.computer.org Information Technology Association of America http://www.itaa.org Institute for Certification of Computing Professionals http://www.iccp.org Society for Information Management http://www.simnet.org Society for Technical Communication http://www.stc.org USENIX, the Advanced Computing Systems Association http://www.usenix.org

COMPUTER SOFTWARE INDUSTRY Computer Society http://www.computer.org

Global Institute for Alternative Medicine http://www.gifam.org

Institute for Certification of Computing Professionals http://www.iccp.org

National Association for Integrative Health Care Practitioners http://aihcp-norfolkva.org

National Workforce Center for Emerging Technologies http://www.nwcet.org

National Center for Complementary and Alternative Medicine, National Institutes of Health http://nccam.nih.gov

Software and Information Industry Association http://www.siia.net

COMPUTER HARDWARE AND PERIPHERALS INDUSTRY Association for Computing Machinery http://www.acm.org CompTIA http://www.comptia.org

COMPUTER SYSTEMS INDUSTRY Association for Computing Machinery http://www.acm.org Computer Society http://www.computer.org

Electronic Resources National Center for Women and Information Technology, University of Colorado http://www.ncwit.org National Workforce Center for Emerging Technologies http://www.nwcet.org University of Washington Computer Science and Engineering Department http://www.cs.washington.edu/WhyCSE

CONSTRUCTION EQUIPMENT INDUSTRY Caterpillar http://www.cat.com Deere & Company http://www.deere.com Equipment World http://www.equipmentworld.com Freedonia http://www.freedoniagroup.com Institute for Supply Management http://www.ism.ws

Conference Board http://www.conference-board.org Human Capital Institute http://www.humancapitalinstitute.org International Society for Performance Improvement http://www.ispi.org Society for Human Resource Management http://www.shrm.org World at Work http://www.worldatwork.org

COUNSELING

SERVICES

American College of Medical Practice Management http://www.epracticemanagement.org American Counseling Association http://www.counseling.org Healthcare Financial Management Association http://www.hfma.org Medical Group Management Association http://www.mgma.com

Komatsu http://www.komatsu.com MarketResearch.com http://www.marketresearch.com Mitsubishi Heavy Industries http://www.mhi.co.jp/en Technik Manufacturing http://www.technikmfg.com

CRIMINAL JUSTICE AND PRISON INDUSTRY American Correctional Association http://www.aca.org American Jail Association http://www.corrections.com/aja Federal Bureau of Prisons http://www.bop.gov

CORPORATE EDUCATION SERVICES American Society of Training and Development http://www.astd.org

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U.S. Bureau of Justice Statistics http://bjs.ojp.usdoj.gov U.S. Department of Justice http://www.justice.gov

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Electronic Resources DAY-CARE

SERVICES

Center for the Study of Child Care Employment, Institute for Research on Labor and Employment http://www.irle.berkeley.edu/cscce/index.html

National Defense Industry Association http://www.ndia.org

DENTAL

AND ORTHODONTICS INDUSTRY

National Adult Day Services Association http://www.nadsa.org

Academy of General Dentistry http://www.agd.org

National Association for the Education of Young Children http://www.naeyc.org

American Association of Orthodontists http://www.braces.org

National Association of Child Care Resource and Referral Agencies http://www.naccrra.org National Child Care Association http://www.nccanet.org National Resource Center for Health and Safety in Child Care and Early Education, University of Colorado Health and Sciences Center at Fitzsimons http://nrckids.org

DEFENSE

INDUSTRY

AeroSpace and Defence Industries Association of Europe http://www.asd-europe.org Aerospace Industries Association http://www.aia-aerospace.org

American Dental Association http://www.ada.org http://jada.ada.org American Dental Hygienists’ Association http://www.adha.org National Institute of Dental and Craniofacial Research http://www.nidcr.nih.gov

ELECTRICAL AND GAS APPLIANCES INDUSTRY Air-Conditioning, Heating and Refrigeration Institute http://www.ahrinet.org Appliance Design http://www.appliancedesign.com Appliance Magazine http://www.appliancemagazine.com

American Institute of Aeronautics and Astronautics http://www.aiaa.org

Appliance Service News http://www.asnews.com

BAE Systems http://www.baesystems.com

Association of Home Appliance Manufacturers http://www.aham.org

Defence Manufacturers Association http://www.the-dma.org.uk

Broom, Brush, and Mop http://www.rankinpublishing.com

Lockheed Martin http://www.lockheedmartin.com

Energy Star, U.S. Environmental Protection Agency http://www.energystar.gov

Electronic Resources Kitchenware News & Housewares Review http://www.kitchenwarenews.com National Electrical Manufacturers Association http://www.nema.org

ELECTRICAL

POWER

INDUSTRY

American Public Power Association http://www.publicpower.org International Brotherhood of Electrical Workers http://www.ibew.org Nuclear Energy Institute http://www.nei.org

FARMING

2139

INDUSTRY

National Plant Data Center http://npdc.usda.gov National Soil Survey Center http://soils.usda.gov North Dakota State University Extension Service http://www.ag.ndsu.edu/extension U.S. Department of Agriculture http://www.usda.gov

FEDERAL PUBLIC ADMINISTRATION

Power and Energy Society http://www.ieee.org

Office of Citizen Services and Communications http://www.usa.gov

U.S. Energy Information Administration http://www.eia.gov

Office of Personnel Management http://www.opm.gov

Utility Workers Union of America http://uwua.net

U.S. Department of Homeland Security http://www.dhs.gov

ENVIRONMENTAL ENGINEERING AND CONSULTATION SERVICES Air and Waste Management Association http://www.awma.org

U.S. Equal Opportunity Employment Commission http://www.eeoc.gov

FINANCIAL SERVICES INDUSTRY

American Academy of Environmental Engineers http://www.aaee.net

AdvisorOne http://www.advisorone.com

Entec UK http://www.entecuk.com

Advisor’s Edge http://www.advisor.ca

Keystone Environmental http://www.keystoneenviro.com

Association for Financial Professionals http://www.afponline.org

Water Environment Federation http://www.wef.org

Bond Market Association http://www.bondmarkets.com Broker World Magazine http://www.brokerworldmag.com

2140

Electronic Resources

Industry Trade Data and Analysis http://ita.doc.gov

National Frozen and Refrigerated Foods Association http://www.nfraweb.org

New York Stock Exchange http://www.nyse.com FOOD On Wall Street http://www.onwallstreet.com

FISHING AND FISHERIES INDUSTRY

RETAIL

INDUSTRY

American Wholesale Marketers Association http://www.awmanet.org Careers in Food http://www.careersinfood.com

American Fisheries Society http://www.fisheries.org

Food Industry Suppliers Association http://www.fisanet.org

Food and Agriculture Organization of the United Nations http://www.fao.org

Food Marketing Institute http://www.fmi.org

Food Institute Online http://www.foodinstitute.com

Grocery Manufacturers Association http://www.gmaonline.org

Intergovernmental Oceanographic Commission http://ioc-unesco.org

Mexican-American Grocers Association http://www.buscapique.com/latinusa/buscafile/ oeste/maga.htm

National Marine Fisheries Service http://www.nmfs.noaa.gov/fishwatch

National Association of Convenience Stores http://www.nacsonline.com

Northwest Atlantic Fisheries Organization http://www.nafo.int

National Grocers Association http://www.nationalgrocers.org/

WorldFish Center http://www.worldfishcenter.org

United Food and Commercial Workers International Union http://www.ufcw.org

FOOD MANUFACTURING AND WHOLESALING INDUSTRY

FOOD

SERVICES

Food Engineering Magazine http://www.foodengineeringmag.com

Association for Healthcare Foodservice http://www.healthcarefoodservice.org

Food Marketing Institute http://www.fmi.org

Catersource http://www.catersource.com

Grocery Manufacturers Association http://www.gmabrands.com

International Foodservice Distributors Association http://www.ifdaonline.org

Institute of Food Technologists http://www.ift.org

Electronic Resources National Association of College and University Food Services http://www.nacufs.org Society for Foodservice Management http://www.sfm-online.org

FREIGHT TRANSPORT INDUSTRY

2141

FURNITURE AND HOME FURNISHINGS INDUSTRY Furniture Today Magazine http://www.furnituretoday.com National Home Furnishings Association http://www.nhfa.org Upholstered Furniture Council http://www.ufac.org

American Trucking Associations http://www.truckline.com American Waterways Operators http://www.americanwaterways.org Association of American Railroads http://www.aar.org International Freight Association http://www.ifa-online.com National Motor Freight Traffic Association http://www.nmfta.org

HAND TOOLS AND INSTRUMENTS INDUSTRY Antique Tools and Trades in Connecticut http://www.attic-us.org Hand Tools Institute http://www.hti.org Missouri Valley Wrench Club http://www.mvwc.org

U.S. Department of Transportation http://www.dot.gov

Potomac Antique Tools and Industries Association http://www.patinatools.org

U.S. Merchant Marine Academy http://www.usmma.edu

Tools of the Trade Magazine http://www.toolsofthetrade.net

FUNERARY

INDUSTRY

Family Funeral Home Association http://www.familyfuneral.org National Funeral Directors and Morticians Association http://www.nfdma.com New York State Funeral Directors Association http://www.nysfda.org Selected Independent Funeral Homes http://www.selectedfuneralhomes.org Service Corporation International http://www.sci-corp.com

HEALTH AND FITNESS INDUSTRY American College of Sports Medicine http://www.acsm.org American Council on Exercise http://www.acefitness.org International Health, Racquet, and Sportsclub Association http://cms.ihrsa.org National Strength and Conditioning Association http://www.nsca-lift.org

2142

Electronic Resources

HEAVY

MACHINES

INDUSTRY

Caterpillar http://www.cat.com Deere & Company http://www.deere.com Equipment World http://www.equipmentworld.com Institute for Supply Management http://www.ism.ws Komatsu http://www.komatsu.com MarketResearch.com http://www.marketresearch.com Mitsubishi Heavy Industries http://www.mhi.co.jp/en Technik Manufacturing http://www.technikmfg.com

HIGHWAY, ROAD, AND BRIDGE CONSTRUCTION INDUSTRY American Association of State Highway and Transportation Officials http://www.transportation.org American Road and Transportation Builders Association http://www.artba.org Associated General Contractors of America http://www.agc.org Association Mondiale de la Route/World Road Association http://www.piarc.org/en Engineering News-Record http://enr.construction.com Reed Construction Data http://www.reedconstructiondata.com World Highways http://www.worldhighways.com

HIGHER EDUCATION INDUSTRY HOME American Association of Collegiate Registrars and Admissions Officers http://www.aacrao.org American Association of University Professors http://www.aaup.org

MAINTENANCE SERVICES

Association of Residential Cleaning Services International http://www.arcsi.org

APPA: Leadership in Educational Facilities http://www.appa.org

Building Services Contractors Association International http://www.bscai.org

College Board http://www.collegeboard.com

Cleaning Management Institute http://www.cminstitute.net

National Association of Student Personnel Administrators http://www.naspa.org

Professional Landcare Network (PLANET) http://www.landcarenetwork.org

Electronic Resources HOSPITAL CARE SERVICES

AND

2143

HOUSEHOLD AND PERSONAL PRODUCTS INDUSTRY

American College of Healthcare Executives http://www.ache.org

American Cleaning Institute http://www.cleaninginstitute.org

American College of Medical Practice Management http://www.epracticemanagement.org

Cosmetic News, Communications International Group http://www.cosmeticnews.com

American Counseling Association http://www.counseling.org

CosmeticsDesign.com, Decision News Media http://www.cosmeticsdesign.com

American Hospital Association http://www.aha.org

Happi http://www.happi.com

Healthcare Financial Management Association http://www.hfma.org Medical Group Management Association http://www.mgma.com National Association of Public Hospitals and Health Systems http://www.naph.org

HOTELS AND MOTELS INDUSTRY American Hotel and Lodging Association http://www.ahla.com American Resort Development Association http://www.arda.org

INDUSTRIAL DESIGN INDUSTRY American Institute of Graphic Arts http://www.aiga.org The Design Society http://www.designsociety.org Industrial Designers Society of America http://www.idsa.org International Council of Societies for Industrial Design http://www.icsid.org

INSURANCE

INDUSTRY

Hospitality Net BV http://www.hospitalitynet.org

American Council of Life Insurance http://www.acli.com

Hospitality Sales and Marketing Association http://www.hsmai.org

American Insurance Association http://www.aiadc.org

International Hotel and Restaurant Association http://www.ih-ra.com

American Risk and Insurance Association http://www.aria.org Independent Insurance Agents and Brokers of America http://www.iiaba.net

2144

Electronic Resources

Insurance Information Institute http://www.iii.org

Lawn and Landscape Magazine, GIE Media http://www.baumpub.com

National Association of Insurance and Financial Advisors http://www.naifa.org

Professional Landcare Network (PLANET) http://www.lawnandlandscape.com

National Association of Insurance Commissioners http://www.naic.org

Tree Care Industry Association http://www.treecareindustry.org

LEGAL National Association of Professional Insurance Agents http://www.pianet.com Society of Actuaries http://www.soa.org

SERVICES AND FIRMS

LAW

American Association for Justice http://www.justice.org American Bar Association http://www.abanet.org

INTERNET AND CYBER COMMUNICATIONS INDUSTRY

American Civil Liberties Union http://www.aclu.org

Association for Computing Machinery http://www.acm.org

Amnesty International USA http://www.amnestyusa.org

Institute of Electrical and Electronics Engineers http://www.ieee.org

Legal Aid Society http://www.legal-aid.org

Internet Corporation for Assigned Names and Numbers http://www.icann.org

National Association for Law Placement http://www.nalp.org

Internet Engineering Task Force http://www.ietf.org

National Association of Criminal Defense Lawyers http://www.criminaljustice.org

Internet Society http://www.isoc.org

National Legal Aid and Defender Organization http://www.nlada.org

Software and Information Industry Association http://www.siia.net

LANDSCAPING

SERVICES

American Nursery and Landscape Association http://www.anla.org American Society of Landscape Architects http://www.asla.org

LIBRARIES AND ARCHIVES INDUSTRY American Archivist http://www.archivists.org American Association of School Librarians http://www.ala.org/aasl American Library Association http://www.ala.org

Electronic Resources Library Journal http://www.libraryjournal.com

LOCAL PUBLIC ADMINISTRATION

Society of American Archivists http://www.archivists.org

LIGHT

MACHINERY

2145

American Society for Public Administration http://www.aspanet.org INDUSTRY

Deere & Company http://www.deere.com Equipment World http://www.equipmentworld.com Institute for Supply Management http://www.ism.ws Komatsu http://www.komatsu.com Makita USA http://www.makita.com Robert Bosch LLC http://www.boschtools.com Techtronic Industries North America http://www.ttigroupna.com

LIVESTOCK AND ANIMAL PRODUCTS INDUSTRY

Association for Public Policy Analysis and Management http://www.appam.org California State Personnel Board http://www.spb.ca.gov City of Houston http://www.houstontx.gov National Association of Schools of Public Affairs and Administration http://www.naspaa.org National Conference of State Legislatures http://www.ncsl.org

LOGGING

INDUSTRY

American Forest and Paper Association http://www.afandpa.org European Biomass Industry Association http://www.eubia.org Forest Industry Network http://www.forestindustry.com.

Food and Agriculture Organization of the United Nations http://www.fao.org

International Tropical Industry Association http://www.itto.int

National Institute for Animal Agriculture http://www.animalagriculture.org

Truck Loggers Association http://www.tla.ca

U.S. Department of Agriculture, Economic Research Service http://www.ers.usda.gov

MASS TRANSPORTATION VEHICLES INDUSTRY American Boat Builders and Repairers Association http://www.abbra.org

2146

Electronic Resources

American Bus Association http://www.buses.org

American Nurses Association http://www.nursingworld.org

American Public Transportation Association http://www.apta.com

American Society for Clinical Laboratory Science http://www.ascls.org

American Society for Engineering Education http://www.asee.org

Center for Health Care Strategies http://www.chcs.org

American Society of Mechanical Engineers http://www.asme.org

Centers for Medicare and Medicaid Services http://www.cms.hhs.gov

Federal Transit Administration, U.S. Department of Transportation http://www.fta.dot.gov

National Association for Home Care and Hospice http://www.nahc.org

Institute of Electrical and Electronics Engineers http://www.ieee.org Institute of Industrial Engineers http://www.iie2net.org

METALS

MANUFACTURING INDUSTRY

American Chemical Society http://www.acs.org

National Bus Rapid Transit Institute, Center for Urban Transportation Research http://www.nbrti.org http://www.rsiweb.org National Council of Examiners for Engineering and Surveying http://www.ncees.org

American Institute for International Steel http://www.aiis.org American Institute of Chemical Engineers http://www.aice.org Minerals, Metals, and Materials Society http://www.tms.org

National Society of Professional Engineers http://www.nspe.org MINING SAE International http://www.sae.org Society of Naval Architects and Marine Engineers http://www.sname.org Transportation Research Board, the National Academies http://www.trb.org

MEDICINE

AND HEALTH INDUSTRY

American Medical Association http://www.ama-assn.org

CARE

INDUSTRY

American Institute of Mining, Metallurgical, and Petroleum Engineers http://www.aimehq.org National Mining Association http://www.nma.org National Stone, Sand, and Gravel Association http://www.nssga.org

Electronic Resources MOTION PICTURE AND TELEVISION INDUSTRY

International Council of Museums http://icom.museum/

Academy of Motion Picture Arts and Sciences http://www.oscars.org

Museum Studies and Reference Library http://www.sil.si.edu

Academy of Television Arts and Sciences http://www.emmys.org

Society of American Archivists http://www.archivists.org

British Film Institute http://www.bfi.org.uk

2147

MUSIC

INDUSTRY

Canadian Film and Television Production Association http://www.cftpa.ca

American Society of Composers, Authors, and Publishers http://www.ascap.com

Centre International de Liaison des Ecoles de Cinema et de Television http://www.cilect.org

American Symphony Orchestra League http://www.symphony.org

Motion Picture Association of America http://www.mpaa.org Screen Actors Guild http://www.sag.org

MUSEUMS AND CULTURAL INSTITUTIONS INDUSTRY American Association for State and Local History http://www.aaslh.org American Association of Museums http://www.aam-us.org Association for Living History, Farms, and Agricultural Museums http://www.alhfam.org

Billboard http://www.billboard-online.com International Federation of the Phonographic Industry http://www.ifpi.org Music Week http://www.musicweek.com Pollstar http://www.pollstar.com Recording Industry Association of America http://www.riaa.com

NATIONAL AND INTERNATIONAL SECURITY INDUSTRY

Association of Children’s Museums http://www.childrensmuseums.org

ASIS International http://www.asisonline.org

Association of College and University Museums and Galleries http://www.acumg.org

Lawrence Livermore National Laboratory http://www.llnl.gov

Association of Zoos and Aquariums http://www.aza.org

North Atlantic Treaty Organization http://www.nato.int

2148

Electronic Resources

U.S. Department of Homeland Security http://www.dhs.gov

NATURAL RESOURCES MANAGEMENT Environmental Careers Center http://environmentalcareer.com http://www.ecojobs.com

National Parks and Conservation Association http://www.npca.org National Recreation and Park Association http://www.nrpa.org Outdoor Amusement Business Association http://www.oaba.org Outdoor Foundation http://www.outdoorfoundation.org

Environmental Careers Organization http://www.eco.org National Association of Environmental Professionals http://www.naep.org

NUCLEAR

POWER

INDUSTRY

American Nuclear Society http://www.ans.org Health Physics Society http://www.hps.org Nuclear Energy Institute http://www.nei.org U.S. Nuclear Regulatory Commission http://www.nrc.gov

OUTDOOR RECREATION INDUSTRY American Alliance for Health, Physical Education, Recreation, and Dance http://www.aahperd.org

PAPER MANUFACTURING AND PRODUCTS INDUSTRY American Forest and Paper Association http://www.afandpa.org Center for Paper Business and Industry Studies http://www.cpbis.gatech.edu Paper Industry Technical Association http://pita.co.uk TAPPI (Technical Association of the Pulp and Paper Industry) http://www.tappi.org

PASSENGER TRANSPORTATION AND TRANSIT INDUSTRY American Public Transportation Association http://www.apta.com Federal Transit Administration, U.S. Department of Transportation http://www.fta.dot.gov

American Camp Association http://www.ACAcamps.org

Institute of Transportation Studies, University of California, Berkeley http://its.berkeley.edu

American Recreation Coalition http://www.funoutdoors.com

International Association of Public Transport http://www.uitp.org

National Park Service http://www.nps.gov

Taxicab, Limousine, and Paratransit Association http://www.tlpa.org

Electronic Resources Transportation Research Board, the National Academies http://www.trb.org

PERSONAL

SERVICES

American Association of Family and Consumer Sciences http://www.aafcs.org National Association for Family Child Care http://www.nafcc.org National Association for the Education of Young Children http://www.naeyc.org National Association of Child Care Resource and Referral Agencies http://www.naccrra.net National Child Care Association http://www.nccanet.org National Child Care Information Center http://www.nccic.org National Extension Association of Family and Consumer Sciences http://www.neafcs.org

PETROLEUM AND NATURAL GAS INDUSTRY

PHARMACEUTICALS AND MEDICATIONS INDUSTRY Biotechnology Industry Organization http://www.bio.org Drug Information Association http://www.diahome.org International Federation of Pharmaceutical Manufacturers and Associations http://www.ifpma.org International Society for Pharmaceutical Engineering http://www.ispe.org Pharmaceutical Research and Manufacturers Association of America http://www.phrma.org

PHILANTHROPIC, CHARITABLE, RELIGIOUS, CIVIC, AND GRANT-MAKING INDUSTRY Alliance for Nonprofit Management http://www.allianceonline.org Association for Research on Nonprofit Organization and Voluntary Action http://www.arnova.org Council on Foundations http://www.cof.org

American Petroleum Institute http://www.api.org

Foundations Center http://foundationcenter.org

ExxonMobil http://www.exxonmobil.com

National Council of Churches http://www.nccsusa.org

Saudi Aramco http://www.saudiaramco.com Shell http://www.shell.us

2149

PLASTICS AND RUBBER MANUFACTURING INDUSTRY American Chemical Society http://www.acs.org

2150

Electronic Resources

American Institute of Chemical Engineers http://www.aice.org International Institute of Synthetic Rubber Producers http://www.azom.com

Universal Postal Union http://www.upu.int

PRINTING

INDUSTRY

Plastics Industry Trade Association http://www.plasticsindustry.org

Graphic Arts Education and Research Foundation http://www.gaerf.org

Society of Plastics Engineers http://www.4spe.org

National Association for Printing Leadership http://www.napl.org

POLITICAL ADVOCACY INDUSTRY

National Association of Printing Ink Manufacturers http://www.napim.org

American League of Lobbyists http://www.alldc.org

Printing Industries of America http://www.printing.org

Association of Accredited Lobbyists to the European Parliament http://www.eulobby.net

Seybold Report, Beard Group http://www.seyboldreport.com

Cassidy and Associates http://www.cassidy.com

PRIVATE EDUCATION INDUSTRY

Center for Public Integrity http://www.publicintegrity.org

Association of Private Enterprise Education http://www.apee.org

Library of Congress http://thomas.loc.gov

Center for Teaching Excellence, University of Medicine & Dentistry of New Jersey, School of Health Related Professions http://cte.umdnj.edu

Public Affairs Council http://www.pac.org

College Board http://www.collegeboard.com POSTAL AND PACKAGE DELIVERY SERVICES Association of International Courier and Express Services http://www.aices.org Express Delivery and Logistics Association http://www.expressassociation.org Global Postal Strategy http://www.postinsight.com

National Education Association http://www.nea.org National Independent Private Schools Association http://www.nipsa.org U.S. Department of Education http://www.ed.gov

Electronic Resources PUBLIC ELEMENTARY AND SECONDARY EDUCATION INDUSTRY American Federation of Teachers http://www.aft.org Center for Public Education http://www.centerforpubliceducation.org National Center for Education Statistics http://nces.ed.gov National Education Association http://www.nea.org Public Education Network http://www.publiceducation.org U.S. Department of Education, Office of Elementary and Secondary Education http://www2.ed.gov/oese

PUBLISHING AND INFORMATION INDUSTRY American Society of Newspaper Editors http://www.asne.org Association of American Publishers http://www.publishers.org International Publishers Association http://www.internationalpublishers.org Magazine Publishers of America http://www.magazine.org Newspaper Association of America http://www.naa.org Small Publishers Association of North America http://www.spannet.org

REAL PUBLIC

HEALTH

SERVICES

American Diabetes Association http://www.diabetes.org American Public Health Association http://www.apha.org Centers for Disease Control and Prevention http://www.cdc.gov Harvard School of Public Health http://www.hsph.harvard.edu U.S. Department of Health and Human Services http://www.hhs.gov World Health Organization http://www.who.int

2151

ESTATE

INDUSTRY

Appraisal Institute http://www.appraisalinstitute.org CCIM Institute http://www.ccim.com Council of Residential Specialists http://www.crs.com Institute of Real Estate Management http://www.irem.org National Association of Realtors http://www.realtor.org U.S. Department of Housing and Urban Development http://portal.hud.gov

RENTAL AND LEASING SERVICES American Rental Association http://www.ARArental.org

2152

Electronic Resources

Association of Progressive Rental Organizations http://www.rtohq.org Canadian Rental Association http://www.CRArental.org

RETAIL

Equipment Leasing and Finance Association http://www.elfaonline.org Truck Rental and Leasing Association http://www.trala.org

RESIDENTIAL MEDICAL INDUSTRY

Technomic http://www.technomic.com

TRADE AND INDUSTRY

SERVICE

Global Entertainment Retail Association-Europe http://www.gera-europe.org International Council of Shopping Centers http://www.icsc.org

CARE

National Grocers Association http://www.nationalgrocers.org

AARP http://www.aarp.org

National Retail Federation http://www.nrf.com

American College of Healthcare Executives http://www.ache.org

Retail Industry Leaders Association http://www.rila.org/pages/default.aspx

American Hospital Association http://www.aha.org Healthcare Financial Management Association http://www.hfma.org Medical Group Management Association http://www.mgma.com

RESTAURANT

INDUSTRY

American Culinary Federation http://www.acfchefs.org American Institute of Wine and Food http://www.aiwf.org International Association of Culinary Professionals http://www.iacp.com International Hotel and Restaurant Association http://www.ih-ra.com National Restaurant Association http://www.restaurant.org

SCIENTIFIC AND TECHNICAL SERVICES American Institute of Chemical Engineers http://www.aiche.org American Society of Mechanical Engineers http://www.asme.org Biotechnology Industry Organization http://www.bio.org National Institutes of Health http://www.nih.gov National Science Foundation http://www.nsf.gov National Society of Professional Engineers http://www.nspe.org

Electronic Resources SCIENTIFIC, MEDICAL, AND HEALTH EQUIPMENT AND SUPPLIES INDUSTRY

2153

International Trade Administration, U.S. Department of Commerce http://www.ita.doc.gov

Advanced Medical Technology Association http://advamed.org

Maritime Administration, U.S. Department of Transportation http://www.marad.dot.gov

Association for the Advancement of Medical Instrumentation http://www.aami.org

Naval Vessel Register http://www.nvr.navy.mil/class.htm

Eucomed—Medical Technologies Industry in Europe http://eucomed.be MEDEC (Medical Devices Canada) http://medec.org Medical Equipment Suppliers Association http://www.mesanet.org Medical Technology and Practice Patterns Institute http://www.mtppi.org

SHIPBUILDING, SUBMARINES, AND NAVAL TRANSPORT INDUSTRY

Public Affairs Office, Military Sealift Command http://www.msc.navy.mil Shipbuilders Council of America http://www.shipbuilders.org Society of Naval Architects and Marine Engineers http://www.sname.org U.S. Coast Guard National Maritime Center http://www.uscg.mil/nmc

SPACE SPACE

EXPLORATION AND SCIENCE INDUSTRY

Aerospace Industries Association http://www.aia-aerospace.org

American Association of Port Authorities Headquarters http://www.aapa-ports.org

American Institute of Aeronautics and Astronautics http://www.aiaa.org

American Shipbuilding Association http://www.americanshipbuilding.com

Eighth Continent Project http://www.8cproject.com

American Society of Naval Engineers http://www.navalengineers.org

European Space Agency http://www.esa.int

International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers, and Helpers http://www.boilermakers.org

Institute of Electrical and Electronics Engineers http://www.ieee.org

International Maritime Organization http://www.imo.org

National Aeronautics and Space Administration http://www.nasa.gov Office of Space Commercialization, National Oceanic and Atmospheric Administration http://www.space.commerce.gov

2154

Electronic Resources

Satellite Industry Association http://www.sia.org

Sporting Goods Manufacturers Association http://www.sgma.com

Space Studies Board, the National Academies http://sites.nationalacademies.org/SSB/ index.htm

World Federation of Sporting Goods Industry/Maison du Sport International http://www.wfsgi.org

Space.com, Space Library http://www.space.com/spacelibrary/ United Nations Office for Outer Space Affairs http://www.oosa.unvienna.org

SPECTATOR SPORTS INDUSTRY

TELECOMMUNICATIONS EQUIPMENT INDUSTRY Broadband for America http://www.broadbandforamerica.com CTIA-The Wireless Association http://files.ctia.org

Amateur Athletic Union http://www.aausports.org

Institute of Electrical and Electronics Engineers http://www.ieee.org

International Olympic Committee http://www.olympic.org

International Telecommunication Union http://www.itu.int

National Athletic Trainer’s Association http://www.nata.org

Journal of Telecommunications and Information Technology, National Institute of Telecommunications http://www.nit.eu

North American Society for Sport Management http://www.nassm.com Sports Turf Managers Association http://www.stma.org U.S. Olympic Committee http://www.olympic-usa.org

SPORTS EQUIPMENT INDUSTRY American Society for Testing and Materials http://www.astm.org National Operating Committee on Standards for Athletic Equipment http://www.nocsae.org National Sporting Goods Association http://www.nsga.org

Microwave Journal http://www.mwjournal.com Telecommunications Industry Association http://www.tiaonline.org

TELECOMMUNICATIONS INFRASTRUCTURE INDUSTRY Broadband for America http://www.broadbandforamerica.com CTIA-The Wireless Association http://www.ctia.org Institute of Electrical and Electronics Engineers http://www.ieee.org International Communication Association http://www.icahdq.org

Electronic Resources International Telecommunication Union http://www.itu.int Journal of Telecommunications and Information Technology, National Institute of Telecommunications http://www.nit.eu Microwave Journal http://www.mwjournal.com Telecommunications Industry Association http://www.tiaonline.org

TEXTILE AND FABRICS INDUSTRY American Association of Textile Chemists and Colorists http://www.aatcc.org Handweavers Guild of America http://www.weavespindye.org Industrial Fabrics Association International http://www.ifai.com

2155

National Endowment for the Arts http://www.nea.gov

THEMED

ENTERTAINMENT INDUSTRY

American Association of Museums http://www.aam-us.org American Gaming Association http://www.americangaming.org International Association of Amusement Parks and Attractions http://www.iaapa.org International Hotel and Restaurant Association http://www.ih-ra.com Smithsonian Institution http://www.si.edu Themed Entertainment Association http://[email protected] World Association of Zoos and Aquariums http://www.waza.org

International Textile Manufacturers Federation http://www.itmf.org/cms TOYS Textile Institute International http://www.texi.org

THEATER AND PERFORMING ARTS INDUSTRY

AND

GAMES

American Specialty Toy Retailing Association http://www.astratoy.org International Council of Toy Industries http://www.toy-icti.org

Actors’ Equity Association http://www.actorsequity.org

Playthings Magazine http://www.playthings.com

American Federation of Musicians http://www.afm.org

Toy Industry Association http://www.toyassociation.org

Americans for the Arts http://www.artsusa.org National Dances Education Association http://www.ndeo.org

INDUSTRY

TRAVEL AND TOURISM INDUSTRY American Society of Travel Agents http://www.asta.net.org

2156

Electronic Resources

National Association of Cruise Oriented Agencies http://www.nacoa.com

International Game Developers Association http://www.igda.org Major League Gaming http://www.mlgpro.com

VETERINARY

INDUSTRY

American Animal Hospital Association http://www.aahanet.org American Association for Laboratory Animal Science http://www.aalas.org American Society for the Prevention of Cruelty to Animals http://www.aspca.org American Veterinary Medical Association http://www.avma.org Animal Behavior Society http://www.abs.org Association of American Veterinary Medical Colleges http://www.aavmc.org Humane Society of the United States http://www.hsus.org

Software and Information Industry Association http://www.siia.net

WAREHOUSING AND INDUSTRY

STORAGE

Dangerous Goods Advisory Council http://www.dgac.org International Association of Refrigerated Warehouses http://www.iarw.org Material Handling Industry of America http://www.mhia.org Modern Materials Handling http://www.mmh.com Supply Chain Management Review http://www.scmr.com Warehousing Education and Research Council http://www.werc.org

International Veterinary Information Service http://www.ivis.org National Association of Veterinary Technicians in America http://www.navta.net United States Animal Health Association http://www.usaha.org

VIDEO, COMPUTER, AND VIRTUAL REALITY GAMES INDUSTRY Entertainment Software Association http://www.theesa.com

WASTE MANAGEMENT INDUSTRY Air and Waste Management Association http://www.awma.org American Council on Renewable Energy http://www.acore.org Association of Compost Producers http://www.healthysoil.org Energy Recovery Council http://www.energyrecoverycouncil.org International Solid Waste Association http://www.iswa.org

Electronic Resources National Recycling Coalition http://www.nrc-recycle.org

Jewelers of America http://www.jewelers.org

National Solid Waste Management Association http://www.environmentalistseveryday.org

Jewelers’ Security Alliance http://www.jewelerssecurity.org

Solid Waste Association of North America http://www.swana.org

Jewelers Vigilance Committee http://www.jvclegal.org

WATCHES AND JEWELRY INDUSTRY Accredited Gemologists Association http://www.accreditedgemologists.org Accrediting Commission of Career Schools and Colleges http://www.accsc.org American Gem Society http://www.americangemsociety.org American Jewelry Design Council http://www.ajdc.org American Watch Association http://www.americanwatchassociation.com American Watchmakers-Clockmakers Institute http://www.awci.com Gemological Institute of America http://www.gia.edu

2157

Jewelry Career Fair http://www.careerfair.gia.org Manufacturing Jewelers and Suppliers of America http://www.mjsa.polygon.net

WATER

SUPPLY

INDUSTRY

American Water Resources Association http://www.awra.org American Water Works Association http://www.awwa.org National Association of Water Companies http://www.nawc.org Water Environment Federation http://www.wef.org Water Quality Association http://www.wqa.org

Indexes

Industries by Career Cluster The industries that appear in Survey of American Industry and Careers have been categorized by the following sixteen career clusters to make it easier to understand which industries provide opportunities to pursue specific career paths. For those interested in a particular job or occupation, the next section of this index lists selected occupations. Some positions, such as chief executive officer, administrative assistant, and payroll manager, can be found in nearly every industry, so mentions of these positions were indexed only when they were discussed at length or played a significant role in a particular industry. Agriculture, Food, and Natural Resources Beverage and Tobacco Industry, 159 Biofuels Industry, 177 Coal Mining Industry, 345 Farming Industry, 613 Fishing and Fisheries Industry, 663 Food Manufacturing and Wholesaling Industry, 681 Food Retail Industry, 704 Food Services, 721 Livestock and Animal Products Industry, 1078 Logging Industry, 1113 Mining Industry, 1187 Natural Resources Management, 1276 Petroleum and Natural Gas Industry, 1384 Restaurant Industry, 1644 Textile and Fabrics Industry, 1839 Water Supply Industry, 2017

Political Advocacy Industry, 1458 Publishing and Information Industry, 1572 Telecommunications Infrastructure Industry, 1819 Theater and Performing Arts Industry, 1859 Video, Computer, and Virtual Reality Games Industry, 1947 Business, Management, and Administration Accounting Services, 1 Business Services, 252 Environmental Engineering and Consultation Services, 593 Hospital Care and Services, 899 Real Estate Industry, 1588 Spectator Sports Industry, 1762 Education and Training Corporate Education Services, 452 Day-Care Services, 503 Health and Fitness Industry, 808 Higher Education Industry, 844 Private Education Industry, 1515 Public Elementary and Secondary Education Industry, 1537

Architecture and Construction Building Architecture Industry, 215 Building Construction Industry, 233 Highway, Road, and Bridge Construction Industry, 863 Home Maintenance Services, 881 Landscaping Services, 1005 Rental and Leasing Services, 1606

Finance Banking Industry, 125 Financial Services Industry, 648 Insurance Industry, 971

Arts, A/V Technology, and Communication Advertising and Marketing Industry, 19 Broadcast Industry, 197 Industrial Design Industry, 952 Internet and Cyber Communications Industry, 989 Motion Picture and Television Industry, 1204 Museums and Cultural Institutions Industry, 1225 Music Industry, 1241

Government and Public Administration Occupations Civil Services: Planning, 305 Civil Services: Public Safety, 325 Federal Public Administration, 631 Libraries and Archives Industry, 1043 Local Public Administration, 1096 2161

2162

Industries by Career Cluster

National and International Security Industry, 1260 Postal and Package Delivery Services, 1476 Space Exploration and Space Science Industry, 1741 Waste Management Industry, 1981 Health Science Complementary and Alternative Health Care Industry, 362 Counseling Services, 469 Dental and Orthodontics Industry, 541 Hospital Care and Services, 899 Medicine and Health Care Industry, 1151 Public Health Services, 1554 Residential Medical Care Industry, 1626 Scientific, Medical, and Health Equipment and Supplies Industry, 1703 Veterinary Industry, 1927 Hospitality and Tourism Casino Industry, 271 Food Services, 721 Hotels and Motels Industry, 918 Outdoor Recreation Industry, 1312 Restaurant Industry, 1644 Themed Entertainment Industry, 1877 Travel and Tourism Industry, 1910 Information Technology Computer Software Industry, 397 Computer Systems Industry, 414 Internet and Cyber Communications Industry, 989 Publishing and Information Industry, 1572 Space Exploration and Space Science Industry, 1741 Law, Public Safety, and Security Criminal Justice and Prison Industry, 485 Legal Services and Law Firms, 1026 National and International Security Industry, 1260 Public Health Services, 1554 Manufacturing Apparel and Fashion Industry, 86 Automobiles and Personal Vehicles Industry, 105 Batteries and Fuel Cells Industry, 141

Biofuels Industry, 177 Building Construction Industry, 233 Chemicals Industry, 288 Computer Hardware and Peripherals Industry, 379 Construction Equipment Industry, 432 Defense Industry, 523 Electrical and Gas Appliances Industry, 559 Food Manufacturing and Wholesaling Industry, 681 Furniture and Home Furnishings Industry, 775 Hand Tools and Instruments Industry, 793 Heavy Machines Industry, 825 Household and Personal Products Industry, 937 Light Machinery Industry, 1060 Mass Transportation Vehicles Industry, 1131 Metals Manufacturing Industry, 1169 Paper Manufacturing and Products Industry, 1332 Petroleum and Natural Gas Industry, 1384 Pharmaceuticals and Medications Industry, 1403 Plastics and Rubber Manufacturing Industry, 1440 Printing Industry, 1495 Rental and Leasing Services, 1606 Retail Trade and Service Industry, 1664 Sports Equipment Industry, 1783 Telecommunications Equipment Industry, 1799 Textile and Fabrics Industry, 1839 Toys and Games Industry, 1893 Watches and Jewelry Industry, 1999 Marketing, Sales, and Service Advertising and Marketing Industry, 19 Financial Services Industry, 648 Real Estate Industry, 1588 Rental and Leasing Services, 1606 Retail Trade and Service Industry, 1664 Personal Services Animal Care Services, 74 Counseling Services, 469 Day-Care Services, 503 Funerary Industry, 760 Home Maintenance Services, 881 Personal Services, 1369

Industries by Career Cluster Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry, 1423 Residential Medical Care Industry, 1626 Science, Technology, Engineering, and Math Alternative Power Industry, 54 Computer Hardware and Peripherals Industry, 379 Defense Industry, 523 Electrical Power Industry, 578 Environmental Engineering and Consultation Services, 593 Industrial Design Industry, 952 Mass Transportation Vehicles Industry, 1131 Nuclear Power Industry, 1297 Pharmaceuticals and Medications Industry, 1403 Scientific and Technical Services, 1682 Space Exploration and Space Science Industry, 1741

2163

Transportation, Distribution, and Logistics Airline Industry, 36 Automobiles and Personal Vehicles Industry, 105 Freight Transport Industry, 742 Mass Transportation Vehicles Industry, 1131 Passenger Transportation and Transit Industry, 1351 Postal and Package Delivery Services, 1476 Rental and Leasing Services, 1606 Shipbuilding, Submarines, and Naval Transport Industry, 1722 Space Exploration and Space Science Industry, 1741 Warehousing and Storage Industry, 1964 Waste Management Industry, 1981

Jobs and Careers This index lists selected jobs and careers that are available in the industries in Survey of American Industry and Careers. Some positions, such as chief executive officer, administrative assistant, and payroll manager, can be found in nearly every industry, so mentions of these positions were indexed only when they were discussed at length or played a significant role in a particular industry. A&R manager, 1256 Account executive/manager; Advertising and Marketing Industry, 25, 31; Business Services, 265 Accountant; Accounting Services, 4, 12-13; Biofuels Industry, 192; Business Services, 265; Casino Industry, 281; Defense Industry, 536; Electrical and Gas Appliances Industry, 574; Logging Industry, 1127; Printing Industry, 1508; Retail Trade and Service Industry, 1674; Scientific, Medical, and Health Equipment and Supplies Industry, 1714; Textile and Fabrics Industry, 1855 Accounts receivable/payable manager/clerk; Accounting Services, 13; Animal Care Services, 81; Automobiles and Personal Vehicles Industry, 120; Biofuels Industry, 192; Business Services, 265; Complementary and Alternative Health Care Industry, 375; Construction Equipment Industry, 448; Defense Industry, 536; Highway, Road, and Bridge Construction Industry, 876; Household and Personal Products Industry, 948; Logging Industry, 1127; Medicine and Health Care Industry, 1165; Publishing and Information Industry,

1581; Residential Medical Care Industry, 1639; Spectator Sports Industry, 1777; Textile and Fabrics Industry, 1855; Waste Management Industry, 1994 Activity coordinator/leader, 1326 Activity coordinator/leader, 515, 517, 520, 1924 Actor, 209, 1218, 1871 Actuary, 984-985 Administrative assistant; Biofuels Industry, 192; Business Services, 265; Computer Hardware and Peripherals Industry, 393; Computer Systems Industry, 425; Defense Industry, 537; Environmental Engineering and Consultation Services, 605; Federal Public Administration, 644; Food Services, 738; Hand Tools and Instruments Industry, 801; Internet and Cyber Communications Industry, 1001; Legal Services and Law Firms, 1038; Local Public Administration, 1109; Medicine and Health Care Industry, 1162; Mining Industry, 1197; Paper Manufacturing and Products Industry, 1345; Political Advocacy Industry, 1472; Printing Industry, 1508; Private Education Industry, 1528; Public Health Services, 1567; Scientific and Technical Services, 1697; Scientific, 2164

Medical, and Health Equipment and Supplies Industry, 1713; Spectator Sports Industry, 1777; Telecommunications Infrastructure Industry, 1833; Travel and Tourism Industry, 1921; Veterinary Industry, 1941; Warehousing and Storage Industry, 1976 Administrative support manager, 297, 605, 1343, 1451, 1777, 1903, 1907, 1939 Administrator, 265, 642, 1107, 1161, 1527, 1637, 1777, 2028 Administrator, public, 1108 Admissions manager, 855 Advertising agent, 27 Advertising executive/manager; Batteries and Fuel Cells Industry, 152; Broadcast Industry, 210; Casino Industry, 284; Furniture and Home Furnishings Industry, 786; Health and Fitness Industry, 818; Hospital Care and Services, 913; Landscaping Services, 1018; Motion Picture and Television Industry, 1221; Outdoor Recreation Industry, 1323; Real Estate Industry, 1600; Residential Medical Care Industry, 1639; Restaurant Industry, 1656; Scientific, Medical, and Health Equipment and Supplies Industry, 1717; Toys and Games Industry, 1903; Travel and Tourism Industry,

Jobs and Careers 1921; Veterinary Industry, 1942; Warehousing and Storage Industry, 1975 Agent, 98. See also specific type of agent Agronomist, 627, 1290 Ambulance driver, 1364 Analyst, application, 172, 642, 893, 1362, 1488 Analyst, budget, 262, 644 Analyst, business, 281, 481, 533, 891, 1695 Analyst, clinical, 1713 Analyst, computer, 342, 392, 409410, 426-427, 946, 985, 999, 1417 Analyst, cost, 192, 1813 Analyst, data, 190, 320, 342, 427, 999, 1362 Analyst, environmental impact, 893, 1362, 1488 Analyst, geographic information system, 320, 607, 1758 Analyst, hydro and ecological management system, 1758 Analyst, information technology, 1108 Analyst, intelligence, 342 Analyst, legislative, 642 Analyst, market; Beverage and Tobacco Industry, 171; Complementary and Alternative Health Care Industry, 373; Counseling Services, 481; Furniture and Home Furnishings Industry, 786; Livestock and Animal Products Industry, 1090; Paper Manufacturing and Products Industry, 1344; Pharmaceuticals and Medications Industry, 1416; Private Education Industry, 1530; Rental and Leasing Services, 1620; Scientific and Technical Services, 1697; Scientific, Medical, and Health Equipment and Supplies Industry, 1717; Toys and Games Industry, 1903

Analyst, network, 427-428, 1831 Analyst, policy, 642, 1815, 1832 Analyst, programmer, 172, 893, 1362, 1488, 1756 Analyst, public health, 1566 Analyst, quality assurance, 193, 1418 Analyst, risk, 893, 1397 Analyst, sales, 171, 891, 1361, 1487 Analyst, scientific systems, 68, 1755 Analyst, security, 482, 642, 1272, 1361, 1487 Analyst, systems, 172, 642, 893, 914, 1362, 1471, 1488, 1640, 1854 Analyst, technical, 172, 893, 1362, 1488 Analyst, technology, 1831 Analyst, water quality, 609 Animator, 1959 Announcer, 1779, 1871 Appraiser, 1601 Arborist, 1019 Architect, 225, 228, 282, 716 Architect, enterprise, 67, 1757 Architect, landscape, 228-229, 698, 1019 Architect, marine, 228, 1734-1735 Architect, naval, 1143, 1735 Architect, solutions, 1995 Architect, technical, 966 Archivist, 1235, 1237 Arranger, 1251 Art director, 31, 754, 945, 1218, 1583 Art therapist, 479, 1636 Artisan, 1254 Assayer, 1694 Assembly worker; Apparel and Fashion Industry, 92; Automobiles and Personal Vehicles Industry, 118; Construction Equipment Industry, 448; Defense Industry, 534-535; Electrical and Gas Appliances Industry, 573; Heavy Machines Industry, 839; Household and

2165

Personal Products Industry, 947; Light Machinery Industry, 1074; Mass Transportation Vehicles Industry, 1146; Scientific, Medical, and Health Equipment and Supplies Industry, 1717; Toys and Games Industry, 1904 Asset manager, 1601 Athlete, 1773-1774 Athletic director, 856, 1530, 1546 Attendant, animal care, 81-82, 1940 Attendant, locker room, 820 Attendant, parking, 285, 914, 931 Attorney, 50, 985, 1037, 1107, 1435, 1779. See also Legal counsel Attorney, contracts, 1831 Attorney, corporate, 67, 1037, 1855 Attorney, employment, 860, 1532 Attorney, intellectual property, 192, 570, 1697 Attorney, patents and grants, 155, 1037 Attorney, telecommunications, 1815, 1832 Auctioneer, 1601 Audiologist, 1164 Audiovisual support specialist, 67, 858, 1108, 1471, 1530, 1549, 1757 Auditor, 4, 13-14, 948, 1197, 1779 Automotive service technician, 120 Automotive technician, 119 Avionics technician, 48 Bacteriologist, 1567 Bagger, 1678. See also Packager Baker, 674, 698, 714, 735 Barber, 1374 Bartender, 283, 736, 930, 1658, 1888, 1923

2166

Jobs and Careers

Bellhop, 931 Bilingual aide, 1550 Billing manager/clerk, 13, 375, 480, 1165, 1581 Bindery worker, 1510-1511 Biochemist, 189, 627, 697, 735, 947, 1417 Biological technician, 1417 Biologist, 609, 1288, 1307, 2029 Biologist, marine, 1289 Biomedical equipment technician, 1716 Biophysicist, 1417 Bloodstock agent, 1776 Boatswain, 674 Bodyguard, 1255, 1778 Boilermaker, 190-191, 298, 1309, 1736 Bookbinder, 1510-1511 Bookkeeper, 15, 515, 1622 Border Patrol agent, 336-337, 340 Brand manager, 945, 1957 Breeder, 82, 627, 1092 Brewmaster, 173 Bricklayer, 247 Broadcast technician, 210 Bulldozer operator, 357-358, 873 Bus driver, 1364, 1550 Business development manager, 318, 533, 1122, 1469 Business operations specialist, 67, 948, 1179, 1415, 1754 Busser, table, 283, 736, 930 Butcher, 698, 714, 1088 Buyer, 100, 192, 790, 1907. See also Media buyer Cabinet secretary, 642 Caddy, 932 Cake designer, 735 Call center specialist, 134, 1794 Camera operator, 209, 1220 Captain, 674, 755, 1398, 1923 Captain, ferry, 1364 Carder, 1853 Caregiver, 1376, 1380 Caretaker, 1434 Caretaker, animal, 82

Carpenter, 247, 282, 786, 788, 895, 1736, 1855, 1890, 1923 Case worker, 1433 Casting agent, 1217 Cataloger, 1056 Caterer, 735, 930, 1776 CEO. See Chief executive officer CFO. See Chief financial officer Chancellor, 855 Chaplain, 497, 772, 1435 Chauffeur, 120, 1364 Cheerleader, 1779 Chef, 283, 735, 930, 1326, 1640, 1656-1657, 1923, 1958 Chemical engineering technician, 172, 947, 1181 Chemical technician, 189, 299, 947, 1019, 1181, 1417 Chemist; Alternative Power Industry, 68; Beverage and Tobacco Industry, 172; Biofuels Industry, 189-190; Chemicals Industry, 299; Home Maintenance Services, 893; Household and Personal Products Industry, 947; Metals Manufacturing Industry, 1181; Pharmaceuticals and Medications Industry, 1417; Plastics and Rubber Manufacturing Industry, 1452; Space Exploration and Space Science Industry, 1755; Textile and Fabrics Industry, 1853; Water Supply Industry, 2029 Chemist, analytical, 1307 Chief executive officer; Batteries and Fuel Cells Industry, 152; Beverage and Tobacco Industry, 169; Business Services, 264; Chemicals Industry, 297; Civil Services: Public Safety, 355; Computer Software Industry, 408; Construction Equipment Industry, 445; Electrical and Gas Appliances Industry, 570; Financial Services Industry, 657; Food Manufacturing and

Wholesaling Industry, 693; Food Services, 732; Furniture and Home Furnishings Industry, 785; Heavy Machines Industry, 836; Light Machinery Industry, 1070; Livestock and Animal Products Industry, 1088; Mining Industry, 1197; Passenger Transportation and Transit Industry, 1360; Pharmaceuticals and Medications Industry, 1415; Postal and Package Delivery Services, 1486; Residential Medical Care Industry, 1637; Scientific, Medical, and Health Equipment and Supplies Industry, 1713; Video, Computer, and Virtual Reality Games Industry, 1957; Warehousing and Storage Industry, 1974; Waste Management Industry, 1993 Chief financial officer, 13, 644, 1197, 1507, 1637, 1855 Chief information officer, 642 Chief operating officer, 479, 803, 911, 1696; Residential Medical Care Industry, 1637 Chief technology officer, 642 Child-care worker, 820 Child-care worker, 518 Chimney sweep, 895 Chiropractor, 370, 1778 Chiropractor, veterinary, 1942 Choreographer, 1870, 18721873, 1889 Cinematographer, 1217 CIO. See Chief information officer Circus performer, 1873 Civil engineering technician, 321, 870 Claims adjuster/appraiser/ examiner, 983 Cleaner, 283, 716, 786, 820, 822, 893, 1362, 1488, 1923 Clinical technician, 1164 Club manager, 817

Jobs and Careers Coach, academic, 1546 Coach, curriculum, 1548 Coach, health, 912 Coach, sports, 820, 1772-1773 Collections manager/agent, 14, 1165 Comedian, 1889 Commercial/industrial designer, 787 Commissioner, 1107 Commodity broker, 626, 658 Communications coordinator/ specialist, 643, 1109, 1416, 1469, 1487, 1567, 1714, 1815, 1832 Compliance officer, 50, 167, 173, 282, 717, 1200, 1599, 1717, 1793, 1811 Composer, 1251-1252, 1872, 1959 Comptroller, 1507, 1753 Computer operator, 605, 659, 1907, 1976 Computer security specialist, 137, 392, 410, 737, 1000, 2028 Computer support specialist; Business Services, 266; Computer Systems Industry, 425; Furniture and Home Furnishings Industry, 787; Higher Education Industry, 858; Insurance Industry, 985; Mining Industry, 1197; Private Education Industry, 1530; Scientific, Medical, and Health Equipment and Supplies Industry, 1718; Spectator Sports Industry, 1777 Computer technician, 137, 155, 659, 715, 717, 737, 1018, 1182, 1381, 1453, 1583, 1735, 1854, 1922, 1976 Concierge, 283, 930, 1888 Conductor, 1251 Conservation specialist, 1327 Conservator, 1236 Construction manager, 874 Construction materials technician, 609

Construction worker, 874 Consultant, 265, 1380, 1620, 1779; Alternative Power Industry, 69 Consultant, environmental, 607, 1289 Consultant, fashion, 100 Consultant, management, 264, 465, 604, 643 Consultant, technology, 893, 1362, 1488 Content developer, 464 Contractor, 100, 1123, 1507 Contracts manager, 67, 265, 1017, 1754, 1777, 1813 Controller, 13 Conveyor operator, 301, 357358, 1198, 1346 Cook; Casino Industry, 283; Criminal Justice and Prison Industry, 497; Day-Care Services, 519; Fishing and Fisheries Industry, 674; Food Retail Industry, 714; Food Services, 735; Health and Fitness Industry, 821; Hospital Care and Services, 914; Hotels and Motels Industry, 930; Outdoor Recreation Industry, 1326; Public Elementary and Secondary Education Industry, 1550; Residential Medical Care Industry, 1640; Restaurant Industry, 16561657; Travel and Tourism Industry, 1923 Copywriter, 30-31, 392, 571, 856, 1529 Corrections officer, 493-494, 1109 Cosmetologist, 820, 1375 Cost estimator, 876, 1017, 1507 Costumer, 1218, 1872, 1889 Counselor, camp, 1326 Counselor, career development, 855, 1528, 1548 Counselor, employee, 448 Counselor, grief, 479, 772 Counselor, guidance, 1528 Counselor, marriage, 473

2167

Counselor, mental health, 478, 518 Counselor, prison, 497 Counselor, rehabilitation, 479, 518 Counselor, school, 478, 15481549 Counter and rental clerk, 1619 Courier, 1491 Crane operator, 752, 1123, 1736 Creative director, 966, 1583, 1903 Crematorium operator, 773 Crossing guard, 873 CTO. See Chief technology officer Curator, 1235, 1237, 1887 Custodian/janitor; Day-Care Services, 519; Health and Fitness Industry, 822; Highway, Road, and Bridge Construction Industry, 873; Mass Transportation Vehicles Industry, 1143; Outdoor Recreation Industry, 1325; Public Elementary and Secondary Education Industry, 1550; Spectator Sports Industry, 1777; Travel and Tourism Industry, 1923; Veterinary Industry, 1941; Video, Computer, and Virtual Reality Games Industry, 1958; Warehousing and Storage Industry, 1976 Customer relations manager/ representative, 153, 169, 802, 891, 1180, 1325, 1360, 1381, 1452, 1486 Customer service representative; Alternative Power Industry, 67; Apparel and Fashion Industry, 101; Banking Industry, 134; Biofuels Industry, 188; Construction Equipment Industry, 445; Counseling Services, 481; Electrical and Gas Appliances Industry, 570; Environmental Engineering and

2168

Jobs and Careers

Consultation Services, 604; Financial Services Industry, 658; Food Manufacturing and Wholesaling Industry, 694; Food Services, 733; Furniture and Home Furnishings Industry, 785; Heavy Machines Industry, 836; Landscaping Services, 1017; Light Machinery Industry, 1070; Livestock and Animal Products Industry, 1089; Medicine and Health Care Industry, 1162; Printing Industry, 1508; Rental and Leasing Services, 1617; Sports Equipment Industry, 1794; Toys and Games Industry, 1902; Video, Computer, and Virtual Reality Games Industry, 1958; Warehousing and Storage Industry, 1975; Water Supply Industry, 2028 Dance therapist, 1636 Dancer, 1872-1873, 1889 Database administrator, 67, 428, 571, 699, 985, 999, 1054, 1108, 1509, 1757 Day-care director, 515 Dealer, card, 282, 932, 1924 Dealer, livestock, 1090 Dean, 855, 1547 Deckhand, 674, 1363, 1923 Dental appliance designer, 553 Dental hygienist, 554-555 Dental laboratory technician, 555 Dentist, 553-554, 1568 Desktop publisher, 1510, 1907 Detective, 340, 1566 Detective, hotel, 929 Detective, store, 99 Development and education specialist, 912 Dietician, 519, 819, 911, 914, 1640, 1778 Diplomatic courier, 643 Director, 1217 Disc jockey, 209

Dishwasher, 283, 736, 914, 930, 1657, 1923 Dispatcher, 1363, 1489; Biofuels Industry, 191; Construction Equipment Industry, 448; Electrical and Gas Appliances Industry, 574; Funerary Industry, 773; Hand Tools and Instruments Industry, 804; Heavy Machines Industry, 840; Home Maintenance Services, 894; Household and Personal Products Industry, 947; Light Machinery Industry, 1074; Metals Manufacturing Industry, 1182; Petroleum and Natural Gas Industry, 1398; Postal and Package Delivery Services, 1489; Warehousing and Storage Industry, 1977 Display designer, 715 Distributor, 100, 676, 1221 Diversity coordinator, 72, 481 Doctor. See Physician Doffer, 1853 Doorperson, 931 Drafter, 313, 873, 1198, 1735 Drafter, architectural, 228, 230, 313, 1019 Drafter, mechanical, 313, 447, 787, 838, 966, 1073, 1344, 1793 Driller, 1198 Driver, race car, 1773 Dry cleaner, 1373, 1380 Dyer, 1853 Economist, agricultural, 624 Editor, 31, 97, 209, 391, 553, 1219, 1254, 1582, 1714 Electrical designer, 1735 Electrical engineering technician, 1810 Electrician; Automobiles and Personal Vehicles Industry, 118; Biofuels Industry, 193; Building Construction Industry, 247; Coal Mining

Industry, 358; Complementary and Alternative Health Care Industry, 374; Environmental Engineering and Consultation Services, 608; Food Manufacturing and Wholesaling Industry, 695; Food Services, 734; Furniture and Home Furnishings Industry, 786; Home Maintenance Services, 895; Mass Transportation Vehicles Industry, 1146; Museums and Cultural Institutions Industry, 1236; Paper Manufacturing and Products Industry, 1345; Rental and Leasing Services, 1619; Shipbuilding, Submarines, and Naval Transport Industry, 1736; Themed Entertainment Industry, 1890; Travel and Tourism Industry, 1923 Electrochemical engineering technician, 154 Electrochemist, 153 Electromechanical engineering technician, 70 Electronic commerce specialist, 997 Electronics engineering technician, 1810 Embalmer, 773 Emergency medical technician, 1566 Emergency worker, 856, 1326, 1397 Energy conservation and use technician, 607-608 Energy trader, 71 Engineer; Computer Hardware and Peripherals Industry, 390; Defense Industry, 533-534; Fishing and Fisheries Industry, 674; Heavy Machines Industry, 838; Light Machinery Industry, 1073; Logging Industry, 1123; Pharmaceuticals and Medications Industry, 1417;

Jobs and Careers Shipbuilding, Submarines, and Naval Transport Industry, 1736; Spectator Sports Industry, 1776; Sports Equipment Industry, 1793; Travel and Tourism Industry, 1923 Engineer, aerospace, 1755-1756 Engineer, agriculture mechanical, 627 Engineer, air quality, 609 Engineer, applications, 69, 1696 Engineer, biomechanical, 1793 Engineer, biomedical, 1418, 1694, 1714-1716 Engineer, building, 1777 Engineer, chemical; Batteries and Fuel Cells Industry, 153; Beverage and Tobacco Industry, 172; Biofuels Industry, 189; Chemicals Industry, 299; Electrical Power Industry, 586; Home Maintenance Services, 893; Household and Personal Products Industry, 947; Metals Manufacturing Industry, 1181; Paper Manufacturing and Products Industry, 1344; Pharmaceuticals and Medications Industry, 1418; Plastics and Rubber Manufacturing Industry, 1452; Space Exploration and Space Science Industry, 1756; Water Supply Industry, 2029 Engineer, civil, 311, 321, 586, 1307 Engineer, combustions, 586 Engineer, communications systems, 1756 Engineer, compression and traffic, 1834 Engineer, computer, 193, 391, 427, 586, 1307, 1715-1716 Engineer, construction, 356, 873, 1756 Engineer, design, 70, 966, 1696, 1852 Engineer, development, 117

Engineer, electrical; Alternative Power Industry, 69; Automobiles and Personal Vehicles Industry, 117; Construction Equipment Industry, 447; Electrial and Gas Appliances Industry, 572; Electrical Power Industry, 586; Mass Transportation Vehicles Industry, 1143, 1145; Nuclear Power Industry, 1307; Paper Manufacturing and Products Industry, 1344; Scientific, Medical, and Health Equipment and Supplies Industry, 1715-1716; Space Exploration and Space Science Industry, 1756; Telecommunications Equipment Industry, 1810; Textile and Fabrics Industry, 1855; Water Supply Industry, 2029 Engineer, electronics, 117, 572, 1756, 1810, 1903 Engineer, environmental, 298, 311, 586, 606-607, 1143, 1344, 1756, 1995 Engineer, field, 873 Engineer, fire protection, 298 Engineer, firmware developing, 607 Engineer, flight, 46 Engineer, food, 697, 735 Engineer, gas engine, 189 Engineer, geological, 1198 Engineer, hardware, 1758 Engineer, health and safety, 298, 1344, 1418, 1756, 1904 Engineer, heating, ventilation, and air-conditioning, 695, 734, 1619 Engineer, human factors, 1756 Engineer, hydraulic, 311, 586 Engineer, industrial; Alternative Power Industry, 70; Automobiles and Personal Vehicles Industry, 117; Beverage and Tobacco Industry, 172; Construction

2169

Equipment Industry, 447; Electrical and Gas Appliances Industry, 572; Furniture and Home Furnishings Industry, 787; Hand Tools and Instruments Industry, 803; Household and Personal Products Industry, 947; Industrial Design Industry, 966; Mass Transportation Vehicles Industry, 1143; Metals Manufacturing Industry, 1181; Paper Manufacturing and Products Industry, 1344; Petroleum and Natural Gas Industry, 1398; Pharmaceuticals and Medications Industry, 1418; Scientific, Medical, and Health Equipment and Supplies Industry, 1715; Space Exploration and Space Science Industry, 1757; Telecommunications Equipment Industry, 18111812; Textile and Fabrics Industry, 1855; Toys and Games Industry, 1907; Water Supply Industry, 2029 Engineer, information technology, 284 Engineer, integration, 1756 Engineer, locomotive, 752, 755, 1365 Engineer, logistics, 70, 1757 Engineer, maintenance, 193, 608 Engineer, manufacturing, 70, 1757, 1812 Engineer, marine, 1143, 17341735 Engineer, materials, 1180-1181, 1307, 1344, 1452, 1756, 1855, 1903, 1907, 2010; Batteries and Fuel Cells Industry, 154; Electrical Power Industry, 586 Engineer, mechanical; Alternative Power Industry, 69; Automobiles and Personal Vehicles Industry, 117;

2170

Jobs and Careers

Construction Equipment Industry, 447; Electrical and Gas Appliances Industry, 572; Electrical Power Industry, 586; Environmental Engineering and Consultation Services, 607; Industrial Design Industry, 966; Light Machinery Industry, 1074; Mass Transportation Vehicles Industry, 1143; Metals Manufacturing Industry, 1181; Nuclear Power Industry, 1307; Paper Manufacturing and Products Industry, 1344; Scientific, Medical, and Health Equipment and Supplies Industry, 1715-1716; Space Exploration and Space Science Industry, 1756; Toys and Games Industry, 1903; Water Supply Industry, 2029 Engineer, medical, 374 Engineer, metallurgical, 1180 Engineer, mining, 356, 1198 Engineer, multimedia design, 67, 1757 Engineer, natural resources, 609 Engineer, network, 67, 1757, 1906 Engineer, network interface, 1811 Engineer, new technology, 1811, 1834 Engineer, nuclear, 1306-1307, 1756 Engineer, office, 873 Engineer, operations, 894, 1363 Engineer, optical, 1758 Engineer, package, 947, 1090 Engineer, petroleum, 1398 Engineer, pipeline, 755 Engineer, pit, 356 Engineer, process, 70, 189, 1089 Engineer, product, 189, 966 Engineer, production, 117, 1696, 1904 Engineer, project, 246, 947, 1143, 1756

Engineer, quality assurance, 70, 1757 Engineer, railroad, 1143 Engineer, recording/sound, 1255 Engineer, reliability, 1756 Engineer, repair, 69 Engineer, research, 68-69, 1695, 1754 Engineer, sales, 297, 999 Engineer, sanitary, 311 Engineer, simulation, 586 Engineer, software; Alternative Power Industry, 68; Batteries and Fuel Cells Industry, 155; Biofuels Industry, 193; Computer Software Industry, 409; Computer Systems Industry, 427-428; Electrical and Gas Appliances Industry, 571; Environmental Engineering and Consultation Services, 606; Food Manufacturing and Wholesaling Industry, 699; Insurance Industry, 985; Internet and Cyber Communications Industry, 999; Metals Manufacturing Industry, 1182; Mining Industry, 1197; Plastics and Rubber Manufacturing Industry, 1453; Scientific, Medical, and Health Equipment and Supplies Industry, 1715-1716, 1718; Space Exploration and Space Science Industry, 1756; Telecommunications Equipment Industry, 1814; Water Supply Industry, 2029 Engineer, sound, 1220 Engineer, stationary, 1811 Engineer, structural, 229, 311, 873, 1735 Engineer, system safety, 1756 Engineer, systems, 69, 1090, 1123, 1254, 1696, 1756, 1834 Engineer, testing, 1696 Engineer, train, 1364

Engineer, training, 607 Engineer, transmission methods, 1834 Engineer, transportation, 311 Engineer, user interface, 999 Engineer, value, 246 Engineer, vehicle, 1143 Engineer, wastewater, 609 Engineer, water and wastewater, 2029 Engineer, welding, 1180 Engineer, wind energy, 71 Engineering technician, 117, 390, 609, 1143, 1689, 1715, 2029 Engraver, 2008 Entomologist, 627 Environmental engineering technician, 607 Environmental science technician, 299, 358, 607, 609 Epidemiologist, 1566 Escrow officer, 1601 Event planner, 49, 534, 1125, 1433, 1776, 1942 Executive assistant, 265, 890, 1777, 1957 Executive secretary, 192, 285, 605, 1197 Exhibit designer, 1236 Expediter, 785, 789, 1326, 1659, 1975, 1977 Explosives worker, 1198 External affairs coordinator, 49, 534, 1125 Facilities maintenance worker; Automobiles and Personal Vehicles Industry, 118; Beverage and Tobacco Industry, 171; Chemicals Industry, 298; Criminal Justice and Prison Industry, 497; DayCare Services, 519; Electrical and Gas Appliances Industry, 572; Hand Tools and Instruments Industry, 802; Health and Fitness Industry, 822; Higher Education Industry, 856; Home

Jobs and Careers Maintenance Services, 893; Landscaping Services, 1018; Mass Transportation Vehicles Industry, 1143; Museums and Cultural Institutions Industry, 1238; Music Industry, 1255; Outdoor Recreation Industry, 1325; Postal and Package Delivery Services, 1487; Private Education Industry, 1529; Scientific and Technical Services, 1699; Travel and Tourism Industry, 1923; Veterinary Industry, 1941; Water Supply Industry, 2028 Farmer/farm manager, 624-625, 717, 1088, 1853 Farmhand, 173, 625, 1089, 1853 Fashion designer, 98-99 Federal law enforcement agent, 336-337 Financial aid officer, 855 Financial analyst, 67, 192, 912, 948, 964, 1089, 1639, 1714, 1754, 1831 Firefighter, 298, 696, 734, 15651566 First-line supervisor, 116, 1020, 1345, 1418 Fish packer, 675 Fish roe processor, 675 Flight attendant, 46-47 Food and beverage service worker, 736 Food laboratory technician, 697, 735 Food safety technician, 173 Food science technician, 172 Food service manager, 497, 519, 732-733, 817, 821, 1323, 1776 Forester, 1288 Forestry worker, 1122 Forklift operator, 191, 1123, 1854, 1977-1978 Freight loader/unloader; Alternative Power Industry, 71; Beverage and Tobacco Industry, 173; Coal Mining Industry, 358; Computer Systems Industry, 427;

Construction Equipment Industry, 448; Electrical and Gas Appliances Industry, 574; Fishing and Fisheries Industry, 676; Food Manufacturing and Wholesaling Industry, 698; Food Services, 737; Freight Transport Industry, 755; Furniture and Home Furnishings Industry, 789-790; Hand Tools and Instruments Industry, 804; Heavy Machines Industry, 840; Light Machinery Industry, 1075; Plastics and Rubber Manufacturing Industry, 1453 Fund-Raiser, 1237, 1433 Funeral director, 771-772 Gaming manager, 282 Gardener, 497, 895, 1020-1021, 1326 Geneticist, 627 Geologist, 356, 609, 1198, 1288, 1398, 2010 Geophysicist, 68, 356, 1307 Golf pro, 932 Government relations manager, 49, 169, 534, 1125, 1471 Governor, 1107, 1568 Graphic artist, 67, 1510, 1583, 1757 Graphic designer; Advertising and Marketing Industry, 31; Animal Care Services, 83; Automobiles and Personal Vehicles Industry, 117; Building Architecture Industry, 230; Building Construction Industry, 248; Computer Hardware and Peripherals Industry, 392; Electrical and Gas Appliances Industry, 571; Higher Education Industry, 856; Household and Personal Products Industry, 945; Internet and Cyber Communications Industry,

2171

999; Museums and Cultural Institutions Industry, 1236; Music Industry, 1254; Printing Industry, 1510; Private Education Industry, 1529; Real Estate Industry, 1599 Gravedigger, 773 Greenskeeper, 1021 Greeter, 1678 Grip, 210, 1220 Groom, 1776 Groomer, 82, 1940 Groundskeeper; Criminal Justice and Prison Industry, 498; DayCare Services, 519; Food Manufacturing and Wholesaling Industry, 698; Food Services, 737; Funerary Industry, 772; Health and Fitness Industry, 822; Highway, Road, and Bridge Construction Industry, 873; Hotels and Motels Industry, 930; Landscaping Services, 1020-1021; Outdoor Recreation Industry, 1326; Rental and Leasing Services, 1621; Spectator Sports Industry, 1777; Video, Computer, and Virtual Reality Games Industry, 1958 Groundwater technician, 609 Handyman, 895 Hazardous materials removal worker, 1995 Hazardous waste manager, 1994 Hazardous waste technician, 298 Headmaster, 1528 Health information technician, 910 Health physicist, 1307 Heating, ventilation, and airconditioning specialist; Casino Industry, 283; Complementary and Alternative Health Care Industry, 374; Criminal Justice and Prison Industry, 497; Furniture and Home

2172

Jobs and Careers

Furnishings Industry, 786; Home Maintenance Services, 895; Museums and Cultural Institutions Industry, 1238; Textile and Fabrics Industry, 1855 Heavy equipment service technician, 839 Help desk specialist; Biofuels Industry, 193; Complementary and Alternative Health Care Industry, 374; Computer Hardware and Peripherals Industry, 392; Computer Software Industry, 410; Computer Systems Industry, 425; Electrical and Gas Appliances Industry, 571; Food Services, 738; Hospital Care and Services, 914; Insurance Industry, 985; Internet and Cyber Communications Industry, 1001; Local Public Administration, 1108; Printing Industry, 1509; Residential Medical Care Industry, 1640; Scientific, Medical, and Health Equipment and Supplies Industry, 1718; Toys and Games Industry, 1906 Highway maintenance worker, 875 Home health aide, 1638 Horologist, 2013 Horticultural therapist, 1636 Horticulturist, 627, 1019, 1326 Host/hostess, radio or television, 209 Host/hostess, restaurant, 1658 Hotel manager, 283, 927 Housekeeper, 283, 374, 519, 895, 914, 929, 1376, 1640, 1923, 1941 Human resources manager; Beverage and Tobacco Industry, 173; Biofuels Industry, 191; Business

Services, 266; Chemicals Industry, 301; Computer Software Industry, 410; Computer Systems Industry, 428; Counseling Services, 481; Environmental Engineering and Consultation Services, 609; Food Manufacturing and Wholesaling Industry, 699; Highway, Road, and Bridge Construction Industry, 875; Home Maintenance Services, 896; Hospital Care and Services, 912; Hotels and Motels Industry, 930; Household and Personal Products Industry, 948; Insurance Industry, 985; Internet and Cyber Communications Industry, 1000; Landscaping Services, 1022; Livestock and Animal Products Industry, 1092; Medicine and Health Care Industry, 1165; Passenger Transportation and Transit Industry, 1365; Political Advocacy Industry, 1472; Postal and Package Delivery Services, 1491; Printing Industry, 1508; Spectator Sports Industry, 1778; Telecommunications Equipment Industry, 1814; Textile and Fabrics Industry, 1854 Hydrologist, 1288 Importer/exporter, 191, 676, 2013 Industrial designer, 965-966, 1852 Industrial engineering technician, 172, 572, 786-787, 947, 1181, 1398, 1418, 1811, 1907 Industrial hygienist, 1091 Industrial therapist, 1164 Information technology manager; Business Services,

266; Computer Hardware and Peripherals Industry, 392; Computer Software Industry, 410; Computer Systems Industry, 428; Financial Services Industry, 659; Food Manufacturing and Wholesaling Industry, 699; Higher Education Industry, 858; Hospital Care and Services, 913; Hotels and Motels Industry, 932; Insurance Industry, 985; Internet and Cyber Communications Industry, 1000; Political Advocacy Industry, 1471; Printing Industry, 1509; Private Education Industry, 1530; Rental and Leasing Services, 1622; Spectator Sports Industry, 1777; Textile and Fabrics Industry, 1854 Information technology technician, 446, 571, 607, 1108, 1254, 1622 Inspector; Airline Industry, 48; Alternative Power Industry, 70; Automobiles and Personal Vehicles Industry, 118; Beverage and Tobacco Industry, 167; Biofuels Industry, 190; Chemicals Industry, 301; Defense Industry, 533; Electrical and Gas Appliances Industry, 573; Furniture and Home Furnishings Industry, 788; Highway, Road, and Bridge Construction Industry, 874; Logging Industry, 1123; Metals Manufacturing Industry, 1182; Mining Industry, 1200; Nuclear Power Industry, 1308; Paper Manufacturing and Products Industry, 1345; Pharmaceuticals and Medications Industry, 1418; Plastics and Rubber

Jobs and Careers Manufacturing Industry, 1453; Shipbuilding, Submarines, and Naval Transport Industry, 1736 Inspector, building, 243, 608, 2028 Inspector, food safety, 696, 698, 717, 734 Inspector, gaming, 282 Inspector, health, 1566 Inspector, occupational health and safety, 1903 Inspector, postal, 1487 Inspector, quality, 947, 1795, 1853 Inspector general, 14, 317, 340 Installer/repairer, 69, 247, 588, 1398, 1813, 1833-1834 Instructional designer, 464 Instructor, 859, 1531 Instructor, aerobics, 818-819 Instructor, aquatics, 819 Instructor, fitness, 819 Insulation worker, 894 Insurance agent, 624, 984 Insurance broker, 984 Intelligence officer, 1272 Interaction designer, 966 Interior designer, 229, 716, 895 Interpreter, 1548 Inventor, 1903 Inventory specialist, 191, 676, 790, 802, 1323, 1655, 1978 Investigator, 608, 786, 929, 1778, 1921 Investigator, crime scene, 341 Investigator, insurance, 983 Janitor. See Custodian/Janitor Jeweler, 2008 Jewelry appraiser, 2008 Jewelry designer, 2010 Jewelry repairer, 2008-2009 Jockey, 1773 Journalist, 209, 1583 Laboratory technician, 172, 189, 427, 609, 912, 1568, 17161717, 1854, 1941 Land-use manager, 1290, 1600

Landscape designer, 1019 Landscaper, 498, 698, 737, 822, 895, 930, 1021, 1326, 1777 Laundry worker, 283, 497, 931, 1373, 1923 Law clerk, 1038 Lawyer. See Attorney Layout designer, 1583 Leasing agent, 1600-1601 Legal counsel; Casino Industry, 284; Construction Equipment Industry, 445; Defense Industry, 535; Electrical and Gas Appliances Industry, 570; Federal Public Administration, 642; Heavy Machines Industry, 837; Light Machinery Industry, 1070; Logging Industry, 1125; Political Advocacy Industry, 1471; Scientific, Medical, and Health Equipment and Supplies Industry, 1718; Toys and Games Industry, 1907 Legal secretary, 192, 445, 570, 837, 1038, 1070, 1435, 1698, 1718 Legislative aide, 1567 Letter carrier, 1490-1491 Librarian, 859, 1053-1054, 1237, 1531, 1549, 1869 Library technician, 1054-1055 Licensed practical nurse. See Nurse Licensing specialist, 1907 Lifeguard, 819, 1326 Light rail operator, 1364 Lighting technician, 1889 Line judge, 1774 Lineman, 588 Litigator, 570, 1697 Livestock producer, 1092 Loan officer, 136 Lobbyist, 49, 155, 534, 570, 1469, 1471, 1718, 1815, 1832 Logistics manager, 479, 736, 753, 948, 1779 Logistics specialist, 1344 Loss prevention specialist, 171, 802, 893, 1487

2173

Luggage handler, 49 Lumberjack, 1124 Machine operator; Beverage and Tobacco Industry, 173; Chemicals Industry, 300-301; Electrical and Gas Appliances Industry, 573; Food Manufacturing and Wholesaling Industry, 698; Furniture and Home Furnishings Industry, 788; Hand Tools and Instruments Industry, 803; Highway, Road, and Bridge Construction Industry, 875; Household and Personal Products Industry, 947; Mass Transportation Vehicles Industry, 1144, 1146; Metals Manufacturing Industry, 1181; Mining Industry, 1198-1199; Paper Manufacturing and Products Industry, 1345; Pharmaceuticals and Medications Industry, 1418; Plastics and Rubber Manufacturing Industry, 1453; Scientific, Medical, and Health Equipment and Supplies Industry, 1717; Sports Equipment Industry, 1794; Textile and Fabrics Industry, 1852-1853; Toys and Games Industry, 1904; Toys and Games Industry, 1904, 1907 Machine tool operator, 118, 440, 443, 803 Machinist; Alternative Power Industry, 70; Automobiles and Personal Vehicles Industry, 118; Chemicals Industry, 298; Defense Industry, 534; Fishing and Fisheries Industry, 675; Hand Tools and Instruments Industry, 803; Mass Transportation Vehicles Industry, 1146; Metals Manufacturing Industry,

2174

Jobs and Careers

1181; Paper Manufacturing and Products Industry, 1345; Shipbuilding, Submarines, and Naval Transport Industry, 1736; Textile and Fabrics Industry, 1855 Mail room supervisor/clerk, 192, 230, 248, 659, 1491, 1976 Maintenance and repair worker; Automobiles and Personal Vehicles Industry, 120; Batteries and Fuel Cells Industry, 155; Food Retail Industry, 717; Heavy Machines Industry, 839; Highway, Road, and Bridge Construction Industry, 874; Home maintenance services, 888; Household and Personal Products Industry, 947; Light Machinery Industry, 10731074; Metals Manufacturing Industry, 1181; Paper Manufacturing and Products Industry, 1345; Scientific and Technical Services, 1696; Toys and Games Industry, 1904 Maitre d’, 1658, 1888 Makeup artist, 1375 Makeup artist, 97, 210, 773, 1218 Manicurist, 820, 1375, 1924 Manual-arts therapist, 1636 Manufacturers representative, 694 Manufacturing technician, 427 Marine oiler, 1398, 1923 Market researcher, 30, 171 Marketing manager; Beverage and Tobacco Industry, 171; Biofuels Industry, 188; Business Services, 265; Computer Hardware and Peripherals Industry, 392; Counseling Services, 481; Home Maintenance Services, 891; Livestock and Animal Products Industry, 1090; Medicine and Health Care Industry, 1163; Motion Picture and Television

Industry, 1221; Music Industry, 1253; Outdoor Recreation Industry, 1324; Passenger Transportation and Transit Industry, 1361; Plastics and Rubber Manufacturing Industry, 1452; Postal and Package Delivery Services, 1487; Scientific and Technical Services, 1697; Scientific, Medical, and Health Equipment and Supplies Industry, 1717; Spectator Sports Industry, 1776; Sports Equipment Industry, 1795; Video, Computer, and Virtual Reality Games Industry, 1957 Marshal, U.S., 336-337, 340 Mascot, 1779 Massage therapist, 820, 932, 1778, 1924 Mate, 674, 1363, 1923 Materials engineering technician, 1181, 1907 Mayor, 1107 Mechanic; Airline Industry, 48; Automobiles and Personal Vehicles Industry, 118; Coal Mining Industry, 358; Furniture and Home Furnishings Industry, 789; Highway, Road, and Bridge Construction Industry, 874; Household and Personal Products Industry, 947; Light Machinery Industry, 10711072; Metals Manufacturing Industry, 1181; Mining Industry, 1200; Paper Manufacturing and Products Industry, 1345; Pharmaceuticals and Medications Industry, 1416; Rental and Leasing Services, 1620; Spectator Sports Industry, 1776 Mechanical designer, 1735 Mechanical engineering technician, 1181

Media buyer, 31, 1795 Media relations representative/ specialist, 171, 188, 891, 1361, 1487, 1717 Media specialist, 1056, 1433 Medical and health services manager, 911 Medical assistant, 446, 837, 1070, 1164, 1778 Medical coding specialist, 481 Medical transcriptionist, 1164 Mental health therapist, 516 Merchandise displayer, 1671 Merchandiser, 173, 786, 1256, 1907 Metallurgist, 1180-1181 Metalworker, 118, 1146, 1182, 1736, 2013 Meteorologist, 1488, 1695 Meter reader, 589 Microbiologist, 1417, 2029 Millwright, 118, 697, 1146, 1345 Model, 98 Modeler, 230, 1959 Mortgage loan broker, 1601 Music therapist, 479-480, 1636 Musical instrument repairer, 1254 Musician, 1251-1252, 1435, 1779, 1871, 1889, 1924 Narrator, 1871 Natural resource manager, 1287 Naturalist, 1327 Naturalist, marine, 609 Network administrator; Banking Industry, 137; Biofuels Industry, 193; Business Services, 266; Computer Systems Industry, 425; Electrical and Gas Appliances Industry, 571; Furniture and Home Furnishings Industry, 787; Insurance Industry, 985; Mining Industry, 1197; Publishing and Information Industry, 1583; Real Estate Industry, 1601; Spectator Sports Industry, 1777; Telecommunications

Jobs and Careers Equipment Industry, 1814; Toys and Games Industry, 1906 Network security specialist, 320, 426, 571, 1397, 1958 Network specialist, 392, 410, 858, 999, 1108, 1344, 1530, 1835 Newscaster, 209 Night club entertainer, 1924 Night watchperson, 1888, 1903 Nuclear reactor operator, 1309 Nuclear waste removal worker, 1309 Nurse, 1638; Complementary and Alternative Health Care Industry, 375; Construction Equipment Industry, 446; Criminal Justice and Prison Industry, 497; Day-Care Services, 516; Heavy Machines Industry, 837; Hospital Care and Services, 911; Insurance Industry, 985; Light Machinery Industry, 1070; Medicine and Health Care Industry, 1164; Private Education Industry, 1528; Public Elementary and Secondary Education Industry, 1548; Public Health Services, 1568; Residential Medical Care Industry, 1638; Spectator Sports Industry, 1778 Nutritionist, 697, 735, 819, 914, 932, 1550, 1640, 1778, 1940 Occupational therapist, 515-516, 1164, 1548 Oceanographer, 1288 Office manager, 29, 264, 372, 375, 479, 551, 1161, 1581 Oiler, 674. See also Marine oiler Ombudsman, 101, 1436 On-air talent, 209 Online merchant, 941 Optician, 1164 Optometrist, 1164 Oral/maxillofacial surgeon, 553554

Order taker/handler, 658, 1907 Orthodontist, 553-554 Packager, 191, 301, 698, 714, 947, 1182, 1346, 1419, 1453, 1905-1906, 1978 Painter, 247, 534, 895, 1146, 1736, 1923 Paralegal; Construction Equipment Industry, 445; Defense Industry, 535; Electrical and Gas Appliances Industry, 570; Federal Public Administration, 642; Heavy Machines Industry, 837; Legal Services and Law Firms, 1038; Light Machinery Industry, 1070; Logging Industry, 1125; Political Advocacy Industry, 1471; Scientific and Technical Services, 1698; Scientific, Medical, and Health Equipment and Supplies Industry, 1718; Toys and Games Industry, 1907 Paramedic, 1566 Park ranger, 339, 1288, 1888 Parole officer, 495 Partner, 13, 785, 1037, 1161, 1221, 1380 Pastry chef, 735 Patent agent, 1698 Patternmaker, 92, 99 Payroll manager/clerk, 13, 448, 574, 840, 1022, 1075, 1697 Peacekeeping officer, 1272 Pedicurist, 820, 1924 Pedodontist, 553 Performer, 283, 932, 1871 Periodontist, 553 Personal assistant, 285, 1380 Pest control worker, 895, 1021 Petroleum engineering technician, 1398 Pharmacist, 714, 1409-1410, 1417 Phlebotomist, 912, 1568 Photographer, 97, 446, 571, 837, 856, 1071, 1254, 1529, 1582 Physical therapist, 516-517, 821, 912, 1164, 1548, 1778

2175

Physician; Construction Equipment Industry, 446; Criminal Justice and Prison Industry, 497; Heavy Machines Industry, 837; Hospital Care and Services, 911; Insurance Industry, 985; Light Machinery Industry, 1070; Medicine and Health Care Industry, 1164; Outdoor Recreation Industry, 1326; Pharmaceuticals and Medications Industry, 1417; Public Health Services, 1568; Residential Medical Care Industry, 1638; Spectator Sports Industry, 1778. See also Oral/maxillofacial surgeon Physician assistant, 446, 837, 1070, 1164, 1568 Physicist, 390 Pilot, 46, 755, 1198, 1491 Pipefitter, 298, 892, 1309, 1736 Piping designer, 1735 Pit boss, 282, 932 Plainclothes operative, 786, 1921 Planner, urban and regional, 319, 321, 1290 Planning commissioner, 317 Plant operator, 190, 301, 788, 947, 1398, 1696, 1853, 2030 Plasterer, 247 Platemaker, 1585 Player, sports, 1773 Plumber, 892; Automobiles and Personal Vehicles Industry, 118; Building Construction Industry, 247; Coal Mining Industry, 358; Complementary and Alternative Health Care Industry, 374; Environmental Engineering and Consultation Services, 608; Food Manufacturing and Wholesaling Industry, 695; Furniture and Home Furnishings Industry, 786; Home Maintenance Services,

2176

Jobs and Careers

895; Hotels and Motels Industry, 929; Paper Manufacturing and Products Industry, 1345; Rental and Leasing Services, 1619; Themed Entertainment Industry, 1890 Podiatrist, 1164 Police officer, 340-341, 1566 Pool maintenance worker, 895, 1923 Poultry hatchery manager, 1092 Power distributor/dispatcher, 588 Power plant operator, 71, 587588, 1200, 1305 Prepress technician, 1511, 1584 President of the United States, 642, 1568 Press agent, 1433 Press operator, 1585 Press secretary, 193, 643, 1109, 1433, 1469, 1567 Pressperson, 1511 Principal, 1528, 1546-1547 Probation officer, 495 Producer, 31, 208, 1216, 1255, 1869, 1959 Product designer, 966 Production manager/supervisor; Beverage and Tobacco Industry, 173; Biofuels Industry, 189; Computer Hardware and Peripherals Industry, 393; Electrical and Gas Appliances Industry, 573; Food Manufacturing and Wholesaling Industry, 698; Hand Tools and Instruments Industry, 803; Mass Transportation Vehicles Industry, 1145; Metals Manufacturing Industry, 1181; Paper Manufacturing and Products Industry, 1345; Petroleum and Natural Gas Industry, 1398; Plastics and Rubber Manufacturing Industry, 1453; Scientific and Technical Services, 1696;

Scientific, Medical, and Health Equipment and Supplies Industry, 1717; Sports Equipment Industry, 1794; Telecommunications Equipment Industry, 1812; Toys and Games Industry, 1904 Production technician/worker, 70, 173, 447, 573, 947, 1073, 1345, 1757, 1812 Professional gamer, 1960 Professor, 859, 1289 Programmer; Advertising and Marketing Industry, 32; Biofuels Industry, 193; Civil Services: Public Safety, 342; Computer Software Industry, 408-409; Computer Systems Industry, 427-428; Construction Equipment Industry, 442; Defense Industry, 533; Food Manufacturing and Wholesaling Industry, 699; Food Services, 737; Furniture and Home Furnishings Industry, 787; Insurance Industry, 985; Metals Manufacturing Industry, 1182; Mining Industry, 1197; Plastics and Rubber Manufacturing Industry, 1453; Rental and Leasing Services, 1622; Scientific, Medical, and Health Equipment and Supplies Industry, 1718; Video, Computer, and Virtual Reality Games Industry, 1960 Programming director, 1235 Project manager, 227, 246, 534, 1272, 1854 Promoter, 283, 1255 Property manager, 1600-1601 Prosthodontist, 553 Psychiatrist, 497 Psychologist, 471, 497, 1433, 1528, 1548, 1778 Psychologist, veterinary, 1942

Public affairs manager/ specialist; Beverage and Tobacco Industry, 169; Broadcast Industry, 210; Civil Services: Planning, 318; Federal Public Administration, 643; Hospital Care and Services, 913; Local Public Administration, 1109; Philanthropic, Charitable, Religious, Civic, and GrantMaking Industry, 1433; Public Health Services, 1567; Residential Medical Care Industry, 1639; Telecommunications Equipment Industry, 1815; Telecommunications Infrastructure Industry, 1832 Public health dentist, 553 Public relations manager; Airline Industry, 49; Biofuels Industry, 193; Complementary and Alternative Health Care Industry, 372; Defense Industry, 534; Higher Education Industry, 856; Logging Industry, 1125; Music Industry, 1253; Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry, 1433; Political Advocacy Industry, 1470; Private Education Industry, 1529; Toys and Games Industry, 1903 Publication coordinator, 67, 1433, 1757 Publicist, 97-98, 155, 1253 Publicity agent, 97 Publisher, 1582 Purchasing manager/agent, 730, 1504; Biofuels Industry, 192; Business Services, 265; Food Retail Industry, 717; Highway, Road, and Bridge Construction Industry, 876; Household and Personal Products Industry, 948; Paper

Jobs and Careers Manufacturing and Products Industry, 1344; Rental and Leasing Services, 1618; Retail Trade and Service Industry, 1674; Shipbuilding, Submarines, and Naval Transport Industry, 1736; Spectator Sports Industry, 1777; Telecommunications Equipment Industry, 1813 Purser, 674 Quality assurance manager/ specialist; Biofuels Industry, 193; Fishing and Fisheries Industry, 675; Food Manufacturing and Wholesaling Industry, 697; Furniture and Home Furnishings Industry, 788; Highway, Road, and Bridge Construction Industry, 872; Livestock and Animal Products Industry, 1089; Logging Industry, 1123; Shipbuilding, Submarines, and Naval Transport Industry, 1734; Video, Computer, and Virtual Reality Games Industry, 1960 Quality assurance technician, 675, 698 Quality assurance tester, 393 Radiation therapist, 1164 Radiographer, 609 Radiologic technician, 912, 1164 Rail transportation worker, 752 Range manager, 1288, 1290 Real estate broker, 1601 Real estate developer, 1601 Real estate securities broker, 1601 Receptionist; Automobiles and Personal Vehicles Industry, 120; Computer Hardware and Peripherals Industry, 393; Computer Software Industry, 410; Dental and Orthodontics Industry, 552; Environmental

Engineering and Consultation Services, 605; Food Manufacturing and Wholesaling Industry, 699; Food Services, 738; Health and Fitness Industry, 820; Internet and Cyber Communications Industry, 1001; Local Public Administration, 1109; Medicine and Health Care Industry, 1162; Printing Industry, 1504 Recreation and sports director, 820 Recreation program director, 1324 Recreation worker, 1325-1326 Recreational therapist, 517, 1164 Recruiter, 71, 264, 428, 967, 1126, 1639, 1757 Recycling coordinator, 1994 Referee, 1774 Refinery supervisor, 1200 Refuse collector, 1995 Registered nurse. See Nurse Religious leaders. See Chaplain Renewable energy technician, 70 Reporter, 209, 1582-1583 Research assistant, 857 Researcher; Civil Services: Public Safety, 341; Defense Industry, 533; Higher Education Industry, 859; National and International Security Industry, 1272; Philanthropic, Charitable, Religious, Civic, and Grant-Making Industry, 1434; Political Advocacy Industry, 1470; Public Health Services, 1566; Rental and Leasing Services, 1620; Scientific and Technical Services, 1695; Textile and Fabrics Industry, 1854 Researcher, dental, 553 Researcher, systems, 70 Reservations manager, 47, 928, 1324, 1618, 1888, 1920 Respiratory therapist, 1164

2177

Rigger, 210, 1736, 1855 Riveter, 1145, 1736 Robotics technician, 804, 1736 Roofer, 247 Roustabout, 1398 Sailor, 755 Sales clerk/associate; Apparel and Fashion Industry, 101; Beverage and Tobacco Industry, 169; Casino Industry, 285; Financial Services Industry, 658; Food Retail Industry, 714; Furniture and Home Furnishings Industry, 790; Home Maintenance Services, 891; Passenger Transportation and Transit Industry, 1361; Postal and Package Delivery Services, 1487; Video, Computer, and Virtual Reality Games Industry, 1960 Sales manager; Alternative Power Industry, 68; Automobiles and Personal Vehicles Industry, 116; Batteries and Fuel Cells Industry, 153; Beverage and Tobacco Industry, 171; Business Services, 265; Casino Industry, 285; Chemicals Industry, 297; Coal Mining Industry, 357; Computer Hardware and Peripherals Industry, 392; Computer Software Industry, 409; Environmental Engineering and Consultation Services, 604; Home Maintenance Services, 891; Hotels and Motels Industry, 928; Insurance Industry, 984; Internet and Cyber Communications Industry, 999; Paper Manufacturing and Products Industry, 1343; Postal and Package Delivery Services, 1487; Publishing and Information Industry, 1582;

2178

Jobs and Careers

Retail Trade and Service Industry, 1675; Scientific, Medical, and Health Equipment and Supplies Industry, 1716; Spectator Sports Industry, 1776; Video, Computer, and Virtual Reality Games Industry, 1960 Salesperson/sales representative; Automobiles and Personal Vehicles Industry, 112; Beverage and Tobacco Industry, 170-171; Biofuels Industry, 188; Business Services, 265; Chemicals Industry, 297; Coal Mining Industry, 357; Computer Hardware and Peripherals Industry, 392; Construction Equipment Industry, 446; Food Retail Industry, 715; Furniture and Home Furnishings Industry, 786; Highway, Road, and Bridge Construction Industry, 872; Household and Personal Products Industry, 945; Landscaping Services, 1018; Livestock and Animal Products Industry, 1090; Pharmaceuticals and Medications Industry, 1416; Postal and Package Delivery Services, 1487; Printing Industry, 1508; Rental and Leasing Services, 1618; Retail Trade and Service Industry, 1673; Scientific and Technical Services, 1697; Scientific, Medical, and Health Equipment and Supplies Industry, 1715; Scientific, Medical, and Health Equipment and Supplies Industry, 1716; Telecommunications Equipment Industry, 1810; Textile and Fabrics Industry, 1852; Video, Computer, and Virtual Reality Games

Industry, 1960; Watches and Jewelry Industry, 2008 Science technician, 154, 1694 Scientist, 717, 1695, 1717 Scientist, agricultural, 627 Scientist, computer, 155, 390, 1182, 1453 Scientist, environmental, 607, 609, 1398 Scientist, food, 172, 697, 735, 2029 Scientist, imaging, 1758 Scientist, materials, 153, 299, 1181, 1307, 1452 Scientist, medical, 1566 Scientist, metals, 1793 Scientist, research, 68, 1716, 1754 Scientist, soil and plant, 627, 1019, 1288, 1291 Script supervisor, 1219 Seafood processor, 675 Seaman, 1363 Secretary. See Cabinet secretary; Executive secretary; Legal secretary; Press secretary Securities broker, 658 Security guard; Banking Industry, 136; Civil Services: Public Safety, 342; Environmental Engineering and Consultation Services, 608; Food Manufacturing and Wholesaling Industry, 696; Freight Transport Industry, 754; Furniture and Home Furnishings Industry, 786; Heavy Machines Industry, 838; Highway, Road, and Bridge Construction Industry, 873; Hotels and Motels Industry, 929; Landscaping Services, 1018; Music Industry, 1255; National and International Security Industry, 1272; Passenger Transportation and Transit Industry, 1361; Personal Services, 1381; Postal and Package Delivery Services,

1487; Rental and Leasing Services, 1620; Textile and Fabrics Industry, 1855; Toys and Games Industry, 1903; Video, Computer, and Virtual Reality Games Industry, 1958 Security manager; Biofuels Industry, 188; Business Services, 266; Chemicals Industry, 299; Counseling Services, 482; Hand Tools and Instruments Industry, 802; Higher Education Industry, 856; Mass Transportation Vehicles Industry, 1143; Museums and Cultural Institutions Industry, 1238; Nuclear Power Industry, 1309; Petroleum and Natural Gas Industry, 1397; Private Education Industry, 1530; Residential Medical Care Industry, 1640; Scientific and Technical Services, 1699; Spectator Sports Industry, 1778; Sports Equipment Industry, 1796; Themed Entertainment Industry, 1888; Watches and Jewelry Industry, 2010 Senator, 1567 Set designer, 97, 1218, 1889 Sewing machine operator, 92, 118, 788 Sexton, 1434 Sheet metal worker, 247 Sheriff, 340 Shipping and receiving clerk, 191, 1853 Shipwright, 1735 Shoemaker, 100 Silversmith, 2013 Silviculturist, 1288 Singer, 283, 1251, 1435, 1871, 1889 Skin care specialist, 820 Skycap, 49 Smelter supervisor, 1200 Social worker, 478, 518, 1433, 1528, 1548

Jobs and Careers Software designer, 409 Software developer/architect; Alternative Power Industry, 68; Space Exploration and Space Science Industry, 1756, 1758 Sommelier, 283, 1658 Songwriter, 1251 Sonographer, 1164 Sorter, 1996 Sound mixer, 1219, 1959 Sound technician, 210, 1255, 1889 Special agent, 14, 340, 643, 1272 Special effects director, 1219 Special events coordinator, 284, 1235, 1656 Speech-language therapist, 516, 1164, 1548 Speechwriter, 318, 643, 1109 Spinner, 1853 Spokesperson, 193, 209, 372, 571, 643 Sports agent, 1775 Stagehand, 1255, 1870, 1889 Statistician, 30, 1417, 1434 Stockbroker, 658 Stone setter, 2013 Store manager, 713, 790, 947, 1236, 1256, 1958 Strategist, 964 Structural designer, 873, 1735 Stylist, 97, 210, 820, 1218, 1375, 1380, 1924 Supply chain manager/analyst, 427, 448, 1718 Surveillance manager, 285 Surveyor, 247, 676, 1198 Switchboard operator, 802 Switchman, 755 Systems administrator, 947 Tailor, 92 Tailor/Dressmaker, 99 Talent agent, 1221, 1252 Talent scout, 1776 Tax manager, 67, 281, 551, 948 Tax preparer, 13, 192, 660 Taxi driver, 1364 Teacher, 464, 497, 517, 1327, 1436, 1531, 1547-1548

Teacher assistant, 517, 1532, 1550 Technical support specialist, 284, 392, 410, 425, 1001, 1810, 1831, 1855 Technologist, 966 Technologist, dairy, 1090 Technologist, food, 172, 1090, 2029 Technologist, medical, 1567 Telemarketer, 83, 297 Telephone operator, 285 Telephone representative, 1109 Teller, 135 Tennis pro, 932 Tester, video game, 1960 Three-Dimensional Artist, 1959 Ticketing agent, 47, 1360, 1920 Tile setter, 247 Title officer, 1601 Tool and die maker, 118, 803, 1146, 1345, 2012 Tour guide, 1327, 1888, 1923 Toy/game designer, 1903 Trader, 660 Traffic manager, 789 Train conductor, 755, 1363 Trainer, 464, 1327, 1995 Trainer, animal, 1940 Trainer, athletic, 820-821, 1773 Trainer, bus driver, 1550 Trainer, employee; Alternative Power Industry, 72; Banking Industry, 138; Casino Industry, 284; Computer Software Industry, 410; Construction Equipment Industry, 448; Household and Personal Products Industry, 948; Pharmaceuticals and Medications Industry, 1419; Shipbuilding, Submarines, and Naval Transport Industry, 1737; Space Exploration and Space Science Industry, 1757; Travel and Tourism Industry, 1922 Trainer, horse, 625, 1776 Trainer, personal, 818-819, 932, 1773, 1924, 1958

2179

Trainer, real estate, 1601 Trainer, safety, 358 Travel agent, 1921 Treasurer, 67, 856, 1549, 1753 Tree trimmer, 1021, 1124 Trooper, 340 Truck driver; Automobiles and Personal Vehicles Industry, 120; Biofuels Industry, 191; Chemicals Industry, 301; Coal Mining Industry, 358; Electrical and Gas Appliances Industry, 574; Food Manufacturing and Wholesaling Industry, 698; Food Retail Industry, 717; Food Services, 737; Furniture and Home Furnishings Industry, 790; Hand Tools and Instruments Industry, 804; Highway, Road, and Bridge Construction Industry, 875; Household and Personal Products Industry, 947; Light Machinery Industry, 1075; Logging Industry, 1123; Metals Manufacturing Industry, 1182; Mining Industry, 1198; Printing Industry, 1511; Spectator Sports Industry, 1779 Turf manager, 1021, 1777 Tutor, 1531, 1550 Typesetter, 1509-1510 Umpire, 1774 Undersecretary, 642, 1568 Undertaker, 773 Underwriter, 983 Upholsterer, 788 Valet, 931, 1380, 1678 Veterinarian, 1694, 1776, 1938 Veterinary technician, 1939-1940 Video game designer, 1959 Videographer, 446, 571, 837, 1071 Visual designer, 966 Voiceover artist, 1959

2180

Jobs and Careers

Waiter, 283 Warden, 493, 1109 Warehouse manager/clerk; Construction Equipment Industry, 448; Electrical and Gas Appliances Industry, 573; Food Retail Industry, 717; Hand Tools and Instruments Industry, 804; Heavy Machines Industry, 840; Light Machinery Industry, 1075; Printing Industry, 1511; Rental and Leasing Services, 1617; Toys and Games Industry, 1905; Warehousing and Storage Industry, 1977 Waste management specialist, 1995 Weaver, 1853 Web designer/developer; Banking Industry, 137; Computer Hardware and Peripherals Industry, 392; Computer Systems Industry, 428; Electrical and Gas Appliances Industry, 571; Funerary Industry, 772; Internet and Cyber Communications Industry,

999; Light Machinery Industry, 1071; Music Industry, 1254; Personal Services, 1381; Retail Trade and Service Industry, 1677; Toys and Games Industry, 1906 Webmaster; Business Services, 266; Civil Services: Planning, 318; Computer Systems Industry, 428; Construction Equipment Industry, 445-446; Food Manufacturing and Wholesaling Industry, 699; Food Services, 738; Freight Transport Industry, 754; Funerary Industry, 772; Heavy Machines Industry, 836-837; Internet and Cyber Communications Industry, 999; Libraries and Archives Industry, 1056; Outdoor Recreation Industry, 1327; Personal Services, 1381; Spectator Sports Industry, 1777 Welder, 1144; Alternative Power Industry, 70; Automobiles and Personal Vehicles Industry, 118; Building Construction

Industry, 247; Chemicals Industry, 301; Coal Mining Industry, 358; Electrical and Gas Appliances Industry, 573; Mass Transportation Vehicles Industry, 1145-1146; Paper Manufacturing and Products Industry, 1345; Shipbuilding, Submarines, and Naval Transport Industry, 1736; Waste Management Industry, 1996 Wholesaler, 717 Wildlife manager, 1327 Winder, 70 Winemaker, 173 Woodworker, 789 Writer, contract, 1272, 1810 Writer, fashion, 97 Writer, game, 1959 Writer, grant, 155 Writer, medical, 1417, 1697 Writer, proposal, 1810, 1831 Writer, regulatory, 1698 Writer, screenplay, 1219 Writer, specification, 230, 1017 Writer, technical, 391, 570, 1697, 1714, 1811, 1834 Writer, teleplay, 1219

Subject Index A&P, 705 AAA. See American Automobile Association AAAP. See American Association of Applied Psychology AACP. See American Association of Clinical Psychologists AAFES. See Army and Air Force Exchange Services AALS. See Association of American Law Schools Aalto, Alvar, 953 AAM. See American Association of Museums AARP, 1642 AASHTO. See American Association of State Highway and Transportation Officials ABA. See American Bar Association Abbott, 1420 AbitibiBowater, 1120 Academy of Accounting Historians, Weatherhead School of Management, 17 Academy of General Dentistry, 557 Academy of Motion Picture Arts and Sciences, 1223 Academy of Television Arts and Sciences, 1223 Accounting services, 1-18 Accredited Gemologists Association, 2015 Accrediting Commission of Career Schools and Colleges, 2015 Acela Express, 1136 ACLU. See American Civil Liberties Union ACT UP. See AIDS Coalition to Unleash Power Actors’ Equity Association, 1875 Acupuncture, 363 ADA. See American Diabetes Association

Addis, William, 542 Administrative assistant; Textile and Fabrics Industry, 1856 Administrative Office of the United States Courts, 343 Advanced Medical Technology Association, 1720 Advanced Research Project Agency Network. See ARPANET Advertising and marketing industry, 19-35 AeroSpace and Defence Industries Association of Europe, 539 Aerospace Industries Association, 539, 1759 AFL. See American Federation of Labor AFM. See American Federation of Musicians AFSCME. See American Federation of State, County, and Municipal Employees AGA. See American Gaming Association Agency for International Development, U.S., 640 AGMA. See American Guild of Musical Artists Agribusinesses, 615 Agricultural Adjustment Act of 1933, 614 Agriculture. See Farming industry Agritourism, 1879 AHA. See American Highway Association; American Hospital Association AIA. See American Institute of Architects AICPA. See American Institute of Certified Public Accountants AIDS Coalition to Unleash Power, 1557 Aiken, Howard, 399 2181

Air and Waste Management Association, 611, 1997 Air-Conditioning, Heating and Refrigeration Institute, 576 Air Transport Association of America, 52 Airborne Express, 1479 Aircraft; defense industry, 524; freight transport industry, 746 Airline industry, 36-53; contribution to the U.S. economy, 39; inputs consumed, 39; projected employment, 51. See also Aircraft AirTran, 42 ALA. See American Library Association Albers Super Market, 706 Alcatraz Prison, 1879 Alcoa, 1178 Alcohol and Tobacco Tax and Trade Bureau, 175 Algae, for biodiesel production, 180 All-terrain vehicles, 108 Allen, Charles, 542 Allen, Paul, 412 Alliance for Nonprofit Management, 1438 Alliance of Automobile Manufacturers, 123 Alok Industries, 829 Alpha Beta, 705 Alternative medicine. See Complementary and alternative health care industry Alternative power industry, 54-73 Altria, 166 Aluminum industry, 1173 Amateur Athletic Union, 1781 Amazon, 991, 1243 American Academy of Environmental Engineers, 611

2182

Subject Index

American Accounting Association, 17 American Advertising Federation, 33 American Airlines, 37, 44 American Alliance for Health, Physical Education, Recreation, and Dance, 1330 American Animal Hospital Association, 1945 American Apparel, 90 American Apparel and Footwear Association, 103 American Apparel Producers’ Network, 103 American Archivist, 1058 American Association for Justice, 1041 American Association for Laboratory Animal Science, 1945 American Association for State and Local History, 1239 American Association of Advertising Agencies, 34 American Association of Applied Psychology, 470 American Association of Clinical Psychologists, 470 American Association of Collegiate Registrars and Admissions Officers, 861 American Association of Family and Consumer Sciences, 1382 American Association of Museums, 1225, 1239, 1891 American Association of Orthodontists, 557 American Association of Port Authorities Headquarters, 1738 American Association of School Librarians, 1058 American Association of State Highway and Transportation Officials, 866, 878 American Association of Textile Chemists and Colorists, 1857 American Association of University Professors, 861

American Automobile Association, 1366 American Bankers Association, 140 American Bar Association, 1028, 1041 American Beverage Association, 175 American Boat Builders and Repairers Association, 1148 American Bonanza Gold Corporation, 1201 American Bus Association, 1148 American Camp Association, 1330 American Chemical Society, 157, 303, 1185, 1456 American Chemistry Council, 303 American Civil Liberties Union, 1030, 1041 American Cleaning Institute, 950 American Coalition for Ethanol, 195 American College of Healthcare Executives, 903, 916, 1642 American College of Medical Practice Management, 483, 916 American College of Sports Medicine, 824 American Correctional Association, 500 American Council for Construction Education, 239 American Council of Life Insurance, 987 American Council on Exercise, 824 American Council on Renewable Energy, 1997 American Counseling Association, 483, 916 American Culinary Federation, 1662 American Dental Assistants Association, 555 American Dental Association, 541, 555, 557

American Dental Hygienists’ Association, 555, 557 American Diabetes Association, 1557, 1570 American Federation of Labor, 1726, 1841 American Federation of Musicians, 1250, 1875 American Federation of State, County, and Municipal Employees, 1048 American Federation of Teachers, 1552 American Fisheries Society, 678 American Folk Art Museum, 1238 American Forest and Paper Association, 1129, 1348 American Gaming Association, 275, 287, 1891 American Gas Association, 145 American Gem Society, 2015 American Guild of Musical Artists, 1250 American Highway Association, 865 American Holistic Medicine Association, 376 American Horse Council, 1081 American Hospital Association, 899, 916, 1642 American Hotel and Lodging Association, 935 American Institute for International Steel, 1185 American Institute of Aeronautics and Astronautics, 539, 1759 American Institute of Architects, 219, 231 American Institute of Architecture Students, 231 American Institute of Certified Public Accountants, 8, 17 American Institute of Chemical Engineers, 157, 303, 1185, 1456, 1701 American Institute of Constructors, 250

Subject Index American Institute of Contractors, 239 American Institute of Electrical Engineers, 1686 American Institute of Graphic Arts, 969 American Institute of Mining, Metallurgical, and Petroleum Engineers, 1202 American Institute of Wine and Food, 1662 American Insurance Association, 987 American Jail Association, 501 American Jewelry Design Council, 2015 American Kennel Club, 84 American League of Lobbyists, 1474 American Library Association, 1044, 1058 American Medical Association, 1167 American Medical Response, 1354 American Museum of Natural History, 1227 American Nuclear Society, 1310 American Nursery and Landscape Association, 1023 American Nurses Association, 1167 American Pet Products Association, 76, 84, 1942 American Petroleum Institute, 1397, 1401 American Planning Association, 323 American Psychological Association, 470 American Public Health Association, 1556, 1570 American Public Power Association, 591 American Public Transportation Association, 1148, 1367 American Recovery and Reinvestment Act of 2009, 57, 194, 322, 466, 823, 877, 1146, 1729

American Recreation Coalition, 1330 American Red Cross, 1152, 1557 American Rental Association, 1610, 1624 American Residential Services/ Rescue Rooter, 888 American Resort Development Association, 935 American Risk and Insurance Association, 987 American Road and Transportation Builders Association, 865, 878 American Shipbuilding Association, 1729, 1738 American Society for Clinical Laboratory Science, 1167 American Society for Engineering Education, 1148 American Society for Public Administration, 1111 American Society for Testing and Materials, 1797 American Society for the Prevention of Cruelty to Animals, 84, 1945 American Society of Composers, Authors, and Publishers, 1258 American Society of Landscape Architects, 1023 American Society of Mechanical Engineers, 1148, 1701 American Society of Naval Engineers, 1738 American Society of Newspaper Editors, 1586 American Society of Training and Development, 467 American Society of Travel Agents, 1925 American Solar Energy Society, 72 American Specialty Toy Retailing Association, 1908 American Symphony Orchestra League, 1258 American Telephone and Telegraph. See AT&T

2183

American Trucking Associations, 758 American Valet, 1376 American Veterinary Medical Association, 1929, 1945 American Warehouseman’s Association, 1965 American Watch Association, 2015 American WatchmakersClockmakers Institute, 2003, 2011, 2015 American Water Resources Association, 2032 American Water Works Association, 2021, 2032 American Waterways Operators, 758 American Wholesale Marketers Association, 719 American Wind Energy Association, 72 Americans for the Arts, 1875 Amnesty International, 1029, 1041 AMNH. See American Museum of Natural History Amory Engineers, 599 Amtrak, 1354 Amusement parks, 1878; projected employment, 1889 Andreessen, Marc, 416 Anheuser-Busch, 168 Animal Behavior Society, 1945 Animal care services, 74-85 Animal products. See Livestock and animal products industry APA. See American Psychological Association APEC. See Asia Pacific Economic Cooperation APHA. See American Public Health Association APPA. See American Pet Products Association APPA: Leadership in Educational Facilities, 862 Apparel and fashion industry, 86-104, 1375; contribution to the U.S. economy, 87; inputs

2184

Subject Index

consumed, 88; projected employment, 102 Appert, Nicholas, 682 Apple, 380, 399, 954, 991, 1243, 1836 Apple Vacations, 1917 Appliances industry, electrical and gas, 559-577; contribution to the U.S. economy, 561; inputs consumed, 562 Appraisal Institute, 1604 Apprenticeship, 453 Aquaculture. See Fishing and fisheries industry Aquariums, 1879 Aquatic Species Program, 180 ARA. See American Rental Association ARA Services, 512 Aramark Corporation, 738, 830, 1370 Aramony, William J., 1426 ARBTA. See American Road and Transportation Builders Association Archer Daniels Midland, 182 Architect Record Examination, 219 Architecture. See Building architecture industry Archives. See Libraries and archives industry Archives Nationales, 1044 Army and Air Force Exchange Services, U.S., 725 Army Corps of Engineers, U.S., 864 ARPA. See Defense Advanced Research Projects Agency ARPANET, 416, 990 ARRA. See American Recovery and Reinvestment Act of 2009 ASCC (computer), 398 ASE, National Institute for. See National Institute for Automotive Service Excellence Ashland, 1389 Ashley Furniture Industries, 777

Ashmolean Museum of Art and Archaeology, 1226 Asia Pacific Economic Cooperation, 1263 Asian American Advertising Federation, 34 ASIS International, 1274 Ask Mr. Foster, 1910 Associated Builders and Contractors, 250 Associated General Contractors of America, 251, 878 Association for Computing Machinery, 395, 430, 1003 Association for Financial Professionals, 662 Association for Healthcare Foodservice, 740 Association for Living History, Farms, and Agricultural Museums, 1239 Association for Public Policy Analysis and Management, 1111 Association for Research on Nonprofit Organization and Voluntary Action, 1438 Association for the Advancement of Medical Instrumentation, 1720 Association Mondiale de la Route, 878 Association of Accredited Lobbyists to the European Parliament, 1474 Association of American Law Schools, 1028 Association of American Publishers, 1587 Association of American Railroads, 758 Association of American Veterinary Medical Colleges, 1945 Association of Certified Fraud Examiners, 15, 17 Association of Children’s Museums, 1239

Association of College and University Museums and Galleries, 1239 Association of Compost Producers, 1997 Association of European Airlines, 52 Association of Executive and Administrative Professionals, 269 Association of Executive Search Consultants, 269 Association of Government Accountants, 14, 17 Association of Hispanic Advertising Agencies, 34 Association of Home Appliance Manufacturers, 576 Association of International Broadcasting, 213 Association of International Courier and Express Services, 1493 Association of Management Consulting Firms, 269 Association of Pet Dog Trainers, 84 Association of Private Enterprise Education, 1534 Association of Progressive Rental Organizations, 1624 Association of Residential Cleaning Services International, 885, 897 Association of Zoos and Aquariums, 1239 Astley, Philip, 1877 AT&T, 1800, 1829 At-sea Processors Association, 672 Atanasoff, John V., 380 Atari, 1948 Atlantic City, 275 Atlas Van Lines, 1971 Atomic Energy Act of 1946, 1298 ATV. See All-terrain vehicles Audiffren, Marcel, 561 Auto Supplier Support Program, 121

Subject Index Automatic Sequence Controlled Calculator. See ASCC Automation; apparel and fashion industry, 99; business services, 254; chemicals industry, 302; computer hardware and peripherals industry, 381; construction equipment industry, 447; electrical and gas appliances industry, 572; food manufacturing and wholesaling industry, 701; food retail industry, 716; heavy machines industry, 838; household and personal products industry, 947; industrial design industry, 968; light machinery industry, 1073; textile and fabrics industry, 1856 Automobile industry. See Automobiles Automobiles; advertising and marketing industry, 20; alternative power industry, 62; batteries and fuel cells industry, 145; industrial design industry, 953; outdoor recreation industry, 1313; rental and leasing services, 1607 Automobiles and personal vehicles industry, 105-124; contribution to the U.S. economy, 107; inputs consumed, 107 Automotive Service Association, 123 AVC Trading, 830 Avis, Warren, 1607 Avis Rent A Car, 1607 AVMA. See American Veterinary Medical Association AWWA. See American Water Resources Association AYKA Incorporated, 1849 Babbage, Charles, 380, 397 Bacon, Francis T., 143

Bad Boy Entertainment, 1251 Bad Boy Records, 1247 Bad Robot, 1210 BAE Systems, 531, 539 Baekeland, Leo, 828, 1442 Bailey, Jason, 1952 Baird, John Logie, 199 Bakelite, 1442 Ball, C. Olin, 683 Ballard Power Systems, 145 Baltimore College of Dental Surgery, 543 Banfield Pet Hospitals, 1935 Bank of America, 132 Bank of North America, 125 Banking industry, 125-140; projected employment, 139; real estate industry, 1589 Bardeen, John, 415 Barnes & Noble, 1609 BASF, 1445 Batteries and fuel cells industry, 141-158; alternative power, 62; coal mining industry, 359 Battery Council International, 157 Bauer, Andreas Friedrich, 1496 Baxter International, 1705 Bazin, Germain, 1228 BBC, 202, 213, 1209 BBN Technologies, 990 BDO Seidman, 10 Beach, Alfred Ely, 1132, 1353 Beccaria, Cessare, 485 Bechtel, 870, 1310 Beef industry, 1080 Beer, 160 Bellagio, 926 Bellini, Mario, 957 Bellovin, Steve, 990 Ben Bridge, 2003 Bench Dog, 1067 Bentham, Jeremy, 485 Benz, Karl, 105 Bergman, Torben, 160 Berners-Lee, Tim, 416, 991 Berry, Clifford, 380 Berry Amendment of 1941, 88 Bessemer, Sir Henry, 1170 Bessemer process, 1170, 1190

2185

Best, Daniel, 441 Best Buy, 1243 Best Friend of Charleston, 1353 Beverage and tobacco industry, 159-176; projected employment, 174 Beverage Marketing Corporation, 161 Bhavani Weavess, 829 Bicycles, 106 Big Bear, 705 Bijnkershoek, Cornelis van, 664 Bilingual Education Act of 1968, 1539 Bill and Melinda Gates Foundation, 1551 Bingham Canyon Copper Mine, 1189 Biodiesel, 60, 179 Biofuels industry, 177-196 Biogas, 60, 177 Biohydrogen, 181 Biomass, 59 Biomass Power Association, 195 Biotechnology Industry Organization, 195, 1421, 1701 Birdseye, Clarence, 683 BJ’s, 1666 Bloch, Henry, 649 Bloch, Richard, 649 Blount, Keith, 400 Blue Cross-Blue Shield, 1153 Blue Nile, 2003 Blumhouse Productions, 1209 Boeing, 538 Bohack’s. See Kroger Company Bollinger Shipyards, 1732 Bombardier, Joseph-Armand, 106 Bombardier Transportation, 1139 Bond, Thomas, 1151 Bond Market Association, 662 Bonsack, James, 161 Bosch. See Robert Bosch LLC Bosch, Robert, 1061 Bow Street Runners, 326 BP (oil company), 182, 1385 Bradstreet Company. See Dunn & Bradstreet

2186

Subject Index

Braid, James, 363 Brattain, Walter, 415 Brazil, ethanol production in, 178 Breeding, pets, 76 Bridge construction. See Highway, road, and bridge construction industry Bridgestone Corporation, 830 Brink’s Company, 253 British Broadcasting Company. See BBC British Film Institute, 1223 British Library, 1044 British Museum, 1226 British Natural Death Centre, 765 British Petroleum. See BP British Telecom, 1801 Broadband for America, 1817, 1837 Broadcast industry, 197-214; inputs consumed, 201; projected employment, 212. See also Radio; Television Broadway, 1861 Brower, Abraham, 1352 Brunswick Boat Group, 122 Budding, Edwin, 1007, 1061 Building and Construction Trades Department, AFLCIO, 251 Building architecture industry, 215-232; projected employment, 230 Building construction industry, 233-251; contribution to the U.S. economy, 234; projected employment, 250 Building Services Contractors Association International, 897 Bulldozer, 433 Bulova, 2003 Bumblebee Foods, 671 Bureau of Justice Statistics, U.S., 501 Burnham, Daniel, 306 Buses; mass transportation vehicles industry, 1134;

passenger transportation and transit industry, 1352 Business services, 252-270; contribution to the U.S. economy, 254; inputs consumed, 254; projected employment, 267 Butanol, 181 Buy Local movement, 1842 C&S Wholesale Grocers, 701 Cable television, 21, 200, 1802, 1836 CACFP. See Child and Adult Care Food Program Cadbury, 700 CAFTA. See Central American Free Trade Act of 2005 Cailliau, Robert, 991 Calder Hall, 1298 California Air Resources Board, 145 California Highway Patrol, 334 California State Personnel Board, 1111 Campbell, James, 574 Campbell’s Soup Company, 686 Canadian Film and Television Production Association, 1223 Canadian Rental Association, 1610, 1624 Canon Europa, 1065 Carlson, Chester, 1062 Carlson Wagonlit Travel, 1910 CarMax, 112 Carnegie, Andrew, 1044, 1179 Carnegie Mellon School of Industrial Design, 964 Carothers, Wallace, 1442 Carrefours, 709 Carrier, Willis, 561 Carrier Corporation, 831 Carson, Rachel, 1314 Case New Holland, 829 Casino industry, 271-287, 1879, 1924; projected employment, 286 Cassidy and Associates, 1474 Cat Fanciers’ Association, 84 Caterpillar, 433, 450, 826, 842

Catersource, 740 CCIM Institute, 1604 CDC. See Centers for Disease Control and Prevention Celanese, 1842 Celluloid Manufacturing Company, 1442 Cemeteries, 762 Center for Automotive Research, 111, 123 Center for Health Care Strategies, 1167 Center for Paper Business and Industry Studies, 1348 Center for Public Education, 1552 Center for Public Integrity, 1474 Center for Teaching Excellence, 1534 Center for the Study of Child Care Employment, 521 Centers for Disease Control and Prevention, 1556, 1570 Centers for Medicare and Medicaid Services, 1165, 1167, 1706 Central American Free Trade Act of 2005, 102 Central Intelligence Agency, 1262 Centre International de Liaison des Ecoles de Cinema et de Television, 1223 Cerf, Vint, 990 Certification Council for Professional Dog Trainers, 84 Certified Government Financial Managerial examination, 14 CGFM examination. See Certified Government Financial Managerial examination Champion Bus, 1141 Chanel, Gabrielle “Coco,” 87 Chappe, Claude, 198 Chardonnet, Hilaire de, 1841 Charitable Choice Act of 1996, 1425 Charities. See Philanthropic, charitable, religious, civic, and grant-making industry

Subject Index Charles Schwab Corporation, 649 Chase, 138 Chegg.com, 1609 Chelsea Food Services, 738 Chemical Bank, 132 Chemicals industry, 288-304; contribution to the U.S. economy, 289; inputs consumed, 289; projected employment, 302 Chernobyl Nuclear Power Plant, 1299 Cherry Hospital, 504 Chesney, Kenny, 1244 Chevron, 1401 Chicago Board of Trade, 655 Chicago Sun-Times, 1574 Chicago Tribune, 1574 Chicago World’s Fair (1893), 306 Child and Adult Care Food Program, 512 Child-care industry, 1375 Child Nutrition Act of 1966, 723 China; batteries and fuel cells industry, 156; biogas production, 179; coal mining industry, 359; complementary and alternative health care industry, 363; hand tools and instruments industry, 795; industrial design industry, 968; Internet and cyber communications industry, 1001; plastics and rubber manufacturing industry, 1454; sports industry, spectator, 1780; telecommunications equipment industry, 1803; textile and fabrics industry, 1856; toys and games industry, 1895; video, computer, and virtual reality games industry, 1961 Chiropractic care, 363 CHP. See California Highway Patrol Chrysler, 110, 145

CIA. See Central Intelligence Agency Cigarettes, 161 Cigna, 978 Circuses, 1877 Cirque du Soleil, 1861 Cisco Systems, 416, 423, 1803 Citizens Bank, 133 City Beautiful movement, 306 City Hotel, 918 Civic organizations. See Philanthropic, charitable, religious, civic, and grantmaking industry Civil planning services, 305-324 Civil Rights Act of 1964, 328, 1539 Civil Service Commission, U.S., 633, 1097 Civil War, American; apparel and fashion industry, 87; defense industry, 524; food manufacturing and wholesaling industry, 682 Clarke, Arthur C., 990 Clean Air Act of 1990, 350 Clean Clothes Campaign, 1842 Cleaning Management Institute, 897 Clothing. See Apparel and fashion industry Cloud computing, 400, 993, 1820 Club Med, 1910 CMS. See Centers for Medicare and Medicaid Services CNET.com, 401 CNSA. See National Space Agency of the People’s Republic of China Coal Mine and Safety Act of 1969, 350 Coal mining industry, 345-361 Coast Guard, U.S., 673, 1134, 1723, 1739 COBOL, 399, 415 Coca-Cola, 161, 830 Coffins, 761 Cohan, Norman H., 1451

2187

Cold War; defense industry, 524; national and international security industry, 1261 College Board, 862, 1534 Colonial Williamsburg, 1879 Colorado River Aqueduct Project, 2019 Comair, 41 Combs, Sean “Puffy,” 1251 Comenius, John Amos, 503 ComfortDelGro, 1358 Commercial banks, 127 Common Business-Oriented Language. See COBOL Commonwealth Agri-Energy, 184 Community Development Society, 323 Community Mental Health Act of 1963, 471 Compass Group North America, 738, 830 Complementary and alternative health care industry, 362-378, 1154; veterinary industry, 1930 CompTIA, 395 Computer communications. See Internet and cyber communications industry Computer games. See Video, computer, and virtual reality games industry Computer hardware and peripherals industry, 379-396; contribution to the U.S. economy, 381; inputs consumed, 381; projected employment, 394 Computer Society (IEEE), 395, 412, 430 Computer software industry, 397-413 Computer systems industry, 414431; contribution to the U.S. economy, 416; inputs consumed, 416. See also Internet ConAgra Foods, 700 Condamine, Charles de la, 1441

2188

Subject Index

Coney Island, 1878 Conference Board, 467 ConocoPhillips, 1401 Conservation and sustainability; fishing and fisheries industry, 665; logging industry, 1116; natural resources management, 1276; outdoor recreation industry, 1313 Construction equipment industry, 432-451 Construction industry; inputs consumed, 234. See also Building construction industry; Construction equipment industry; Highway, road, and bridge construction industry Constructor Certification Commission, 250 Consumer Product Safety Commission, 1896 Consumer Product Safety Improvement Act of 2008, 1896 Continental Airlines, 179 Convenience stores, 706, 1666 Converse, Morton, 1894 Cook, Thomas, 1910 Cooper, Kenneth H., 810 Copperstone Mine, 1201 Copy machine, 1062 Corrections Corporation of America, 487 Cosin, Lionel, 504 Cost Accounting Standards Board, 13 Costco, 708 Cotton gin, 828 Council of Residential Specialists, 1604 Council on Foundations, 1438 Counseling services, 469-484 Courtaulds Fibers, 1841 CPSC. See Consumer Product Safety Commission CPSIA. See Consumer Product Safety Improvement Act of 2008 Craftsman, 1063

Craigslist, 994 Crawford, Cindy, 97 Crazy Coffins, 761 Credit Union National Association, 140 Credit unions, 127 Cremation, 764 Crime; computer software industry, 411; logging industry, 1128 Criminal justice and prison industry, 485-502 Critical Path Method, 234 Crowley Marine, 1138 Cruickshank, William, 142 Cruises; theater and performing arts industry, 1863; travel and tourism industry, 1911 CTIA-The Wireless Association, 1817, 1837 Cugnot, Nicholas-Joseph, 105 Cullen, Michael, 705 Cultural institutions. See Museums and cultural institutions industry Cureton, Thomas K., 809 Daimler-Benz, 145 Daimler Buses North America, 1141 Dairy industry, 1080 Dangerous Goods Advisory Council, 1979 Daniell, John F., 142 DARPA. See Defense Advanced Research Projects Agency Davey Tree Expert Company, 889, 1014 Davis, George, 1685 Davy, Humphry, 142, 578, 1170 Day-care services, 503-522; projected employment, 520 Dean Warehouse, 1971 De Beers, 2001 DEC. See Digital Equipment Corporation Deere, John, 433, 826 Deere & Company, 433, 450, 826, 842, 1064, 1076

Defence Manufacturers Association, 539 Defense Advanced Research Projects Agency, 989 Defense industry, 523-540. See also Military, U.S. Defense National Stockpile Center, 1174 Delano, Jane, 1152 Delicious, 992 Delivery services, postal and package, 1476-1494 Dell, 383 Deloitte, 10 Delta Airlines, 39 DeMille, Cecil B., 1207 Dental and orthodontics industry, 541-558 Department of Agriculture, U.S., 331, 629, 634, 1094 Department of Commerce, U.S., 634 Department of Defense, U.S, 634 Department of Education, U.S., 20, 634, 1535 Department of Energy, U.S., 195, 634, 1298 Department of Health and Human Services, U.S., 634, 1570 Department of Homeland Security, U.S., 330, 343, 634, 646, 1262, 1274 Department of Housing and Urban Development, U.S., 315, 634, 1605 Department of Justice, U.S., 331, 343, 501, 634 Department of Labor, U.S., 634 Department of State, U.S., 634 Department of the Interior, U.S., 634 Department of the Treasury, U.S., 634 Department of Transportation, U.S., 634, 758, 1361 Department of Veterans Affairs, U.S., 634 Derecktor, 1137

Subject Index Design, industrial. See Industrial design industry, 969 Design Society, The, 969 Deutsche Bahn, 1358 DeWalt, Raymond, 1061 Dewey, Melvil, 1044 DHL, 1476, 1971 DHS. See Department of Homeland Security, U.S. Diamond Peak, 1321 Diesel, Rudolf, 177 Digg, 992 Digital Equipment Corporation, 399 Diplomatic Security Service, 332 Direct Air, 41 Disney, Walt, 1878 Disneyland Park, 1879 Dockwa, William, 1477 Dollar Store, 709 Doosan Group, 450, 841 Dot-com bubble, 991 Douglas, Alexander, 1947 Dow Chemical Company, 295 Drais, Karl von, 106 Dream Dinners, 738 DreamHost, 992 Drilling, 827 Drug Information Association, 1421 Drugs. See Pharmaceuticals and medications industry Duke University, 861 Dunlop, John, 106 Dunn & Bradstreet, 253 DuPont, 1443, 1841 Duryea, Charles, 105 Duryea, Frank, 105 Dutch West Indies Company, 160 E. F. Hutton, 649 Eames, Bernice “Ray,” 953 Eames, Charles, 953 Earth Tech, 601 Eastman, 1842 Eastman Chemical, 1448 Eastman Kodak Company, 1065 Eaton Corporation, 1449 eBay, 991

Eberhard Equipment, 438 E-books, 1575 Eckert, John P., 380, 415 Eclatorq, 796 Ecological Food Manufacturers Association, 685 E-commerce; computer hardware and peripherals industry, 384; computer software industry, 411; computer systems industry, 429; construction equipment industry, 438; electrical and gas appliances industry, 563; food retail industry, 716; hotels and motels industry, 921; internet and cyber communications industry, 992; retail trade and service industry, 1671; travel and tourism industry, 1912; watches and jewelry industry, 2014 Ecotourism, 1314 Edison, Thomas Alva, 143, 561, 579, 1061, 1205 Education industry, higher, 844862 Education industry, private, 1515-1536 Education industry, public elementary and secondary, 1537-1553 Education services, corporate, 452-468 Edward Jones Investments, 649 Edward Lloyds Coffee House, 1725 Eighteenth Amendment, 160 Eighth Continent Project, 1759 Einthoven, Willem, 1704 El Dorado National, 1141 El Paso Intelligence Center, 342 Electrical and gas appliances industry; projected employment, 575 Electrical power industry, 578592, 1297; alternative power, 57; contribution to the U.S. economy, 580; inputs

2189

consumed, 581; projected employment, 590 Electrochemical Society, 157 Electrolux, 559 Electronic Numerical Integrator and Computer. See ENIAC Eliason, Carl J., 106 Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery of 2006, 1737 EMI, 1242 Energy Information Administration, 73, 360, 591 Energy Policy Act of 2005, 178 Energy Recovery Council, 1997 Energy Star program, 562, 576 Engineer, civil, 870 Engineering, environmental. See Environmental engineering and consultation services English Highway Act of 1555, 864 ENIAC, 380, 398, 415 Entec UK, 611 Enterprise Holdings, 1622 Entertainment, themed. See Themed entertainment industry Entertainment and Leisure Software Association, 1962 Entertainment Software Association, 1962 Environmental Careers Organization, 1295 Environmental engineering and consultation services, 593-612 Environmental issues; beverage and tobacco industry, 161; biofuels industry, 178; building architecture industry, 218; building construction industry, 236; chemicals industry, 290; electrical and gas appliances industry, 575; environmental engineering and consultation services, 593; farming industry, 615; food

2190

Subject Index

manufacturing and wholesaling industry, 684; funerary industry, 765; heavy machines industry, 841; home maintenance services, 883; hotels and motels industry, 921; household and personal products industry, 939; industrial design industry, 956; light machinery industry, 1076; paper manufacturing and products industry, 1336; plastics and rubber manufacturing industry, 1444; printing industry, 1499; rental and leasing services, 1609; retail trade and service industry, 1678; shipbuilding, submarines, and naval transport industry, 1729; textile and fabrics industry, 1841; waste management, 1981 Environmental Protection Agency, 597, 634, 2021 EPA. See Environmental Protection Agency Epstein, Max, 1965 Equal Opportunity Employment Commission, U.S., 646 Equestrian industry, 1080 Equipment, construction. See Construction equipment industry Equipment, sports. See Sports equipment industry Equipment, telecommunications. See Telecommunications equipment industry Equipment Leasing and Finance Association, 1624 Erie Canal, 744 Ernst & Young, 10 ESA. See European Space Agency Esmor, 487 Esslinger, Hartmut, 957 Ethan Allen, 777 Ethanol, 59, 178 Ethernet, 416

EU. See European Union Eucomed—Medical Technologies Industry in Europe, 1720 European Biomass Industry Association, 1129 European Chemical Industry Council, 303 European Regions Airline Association, 52 European Space Agency, 1744, 1759 European Union, 1263 Eustachi, Bertolomeo, 542 Eveready, 144 Executive Office of the President, 634 Exide Technologies, 150 Express Delivery and Logistics Association, 1494 ExxonMobil, 1386, 1401, 1445 F. A. O. Schwarz, 1895 FAA. See Federal Aviation Administration Fabrics industry. See Textile and fabrics industry Facebook, 991 Fair Labor Standards Act of 1938, 1080 Family Funeral Home Association, 774 Fannie Mae, 1589 Faraday, Michael, 579 Farm Service Agency, 619 Farmers Insurance Group, 976 Farming industry, 613-630; contribution to the U.S. economy, 614; inputs consumed, 614; projected employment, 628 Farnsworth, Philo, 561 Farrel, 1447 FASB. See Financial Accounting Standards Board Fashion Group International, 103 Fashion industry. See Apparel and fashion industry Fauchard, Pierre, 542

FBI. See Federal Bureau of Investigation FCC. See Federal Communications Commission FDA. See Food and Drug Administration FDIC. See Federal Deposit Insurance Corporation Federal Aid Highway Act of 1921, 865 Federal Aid Road Act of 1916, 919 Federal Aviation Administration, 38 Federal Bureau of Investigation, 5, 335, 1263 Federal Bureau of Prisons, 501 Federal Communications Commission, 200 Federal Deposit Insurance Corporation, 126 Federal Energy Regulatory Commission, 584 Federal Express. See FedEx Corporation Federal Housing Administration, 1589 Federal Motor Carrier Safety Administration, 1134 Federal National Mortgage Association. See Fannie Mae Federal Protective Service, 332, 638 Federal Railroad Administration, 1134 Federal Reserve Act of 1913, 126 Federal Savings and Loan Insurance Corporation, 127 Federal Trade Commission, 706 Federal Transit Administration, 1148, 1367 Federal’noye Kosmicheskoye Agentstvo Rossii. See Roscosmos FedEx Corporation, 744, 1476 Ferguson Enterprises, 831 Fermi, Enrico, 1298 Ferris wheel, 1878 FHA. See Federal Housing Administration

Subject Index Fielding, Henry, 326 Financial Accounting Standards Board, 17 Financial services industry, 648662; contribution to the U.S. economy, 650-651; inputs consumed, 650-651; projected employment, 661. See also Banking industry Finlay Fine Jewelry, 2003 Firefox, 400 Firestone, 1453 First Amendment, 1459 Fishing and fisheries industry, 663-680, 1313; projected employment, 677 Fitness industry. See Health and fitness industry FKA. See Roscosmos Flamingo (casino), 273 Flatiron Cleaning Company, 882 FMCSA. See Federal Motor Carrier Safety Administration FNMA. See Fannie Mae Fokker, Anthony, 525 Follett Higher Education Group, 1609 Food and Agriculture Organization of the United Nations, 678, 1093 Food and Drug Administration, 683, 724, 1406, 1686, 1706, 1966, 2027 Food Code, FDA, 724 Food Industry Suppliers Association, 719 Food Institute Online, 678 Food manufacturing and wholesaling industry, 681-703; contribution to the U.S. economy, 685; inputs consumed, 685; projected employment, 700 Food Marketing Institute, 701, 719 Food Protection Plan, 685 Food retail industry, 704-720; projected employment, 718 Food services, 721-741; projected employment, 739

Ford, Henry, 105, 178, 434, 827, 1062 Ford Motor Company, 105, 145, 961 Forest Industry Network, 1129 FORTRAN, 415 Foundations Center, 1438 Fourteenth Amendment, 1539 Franchises; automobiles and personal vehicles industry, 111; personal services, 1371; real estate industry, 1591; sports industry, spectator, 1765 Franklin, Benjamin, 972, 1061, 1151, 1485 Fraud; accounting services, 14; computer software industry, 399, 411; financial services industry, 650; food manufacturing and wholesaling industry, 685; internet and cyber communications industry, 1002 Fred Meyer Jewelers, 2003 Free School Societies, 1539 Freedonia, 450 Freeport-McMoRan, 1195 Freight transport industry, 742759; contribution to the U.S. economy, 744; inputs consumed, 744; projected employment, 757 Fresneau, François, 1441 Freud, Sigmund, 469 Frog design, 957 FSLIC. See Federal Savings and Loan Insurance Corporation FTC. See Federal Trade Commission Fuel cells. See Batteries and fuel cells industry FuelCell Energy, 157 Fuji Electric Retail Systems, 830 Fujifilm Holdings Corporation, 1065 Funerary industry, 760-774 Fur Commission USA, 1082 Fur industry, 1082

2191

Furniture and home furnishings industry, 775-792; contribution to the U.S. economy, 776; inputs consumed, 776; projected employment, 790 Furniture Brands International, 777 Gair, Robert, 1725 Gallery Furniture, 777 Galvani, Luigi, 142 Games. See Toys and games industry; Video, computer, and virtual reality games industry Gannett Newspapers, 22, 1574 Garment District, New York, 91 Garment sewing and alteration industry, 1373 Garrity, Mary Carol, 778 Garros, Roland, 524 Gas Light and Coke Company, 560 Gasoline. See Petroleum and natural gas industry Gassner, Carl, 143 Gate Gourmet, 731 Gates, Bill, 408 GATX Corporation, 1965 GDSN. See Global Data Synchronization Network GE Capital Mortgage, 1370 GE Medical Systems, 1705 Gehry Partners, 218 Gemological Institute of America, 2011, 2015 Genentech, 1684 General Electric, 65, 144, 559, 963 General Mills, 700 General Motors, 110, 145, 957 General Services Administration, 725 Genesis HealthCare Corporation, 1630 Genmar Holdings, 122 Genome Project, 1154 Geothermal energy, 62 Gerber Products, 512

2192

Subject Index

German Beer Purity Law of 1516, 160 Ghost, Amanda, 1249 GHTF. See Global Harmonization Task Force GI Bill. See Servicemen’s Readjustment Act of 1944 Giant Bank, 128 Gibbs, Josiah Willard, 1171 Gifford, Kathie Lee, 90 Gilbert, William, 1686 Gillig Corporation, 1134 Gladding-Hearn Duclos Corporation, 1137 Glass-Steagall Act of 1932-1933, 126 Global Data Synchronization Network, 685 Global Entertainment Retail Association-Europe, 1680 Global Harmonization Task Force, 1706 Global Institute for Alternative Medicine, 376 Global Postal Strategy, 1494 Globus, 1913 GM. See General Motors Goldman, Sylvan, 716 Gompers, Samuel, 1726 Goodyear, Charles, 289, 542, 828, 1441 Goodyear Tire & Rubber Company, 830, 1443 Google, 22, 397, 991, 1046 Government Accountability Office, 5, 343 Governmental Energy Independence and Security Act of 2007, 193 Grand Union, 705 Grant, Ulysses S., 1460 Grant Thornton, 10 Grants. See Philanthropic, charitable, religious, civic, and grant-making industry Graphic Arts Education and Research Foundation, 1513 Grasberg Mine, 1195 Great Atlantic and Pacific Tea Company. See A&P

Great Depression; banking industry, 126; civil planning services, 306; corporate education services, 455; farming industry, 614; financial services industry, 649; industrial design industry, 953 Great Western Tea Company. See Kroger Company Greyhound Lines, 1134, 1354 Griffiths, Julius, 1353 Grocery Manufacturers Association, 702, 719 Grooming, pet, 74 Grove, Andrew, 380 Grove, William Robert, 142 GSA. See General Services Administration Gutenberg, Johann, 1044, 1333, 1496, 1573 H & R Block, 649 Hadaway, William, 561 Hahn, Otto, 1297 Hahnemann, Samuel, 363 Hair and beauty services, 1374 Hall-Scott Motor Car Company, 1134 Hallidie, Andrew S., 1133 Hamilton Parker Company, 1449 Hammond, S. P., 75 Hancock, Thomas, 1441 Hancock, Walter, 1352 Hand tools and instruments industry, 793-807 Hand Tools Institute, 806 Handweavers Guild of America, 1857 Handy Dan’s, 797 Hanjin, 751 Hard drives, 382 Hargreaves, James, 828 Harrah’s Entertainment, 274 Harrison, John, 289 Harryhausen, Ray, 1221 Harvard School of Public Health, 1570 Harvard University, 861 Hasbro, 1895

HBO, 200 Head Start, 504 Health and fitness industry, 808824 Health care. See Medicine and health care industry Health Care and Education Reconciliation Act of 2010, 972 Health equipment. See Scientific, medical, and health equipment and supplies industry Health issues; casino industry, 277; criminal justice and prison industry, 490; dental and orthodontics industry, 544; environmental engineering and consultation services, 609; farming industry, 618 Health Physics Society, 1310 Health services, public. See Public health services Healthcare Financial Management Association, 483, 916, 1642 Heavy machines industry, 825843; contribution to the U.S. economy, 829; inputs consumed, 830; projected employment, 841 Henrico County, 1544 Henry, Joseph, 579 Hepburn Act of 1906, 1965 Hertz, Heinrich, 198 Hertz, John, 1607 Hertz Corporation, 1607 Hewlett-Packard, 395, 1815 Higher Education Act of 1965, 1517 Highway Research Board, U.S., 865 Highway, road, and bridge construction industry, 863880; projected employment, 877 Higinbotham, William, 1947 Hilfiger, Tommy, 89 Hill, Rowland, 1477

Subject Index Hilton, Conrad, 919 Hilton Hotels and Resorts, 919 Hoe, Richard March, 1496 Holland, J. P., 1728 Hollerith, Herman, 380, 398 Holley, Alexander, 1171 Holmes, Hogden, 828 Holt, Benjamin, 433, 441 Home Box Office. See HBO Home Depot, 797, 883 Home furnishings. See Furniture and home furnishings industry Home maintenance services, 881-898; projected employment, 897 Homeopathy, 363 Honda, Soichiro, 953 Honda Motor Company, 110, 961 Hoover Company, 561 Hopper, Grace Murray, 399 Hornsby, Richard, 434 Hornsby Company, 434 Hospital care and services, 899917; inputs consumed, 902; projected employment, 915 Hospitality Net BV, 935 Hospitality Sales and Marketing Association, 935 Hotels and motels industry, 918936; contribution to the U.S. economy, 920; inputs consumed, 921; projected employment, 934 Hotels.com, 1912 Housecleaning, 1375 Household and personal products industry, 937-951 Housing. See Real estate industry Houston, City of, 1111 Huawei, 1803 Hughes Missile Systems, 1267 Hull, Clark L., 363 Hull, William, 1459 Human Capital Institute, 467 Humane Society of the United States, 1945 Hunting industry, 1313 Husqvarna, 1063

Hutton, Lauren, 97 Hyatt, John Wesley, 1442 Hydroelectric power, 60 Hypnosis, 363 IASA. See Improving America’s Schools Act of 1994 IBM. See International Business Machines ICOM. See International Council of Museums ICSID. See International Council of Societies of Industrial Design IDEA. See Individuals with Disabilities Education Act of 1975 Identity theft, 419, 1667 IEA. See International Energy Agency IFDA. See International Foodservice Distributors Association IGRA. See Indian Gaming Regulatory Act of 1988 IIA. See Institute of Internal Auditors IKEA, 777 ILA. See International Longshoremen’s Association IMA. See Institute of Management Accountants IMG Worldwide, 1765 Improving America’s Schools Act of 1994, 1540 Independent Community Bankers of America, 140 Independent Insurance Agents and Brokers of America, 987 India; hand tools and instruments industry, 795; motion picture and television industry, 1209 Indian Gaming Regulatory Act of 1988, 273 Indian Space Research Organization, 1743 Individuals with Disabilities Education Act of 1975, 1540

2193

Industrial design industry, 952970 Industrial Designers Society of America, 953, 969 Industrial Fabrics Association International, 1857 Industrial Revolution; accounting services, 3; building architecture industry, 216; chemicals industry, 289; civil planning services, 306; construction equipment industry, 433; farming industry, 614; food manufacturing and wholesaling industry, 682; heavy machines industry, 826; higher education, 845; household and personal products industry, 938; metals manufacturing industry, 1170; scientific and technical services, 1685; toys and games industry, 1894 Industry Trade Data and Analysis, 662 Indy Car, 1764 Information industry. See Publishing and information industry Information Technology Association of America, 395 Institute for Certification of Computing Professionals, 395, 412 Institute for Supply Management, 450, 842, 1076 Institute of Electrical and Electronics Engineers, 1003, 1149, 1760, 1817, 1837 Institute of Food Technologists, 685, 702 Institute of Industrial Engineers, 1149 Institute of Internal Auditors, 13, 17 Institute of Management Accountants, 13, 17 Institute of Real Estate Management, 1605

2194

Subject Index

Institute of Transportation Studies, 1368 Institution of Civil Engineers, 594 Institution of Mechanical Engineers, 1686 Insurance industry, 971-988; contribution to the U.S. economy, 973; inputs consumed, 973; marine, 1724; projected employment, 986 Insurance Information Institute, 987 Integrated circuits, 382 Intel Corporation, 380 Interborough Rapid Transit, 1353 Intergovernmental Oceanographic Commission, 679 Internal Revenue Service; accounting services, 5; philanthropic, charitable, religious, civic, and grantmaking industry, 1425; rental and leasing services, 1607 International Advertising Association, 34 International Air Transport Association, 53, 758 International Association of Amusement Parks and Attractions, 1891 International Association of Broadcasting Manufacturers, 213 International Association of Clothing Designers and Executives, 103 International Association of Culinary Professionals, 1662 International Association of Outsourcing Professionals, 269 International Association of Public Transport, 1368 International Association of Refrigerated Warehouses, 1979

International Atomic Energy Agency, 1298 International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers, and Helpers, 1738 International Brotherhood of Electrical Workers, 587, 591, 885 International Brotherhood of Teamsters, 1726 International Business Machines, 380, 398, 415, 991, 1608 International Code Council, 218 International Communication Association, 1837 International Council of Beverages Associations, 175 International Council of Museums, 1225, 1240 International Council of Shopping Centers, 1680 International Council of Societies of Industrial Design, 953, 969 International Council of Toy Industries, 1909 International Energy Agency, 194-195 International Federation of Pharmaceutical Manufacturers and Associations, 1421 International Federation of the Phonographic Industry, 1258 International Foodservice Distributors Association, 723, 738, 740 International Freight Association, 758 International Game Developers Association, 1962 International Health, Racquet, and Sportsclub Association, 824 International Hotel and Restaurant Association, 935, 1662, 1891

International Institute of Synthetic Rubber Producers, 1456 International Longshoremen’s Association, 1726 International Maritime Organization, 1736, 1738 International Olympic Committee, 1781 International Paper Company, 1338 International Publishers Association, 1587 International Ship and Port Facility Security Code, 1736 International Snowmobile Manufacturers Association, 121 International Society for Performance Improvement, 467 International Society for Pharmaceutical Engineering, 1421 International Solid Waste Association, 1998 International Telecommunication Union, 1817, 1838 International Textile Manufacturers Federation, 1857 International Tobacco Growers Association, 176 International Trade Administration, 1738 International Traffic in Arms Regulations, 1749 International Tropical Industry Association, 1129 Internet; advertising and marketing industry, 22; broadcast industry, 200; business services, 254; computer software industry, 399; computer systems industry, 414; corporate education services, 456; defense industry, 525; food services, 724; insurance

Subject Index industry, 975; libraries and archives industry, 1046; motion picture and television industry, 1210; music industry, 1243; national and international security industry, 1273; publishing and information industry, 1573; telecommunications infrastructure, 1820 Internet and cyber communications industry, 989-1004. See also Computer systems industry; Internet Internet Corporation for Assigned Names and Numbers, 1003 Internet Engineering Task Force, 1003 Internet Society, 1003 Interpublic Group of Companies, 1770 Interstate Commerce Commission, 1965 iPhone, 411, 1836 IRS. See Internal Revenue Service ISPS. See International Ship and Port Facility Security Code ISRO. See Indian Space Research Organization ITAR. See International Traffic in Arms Regulations iTunes Store, 406, 1253 Ive, Jonathan, 953 Iwasaki, Yataro, 441 J. & E. Stevens, 1894 J. P. Morgan Chase. See Chase Jack Morton Worldwide, 1770 Jackson, Peter, 1209 Jackson County Maritime Trades Academy, 1737 Jacobs, Walter L., 1607 Japan Aerospace Exploration Agency, 1744 JAXA. See Japan Aerospace Exploration Agency Jay-Z, 1249

JCAHO. See Joint Commission on Accreditation of Health Care Organizations Jefferson, Thomas, 160 Jennifer Convertibles, 777 Jewel Food Stores, 707 Jewelers of America, 2002, 2015 Jewelers’ Security Alliance, 2009, 2015 Jewelers Vigilance Committee, 2015 Jewelry. See Watches and jewelry industry Jobs, Steve, 380 John Bean Technologies Corporation, 830 Johnson, SC. See SC Johnson Johnson & Johnson, 1420, 1705 Joint Commission on Accreditation of Health Care Organizations, 1165 Jones Act of 1920, 1727 Jones Brothers Tea Company. See Grand Union JSA. See Jewelers’ Security Alliance Judiciary Act of 1789, 328 Jullien’s Restarator, 1645 Jung, Carl, 470 Juniper Networks, 1815 Kahn, Bob, 990 Kaiser Aluminum, 1178 Kaiser Permanente, 978 Kamen, Dean, 109 Karan, Donna, 89 Katsushiro Indonesia, 830 Kawasaki Rail, 1139 Kay Jewelers, 2015 Kefauver Committee, 273 Kellogg, 700 Kelly Airmail Act of 1925, 38 Kelly Services, 261 Keystone Environmental, 611 KGB. See Soviet Committee for State Security Kilby, Jack, 415 Kimberly-Clark, 1336 Kindel Furniture, 777 KinderCare, 512

2195

King Kullen, 705 Kiosks, 1666 Klein, Anne, 89 Klein, Calvin, 89 Klein, Richard, 439 Klein Products, 439 KLM (airlines), 44 Knitting Factory, 1247 Koenig, Friedrich, 1496 Kohler Company, 831 Komatsu, 450-451, 829, 842, 1076 Komitet Gosudarstvennoy Bezopasnosti. See Soviet Committee for State Security KPMG (accounting firm), 10 Kraft, G. Howard, 683 Kraft Foods, 686 Kroger Company, 708 Kuroki, Yasuo, 953 Kuwait Petroleum Corporation, 1387 Kvichak Marine Industries, 1137 Kyoto Protocol of 1997, 56 L. and J. G. Stickley, 776 L. L. Bean, 1322, 1879 Labor issues; apparel and fashion industry, 90; automobiles and personal vehicles industry, 110; business services, 253; coal mining industry, 346; construction equipment industry, 447; criminal justice and prison industry, 486; farming industry, 624; home maintenance services, 882; livestock and animal products industry, 1080; textile and fabrics industry, 1840 LaLanne, Jack, 810 LAN. See Local area network Landscaping services, 1005-1025 Lanham Act of 1941, 504 LaPetite Academy, 512 Las Vegas Strip, 275 Laundry and dry cleaning industry, 1373 Lauren, Ralph, 99

2196

Subject Index

Lavoisier, Antoine, 289, 1170 Law firms. See Legal services and law firms Lawn mower, 1007, 1061 Lawrence Livermore National Laboratory, 1274 Lazarus, Simon, 1665 La-Z-Boy, 777 Leadership in Energy and Environmental Design programs, 218 Leasing. See Rental and leasing services Leblanc, Nicolas, 289 Leclanche cell, 143 LEED programs. See Leadership in Energy and Environmental Design programs Legal Aid Society, 1041 Legal services and law firms, 1026-1042; contribution to the U.S. economy, 1029; inputs consumed, 1029 Legoland, 1890 L’Enfant, Pierre, 305 Leonardo da Vinci, 36 LHWCA. See Longshoremen’s and Harbor Worker’s Compensation Act of 1927 Libby, McNeill, and Libby, 683 Libraries and archives industry, 1043-1059 Library of Congress, 1044, 1474 Library Services and Construction Act of 1964, 1044 Licklider, J. C. R., 989 Light machinery industry, 10601077 Lilienthal, Otto, 37 Linux, 400 Litchfield Law School, 1028 Literature & Latte, 400 Live Nation, 1244 Livestock and animal products industry, 1078-1095; waste management, 1982 Lloyd, Edward, 972 Lloyd’s of London, 972

Lobbying. See Political advocacy industry Local area network, 414 Lockheed Martin, 538-539 Loewy, Raymond Fernand, 953 Logging industry, 1113-1130; projected employment, 1128 Lombardi, Chris, 1245 Longshoremen’s and Harbor Worker’s Compensation Act of 1927, 1727 Loomis, Mahlon, 198 Lotteries, 272 Louvre, 1226 Lovelace, Ada, 380, 398 Lowe’s, 797 Lumière, Auguste, 1206 Lumière, Louis, 1206 Lust, Benedict, 363 Luther, Matin, 1044 Mac OS, 399 Macadam, 864 McAdam, John Loudon, 864 McAfee, 400 McClatchy, 1579 McDonald’s, 1646 McGladrey & Pullen, 10 Machinery, heavy. See Heavy machines industry Machinery, light. See Light machinery industry Macintosh (computer), 380 Macintosh, Charles, 1441 McLaren Formula One, 1770 McLean, Milton, 1725 MacUploads.com, 401 Macy, Rowland Hussey, 1665 Macy’s, 1665, 1895 Madoff, Bernie, 650 Maersk, 751 Magazine Publishers of America, 1587 Magnavox, 1948 Mahan, Alfred Thayer, 1725 Maison du Sport International. See World Federation of Sporting Goods Industry Major League Baseball, 1762 Major League Gaming, 1962

Major League Soccer, 1764 Makita Corporation, 1061, 1063, 1076 Mall of America, 1880 Mallory Battery Company, 144 Manchester City Football Club, 1770 Manpower (company), 261 Manufacturing, food. See Food manufacturing and wholesaling industry Manufacturing, metals. See Metals manufacturing industry Manufacturing, paper. See Paper manufacturing and products industry Manufacturing, plastics and rubber. See Plastics and rubber manufacturing industry Manufacturing Jewelers and Suppliers of America, 2015 MARAD. See Maritime Administration Marathon Oil Corporation, 1389 Marconi, Guglielmo, 198 Marcus, Rudolf, 144 Maritime Administration, 1723, 1729, 1738 Maritime Transportation Act of 2002, 1737 Mark 1. See ASCC Marketing industry. See Advertising and marketing industry MarketResearch.com, 451 Marriott, J. Willard, 723 Marriott International, 919 Marshals Service, U.S., 328 Mascoma, 184 Mass transportation vehicles industry, 1131-1150; projected employment, 1147 Matador, 1245 Material Handling Industry of America, 1979 Mathematical Formula Translating System. See FORTRAN

Subject Index Mattel, 1895 Mauchly, John W., 380, 415 Mausoleums, 762 Maxwell, James Clerk, 198 Mayflower Transit, 1971 Maytag Company, 561 Meals-on-Wheels, 724 MEDEC, 1720 Medicaid, 1153 Medical care industry, residential, 1626-1643; contribution to the U.S. economy, 902; inputs consumed, 902; projected employment, 1641 Medical Devices Canada. See MEDEC Medical equipment. See Scientific, medical, and health equipment and supplies industry Medical Equipment Suppliers Association, 1720 Medical Group Management Association, 483, 916, 1642 Medical Technology and Practice Patterns Institute, 1720 Medical tourism, 1914 Medical Waste Tracking Act of 1988, 1988 Medicare, 1153, 1628 Medications. See Pharmaceuticals and medications industry Medicine and health care industry, 1151-1168; contribution to the U.S. economy, 902, 1153; inputs consumed, 902, 1154; projected employment, 1166 Medrad, 1709 Medtronic, 1705 Méliès, Georges, 1207 Mendeleyev, Dmitri, 1170 Mental Health Act of 1946, 470 Mental health services, 470 Mercantile Agency. See Dunn & Bradstreet Merchant Marine Academy, U.S., 758, 1734

Merchant Marine Act, Section 27. See Jones Act of 1920 Meredith, 1579 Merit Systems Protection Board, 633, 1098 Merrill Lynch, 649 Metals manufacturing industry, 1169-1186; contribution to the U.S. economy, 1172; inputs consumed, 1172; projected employment, 11831184 Metcalfe, Bob, 416 Metropolitan Museum of Art, 1227 Metropolitan Police Act of 1829, 326 Metropolitan Transportation Authority, 1358 Metropolitan Water District of Southern California, 2019 Mexican-American Grocers Association, 719 MGM Grand, 280 Michelin, 1445 Michigan Natural Storage Company, 1965 Microsoft, 963, 993, 1949 Microsoft Office, 400 Microsoft Windows, 399 Midwifery, 362 Military, U.S.; computer hardware and peripherals industry, 394; food services, 723; shipbuilding, submarines, and naval transport industry, 1723; theater and performing arts industry, 1863 Military-industrial complex, 525 Military Sealift Command, 1723, 1738 Mine Control and Reclamation Act of 1977, 350 Mine Safety and Health Association, 360 Minerals, Metals, and Materials Society, 1185 Mining industry, 830, 1187-1203; contribution to the U.S.

2197

economy, 1190; inputs consumed, 1191; projected employment, 1201; waste management, 1985. See also Coal mining industry Miramax Films, 1209 Mitsubishi Heavy Industries, 441, 451, 828, 842 MLB. See Major League Baseball MLS. See Major League Soccer Mohegan Sun Casino, 273 Moissan, Henri, 2010 MOMA. See Metropolitan Museum of Art Monsanto, 185, 1842 Montgolfier, Jacques-Étienne, 37 Montgolfier, Joseph-Michel, 37 Moore, Gordon, 380 Morita, Akio, 953 Morrill Land-Grant Act of 1862, 844 Morrison, James Beall, 542 Morse, Samuel, 198, 579 Mortgage Bankers Association, 140 Moscow Art Theatre, 1860 Motels. See Hotels and motels industry Motion picture and television industry, 1204-1224; contribution to the U.S. economy, 1209; inputs consumed, 1209; projected employment, 1222 Motion Picture Association of America, 1209, 1223 Motor vehicle manufacturing; projected employment, 122 Motorcycles, 106 Motorola Droid, 411 Movado, 2003 Mozilla Foundation, 402, 411 MPAA. See Motion Picture Association of America MTM Enterprises, 1210 Muir, John, 1313 Mullen, Michael C., 1729 Museum of Fine Arts, 1227 Museum Studies and Reference Library, 1240

2198

Subject Index

Museums and cultural institutions industry, 12251240, 1879; projected employment, 1238 Music industry, 1241-1259 Mutant Enemy Productions, 1210 Muybridge, Eadweard, 1205 NAAB. See National Architectural Accrediting Board NADSA. See National Adult Day Services Association NAFTA. See North American Free Trade Act of 1994 Nagelmackers, Georges, 1910 NAR. See National Association of Realtors NARA. See National Archives and Records Administration NASA. See National Aeronautics and Space Administration NASCAR. See National Association for Stock Car Auto Racing National Adult Day Services Association, 504, 521 National Aeronautics and Space Administration, 144, 634, 990, 1743, 1760 National Alcohol Beverage Control Association, 176 National Architectural Accrediting Board, 218, 231 National Archives and Records Administration, 1046 National Association for Family Child Care, 504, 1383 National Association for Home Care and Hospice, 1167 National Association for Integrative Health Care Practitioners, 376 National Association for Law Placement, 1041 National Association for Printing Leadership, 1513 National Association for Stock Car Auto Racing, 1764

National Association for the Education of Young Children, 522, 1383 National Association of Broadcasters, 213 National Association of Child Care Resource and Referral Agencies, 522, 1383 National Association of College and University Food Services, 740 National Association of Convenience Stores, 719 National Association of Criminal Defense Lawyers, 1041 National Association of Cruise Oriented Agencies, 1925 National Association of Development Organizations, 323 National Association of Environmental Professionals, 1296 National Association of Home Builders Urban Land Institute and Appraisal Institute, 1590 National Association of Insurance and Financial Advisors, 988 National Association of Insurance Commissioners, 988 National Association of Local Government Environmental Professionals, 323 National Association of Printing Ink Manufacturers, 1513 National Association of Professional Insurance Agents, 988 National Association of Public Hospitals and Health Systems, 916 National Association of Realtors, 1589, 1605 National Association of Schools of Public Affairs and Administration, 1111 National Association of Student Personnel Administrators, 862

National Association of Veterinary Technicians in America, 1945 National Association of Water Companies, 2032 National Athletic Trainer’s Association, 1781 National Automobile Dealers Association, 123 National Bank Act of 1863, 126 National Bankers Association, 140 National Basketball Association, 1764 National Bicycle Dealers Association, 123 National Biodiesel Board, 73, 195 National Bituminous Coal Wage Agreement of 1978, 350 National Broadcasting Company. See NBC National Bus Rapid Transit Institute, 1149 National Business Travel Association, 1925 National Center for Complementary and Alternative Medicine, 366, 377 National Center for Education Statistics, 1552 National Center for Women and Information Technology, 430 National Child Care Association, 522, 1383 National Child Care Information Center, 1383 National Collegiate Athletic Association, 1764 National Conference of State Legislatures, 1111 National Council of Architectural Registration Boards, 219, 231 National Council of Churches, 1438 National Council of Examiners for Engineering and Surveying, 1149

Subject Index National Dances Education Association, 1875 National Defense Industry Association, 540 National Dog Groomers Association of America, 84 National Education Association, 1534, 1552 National Electrical Manufacturers Association, 576 National Endowment for the Arts, 1860, 1875 National Extension Association of Family and Consumer Sciences, 1383 National Football League, 1762 National Football League Players Association, 1768 National Frozen and Refrigerated Foods Association, 702 National Funeral Directors and Morticians Association, 774 National Grocers Association, 719, 1680 National Hockey League, 1764 National Home Furnishings Association, 791 National Hydrogen Association, 157 National Independent Private Schools Association, 1534 National Indian Gaming Association, 287 National Institute for Animal Agriculture, 1094 National Institute for Automotive Service Excellence, 119 National Institute of Dental and Craniofacial Research, 552, 557 National Institute of Mental Health, 470 National Institutes of Health, 1683, 1701 National Iranian Oil Company, 1387

National Legal Aid and Defender Organization, 1041 National Marine Fisheries Service, 679 National Marine Manufacturers Association, 123 National Medical Group Managers Association, 903 National Mining Association, 360, 1203 National Motor Freight Traffic Association, 758 National Motorcycle Dealers Association, 123 National Oceanic and Atmospheric Administration, 665, 1691, 1746, 1760 National Operating Committee on Standards for Athletic Equipment, 1785, 1797 National Organic Program, 1853 National Park Service, 1313, 1330 National Parks and Conservation Association, 1330 National Plant Data Center, 629 National Recreation and Park Association, 1331 National Recycling Coalition, 1998 National Renewable Energy Laboratory, 73 National Resource Center for Health and Safety in Child Care and Early Education, 522 National Restaurant Association, 1659, 1662 National Retail Federation, 1679-1680 National Right to Work Legal Defense Foundation, 1030 National School Lunch Act of 1946, 723 National Science Foundation, 1683, 1701 National Security Agency, 1262 National Society of Professional Engineers, 1149, 1701 National Soil Survey Center, 629

2199

National Solid Waste Management Association, 1998 National Space Agency of the People’s Republic of China, 1744 National Sporting Goods Association, 1797 National Stone, Sand, and Gravel Association, 1203 National Strength and Conditioning Association, 824 National Weather Service, 1691 National Workforce Center for Emerging Technologies, 412, 430 Nationwide Mutual Insurance, 980 Native Americans; casino industry, 272; funerary industry, 761 NATO. See North Atlantic Treaty Organization Natural disasters, effect of; civil planning services, 308; construction equipment industry, 444; environmental engineering and consultation services, 597; fishing and fisheries industry, 666; shipbuilding, submarines, and naval transport industry, 1731 Natural gas. See Petroleum and natural gas industry Natural resources management, 1276-1296 Naturopathic Physicians Licensing Examinations, 365 Naturopathy, 363 Naval Vessel Register, 1738 Navegante Group, 287 Navsea Shipbuilding Support Office, 1723 NBA. See National Basketball Association NBC, 204 NBC Universal, 1213 NCAA. See National Collegiate Athletic Association

2200

Subject Index

NCARB. See National Council of Architectural Registration Boards NCCAM. See National Center for Complementary and Alternative Medicine NCLB. See No Child Left Behind Act of 2001 Nell Hill, 777 Neptune Society, 765 Nestlé, 161 Network interface card, 419 New Flyer, 1141 New Line Studios, 1209 New York Day Nursery, 504 New York Philharmonic, 1860 New York Police Department, 329 New York Public Library, 1051 New York State Funeral Directors Association, 774 New York Stock Exchange, 649, 662 New York Times, The, 22 New York Times Company, 1574 Newbury Comics, 1247 Newspaper Association of America, 1587 Newspapers; advertising and marketing industry, 19; publishing and information industry, 1573 NFL. See National Football League NHL. See National Hockey League NIC. See Network interface card Nichols Brothers, 1137 Nicholson, William, 578 NIDCR. See National Institute of Dental and Craniofacial Research Nieuwland, Julius, 1443 NIH. See National Institutes of Health Nikon Corporation, 1065 NIMH. See National Institute of Mental Health 99 Cents Only Store, 709 Nintendo Company, 1948

No Child Left Behind Act of 2001, 1539 NOAA. See National Oceanic and Atmospheric Administration NOCSAE. See National Operating Committee for Standards for Athletic Equipment Nomura, Ichiro, 665 Nonprofits. See Philanthropic, charitable, religious, civic, and grant-making industry Nortel, 1802 North American Broadcasters Association, 213 North American Free Trade Act of 1994, 102 North American Society for Sport Management, 1781 North Atlantic Treaty Organization, 1262, 1274 North Dakota Highway Patrol, 334 North Dakota State University Extension Service, 629 Northrop Grumman Corporation, 1267, 1732 Northwest Atlantic Fisheries Organization, 679 Norton, 400 Noyce, Robert, 380, 415 NPLEX. See Naturopathic Physicians Licensing Examinations NRA. See National Restaurant Association NSA. See National Security Agency NSF. See National Science Foundation Nuclear Energy Institute, 591, 1311 Nuclear power industry, 12971311; alternative power, 55; waste management industry, 1986 Nuclear Regulatory Commission, U.S., 584, 1298, 1311 Nursing homes. See Medical care industry, residential Nutreco Holding NV, 665

OAA. See Old Age Assistance Obama, Barack, 1472 Obama, Michelle, 823 Obninsk Nuclear Power Plant, 1298 Occupational Safety and Health Administration, 717, 1966 Octagon (television system), 199 Octagon Worldwide, 1770 Office of Citizen Services and Communications, 646 Office of Elementary and Secondary Education, 1552 Office of Faith-Based and Community Initiatives, 1425 Office of Management and Budget, 644 Office of Personnel Management, 343, 633-634, 646, 1098 Office of Space Commercialization, 1746 Office of Strategic Services, 1261 Office of Thrift Supervision, 127 Ohga, Norio, 953 OIS. See Organization of American States Old Age Assistance, 1628 Olds, Ransom, 434, 827, 1062 Olds Motor Vehicle Company, 434, 827, 1062 Olmsted, Frederick Law, 306, 1007 Olympic Games, 1762 Olympus Corporation, 1065 Online banking, 128 Online trading, 649 Ontario Bus, 1134 OPEC. See Organization of Petroleum Exporting Countries Open Systems Interconnect model, 419 OPM. See Office of Personnel Management Orbitz, 1912 Organic foods and farming, 616, 685, 1083, 1660 Organization of American States, 1263

Subject Index Organization of Petroleum Exporting Countries, 1387 Ørsted, Hans Christian, 578 Orthodontics industry. See Dental and orthodontics industry OSHA. See Occupational Safety and Health Administration OSI model. See Open Systems Interconnect model OSS. See Office of Strategic Services Otis Elevator Company, 828 Outdoor Amusement Business Association, 1331 Outdoor Foundation, 1328, 1331 Outdoor recreation industry, 1312-1331 Outsourcing, 253 Owen, Robert, 722 Owens-Corning, 1841 Pacioli, Luca, 2 PACS. See Picture Archiving and Communications Systems Palmer, Michael, 363 Palmer, Volney, 20 Pantry, 710 Paper Industry Technical Association, 1348 Paper manufacturing and products industry, 1332-1350; contribution to the U.S. economy, 1335; inputs consumed, 1335; projected employment, 1347 Paré, Ambroise, 542 Parkes, Alexander, 1442 Partridge, Alden, 594 Pascal, Blaise, 1352 Passenger transportation and transit industry; projected employment, 1366, 1367 Pasteur, Louis, 682 Patient Protection and Affordable Care Act of 2010, 375, 914, 972, 1155, 1569 Patronage system, 632 Payplat, Jean-Baptiste Gilbert, 1645

PC. See Personal computer Peale, Charles Wilson, 1227 Peel, Sir Robert, 327 Penguin Group, 1579 Pennsylvania Hospital, 1151 Penny Post, 1477 Pentagon, 1265 PepsiCo, 161 Performing arts. See Theater and performing arts industry Perkin, William, 289 Permanent International Association of Road Congresses, 866 Personal computer, 380; video, computer, and virtual reality games industry, 1948 Personal products. See Household and personal products industry Personal services, 1369-1383; contribution to the U.S. economy, 1371; inputs consumed, 1371; projected employment, 1382 Personal vehicles. See Automobiles and personal vehicles industry Pet Food Institute, 1942 PETCO, 80 Petroleos de Venezuela, 1387 Petroleum and natural gas industry, 1384-1402; contribution to the U.S. economy, 1387, 1388; inputs consumed, 1387, 1388; projected employment, 13991401 Pets. See Animal care services PetSmart, 80, 1935 PGA. See Professional Golfers Association Pharmaceutical Research and Manufacturers Association of America, 1421 Pharmaceuticals and medications industry, 14031422; projected employment, 1420

2201

Philadelphia Contributionship for the Insurance of Houses from Loss by Fire in South Carolina, 972 Philanthropic, charitable, religious, civic, and grantmaking industry, 1423-1439; projected employment, 1437 Philip Morris USA, 161 Phumbhra, Aayush, 1609 PIARC. See Permanent International Association of Road Congresses Picture Archiving and Communications Systems, 1706 Pier 1 Imports, 778 Piggly Wiggly, 705 Pilgrim’s Pride, 700 Pipelines, 747, 1388 Piracy, 98; computer software industry, 402; motion picture and television industry, 1210; music industry, 1243 PLANET. See Professional Landcare Network Planning. See Civil planning services Planté, Gaston, 142 Plastics and rubber manufacturing industry, 14401457, 1982; contribution to the U.S. economy, 1443; inputs consumed, 1443; projected employment, 1455 Plastics Industry Trade Association, 1456 Plug Power, 157 Poet Energy, 185 Political advocacy industry, 14581475 Political issues; batteries and fuel cells industry, 151; biofuels industry, 194; criminal justice and prison industry, 500; mining industry, 1195; natural resources management, 1288 Pollution; alternative power industry, 56; automobiles and personal vehicles industry,

2202

Subject Index

107; batteries and fuel cells industry, 145, 149; coal mining industry, 348; metals manufacturing industry, 1176; mining industry, 1191; water supply industry, 2028 Pony Express, 1477 Postal and package delivery services; projected employment, 1492, 1493 Postal Inspection Service, 1487 Postal Reorganization Act of 1970, 1479 Postal Service, U.S., 1476 Postal services. See Delivery services, postal and package Potomac Antique Tools and Industries Association, 806 Pottery Barn, 777 Poultry industry, 1082 Power and Energy Society, 591 PPACA. See Patient Protection and Affordable Care Act of 2010 Preliminary SAT, 1519 Presbyterian Ministers’ Fund, 972 Prescott, Samuel, 682 President’s Council on Physical Fitness and Sports, 809 PricewaterhouseCoopers, 10 Priestley, Joseph, 160, 1441 Printing Industries of America, 1513 Printing industry, 1495-1514; contribution to the U.S. economy, 1499; inputs consumed, 1499; projected employment, 1512 Prisons. See Criminal justice and prison industry Procter & Gamble, 940 Product safety issues; automobiles and personal vehicles industry, 120; beverage and tobacco industry, 162; fishing and fisheries industry, 677; food manufacturing and wholesaling industry, 683;

pharmaceuticals and medications industry, 1420; toys and games industry, 1896 Professional Fashion Photography Organization, 103 Professional Golfers Association, 1764 Professional Landcare Network, 897, 1024 Projected employment; airline industry, 51; amusement parks, 1889; apparel and fashion industry, 102; banking industry, 139; beverage and tobacco product industry, 174; broadcast industry, 212; building architecture industry, 230; building construction industry, 250; business services, 267; casino industry, 286; chemicals industry, 302; computer hardware and peripherals industry, 394; day-care services, 520; electrical and gas appliances industry, 575; electrical power industry, 590; farming industry, 628; financial services industry, 661; fishing and fisheries industry, 677; food manufacturing and wholesaling industry, 700; food retail industry, 718; food services, 739; freight transport industry, 757; furniture and home furnishings industry, 790; heavy machines industry, 841; highway, road, and bridge construction industry, 877; home maintenance services, 897; hospital care and services, 915; hotels and motels industry, 934; insurance industry, 986; logging industry, 1128; mass transportation vehicles industry, 1147; medicine and

health care industry, 1166; metals manufacturing industry, 1183-1184; mining industry, 1201; motion picture and television industry, 1222; motor vehicle manufacturing, 122; museums and cultural institutions industry, 1238; paper manufacturing and products industry, 1347; passenger transportation and transit industry, 1366, 1367; personal services, 1382; petroleum and natural gas industry, 13991401; pharmaceuticals and medications industry, 1420; philanthropic, charitable, religious, civic, and grantmaking industry, 1437; plastics and rubber manufacturing industry, 1455; postal and package delivery services, 1492-1493; printing industry, 1512; public elementary and secondary education industry, 1551; publishing and information industry, 1585; real estate industry, 1603-1604; rental and leasing services, 1623; residential medical care industry, 1641; restaurant industry, 1660; retail trade and service industry, 1679; scientific and technical services, 1700; sports equipment industry, 1796; telecommunications infrastructure industry, 1832; textile and fabrics industry, 1851, 1854; theater and performing arts industry, 1874; travel and tourism industry, 1922; warehousing and storage industry, 1978; waste management industry, 1997; water supply industry, 2031 PSAT. See Preliminary SAT

Subject Index Public administration, federal, 631-647; contribution to the U.S. economy, 633; inputs consumed, 634 Public administration, local, 1096-1112; contribution to the U.S. economy, 1097; inputs consumed, 1097 Public Affairs Council, 1474 Public Education Network, 1552 Public elementary and secondary education industry; projected employment, 1551 Public Health Act of 1848, 1982 Public Health Security and Bioterrorism Preparedness Act of 2002, 685 Public health services, 1554-1571 Public safety services, 325-344 Public Storage Company, 1966 Public Utilities Regulatory Act of 1987, 581 Publishing and information industry, 1572-1587; contribution to the U.S. economy, 1574; inputs consumed, 1575; projected employment, 1585 Publishing industry Pulsar, 2000 Purolator, 1476 Quabbin Reservoir, 2019 Quantum Fuel Systems, 157 Quicken, 138 QuikTrip, 1391 Radio; advertising and marketing industry, 21; broadcast industry, 198; music industry, 1242 Raikes, Robert, 1539 Railroads; accounting services, 3; freight transport industry, 744; mass transportation vehicles industry, 1132; passenger transportation and transit industry, 1353; rental and leasing services, 1607 Railway Supply Institute, 1149

Rams, Dieter, 957 Rand Corporation, 415, 1269 Random House, 1579 Rayovac, 144 Raytheon Company, 531, 561, 1266 Real estate industry, 1588-1605; contribution to the U.S. economy, 1590; inputs consumed, 1590; projected employment, 1603, 1604 Recording Industry Association of America, 1243, 1258 Recreation, outdoor. See Outdoor recreation industry Recycling; beverage and tobacco industry, 161; paper manufacturing and products industry, 1347; printing industry, 1499; waste management, 1984 Reeve, Tapping, 1028 Regional Airline Association, 53 Regulatory issues; beverage and tobacco industry, 162; building construction industry, 236; casino industry, 282; chemicals industry, 295; criminal justice and prison industry, 499; fishing and fisheries industry, 666; household and personal products industry, 939; logging industry, 1127; passenger transportation and transit industry, 1361; plastics and rubber manufacturing industry, 1449; warehousing and storage industry, 1966; water supply industry, 2021 REI Corporation, 1321 Religion; criminal justice and prison industry, 496; day-care services, 504; funerary industry, 761; philanthropic, charitable, religious, civic, and grant-making industry, 1435; private education industry, 1515; public

2203

elementary and secondary education industry, 1538 Religious organizations. See Philanthropic, charitable, religious, civic, and grantmaking industry Remediation services industry, 1990 Renewable Fuels Association, 195 Rent-A-Center, 1608 Rent the Runway, 1610 Rental and leasing services, 1606-1625; contribution to the U.S. economy, 1607; inputs consumed, 1607; projected employment, 1623 Residential medical care. See Medical care industry, residential Responsible Care Initiative, 291 Restaurant industry, 1644-1663; contribution to the U.S. economy, 1646; inputs consumed, 1646; projected employment, 1660 Retail industry, food. See Food retail industry Retail Industry Leaders Association, 1680 Retail trade and service industry, 1664-1681; contribution to the U.S. economy, 1666; inputs consumed, 1666; projected employment, 1679 Reutter, Mark, 1172 Reynolds Metal, 1178 RIAA. See Recording Industry Association of America Richardson, Earl, 561 Ricketts, John Bill, 1877 Rio Tinto, 1195 Rittenhouse, William, 1333 RKA. See Roscosmos Road construction. See Highway, road, and bridge construction industry Robert Bosch LLC, 561, 1061, 1076 Roberts, Larry, 416

2204

Subject Index

Roche, 1420 Rockefeller, John D., 1385 Roebuck, Alvah, 776 Roebuck, John, 289 Rolex, 2013 Rolfe, John, 161 Röntgen, Wilhelm, 1704 Roosevelt, Theodore, 1725 Roscosmos, 1744 Rosewood Hotels and Resorts, 921 Royal Dutch Shell, 1385, 1402 Rubber. See Plastics and rubber manufacturing industry Rubel, Ira W., 1496 Rubin, Rick, 1249 Russell, Steve, 415 Ryder System, 1609 Saab, 1266 SAE International, 1149 Safety Coach, 1134 Safety issues; automobiles and personal vehicles industry, 110; batteries and fuel cells industry, 148; building architecture industry, 216; chemicals industry, 292; coal mining industry, 347; construction equipment industry, 447; counseling services, 481; electrical and gas appliances industry, 573; farming industry, 621; fishing and fisheries industry, 668; food manufacturing and wholesaling industry, 690; food services, 729; heavy machines industry, 838; highway, road, and bridge construction industry, 867; logging industry, 1120; mass transportation vehicles industry, 1140; mining industry, 1195; nuclear power industry, 1300; public health services, 1564; public safety services, 333; waste management industry, 1995; water supply industry, 2022

Safety of Life at Sea Convention of 1914, 1736 Safeway, 716 Sam’s Club, 701, 724, 1666 Samsung, 561 Sandals, 1910 Sanyo, 156 Sara Lee, 683 Sarbanes-Oxley Act of 2002, 16 Satellite Industry Association, 1760 Satellite radio, 200 Satellites; defense industry, 526; space exploration and space science industry, 1743; telecommunications equipment industry, 1801; telecommunications infrastructure, 1821 Saudi Aramco, 1387, 1401 Saunders, Joe, 1607 Savings-and-loan banks, 127 SC Johnson, 940 Schelling Anlagenbau, 831 Schönbein, Christian F., 142 School of Design (Lyons, France), 953 School of Industrial Design (Georgia), 963 Schwab. See Charles Schwab Corporation Schwab, Charles, 649 Schwing Stetter, 830 SCI. See Service Corporation International Scientific and technical services, 1682-1702; contribution to the U.S. economy, 1683; inputs consumed, 1684; projected employment, 1700 Scientific, medical, and health equipment and supplies industry, 1703-1721 SCORE. See Service Corps of Retired Executives Screen Actors Guild, 1218, 1223 Scrivener, 400 Seaman, Valentine, 363 Search engines, 417 Sears, 776, 888, 1064, 1786, 1894

Sears, Richard, 776 Seattle Post-Intelligencer, 1574 SEC. See Securities and Exchange Commission Second Life, 1002 Secondary School Admission Test, 1519 Secret Service, 1263 Securities and Exchange Commission, 5, 127 Security industry, national and international, 1260-1275 Security Plastics, 1451 Sega, 1948 Segway, 109 Seiko, 2003 Selected Independent Funeral Homes, 774 Semantic Web. See Web 3.0 Service Corporation International, 769, 774 Service Corps of Retired Executives, 1974 ServiceMaster, 883 Servicemen’s Readjustment Act of 1944, 307, 845 7-Eleven, 710 SGMA. See Sporting Goods Manufacturers Association Shadid, Michael, 1153 Sharp, James, 560 Sheep industry, 1082 Shell. See Royal Dutch Shell Sheraton Hotels and Resorts, 919 Shin Caterpillar Mitsubishi, 433, 826 Shipbuilders Council of America, 1738 Shipbuilding, submarines, and naval transport industry, 1136, 1722-1740; contribution to the U.S. economy, 1724 Shippen, William, 363 Shippingport Atomic Power Station, 1299 Shockley, William, 415 Shopping mall, 1665 Siegel, Bugsy, 273 Siemens (company), 65

Subject Index Siemens, Ernest Werner von, 1353 SIIA. See Software and Information Industry Association Simon, Samuel, 1497 Sinclair, Upton, 683 Sirius XM, 213 Six Flags, 1891 Sixteenth Amendment, 3 Skype, 1815 Slater, Samuel, 828 Small Publishers Association of North America, 1587 Smithfield Foods, 700 Smithson, James, 1227 Smithsonian Institution, 1227, 1883, 1891 Snell, James, 542 Snow, John, 2018 Snowmobiles, 106 Social networking, 418, 992, 1949 Social Security Act of 1965, 902 Social Security Administration, 634 Société des Crèches, 504 Society for Foodservice Management, 738, 740 Society for Human Resource Management, 467 Society for Information Management, 395 Society for Mining, Metallurgy, and Exploration, 360 Society for Technical Communication, 395 Society of Actuaries, 988 Society of American Archivists, 1059, 1240 Society of Naval Architects and Marine Engineers, 1149, 1739 Society of Plastics Engineers, 1456 Sodexo, 738 Soft drinks, 160 Software, computer. See Computer software industry

Software and Information Industry Association, 412, 1003, 1962 Solar power, 57 Solid Waste Association of North America, 1998 Sömmerring, Thomas von, 198 Sony BMG Music Entertainment, 1243 Sony Corporation, 156, 561, 953, 1949 Sony Pictures, 1209 South Dakota Highway Patrol, 334 Southdale Mall, 1665 Soviet Committee for State Security, 1262 Space exploration and space science industry, 144, 17411761 Space Studies Board, 1760 Space tourism, 1747 Sparrows Point, 1171 Special Committee to Investigate Organized Crime in Interstate Commerce. See Kefauver Committee Spectator sports. See Sports industry, spectator Spencer, Percy, 561 Spinning Jenny, 828 Sporting Goods Manufacturers Association, 1784, 1797 Sports equipment industry, 1783-1798; projected employment, 1796 Sports industry, spectator, 17621782 Sports Turf Managers Association, 1781 SSAT. See Secondary School Admission Test Standard and Poor’s, 253 Standard Oil Company, 1385 Stanhope, Lord, 1496 Stanislavsky, Konstantin, 1860 Stanley Black & Decker, 1063 StarKist, 671 State Farm Insurance, 976 Staten Island Ferry, 1133

2205

Staudinger, Herman, 1443 Steel industry, 1171 Stephenson, George, 1353 Sterling Jewelers, 2003 Steven, Montague, 75 Stickley. See L. and J. G. Stickley Stickley, John George, 776 Stickley, Leopold, 776 Stock market, 648 Stockton & Darlington Railroad Company, 1353 Storage. See Warehousing and storage industry Strassman, Fritz, 1297 Submarines, 524. See also Shipbuilding, submarines, and naval transport industry SUDOCS. See Superintendent of Documents Suffolk County Police Department, 333 Sundance Film Festival, 1209 Superintendent of Documents, 1057 Supermarkets, 705 Surface Transportation Board, 1134 Swatch, 2013 Sweet Petula, 940 Swett, James H., 1132 Swine industry, 1081 Sysco Corporation, 723 Systemair, 831 Tabulating Machine Company. See International Business Machines TAPPI. See Technical Association of the Pulp and Paper Industry Target, 707, 1243, 1896 TauTona Mine, 1199 Taxicab, Limousine, and Paratransit Association, 1368 Taylor, Bob, 990 Taylor, Frederick Winslow, 953, 1179 TBS, 200 Teague, Richard, 953

2206

Subject Index

Team Drivers International Union. See International Brotherhood of Teamsters Team Valor International, 1767 Teamsters. See International Brotherhood of Teamsters Technical Association of the Pulp and Paper Industry, 1348 Technical services. See Scientific and technical services Technik Manufacturing, 451, 833, 842 Technomic, 1659, 1662 Techtronic Industries Company, 1063, 1077 Telecommunication Arts High School, 1543 Telecommunications equipment industry, 1799-1818; contributions to the U.S. economy, 201; inputs consumed, 201 Telecommunications Industry Association, 1816-1817, 18371838 Telecommunications infrastructure industry, 18191838; contributions to the U.S. economy, 201; inputs consumed, 201; projected employment, 1832 Television; advertising and marketing industry, 21; broadcast industry, 199; electrical and gas appliances industry, 561 Television industry. See Motion picture and television industry Telnet, 416 Temperance movement, 160 Terex, 829 Terrorism; airline industry, 39; defense industry, 525; national and international security industry, 1262; petroleum and natural gas industry, 1397; public safety

services, 330; travel and tourism industry, 1925 Tesco, 716 Tesla, Nikola, 580 Texas Instruments, 380 Texas Rangers, 328 Textile and fabrics industry, 827, 1839-1858; contribution to the U.S. economy, 1841; inputs consumed, 1842; projected employment, 1851, 1854 Textile Institute International, 1857 Theater and performing arts industry, 1859-1876; projected employment, 1874 Theft; construction equipment industry, 447; food retail industry, 715; heavy machines industry, 838; watches and jewelry industry, 2009 Themed Entertainment Association, 1891 Themed entertainment industry, 1877-1892 Think tanks, 1269 Thomans Nationwide Transport. See TNT Thomas, Perley A., 1134 Thomas Built Buses, 1134 Thomas Cook and Son, 1910 Thorndike, Edward, 75 Three Mile Island Nuclear Generating Station, 590, 1299 3Com Corporation, 416 Thurn and Taxis, 1477 Ticketmaster, 1249 Tidal power, 61 Tiffany, Paul A., 1172 Tiffany’s, 2003 Time Warner, 1579 Timex, 2003 Tire industry, 436 TNT, 1476 Tobacco industry. See Beverage and tobacco industry Tobacco Merchants Association, 176 Todd Shipyards, 1138

Tomlinson, Ray, 990 Tools, hand. See Hand tools and instruments industry Tourism. See Travel and tourism industry Tourneau, 2000 Toy Industry Association, 1909 Toy Manufacturers of the United States, 1895 Toyota, 110, 145 Toys and games industry, 18931909 Toys“R”Us, 1896 Trader Joe’s, 707 Training, dog, 75 Trans World Entertainment, 1257 Transportation, freight. See Freight transport industry Transportation and transit industry, passenger, 13511368; contribution to the U.S. economy, 1353; inputs consumed, 1353 Transportation Construction Coalition, 866 Transportation Research Board, 1149, 1368 Transportation Security Administration, 1263 Transportation Security Authority, 41 Transportation vehicles, mass. See Mass transportation vehicles industry Trauck, 1913 Travel and tourism industry, 1910-1926; casinos, 274; fishing and fisheries, 677; highway, road, and bridge construction, 877; hotels and motels industry, 918; mines, 1191; museums and cultural institutions, 1227; outdoor recreation industry, 1313; passenger transportation and transit industry, 1354; projected employment, 1922; restaurant industry, 1644; themed entertainment, 1877.

Subject Index See also Agritourism; Ecotourism; Medical tourism; Space tourism Travel Industry Association, 269 Travelocity, 1912 Tree Care Industry Association, 1024 Tremont House, 918 Tri Marine International, 678 Tribeca Film Festival, 1209 Trident Seafoods, 678 Truck Loggers Association, 1129 Truck Rental and Leasing Association, 1624 Trucking, 120, 358, 437, 717, 747 TruGreen, 1014 TSA. See Transportation Security Authority Turner Broadcasting Service. See TBS Twentieth Century Fox Film Corporation, 1209 Twitter, 991 Tyco Healthcare, 1705 Tyree Organization, 594 Tyson Foods, 684 U-Haul International, 1623 U-Store-It, 1971 UAW. See United Automobile, Aerospace, and Agricultural Implement Workers Umpqua Bank, 130 Underwood, William, 682 Unifirst Corporation, 1370 Unilever, 943, 945 Union Carbide Corporation, 150 Union Oyster House, 1645 Unions; airline industry, 43; apparel and fashion industry, 101; automobiles and personal vehicles industry, 110; coal mining industry, 347; food retail industry, 708; food services, 738; heavy machines industry, 838; home maintenance services, 885; hotels and motels industry, 926; libraries and archives

industry, 1048; local public administration, 1104; mass transportation vehicles industry, 1138; metals manufacturing industry, 1171; music industry, 1250; paper manufacturing and products industry, 1345; passenger transportation and transit industry, 1358; postal and package delivery services, 1484; printing industry, 1503; public health services, 1558; shipbuilding, submarines, and naval transport industry, 1725; sports industry, spectator, 1766; textile and fabrics industry, 1841 UNITE HERE, 101 United Aircraft Corporation. See United Technologies Corporation United Airlines, 38 United Automobile, Aerospace, and Agricultural Implement Workers, 110 United Food and Commercial Workers International Union, 719 United Mine Workers of America, 350, 360 United Nations Convention on the Law of the Sea, 664 United Nations Fisheries and Aquaculture Department, 665 United Nations Office for Outer Space Affairs, 1760 United Parcel Service. See UPS United States Advanced Battery Consortium, 156 United States Animal Health Association, 1945 United States Fuel Cell Council, 157 United States Green Building Council, 218 United States Olympic Committee, 1781 United Streetcar, 1140, 1146

2207

United Technologies Corporation, 144 United Van Lines, 1971 United Way, 1426 UnitedHealth Group, 978 Universal Music Group, 1243 Universal Postal Union, 1478, 1494 Universal Product Code, 716 Universal Studios, 1209, 1890 University Hospitals (Cleveland), 903 UPC. See Universal Product Code Upholstered Furniture Council, 792 UPS, 1476 Upton Machine Company, 561 Urban Land Institute, 323 Urban planning, 305 USAID. See Agency for International Development, U.S. USCSC. See Civil Service Commission, U.S. USENET, 990 USENIX, the Advanced Computing Systems Association, 396 UTC. See United Technologies Corporation Utility Workers Union of America, 587, 591 Value City Furniture, 790 VeraSun Energy, 186 Veterinary College of Philadelphia, 1928 Veterinary industry, 1927-1946 VGA Antech, 1935 Vic Fearn & Company, 761 Video, computer, and virtual reality games industry, 19471963 Virgin Megastore, 1243 Virtual Bank, 128 Virtual reality games. See Video, computer, and virtual reality games industry Vivendi Universal, 1213

2208

Subject Index

Vollmer, August, 327 Volta, Alessandro, 142, 578, 1686 Volvo Construction Equipment, 829 Vonage, 1815 VT Halter Marine, 1138 Wackenhut, 487 Waldorf Astoria (New York), 926 Walkman (Sony), 1242 Walmart, 217, 707, 800, 940, 1243, 1896, 2003 Walt Disney Company, 1209, 1881 Waltham Watch Company, 2000 WAN. See Wide area network Wanamaker, John, 1665 Wanamaker’s Grand Depot, The, 1665 Warehousing and storage industry, 1964-1980; contribution to the U.S. economy, 1966; inputs consumed, 1967; projected employment, 1978 Warehousing Education and Research Council, 1980 Warner Bros., 1207 Warner Music Group, 1243 Washington Mutual, 138 Washington State Ferry, 1133 Waste Management, Inc., 602 Waste management industry, 1981-1998; contribution to the U.S. economy, 1983; inputs consumed, 1984; projected employment, 1997 Watches and jewelry industry, 1999-2016 Water supply industry; projected employment, 2031 Water Chutes Park, 1878 Water Environment Federation, 611, 2032 Water Quality Association, 2032 Water supply industry, 2017-2033 Water transportation industry; inputs consumed, 1725

Watercraft; automobiles and personal vehicles industry, 107; defense industry, 524; freight transport industry, 745; mass transportation vehicles industry, 1133. See also Shipbuilding, submarines, and naval transport industry Watt, James, 1062 Web 3.0, 33 Weight Watchers International, 1370 Wells Fargo, 138 Western Electric, 1800 Western Flyer, 1134 Westinghouse, 561, 1310 Westinghouse, George, 579 Westphalia, Peace of, 1648, 1261 Whirlpool Corporation, 559, 831 White Castle, 1646 Whitney, Eli, 828 Wholesaling, food. See Food manufacturing and wholesaling industry Wickes Furniture, 777 Wickman, Carl Eric, 1134 Wide area network, 414 Willis Tower, 217 Wind power, 58 Wine, 160 Wingnut Films, 1209 WIPO. See World Intellectual Property Organization Wireless technology, 429 Woods, Tiger, 1765 Woolworth’s, 1895 Works Progress Administration, 306 World Advertising Research Center, 34 World Association of Zoos and Aquariums, 1891 World at Work, 467 World Coal Association, 360 World Energy, 184 World Federation of Sporting Goods Industry, 1797 World Health Organization, 1570

World Intellectual Property Organization, 953 World Road Association. See Association Mondiale de la Route World War I; defense industry, 524; toys and games industry, 1895 World War II; civil planning services, 307; corporate education services, 455; defense industry, 524; freight transport industry, 744; health and fitness industry, 809; metals manufacturing industry, 1171; rental and leasing services, 1607; shipbuilding, submarines, and naval transport industry, 1728 World Wide Web, 416 WorldFish Center, 679 Wozniak, Steve, 380, 399 WPA. See Works Progress Administration Wright, Orville, 37, 524 Wright, Wilbur, 37, 524 Xerox Corporation, 1062, 1608 Y, the, 809 Yahoo!, 991 YMCA. See Y, the Young, Brigham, 1665 Young Men’s Christian Association. See Y, the YouTube, 33, 992 Zale Corporation, 2003 Zions Cooperative Mercantile Institution, 1665 Zipcar.com, 1609 Zomba Label Group, 1247 Zoning, 306 Zoos, 1232, 1327, 1879 ZTE, 1803 Zuckerberg, Mark, 993 Zuraw crane, 743 Zworykin, Vladimir, 561